Metro Lights, L.L.C. v. City of Los Angeles ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
METRO LIGHTS, L.L.C., a New 
York limited liability company,
Plaintiff-Appellee, No. 07-55179
v.  D.C. No.
CV-04-01037-
CITY OF LOS ANGELES, a California GAF(Ex)
municipal corporation,
Defendant-Appellant.

METRO LIGHTS, L.L.C., a New 
York limited liability company,
No. 07-55207
Plaintiff-Appellant,
v.  D.C. No.
CV-04-01037-GAF
CITY OF LOS ANGELES, a California
OPINION
municipal corporation,
Defendant-Appellee.

Appeal from the United States District Court
for the Central District of California
Gary A. Feess, District Judge, Presiding
Argued and Submitted
June 4, 2008—Pasadena, California
Filed January 6, 2009
Before: David R. Thompson, Diarmuid F. O’Scannlain, and
Richard C. Tallman, Circuit Judges.
Opinion by Judge O’Scannlain
35
38 METRO LIGHTS v. CITY OF LOS ANGELES
COUNSEL
Kenneth T. Fong, Deputy City Attorney for the City of Los
Angeles, California, argued the cause for the defendant-
appellant and cross-appellee and filed the briefs; Rockard
Delgadillo, City Attorney, Claudia McGee Henry, Senior
Assistant City Attorney, and Jeri L. Burge, Assistant City
Attorney, Los Angeles, California, were on the briefs.
Laura W. Brill, Attorney for Amici Curiae CBS-Decaux LLC
and California League of Cities, Irell & Manella LLP, Los
Angeles, California, also argued the cause for the defendant-
appellant and cross-appellee and filed briefs.
Laurence H. Tribe, Attorney, Cambridge, Massachusetts,
argued the cause for the plaintiff-appellee and cross-appellant;
Paul E. Fisher, Attorney, Newport Beach, California, filed the
briefs; Eric V. Rowen, Scott D. Bertzyk, and Karin L. Bohm-
holdt, Attorneys, Greenberg Traurig LLP, Santa Monica, Cal-
ifornia, were on the briefs.
OPINION
O’SCANNLAIN, Circuit Judge:
We must determine whether a city violates the First
Amendment by prohibiting most offsite commercial advertis-
ing while simultaneously contracting with a private party to
permit sale of such advertising at city-owned transit stops.
METRO LIGHTS v. CITY OF LOS ANGELES 39
I
This case lies at the crossroads of two courses of action that
the City of Los Angeles has followed. First, in December
2001, the City entered into a contract with Viacom Decaux
LLC, later to become CBS-Decaux LLC (“CBS”), under
which CBS would install public facilities at city-owned transit
stops across the city in exchange for exclusive advertising
rights on those facilities. Five months later, the City enacted
an ordinance (“the Sign Ordinance”) generally banning offsite
advertising1 but excluding from its reach, among other places,
such transit stops. Los Angeles Municipal Code (“L.A.M.C.”)
§§ 91.101.4, 91.101.5, 91.6205.11.
A
Since 1987, the City has engaged in an almost unbroken
chain of agreements with private contractors in which the City
granted the exclusive right to advertise on transit shelters in
exchange for the installation of such facilities and annual pay-
ments. The first contract provided for the “exclusive right to
display advertising materials on [transit] shelters” in exchange
for the installation of 2,500 shelters, as well as annual pay-
ments of the greater of either a percentage of gross advertising
receipts or a lump sum.
In May 1999, after the first contract had expired, the City
entered into the Norman Bus Bench Franchise agreement,
modeled after its predecessor. The City gave Norman, the
franchisee, the exclusive right to place commercial advertis-
ing on bus stop benches in the City, in exchange for the instal-
lation and maintenance of 6,000 to 8,770 benches, a similar
fee structure, and a commitment to place public service
announcements on them.
1
As discussed in greater detail infra, offsite advertising, or offsite sign-
age, refers to a sign on private property advertising commercial services
or wares purveyed elsewhere than on the premises where the sign is
located.
40 METRO LIGHTS v. CITY OF LOS ANGELES
The City decided to deviate from the model somewhat in
late 2001. It would supersede the Norman Contract by means
of a new form of agreement, which would require a franchisee
to install not only new bus stop benches, but also other public
facilities such as shelters at bus stops, automated self-cleaning
public toilets, trash receptacles, public amenity kiosks, and
news racks. Otherwise, the new contract would be identical to
the Norman Contract. The City initiated an open bidding pro-
cess, stating that its objectives included: (1) the use of one
contractor to establish a single point of accountability; (2) the
significant upgrade of “the appearance and quality of street
furniture on Los Angeles City streets”; and (3) the improve-
ment of the “visual character of the streetscape,” particularly
by “reduc[ing] physical and visual clutter on sidewalks” and
ensuring that “[t]he streets of the City are [not] littered with
various street elements that are situated in unplanned ways . . .
creating general chaotic visual impacts on the street.” While
the new contract provided for exclusive advertising rights on
the new public facilities, it said nothing about municipal regu-
lation of offsite signs.
CBS (then known as Viacom Decaux LLC), was the suc-
cessful bidder and, on December 21, 2001, entered into a
twenty-year contract with the City. Under the terms of that
contract, called the Street Furniture Agreement (“the SFA”),
first Viacom Decaux, and then CBS, agreed to install the new
public facilities and to make annual payments according to a
formula similar to those the City had used in its earlier deals.
The bus stop shelters and other facilities would remain City
property, and the City would retain control over much of the
design of the installed street furniture.
