GEFT OUTDOOR LLC v. CITY OF FISHERS, INDIANA et al

Filing 99

ORDER DENYING LEAVE TO FILE AMENDED COMPLAINT: GEFT's motion for leave amend its complaint is DENIED. Dkt. 87 . Final judgment will issue by separate entry dismissing GEFT's federal claims with prejudice and relinquishing jurisdiction over its Indiana-law claims. See Order. Signed by Judge James Patrick Hanlon on 9/26/2024. (LF)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
GEFT OUTDOOR LLC,

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Plaintiff,
v.
CITY OF FISHERS, INDIANA,
CITY OF FISHERS BOARD OF ZONING
APPEALS,
Defendants.

No. 1:21-cv-03058-JPH-CSW

ORDER DENYING LEAVE TO FILE AMENDED COMPLAINT
GEFT Outdoor is an advertising company that wants to construct two
digital billboards on property it leased in Fishers, Indiana. But the billboards
didn't meet the sign standards in Fishers's Unified Development Ordinance
("UDO"), and the Fishers Board of Zoning Appeals ("BZA") denied GEFT's
requests for variances to allow digital signs that exceeded the UDO's maximum
area and height restrictions. Dkt. 1-3; dkt. 1-4. GEFT then filed this case,
alleging that the UDO's sign standards and variance provisions are
unconstitutional. Dkt. 1. Fishers later amended the relevant parts of its UDO
and moved to dismiss GEFT's complaint. Dkt. 63. The Court granted that
motion as to GEFT's federal claims and determined that it should relinquish
jurisdiction over GEFT's Indiana-law claims. Dkt. 84.
GEFT has filed a motion to amend its complaint to reassert its claims
under Fishers's previous UDO and to raise claims under its amended UDO.

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Dkt. [87]. Since allowing the amendment would be futile, that motion is
DENIED.
I.
Facts and Background
The Court accepts and recites "the well-pleaded facts in the [proposed
amended] complaint as true." McCauley v. City of Chicago, 671 F.3d 611, 616
(7th Cir. 2011).
GEFT is an outdoor advertiser that buys or leases land to use for signs
that convey "both commercial and noncommercial speech." Dkt. 87-1 at 2–4.
It has leased portions of two properties in Fishers and plans to place digital
billboards on both. Id. at 4–5. The first billboard, on 131st Street, would be "a
70-foot, double-sided, back-to-back billboard with digital displays on both
sides." Id. at 12. The second, on 106th Street, would be "a 70-foot, doublesided, back-to-back billboard with one side having a digital display and the
other with a static display." Id. at 12–13.
When GEFT first sought to put up its proposed billboards in 2021, the
sign standards in Fishers's UDO required a permit. UDO § 6.17.3.A ("It is
unlawful for any person to place, alter, or to permit the placement or alteration
of a sign . . . without first obtaining an approved sign permit application."); dkt.
32-4 at 4. At the time, the UDO defined a Sign as:
Any name, identification, description, display, or
illustration which is affixed to, painted on, or is
represented directly or indirectly upon a building,
structure, or piece of land, and which directs attention
to an object, product, place, activity, person, institution,
organization, or business. Religious symbols on places
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of worship or structures owned and operated by
religious organizations are not considered a sign unless
accompanied with text. Address numbers are not
considered a sign.
Dkt. 27 at 4 (quoting UDO art. 12.2). The UDO also prohibited new pole signs
and digital signs and imposed maximum area and height limitations on ground
signs. UDO §§ 6.17.2.A, 6.17.5.I, 6.17.6. GEFT sought variances from those
provisions for its proposed billboards, but the BZA denied the requests. Dkt.
87-1 at 14–15.
GEFT then brought this action in December 2021, alleging that (1)
Fishers's sign standards use content-based restrictions on speech in violation
of the United States and Indiana Constitutions, (2) the permitting and variance
schemes in Fishers's UDO are unconstitutional prior restraints on speech
under the United States and Indiana Constitutions, and (3) the BZA's denials of
GEFT's variance requests violate the United States Constitution and exceeded
its statutory authority. Dkt. 1 at 12–20. GEFT also sought a preliminary
injunction preventing Fishers from enforcing its original UDO as to GEFT's
proposed billboards. Dkt. 10; dkt. 11 at 2. The Court denied GEFT's motion
for preliminary injunction. Dkt. 43. GEFT appealed, and the Seventh Circuit
dismissed the appeal as moot because "Fishers has repealed or materially
amended the challenged [UDO] provisions." Dkt. 67.
In that amendment, which took effect in May 2022, Fishers removed the
religious-symbol exemption from the Sign definition. Dkt. 87-1 at 16. The
amendment also specified standards that must be considered in sign
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permitting decisions. Id. (requiring staff to consider sign size, composition, and
"lighting or location conditions"). It similarly adopted a new variance provision
with "new substantive criteria including whether the sign: (1) obstructs view of
buildings and architecture, (2) is compatible with the existing skyline, and (3)
tends to distract motorists or pedestrians." Id.
Fishers filed a motion to dismiss GEFT's complaint for lack of jurisdiction
and for failure to state a claim, relying in part on the 2022 UDO amendment.
Dkt. 63. The Court granted the motion to dismiss GEFT's federal claims as
moot and found that it should relinquish jurisdiction over GEFT's state-law
claims. Dkt. 84. The order gave GEFT the opportunity to seek leave to amend
its complaint. Id. at 14. GEFT has sought leave to amend, dkt. 87, attaching
its proposed amended complaint, dkt. 87-1.
II.
Applicable Law
Leave to amend should be freely given when justice so requires. See Fed.
R. Civ. P. 15(a); Runnion ex rel. Runnion v. Girl Scouts of Greater Chi. & Nw.
Indiana, 786 F.3d 510, 519 (7th Cir. 2015). But district courts "may deny
leave to amend . . . where there is a good reason to do so," such as undue
delay, prejudice, bad faith, or futility. R3 Composites Corp. v. G&S Sales Corp.,
960 F.3d 935, 946 (7th Cir. 2020). An amendment is futile when "it seeks to
add a new claim that does not allege a viable theory of liability," Thomas v.
Dart, 39 F.4th 835, 841 (7th Cir. 2022), "reassert[s] claims previously
determined," Garcia v. City of Chicago, Ill., 24 F.3d 966, 970 (7th Cir. 1994), or

