This case was last updated from Los Angeles County Superior Courts on 07/01/2019 at 16:48:28 (UTC).

SKY POSTERS INC VS CALIFORNIA DEPARTMENT OF TRANSPORTATION

Case Summary

On 04/30/2018 a Other case was filed by SKY POSTERS INC against CALIFORNIA DEPARTMENT OF TRANSPORTATION in the jurisdiction of Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****3417

  • Filing Date:

    04/30/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Other

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

JAMES C. CHALFANT

 

Party Details

Petitioner and Plaintiff

SKY POSTERS INC.

Defendant and Respondent

DOES 1 TO 25

Interested Party

CALIFORNIA DEPARTMENT OF TRANSPORTATION

 

Court Documents

Minute Order

6/6/2019: Minute Order

Ex Parte Application

6/6/2019: Ex Parte Application

Notice

4/26/2019: Notice

Notice of Lodging

2/14/2019: Notice of Lodging

Minute Order

9/6/2018: Minute Order

PROOF OF SERVICE SUMMONS

9/6/2018: PROOF OF SERVICE SUMMONS

RESPONDENT CALIFORNIA DEPARTMENT OF TRANSPORTATION'S NOTICE OF INTENT TO FILE A RESPONSIVE PLEADING

9/14/2018: RESPONDENT CALIFORNIA DEPARTMENT OF TRANSPORTATION'S NOTICE OF INTENT TO FILE A RESPONSIVE PLEADING

DEPARTMENT OF TRANSPORTATION'S CROSS-PETITION TO ENFORCE ADMINISTRATIVE ORDER AGAINST SKY POSTERS, INC.; VERIFICATION; ETC

9/18/2018: DEPARTMENT OF TRANSPORTATION'S CROSS-PETITION TO ENFORCE ADMINISTRATIVE ORDER AGAINST SKY POSTERS, INC.; VERIFICATION; ETC

Minute Order

9/20/2018: Minute Order

Minute Order

1/8/2019: Minute Order

Minute Order

2/7/2019: Minute Order

Minute Order

11/20/2018: Minute Order

Summons on Cross Complaint

9/18/2018: Summons on Cross Complaint

Minute Order

8/9/2018: Minute Order

NOTICE OF TRIAL SETTING CONFERENCE & ATTACHED ORDERS THEREON

5/2/2018: NOTICE OF TRIAL SETTING CONFERENCE & ATTACHED ORDERS THEREON

SUMMONS

4/30/2018: SUMMONS

PETITION FOR WRIT OF ADMINISTRATIVE MANDAMUS

4/30/2018: PETITION FOR WRIT OF ADMINISTRATIVE MANDAMUS

5 More Documents Available

 

Docket Entries

  • 06/06/2019
  • at 08:30 AM in Department 85, James C. Chalfant, Presiding; Hearing on Ex Parte Application (to Continue Hearing on Petition) - Held - Motion Granted

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  • 06/06/2019
  • Ex Parte Application (to Continue Hearing On Petition for Writ of Mandate); Filed by Sky Posters, Inc. (Plaintiff)

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  • 06/06/2019
  • Minute Order ( (Hearing on Ex Parte Application to Continue Hearing on Petition)); Filed by Clerk

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  • 04/26/2019
  • Notice (Respondent California Department Of Transportations Notice Of No Receipt Of Petitioners Opening Brief); Filed by California Department of Transportation (Real Party in Interest)

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  • 02/14/2019
  • Notice of Lodging (RESPONDENT CALIFORNIA DEPARTMENT OF TRANSPORTATION'S CERTIFICATION AND LODGING OF THE RECORD IN THIS MATTER); Filed by California Department of Transportation (Real Party in Interest)

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  • 02/07/2019
  • at 09:30 AM in Department 85, James C. Chalfant, Presiding; Trial Setting Conference - Held

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  • 02/07/2019
  • Minute Order ( (Trial Setting Conference)); Filed by Clerk

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  • 01/08/2019
  • at 1:30 PM in Department 85, James C. Chalfant, Presiding; Trial Setting Conference - Held - Continued

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  • 01/08/2019
  • Minute Order ((Trial Setting Conference)); Filed by Clerk

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  • 11/20/2018
  • at 1:30 PM in Department 85, James C. Chalfant, Presiding; Trial Setting Conference - Held - Continued

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13 More Docket Entries
  • 09/06/2018
  • Minute order entered: 2018-09-06 00:00:00; Filed by Clerk

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  • 08/09/2018
  • at 09:30 AM in Department 85; Trial Setting Conference (Trial Setting Conference; Court makes order) -

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  • 08/09/2018
  • Minute Order

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  • 08/09/2018
  • Minute order entered: 2018-08-09 00:00:00; Filed by Clerk

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  • 05/02/2018
  • Notice of Trial Setting Conference and Attached Orders Thereon; Filed by Clerk

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  • 05/02/2018
  • Notice of Trial Setting Conference and Attached Orders Thereon; Filed by Clerk

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  • 05/02/2018
  • NOTICE OF TRIAL SETTING CONFERENCE & ATTACHED ORDERS THEREON

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  • 04/30/2018
  • SUMMONS

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  • 04/30/2018
  • Petition; Filed by null

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  • 04/30/2018
  • PETITION FOR WRIT OF ADMINISTRATIVE MANDAMUS

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Tentative Rulings

Case Number: BS173417    Hearing Date: October 24, 2019    Dept: 85

Sky Posters, Inc. v. California Department of Transportation, et al., BS173417

Tentative decision on writ of mandate: granted in part

Petitioner Sky Posters, Inc. (“Sky Posters”) petitions the court for a writ of mandate directing Respondents California Department of Transportation (“Caltrans”) to set aside its decision that Sky Posters illegally placed two advertising displays on the walls of the building at 9800 La Cienega Boulevard, Inglewood (“Property”).

The court has read and considered the moving papers, opposition, and reply,[1] and renders the following tentative decision.

A. Statement of the Case

1. Petition

Petitioner Sky Posters commenced this proceeding on April 30, 2018, alleging a cause of action for administrative mandamus. The Petition alleges in pertinent part as follows.