B
On April 30, 2002, the Los Angeles City Council adopted
its Sign Ordinance, which listed six purposes, mostly con-
nected to traffic safety and aesthetics.2 Essentially, the new
2
Those purposes are: (1) ensuring “[t]hat the design, construction,
installation, repair and maintenance of signs will not interfere with traffic
METRO LIGHTS v. CITY OF LOS ANGELES 41
law, which amended L.A.M.C. § 91.6205.11, provided that
“[s]igns are prohibited if they . . . [a]re off-site signs, except
when off-site signs are specifically permitted pursuant to a
variance, legally adopted specific plan, supplemental use dis-
trict or an approved development agreement. This shall also
apply to alterations or enlargements of legally existing off-site
signs.” The L.A.M.C. defines “Off-Site Sign” as “[a] sign
which displays any message directing attention to a business,
product, service, profession, commodity, activity, event, per-
son, institution or any other commercial message, which is
generally conducted, sold, manufactured, produced, offered or
occurs elsewhere than on the premises where such sign is
located.” L.A.M.C. § 91.6203. The prototypical offsite sign,
it seems, is the common billboard, whether freestanding or
affixed to a building or other structure. The exhibits in the
record show, however, that posters set in glass cases that are
then affixed to structures also count as offsite signs.
The ban applies exclusively to commercial signs. Id.3 In
addition, under L.A.M.C. §§ 91.101.4, 91.101.5, the City’s
Building Code (of which the ban is a part) does not apply to
“work located primarily in a public way,” such as public tran-
safety or otherwise endanger public safety;” (2) providing “reasonable
protection to the visual environment while providing adequate conditions
for meeting sign users[’] needs;” (3) reducing “incompatibility between
signs and their surroundings;” (4) providing “the public and sign users”
with “signs having improved legibility, readability and visibility;” (5)
“equalizing the opportunity for messages to be displayed;” and (6) provid-
ing that “adequacy of message opportunity will be available to sign users
without dominating the visual appearance of the area.” L.A.M.C.
§ 91.6201.2
3
Metro Lights argues that “the City completely prohibits off-site signs
regardless of whether they convey commercial or non-commercial
speech,” but our precedent forecloses such claim. See Clear Channel Out-
door Inc. v. City of L.A., 340 F.3d 810, 815 (9th Cir. 2003) (“In effect,
[L.A.M.C. § 91.6203] creates an exemption for noncommercial off-site
signs.”).
42 METRO LIGHTS v. CITY OF LOS ANGELES
sit shelters and other facilities. The Sign Ordinance did not
alter or amend this additional exemption.4
At the time the Sign Ordinance became effective, there
were approximately 18,500 transit stops in the City.
C
Metro Lights, LLC, (“Metro Lights”) owns and operates
outdoor signs in a variety of markets, including Los Angeles.
Around December 2003, the City issued Metro Lights numer-
ous citations for violating the Sign Ordinance by installing
new offsite signs. In response, Metro Lights brought this suit,
seeking declaratory and injunctive relief, as well as damages,
pursuant to 42 U.S.C. § 1983 and 28 U.S.C. §§ 2201 & 2202.
The City moved to dismiss, while Metro Lights moved for a
preliminary injunction to enjoin the City from enforcing the
Sign Ordinance as to twenty specified signs. The district court
granted the City’s motion in part, dismissing several but not
all of the First Amendment claims, but also granted Metro
Lights’s motion for a preliminary injunction.
Metro Lights responded by filing its second amended com-
plaint, which also raised various First Amendment claims
under § 1983. Metro Lights ultimately moved for partial sum-
mary judgment on its First Amendment claims, arguing that
the SFA undermined the City’s purported grounds for enact-
ing the Sign Ordinance. After the district court had held a
hearing but before it had ruled on Metro Lights’s motion, the
City filed its own motion for partial summary judgment on the
same constitutional claims, arguing that the Sign Ordinance
was constitutional in light of the City’s interests in promoting
aesthetics and traffic safety.
4
The City earnestly argues that this is not really an exemption but sim-
ply the non-application of the statute to the public way. We fail to see any
difference sufficient to change our analysis and so we do not opt for one
label over the other.
METRO LIGHTS v. CITY OF LOS ANGELES 43
On August 11, 2006, the district court entered its final order
granting Metro Lights’ motion for partial summary judgment
on the merits of its First Amendment claim. According to the
district court, “[t]he City cannot, on the one hand, preclude
Plaintiff from displaying messages on its off-site signs as a
supposed legitimate exercise of its police powers while, on
the other hand, authorizing its Street Furniture contractor to
erect off-site signs in or near the public rights of way through-
out the City of Los Angeles.”
After this defeat, the City filed a motion for summary judg-
ment asserting that Metro Lights was not entitled to damages.
This time the City met with some success, as the district court
granted the motion and denied Metro Lights an award of dam-
ages.
Judgment was entered on January 23, 2007.5 The City
timely appealed from the grant of summary judgment as to the
First Amendment claims, and Metro Lights timely cross-
appealed from the grant of summary judgment denying its
claim for damages.
II
[1] The First Amendment provides that “Congress shall
make no law . . . abridging the freedom of speech.” It applies
to state and local governments, such as the City of Los Ange-
les, through the Fourteenth Amendment’s Due Process
Clause. Near v. State of Minn., 283 U.S. 697, 707 (1931).
However, “[e]ven a cursory reading” of the Supreme Court’s
opinions in this area of the law “reveals that at times First
Amendment values must yield to other societal interests.”
Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 501
(1981). See also Members of City Council of City of L.A. v.
5
The district court’s order also granted the City’s claim for summary
judgment as to an equal protection claim Metro Lights made, a disposition
the parties have not appealed.
44 METRO LIGHTS v. CITY OF LOS ANGELES
Taxpayers for Vincent, 466 U.S. 789, 804 (1984) (“It has been
clear since [the Supreme] Court’s earliest decisions concern-
ing the freedom of speech that the state may sometimes curtail
speech when necessary to advance a significant and legitimate
state interest.”). Furthermore, “[t]he Constitution . . . accords
a lesser protection to commercial speech than to other consti-
tutionally guaranteed expression. The protection available for
particular commercial expression turns on the nature both of
the expression and of the governmental interests served by its
regulation.” Cent. Hudson Gas & Elec. Corp. v. Pub. Serv.
