Lauder, Inc. v. City of Houston, TexasLauder, Inc. v. City of Houston, Texas
MEMORANDUM AND OPINION ENTERING FINDINGS OF FACT AND CONCLUSIONS OF LAW
This is а First Amendment challenge to a newsrack ordinance enacted by the City of Houston in 2007. The ordinance requires newsracks on the City’s rights-of-way to meet certain material, size, and placement standards and requires publishers using newsracks to pay a permit fee.
This court held an evidentiary hearing in 2008 and denied Lauder’s application for a temporary restraining order. The parties conducted discovery and this court held a two-day bench trial. As explained in detail below, this court finds and concludes, based on the pleadings, the evidence, and the applicable authorities, that Lauder’s First Amendment challenge to the City’s newsrack ordinance fails as a matter of law.
I. FINDINGS OF FACT
A. Background
On February 14, 2007, the Houston City Council passed, and the Mayor signed, ordinance number 2007-225. (Docket Entry No. 44, Ex. A at 15). Before that date, the City’s ordinance regulating newsracks, which was enacted in 1976, stated as follows:
A person may sell and/or install any nonelectrical apparatuses for the sale of daily or weekly newspapers on sidewalks, or other public property or property dedicated to public use provided, it shall be unlawful for any person to install any apparatus used for the sale of newspapers where such apparatus will impede or interfere with the free passage of persons on sidewalks or other public property. The permission granted by this section shall apply to the extent of the city’s right, title and interest only.
(Def.’s Ex. 4).
The 2007 ordinance was more specific and detailed. It began by stating the reasons for the new regulation:
WHEREAS, the uncontrolled placement and maintenance of newsracks in public rights-of-way presents a danger to the safety and welfare of persons using such rights-of-way, including pedestrians, persons entering or exiting vehicles and buildings, and persons performing essential utility, traffic control, and emergency services; and
WHEREAS, newsracks located so as to cause a danger to persons using public rights-of-way, and unsightly news-racks located therein, such as newsracks that are poorly maintained or that have been defaced with graffiti, constitute public nuisances; and
WHEREAS, the City Council finds and declares that regulating the placement, appearance, size and servicing of newsracks on public rights-of-way is necessary to promote the public health, general welfare, and safety of persons using public rights-of-way, and to foster the aesthetics of the City ....
{Id. at 1).
The 2007 ordinance requires a publisher who wants to distribute publications in a newsrack on a public right-of-way to obtain a permit and decal from the City.
{Id.
§ 7, § 40-452). To obtain a permit, each publisher must submit an application setting out contact information; the number of newsracks and a description of the location for each one; a description of each newsrack, including dimensions, signage, and whether it has a coin-operated mecha
If a permit application is denied in whole or in part, the applicant must be notified within ten business days by certified mail or e-mail and the City must explain the reasons for the denial. (Id. § 40-453(i). The applicant has ten business days after receiving the denial to revise and resubmit the application or submit a written request for an appeal. (Id.). If an appeal is requested, a hearing examiner must conduct a hearing within thirty days. (Id. § 40-453(k)). Written notice of the time and place of the hearing must be provided no less than ten business days before the hearing. (Id.). The hearing examiner must issue a written decision within fifteen business days after the hearing. (Id.). The hearing examiner’s decision on the appeal is final. (Id.).
The ordinance imposes maintenance and display requirements on a publisher’s newsracks. The requirements include that the newsracks be “in a neat and clean condition and in good repair at all times” and “constructed, installed, and maintained in a safe and secure condition.” (Id. § 40-454(a)(1), (a)(2)). The ordinance limits newsrack size to “a height of not less than 36 inches and not more than 54 inches (including the base); a width of not less than 15 inches and not more than 25 inches; and a depth of not less than 12 inches and not more than 21 inches.” 1 (Id. § 40-155(a)). The ordinance requires newsracks to “be manufactured from 20-gauge or thicker zinc coated steel.” (Id. § 40-455(b)(l)). A coin-operated news-rack must weigh no less than eighty pounds when empty, excluding the base; no-charge newsracks must weigh no less than fifty pounds when empty, excluding the base. (Id. § 40 — 455(b)(4)). The ordinance requires both types of newsracks to be attached to a concrete base or base and pedestal with a net weight of not less than 95 pounds. (Id. § 40 — 455(b)(5)). The concrete base must measure 23 inches from front to back, not extend more than 1.5 inches beyond the side of the newsrack bottom, measure 3 inches high, and not be decorated or colored. (Id.). The ordinance imposes other requirements on windows, handles, and springs. (Id. § 40-455(b)(6)-(8)). Finally, the ordinance requires that every newsrack be painted a specified dark-green color. (Id. § 40-455(b)(9)).