In August 2010, Sky Posters applied to Caltrans for redevelopment display permits for the Property pursuant to section 5273 of the California Outdoor Advertising Act (“Act”). This application was approved, and Caltrans issued three redevelopment display permits to Sky Posters: (1) RD07-0097, (2) RD07-0095, and (3) RD07-009.

The redevelopment display permits authorized Sky Posters to lawfully erect advertising displays advertising businesses in the redevelopment area for goods services or products produced, manufactured or sold at a business in the redevelopment area as long as the name and address of the redevelopment area is identified in copy on the sign at a maximum of 100 square feet. If these conditions and the other conditions set forth in section 5273 of the Act are met, the display would be considered on-premises.

Caltrans issued two violation notices to Sky Posters on April 28, 2014 for placing and maintaining two advertising displays on the Property in alleged violation of the Act. Violation No. V07-0285 was issued for a sign advertising the movie "X-Men" and Violation No. V07-0286 was issued for a sign advertising "Nissan."

After a hearing, the administrative hearing officer concluded that the signs were illegal off-premise displays, affirmed the two violation notices, and imposed a penalty of $10,300 for failure to timely remove the Nissan sign within 30 days of issuance of the notice of violation and $129,868.42 in disgorgement of revenues received for the X-Men sign despite the sign being removed within 30 days of notice.

In addition, the hearing officer ordered disgorgement in revenues received for 20 signs erected by Sky Posters after the X-Men and Nissan signs were removed, despite the fact that the subsequent signs were not the included in the violation notices. The total disgorgement imposed by the hearing officer for the 20 subsequent signs was $1,275,772.58.

Sky Posters alleges that he Nissan and X-Men signs were redevelopment displays lawfully erected pursuant to the redevelopment display permits issued by Caltrans, Caltrans did not have authority to award disgorgement for the X-Men sign because that display was removed within 30 days of issuance of the violation notice, and Caltrans did not have jurisdiction to award disgorgement on the 20 displays erected after removal of the X-Men and Nissan signs because the subsequent displays were never part of the violation notices issued by Caltrans and were never part of the underlying administrative proceeding.

2. Cross-Petition

Caltrans filed a Cross-Petition on September 18, 2019 seeking enforcement of the Decision against Sky Posters. The court struck the Cross-Petition on September 20, 2018.

B. Standard of Review

CCP section 1094.5 is the administrative mandamus provision which structures the procedure for judicial review of adjudicatory decisions rendered by administrative agencies. Topanga Ass’n for a Scenic Community v. County of Los Angeles, (“Topanga”) (1974) 11 Cal.3d 506, 514-15. The issue for mandamus is whether the agency proceeded without jurisdiction, did not provide a fair trial, or committed a prejudicial abuse of discretion. An abuse of discretion is established if the agency did not proceed in the manner required by law, the decision is not supported by the findings, or the findings are not supported by the evidence. CCP §1094.5(b).

Questions of law are reviewed de novo. Duncan v. Dep’t of Pers. Admin., (2000) 77 Cal.App.4th 1166, 1174. This includes the question of whether the petitioner received a fair hearing at the administrative level, because the determination of procedural fairness amounts to a question of law. Gonzalez v. Santa Clara Cty. Dep’t of Soc. Servs., (2014) 223 Cal.App.4th 72, 96. The remedy for the denial of fair hearing is a new hearing before the agency. Clark v. City of Hermosa Beach, (1996) 48 Cal.App.4th 1152, 1175.

CCP section 1094.5 does not in its face specify which cases are subject to independent review, leaving that issue to the courts. Fukuda v. City of Angels, (1999) 20 Cal.4th 805, 811. In cases reviewing decisions which affect a vested, fundamental right the trial court exercises independent judgment on the evidence. Bixby v. Pierno, (1971) 4 Cal.3d 130, 143. See CCP §1094.5(c). In all other cases, the substantial evidence standard applies. “Substantial evidence” is relevant evidence that a reasonable mind might accept as adequate to support a conclusion (California Youth Authority v. State Personnel Board, (“California Youth Authority”) (2002) 104 Cal.App.4th 575, 585), or evidence of ponderable legal significance, which is reasonable in nature, credible and of solid value. Mohilef v. Janovici, (1996) 51 Cal.App.4th 267, 305, n.28.

Sky Posters argues that the court’s independent judgment is the standard of review because Caltrans is attempting to revoke a fundamental vested right. Pet. Op. Br. at 5-6. Sky Posters cites Goat Hill Tavern v. City of Costa Mesa, (“Goat Hill”) (1992) 6 Ca1.App.4th 1519, 1529-30, which it contends is directly on point. In Goat Hill, the court reasoned that the rights affected by refusal to renew a tavern’s permit were sufficiently vested and important to qualify for the independent judgment standard. Id

Caltrans disagrees, noting that its decision did not put Sky Posters out of business, as was the case in Goat Hill. Nor does it preclude Sky Posters from advertising redevelopment zone businesses in Inglewood pursuant to Bus. & Prof. Code section 5273. Opp. at 4. Caltrans also notes that Sky Posters’ primary business is selling posters, not advertising. Opp. at 4.

In determining whether Sky Posters has a fundamental vested right subject to independent review, the court must weigh together the importance of the right involved and the degree to which it is possessed. Hardesty v. Sacramento Metropolitan Air Quality Management District, (“Hardesty’) 202 Cal.App.4th 404, 414 (citing Frink v. Prod, (1982) 31 Cal.3d 166, 177) (abatement of mining operation until appellant obtained permit upheld under substantial evidence standard). The search for “vestedness” and the search for “fundamentalness” are one and the same. Id. The ultimate question is whether the affected right is sufficiently significant that its abridgement by a body lacking judicial power should be reviewed independently. Id.