Comm’n of New York, 447 U.S. 557, 562-63 (1980) (internal
citation omitted).
[2] In Central Hudson, the Supreme Court announced a
four-part test for assessing the constitutionality of a restriction
on commercial speech: (1) if “the communication is neither
misleading nor related to unlawful activity,” then it merits
First Amendment scrutiny as a threshold matter; in order for
the restriction to withstand such scrutiny, (2) “[t]he State must
assert a substantial interest to be achieved by restrictions on
commercial speech;” (3) “the restriction must directly
advance the state interest involved;” and (4) it must not be
“more extensive than is necessary to serve that interest.” Id.
at 564-66; see Clear Channel Outdoor, Inc., 340 F.3d at 815.
No one argues that this test should not apply here;6 since we
are dealing with a regulation on commercial speech, Central
Hudson plainly controls.
6
Metro Lights briefly argues that the district court erred in applying
Central Hudson because the regulation in this case purportedly is content-
based. However, whether or not the City’s regulation is content-based, the
Central Hudson test still applies because of the reduced protection given
to commercial speech. See Ballen v. City of Redmond, 466 F.3d 736, 743-
44 (9th Cir. 2006). Metro Lights cited a number of cases in support of its
argument, but none of them concerned regulation of commercial speech,
and hence did not discuss the applicability of Central Hudson.
METRO LIGHTS v. CITY OF LOS ANGELES 45
A
The parties do not dispute that the offsite advertising at
issue in this case merits First Amendment protection because
it is neither misleading nor related to unlawful activity.7 Nor
is there any serious contention that the City has not asserted
a substantial interest. It is well-established that traffic safety
and aesthetics constitute substantial government interests. See
Metromedia, 453 U.S. 507-08. The L.A.M.C., indeed, stresses
the City’s interests in traffic safety and aesthetics several
times, as did the City’s proposal for bids for the SFA. Central
Hudson requires at most that the City “assert a substantial
interest,” 447 U.S. at 564; such references constitute just such
an assertion. Recognizing the straightforwardness of such
result, the parties have focused their argument, and we there-
fore focus our analysis, upon the third and fourth elements of
the Central Hudson test. That is, we ask whether the City’s
restriction “directly advances” the government interest and
whether the City’s restriction is narrowly tailored to its aim.
B
The Supreme Court has said that “[t]he last two steps of the
Central Hudson analysis basically involve a consideration of
the ‘fit’ between the legislature’s ends and the means chosen
to accomplish those ends.” United States v. Edge Broadcast-
ing Co., 509 U.S. 418, 427-28 (1993) (internal quotation
marks omitted). It has not always been clear how this basic
inquiry differs with respect to the last two steps of the Central
Hudson analysis, and indeed the Supreme Court has observed
7
We note that the district court’s analysis confused this part of the test,
though the court came to the correct conclusion as to this point. It relied
in part on the observation that “[a]dvertising is undisputably a lawful
activity.” That is not the point, since not all advertisements receive First
Amendment protection. Central Hudson asks if the commercial speech is
“related to unlawful activity.” 447 U.S. at 564. Thus, in the context of
advertising, one must ask whether the goods or services the party adver-
tises are illegal.
46 METRO LIGHTS v. CITY OF LOS ANGELES
that the steps of the analysis are “not entirely discrete.”
Greater New Orleans Broadcasting Ass’n, Inc. v. United
States, 527 U.S. 173, 183 (1999). But several important
threads specific to each step bear a closer look.
1
When one asks (referring to Central Hudson’s third ele-
ment) whether a “regulation directly advances the govern-
mental interest asserted[,] . . . . [i]t is readily apparent that this
question cannot be answered by limiting the inquiry to
whether the governmental interest is directly advanced as
applied to a single person or entity.” Edge Broadcasting, 509
U.S. at 427 (internal quotation marks omitted). Thus, we must
look at whether the City’s ban advances its interest in its gen-
eral application, not specifically with respect to Metro Lights.
[3] Another consideration in the direct advancement
inquiry is “underinclusivity,” which Metro Lights has made
the centerpiece of its First Amendment challenge on appeal.
Though it may seem counter-intuitive at first, the Supreme
Court has held that a regulation can be unconstitutional if it
“in effect restricts too little speech because its exemptions dis-
criminate on the basis of the signs’ messages [or because]
[t]hey may diminish the credibility of the government’s ratio-
nale for restricting speech in the first place.” City of Ladue v.
Gilleo, 512 U.S. 43, 50-51, 52 (1994). To put it in the context
of the Central Hudson test, a regulation may have exceptions
that “undermine and counteract” the interest the government
claims it adopted the law to further; such a regulation cannot
“directly and materially advance its aim.”8 Rubin v. Coors
8
It is not always clear to which element of Central Hudson an underin-
clusivity analysis relates. In Valley Broadcasting Co. v. United States, for
instance, we struck down an underinclusive regulation because it did not
directly advance the government’s interest, the requirement of the third
element of Central Hudson. 107 F.3d 1328, 1333-36 (9th Cir. 1997). We
have also had occasion, however, to analyze a regulation for unconstitu-
METRO LIGHTS v. CITY OF LOS ANGELES 47
Brewing Co., 514 U.S. 476, 489 (1995) (striking down a fed-
eral law prohibiting labels on beer products from showing
alcohol content but permitting beer advertisements from con-
taining such information and permitting such information on
wine and spirits).