The ordinanсe restricts the placement and location of the newsracks. A news-rack cannot be placed where it “[ejndagers public safety”; “[ijnterferes with public utility, public transportation, or other governmental use”; or “interferes with or impedes: a. Pedestrian or vehicular traffic; b. Entry or exit from a residence or business; c. access to a legally parked or stopped vehicle; d. Use of a traffic sign or signal, emergency call box, transit shelter, bus stop, elevator, mailbox, or other public service; or e. Access to use of a delivery area or loading zone.”
(Id.
§ 40-456(a)).
The ordinance allows the City to seize and remove noncompliant newsracks. (Id. § 40-458). If a newsrack has no permit, the City can seize that newsrack. (Id. § 40-458(a)(l)). If the newsrack has a permit but does not comply with the ordinance, the City must provide the person responsible for the newsrack’s installation and maintenance with notice and ten business days to remedy the violation or request a hearing to contest the seizure. (Id. § 40 — 458(b)). The ordinance provides deadlines for the hearing officer to hold a hearing and issue a written decision. (Id. § 40-458(d)-(f)). If the violation is not remedied within ten days after notice of the hearing officer’s written dеcision, or if the permittee fails to ask for a hearing within ten days, the City may seize the newsrack. (Id. § 40-458(a)).
The maintenance, display, size, and design provisions were effective immediately for new newsracks placed in a public right-of-way. The other ordinance requirements had to be met by December 31, 2007 for newsracks inside the central business district, by December 31, 2008 for news-racks outside the central business district but within the area defined by an interstate that provides a large “loop” around the City (the “1-610 loop”), and by December 31, 2009 for newsracks outside the I-610 loop. (Id. § 8(a)). For existing news-racks, the effective date within the central business district was December 31, 2007, with certain provisions, such as the color requirement, not taking effect until December 31, 2008. (Id. § 8(b)). For existing newsracks located outside the central business district, the effective date for all ordinance provisions was December 31, 2008. (Id. § 8(c)).
On May 2, 2007, the City amended the ordinance to make it apply to all news-racks outside the central business district on December 31, 2008. (Docket Entry No. 44, Ex. B, Ordinance No. 2007-537 at § 1). On August 29, 2007, the City again amended the ordinance to change the size requirements in § 4(M55(a) to exclude the base from the calculation of the newsrack height. (Id., Ex. C, Ordinance No. 2007-984 at § 1).
Before enacting the 2007 ordinance, the City Council’s Quality of Life Committee held approximately sixteen meetings on the proposed regulations. (Def.’s Ex. 4). The Committee considered numerous issues, including the geographic area the ordinance would cover, the need to protect the accessibility of public rights-of-way for pedestrians generally and for individuals with disabilities in particular, what size and dimensions the newsracks should be, the type of signage on the newsracks, what color should be used, and what materials should be used. The Committee members’ notes and the video recordings of the hearings are in the record. They show that City staff and Committee members heard from the City’s lawyers, who described approaches used in other cities that regulated newsracks and the First Amendment limits on such regulations. City Council member and committee chair Pam Holm repeatedly emphasized the need to balance the City’s interest in safety and aesthetics with the publishers’ interest in reaching readers. In addition to Holm, other Council members, City staff, and members of the public — primarily property owners, community advocates, and representatives of newspaper publishers — attended the
Sharon Lauder, who owns and operates Lauder, Inc., testified that she first learned about the ordinance from an article in the Houston Chronicle soon after the ordinance was enacted on February 14, 2007. Although Ms. Lauder testified that she had no information about the newsrack ordinance until after its passage, this court finds that the City made extensive and successful efforts to provide notice to, and hear from, members of the public and in particular from newspaper publishers before the ordinance was enacted. Representatives of the Houston Press and Rumbo testified that the City solicited comments. Rome testified that he took two City staff members around Houston to demonstrate some of the problems smaller publications would face.
The Committee responded to many of the criticisms and suggestions. After some of the publishers expressed concerns about the costs of complying with the proposed ordinance, and several Council members stated their concern that small publications would not be able to afford prompt compliance, Holm and other Committee members asked the publishers to provide specific information about costs and how the proposed ordinance might be changed to reduce that burden. The Council later modified the proposed ordinance to provide staggered effective dates for different areas of the City. As revised, the ordinance would first become effective in the central business district and later in other areas. This allowed publishers with newsracks outsidе the CBD to spread compliance costs over nearly two years.