A right is fundamental on either of two bases: (1) the character and quality of its economic aspect and (2) the character and quality of its human aspect. Benetatos v. City of Los Angeles, (“Benetatos”) (2015) 235 Cal.App.4th 1270, 1280 (citations omitted) (substantial evidence applied to city’s imposition of conditions on continued operation of burger stand to abate a nuisance). In weighing the fundamental issue, the courts do not alone weigh the economic aspect, but also its effect in human terms and its importance to the individual in the life situation. Id. (citing Bixby v. Pierno, (1971) 4 Cal.3d 130, 144). This task is done on a case-by-case basis. Id. The substantial evidence standard of review has been applied to administrative decisions that restrict a property owner’s return, increase the cost of doing business, or reduce profits because such decisions impact mere economic interests. Id. at 1281 (citations omitted). On the other hand, the independent judgment standard of review is applied to decisions that will drive a property owner out of business or significantly injure the owner’s ability to function. Ibid. Where a case involves pure economic interests, courts are far less likely to find a fundamental vested right. Ibid. (citation omitted).

The ultimate question in each case is whether the affected right is deemed to be of sufficient significance to preclude its extinction or abridgement by a body lacking judicial power. Interstate Brands v. Unemployment Ins. Appeals Bd., (1980) 26 Cal.3d 770, 779, n.5. In analyzing the fundamental nature of a right, less sensitivity is provided to the preservation of purely economic privileges. Id. at 779, n.6. A property owner has neither a vested right to develop their property in a particular fashion, nor a vested right to a permit free of conditions. Paoli v. California Coastal Com., (1986) 178 Cal.App.3d 544, 550-51 (reviewing Commission’s decision imposing an open space easement condition on CDP).

Sky Posters’ economic interest in the permits to erect three redevelopment displays is insufficient to create a vested fundamental right. Sky Posters’ primary business is in selling posters, not advertising, and Caltrans’ decision would not drive it out of business or significantly injure its ability to function. The substantial evidence standard of review applies to the factual determinations of Caltrans’ decision. It is worth noting, however, that the parties do not dispute any of the facts, only the legal conclusions. The court reviews questions of law de novo. Duncan v. Department of Personnel Administration, (2000) 77 Cal.App.4th 1166, 1174.

The agency’s decision must be based on the evidence presented at the hearing. Board of Medical Quality Assurance v. Superior Court, (1977) 73 Cal.App.3d 860, 862. An agency is presumed to have regularly performed its official duties (Ev. Code §664), and the petitioner therefore has the burden of proof. Steele v. Los Angeles County Civil Service Commission, (1958) 166 Cal.App.2d 129, 137. “[T]he burden of proof falls upon the party attacking the administrative decision to demonstrate wherein the proceedings were unfair, in excess of jurisdiction or showed prejudicial abuse of discretion. Afford v. Pierno, (1972) 27 Cal.App.3d 682, 691.

Sky Posters has the burden of demonstrating that Caltrans’ findings are not supported by substantial evidence in light of the whole record. Young v. Gannon, (2002) 97 Cal.App.4th 209, 225. The trial court considers all evidence in the administrative record, including evidence that detracts from evidence supporting the agency’s decision. California Youth Authority, supra, 104 Cal.App.4th at 585.

C. Governing Law

1. The Outdoor Advertising Act

The Act, codified at Bus. & Prof.[2] Code section 5200-5486, governs the placing of advertising displays within view of highways located in unincorporated areas and the placing of advertising displays within 660 feet from the edge of the right of way of, and the copy of which is visible from, interstate highways or primary highways, including the portions of such highways located in incorporated areas. Bus. & Prof. Code §5271.

The term “advertising display” refers to “advertising structures and to signs.” §5202. An “advertising structure” means a structure of any kind or character used for outdoor advertising purposes, upon which any poster, bill, printing, painting or other advertisement of any kind may be placed for advertising purposes. §5203. A “sign” refers to any card, cloth, paper, metal, painted or wooden sign of any character placed for outdoor purposes on any building, structure, or thing, other than an advertising structure. §5221.

No person shall place any advertising display within areas affected by the Act without first having secured a written permit. §5350.

No person shall engage in or carry on the business of outdoor advertising without first having paid the licensee fee. §5301.

No advertising display may be placed or maintained on property adjacent to a 1000 foot or greater section of a freeway that has been landscaped with an average depth of 20 feet or includes trees if the advertising display is designed to be viewed primarily by persons traveling on the freeway. §5440.

The Act requires proof of consent of the owner of the property or location where the advertising display is placed. §§ 5460, 5354.

The Act does not apply to any advertising display used exclusively “[t]o advertise the business conducted, services rendered, or goods produced or sold upon the property on which the advertising display is placed if the display is on the same side of the highway and within 1,000 feet of the point on the property or within 1,000 feet of the entrance to the site at which the business is conducted, services are rendered, or goods are produced or sold. §5272(a)(4).

Notwithstanding the dissolution of a redevelopment agency, an advertising display that advertises the businesses and activities developed within the boundaries of, and as a part of, a redevelopment project, may be considered an on-premises display if it meets all the following conditions: (1) the advertising display is located within the boundary limits of the project; (2) the advertising display was constructed on or before January 1, 2012; and (3) the advertising display does not cause the reduction of federal highway funds. §5273(a)(1)-(3). Such an advertising display may remain until January 2, 2023. §5273(b).

“The applicable city, county, or city and county shall be responsible for ensuring that an advertising display is consistent with this section and provides a public benefit. This provision shall not be construed to preclude any enforcement authority of the department under this chapter.” §5273(c).

“The applicable city, county, or city and county shall annually, by December 31, certify to the department that the advertising copy[3] of the advertising display is advertising businesses or activities operating within the boundaries of the redevelopment project area and that at least 10 percent of the advertising copy, up to a maximum of 100 square feet, is used to display the address or location or locations of the business or activity, or to identify the route to the business or activity from the nearest freeway offramp. The department may independently review compliance with this certification. An advertising display subject to this section shall be removed if it is in violation of this subdivision more than three times within a 10-year period and the violation has not been corrected within 30 days of the date of mailing of a violation notice to the owner or operator by the department.” §5273(d).

All advertising displays placed in violation of the Act are public nuisances. §5461. A violation of the Act is a misdemeanor. §5464.

If a display is placed or maintained without a valid, unrevoked, and unexpired permit, and is not removed within thirty days of written notice from Caltrans, the penalty shall be $10,000 plus $100 for each day the display is placed or maintained after Caltrans sends written notice. §5485(b)(2). In addition to the penalties set forth in subdivision (b), the gross revenues from the unauthorized advertising display shall be disgorged. Bus. & Prof. Code §5485(c).