The Supreme Court has struck down several arrangements
at least in part because they were unconstitutionally underin-
clusive. In one case, an advertising magazine sued the City of
Cincinnati because it prohibited, in the interests of aesthetics
and sidewalk safety, the distribution of commercial handbills
in newsracks but permitted the distribution of non-
commercial handbills. City of Cincinnati v. Discovery Net-
work, Inc., 507 U.S. 410, 424 (1993). The Court held that “the
distinction [between commercial and non-commercial publi-
cations] bears no relationship whatsoever to the particular
interests that the city has asserted.” Id. at 424 (emphasis in
original). The decision made it clear that, absent “some basis
for distinguishing between [non-commercial] newspapers and
commercial handbills that is relevant to an interest asserted by
the city,” Cincinnati could not rely on either the lower value
of commercial speech for First Amendment purposes or the
mere fact that by banning one kind of newsrack it was
advancing its interest because, of course, there would be
fewer newsracks. Id. at 428, 426-27 (internal quotation marks
omitted). In other words, Central Hudson requires a logical
connection between the interest a law limiting commercial
speech advances and the exceptions a law makes to its own
application.
tional underinclusivity under the narrow tailoring requirement of Central
Hudson—the fourth element. See Ballen, 466 F.3d at 742-44. One might
reconcile these cases by noting that in Valley Broadcasting the underinclu-
sivity simply undermined the statute’s ability to advance the government’s
interest, 107 F.3d at 1334, whereas in Ballen it reflected a content-based
discrimination in speech, 466 F.3d at 743-44. By discriminating on the
basis of content, the statute that Ballen struck down was “more extensive
than necessary” to advance the government’s interest. Central Hudson,
447 U.S. at 566.
48 METRO LIGHTS v. CITY OF LOS ANGELES
In Greater New Orleans, a case Metro Lights cites repeat-
edly, the Supreme Court further clarified the meaning of
unconstitutional underinclusivity. Building on prior cases,
especially Rubin, 514 U.S. 476, the Court struck down a fed-
eral law which banned broadcast advertising for most private
casinos but exempted, among others, advertising for Indian
tribal casinos. 527 U.S. at 195-96. The Court found that “there
was little chance that the speech restriction could have
directly and materially advanced its aim”—“minimizing
casino gambling and its social costs”—because its exemptions
defeated its purpose. Id. at 193 (internal quotation marks
omitted). It seems to us crucial to the Court’s conclusion in
Greater New Orleans that forbidding one type of advertising
but not another “would merely channel gamblers to one
casino rather than another.” Id. at 189. Since the government
had failed to convince the Court that tribal casino gambling
was any less problematic than private casino gambling, such
mere redistribution of gamblers was a fatal inefficacy.
[4] Thus, under Supreme Court precedent, regulations are
unconstitutionally underinclusive when they contain excep-
tions that bar one source of a given harm while specifically
exempting another in at least two situations. First, if the
exception “ensures that the [regulation] will fail to achieve
[its] end,” it does not “materially advance its aim.” Rubin, 514
U.S. at 489. This is the lesson of Greater New Orleans: self-
defeating speech restrictions will violate the First Amend-
ment. See Greater New Orleans, 527 U.S. at 190 (“The opera-
tion of [the regulation] . . . is so pierced by exemptions and
inconsistencies that the Government cannot hope to exonerate
it.”). Second, exceptions that make distinctions among differ-
ent kinds of speech must relate to the interest the government
seeks to advance. Discovery Network, 507 U.S. at 418-19(also noting the “minimal impact” the regulation would
achieve as a result of the exception).
2
As to narrow tailoring, the fourth element of the Central
Hudson test requires that the challenged regulation not be
METRO LIGHTS v. CITY OF LOS ANGELES 49
“more extensive than is necessary to serve that interest.” Cen-
tral Hudson, 447 U.S. at 566. The Supreme Court has clari-
fied that this requirement does not demand that the
government use the least restrictive means to further its ends.
Rather,
what [precedent] require[s] is a fit between the legis-
lature’s ends and the means chosen to accomplish
those ends—a fit that is not necessarily perfect, but
reasonable; that represents not necessarily the single
best disposition but one whose scope is in proportion
to the interest served; that employs not necessarily
the least restrictive means but . . . a means narrowly
tailored to achieve the desired objective.
Bd. of Trustees of the State Univ. of N.Y. v. Fox, 492 U.S. 469,
480 (1989) (internal quotation marks and citation omitted).
III
As we now turn to the application of Central Hudson to the
case before us, we are faced with a difficult threshold ques-
tion. For the City argues that a more recent Supreme Court
decision, Metromedia, Inc. v. City of San Diego, 453 U.S.
490, controls the result. In Metromedia, the Supreme Court,
applying Central Hudson, upheld a law similar to the City’s
insofar as it regulated commercial speech.
A
Much like the Sign Ordinance in this case, the City of San
Diego law at issue in Metromedia banned commercial offsite
signs, but not onsite signs.9 Specifically, San Diego prohibited
9
The law also banned noncommercial signage, but the Court distin-
guished the commercial and noncommercial applications of the law for
purposes of its analysis. See Metromedia, 453 U.S. at 506-07. A majority
of the Court upheld the constitutionality of the ban to the extent that it
50 METRO LIGHTS v. CITY OF LOS ANGELES
“[a]ny sign which advertises or otherwise directs attention to
a product, service or activity . . . produced or offered else-
where than on the premises where such sign is located.” 453
U.S. at 493 n.1. In addition to leaving onsite signs untouched,
the ordinance created twelve exemptions for certain offsite
signs, including “government signs” and “signs located at
public bus stops.” Id. at 494, 495 n.3.
The Metromedia Court began by limiting its holding to bill-
board advertising. Id. at 501 (“Each method of communicat-
ing ideas is a law unto itself and that law must reflect the
differing natures, values, abuses and dangers of each method.
We deal here with the law of billboards.” (internal quotation
marks and footnote omitted)). Because we too, deal with a
law regulating billboards, at least in significant part,
Metromedia applies to this case as an initial matter, whether
or not it dictates the final result.