Lauder publishes a monthly paper that it distributes without charge under the names Houston Tribune and Heights Tribune. The paper, which Lauder began publishing in 1986, features cheerful, “positive news” about Houston. According to Ms. Lauder, she distributed the paper to between approximately 20,000 and 22,000 readers each month before the City passed the ordinance. Before the ordinance’s passage, Lauder distributed the paper in private locations, such as restaurants or stores, and through 65 newsracks located in public rights-of-way. A small number of individuals subscribed and received the paper by mail.
The newsracks Lauder used in the public rights-of-way did not comply with the ordinance. They were plastic, not metal; blue, not forest green; and generally weighted with bricks or cement blocks placed inside a hollow base rather than mounted on a cement base. Lauder did not attempt to obtain compliant newsracks. Instead, Lauder removed many of its newsracks from public rights-of-way, although some were kept in place in violation of the ordinance.
As soon as Ms. Lauder learned of the ordinance, she began contacting City Council members and City employees. She spoke at City Council meetings seven times, asking that the City modify or repeal the ordinance. The City refused. On
Lauder sued the City on October 28, 2008, alleging that the ordinance is unconstitutional on its face and as applied. 2 In its amended complaint, Lauder alleges that the “provisions were formulated by a small number of publications, and designed to protect those publications from the tremendous costs of compliance; the Ordinance is overbroad in coverage and requirements, and vague with respect to its geographic coverage and enforcement; does not provide adequate procedural protections; provides no guidelines for uniform and equitable enforcement; and imposes outrageous costs on the exercise of protected speech.” {Id. ¶ 75). Lauder alleges that the “costs and over-specific newsrack requirements are discriminatory as written, and go far beyond the interest of safety and aesthetics.” {Id.). Lauder claims that the “ordinance is directed at a traditional speech forum and unreasonably burdens the rights of Plaintiff to participate in the forum.” {Id. ¶ 76). Lauder alleges that the “practical effect of the ordinance is to take small publications off the streets and to threaten their business model” and that “it works as a prior restraint of Plaintiffs’ First Amendment rights ... [because] the licensing and decal fees are beyond any amount necessary to defray reasonable administrative costs.” {Id. ¶¶ 77-78).
After an evidentiary hearing held on November 25, 2008, this court denied Lauder’s request for a temporary restraining order, stating on the record the findings and conclusions that Lauder had failed to make the necessary showing for such relief. In February 2009, Lauder moved for leave to amend to add the publisher Spanish News, Inc. as a plaintiff. (Docket Entry No. 22). A proposed amended complaint including this plaintiff was filed with the motion. (Docket Entry No. 24). The City opposed the motion. (Docket Entry Nos. 32, 33). This court granted the motion to add Spanish News as a plaintiff. (Docket Entry No. 37). Lauder also moved for leave to add the African-American News as a plaintiff, but had no amended complaint to support the addition. This court granted the motion but ordered Lauder to file an amended complaint with this party and its claims included by April 10, 2009. No amended complaint was filed. Before trial, Lauder asked and was allowed to dismiss Spanish News as a plaintiff. (Docket Entry No. 46).
The City moved to dismiss on the basis that based on the ordinance language, Lauder’s complaint failed to state a claim. (Docket Entry No. 44). Before the bench trial began on January 25, 2010, this court ruled on the pending motions. This court dismissed the allegations that: 1) the ordinance was unconstitutionally vague because it did not adequately define “central business district”; 2) the ordinance was an unconstitutional content-based restriction; and 3) the ordinance left City employees with too much discretion to grant or deny licenses and to seize noneompliant news-racks.
Lauder also told this court that it would not pursue its disparate-impact claim that the ordinance was unconstitutional because larger publications could
Lauder clarified that its focus was on the detailed requirements the ordinance imposed for the materials and dimensions for newsracks and on the compliance costs. Lauder explained that the detailed requirements meant that the problem was not too much official discretion to decide which publishers or distributors would receive a permit but rather overly prescriptive requirements and an absence of any discretion on the part of City officials to deviate from them. Although Lauder initially faulted other portions of the ordinance, it narrowed its challenge to the requirements that each newsrack: 1) be made of 20-gauge or thicker zinc-coated steel; and 2) sit atop a 95-pound cement base. Three specific questions remained for trial: 1) whether the newsrack specifications survive intermediate scrutiny under the First Amendment; 2) whether the permit fees are reasonably related to the City’s administrative costs; and 3) whether the ordinance affords adequate procedures for review. Each is analyzed below.
B. Whether the Newsrack Specifications Survive Intermediate Scrutiny
The two Supreme Court cases to consider newsrack regulations involved one ordinance that the Court found left officials too much enforcement discretion and another ordinance that targeted only commercial publications.