On-premises advertising displays are not regulated by the Act. On-premises advertising includes any structure, sign, or display that is intended or used “to advertise the business conducted, services available or rendered, or the goods produced, sold, or available for sale, upon the property where the advertising display has been lawfully erected.” §5490(b)(2).

2. California Code of Regulations

When Caltrans determines that a permanently placed display violates the Act or the regulations, the owner of that display is given a written violation notice by certified mail that the display is in violation and subject to removal, and the owner is liable for all statutory penalties and, if the display is removed by the Department, actual costs of removal. 4 CCR §2441(a). The owner has 30 days from the date of the certified mailing to correct the violation, remove the display, or appeal to the director. 4 CCR §2441(e).

A new violation notice is not issued if the display is sold, transferred, or the copy is changed. When purchasing a display, the new display owner is responsible for determining the legal status of the display by contacting the Office of Outdoor Advertising. 4 CCR §2441(d).

D. Statement of Facts[4]

1. Background

In July 2010, Sky Posters entered into an Agreement with the City of Inglewood (the “City”) for advertising on two sides of the Property. AR 1378. On April 28, 2014, Caltrans issued two separate violation notices, V07-0285 and V07-0286, to Sky Posters for signs on the Property, one for a sign advertising a Nissan Sentra (AR 8-9) and one for a sign advertising an “X-Men” movie. AR 1-2. Other than the advertising copy in question, the two notices were identical, alleging the following violations: (1) failure to procure a permit in violation of section 5350, (2) failure to pay a license fee in violation of section 5301, (3) lack of property owner’s consent in violation of sections 5354 and 5460, (4) advertising displays next to a landscaped freeway in violation of section 5440, (5) advertising outside of redevelopment zone in violation of section 5273, and (6) placement of advertisement less than 500 feet from another advertisement in violation of section 5408. AR 1-2, 8-9.

Sky Posters timely appealed the violation notices and requested a hearing. AR 1734. In response, Caltrans filed separate Accusations for each violation. AR 14, 52. The Accusations noted that the subject advertisements had not been removed and that Caltrans sought a determination confirming (a) Caltrans’ recommendation that the displays be removed, (b) awarding all penalties allowed, including disgorgement of all revenues generated by the illegal displays allowed under section 5482(c) and (c) ordering Sky Posters to pay Caltrans’ attorney fees, costs of investigation, and the costs of removal of the displays found in violation, and (d) such other and further action as may be just and proper. AR 15-16, 53-54.

Sky Posters filed a notice of defense to each of the Accusations. AR 105-11, 122-18.

2. The ALJ’s Proposed Decision

The actions were consolidated for hearing and the hearing was held on July 6-10, 2015. AR 1733-34. Sky Posters filed a motion in limine to exclude photographs or other evidence of signs erected after the X-Men and Nissan signs were removed. AR 225-29. The ALJ denied the motion. The ALJ issued her decision on November 30, 2015. AR 1733, 1752. The ALJ found in pertinent part as follows.[5]

The X-Men display was removed on May 24, 2014 and the Nissan display was removed on May 31, 2014. AR 1737.

Sky Posters’ position is that the Act is not applicable because the two signs advertise businesses and activities located within a redevelopment zone and are legal redevelopment displays under section 5273. AR 1734-35. Sky Posters alternatively contends that the signs are on-premise displays exempt from the Act pursuant to section 5272. AR 1735.

The signs each had a tagline that included the address of an Inglewood business, with the Nissan display reading “Nissan Available @ Carmax” and the X-Men display reading “Tickets Available @ Inglewood Tickets.” AR 1735. The signs also included a tagline that read “Sky Posters…Creating & Selling Commercial Pop Culture Posters…Available Inside,” and Sky Posters leased office space inside the Property. AR 1735.

Pursuant to its Agreement with the City, Sky Posters was required to obtain prior approval from the City before placing any graphic wall sign on the Property and any change in the advertising content, graphics, size, or location require an additional prior review and approval. AR 1736. Sky Posters obtained building permits from the City for the two signs. AR 1736.

The City’s Senior Economic Community Development Manager, Christopher Jackson (“Jackson”), approved the Nissan display, concluding that the display was an advertisement for a Carmax business within the redevelopment zone. AR 1737. Jackson noted that the Nissan display included a statement that Nissans were available at Carmax and showed Carmax’s address. AR 1737. Jackson concluded that the X-Men display also advertised a business within the redevelopment zone after finding that Inglewood Tickets sold movie tickets through a kiosk within the zone and because the display stated that tickets for the X-Men movie were available at Inglewood Tickets. AR 1737.

Michael McNeilly (“McNeilly”), owner of Sky Posters, believed that the two signs were proper redevelopment displays because they included the taglines showing the name and address of businesses located in the redevelopment zone as well as Sky Posters’ own business inside the Property. AR 1738-39.

The City’s determination that the signs were redevelopment displays is not binding on Caltrans and the authority granted to the City under the Act does not preclude Caltrans from exercising its enforcement authority. AR 1740. Caltrans’ inspector, Raj Champaneri (“Champaneri”), issued the notices of violation based on his conclusion that the signs are off-premise displays and advertise a business, goods, or services that are not located upon the property where the display is placed. AR 1741. Champaneri’s investigation did not find a Nissan dealership or a movie theater that showed first-run movies within the City’s redevelopment zone. AR 1741.

Champaneri accordingly concluded that Sky Posters did not have the requisite permit to display the signs as it only had Caltrans’ approval for redevelopment displays, not off-premise displays. AR 1741. Sky Posters therefore placed the signs in violation of section 5350 of the Act. AR 1741.

Champaneri also found no evidence that Sky Posters paid the license fee required to engage in the business of outdoor advertising in violation of section 5301. AR 1741. Thus, Caltrans established that Sky Posters placed the signs in volation of section 5301. AR 1741.

Sky Posters further violated sections 5354 and 5460 because it lacked written proof of the Property owner’s consent to the signs. AR 1742. Although Sky Posters provided a May 5, 2014 letter of the Property owner’s consent, the letter does not establish the owner’s consent as of April 28, 2014 when the violation notices were issued. AR 1742.

