Cincinnati v. Fourth Natl. Realty, L.L.C. , 2023 Ohio 1012 ( 2023 )

[Cite as Cincinnati v. Fourth Natl. Realty, L.L.C., 2023-Ohio-1012.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
CITY OF CINCINNATI, : APPEAL NO. C-220209
TRIAL NO. A-1503539
Plaintiff-Appellee,
:
vs.
:
FOURTH NATIONAL REALTY, LLC, O P I N I O N.
Defendant-Appellant. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: March 29, 2023
Emily Smart Woerner, City Solicitor, Marion E. Haynes, III, Deputy Solicitor, and
Mark R. Manning, Assistant City Solicitor, for Plaintiff-Appellee,
Holzapfel Law, LLC, and Eric C. Holzapfel, for Defendant-Appellant.
OHIO FIRST DISTRICT COURT OF APPEALS
BOCK, Judge.
{¶1} Defendant-appellant Fourth National Realty, LLC, appeals the trial
court’s grant of summary judgment in favor of plaintiff-appellee City of Cincinnati
(“the City”). Fourth National argues that the trial court abused its discretion when it
denied Fourth National leave to amend and supplement its answer, and that the City’s
off-site and outdoor-advertising sign prohibitions violate its free-speech rights. For
the following reasons, we affirm the trial court’s judgment.
I. Facts and Procedure
{¶2} This is the third time this case is before us on appeal. See Cincinnati v.
Fourth Natl. Realty, LLC, 2017-Ohio-1523, 88 N.E.3d 1278 (1st Dist.) (“Fourth I”),
and Cincinnati v. Fourth Natl. Realty, LLC, 1st Dist. Hamilton Nos. C-180156 and C-
180174, 2019-Ohio-1868 (“Fourth II”). The dispute concerns an advertisement
(“sign”) affixed to the exterior of a building owned by Fourth National in the City’s
“Downtown Development” (“DD”) zoning district:
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{¶3} Fourth National hung the sign without securing the necessary permit
and zoning variance. Fourth II at ¶ 4. The sign ran afoul of the Cincinnati Zoning Code
(“Zoning Code”) as an off-site sign prohibited by Zoning Code 1427-17. Id. It was an
off-site sign under former Zoning Code 1427-03-O because it “direct[ed] attention to
a business, commodity, service, person or entertainment conducted, sold, or offered
elsewhere than on the premises where the sign is maintained.” Id. at ¶ 6. In addition,
it contravened the Zoning Code’s prohibition on outdoor-advertising signs in the DD
zoning district. Id. at ¶ 4. The sign fell under former Cincinnati Municipal Code
(“Municipal Code”) 895-1-O’s definition of outdoor-advertising signs because it was
“affixed to a structure, visible from any street, highway, or other public way or park,
displaying a message or promoting goods, products, services, events, activities, ideas,
opinions, and candidates for public office.” Id.
{¶4} The City filed for injunctive relief against Fourth National, requesting a
preliminary and permanent injunction ordering Fourth National to remove the sign.
In response, Fourth National raised free-speech, equal-protection, and tort
counterclaims. Both parties moved for summary judgment. The trial court granted the
City’s motion for summary judgment, ordered the removal of the sign, and dismissed
Fourth National’s counterclaims. On appeal, we reversed the trial court’s judgment
and remanded the case, holding that Fourth National had standing to raise both as-
applied and facial challenges under the First Amendment to the United States
Constitution and Section 11, Article I, of the Ohio Constitution. Fourth I at ¶ 47.
{¶5} Meanwhile, the City passed Ordinance No. 372-2017, which amended
parts of the Zoning Code, including the definition of outdoor-advertising signs to “have
the same meaning as ‘Off-Site-Sign.’ ” Fourth II, 1st Dist. Hamilton Nos. C-180156 and
C-180174, 2019-Ohio-1868, at ¶ 15. And the ordinance narrowed the definition of off-
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OHIO FIRST DISTRICT COURT OF APPEALS
site signs under former Zoning Code 1427-03-O as follows:
Commercial Sign (i) that proposes or promotes a commercial
transaction to be conducted on a premises other than the premises on
which the sign is located; or (ii) directs attention to a good, product,
commodity, business, service, event, or other object that serves as the
basis of a commercial transaction that is not conducted on the same
premises as the premises on which the sign is located.