The Court then applied Central Hudson. Id. at 507. San
Diego, much like Los Angeles does now, argued that the ban
furthered its interests in enhancing “traffic safety and the
appearance of the city.” Id. Just as we do in this case, the
Court quickly concluded that the advertising in question was
not illegal or misleading and that the City’s proffered interests
were substantial. Id. Indeed, the Court also dismissed the
fourth Central Hudson element (narrow tailoring), summarily
holding that San Diego’s ordinance was no broader than nec-
essary. Id. at 508 (“If the city has a sufficient basis for believ-
ing that billboards are traffic hazards and are unattractive,
then obviously the most direct and perhaps the only effective
approach to solving the problems they create is to prohibit
only prohibited commercial advertising, but a plurality ultimately over-
turned the ordinance because its reach included “signs carrying noncom-
mercial advertising,” such that the “ordinance reaches too far into the
realm of protected speech.” Id. at 512-521. As noted, we have held that
the Los Angeles Sign Ordinance only prohibits commercial offsite signs.
See Clear Channel Outdoor Inc., 340 F.3d at 815.
METRO LIGHTS v. CITY OF LOS ANGELES 51
them.”). We shall return to narrow tailoring in more detail
below.
“The more serious question,” the Court thought, “concerns
the third of the Central Hudson criteria: Does the ordinance
‘directly advance’ governmental interests in traffic safety and
in the appearance of the city?” Id. In other words, was the
ordinance underinclusive? The Court first recognized “the
accumulated, common-sense judgments of local lawmakers
and of the many reviewing courts that billboards are real and
substantial hazards to traffic safety,” id. at 509, and that “bill-
boards by their very nature, wherever located and however
constructed, can be perceived as an ‘esthetic harm.’ ” Id. at
510.
Most importantly, the Court rejected the argument that San
Diego “denigrates its interest in traffic safety and beauty and
defeats its own case by permitting onsite advertising and other
specified signs.” Id. at 510-11. The Court based its rejection
of this underinclusivity argument on three grounds. First, the
law’s non-application to onsite advertising, the Court noted,
did not alter the direct relation between the city’s goals and
the ban’s application to most offsite advertising. Id. at 511. In
other words, a ban on some offsite signs still advances traffic
safety and aesthetics more than a ban on none.10 Second, the
Court accepted the reasonableness of the supposition that
“offsite advertising, with its periodically changing content,
presents a more acute problem than does onsite advertising.”
Id. Finally, the Court observed, “San Diego has obviously
chosen to value one kind of commercial speech—onsite
advertising—more than another kind of commercial speech—
offsite advertising.” Id. at 512. In a statement of deference
most relevant to this case, the Court insisted that “[t]he ordi-
nance reflects a decision by the city that the former interest,
10
As indicated by the discussion supra, at 47-48, this reason, standing
alone, does not appear sufficient to overcome a First Amendment chal-
lenge. Discovery Network, 507 U.S. at 426-27.
52 METRO LIGHTS v. CITY OF LOS ANGELES
but not the latter, is stronger than the city’s interests in traffic
safety and esthetics. The city has decided that in a limited
instance . . . its interests should yield. We do not reject that
judgment.” Id.Though the deference Metromedia shows may seem to be
in some tension with other underinclusivity cases such as Dis-
covery Network and Greater New Orleans, the Supreme Court
has reaffirmed Metromedia in numerous contexts since the
decision. In Taxpayers for Vincent, the Court approvingly
reviewed Metromedia’s conclusion that cities have a valid
interest in regulating the “visual evil” of billboards. 466 U.S.
at 808 n.27. Taxpayers relied in part on Metromedia’s rejec-
tion of “the argument that a prohibition against the use of
unattractive signs cannot be justified on esthetic grounds if it
fails to apply to all equally unattractive signs wherever they
might be located.” Id. at 810 (emphasis added). The Court
also recognized the continuing vitality of Metromedia in City
of Ladue v. Gilleo, 512 U.S. 43, when it cited the earlier opin-
ion as bedrock for its analysis of a law restricting signs on res-
idential property. Id. at 49.
B
[5] The ordinance considered in Metromedia is virtually
identical to the ordinance before us now—a total ban on off-
site signs, with an exception for shelters at transit stops
among other exceptions, enacted to promote traffic safety and
aesthetics. Furthermore, Metromedia explicitly addressed an
underinclusivity challenge. Nevertheless, Metro Lights argues
that Metromedia does not control this case.
1
Metro Lights argues that we are not bound by Metromedia
for two reasons. First, it points out that “although the upheld
city ordinance [in Metromedia] exempted bus benches, the
topic of bus benches was not substantively discussed or con-
METRO LIGHTS v. CITY OF LOS ANGELES 53
sidered” in the decision. Second, and more importantly, Metro
Lights argues that the SFA, as an exception to the application
of the Sign Ordinance, violates Central Hudson.
a
Metro Lights focuses more on the reasoning than the hold-
ing of Metromedia. For Metro Lights does not dispute, as it
cannot, that Metromedia upheld a ban on offsite commercial
advertising that included an exception for bus stop benches.
Metro Lights insists however, that the exception was insignif-
icant to the Court’s holding, because the bus stop bench and
other exceptions that the Court considered in Metromedia
were de minimis, unlike the public transit exemption that Los
Angeles has carved out of its Sign Ordinance. Indeed, counsel
for Metro Lights at oral argument contended that the bus
bench exception in Metromedia only came to the Supreme
Court’s attention because counsel for Metromedia described
it as so minimal that it could not save San Diego’s law from
being a total prohibition on offsite advertising.
This proffered distinction fails to convince us in light of
what Metromedia actually says. The Court expressly men-
tioned the twelve exceptions to San Diego’s offsite sign ban.
Metromedia, 453 U.S. at 495 n.3 (including in the list of
exceptions “[a]ny sign erected and maintained pursuant to and
in discharge of any governmental function” and “[b]ench
signs located at designated public transit bus stops”).
Metromedia’s reasoning confirms that the Court was well
aware of the exceptions to the law and conscious that, in
approving the San Diego ordinance’s commercial application,
it was approving those exceptions too. Indeed, the Court held
the statute unconstitutional with respect to its noncommercial
application in part because of its exceptions. Id. at 512-16.