The section of the freeway adjacent to the signs is designated as a landscaped freeway by Caltrans and advertising displays require a permit pursuant to section 5440 from Caltrans for the placement of off-premise displays. AR 1742. Sky Posters did not have a permit and therefore violated section 5440. AR 1742.

Sky Posters also violated the spacing requirements of Caltrans’ guidelines in violation of section 5408. AR 1742.

The evidence does not support Sky Posters’ contention that the signs constitute redevelopment displays that advertise businesses and activities within the City’s redevelopment zone. AR 1739. The taglines on the signs are insufficient to qualify the Advertisements as redevelopment displays within the meaning of section 5273 because they are visually dwarfed by the more prominent and conspicuous images and text for the X-Men movie and the Nissan. AR 1739, 1748. The signs are clearly advertising a first-run X-Men movie and a model-year Nissan and cannot be reasonably construed as advertising for Inglewood Tickets or Carmax. AR 1739, 1748. The signs also cannot be reasonably construed as advertising Sky Posters’ business inside the Property. AR 1739, 1748. Sky Posters’ contention is further undermined because neither Inglewood Tickets nor Carmax paid for the signs; there was no agreement between Sky Posters and either business for display of the signs. AR 1739-40. Instead, the signs were paid for by a movie studio or its media agent (the X-Men display) and by Nissan or its media agent (Nissan display). AR 1739.

Subsequent to removal of the signs, Sky Posters placed advertising displays for 19 movies and one Chrysler vehicle on the Property at the same location. AR 1743. The subsequent displays could not be reasonably construed as redevelopment displays for the same reasons as stated for the two signs. AR 1744, 1749. Sky Posters did not have permits from Caltrans for the subsequent displays as required by section 5350 of the Act, and therefore violated the Act by placing and maintaining them. AR 1743-44.

Sky Posters’ placement of the subsequent displays on the Property was a continuation of the violations cited for the signs. AR 1748-49. The subsequent displays were in all respects substantially similar to the Advertisements and Caltrans was not required to issue a new violation notice for each of the subsequent displays, which were merely a change in the advertising copy from the Advertisements. AR 1749.

Cause does not exist to assess the penalty under section 5485(b)(2) for the X-Men display, as Sky Posters had until May 28, 2014 to remove the display without penalty and it removed the X-Men display on May 24, 2014. AR 1749. Cause exists to assess the penalty as to the Nissan display, as Sky Posters had until May 28, 2014 to remove the display without penalty and failed to remove it until May 31, 2014. AR 179. A penalty of $10,000 plus $300 (for the three days the display was maintained beyond the 30-day period from the notice of violation) may be assessed against Sky Posters for the Nissan display. AR 1749-50. Cause does not exist to assess the penalty against Sky Posters for the subsequent displays, as insufficient evidence was presented to establish the number of days that each of the subsequent displays was maintained on the Property. AR 1750.

Cause exists pursuant to section 5485(c) to order Sky Posters to disgorge revenue it received from the X-Men display and the subsequent displays, but not the Nissan display. AR 1750. The evidence was insufficient to establish the amount of gross revenue Sky Posters received from the Nissan display. AR 1743, 1750. The evidence established the gross revenue from the X-Men display was $129,868.42 and the gross revenue from the subsequent displays was $2,126,287.63. AR 1743, 1750. The evidence also established that Sky Posters paid the City 40% of the revenue it received from the displays. AR 1743, 1750. The ALJ ordered Sky Posters to disgorge the entirety of its $129,868.42 revenue from the X-Men display and 60% of its revenue from the subsequent displays ($1,275,772.58). AR 1750. Caltrans presented no evidence of its investigation and enforcement costs, and the ALJ denied those remedies. AR 1751.

On January 21, 2016, Caltrans, through its Chief of Traffic Operations, adopted the ALJ’s decision. AR 1732. On February 28, 2016, Sky Posters petitioned for reconsideration of the decision. AR 1755-59. On April 18, 2016, Caltrans granted the petition for reconsideration and ultimately heard the matter on September 26, 2017. AR 1837-38, 1865. On February 27, 2018, after the hearing and the filing of post-hearing briefs, Caltrans issued its decision affirming the ALJ’s decision. AR 1977.

E. Analysis

Petitioner Sky Posters asserts that the decision was contrary to law, both because the signs qualified as redevelopment displays under section 5273 of the Act and because the award of civil penalties and disgorgement was unlawful.

1. Were the Signs Redevelopment Displays?

a. Sky Posters’ Position

Sky Posters argues that the ALJ erred in finding that the signs were off-premise displays because she invented her own standards for the determination instead of than properly using the factors set forth in section 5273.

Sky Posters notes that the Act regulates the placement of off-premise displays adjacent to highways and freeways in the State of California to bring the state into compliance with the federal Highway Beautification Act (23 U.S.C. §131), which requires that states provide effective control of outdoor advertising along federal-aid and primary highways. See §§ 5251, 5405(e). The Act only regulates only off-premise displays, and such signs require a Caltrans permit (§5350), are allowed only in business districts (§5404), are prohibited along bonus segments (§5406), penalty segments (§5407), and landscaped freeways (§5440), cannot be placed within 500 feet of another display (§5408(d)), and are limited to a maximum size of 1,200 square feet, a maximum height of 25 feet, and a maximum length of 60 feet (§5408(a)). In contrast, on-premise signs, which "advertise the business conducted, services rendered, or goods produced or sold upon the property on which the advertising display is placed", are not regulated by the Act. §5272(a)(4). Pet. Op. Br. at 6-7.

Sky Posters adds that section 5273 makes redevelopment displays a sub-category of the unregulated on-site signs. “Redevelopment displays” are signs located in a redevelopment area and used to advertise the businesses and activities developed within the redevelopment project area. 215273(a). They require approval by the local redevelopment agency and an RDA permit from Cal-Trans. Once approved, the redevelopment display may advertise any business in the redevelopment zone. Pet. Op. Br. at 7.

Redevelopment agencies were abolished by the Legislature effective February 1, 2012. Pursuant to legislation effective in 2013, section 5273 was amended to allow redevelopment displays to continue to exist until January 1, 2023. According to Sky Posters, the 2013 legislation significantly amended section 5273.