City of Cincinnati v. Discovery Network, Inc.,
The First Amendment clearly applies not only to the contents of newspapers but also to their means of distribution.
Houston Chronicle Publ’g Co. v. City of League City, Tex.,
As Lauder acknowledges, the City’s ordinance is not a total ban on news-racks in a public right-of-way. Instead, the ordinance sets standards for the appearance, composition, and placement of newsracks. Courts that have invalidated municipal ordinances that completely ban newsracks have often noted that regulations limiting the placement, design, and composition of newsracks are less likely to offend the First Amendment.
See, e.g., News & Observer Publ’g Co. v. Raleigh-Durham Airport Auth.,
The essence of Lauder’s attack on the ordinance is that it increases a publisher’s costs to a level at which Lauder and others
1. The City’s Interests Are Substantial
The record clearly shows that the City has substantial interests to justify regulating the newsracks. The ordinance states, and the City argues, that the regulations are necessary to serve aesthetics and рublic safety. Both are recognized as legitimate interests for municipal governments.
Metromedia, Inc. v. City of San Diego,
The evidence in the present record amply supports a finding that the City’s interests in public safety and aesthetics are substantial. The newsrack ordinance is far from the City’s first or only regulation to improve the appearance of the City’s public spaces and to reduce safety hazards. For example, the City adopted regulations for signs and billboards in 1980, which the Fifth Circuit has upheld against a constitutional challenge.
RTM Media, L.L.C. v. City of Houston,
The record does not support Lauder’s argument that the City lacked evidence of, or information about, specific problems that the ordinance was needed to address.
The City has also shown a substantial interest in regulating newsracks to improve public safety. The ordinance requires setbacks at intersections to allow unobstructed sight lines for drivers and requires newsracks to face away from the street so that people do not have to go into the street to retrieve publications. The cement bases are made uniform across the front and required to be of a consistent and specific size to reduce the risk of pedestrians tripping and to make it easier for those in wheelchairs to pass. The case law recognizes that a city’s interest in the free and unobstructed use of sidewalks can be substantial.
See Madsen v. Women’s Health Ctr.,
Lauder argues that the absence of specific studies performed by the City on the safety problems of plastic newsracks with hollow bases in which weights can be placed — as opposed to the steel newsracks with cеment bases the ordinance requires — makes the ordinance requirements invalid. Ms. Lauder testified that she did not personally experience problems with her plastic newsracks toppling and had not received complaints that people had tripped over them. As noted, however, the City did receive information about the safety and aesthetic problems the unregulated newsracks presented during the hearings on the proposed ordinance. And the case law does not support the argument that specific empirical studies are required to document the extent of such problems before content-neutral regulations are permissible. “Studies, anecdotes pertaining to different locales, history, consensus, and simple common sense may serve as evidence that the proposed activity will endanger significant interests. In the case of safety restrictions, for example,
In its closing argument, Lauder suggested that although the City’s interests might be strong enough to justify the ordinance’s newsrack restrictions and requirements within the central business district, the interests are not strong enough to justify applying the regulations outside the CBD. Insofar as this is an argument that outlying areas are less deserving of aesthetic protection than those within the CBD, the argument is unpersuasive. Several courts have disapproved of attacking the government’s interest in improving the appearance of public areas based on a notion that certain areas are less aesthetically valuable than others. As former Chief Justice Rehnquist stated in a case involving billboard regulation, “the aesthetic justification alone is sufficient to sustain a total prohibition of billboards within a community, regardless of whether the particular community is a historical community such as Williamsburg or one as unsightly as the older parts of our major metropolitan areas. Such areas should not be prevented from taking steps to correct, as best they may, mistakes of their predecessors.”
Metromedia,
Lauder’s counsel also suggested that pedestrian congestion is less significant outside the CBD, presumably making the regulations overbroad. But Lauder has not challenged the portions of the ordinance that restrict newsrack placement. And there are clearly many areas outside the CBD where newsracks are crowded together and both pedestrian and vehicle traffic are heavy. The record shows that areas outside the CBD were of primary concern to the City Council in enacting the newsrack ordinance. The record contains
2. The Restrictions Are Narrowly Tailored
The ordinance must not only serve substantial interests; it must also be narrowly tailored to achieve that end.
Knowles v. City of Waco, Tex.,
Lauder argues that the ordinance is invalid because it could have been less restrictive. Specifically, Lauder argues that the ordinance should permit publishers to use newsracks made of a greater variety of materials than the specified steel of a minimum gauge and should permit the use of other means to stabilize and weigh the newsracks besides a concrete base. Lauder argues that the ordinance should permit its newsracks like its newsracks, which are plastic and use removable bags of sand or gravel or bricks as weights.
