South Fla. Equitable Fund Llc v. City of Miami

770 F.Supp.2d 1269

SOUTH FLORIDA EQUITABLE FUND LLC, Plaintiff,

v.CITY OF MIAMI, FLORIDA, Defendant.

Case No. 10–21032–CIV.

United States District Court, S.D. Florida.

March 14, 2011.

Jamie Zysk Isani, Thomas Richard Julin, Hunton & Williams LLP, Miami, FL, for Plaintiff.Warren Bittner, Miami City Attorney's Office, Miami, FL, for Defendant.

ORDER ON MOTIONS FOR SUMMARY JUDGMENT

URSULA UNGARO, District Judge.

THIS CAUSE came before the Court upon Plaintiff South Florida Equitable Fund, LLC's and Defendant City of Miami's cross motions for summary judgment. (D.E. 13 & 22). The Motions are now ripe for disposition.

THE COURT has considered the Motion and pertinent portions of the record and is otherwise fully advised in the premises.

I. Procedural Background

In its Complaint, Plaintiff South Florida Equitable Fund, LLC (“SFEF”) alleges that it builds, operates, and maintains outdoor signs and billboards in South Florida, including Miami. (Complaint, D.E. 1, ¶ 2).¹ It seeks declaratory and injunctive relief, and compensatory damages pursuant to 42 U.S.C. § 1983 for the City's allegedly unconstitutional application of Zoning Ordinance 11000 (“Old Zoning Ordinance”), which, until June 2010 regulated, inter alia, outdoor advertising signs. (D.E. 1 at 12, A–H). The Court has permitted CBS Outdoor, Inc. (“CBS”) and Clear Channel, Inc. (“Clear Channel”), two outdoor advertising companies that lease property for the construction and operation of outdoor signs and billboards, to intervene. (D.E. 50). SFEF and the City have moved for summary judgment. The intervenors have not moved for summary judgment but have filed memoranda supporting the City's position.

II. Factual Background

The following relevant facts are undisputed unless stated otherwise.A. The Old Zoning Ordinance

On April 1, 2010, at the time that SFEF filed this lawsuit, the Old Zoning Ordinance regulated all signs, including “outdoor advertising signs.” (D.E. 20–1). Section 10.2 defined an “outdoor advertising sign” as a sign “used in the conduct of the outdoor advertising business.” (D.E. 20–1, Ex. 1). Pursuant to section 10.2, “outdoor advertising business” was

The business of receiving or paying money for displaying signs where sign copy does not pertain to the use of the property, a product sold, or the sale or lease of the property on which the sign is displayed and which does not identify the place of business as purveyor of the merchandise or services advertised on the sign.

( Id.). Section 10.4.5 of the Old Zoning Ordinance provided that “no new freestanding ‘Outdoor advertising signs,’... shall be allowed.” Section 10.4.5 also provided,

Notwithstanding any provisions of this Zoning Ordinance to the contrary, permits for outdoor advertising signs may be issued pursuant to a Settlement Agreement authorized by Resolution passed by the City Commission, in conjunction with the settlement of related litigation, which expressly authorizes issuance of such permits for said outdoor advertising signs, and then only under the terms and conditions of settlement agreements that result in a net reduction in the party to the settlement's number of outdoor advertising signs located in the City of Miami.

(D.E. 1 ¶ 17; D.E. 8 ¶ 17). SFEF filed this lawsuit to challenge the constitutionality of the Old Zoning Ordinance after the City allegedly rejected the settlement agreement it proposed pursuant to section 10.4.5. ( See D.E. 1).B. The City's Zoning Ordinance 13181 (the “New Zoning Ordinance”)

On June 10, 2010, two months after SFEF filed this lawsuit, the City Commission enacted Zoning Ordinance 13181. (D.E. 20–1, Ex. A). The Preamble of the New Zoning Ordinance provides that it “supercedes and controls over provisions of any other law, ordinance, rule, regulation of the City,” including the challenged provisions of Article 10 of the Old Zoning Ordinance. (D.E. 22–5, at 1). The following are other pertinent portions of the Preamble:

WHEREAS, because of the visual bright and deleterious effects of its neighborhoods resulting from billboards, the City of Miami (“City”) has a substantial and significant government interest in reducing the number of billboards within the City, especially within its neighborhoods; and....

WHEREAS the City also has a substantial and significant government interest in promoting public safety and welfare by providing reasonable protection to the visual environment and by ensuring that billboards do not interfere with traffic safety or otherwise endanger public safety;

WHEREAS the Florida Legislature, by enactment of Section 70.20, Florida Statutes (2002), has empowered the City, for the purpose of accomplishing public goals, to enter into relocation and reconstruction agreements ....; and

WHEREAS it is hereby declared public goals of the City to reduce the number of billboards within its neighborhoods, and to prevent the proliferation of illegally constructed billboards throughout the City.”

