RCP Publications Inc. v. Chicago
Filing
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MEMORANDUM OPINION AND ORDER signed by the Honorable Matthew F. Kennelly on 9/2/2016: For the reasons stated in the accompanying Memorandum Opinion and Order, the Court denies defendant's motion to dismiss [dkt. no. 22]. Defendant is directed to answer the complaint within fourteen days of this order. The case is set for a status hearing on September 9, 2016 at 1:30 p.m. (mk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
RCP PUBLICATIONS INC.,
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Plaintiff,
vs.
CITY OF CHICAGO,
Defendants.
Case No. 15 C 11398
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
RCP Publications Inc. has sued the City of Chicago for violating its First
Amendment rights and the rights of a class of those similarly situated. RCP contends
that section 10-8-320 of the Chicago Municipal Code (entitled "Posting Bills") is an
unconstitutional restriction on speech. The City has moved the Court to dismiss the
complaint for failure to state a claim under Fed. R. Civ. P. 12(b)(6). For the reasons
stated below, the Court denies the City's motion.
Background
RCP Publications is a not-for-profit corporation based in Chicago that publishes a
variety of materials related to political, economic, and social issues. In March 2015,
RCP hosted on its website an online premiere of a movie called "Revolution and
Religion: The Fight for Emancipation and the Role of Religion," making the film available
for free. A second organization, the BA Everywhere Committee, hosted an in-person
premiere for the film. The complaint does not allege whether the in-person showing
was free or whether, instead, there was a charge to see the film.
BA Everywhere produced posters advertising both the online and in-person
premieres of the film. According to RCP, BA Everywhere gave copies of the posters to
its supporters to distribute how they wished. An unknown person taped a copy of the
BA Everywhere poster to a street light pole at 5701 S. Kimbark Avenue in Chicago,
allegedly without RCP's knowledge. On July 14, 2015, RCP received official notice that
it had violated ordinance section 10-8-320 of the Chicago Municipal Code, which
involves the posting of "commercial advertising material." The ordinance provides:
No person shall distribute or cause others to distribute, as defined in
Section 10-8-325, commercial advertising material by means of posting,
sticking, stamping, tacking, painting or otherwise fixing any sign, notice,
placard, bill, card, poster, advertisement or other device calculated to
attract the attention of the public, to or upon any sidewalk, crosswalk, curb
or curbstone, flagstone or any other portion or part of any public way,
lamppost, electric light, traffic light, telegraph, telephone or trolley line
pole, hydrant, shade tree or tree-box, or up on the piers, columns, trusses,
girders, railings, gates or parts of any public bridge or viaduct, or upon any
pole box or fixture of the police and fire communications system . . ., or on
any bus shelter, except that the city may allow the posting of decorative
banners in accordance with Section 10-8-340 below.
Chi. Mun. Code § 10-8-320(a). The ordinance does not define "commercial advertising
material." It establishes a rebuttable presumption that anyone whose goods, services,
or activites are promoted in the commercial advertising matter caused it to be
distributed. Id. § 10-8-320(b). It provides for a fine up to $1,000 for each offense. Id. §
10-8-320(c).
RCP contested the ticket. On November 16, 2015, the administrative law judge
handling the matter found that RCP liable had violated the ordinance and imposed a
fine of $350 plus $40 in fees.
One month later, RCP filed the present lawsuit. RCP contends that section 10-8-
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320 violates its First Amendment rights and those of all persons who have been ticketed
or fined under the ordinance. RCP argues that the ordinance is an unconstitutional
content-based restriction because it regulates speech based on the topic discussed,
specifically, it restricts "commercial" signs but not others. According to RCP, there is no
compelling government interest served by the restriction.
The City has moved to dismiss, arguing that the ordinance does not violate the
First Amendment and that RCP has failed to state a plausible claim. The Court denies
the City's motion for the reasons stated below.
Discussion
To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), "a
complaint must contain sufficient factual matter . . . to state a claim to relief that is
plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Although "the degree of specificity
required is not easily quantified . . . the plaintiff must give enough details about the
subject-matter of the case to present a story that holds together." McCauley v. City of
Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Swanson v. Citibank, N.A., 614
F.3d 400, 404 (7th Cir. 2010). The Court "accept[s] as true all well-pleaded facts in the
complaint, and draw[s] all reasonable inferences in favor of the plaintiff." Kubiak v. City
of Chicago, 810 F.3d 476, 480 (7th Cir. 2016); see also Tamayo v. Blagojevich, 526
F.3d 1074, 1081 (7th Cir. 2008)).
A.