The ordinance’s requirements of steel racks and cement bases are narrowly tailored. The City enacted the ordinance to make newsracks more attractive and safer. To further its aesthetic interests, the City enacted a consistent set of standards to govern newsracks’ materials and color and imposed a range of permitted dimensions. Courts have held that imposing uniform requirements on newsracks’ appearance is a narrowly tailored way to advance a municipality’s significant interest in aesthetics.
Honolulu Weekly,
The steel material and cement-base requirements also further the City’s interest in public safety. Steel of the required gauge and finish is durable. A 95-pound cement base prevents newsracks from tipping over, being displaced or moved, or being blown in a high wind. At one point, the City considered bolting the newsracks down as an alternative, but as еxplained during the hearings, (Def.’s Ex. 4), that would make the racks harder to service and difficult for emergency personnel to move if they were in the way. A City engineer also testified that the low center of gravity of the cement base helps prevent the newsracks from tipping — or being tipped — over or from blowing. Comments at the hearings and photographs in the record suggest these were significant problems before the ordinance.
The City also presented evidence to support its decision to require a cement base as opposed to allowing a hollow plastic or steel base that could be filled with bags of sand or gravel or bricks. Such bags readily deteriorate in Houston’s climate, allowing the sand and gravel to escape, resulting in both a source of litter and an ineffective base weight. And the bags or bricks can be readily removed, for purposes ranging from commercial uses to vandalism.
Lauder has not contended that the ordinance restricts any expressive quality in the materials used for the newsracks. Lauder does not challenge the requirement of a single color.
Gold Coast Publ’ns,
“Although the [Supreme] Court has shown special solicitude for forms of expression that are much less expensive than feasible alternatives and hence may be important to a large segment of the citizenry, this solicitude has practical boundaries.”
Taxpayers for Vincent,
The parties have not cited, and this court has not found, a decision invalidating on First Amendment grounds an otherwise valid newsrack restriction because of compliance costs.
See, e.g., Globe Newspaper Co.,
At the same time, the City does not cite newsrack cases concluding that compliance costs are irrelevant. Evidence that compliance costs are “prohibitive” are part of the functional analysis of the impact of the ordinance and the availability of alternative means of distribution.
See Globe Newspaper Co.,
Lauder’s arguments against narrow tailoring are not persuasive under the narrow tailoring — as opposed to the least-restrictive-means analysis — that this court must apply.
Ward,
Lauder also objects that the choice of steel for newsracks is not tailored to the рurpose of avoiding deterioration because steel rusts. Lauder offered photographs of a rusty metal newsrack, (Pl.’s Exs. 67-69). But Ms. Lauder conceded that she did not know how old that newsrack was or when it was painted. Ms. Lauder testified that her personal experience with steel newsracks was limited to a period early in her career as a publisher. Her career began in 1986. She presented a witness, Emilio Martinez, who testified that steel newsrack durability had improved substantially in recent years. The City presented evidence that steel would meet the objectives of durability and strength. Many other recently enacted municipal newsrack ordinances also specify steel of similar minimum gauge and treatment. See, e.g., Miami Beach, Fla., Code Of Ordinances, § 82-256(4)(a) (requiring construction of “galvanized steel with corrosive resistant hardware and door assembly”); Miami-Dade Cniy., Fla, Code Of Ordinances § 54-268(a) (same); El Paso De Robles, Cal., Municipal Code, § 11.35.040(A)(1) (requiring newsracks to be “metal” and “equivalent” to certain makes and models); Los Angeles, Cal., Municipal Code § 42.00(f)(7)(B)(3) (requiring that newsracks be “primarily constructed of metal”); Philadelphia, Pa., Code Of Ordinances § 9-211(3)(a)(.2) (requiring boxes of “20-gauge zinc-grip steel or thicker”). 4
Lauder also argues that requiring cement bases does not further the City’s interest in public safety because the bases present a tripping hazard. Under the ordinance, the cement bases must measure 23 inches, front to back, and must extend no further than 1.5 inches beyond the sides of the newsracks. 5 (Def.’s Ex. 1, § 40-455(b)(5)). As already explained, using uniform cement bases to stabilize news-racks is a narrowly tailored means to improving aesthetics and safety. During one hearing, the Committee’s chair, Holm, defended the uniform front-to-back dimension requirements as essential to making tripping less likely. The approach Lauder advocates of using hollow bases of different dimensions in which different kinds of weights could be placed could add to, rather than reduce, the tripping hazard.