{¶6} In the trial court, Fourth National unsuccessfully moved to add
additional counterclaims. Again, the parties filed competing summary-judgment
motions. Relevant here, the trial court ruled that the 2017 ordinance “changed the
legal effect of the City’s sign code” and mooted Fourth National’s free-speech claims.1
We affirmed, in part, agreeing that the 2017 ordinance mooted Fourth National’s facial
challenge. Fourth II at ¶ 37. But we reversed the trial court’s ruling that Fourth
National’s as-applied challenge was moot, explaining:
Fourth National’s proposed sign would indisputably advertise products
not sold on the premises and would qualify as an off-site sign both
before and after the enactment of Ordinance No. 372-2017.
Consequently, the sign remained in violation of [Zoning Code] 1411-39
and 1427-17. The restriction as applied to Fourth National remained
unaltered by the ordinance and prohibited off-site signs while allowing
on-site signs, which, according to Fourth National is an impermissible
1In addition, the trial court rejected the City’s jurisdictional challenge based on Fourth National’s
alleged failure to serve the Attorney General in violation of R.C. 2721.12. The City appealed that
decision. See Fourth II at ¶ 17. We rejected the City’s claim that the trial court lacked subject-matter
jurisdiction. Id. at ¶ 52. The Ohio Supreme Court affirmed and remanded the case to the trial court
to consider Fourth National’s free-speech claim. City of Cincinnati v. Fourth Natl. Realty, L.L.C.,
163 Ohio St.3d 409, 2020-Ohio-6802, 170 N.E.3d 832, ¶ 2.
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OHIO FIRST DISTRICT COURT OF APPEALS
content-based prohibition. We therefore hold that Fourth National’s as-
applied challenge was not rendered moot by Ordinance No. 372-2017,
and that the trial court erred in determining otherwise.
Fourth II at ¶ 42. We remanded the case to the trial court.
{¶7} In November 2020, the City passed Ordinance No. 280-2020 (“2020
Ordinance”), which uncoupled the meanings of outdoor-advertising signs and off-site
signs under the Zoning Code. Now an outdoor-advertising sign is either:
(i) a sign for which its owner or operator receives, or is entitled to
receive, rent or other consideration from another person or entity in
exchange for the use of the sign, including for the placement of a
message on the sign; or (ii) a sign that is offered or made available by its
owner or operator for use by another person or entity, including for the
placement of a message on the sign, in exchange for rent or other
consideration.
{¶8} Fourth National attempted to reassert its four original counterclaims in
an April 2021 motion for leave to file an amended and supplemental counterclaim.
The trial court denied that motion. In September 2021, the parties filed competing
summary-judgment motions. Relevant here, Fourth National cited the definition of
outdoor-advertising signs, as amended by the 2020 Ordinance.
{¶9} Then in October 2021, Fourth National filed a motion for leave to amend
its answer and counterclaims, citing the amendments made by the 2020 Ordinance.
Fourth National again tried to revive its facial challenge to the Zoning Code, equal-
protection claim, and damages claim under 42 U.S.C. 1983. Fourth National also
alleged a broad claim that the Zoning Code’s restrictions constituted a taking in
violation of the Fifth Amendment to the United States Constitution. The trial court
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OHIO FIRST DISTRICT COURT OF APPEALS
denied Fourth National’s motion for leave to amend its answer and counterclaims.
Months later, the trial court again granted summary judgment for the City.
{¶10} Fourth National appeals. In two assignments of error, Fourth National
asks us to reverse the trial court’s grant of summary judgment and denial of its motion
for leave to amend its answer and counterclaims.
II. Law and Analysis
Fourth National’s Motion For Leave Was Untimely
{¶11} In its first assignment of error, Fourth National argues that the trial
court abused its discretion when it denied Fourth National’s third motion for leave to
file an amended answer and counterclaims. Fourth National argues that amending its
answer and counterclaims under Civ.R. 15(A) was proper because of the change to the
Zoning Code and its timely request.
