9th Circuit backs bagel baker in legal brouhaha over signs

Thursday, September 21, 2006

A Washington state bagel-shop owner has won another round in his legal fight with the city of Redmond over its portable-sign ordinance.

On Sept. 15, the 9th U.S. Circuit Court of Appeals upheld a lower court’s ruling that found the ordinance violated the First Amendment commercial-speech rights of Dennis Ballen, owner of Blazing Bagels.

Ballen filed suit against the city after being told in June 2003 that he was violating a city ordinance banning portable signs. An employee of the store had been standing on a street corner holding a 3 ½- by- 2 ½ foot sandwich board that read “Fresh Bagels-Now Open.”

The appeals court noted that the city had passed the ordinance in 1997 to promote “traffic safety and community aesthetic,” but allowed 10 exemptions including real estate, political and celebratory signs. The city told Ballen to remove his ad or he could face a $5,000 fine or up to a year in prison.

Ballen claimed that removing the outdoor ad cost him hundreds of dollars each week and forced him to lay off the employee who held the sign. The Institute for Justice, a Washington, D.C., based civil liberties law firm, took an interest in the case, ultimately funding the lawsuit challenging the ordinance.

William Maurer, executive director of the institute's Washington state chapter, praised last week's ruling in Ballen v. City of Redmond.

“We’re extremely pleased and happy that the 9th Circuit recognized that commercial speech cannot be discriminated against,” he said.

J. Zachary Lell, the attorney for the city of Redmond, said that he was “surprised and disappointed” by the 9th Circuit's decision.

U.S. District Judge Thomas S. Zilly halted enforcement of the ordinance in January 2004, saying that the law likely violated the First Amendment.

In June 2004, U.S. District Judge Marsha J. Pechman confirmed that the ordinance was indeed unconstitutional and awarded Ballen $165,508 in attorneys fees and nominal damages. The city appealed her decision.

Redmond lifted its ban on portable signs in December 2005 but continued to appeal Pechman’s ruling because Ballen had been awarded attorneys fees and damages. City officials said they also planned to reinstate the ordinance if the city won the appeal.

“From the city’s perspective, the challenged sign ordinance was modeled after and functionally identical to other municipal regulations that have been consistently upheld by the courts,” Lell said.

On Sept. 15, a unanimous three-judge 9th Circuit panel upheld Pechman’s decision. Writing for the court, Circuit Judge Richard C. Tallman cited the 1980 U.S. Supreme Court decision in Central Hudson Gas & Electric Corp. v. Public Service Comm. as a standard for validating government restrictions on commercial speech.

Commercial speech is “expression related solely to the economic interests of the speaker and its audience.”

The Central Hudson test contains a threshold requirement that the speech concern lawful activity and not be misleading. If it satisfies this threshold requirement, then the government must establish (a) a substantial governmental interest; (b) that its regulation directly advances that substantial governmental interest; and (c) its regulation is not more extensive than necessary.

Tallman said that Redmond's ordinance failed the final prong of Central Hudson. “The City has failed to show how the exempted signs reduce vehicular and pedestrian safety or besmirch community aesthetics any less than the prohibited signs.”

Calling the exemptions to the ordinance “discriminatory,” Tallman wrote, “the City has protected outdoor signage displayed by the powerful real estate industry from an Ordinance that unfairly restricts the First Amendment rights of, among others, a lone bagel shop owner.”

Lell said no decision about whether to appeal the 9th Circuit's ruling had been made but that the city's options would discussed at the next City Council meeting.

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