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would not "survive a motion to dismiss," Gandhi v. Sitara Cap. Mgmt., LLC, 721
F.3d 865, 869 (7th Cir. 2013).
III.
Discussion
GEFT seeks leave to file an Amended Complaint that would revive its
previously dismissed claims under Fishers's prior UDO and assert new claims
under the amended UDO. See dkt. 87; dkt. 87-1. Fishers argues that leave to
amend should be denied because GEFT's proposed amendments are futile.
Dkt. 92 at 1.
A. Amendment as of Right
GEFT argues that it's entitled to amend its complaint "once as a matter
of right" because the Court's dismissal order did not dispose of all clams or
enter final judgment. Dkt. 87 at 2; dkt. 95 at 1. The right to amend, however,
must be exercised "no later than" 21 days after service of a responsive pleading
or motion under Rule 12(b), (e), or (f), "whichever is earlier." Fed. R. Civ. P.
15(a)(1)(B). Here, the 21-day clock started on February 9, 2022, when Fishers
served its Rule 12(b) motion, dkt. 25, making GEFT's proposed amended
complaint too late to be filed as of right, see dkt. 87.
The cases that GEFT relies on do not hold otherwise. See Foster v.
DeLuca, 545 F.3d 582, 583–84 (7th Cir. 2008); Crestview Vill. Apartments v.
U.S. Dept. of Housing & Urban Dev., 383 F.3d 552 (7th Cir. 2004). Those cases
applied Rule 15 before its 2009 amendment, which added that "the right to
amend once as a matter of course terminates 21 days after service of a motion