First, the amendment required that "at least ten percent of the advertising copy, up to a maximum of 100 square feet, [be] used to display the address or location or locations of the businesses, or activity or to identify the route to the business or activity from the nearest freeway offramp." §5273(d). Pet. Op. Br. at 7.

Second, the amendment delegated the responsibility for ensuring that redevelopment display comply with section 5273 to the city or county where the display is located. §5273(c). To fulfill at responsibility, the local jurisdiction is required to certify annually to Cal-Trans that the advertising copy "is advertising businesses or activities operating within the boundaries of the redevelopment project area and that at least 10% of the advertising copy, up to a maximum of 100 square feet, is used to display the address or location [of the business or activity in the redevelopment area]." §5273(d). See also §5273(e) (the city or county "shall have primary responsibility for ensuring that the display remains in conformance with all provisions of this section."). Pet. Op. Br. at 7-8.

Finally, the amendment clarified that, if the redevelopment display meets the conditions in section 5273, it will "be considered an on-premise display." §5273(a). The definition of "on-premise" display includes signs used to advertise "goods produced or sold upon the property on which the advertising display is placed." §5272(a)(4). Pet. Op. Br. at 8.

Sky Posters concludes that, pursuant to the criteria of section 5273, it may use a redevelopment display to lawfully advertise goods available for purchase at any business in the redevelopment area. Sky Posters asserts that the only requirements it needed to meet were that (1) the signs were for businesses or activities operating within the boundaries of the redevelopment project area and (2) at least 10% of the advertising copy, up to a maximum of 100 square feet, was used to display the address or location of said business or activity. Pet. Op. Br. at 7-8; Reply at 1-3.

According to Sky Posters, the unrefuted evidence shows that the X-Men and Nissan signs advertised products available for purchase in the redevelopment area. Specifically, the Nissan sign advertised vehicles for purchase at CarMax and the X-Men sign advertised that tickets for the movie could be purchased at Inglewood Tickets. Both CarMax and Inglewood Tickets are in the Merged Inglewood Redevelopment Project Area and were clearly identified in text more than 100 square feet in size at the bottom of the signs. Pet. Op. Br. at 8.

Sky Posters argues that the ALJ improperly failed to analyze these “standards” and implemented her own. Pet. Op. Br. at 8-9; Reply at 3-4. Instead of analyzing whether the X-Men and Nissan signs met the section 5273 criteria, the ALJ found that the tagline on the signs identifying the local businesses was “visibly dwarfed” by the rest of the display and that neither of the tagline businesses paid to have their names advertised. Therefore, the taglines were insufficient to qualify the signs as redevelopment displays under section 5273.

Sky Posters argues that neither of these standards is mentioned by the Act. The “visibly dwarfed” standard is inconsistent with section 5273(d), which requires only 10% of the advertising copy, up to a maximum of 100 square feet, be used to display the address or location of the redevelopment business. There also is no requirement in the Act that a redevelopment business pay for the advertisement. A redevelopment area is necessarily blighted and a requirement that a local business pay for the sign would be inconsistent with section 5273’s legislative purpose. Pet. Op. Br. at 9-10; Reply at 4.

b. Merits

Sky Posters contention that section 5273(d) only requires 10% of the advertising copy or a maximum of 100 square feet of the sign be devoted to the redevelopment business’s tagline misinterprets the statute. Reply at 2. Sky Posters’ argument requires interpretation of section 5273(d).

In construing a statute, a court must ascertain the intent of the legislature so as to effectuate the purpose of the law. Brown v. Kelly Broadcasting Co., (1989) 48 Cal.3d 711, 724; Orange County Employees Assn. v. County of Orange, (“Orange County”) (1991) 234 Cal.App.3d 833, 841. The court first looks to the language of the statute, attempting to give effect to the usual, ordinary import of the language and seeking to avoid making any language mere surplusage. Brown v. Kelly Broadcasting Co., (1989) 48 Cal 3d 711, 724. Significance, if possible, is attributed to every word, phrase, sentence and part of an act in pursuance of the legislative purpose. Orange County, supra, 234 Cal.App.3d at 841. The enactment must be given a reasonable and commonsense interpretation consistent with the apparent purpose and intent of the lawmakers, practical rather than technical in nature, and which, when applied, will result in wise policy rather than mischief or absurdity. To that end, the court must consider, in addition to the particular language at issue and its context, the object sought to be accomplished by the statute, the evils to be remedied, and public policy. Lungren v. Deukmejian, (1988) 45 Cal. 3d 727, 735.

As Caltrans argues (Opp. at 10), Sky Posters ignores section 5273(d)’s plain language, which requires that the City annually certify that the advertising copy of the advertising display is advertising businesses or activities operating within the boundaries of the redevelopment project area and that “at least 10 percent of the advertising copy, up to a maximum of 100 square feet, is used to display the address or location or locations of the business or activity, or to identify the route to the business or activity from the nearest freeway offramp.” §5273(d) (emphasis added). The emphasized language requires that at least 10% of the sign’s text be used to display the local business address or route to that business from the freeway offramp. This address or route can be no larger than 100 square feet, which means that the redevelopment display can total no more than 1000 square feet.

Sky Posters’ contention that 10% of the sign or 100 square feet be devoted to the tagline would permit huge signs – such as the ones at issue – to be called redevelopment displays so long as the tagline was 100 square feet. That is not what the plain language says. It says at least 10%, up to a maximum of 100 square feet. These are minimum and maximum conditions and both conditions must be met. There must be at least 10% of the square footage devoted to the tagline and the tagline can be a maximum of 100 square feet. A tagline that is less than 10% of the sign but is 100 square feet does not qualify as a redevelopment display.