Responding to Chief Justice Burger’s dissent, the plurality
commented that “the Chief Justice . . . misunderstands the sig-
nificance of the city’s extensive exceptions to its billboard
prohibition.” Id. at 520. It was, indeed, the Chief Justice, not
54 METRO LIGHTS v. CITY OF LOS ANGELES
the plurality, who suggested “that the favored categories
[were] for some reason de minimis in a constitutional sense.”
Id. at 519. By negative implication, the majority seems to
have taken the opposite position.
It is true that this second portion of the majority’s argument
does not mention the bus stop bench exception by name, but
focuses instead on other exceptions. See id. (mentioning the
exceptions for onsite commercial advertising and temporary
political campaign advertising). But even though it is unclear
whether the bus stop bench exception was foremost in the
mind of the Metromedia Court, that hardly justifies us in
ignoring its presence in the statute which, in relevant part, the
Court upheld. In any event, except for counsel’s reference at
oral argument, Metro Lights provides no support for its argu-
ment that “the bus shelter and other exceptions” considered in
Metromedia were “de minimis,” or that they were signifi-
cantly different in scope than the exemption in this case. Thus
we must conclude that Metromedia is essentially indistin-
guishable from this case insofar as the challenged ordinances,
in their commercial applications, are concerned.
b
Metro Lights also points to the SFA to distinguish this case
from Metromedia. Indeed, its counsel, at oral argument, con-
ceded that Metromedia “probably would” control without the
SFA.11 The district court, too, concluded that the Sign Ordi-
nance, standing alone, would satisfy the Central Hudson test.
According to Metro Lights, however, the advertising permit-
ted under the SFA is equally dangerous—and arguably more
so—than the advertising banned under the Sign Ordinance
11
Counsel also did add that Metromedia would only control “if [the Sign
Ordinance] was a ban on all offsite commercial signs,” that is, without an
exception for public transit facilities. But as we explained supra, this
caveat does not hold water because the law at issue in Metromedia itself
contained such an exception.
METRO LIGHTS v. CITY OF LOS ANGELES 55
and therefore the ordinance cannot “directly advance” the
City’s interests in traffic safety and aesthetics. Metro Lights
essentially contends, in other words, that the SFA so warps
the regulatory scheme of the Sign Ordinance that it makes it
more like the underinclusive statute the Supreme Court struck
down in Greater New Orleans (and similar cases) than the
San Diego ordinance upheld in Metromedia. Although we do
find the SFA a troubling companion to the Sign Ordinance,
we must nonetheless conclude that it does not break the grip
of Metromedia over this case.12
The Court in Metromedia squarely faced an underinclu-
sivity challenge to San Diego’s law and rejected it. It is true
that such challenge focused on the exclusion of onsite signs
rather than the exclusion of signs at public transit stops. How-
ever, the Court did note the exception for “other specified
signs” at the start of its substantive discussion. More impor-
tantly, nothing in its analysis, which exudes deference for a
municipality’s reasonably graduated response to different
aspects of a problem, binds its holding inextricably to the par-
ticular onsite-offsite distinction.
This becomes apparent once one reconsiders the three main
reasons the Court gave for its decision in Metromedia. See id.
at 511-512; see also supra at 51-52. First, just like in
Metromedia, the specific exception in question here does not
12
Incidentally, we note a weakness inherent in Metro Lights’ reliance on
the SFA as a distinction between this case and Metromedia, a distinction
the City never pointed out. For Metromedia teaches that a municipality
may constitutionally bar offsite advertising with an exception for public
transit stops. It would be strange, then, if the prohibition suddenly violated
the Constitution because the municipality made use of such an exception.
But that is what Metro Lights urges us to hold, since the SFA grants CBS
the right to sell advertising where the Sign Ordinance did not apply in the
first place—transit stops. How can it be constitutional to make an excep-
tion to a law, but unconstitutional for the exception to operate in practice?
Metro Lights makes its argument without facing this uncomfortable ques-
tion.
56 METRO LIGHTS v. CITY OF LOS ANGELES
weaken the direct link between the City’s objectives and its
general prohibition of offsite advertising. Metro Lights, as did
the district court, points to a photograph that shows two off-
site signs, one on a bus shelter and one on an adjacent build-
ing. They are the same size and bear the same advertisement.
According to Metro Lights, this literally illustrates how the
SFA undermines the City’s objectives. But in fact it illustrates
quite the opposite. Without the Sign Ordinance, there are two
signs; with it, there would be only one. Thus the Sign Ordi-
nance would halve the clutter on the street shown in the pho-
tograph.
Second, the Metromedia Court accepted that offsite adver-
tising “present[ed] a more acute problem than does onsite
advertising” simply because of the former’s “periodically
changing content.” Metromedia, 453 U.S. at 511. Here, Los
Angeles essentially argues that the proliferation of offsite
advertising by numerous and disparate private parties creates
more distracting ugliness than a single, controlled series of
advertisements on city property over which the City wields
contractual supervision. If periodically changing content was
sufficient for San Diego to disfavor offsite signs in general,
then we must accept that uncontrolled and incoherent prolifer-
ation is sufficient for Los Angeles to disfavor offsite signs
away from transit stops.
[6] Finally, and most importantly, Metromedia’s third ratio-
nale, with its emphasis on deference to legislative judgment,
resounds quite clearly in this case. Los Angeles, just like San
Diego, “has obviously chosen to value one kind of commer-
cial speech”—controlled offsite advertising on public transit
facilities—“more than another kind of commercial speech”—
uncontrolled offsite advertising spread willy-nilly about the
streets. Id. at 512. Just as in Metromedia, “[t]he ordinance
reflects a decision by the city that the former interest, but not
the latter, is stronger than the city’s interests in traffic safety
and esthetics. The city has decided that in a limited instance
. . . its interests should yield.” Id. As the district court noted,
METRO LIGHTS v. CITY OF LOS ANGELES 57
the City has been compensated handsomely for this classically
legislative decision, not only in money but in the installation
of presumably more attractive public transit facilities and in
a veto over the design of advertisements that appear at those
facilities. The Metromedia Court declined to overrule such a
legislative judgment, id., and so do we.