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under Rule 12(b)." Rule 15 Committee Note—2009 Amendment; see Runnion,
786 F.3d at 519. GEFT's motion to amend therefore must be considered under
Rule 15(a)(2)'s standard that the "court should freely give leave [to amend]
which justice so requires." Id. 1
B. Claims under Fishers's Prior UDO
The Court previously dismissed GEFT's federal claims under the preamendment UDO. Dkt. 84. GEFT's federal claims for injunctive relief were
moot because Fishers had "changed the core of the challenged [UDO]
provisions." Id. at 4–9. And GEFT could not recover monetary damages since
unchallenged UDO provisions would prohibit its billboards even if the
challenged provisions were unconstitutional, since any unconstitutional
provisions would be severed. Id. at 9–12.
1. Claims for Injunctive Relief
GEFT first briefly argues that its claims for injunctive relief are not moot
because Fishers's 2022 UDO amendment "was irrelevant to the mootness
determination" since "generally permit applicants have a right to have their
applications considered in accordance with the laws in effect when the
application is made." Dkt. 95 at 6. The Seventh Circuit has already held,
however, that GEFT's injunctive-relief claims under the prior UDO are moot.

GEFT also argues in its reply brief that, if it cannot amend as of right, leave to
amend should be granted so it can "file a full response brief" to a subsequent motion
to dismiss instead of being limited to 20 pages in its reply brief in support of its
motion to amend. Dkt. 95 at 5. The 20-page limit does not justify granting leave to
amend because GEFT could've asked for a more generous page limit, does not identify
any argument it was unable to develop, and ultimately used less than 17 pages of its
20-page allotment. See id.
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Dkt. 67 (Seventh Circuit mandate dismissing preliminary-injunction appeal as
moot); see also GEFT Outdoor, LLC v. Monroe County, Indiana, 62 F.4th 321,
325–26 (7th Cir. 2023). Moreover, GEFT does not allege that it ever applied to
Fishers for permits for its proposed billboards in order to preserve any right to
have its applications considered under prior law. See dkt. 87-1 at 12–14
(alleging that GEFT applied for Indiana Department of Transportation permits
and Fishers variances, without mentioning applications for permits under the
UDO). GEFT does not explain how it can vest in the prior UDO as a "permit
applicant" when it did not apply for permits under that UDO. See dkt. 95 at 5–
6; Ind. Code § 36-7-4-1109(c) (explaining when a "complete [permit]
application" to a local government agency will be governed by the law in effect
at the time of that application).
Under Seventh Circuit precedent, and since GEFT has no entitlement to
seek injunctive relief under the prior UDO, GEFT's attempt to amend its
complaint to seek injunctive relief under the prior UDO is futile. See GEFT
Outdoor, 62 F.4th at 326 (holding that a request for injunctive relief was moot
because GEFT's "desired outcome (an injunction against the entire sign
ordinance) cannot provide effectual relief from provisions that no longer exist").
2. Claims for Monetary Damages
GEFT argues that it can recover damages under Fishers's prior UDO
because portions of that UDO were unconstitutional and could not be severed
from the remainder of the UDO. Dkt. 95 at 6–13. Fishers responds that the
proposed amendment is futile because it does not respond to the Court's
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conclusion in its dismissal order that any unconstitutional provisions could be
severed. Dkt. 92 at 7–13. After this Court's order dismissing the federal
claims in GEFT's prior complaint as moot, see dkt. 84 at 14, the Seventh
Circuit clarified that dismissals like this one based on the severability of an
ordinance are rulings on the merits, so the Court addresses futility on that
basis rather than based on mootness. See GEFT Outdoor, LLC v. City of
Evansville, Ind., 110 F.4th 935, 938 (7th Cir. 2024) ("GEFT loses on the merits
rather than for lack of standing.").
In denying GEFT's motion for preliminary injunction and in granting
Fishers's motion to dismiss, the Court held that any unconstitutional
provisions in the prior UDO are severable, leaving the rest of the UDO intact.
Dkt. 42 at 11–15; dkt. 84 at 9–12. The rest of the prior UDO includes a digital
sign ban and area and height limitations, which GEFT did not individually
challenge though they would prohibit GEFT's proposed billboards. See dkt. 84
at 11–12. GEFT does not explain how its proposed amended complaint could
change that severability analysis. See dkt. 87. As the Court explained, even if
GEFT's challenge to other provisions were to succeed, under Indiana's
severability doctrine a statute or ordinance with an unconstitutional provision
"is not necessarily void in its entirety." See dkt. 84 at 9–12 (quoting Paul Steiler
Enters., Inc. v. City of Evansville, 2 N.E.3d 1269, 1279 (Ind. 2014)). Instead,
the "unobjectionable" portions can be severed and remain in effect if (1) they
can be given legal effect and (2) "the legislature intended the provision[s] to
stand" if others fall. Id.
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Here, severing any infirm provisions from the pre-amendment UDO
would leave "a workable legal standard" with sign standards that could be
enforced against non-compliant signs. Id. That includes the prior UDO's
digital sign ban and area and height limitations—provisions of the UDO that
GEFT's proposed billboards would violate but that GEFT does not challenge.
Dkt. 84 at 9; dkt. 43 at 15–16 (citing UDO §§ 6.17.2.A, 6.17.5.I, 6.17.6.E).
And Fishers stated its intent in the UDO's unambiguous severability
provision: "If any provision or the application of any provision of the UDO is
held unconstitutional or invalid by the courts, the remainder of the UDO or the