{¶12} We review the denial of a motion for leave to amend a pleading for an
abuse of discretion. See Meehan v. Mardis, 1st Dist. Hamilton No. C-210399, 2022-
Ohio-1379, ¶ 4, citing Turner v. Cent. Local School Dist., 85 Ohio St.3d 95, 99, 706
N.E.2d 1261 (1999). A trial court abuses its discretion when its decision is
unreasonable, arbitrary, or unconscionable. AAAA Ents. v. River Place Community
Urban Redevelopment Corp., 50 Ohio St.3d 157, 161, 553 N.E.2d 597 (1990).
{¶13} Relevant here, Civ.R. 15(A) provides that “a party may amend its
pleading only with the opposing party’s written consent or the court’s leave. The court
shall freely give leave when justice so requires.” While the rule advocates for granting
leave when justice so requires, “motions to amend pleadings pursuant to Civ.R. 15(A)
should be refused if there is a showing of bad faith, undue delay, or undue prejudice
to the opposing party.” Meehan at ¶ 5, quoting Turner at 99.
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{¶14} Fourth National claims its motion for leave was timely. The City
disagrees. Ordinarily, delay is generally not enough to deny leave to amend without a
showing of prejudice from the delay. But as we have explained, “ ‘where a motion for
leave to file an amended complaint is not timely tendered and there is no apparent
reason to justify the delay, a trial court does not abuse its discretion in denying a
proposed amendment.’ ” Meehan at ¶ 6, quoting Franciscan Communities, Inc. v.
Rice, 8th Dist. Cuyahoga No. 109889, 2021-Ohio-1729, ¶ 37.
{¶15} The City passed the 2020 Ordinance on November 12, 2020. Fourth
National cited the amended definition in its September 2021 motion for summary
judgment. The City moved for summary judgment three days later. And roughly one
month later, Fourth National filed its third motion for leave to amend, attempting to
revive its dismissed claims and add its takings claim. While Fourth National argues
that the City passed the 2020 Ordinance in a clandestine manner, the record shows
that the 2020 Ordinance was published in the City’s bulletin in November 2020.
{¶16} With no apparent reason to justify this delay, the trial court did not
abuse its discretion when it denied Fourth National’s motion. See Franciscan
Communities at ¶ 40 (“ ‘where information relied upon in seeking leave to amend
should have been known to a plaintiff earlier, a plaintiff’s delay in seeking leave to
amend can be considered unjustified,’ and a trial court can reasonably deny a motion
for leave to amend on that basis.”). Thus, we overrule the first assignment of error.
The City’s Commercial-Speech Restrictions Are Constitutional
{¶17} In its second assignment of error, Fourth National challenges the trial
court’s grant of summary judgment in favor of the City. Fourth National maintains
that the Zoning Code restrictions violate its free-speech rights guaranteed by the Ohio
and United States Constitutions.
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶18} We review a trial court’s grant of summary judgment de novo. Collett v.
Sharkey, 1st Dist. Hamilton No. C-200446, 2021-Ohio-2823, ¶ 8. “Summary
judgment is appropriately granted when there exists no genuine issue of material fact,
the party moving for summary judgment is entitled to judgment as a matter of law,
and the evidence, when viewed in favor of the nonmoving party, permits only one
reasonable conclusion that is adverse to that party.” Id.{¶19} Zoning Code 1427-17 restricts the zoning districts where an off-site sign
may be displayed. It prohibits off-site signs in the DD zoning district. Under Zoning
Code 1427-03-O, off-site signs are commercial signs that promote (1) off-premises
commercial transactions or (2) off-site goods, products, commodities, services, events,
businesses, or other objects. And Zoning Code 1411-39(a)’s restriction of outdoor
advertisements applies to signs displayed by a property owner in exchange for
consideration. Municipal Code 891-1-O.
{¶20} Fourth National acknowledges that regulations distinguishing off-site
signs from on-site signs have been upheld as constitutional under the First
Amendment to the United States Constitution. See City of Austin v. Reagan Natl.