To apply the Metromedia analysis to the Sign Ordinance
before us today is also to understand why Metro Lights’
attempt to cast this case in the mold of Greater New Orleans
and other underinclusivity cases fails. There, the Court found
the ban on broadcast advertising of private casinos to be com-
pletely ineffective with respect to Congress’s goal. Gamblers,
particularly compulsive gamblers, would simply redirect their
business to Indian casinos instead of private casinos. But here
the Sign Ordinance allows the City to put a firm cap on the
quantum of advertising it allows, precisely because, even
when combined with the SFA, the ordinance prevents any
redirection or “channeling” in response to it. There is only
one agreement with the City, giving one company exclusive
advertising rights where the Sign Ordinance already did not
apply. Private offsite advertisers cannot now flood transit
stops with signs the way formerly private casino gamblers
could flood tribal casinos.
Furthermore, unlike, for instance, the distinction between
commercial and noncommercial newsracks in Discovery Net-
work, here there is “some basis for distinguishing” offsite
commercial signage concentrated and controlled at transit
stops and uncontrolled, private, offsite commercial signage
“that is relevant to an interest asserted by the city,” see Dis-
covery Network, 507 U.S. at 428. Metro Lights and the district
court appear to ignore that without a ban, offsite signage gen-
erates precisely the “visual clutter” that motivated both the
ordinance and the SFA. Ultimately, whether one considers the
Sign Ordinance from the perspective of the City’s interest in
traffic safety or its interest in aesthetics, the SFA does not
work at inexorable cross-purposes to it. Although the SFA
58 METRO LIGHTS v. CITY OF LOS ANGELES
permits some advertising, a regime that combines the Sign
Ordinance and the SFA still arrests the uncontrolled prolifera-
tion of signage and thereby goes a long way toward cleaning
up the clutter, which the City believed to be a worthy legisla-
tive goal.
At one point in its briefs, Metro Lights suggests that
Metromedia is inconsistent with cases like Discovery Network
(and, by implication, Greater New Orleans). We take no posi-
tion on whether such inconsistency is real, but we simply note
that we are bound to follow the Supreme Court precedent
most directly on point. See Rodriguez de Quijas v. Shearson/
Am. Express, Inc., 490 U.S. 477, 484 (1989) (“If a precedent
of [the Supreme] Court has direct application in a case, yet
appears to rest on reasons rejected in some other line of deci-
sions, the Court of Appeals should follow the case which
directly controls, leaving to [the Supreme] Court the preroga-
tive of overruling its own decisions.”). For the reasons we
have explained, Metromedia is such a case, and it controls the
outcome.
2
It remains to discuss the applicability of Metromedia’s
analysis of the fourth element of the Central Hudson test, nar-
row tailoring. Metro Lights’ argument holds even less water
here because the narrow tailoring requirement guards against
over-regulation rather than under-regulation, Central Hudson,
447 U.S. at 565. As Metromedia observed: “[i]f the city has
a sufficient basis for believing that billboards are traffic haz-
ards and are unattractive, then obviously the most direct and
perhaps the only effective approach to solving the problems
they create is to prohibit them.” Id. at 508. If a complete pro-
hibition would be sufficiently narrowly tailored, then a partial
one must also be. All the same, we find several arguments
that demand further consideration.
METRO LIGHTS v. CITY OF LOS ANGELES 59
a
[7] First, we note that the district court concluded that the
sign ordinance was not narrowly tailored to the City’s inter-
ests because the City could have “impose[d] the same require-
ments on other private advertisers that it did on [CBS],” such
as by “requir[ing] that any advertisements meet certain speci-
fications . . . to promote the City’s goals with regard to traffic
safety and aesthetics.” The district court failed to account for
the fact that the City’s plan allowed it to supervise a more
concentrated supply of offsite signage, which plausibly con-
tributes to its interest in visual coherence as a part of aesthetic
quality. This plausible explanation would seem to satisfy
Metromedia’s deferential review, even if the district court’s
criticism might have some appeal were we writing on a tabula
rasa.
b
Metro Lights further argues that the Sign Ordinance, when
combined with the SFA, creates a content-based regime rather
than a content-neutral one. According to Metro Lights, this
justifies a more measured analysis of the narrow tailoring
requirement than the summary treatment of Metromedia.
Indeed, Metro Lights urges us to follow our decision in Bal-
len, where we refused to apply Metromedia to a municipal
law prohibiting portable signs but creating several “content-
based exceptions” for various signs, including real estate
signs. 466 F.3d at 743. In our view, the municipality “pro-
tected outdoor signage displayed by the powerful real estate
industry from an Ordinance that unfairly restricts the First
Amendment rights of, among others, the lone bagel shop
owner [who is the plaintiff].” Id. Metro Lights urges us to
interpret the SFA as a similar example of a city playing favor-
ites with whose First Amendment rights it chooses to respect.
But the analogy to Ballen fails. First of all, the Sign Ordi-
nance is not by its terms a content-based regulation, nor is its
60 METRO LIGHTS v. CITY OF LOS ANGELES
non-application to public transit facilities a content-based
exception. As counsel for Metro Lights argued, “[the contents
of] signs on kiosks are defined by who the speaker is, not by
the message.” If this is true, then it supports the City’s posi-
tion. For we believe it a false comparison to argue that the
City favors CBS over other speakers. CBS doesn’t say any-
thing; it only sells space to advertisers who say things. And
Metro Lights has shown no evidence that the City or CBS dis-
criminate among advertisers in the sale of advertising space.
Nor is Metro Lights challenging the bidding process by which
the City chose CBS as its counter-party to the SFA.
