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Icon Groupe, LLC v. Washington County

United States District Court, D. Oregon, Portland Division

May 26, 2015

ICON GROUPE, LLC, a Washington limited liability company, Plaintiff,
WASHINGTON COUNTY, a local county government within the State of Oregon; and ANDREW SINGELAKIS, in his official and individual capacities, Defendants.


JOHN V. ACOSTA, Magistrate Judge.


In this Section 1983 action, Plaintiff Icon Groupe, LLC, ("Icon"), alleges defendants Washington County ("County") and Andrew Singelakis ("Singelakis)(collectively "Defendants"), violated Icon's constitutional right to freedom of speech when they failed to grant Icon's applications for permits to erect and maintain seventeen freestanding signs displaying public safety messages, such as "Celebrate the Holiday Safely - Happy Memorial Day". (Am. Compl. ¶¶ 2, 11.) Defendants move for summary judgment arguing their actions did not result in a violation of Icon's right to freedom of speech, and that even if such violation occurred they are entitled to absolute or qualified immunity.

The court finds Defendants' denial of the applications was based on content-neutral restrictions on time, place, and manner found in the County's applicable regulations and did not violate Icon's free speech rights. Because no constitutional violation occurred, the court need not address Defendants' immunity arguments. Accordingly, Defendants' motion for summary judgment is granted.[1]


The facts underlying this action are not in dispute. Icon is a sign company engaged in applying for and maintaining freestanding signs within the State of Oregon. (Am. Compl. ¶ 3.) From March to June, 2010, Icon filed seventeen permit applications with the County seeking the approval of freestanding signs to be located in unincorporated portions of the County (the "Applications"). (Am. Compl. ¶ 11.) Because the signs contained safety messages, Icon believed they qualified for an exemption from otherwise applicable size and height restrictions. (Am. Compl. ¶¶ 11, 12, 14.) The exemption, found at section 414-5.9 of the County Community Development Code ("CDC") provided that "safety signs" identified as "[d]anger signs, trespassing signs, warning signs, traffic signs, memorial plaques, signs of historical interest, holiday signs, public and service information signs such as rest rooms, mailbox identification, [and] newspaper container identification" were "exempted from development permit requirement[s] and from the standards set forth above; however, a permit may be required as determined by the Building Official" (the "Exemption"). (Isaak Decl. Ex. A at 6-7.)

Rather than approve the Applications, Singelakis, the director of the County's Land Use & Transportation Department, denied all of the Applications in two, substantially similar, one-page letters issued on June 8, 2010, and June 21, 2010, respectively. (Am. Compl. ¶ 15.) The letters stated that "Article [I], [2] section 8 of the Oregon Constitution precludes application of the content based exemptions cited in the application" and that the proposed signs exceeded the size and height provisions in the applicable zones. (Isaak Decl. Exs. D, E.) Icon timely appealed the denials to the County's hearings officer ("Hearings Officer"), who failed take final action within the 120 days required under OR. REV. STAT. 215.427(1). (Am. Compl. ¶¶ 16, 17.) Icon timely petitioned for writs of mandamus under OR. REV. STAT. 215.429, asking the Washington County Circuit Court for the State of Oregon to compel the County to approve all of the Applications. (Am. Compl. ¶ 20.)

During the period Icon's appeal, and then petition, were pending, the Hearings Officer and Oregon's Land Use Board of Appeals ("LUBA"), considered and ruled on a virtually identical issue. Between March and May of 2010, Onsite Advertising Services, LLC, filed sixteen permit applications for freestanding double-sided billboard signs with the County. Onsite Adver. Servs., LLC v. Washington County, 63 Or. LUBA 414 (2011), aff'd. without opinion, 246 Or.App. 82 (2011), rev. denied, 351 Or. 586 (2012). On June 8, 2010, the County's planning director ("Planning Director") denied all of the applications in decisions which included the statement: "Article [I], section 8 of the Oregon Constitution precludes application of the content based exemptions cited in the application." Id. at 417. The Planning Director additionally found the proposed signs did not comply with other provisions of the CDC. Id. Onsite appealed the decisions to the Hearings Officer.