Advertising of Austin, LLC, ___U.S.___, 142 S.Ct. 1464, 1469, 212 L.Ed.2d 418(2022) (recalling that “federal, state, and local governments have long distinguished
between signs (such as billboards) that promote ideas, products, or services located
elsewhere and those that promote or identify things located onsite.”). Instead, Fourth
National attempts to distinguish federal precedent upholding these distinctions under
the United States Constitution from state-court opinions interpreting Section 11,
Article I of the Ohio Constitution, which provides that “no law shall be passed to
restrain or abridge the liberty of speech.” To this end, Fourth National relies heavily
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on the Ohio Supreme Court’s decision in Norton Outdoor Advertising, Inc. v.
Arlington Hts., 69 Ohio St.2d 539, 542, 433 N.E.2d 198 (1982).
{¶21} We are not persuaded. The Ohio Supreme Court has repeatedly stated
that “the free speech guarantees accorded by the Ohio Constitution are no broader
than the First Amendment, and that the First Amendment is the proper basis for the
interpretation of Section 11, Article I of the Ohio Constitution.” Eastwood Mall v.
Slanco, 68 Ohio St.3d 221, 222, 626 N.E.2d 59 (1994) (collecting cases).
{¶22} At oral argument, Fourth National agreed that the restrictions target
commercial speech, which receives lesser protection than other constitutionally-
protected speech. See City of Austin at 1469; see also Cent. Hudson Gas & Elec. Corp.
v. Pub. Serv. Comm., 447 U.S. 557, 562-563, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980).
Indeed, commercial speech may be subjected to “ ‘modes of regulation that might be
impermissible in the realm of noncommercial expression.’ ” Bd. of Trustees v. Fox,
492 U.S. 469, 477, 109 S.Ct. 3028, 106 L.Ed.2d 388 (1989), quoting Ohralik v. Ohio
State Bar Assn., 436 U.S. 447, 456, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978). And it is well-
settled that commercial-speech restrictions receive a lesser form of scrutiny, and
courts “distinguish commercial speech from speech at the First Amendment’s core.”
Florida Bar v. Went for It, 515 U.S. 618, 623, 115 S.Ct. 2371, 132 L.Ed.2d 541 (1995).
{¶23} We review the commercial-speech regulations in this case under the test
set forth in Cent. Hudson. When the government attempts to regulate non-misleading
commercial speech related to a lawful activity, the government must assert a
substantial interest achieved by the regulation, the regulation must directly advance
the state interest, and it must be no more extensive than necessary to serve that
interest. Cent. Hudson at 564-566. The parties do not dispute that the City is
regulating nonmisleading speech relating to lawful activity. And “it is far too late to
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OHIO FIRST DISTRICT COURT OF APPEALS
contend” that public safety and aesthetics are not substantial government interests.
Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 508, 101 S.Ct. 2882, 69 L.Ed.2d
800 (1981) (collecting cases). Rather, the central issue in this case is whether the
speech restrictions directly advance the City’s interest in public safety and aesthetics,
and whether the restrictions are no more extensive than necessary.
{¶24} The City’s commercial-speech restrictions must directly advance its
stated interests in aesthetics and public safety. In Cent. Hudson, the Court considered
whether the state’s interest was directly advanced by the restriction in question,
looking for an “immediate connection” or “direct link” between the restriction and
interest. Cent. Hudson at 569. The City must show, “that the harms it recites are real
and that its restriction will in fact alleviate them to a material degree.” Went For It at
626, quoting Rubin v. Coors Brewing Co., 514 U.S. 476, 487, 115 S.Ct. 1585, 131
L.Ed.2d 532 (1995), quoting Edenfield v. Fane, 507 U.S. 761, 767, 113 S.Ct. 1792, 123
L.Ed.2d 543 (1993). In its motion for summary judgment, the City relied on expert
reports from several of its employees, including a traffic engineer, a senior city
planner, and a zoning administrator.