Not to be deterred, Metro Lights drew our attention to addi-
tional precedents at oral argument in support of a further vari-
ation on this allegation of unconstitutional favoritism. Upping
the rhetorical ante, Metro Lights accused the City of “auc-
tion[ing] off First Amendment rights” to the highest bidder,
in this case CBS. This is strong, if rather sloganeering, lan-
guage, but after reviewing the case law on which Metro
Lights relies, we believe it to be little more than a canard.
Metro Lights bases its argument on a passage from Nollan
v. California Coastal Commission, 483 U.S. 825 (1987). In
Nollan the Supreme Court found a taking without just com-
pensation, in violation of the Fifth Amendment, where a zon-
ing board conditioned a building permit on the grant of an
easement to the government. See generally id. The Court
began by acknowledging that if the refusal to grant a building
permit was not a taking, then “a permit condition that serves
the same legitimate . . . purpose as a refusal to issue the per-
mit should not be found to be a taking [either].” Id. at 836.
However, “[t]he evident constitutional propriety disappears,”
according to the Court, “if the condition substituted for the
prohibition utterly fails to further the end advanced as the jus-
tification for the prohibition.” Id. at 837. The Court then made
the analogy which counsel for Metro Lights emphasized at
oral argument, namely that without such a connection:
METRO LIGHTS v. CITY OF LOS ANGELES 61
the situation becomes the same as if [state] law for-
bade shouting fire in a crowded theater, but granted
dispensations to those willing to contribute $100 to
the state treasury. While a ban on shouting fire can
be a core exercise of the State’s police power to pro-
tect the public safety, and can thus meet even our
stringent standards for regulation of speech, adding
the unrelated condition alters the purpose to one [i.e.,
raising revenue] which, while it may be legitimate,
is inadequate to sustain the ban. Therefore, even
though, in a sense, requiring a $100 tax contribution
in order to shout fire is a lesser restriction on speech
than an outright ban, it would not pass constitutional
muster.
Id. at 837.
According to Metro Lights, the Sign Ordinance, coupled
with the SFA, amounts to just such an unconstitutional
dispensation-with-taxation system. In reality, however, this is
merely the underinclusivity argument repackaged, which we
reject for the reasons explained supra, at 54-58. Nonetheless,
we take this contention on its own terms, and we find it prem-
ised on a fundamental misreading of Nollan.
[8] What makes the tax on shouting fire in a crowded the-
ater unconstitutional, according to the majority in Nollan, is
that, as a matter of logical necessity, it changes the purpose
justifying the underlying ban on shouting fire—no longer for
public safety but now for raising revenue. And raising reve-
nue by taxation, though by itself perfectly legitimate state
action, does not allow a state selectively to prohibit constitu-
tionally protected conduct. But the SFA does not have the
same effect as the hypothetical dispensation-tax; it does not
make the Sign Ordinance about raising revenue instead of
about safety and aesthetics. It is not as if CBS, by paying the
City money and building handsome street furniture, is
allowed to sell offsite advertisements wherever it wants, like
62 METRO LIGHTS v. CITY OF LOS ANGELES
the man who pays for the privilege of shouting fire in a
crowded theater. Moreover, and more importantly, even if
there were no SFA but only the Sign Ordinance, the City
would still exercise proprietary control over who gets to
advertise on its transit facilities. Indeed, the City did just that
with the two contracts that preceded the SFA. Such control is
not an assertion of police power which the City relinquishes
at a price, like the hypothetical ban on shouting fire, but a
simple attribute of the City’s ownership of the transit facili-
ties. What the SFA really does is harmonize the City’s interest
as a proprietor of discrete pieces of property with its police
power interest, manifested in the Sign Ordinance, in goals
such as traffic safety and aesthetics.
It appears to us, therefore, that the slogan Metro Lights has
advanced, that “First Amendment rights are not for sale,” sim-
ply misses the point. Certainly the government cannot silence
one speaker but not another because the latter has paid a tax,
even though it could constitutionally silence both. But that
doesn’t mean the City cannot silence speakers in general but
permit them to bid for the right to speak on City-owned land,
assuming that the speakers on City-owned land do not under-
mine the goal of the City’s general prohibition. As we have
explained, the City has not done that in this case because the
SFA does not “ensure[ ] that the [Sign Ordinance] will fail to
achieve [its] end,” or so undermine it that it cannot “materi-
ally advance its aim.” Rubin, 514 U.S. at 489.13
13
We are aware of other variants of the charge that the City has shown
illegal favoritism. Metro Lights has implied several times that the City’s
overall scheme makes the City a monopolist in the supply of commercial
advertising space. Even the district court found the SFA suspect because
of its proximity in time to the enactment of the Sign Ordinance and its
broad scope relative to the City’s previous advertising agreements. But the
First Amendment does not prohibit municipal monopolies. As long as the
City can show with plausibility sufficient to merit the deference of
Metromedia that the Sign Ordinance, even coupled with the SFA,
advances the City’s interests and is narrowly tailored, then the City’s pol-
icy survives First Amendment scrutiny.
METRO LIGHTS v. CITY OF LOS ANGELES 63
IV
[9] Having considered the four elements of the Central
Hudson test in light of Metromedia, we conclude that the SFA
does not render the Sign Ordinance unconstitutional under the
First Amendment. Indeed, we believe that Metromedia com-
pels such conclusion. Though Metro Lights cross-appealed
the district court’s grant of summary judgment for the City on
the issue of damages, such issue is now moot because the City
is entitled to summary judgment in its favor on the merits.
V
[10] For the foregoing reasons, we reverse the district
court’s grant of summary judgment for Metro Lights and its
denial of summary judgment for the City with respect to
Metro Lights’ First Amendment claims and remand with
instructions to dismiss. We dismiss as moot Metro Lights’
cross-appeal of the district court’s grant of summary judgment
for the City with respect to damages.14
REVERSED.
14
We also dismiss as moot the various requests that the Court take judi-
cial notice.