Lauder fails to show that the City imposed newsrack requirements that were either ineffective to meet the ordinance objectives or that unnecessarily increased the costs of compliance. There is no evidence of the kind of substantial burden on speech required to defeat narrow tailoring under intermеdiate scrutiny.
Ward
illustrates the limited but important discretion cities enjoy in setting time, place, and manner restrictions. The issue in
Ward
was New York City’s requirement that bands giving concerts in Central Park use a city sound technician.
Ward,
Lauder argues that the ordinance should have been less prescriptive and instead provided for flexible alternatives with more discretion in the parking management division officials. Lauder points to the newsrack ordinance in
Gold Coast Publications
as support. That ordinance required using one of several specific makes and models of newsracks or an “equivalent,” defined as the “same size, dimensions, and style of the specified newsrack.”
Id.
at 1341 (quoting the ordinance). To the extent Lauder argues that the City of Houston should have allowed racks made of plastic and weighted by bricks as an “equivalent” to what the ordinance required, the record defeats her argument. Although the ordinance left open various ways in which publishers could comply — a range of heights and shapes, and the ability to use different kinds of identifying labels — the record shows that the City decided that newsracks lacking cement bases and steel construction were not sufficient to meet the ordinance goals and were not equivalent to the newsracks the ordinance requires. To the extent Lauder argues that the ordinance is constitutionally invalid because it gives officials too little discretion to deviate from the requirements, the law does not support her argument. There are constitutional concerns that arise when content-neutral time, place, and manner restrictions leave such discretion to government decision-makers, raising the specter of covert content discrimination.
See, e.g., Lakewood,
3. Lauder Has Ample Alternatives for Distribution
Having determined that the ordinance is narrowly tailored, the next question is whether it leaves open ample alternatives for communication. “While the First Amendment does not guarantee the right to employ every conceivable method of communication at all times and in all places, a restriction on expressive activity may be invalid if the remaining modes of communication are inadequate.”
Int’l Women’s Day March,
There is no dispute that publishers who comply with the ordinance may place their newsracks on the City’s rights-of-way. Lauder does not argue that there is insufficient space left open on the City’s rights-of-way for its newsracks. Nor does it appear that there is difficulty in obtaining
As noted above, although no court has struck down a newsrack ordinance because of compliance costs, the cases leave open the possibility that compliance costs can be problematic if they are “prohibitively expensive.”
Hop Publ’ns,
Before looking to the record evidence on the effect of the costs on Lauder’s ability to comply with the ordinance requirements, it is helpful to note that the City modified the ordinance to give publishers time to comply and to spread the costs of doing so. The City Council passed the ordinance on February 14, 2007. The newsrack specifications first took effect in the Central Business District at the end of the year, on December 31, 2007. Lauder had an additional year, until December 31, 2008, to comply outside the CBD, nearly two years after the ordinance’s enactment. The City decided to stagger the effective date partially in rеsponse to publishers’ concerns. Those concerns included that the financial impact on smaller publishers, such as Lauder. The question is not whether Lauder had cash on hand for immediate compliance, but whether it could afford to purchase compliant news-racks over the nearly-two year period before the ordinance would affect the last of its newsracks in the City’s right-of-way.
Ms. Lauder’s testimony and the argument of her counsel left it unclear whether she believed the cost to Lauder was beyond its financial capability, as opposed to a cost it would rather not assume. For example, Ms. Lauder testified at the preliminary injunction hearing that she considered it unreasonable that Lauder would have to remove the plastic newsracks it already owned from the public rights-of-way — although it could continue to use them elsewhere — and replace them with compliant newsracks. Ms. Lauder testified that she did not think Lauder should have to take out a loan to comply with the ordinance. But, as noted above, the First Amendment does not protect a right to the most financially advantageous method of distribution.
To the extent Lauder argues that the compliance costs are prohibitive, the record does not support that assertion. Ms. Lauder testified that Lauder owns 65 newsracks, of which 24 to 28 were in the CBD. She estimated the cost of a compliant newsrack to be approximately $300.
6
Assuming that Lauder had 28 newsracks in the CBD and that the cost estimates are
The question, assuming that the compliance costs can make alternatives inadequate, is whether this level of expense is “prohibitively expensive.” Lauder has not suggested the appropriate metric for determining whether the compliance costs are prohibitive. But the evidence shows that Lauder could pay the compliance costs. Lauder’s tax returns show that its revenues from 2004 to 2008 ranged from between $96,778 in 2006 to $113,507 in 2004, averaging just over $106,700. The cost of replacing Lauder’s entire stock of affected newsracks with compliant news-racks would have been approximately 10 percent of the revenues for two years. 7 Lauder has presented no other evidence of its ability to pay. The record shows that Lauder had the financial resources to purchase compliant racks to continue distributing newspapers on the public rights-of-way.
