Ctr. for Investigative Reporting v. Se. Pa. Transp. Auth.

337 F.Supp.3d 562

The CENTER FOR INVESTIGATIVE REPORTING

v.SOUTHEASTERN PENNSYLVANIA TRANSPORTATION AUTHORITY

CIVIL ACTION NO. 18-1839

United States District Court, E.D. Pennsylvania.

Signed November 28, 2018

Brian M. Hauss, Jacob J. Hutt, American Civil Liberties Union, New York, NY, Dylan J. Steinberg, John S. Stapleton, Rebecca Santoro Melley, Hangley Aronchick Segal & Pudlin, Molly M. Tack-Hooper, ACLU of Pennsylvania, Philadelphia, PA, Diana Victoria Baranetsky, Emeryville, CA, for the Center for Investigative Reporting.

Maryellen Madden, John J. Powell, Montgomery McCracken Walker & Rhoads, LLP, Philadelphia, PA, for Southeastern Pennsylvania Transportation Authority.

MEMORANDUM OPINION

Baylson, District Judge.

TABLE OF CONTENTS

I. INTRODUCTION...570

II. FACTUAL BACKGROUND...570

A. Initial Proposed CIR Advertisement...570

B. SEPTA's Rejection of the Proposed Ad...573

C. Revised Advertisement and Second Rejection...574

III. PROCEDURAL BACKGROUND...574

IV. EVIDENCE...575

A. Preliminary Injunction Evidence...575

B. Benedetti's Trial Testimony...575

1. Impact of AFDI Litigation...575

2. SEPTA's Application of Standards, Including the Challenged Provisions....576

3. Interpretation of the Challenged Provisions...577

4. Digital Displays/News Feeds...578

5. Asserted Inconsistencies in Benedetti's Testimony and Other Evidence...578

C. Other Exhibits and Depositions...580

D. Examples of Ads Accepted and Rejected by SEPTA...581

E. Advertisements by Banks...583

V. PARTIES' CONTENTIONS...584

A. CIR's Contentions...584

1. Standards are Not Capable of Reasoned Application...584

2. The Challenged Provisions are Not Viewpoint Neutral on their Face or As Applied...585

3. Standards are Not "Reasonable" in Light of the Purpose of the Forum...585

4. SEPTA's Advertising Space is a Designated Public Forum, and the 2015 Advertising Standards Do Not Satisfy Strict Scrutiny...585

B. SEPTA's Contentions...586

1. The Advertising Space on Buses is a Non-Public Forum...586

2. The Advertising Standards are Reasonable...586

3. The Advertising Standards are Viewpoint Neutral...588

VI. FINDINGS OF FACT...588

A. General...588

B. SEPTA'S Response to AFDI Ad...589

C. SEPTA's Process for Reviewing Proposed Advertising...591

D. Bank Advertisements...595

E. SEPTA's Denial of CIR's Proposed Advertisement...596

VII. DISCUSSION OF LAW...597

A. Forum Analysis...598

1. Defining the Forum and Type of Forum...598

2. The Advertising Space on SEPTA Buses is a Non-Public Forum...601

B. The Standards and Burden Applicable in a Non-Public Forum...602

C. CIR's Facial Attack on Whether the Challenged Provisions Are Capable of Reasoned Application Under Mansky...603

1. Language That Must be Stricken as Incapable of Reasoned Application...604

2. Meet and Confer Requirement...605

D. CIR's Facial Attack on the Restrictions (as to be Amended)...605

1. NAACP v. City of Philadelphia...606

2. Transit Authorities Advertisements as a Subset of First Amendment Jurisprudence...608

3. The Special Circumstances of a "Captive Audience" on Transit Vehicles...608

4. SEPTA as a Government Actor...609

5. Decisions on Transit Authorities' Speech Regulations in the Third Circuit...609

6. Decisions on Transit Authorities' Speech Regulations Outside of the Third Circuit...611

7. SEPTA's Restrictions (as to be Amended) Are Reasonable in Light of the Purpose of the Forum...612

E. Content-Based, Viewpoint Neutral Restrictions of Advertisements in Transit Vehicles Do Not Offend the First Amendment...613

1. SEPTA's Restrictions (as to be Amended) Are Viewpoint Neutral on Their Face...615

2. SEPTA's Restrictions are Viewpoint Neutral as Applied...616

a. SEPTA's Acceptance of Public-Service Advertisements...616

b. SEPTA's Acceptance of Bank Advertisements is Not Accepting Viewpoint Advertisements and SEPTA's Rejection of CIR's Advertisements was Reasonable...618

VIII. CONCLUSION...620

I. INTRODUCTION

Southeastern Pennsylvania Transit Authority ("SEPTA") has been operating the mass transit system in Philadelphia since 1964. It operates bus, subway, commuter rail, light rail, and trolley service to Philadelphia and Delaware, Montgomery, Bucks and Chester counties, with some train service to Wilmington, Delaware and Trenton, New Jersey.