( Id.). Section 62–702 of the New Zoning Ordinance provides that “no new freestanding ‘Billboards'... shall be permitted anywhere within the territorial boundaries of the City.” ( Id. at § 62–702). Section 62–703 states that “[p]ursuant to the authority granted to the City by the Florida Legislature under section 70.20 of the Florida Statutes ² ... unexpired permits for Billboards may be amended pursuant to a relocation and reconstruction agreement....” ( Id. at § 62–703). Section 62–704 sets forth fourteen requirements that a relocation and reconstruction agreement must meet and provides that the “City Manager ... shall negotiate the terms of any relocation and reconstruction agreement ...” ( Id. at § 62–704).C. Clear Channel's settlement agreement and CBS's lawsuit under the Old Zoning Ordinance

In 2001, Clear Channel and CBS began to challenge the City's Old Zoning Ordinance after they were subject to code enforcement proceedings, in which the City issued Notices of Violation to outdoor advertising sign owners with illegal and nonconforming signs. (D.E. 1 ¶¶ 10, 12; D.E. 8 ¶¶ 10, 12). ³ In July 2001 and February 2002, National/CBS filed two lawsuits in federal court against the City, challenging the City's refusal to grant it permits for new signs and the constitutionality of the Old Zoning Ordinance. (D.E. 17–1 ¶ 19). Carter and Clear Channel did not file suit, opting instead to seek compromise and resolution with the City as it continued to defend the code enforcement actions on state and municipal law grounds. ( Id. at ¶ 20). In July 2004, the City and Clear Channel agreed upon a settlement agreement in which the City granted Clear Channel new billboard permits in exchange for the removal of certain of its existing billboards and paying certain fees. (D.E. 1–1, Ex. B).

D. CBS's settlement agreement with the City under the Old Zoning Ordinance

On May 1, 2008, while CBS was in the process of negotiating a settlement with the City, it entered into a Letter of Understanding (LOU) with Outlook Media of South Florida (“Outlook”). The LOU provided, inter alia, that if Outlook assisted CBS in securing a settlement agreement with the City for seven “amended permits” as defined in the settlement agreement, and acquired four additional “commercially viable” sites for outdoor advertising signs, CBS would pay Outlook a development fee and certain rents for each of the four sites and assign Outlook the rights to one of its “amended permits” under the settlement agreement with the city. (D.E. 17–3). On July 18, 2008, CBS entered into a settlement agreement with the City that granted CBS new billboard permits in exchange for removing certain existing billboards and paying certain fees. (D.E. 1–1, Ex. C).⁴ CBS admits that Outlook assisted it in finalizing the settlement agreement with the City but disputes that Outlook produced four “commercially viable” sites. (D.E. 17–1 ¶ 78). Ultimately, CBS did not assign Outlook the rights to any of the billboard permits it obtained through its settlement with the City. ( Id. at 86).

E. Outlook becomes SFEF and proposes its own settlement agreement under the Old Zoning Ordinance

In October 2008, the principals of Outlook, Harkley Thorton and Santiago Echemendia, formed SFEF for the purpose of obtaining their own settlement agreement ⁵ with the City, but before they could do that, they needed to obtain billboards. (D.E. 17–7 ¶ 99; D.E. 20–9, Ex. 2). On or about January 8, 2009, SFEF contracted to purchase the “Boardworks Sign” from the Boardworks Outdoor Advertising Company. (D.E. 1 ¶ 32). In February 2010, SFEF acquired the rights to the “Hampton Inn Sign,” located at 299 S.W. 17th Road, Miami, Florida. (D.E. 1 ¶ 31). In March 23, 2010, SFEF acquired the title to the Boardworks Sign, located at 555 N.W. 79th Street, Miami, Florida. (D.E. 1 ¶¶ 32–33).

On February 12, 2010, before SFEF had closed on the Boardworks Sign, the City issued a Notice of Violation to the owner of the property where the Boardworks Sign is located, seeking removal of the sign on the ground that it was erected without a billboard permit. (D.E. 20–4). Shortly after the City issued its Notice of Violation, Echemendia met with the City Manager at the time, Pedro Hernandez, and other city employees and proposed an agreement to settle the dispute regarding the Boardworks Sign. (D.E. 38–6 ¶ 11). During the week of February 22, 2010, Carlos Migoya replaced Pedro Hernandez as City Manager. ( Id. at ¶ 12). Shortly thereafter, Echemendia asked Migoya to place the proposed settlement agreement on the City agenda for the March 25, 2010 City Commission meeting, but Migoya deferred Echemendia's request to the City Attorney's Office. ( Id. at ¶ 15).

On February 25, 2010, Echemendia submitted to the City Attorney via email a settlement proposal providing that SFEF would remove the Boardworks Sign and surrender the Hampton Inn sign, in exchange for the City granting SFEF a permit to construct a new outdoor advertising sign. (D.E. 17–28). The email...