Commercial or noncommercial speech
The First Amendment prohibits the government from "abridging the freedom of
speech." U.S. Const. amend. I. Certain categories of speech—like commercial
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speech—receive a lesser degree of protection. See Jordan v. Jewel Food Stores, Inc.,
743 F.3d 509, 515 (7th Cir. 2014). "[C]ommercial speech is constitutionally protected
but governmental burdens on this category of speech are scrutinized more leniently
than burdens on fully protected noncommercial speech." Id. (citing Bd. of Trs. of State
Univ. of New York v. Fox, 492 U.S. 469, 477 (1989)).
The "starting point" definition for commercial speech is speech that "proposes a
commercial transaction." Jordan, 743 F.3d at 516. The Seventh Circuit has identified
guideposts for classifying speech as commercial speech, including whether 1) the
speech is an advertisement; 2) the speech refers to a specific product; and 3) the
speaker has an economic motivation for the speech. See United States v. Benson, 561
F.3d 718, 725 (7th Cir. 2009) (citing Bolger v. Youngs Drugs Prods. Corp., 463 U.S. 60,
66-67 (1983)). "This is just a general framework, however; no one factor is sufficient,
and Bolger strongly implied that all are not necessary." Jordan, 743 F.3d at 517.
The parties have briefed the motion to dismiss on the premise that the ordinance
is a regulation of commercial speech and only that. In the Court's view, that is less than
clear. Specifically, the Court cannot say, based on RCP's complaint, that the speech for
which it was penalized under the City's ordinance is appropriately classified as
commercial in the first place. The film itself plainly had a political or social message;
that much is clear from the description in the complaint. Although the poster publicized
the in-person and online premieres of the film, that does not necessarily make it
commercial speech. Among other things, there is no indication whether RCP had an
economic motivation. Further, the political nature of the film and of RCP suggests the
speech being regulated might actually be political—similar, perhaps, to a poster
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promoting a rally for a political candidate. This could affect the standard of review used
to assess the ordinance, because "[l]aws that burden political speech are subject to
strict scrutiny." Citizens United v. Federal Election Comm'n, 558 U.S. 310, 340 (2010).
The boundary between commercial speech and non-commercial speech is not
always clear, as reflected by the Seventh Circuit's very extended discussion of this point
in Jordan. Jordan, 743 F.3d at 515-21. There are at least some cases in which it is
"legally or practically impossible for the speaker to separate the commercial and
noncommercial elements of his speech," id. at 521, and it is at least conceivable that
this is one such case—the parties have not addressed the point. If this is such a case,
then the question is whether, "taken as a whole," the speech is properly classified as
noncommercial. Id. at 520 (quoting Fox, 492 U.S. at 474).
The lack of clarity regarding whether the poster was actually "commercial
speech" as cases under the First Amendment use that term suggests a potential
(though unraised) statutory vagueness argument. See Ctr. for Individual Freedom v.
Madigan, 697 F.3d 464, 478-79 (7th Cir. 2012) ("[T]he void-for-vagueness doctrine
protects against the ills of a law that fails to provide a person of ordinary intelligence fair
notice of what is prohibited, or is so standardless that it authorizes or encourages
seriously discriminatory enforcement."). As the Court has noted, the ordinance provides
no definition or guidance regarding what constitutes "commercial advertising material"
subject to the ban. But because the parties have not addressed this point, the Court
leaves it for another day.
B.
Application of the law regarding commercial speech
Because the parties discuss the ordinance's constitutionality based on the
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premise that it is a regulation of commercial speech, the Court will address their
arguments even though, as just discussed, it is not clear that the ordinance is actually
that focused. According to RCP, section 10-8-320 is an improper content-based
restriction because it distinguishes between commercial and non-commercial speech.
RCP further argues that the City cannot establish a compelling interest for the ordinance
or that it is narrowly tailored to meet such an interest and that the ordinance does not
survive strict scrutiny. The City argues that the ordinance is not subject to strict scrutiny
but rather that the applicable standard is the intermediate scrutiny standard for
commercial speech set out in Central Hudson Gas & Electric Corp. v. Public Service
Commission of New York, 447 U.S. 557, 561 (1980).
RCP's primary argument rests upon its contention that the Supreme Court's
recent decision in Reed v. Town of Gilbert, 135 S. Ct. 2218 (2015), changes the law
with respect to legislation regulating commercial speech. In Reed, the Supreme Court
examined the constitutionality of a local ordinance that placed certain restrictions on
outdoor signs depending on the signs' content. Reed, 135 S. Ct. at 2224-26.