The First Amendment allows some reduction in potential audience by a valid regulation.
See Int’l Women’s Day March,
It is also unclear to what extent the Tribune’s circulation decline resulted from the ordinance. Ms. Lauder testified that she distributed the Tribune through news-racks located on public rights-of-way and on private property, such as in restaurants, as well as some subscriptions. Total circulation hovered between 20,000 and 22,000 per month. Although Ms. Lauder testified that she believed her circulation decreased “considerably” after the ordinance, she could not testify how much. The evidence does not distinguish between the number of newspapers Lauder distributed through the newsracks on the public rights-of-way as opposed to newsracks located elsewhere. 9
The record shows that Lauder has alternative means of distribution besides
Ms. Lauder’s testimony, although equivocal, does not suggest that these opportunities are unavailable to the Tribune. During her testimony, she stated, “I keep trying to put them up in the buildings, you know, in the little shopping centers.... So I put two [newsracks] ... in shopping centers. Then I got called by the shopping centers to pick them up, they don’t want them there. So anyway, it’s difficult to get into somebody’s shopping center.” Ms. Lauder’s testimony does not, however, indicate that she sought permission to place her newsracks at a shopping center before doing so. More importantly, she testified that the Tribune is already available in private locations. This court finds that distribution through newsracks and other means with private-property owners’ permission is a significant alternative means of distribution.
Another alternative is door-to-door distribution. Ms. Lauder testified that she distributed the
Tribune
door to door for
The
Tribune
is also available online, which is another alternative means of distribution unaffected by the ordinance. Ms. Lauder testified that she did not know how much online readership the
Tribune
receives and pointed to the financial problems of being an online-only publication. Ms. Lauder testified that in her experience, advertisers and readers demand a print edition. The Supreme Court has recognized that internet publication may be an adequate alternative to more traditional forms of communication, but that case, decided earlier this year, concerned a university, where students have more consistent computer and internet access than other members of the population.
See Christian Legal Soc’y,
In some cases, it may be important for a publication to have newsracks on a public right-of-way.
Cf. Int’l Women’s Day March,
Under the case law, the ordinance requirements for making newsracks consistent in size and color and using decals to identify the publication are properly treated as restrictions on commercial speech, which receive less First Amendment scrutiny.
Hoover v. Morales,
The ordinance is constitutional facially and as applied to Lauder. The requirements of using steel of a minimum thickness and a protective coating, and a cement base, are narrowly tailored to the City’s substantial interests in aesthetics and public safety and leave ample alternative channels of communication. Considering distribution alternatives other than the rights-of-way makes it even clearer that Lauder has ample alternatives to reach its potential readers and advertisers. Even assuming that an otherwise constitutional ordinance may be unconstitutional because it the costs of compliance are prohibitive, the record does not show that the costs to Lauder of replacing enough of its news-racks in the affected areas to reach a roughly similar audience would have been so prohibitive over the nearly two-year phased implementation period as to raise a constitutional problem.
C. The Permit and Application Fees
Lauder also argues that the fees under the ordinance are excessive. The ordinance requires a one-time application fee of $300 from any publisher wishing to place newsracks in public rights-of-way. Publishers must also seek a permit for each newsrack, at a cost of $5 per news-rack, renewable each year. The City issues a label when the permit is issued, which the publisher must affix to the news-rack. Under certain circumstances, such as if the decal becomes worn, the City may require that the publisher pay $1 to replace it.
“Government cannot tax First Amendment rights, but it can exact narrowly tailored fees to defray administrative cost of regulation.”
TK’s Video, Inc. v. Denton Cnty., Tex.,
Lauder alleges that the licensing and decal fees are beyond the amounts necessary to defray reasonable administrative costs. (Docket Entry No. 24, ¶ 78). The City has presented uncontroverted evidence that the costs of enforcing the ordinance exceed the permit and application revenues. In response to a question from the City’s lawyer about whether the fees “covered your administrative cost for enforcement of the program,” Maria Irshad, an employee in the City’s Parking Management Division, responded, “No.” She explained that she and another Parking Management Division employee, Carlos Medel, patrol the CBD and send out notices to violators. Medel also testified and elaborated on the costs. He testified that the City purchased a truck with a lift on the back, which it uses to seize noncompliant newsracks as well as for other purposes. He testified that three to five City employees survey newsracks on public rights-of-way to determine compliance. This work, and the seizure of noncompliant racks, often takes place on Saturdays, requiring the City to pay overtime. The employees’ testimony was credible. Lauder has offered no evidence in response. The court finds that the revenue collected through application and permit fees does not exceed the City’s implementation and enforcement costs. 12
D. Judicial Review
Before trial, this court dismissed Lauder’s claim that the ordinance was unconstitutional because it gave City officials too much discretion. The claim that the City had insufficient procedures for judicial review remained. 13 If a provision for judicial review was required, the ordinance would be unconstitutional. It provides an administrative appeal, but makes that appeal process final. After further consideration, this court concludes that the ordinance, as a content-neutral time, place, and manner restriction that does not vest the City with excessive or unbridled discretion, does not require an explicit procedure for judicial review of newsrack application denials.