This case concerns the advertising space on the inside of SEPTA buses. SEPTA's bus network serves the many neighborhoods of Philadelphia and suburbs. Many residents of Philadelphia, particularly those for whom private vehicles, taxis or other forms of transportation are inaccessible or too expensive, rely on SEPTA buses, trolleys, and subways for daily transportation. The viability of this public transit system is thus of critical importance in a city of over 1.5 million, where more than 25% of residents live below the poverty rate. QuickFacts: Philadelphia City, Pennsylvania, U.S. CENSUS BUREAU https://www.census.gov/quickfacts/philadelphiacitypennsylvania (July 1, 2017)

II. FACTUAL BACKGROUND

A. Initial Proposed CIR Advertisement

Plaintiff, The Center for Investigative Reporting ("CIR") is a nonprofit investigative journalism organization based in Emeryville, California. (10/01/18 Trial Ex. 11.) Its mission notes that "Advances in social justice, solutions to pressing problems, and greater accountability in both the public and private sectors all rely on the availability of credible information. Verifiable, nonpartisan facts empower the public to effect positive change, advancing improved outcomes for a broad range of critical issues." (Id. ) CIR's reporting is published on its news website Reveal (www.revealnews.org), as well as on its national radio show, podcast, video, and live events. (ECF l, "Compl." ¶ 11.)

On February 15, 2018, CIR published the results of a year-long investigation into disparate lending trends throughout the country. (Trial Ex. 4.) The results of this investigation showed that in 61 metropolitan areas, applicants of color were more likely to be denied conventional home purchase mortgages. (Id. ) CIR used the information from this investigation to create a 10-panel comic strip entitled "A Stacked Deck." (Trial Ex. 7.)

In January 2018, a designer from CIR emailed Jon Roche, Vice President at Intersection, the company that manages advertising space for SEPTA, seeking to display the comic on the interior of SEPTA buses. (Trial Ex. 10, Jan. 17, 2018 Email from G. Hongsdusit to J. Roche.) The comic was derived from the following advertisement from Reveal's website:

(Compl. ¶ 16.)

B. SEPTA's Rejection of the Proposed Ad

SEPTA rejected CIR's proposed advertisement, noting that "[t]he proposed ad is an issue ad and cannot be accepted. Disparate lending is a matter of public debate and litigation." Ex. 10, Feb. 22, 2018 Email from J. Roche to H. Young.) Included in the email exchange with CIR was a copy of the SEPTA's 2015 Advertising Standards. (Id. )

Following SEPTA's rejection of the ad, Victoria Baranetsky, Esq., General Counsel for CIR, exchanged letters with SEPTA's General Counsel, Gino Benedetti Esq., regarding the stated reason for the rejection. (See Trial Exs. 16–19.) Benedetti explained that SEPTA adopted the 2015 Advertising Standards after previous litigation involving SEPTA's advertising policies. See Am. Freedom Defense Initiative v. SEPTA, 92 F.Supp.3d 314 (E.D. Pa. 2015) (hereinafter " AFDI") (Goldberg, J.). Benedetti stated that SEPTA rejected CIR's proposed advertisement "under Standards 9(b)(iv)(a) and (b)" of the 2015 Advertising Standards. (Trial Ex. 17.) These standards read:

Prohibited Advertising Content. Advertising is prohibited on transit facilities, products and vehicles if it or its content falls into one or more of the following categories—

(a) Advertisements promoting or opposing a political party, or promoting or opposing the election of any candidate or group of candidates for federal, state, judicial or local government offices are prohibited. In addition, advertisements that are political in nature or contain political messages, including advertisements involving political or judicial figures and/or advertisements involving an issue that is political in nature in that it directly or indirectly implicates the action, inaction, prospective action or policies of a government entity.

(b) Advertisements expressing or advocating an opinion, position or viewpoint on matters of public debate about economic, political, religious, historical or social issues.

(Trial Ex. 22, at ¶¶ II(A)(9)(b)(i)–(ii).)

The second sentence of subparagraph (a) and subparagraph (b) are collectively referred to as the "Challenged Provisions."¹ The 2015 Advertising Standards also include language stating that SEPTA has the "express intention ... that property allocated for advertising be a non-public forum." (Id. at ¶ II(A)(9)(b)(ii).)

C. Revised Advertisement and Second Rejection

Benedetti presented testimony as to his objection to two panels which he stated were of "particular concern,"—one showing "a white hand handing keys and stick of dynamite to a black hand," and one that displayed "African-Americans holding signs protesting ... and a white guy not part of the protest." (Trial Ex. 111, Benedetti Dep. at 156:9–158:3.) CIR proposed a revised advertisement which removed these panels, but SEPTA again rejected that advertisement as being "barred by the same advertising standards as the first." (ECF 32, SEPTA Opp'n to CIR Mot. for Inj. Ex. A, at 1.)

III. PROCEDURAL BACKGROUND

CIR's May 1, 2018 complaint asserts a single cause of action for a violation of the First and Fourteenth Amendments. (Compl. at 12.) The Complaint sought declaratory and injunctive relief, as well as costs and attorneys' fees, and any other relief that the Court deems proper. SEPTA answered the Complaint on June 5, 2018. (ECF 10, Answer.)

On August 17, 2018, CIR moved for a preliminary injunction seeking to enjoin SEPTA from administering its 2015 Advertising Standards. (ECF 20, "Mot. for Prelim. Inj.") SEPTA opposed that motion on August 31, 2018 (ECF 21, SEPTA Opp'n; ECF 23, "SEPTA Am. Opp'n"), and CIR replied in support on September...