Specifically, the ordinance prohibited outdoor signs anywhere without a permit but
exempted twenty-three categories of signs, including "ideological signs," "political
signs," and "temporary directional signs relating to a qualifying event," terms that were
each defined in the ordinance. Significantly, each of these exempted categories of
signs was regulated somewhat differently in terms of allowed sign size and the types of
locations where signs could be placed. The Court concluded that the distinctions the
ordinance made among different types of signs was a paradigmatic example of contentbased discrimination, because it "single[d] out specific subject matter for differential
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treatment, even if it d[id] not target viewpoints within that subject matter." Id. at 2230.
This content-based discrimination required subjecting the ordinance to strict scrutiny,
which in turn required the town to demonstrate that it was narrowly tailored to address a
compelling government interest. Id. at 2231. On this point, the Court held that the
ordinance failed—its distinctions were "hopelessly underinclusive," because the
"temporary directional signs [were] no greater an eyesore than ideological or political
ones." Id. (citing Discovery Network, 507 U.S. at 425). As a result, the Court held that
the code was not narrowly tailored to address the two governmental interests proffered
by the town—aesthetics and traffic safety. Id.
RCP argues that the City's ordinance is an improper content-based restriction
under Reed because its restrictions single out commercial advertisements. This Court,
however, does not see Reed as overturning the Supreme Court's consistent
jurisprudence subjecting commercial speech regulations to a lesser degree of judicial
scrutiny. The case says nothing of the kind, indeed, it does not even address the
commercial-noncommercial distinction.
The Seventh Circuit has not yet addressed whether Reed applies to laws
targeting commercial speech for differential treatment. The Seventh Circuit has cited to
Reed four times: in challenges to laws restricting private signs on public ways, peddling
near Wrigley Field, advertisements of adult-entertainment clubs, and panhandling on
city streets. See Constr, and Gen. Laborers Local Union No 330 v. Town of Grand
Chute, --- F.3d ----, 2016 WL 4410073 (7th Cir. Aug. 19, 2016); Left Field Media LLC v.
City of Chicago, 822 F.3d 988 (7th Cir. 2016); BBL, Inc. v. City of Angola, 809 F.3d 317
(7th Cir. 2015); Norton v. City of Springfield, 806 F.3d 411 (7th Cir. 2015). The court
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determined that Reed applied to the panhandling restriction in Norton but not to the
peddling restriction in Left Field or the adult-entertainment restriction in BBL, Inc. The
court did not resolve Town of Grand Chute on the merits, though it noted that District
Court should not dismiss the remanded case based on the town's argument that it
lacked "an invidious reason" for preferring some speech over other speech, stating that
"Reed tells us that content discrimination is almost always forbidden." Town of Grand
Chute, 2016 WL 4410073, *3. That statement, however, had nothing to do with the
distinction between noncommercial and commercial speech; it concerned the contention
that the town had selectively enforced a sign ban based on the content of the particular
sign. See id. at *2.
In a footnote in BBL, Inc., the Seventh Circuit noted its belief that Reed did not
upend established doctrine for evaluating the regulation of businesses that offer
sexually explicit entertainment—"a category the Court has said occupies the outer
fringes of First Amendment protection." BBL, Inc., 809 F.3d at 326 n.1. This suggests
that the Seventh Circuit does not see Reed as rewriting the Supreme Court's free
speech jurisprudence.
Another judge in this District has considered the effect of Reed on the First
Amendment treatment of commercial speech, and he reached the same conclusion this
Court reaches here. See Peterson v. Vill. of Downers Grove, 150 F. Supp. 3d 910 (N.D.
Ill.) (Chang, J.). In Peterson, Judge Chang acknowledged that Reed's reach is unclear.
Id. at 927. Still, absent further guidance from the Seventh Circuit or Supreme Court,
Judge Chang concluded that Reed does not overrule decades of jurisprudence
regarding commercial speech. Id. at 928. He noted that the majority opinion's failure to
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mention Reed's impact on commercial speech was "not surprising, because . . . all of
the restrictions at issue in Reed applied only to non-commercial speech." Id. at 927-28.
Further, the Supreme Court has been quite clear that it is that Court's own
prerogative to overrule its precedent. See Rodriguez de Quijas v. Shearson/Am.
Express, Inc., 490 U.S. 477 (1989) ("If a precedent of th[e] [Supreme] Court has direct
application in a case, yet appears to rest on reasons rejected in some other line of
decisions, the Court . . . should follow the case which directly controls, leaving to th[e]
[Supreme] Court the prerogative of overruling its own decision"). Reed did not even cite
to Central Hudson, let alone expressly modify or overrule it.