This plain meaning interpretation is consistent with the purpose of the Act, which is to regulate off-premise advertising displays. The court agrees with Sky Posters that on-premise signs are not regulated and that redevelopment displays under section 5273 are a subcategory of on-premise signs. Thus, section 5273’s redevelopment signs are an exception to the regulation of off-premise signs. Section 5273 authorizes signs in a redevelopment area that direct freeway travelers to a redevelopment business or activity. This purpose is not served if the tagline were permissibly a small part of a large sign. Indeed, redevelopment signs could swallow the Act’s regulation of off-premise signage in redevelopment areas, as Sky Poster’s signs did in this case. The two signs in question indisputably do not meet section 5273’s requirement of a tagline that is both 10% of the sign and 100 square feet. Therefore, they do not qualify as redevelopment displays under section 5273.

Additionally, the signs do not meet section 5273’s other criteria. Section 5273(a)(1)-(3) provides that an advertising display that advertises the businesses and activities developed within the boundaries of, and as a part of, a redevelopment project, may be considered an on-premises display if it meets all the following conditions: (1) the advertising display is located within the boundary limits of the project; (2) the advertising display was constructed on or before January 1, 2012; and (3) the advertising display does not cause the reduction of federal highway funds. §5273(a)(1)-(3). As pertinent, section 5273(a) requires that the redevelopment sign advertise a business or activity of the redevelopment area.

The ALJ found that Sky Posters’ signs do not meet this criteria. In arguing that she was wrong, Sky Posters mischaracterizes the context and purpose of the ALJ’s findings. The ALJ did not find that the taglines were visibly dwarfed or that the businesses did not pay for the signs in lieu of applying the section 5273 criteria. Rather, the ALJ made these findings to demonstrate why the signs could not be reasonably construed as advertising local businesses in the redevelopment area. AR 1739, 1748. The ALJ found that the two signs did not display the business of the redevelopment because the tagline identifying the local businesses was “visibly dwarfed” by the rest of the display and neither one of the advertised businesses – the X-Men movie’s distributor and Nissan – had a business in the redevelopment area. Neither of the local businesses paid to have their names advertised, further demonstrating that the signs advertised X-Men and Nissan, not the locations where their products could be purchased.

The ALJ’s conclusion is supported by substantial evidence. The signs did not promote local business in the redevelopment area; they promoted X-Men and Nissan, directly benefiting the owners/distributors of those products, neither of which was located in the redevelopment area. It is not enough to say in a tagline that a product can be purchased locally. There is no difference between Sky Posters’ argument that the car and movie tickets may be purchased at local CarMax and Inglewood Tickets, respectively, and a billboard advertising Milky Way candy bars with a tagline that they can be purchased at a local grocery store. The billboard is advertising the product (Milky Way), not the location where it can be purchased. This does not meet section 5273(a)’s requirement of a sign advertising the businesses and activities of the redevelopment area.

Caltrans argues that the ALJ’s analysis is supported by People ex rel. Department of Transportation v. Maldonado, (“Maldonado”) (2001) 86 Cal.App.4th 1225, a public nuisance case which concerned whether billboard advertisements qualified as on-premise displays under the Act. Opp. at 6-7. The petitioner in Maldonado wanted to use the billboard as an off-premises display but was denied a permit because the billboard site was along a landscaped freeway. Id. at 1228. The petitioner then attempted to use the billboard to advertise on-premises goods and services by leasing both the billboard and space in the building to a jeweler, Stanford football, and a Holiday Inn. Id. at 1229. None of the lessees used the space for sale of goods or services advertised on the billboard. Ibid.

The Maldonado court concluded that whether the billboard was a permissible on-premises display depends on objective facts. Id. at 1231. The advertisements did not qualify as an on-premises display under the Act because none of the advertisements was used exclusively to designate the name of the premises occupant. Id. Caltrans’ regulations provided that an advertisement is not an on-premises display if it advertises a brand, trade name, product or service only incidental to the principal activity conducted at the property. 4 CCR §2243(c). This interpretation of section 5442’s on-premises exception was entitled to great weight. Id. at 1232. The language of the Act requires a direct, ongoing, and substantial relationship between the advertisement and the premises. Id. As a result, the signs were not on-premises billboards and violated the Act.

Sky Posters argues that Maldonado is distinguishable because it did not involve redevelopment displays and because the advertisements did not advertise products or businesses conducted on the premises. Reply at 5-6. It is true that Maldonado did not involve redevelopment displays and the signs were for local businesses that did not conduct the advertised business on the premises. These distinguishing facts mean that Moldonado is not controlling, but it is instructive in determining whether a sign constitutes a redevelopment display. As instructed by Maldonado, the test for a redevelopment display is objective in nature, and incidental activity conducted in the redevelopment area is insufficient to qualify as a redevelopment display.

As in Maldonado, the relative size of the taglines and the fact that Carmax and Inglewood Tickets did not pay for the signs supports the ALJ’s finding that the signs only incidentally advertised the local businesses. The fact that tickets for the X-Men movie and the Nissan car model may be purchased from a local business does not make the sign’s advertisement of the movie and car into a redevelopment display.

The ALJ did not err in finding that the signs could not reasonably be construed as advertising local businesses. Her conclusion that the signs are not redevelopment displays is supported by both the proper interpretation of section 5273 and substantial evidence.

2. Was the Penalty of Disgorgement Contrary to Law?

Sky Posters makes several arguments that the award of disgorgement for the displays it erected after removal of the X-Men and Nissan signs was contrary to law. Sky Posters argues that Caltrans did not have jurisdiction over the subsequent displays because it never issued a violation notice for them as required by 4 CCR section 2441. Pet. Op. Br. at 12. Additionally, section 5485(b)(2) and (c) permit disgorgement only where the display is “not removed within 30 days of written notice”. The X-Men sign was timely removed during the safe harbor, the ALJ had no authority to order disgorgement for the X-Men sign. Pet. Op. Br. at 13. Finally, Sky Posters argues that it did not receive fair warning of the penalty in violation of Ex Parte Young, (1908) 209 U.S. 123, which held that due process precludes accrual of enormous fines and possible imprisonment while a litigant was testing the constitutionality of a statute that was not otherwise providing for judicial review, Wadley Southern Railway Co. v. Georgia, (“Wadley”) (1915) 225 U.S. 651, 661, which extended Ex Parte Young to toll non-compliance penalties where judicial review is available and the fined petitioner promptly challenges the statute on non-frivolous grounds, and the criminal “fair warning” doctrine, which bars enforcement of a statute that forbids or requires an act so vague that persons of common intelligence must guess at its meaning. See United States v. Lanier, (1997) 520 U.S. 259, 267. Pet. Op. Br. at 11-13, 15; Reply at 7-8.