In
Freedman v. Maryland,
the Supreme Court held that a Maryland law requiring government censors to approve films before their release was constitutional.
“Until [2002], it was unclear whether the
Freedman
formulation applied to content-neutral permit schemes designed to ensure public safety in a traditional public forum.”
Utah Animal Rights Coalition v. Salt Lake City Corp.,
Some courts have interpreted the phrase “subject to effective judicial review” as requiring only sufficient detail to guide decisionmaking and not separate court proceedings.
Granite State Outdoor Adver., Inc. v. City of St. Petersburg, Fla.,
II. CONCLUSIONS OF LAW
The City’s newsrack ordinance’s requirements of 20-gauge or thicker zinc-coated steel and cement bases are narrowly tailored to the City’s substantial interests in public safety and aesthetics and
The fees under the newsrack ordinance are consistent with the First Amendment because they defray the City’s administrative costs.
As a content-neutral time, place, and manner restriction that does not leave enforcing officials with unbridled discretion, the newsrack ordinance need not contain an explicit provision for judicial review.
This court rejects Lauder’s First Amendment challenges to Houston’s news-rack ordinance. Final judgment is entered by separate order.
Notes
. As noted below, the City later amended the height requirement.
. The amended complaint also asserted an antitrust claim. {Id. ¶¶ 79-80). The claim was dismissed at Lauder's request the first day of the bench trial.
. Mark Rome testified that
Rumbo
opposed the color restrictions, and Doris Ellis of the
Houston Sun
also objected to the mono
. Lauder’s counsel at one point highlighted that the materials requirement is not just for steel of a minimum gauge, but for zinc-coated steel. This specification neither shows a failure of narrow tailoring nor inadequate alternativеs. Lauder has not indicated, for exam-
. An earlier version of the ordinance did have a uniform requirement for the newsrack bases’ width. A representative from the Houston Chronicle complained that having a uniform base width would limit the number of news-racks that could fit in the ten-foot banks permitted under the ordinance. The draft ordinance was amended to allow flexibility on width.
. The City's witness, Maria Irshad, testified that the City had obtained estimates of approximately $200 for a compliant newsrack and base.
. By comparison, Lauder estimated that she had spent between $15,000 and $20,000 on this case by the preliminary injunction hearing.
. The Fifth Circuit has referred to access to a "potential audience” when considering adequate alternatives.
Int’l Women's Day March,
. To the extent that Lauder relies on the cost of plastic newsracks that it can no longer use in the City’s rights-of-way, it is not clear that these sunk costs, as opposed to compliance costs, are relevant to determining whether the ordinance compliance costs are prohibitive. Even if relevant, the record provides no basis to determine their extent. And Lauder could use its noncompliant newsracks outside the public rights-of-way.
. Courts have disagreed whether cоnsidering means of communication outside a public forum is appropriate.
Compare, e.g., Providence Journal,
. Unlike many other cities, where foot traffic is almost exclusively at street level, much of Houston's foot traffic in the CBD is in a private system of tunnels that connect many of the City’s major office buildings. Pedestrians use the tunnels to avoid the heat of the summer, traffic, and inclement weather. The tunnels contain many shops and restaurants, drawing pedestrians — that is, potential readers — underground.
. The fees are in line with those charged by other cities under similar ordinances. See, e.g., Boston, Mass., Code § 16 — 38.2(f) (requiring yearly payment of $300 plus $25 per newsrack); Dallas, Tex., Code Of Ordinances § 43-115(a)(3) (requiring $5 per newsrack per year); Miami-Dade Cnty., Fla., Code Of Ord , § 54-266 (requiring $10 per newsrack per year); San Francisco, Cal., Public Works Code 184.12(d)(6) (charging $30 per newsrack per year).
. Lauder has not asserted a due process claim.
See, e.g., Jacobsen,