The Court concludes, for these reasons, that Central Hudson and its progeny
continue to control the propriety of restrictions on commercial speech. Central Hudson
establishes a four-part test for regulations curtailing commercial speech. Central
Hudson, 447 U.S. at 566. First, the plaintiff must prove that the regulated
communication is neither misleading nor related to unlawful activity. Id. Then, the party
seeking to uphold the regulation must demonstrate that the regulation serves a
substantial government interest; directly advances the government interest asserted;
and is not more extensive than necessary to serve that interest. Id. The burden of
proof for the last two elements "is not satisfied by mere speculation or conjecture;
rather, a governmental body seeking to sustain a restriction on commercial speech must
demonstrate that the harms it recites are real and that its restriction will in fact alleviate
them to a material degree." Edenfield v. Fane, 507 U.S. 761, 770-71 (1993) (emphasis
added).
The City does not contend that the poster contained anything that was
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misleading or involved unlawful activity. And RCP does not contend that the City lacks
a substantial interest in curtailing litter or maintaining the city's aesthetics. Therefore, as
in Discovery Network, the only issues of contention are the last two elements of the
Central Hudson test—whether the regulation advances the governmental interest
asserted and whether it is more extensive than necessary. In other words, the case
turns on whether there is a reasonable fit between the prohibition of commercial posters
and the City's interest in curtailing litter. Because it is "well established that the party
seeking to uphold a restriction on commercial speech carries the burden of justifying it,"
the City bears the burden of showing a reasonable fit. Edenfield, 507 U.S. at 770-71. If
a restriction "places too much importance on the distinction between commercial and
noncommercial speech . . . [and] bears no relationship whatsoever to the particular
interests that the city asserted," there is no reasonable fit, and the ordinance is invalid.
Discovery Network, 507 U.S. at 424.
The City has offered nothing on whether the ordinance "will in fact alleviate [litter]
to a material degree." Edenfeld, 507 U.S. at 771. On the current record, the Court
cannot determine whether the regulation is stricter than necessary or, conversely, is
unduly underinclusive given its limitation to "commercial advertising material." For
example, in Discovery Network, the "fit" determination rested at least in part on the
number of commercial newsracks versus noncommercial newsracks:
The benefit to be derived from the removal or 62 [commercial] newsracks
while about 1500-2000 [noncommercial newsracks] remain in place was
considered "minute" by the District Court and "paltry" by the Court of
Appeals. We share their evaluation of the "fit" between the city's goal and
its method of achieving it.
Discovery Network, 507 U.S. at 418. Because the city's primary concern was the
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number of newsracks on its streets, and because "all newsracks, regardless of whether
they contain commercial or noncommercial publications, [we]re equally at fault," the
Supreme Court held that the ordinance was unconstitutionally underinclusive. Id. at
426.
Without a more developed record, the Court cannot determine whether there is a
sufficient fit between the City's proffered interests and the restriction on speech that is at
issue. For example, in Pearson v. Edgar, 153 F.3d 397, 400 (7th Cir. 1998), the
Seventh Circuit remanded a case back to the district court and directed the court to
conduct an evidentiary hearing to allow the parties to create the appropriate record for
determining the constitutionality of the statute at issue in light of the standards set out in
Discovery Network. The district court conducted the evidentiary hearing and eventually
ordered a bench trial to gain a better understanding of the issues at hand. Id. At the
conclusion of that trial—which revolved around a law restricting types of real estate
solicitation known as "panic peddling" and "blockbusting"—the district court determined
that although "panic peddling and blockbusting did occur in Chicago during the 1960s
and early 1970s[,] . . . blockbusting and panic peddling rarely, if ever, occur in Illinois
today." Pearson v. Edgar, 965 F. Supp. 1104, 1108-09 (N.D. Ill. 1997). The court went
on to note that the defendants produced no evidence that real estate solicitation harms
or threatens to harm residential privacy—the defendant's cited interest in that case.
Pearson, 153 F.3d at 400. The court applied the Central Hudson test and determined
that the statute was unconstitutional based on the underinclusive fit. Id.
For these reasons, the Court concludes that even if the City's ordinance is
properly read as a regulation of commercial speech and nothing more, RCP's claim is
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not subject to dismissal for failure to state a claim.
Conclusion
For the foregoing reasons, the Court denies defendant's motion to dismiss [dkt.
no. 22]. Defendant is directed to answer the complaint within fourteen days of this
order. The case is set for a status hearing on September 9, 2016 at 1:30 p.m.
________________________________
MATTHEW F. KENNELLY
United States District Judge
Date: September 2, 2016
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