application of such provision to other circumstances shall not be affected."
Dkt. 34 at 13–14 (quoting UDO § 1.2.4). This statement creates a strong
presumption of severability. See id. (applying City of Hammond v. Herman &
Kittle Props., Inc., 119 N.E.3d 70, 87 (Ind. 2019)). Against Fishers's clearly
stated intent, GEFT's allegation that Fishers "would not have enacted the Pre2022 Sign Standards" without the challenged provisions rings hollow. See dkt.
87-1 at 19, 22; Tobey v. Chibucos. 890 F.3d 634, 639 (7th Cir. 2018) (While
"the well-pleaded factual allegations in the complaint" must be accepted as
true, courts "do not credit legal conclusions, or threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements.").
Indeed, Fishers specified that "the remainder of the UDO" stands if "any
provision"—without limitation—is held unconstitutional. See dkt. 43 at 14.
Moreover, severing unconstitutional provisions is the presumptive
remedy for First Amendment violations. See dkt. 62 at 6–9 (applying Barr v.
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American Assoc. of Pol. Consultants, Inc., 140 S. Ct. 2335, 2349 (2020)); GEFT
Outdoor, 62 F.4th at 330–32. So, since the UDO would prohibit GEFT's
proposed billboards regardless of whether the Court determined that the
challenged provisions were unconstitutional, GEFT cannot recover for its
federal claims related to its proposed billboards. See Leibundguth Storage &
Van Serv., Inc. v. Vill. of Downers Grove, Ill., 939 F.3d 859, 861–62 (7th Cir.
2019) ("The Village's ordinance contains content discrimination, but as we have
explained that discrimination does not aggrieve" the plaintiff because the
plaintiff's "problems come from the ordinance's size and surface limits, not
from any content distinctions.").
GEFT nevertheless argues that the UDO isn't severable because the
federal government requires the State of Indiana to maintain "effective control"
over signs along highways or risk losing federal funds. Dkt. 95 at 9. As the
Court previously explained, however, severance would allow Fishers to
maintain control over signs by enforcing its standards "against non-compliant
signs" even if other provisions, including the permit requirement, were severed.
Dkt. 84 at 10. Just the timing of enforcement would be affected. See dkt. 43
at 12 ("Without [its permitting scheme], Fishers would simply have to enforce
its sign standards 'on the back end.'"). GEFT's proposed amended complaint
therefore does not plausibly allege that severance would lead to the loss of
"effective control" over Fishers's signs. That's especially true since GEFT's
proposed solution to the alleged "effective control" issue is to allow Fishers no
control by voiding the UDO in its entirety. See dkt. 95 at 8.
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Finally, GEFT argues that Fishers would not have intended severance
because if the prior UDO's variance provision were severed as unconstitutional,
then Fishers would be violating a state requirement that zoning codes provide a
variance procedure. Dkt. 95 at 12; see GEFT Outdoor, 62 F.4th at 329 ("The
Indiana legislature requires local governments . . . to include a variance
provision in their zoning codes."). But Indiana state law itself provides variance
criteria for a local board of zoning appeals to use:
A board of zoning appeals shall approve or deny
variances of use from the terms of the zoning ordinance.
The board may impose reasonable conditions as part of
its approval. A variance may be approved under this
section only upon a determination in writing that:
(1) the approval will not be injurious to the public
health, safety, morals, and general welfare of the
community;
(2) the use and value of the area adjacent to the
property included in the variance will not be
affected in a substantially adverse manner;
(3) the need for the variance arises from some
condition peculiar to the property involved;
(4) the strict application of the terms of the zoning
ordinance will constitute an unnecessary
hardship if applied to the property for which the
variance is sought; and
(5) the approval does not interfere substantially with
the comprehensive plan adopted under the 500
series of this chapter.
Ind. Code § 36-7-4-918.4. Indeed, the Seventh Circuit upheld exactly these
criteria last year after Monroe County, Indiana used them to decide variance
requests. See GEFT Outdoor, 62 F.4th at 329 (holding that this variance
provision "does not give so much discretion to the Board of Zoning Appeals that
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it violates the First Amendment"). Because Fishers could apply those variance
criteria if its own were unconstitutional, this argument does not undercut
Fishers's clear statement that it intends severance if "any" of the prior UDO's
provisions were unconstitutional. See dkt. 43 at 14.
Because the challenged provisions of the UDO are severable and the
unchallenged provisions prohibit GEFT's proposed billboards, allowing GEFT's
proposed amendment would be futile. What's more, after GEFT sought leave to
amend its complaint, the Seventh Circuit explained in a similar case that facial
challenges to zoning ordinances "fail unless the plaintiff shows that a
substantial portion of the law's applications are unconstitutional." GEFT
Outdoor, 110 F.4th at 938. Here, as in that case, GEFT has not challenged
other provisions of the prior UDO, like its digital sign ban and area and height
restrictions, which "effectively concedes that the main sweep of the ordinance
[was] valid." Id.
GEFT nevertheless argues, in a supplemental brief, that leave to amend
should be granted so that it can pursue as-applied claims regarding its two
proposed billboards. Dkt. 98. But even assuming that GEFT's proposed
amended complaint could be read to allege as-applied challenges to the prior
UDO, that would not overcome the prior UDO's severability, which would leave
unchallenged provisions that prohibit GEFT's proposed billboards. See