{¶25} Beginning with public safety, we hold that the zoning provisions directly
advance the City’s interest. The reports established that advertisements for off-site
businesses or products distract drivers without providing any navigational assistance
to drivers. Most buildings in the DD zoning district “are built to the sidewalk and are
several stories high,” making signs such as Fourth National’s difficult to read while
driving. The lack of a wayfinding element in off-site and outdoor-advertising signs,
and potential for driver distraction, increase the risk of a severe injury because of the
speed limits in the DD zoning district and significant pedestrian activity. Infact, Fourth
National’s sign is within roughly 111 feet of a crosswalk. While on-site signs were
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acknowledged in the reports as “unavoidable distractions,” prohibiting additional off-
site signs temper the amount of driver distractions, to some degree.
{¶26} In addition, we hold that the zoning provisions directly advance the
City’s interest in aesthetics. The reports established that off-site and outdoor-
advertising signs, in an attempt to compete with on-site signs, are indiscriminately
placed, obscure architectural features, spoil natural views and scenic ways, and
“generally overwhelm[] the urban environment.” The DD zoning district includes a
large historic district featuring “the architectural features of the style and time period.”
That same report concluded that the restrictions “preserve the historic and aesthetic
character of our residential areas and neighborhood business districts.” It is
incontrovertible that “billboards [and signs] by their very nature, wherever located
and however constructed, can be perceived as an ‘esthetic harm.’ ” Metromedia, 453
U.S. at 510, 101 S.Ct. 2882, 69 L.Ed.2d 800. Absent an impermissible purpose,
minimizing the presence of these structures typically advance the goal of preserving
aesthetics. Id. In other words, there is a direct link between the sign restrictions and
the City’s interest in preserving aesthetics.
{¶27} While Fourth National contends that the existence of on-site signs
undercuts the City’s reliance on its stated interests, this line of argument has been
repeatedly rejected by federal and state courts. See, e.g., Suburban Lodges of Am., Inc.
v. City of Columbus Graphics Comm., 145 Ohio App.3d 6, 15, 761 N.E.2d 1060 (10th
Dist.2000) (citing Metromedia to reject an argument that under-inclusivity was fatal
to a commercial-speech restriction and refusing to question the city’s “common-sense
conclusion that limiting the text of advertising signs generally reduces visual clutter
along the highway and reduces the possibility of traffic accidents.”). And while Fourth
National offered an expert report that attempted to challenge the findings made by the
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City’s experts, her conclusions cannot overcome the “common-sense conclusion” that
limiting the proliferation of signs in a pedestrian-dense, historic neighborhood
advances the City’s interests in public safety and aesthetics.
{¶28} Finally, the regulations must be no more extensive than necessary to
advance aesthetics and public safety. The constitutional guarantees of free speech do
not require a perfect fit, but one that is reasonable. See Fox, 492 U.S. at 480, 109 S.Ct.
3028, 106 L.Ed.2d 388. On one hand, the City must show that the regulation is
“carefully calculated,” not that the regulation is the “least restrictive” way to achieve
its interests. Id. On the other hand, “if there are numerous and obvious less-
burdensome alternatives to the restriction on commercial speech, that is certainly a
relevant consideration in determining whether the ‘fit’ between ends and means is
reasonable.” Cincinnati v. Discovery Network, 507 U.S. 410, 417, 113 S.Ct. 1505, 123
L.Ed.2d 99 (1993), fn. 13. The City’s expert reports established that the off-site and
outdoor-advertising signs were permitted in other parts of Cincinnati, in areas with
“less multiple simultaneous driver distractions, where the scale of the signs correlated
to the speed of traffic and where generally residential uses were not disrupted by the
scale, lighting, and messages.” Like those in Metromedia and Suburban Lodges, the
restrictions do not constitute a complete ban on off-site and outdoor-advertising signs.
Therefore, the Zoning Code’s commercial-speech restrictions of off-site and outdoor-
advertising signs are reasonable, and are calculated to advance the City’s interests.
{¶29} In sum, the City’s sign restrictions in the Zoning Code directly advance
the City’s substantial interests in public safety and aesthetics, and the restrictions are
no more extensive than necessary. Fourth National’s second assignment of error is
overruled.
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III. Conclusion
{¶30} For the reasons stated, we overrule Fourth National’s two assignments
of error and affirm the trial court’s judgment.
Judgment affirmed.
CROUSE, P.J., and WINKLER, J., concur.
Please note:
The court has recorded its entry on the date of the release of this opinion.
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