On July 20, 2010, the County's Board of Commissioners (the "Board") adopted Ordinance 735, which removed all content-based distinctions in Section 414-5 of the CDC, including the Exemption. Id. Ordinance 735 specifically provided that, to the extent allowed by law, the changes adopted in the ordinance applied to all sign applications received on or after January 1, 2010. Id. The Hearings Officer upheld the Planning Director's denial of Onsite's applications on November 29, 2010. Id. at 418. Onsite then appealed the decision to LUBA.

In an opinion dated June 22, 2011, LUBA noted Onsite and the County "apparently agree that some or all of the CDC 414-5.9 exemptions are based on the content of the sign and to that extent CDC 414-5 runs afoul of Article 1, Section 8 of the Oregon Constitution" and relied on this concession in addressing Onsite's assignments of error. Id. at 420. It is unclear whether Icon, who intervened on the side of the County, took any position on the constitutionality of the Exemption.[3]

The primary question before LUBA was how to properly consider Onsite's applications assuming the Exemption was unconstitutional. Onsite argued the unconstitutionality of the Exemption rendered all of Section 414 unconstitutional, requiring the entire section be severed. Id. at 420-21. If accepted, this argument would effectively eliminate any regulation of signage by the County and require the approval of all pending sign applications filed prior to July 20, 2010, the effective date of Ordinance 735. Id. at 422. The County argued only the Exemption should be severed, subjecting all sign applications to the regulations set forth in the remaining CDC sections, consistent with Ordinance 735. Id. at 422.

LUBA relied on statutory and case law, and the County's representation of their position as set forth in the CDC and Ordinance 735, in finding only the Exemption should be severed. LUBA explained Oregon statutes presume when part of a statute is held unconstitutional the legislature intended the remaining parts to remain in effect unless the statute specifically provides otherwise or the remaining parts were not intended, or are not able, to stand on there own. OR. REV. STAT. 174.040 (2013). This presumption applies equally in determining whether "part of an ordinance, if held to be unconstitutional, should be severed from the remaining parts." Id. at 421 (quoting City of Portland v. Dollarhide, 300 Or. 490 (1986). LUBA noted the County adopted a severability clause, which it considered to express "an even stronger preference to sever portions of the CDC found to be unconstitutional and continue to apply the constitutional portions of the CDC." Id. at 421. Finally, LUBA reasoned:

[g]iven the choice of (1) severing CDC Section 414 in its entirety, and leaving signs unregulated, or (2) severing CDC 414-5.9, and leaving those formerly unregulated signs subject to regulation unless and until a constitutional way to exempt some or all of those signs could be adopted, Ordinance 735 strongly suggests that the board or court commissioners would have preferred to sever CDC 414-5.9.

Id. at 426. LUBA affirmed the Hearings Officer's conclusion that only the Exemption should be severed, leaving the remaining sign regulations in effect. Id. at 427. LUBA also agreed with the Hearings Officer's conclusion that the signs identified in Onsite's application are prohibited by other provisions in the CDC and, therefore, were properly denied. Id. at 428-31.

Six months later, the state court issued a decision on the Icon petition. In a letter opinion issued on January 6, 2012, the state court found that under the plain language of the state statutes upon which Icon based its petition, and in the absence of evidence the Applications violated any substantive provision of the CDC as it existed at the time the Applications were filed, the court was obligated to issue a peremptory writ requiring the County to approve the Applications and issue the requested permits to Icon (the "State Ruling"). (Isaak Decl. Ex. J at 4.) The state court, assuming the State Ruling would be appealed, also addressed the issue of whether Defendants' denial of the Applications, based on what they perceived as an unconstitutional regulation, was appropriate. (Isaak Decl. Ex. J at 4-5.) The state court explained that:

[t]his being a Mandamus decision, the County can only rely on the constitutionality (or unconstitutionality) if by following CDC 414-5.9 the county official having to follow CDC 414-5.9 would either violate that [official']s oath of office or cause the official to be personally liable in some way.