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Leibundguth, 939 F.3d at 861–62. GEFT's motion to amend its complaint to
challenge the prior UDO is therefore futile. 2
C. Claims under Fishers's Amended UDO
GEFT's proposed amended complaint would also allege that the amended
UDO's sign standards contain impermissible content-based restrictions and
that its permitting and variance procedures are unconstitutional prior
restraints. Dkt. 87-1 at 26–32. Fishers argues that these claims are futile for
the same reason as GEFT's claims under the prior UDO—because GEFT's
proposed billboards "are still too large, too tall, and too 'digital' to conform to"
sign standards that GEFT does not individually challenge. Dkt. 92 at 13–18.
In reply, GEFT does not address its claims under the amended UDO. See dkt.
95 at 5 ("The City's Pre-2022 UDO applies, and the amendment of that
ordinance is immaterial here.").
Because Fishers's amended UDO retained a digital sign ban and area
and height limitations that would prohibit GEFT's proposed billboards, it would
be futile to allow GEFT to amend its complaint to challenge the amended UDO.
See Leibundguth, 939 F.3d at 861–62. GEFT does not argue that the
severability analysis would be different for the amended UDO, see dkt. 95, and
indeed the amendment removed provisions that GEFT had alleged were
content-based. See dkt. 92 at 13–18. Therefore, the Amended Complaint "does
not allege a viable theory of liability" under the amended UDO, making
Because the UDO's severability makes GEFT's proposed amendment futile, the Court
need not revisit its conclusion in its preliminary-injunction order that some provisions
of Fishers's prior UDO were "likely unconstitutional." See dkt. 43 at 5.
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amendment futile. Thomas, 39 F.4th at 841; see GEFT Outdoor, 110 F.4th at
938.
IV.
Conclusion
GEFT's motion for leave amend its complaint is DENIED. Dkt. [87].
Final judgment will issue by separate entry dismissing GEFT's federal claims
with prejudice and relinquishing jurisdiction over its Indiana-law claims.
SO ORDERED.
Date: 9/26/2024

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