Most of these arguments may be dealt with summarily. As Sky Posters admits, the fair warning doctrine applies to criminal cases. While the Act has criminal sanctions available (§5364), Sky Posters was not prosecuted, and a criminal fair warning is irrelevant.

Ex Parte Young and Wadley are due process cases holding that a petitioner should be permitted to challenge the constitutionality of a statute without accruing statutory penalties while doing so. Sky Posters is not challenging any portion of the Act as unconstitutional; it is only arguing that the Act should be interpreted in a way which permits its signs as redevelopment displays. Moreover, Sky Posters’ penalties are subject to judicial review and the Act therefore is constitutional. Wadley, supra, 235 U.S. at 661.

No penalty was accruing for Sky Posters during this mandamus case. Sky Posters appears to argue that some of the disgorgement penalty was incurred for the display of the subsequent signs during a portion of the administrative proceeding. Pet. Op. Br. at 14. That portion of the disgorgement does not violate Ex Parte Young or Wadley because they prohibit only the accrual of penalties for previous misconduct during a non-frivolous judicial challenge of a statute; they do not protect a party from accruing penalties for continuing misconduct during an administrative proceeding.

This brings the court to Sky Posters’ notice and jurisdiction arguments. Caltrans argues that removal of one violating copy and replacing it with another violating copy does not cure the violation or avoid the penalties of section 5485(b). Opp. at 11. Caltrans cites 4 CCR section 2441(d)(1), which provides: “A new violation notice is not issued if the display is sold, transferred, or the copy is changed. When purchasing a display, the new display owner is responsible for determining the legal status of the display by contacting the Office of Outdoor Advertising.” 4 CCR §2441(d). Caltrans argues that the ALJ found that Sky Posters replaced the signs with other violating copies. Opp. at 11.

Sky Posters replies that the ALJ never referred to the subsequent displays as a change in copy. Rather, she referred to them as “subsequent displays.” Thus, there is no factual basis for the argument in Caltrans’ opposition that the subsequent displays were “copy changes.” Reply at 8.

While the ALJ referred to the subsequent displays as such, she concluded that they were merely a change in copy. Sky Posters is correct that the ALJ described them as “subsequent displays”, and that the subsequent displays did not qualify as redevelopment signs for the same reason that the X-Men and Nissan signs did not qualify. AR 1743-45. She concluded that the subsequent displays violated the Act in the same manner and for the same reasons as did the X-Men and Nissan displays. AR 1745. The ALJ also described the subsequent displays as “continuing violations” that were substantially similar to the offending signs in all respects. AR 1748-49. However, the ALJ concluded that Sky Posters removed the offending signs only to replace them with advertisements for different movies and a different vehicle. As a result, the subsequent displays violated the Act because they constituted mere changes in advertising copy for which Caltrans was not required to issue a new violation notice. AR 1749.

The question is whether the ALJ was correct that substantially similar advertisements of different movies and a different vehicle were a change in copy. As pertinent, 4 CCR section 2441(d)(1) states that Caltrans will not issue a new violation notice if there has only been a copy change. The term “copy” is not defined in the Act. As previously stated, the business meaning of “advertising copy” is the text of an advertising message aimed at the prospective buyer. http://www.businessdictionary.com. The court will interpret section 2441(d)(1) reference to copy using this common business parlance.

Sky Posters is correct that the record lacks substantial evidence that the subsequent displays were merely a change in copy. A change in copy is a change in the text of an advertising message. Potentially, an advertiser’s change of script for one product to another could be a change in copy; the advertiser simply has changed its message to consumers. For example, a change from a Nissan Sentra advertisement to an advertisement for another Nissan model could well be a change in copy. However, a change between advertisers would not be a change in copy. This is true even if, as here, both advertisements violate the Act because they do not qualify as redevelopment displays.

In this case, Sky Posters’ subsequent signs advertised 19 movies and a Chrysler vehicle and did not qualify as redevelopment signs for the same reasons as the X-Men and Nissan signs. No evidence was cited to the court that the Nissan advertisement was placed by the same business as the Chrysler sign. There also was no cited evidence that the movie advertiser was the same for the offending X-Men sign and the subsequent movie signs. Without such evidence, the court cannot conclude that the subsequent signs were merely a change in copy within section 2441(d)(1). Since evidence does not support a conclusion that the subsequent signs were merely a change in copy, Sky Posters is correct that a new notice of violation was required and that Caltrans lacked jurisdiction to order disgorgement for the subsequent displays.

The penalty of disgorgement for the subsequent displays was contrary to law.

F. Conclusion

The petition for writ of mandate is granted in part. Caltrans is directed to set aside the order for disgorgement of $1,275,772.58 for the subsequent displays. In all other respects, the Petition is denied.

Sky Posters’ counsel is ordered to prepare a proposed judgment and writ, serve them on Caltrans’ counsel for approval as to form, wait ten days after service for any objections, meet and confer if there are objections, and then submit the proposed judgment along with a declaration stating the existence/non-existence of any unresolved objections. An OSC re: judgment is set for December 12, 2019 at 9:30 a.m.


[1] Sky Posters’ footnotes in its moving papers and reply violate the 12-point type requirement of CRC 2.104 and have not been considered.

[2] All further statutory references are to the Business and Professions Code unless otherwise stated.

[3] The business definition of “advertising copy” is the text of a print, radio, or television advertising message that aims at catching and holding the interest of the prospective buyer, and at persuading him or her to make a purchase all within a few short seconds. http://www.businessdictionary.com.

[4] Petitioner’s Joint Appendix initially failed to provide readable Bates-stamp numbers and it was required to submit a new one. Even the corrected Joint Appendix failed to include the entire ALJ decision and other pages cited by the parties. Petitioner’s counsel is admonished to review the joint appendix carefully before lodging it in all future cases.

[5] The following citations to the ALJ’s decision are proof only of the ALJ’s determination of facts, not the facts themselves. However, the parties do not dispute that the ALJ accurately stated the facts.