((Isaak Decl. Ex. J at 4.) Initially, the state court found Singelakis could not be held personally liable for enforcing the questionable exemption. The state court then reasoned that because the questionable exemption was not unconstitutional on its face, but only as applied by Defendants who considered the contents of the proposed sign messages in deciding that the Exemption did not apply, Defendants could not rely on the unconstitutionality of the questionable exemption in denying the Applications. (Isaak Decl. Ex. J at 4.) On June 5, 2012, the court entered a final judgment issuing the peremptory writ. (Isaak Decl. Ex. J at 1-3.) Defendants appealed the State Ruling and sought to stay enforcement of the judgment pending resolution of the appeal. The appellate court denied Defendants' motion for a stay, and Defendants have since issued a few permits under the Applications.

Icon filed this action on June 20, 2012, alleging Defendants' actions violated their equal protection, procedural due process, and freedom of speech rights guaranteed by the United States Constitution. On April 4, 2014, after this court dismissed Icon's equal protection and due process claims, Icon filed an Amended Civil Rights Complaint stating a single claim for violation of its right to free speech ("Amended Complaint"). Icon Groupe, LLC v. Washington County, 948 F.Supp.2d 1202 (D. Or. 2013). In the Amended Complaint, Icon alleges Defendants' denial of, and failure to take final action on, the Applications are based on Defendants' "distaste for the for-profit messages that Icon might in the future put on the signs." (Am. Compl. ¶ 18.) Icon further alleges that "despite the availability of less restrictive alternatives, [Defendants] nonetheless took the most restrictive course of denying all of Icon's applications and then not acting on Icon's administrative appeals." (Compl. ¶ 17.)

Preliminary Procedural Matter s

The parties dispute the effect of the State Ruling in light of the pending appeal. Defendants assert the court should abstain from reaching issues addressed in the State Ruling to avoid inconsistent rulings as those issues are currently on appeal. Icon argues the pendency of the appeal has no effect on this action and that issue preclusion attaches to the State Ruling. Specifically, Icon contends this court is obligated to give preclusive effect to the State Ruling finding the relevant section constitutional and Defendants not free to base decisions on their own interpretation of the Oregon constitution.

When the effect of a state court judgment is at issue, federal courts must apply the law of the forum state to determine the preclusive effect of the judgment. Migra v. Warren City Sch. Dist. Bd. of Ed., 465 U.S. 75, 84 (1984). In Oregon, the pendency of an appeal does not prevent a judgment from operating as res judicata or collateral estoppel. Ron Tonkin Gran Turismo, Inc. v. Wakehouse Motors, Inc., 46 Or.App. 199, 207 (1980). Consequently, the mere fact the State Ruling is currently on appeal does not prevent it from operating as res judicata or collateral estoppel.

Collateral estoppel, alternatively referred to as issue preclusion, arises when an issue of ultimate fact has been determined in a prior proceeding. Nelson v. Emerald People's Util. Dist., 318 Or. 99, 102-103 (1994). The premise is that if "one tribunal has decided an issue, the decision on that issue may preclude relitigation of the issue in another proceeding." Fisher Broadcasting v. Dep't. of Revenue, 321 Or. 341, 347 (1995). For issue preclusion to apply, the issues in the two proceedings must be identical and essential to a final decision on the merits in the first proceeding. Nelson, 318 Or. at 104 (citations omitted).[4] The party asserting issue preclusion bears the burden of proof on these two requirements. Thomas v. U.S. Bank Nat'l Ass'n, 244 Or.App. 457, 469 (2011).

Oregon law imposes a "strict standard for the identity of issues' requirement and require[s] that the precise question was raised and determined in the former suit.'" Engquist v. Or. Dep't of Agric., 478 F.3d 985, 1007 (9th Cir. 2007) (quoting State v. Hunt, 161 Or.App. 338, 985 P.2d 832 (1999)). In a previous motion to abate this action pending final resolution of the mandamus action, Defendants argued the issues before the state court in the mandamus action were the same as those before the court in this action, and thus the court must defer to the state court on state law issues.[5] The court denied this request, finding the constitutional issues raised in the mandamus action were not the same as those alleged in the instant action. Icon Groupe, 948 F.Supp.2d at 1216. In the mandamus action, Defendants defended their denial, or failure to approve, the Applications based on their view the Exemption was content-based and, therefore, unconstitutional. In other words, the constitutionality of the Exemption was pivotal to Defendants' substantive defense. Here, Icon claims ...

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