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Oregon Natural Resources Council Fund v. Port of Portland

Court of Appeals of Oregon

June 28, 2017

OREGON NATURAL RESOURCES COUNCIL FUND, dba Oregon Wild, Plaintiff-Respondent, Cross-Appellant,
v.
PORT OF PORTLAND, Defendant-Appellant, Cross-Respondent.

          Argued and submitted October 6, 2015; resubmitted en banc May 17, 2017.

         Multnomah County Circuit Court 130913593 Eric J. Neiman, Judge pro tempore.

          Matthew J. Kalmanson argued the cause for appellant-cross-respondent.

          With him on the briefs were Karen O'Kasey and Hart Wagner LLP.

          Thomas M. Christ argued the cause and fled the briefs for respondent-cross-appellant.

          Before Hadlock, Chief Judge, and Armstrong, Ortega, Sercombe, Duncan, Egan, DeVore, Tookey, Garrett, DeHoog, and Shorr, Judges, and Flynn, J. pro tempore.

         Case Summary: Defendant Port of Portland (the Port) appeals a judgment declaring that the Port violated Article I, section 8, of the Oregon Constitution when it rejected a proposed advertisement that plaintiff Oregon Natural Resources Council (Oregon Wild) wanted to run at Portland International Airport. The circuit court reasoned that the Port's advertising policy imper-missibly restricts the content of speech by prohibiting political but not commercial advertisements-a ruling based largely on our decision in Karuk Tribe of California v. TriMet, 241 Or.App. 537, 251 P.3d 773 (2011), aff'd by an equally [286 Or. 448] divided court, 355 Or. 239, 323 P.3d 947 (2014), in which we held that TriMet had violated Article I, section 8, when it similarly restricted advertisements on the side of public busses. On appeal, the Port argues that this case is distinguishable legally and factually from Karuk Tribe because (1) the Port's advertising policy is not a "law" for purposes of Article I, section 8 (an argument that Karuk Tribe did not address); (2) even if the policy is a law, it does not regulate speech based on content but rather based on concerns inherent in managing an international commercial airport, which are very different from concerns about the outside of busses; and (3) even if the policy is a law that regulates speech based on content, the restrictions nonetheless fall within a well established historical exception for municipal corporations acting in a proprietary rather than governmental capacity. Oregon Wild responds that the case is moot, because its advertisement has run and it has no present plans to run it again. As for the merits, Oregon Wild argues that the circuit court correctly followed Karuk Tribe and rejected the Port's arguments. Held: The circuit court's declaration of the parties' rights and obligations continues to have a practical effect on them, notwithstanding Oregon Wild's representation that it has no present plan to run the particular advertisement in question; thus, the appeal is not moot. With regard to the merits, the Port's advertising policy, which is a rule enacted by a government that regulates the conduct of anyone who seeks to place advertisements on the government's property, is a "law" within the meaning of Article I, section 8. The text of the advertising policy expressly regulates based on the content of particular advertisements, prohibiting religious and political content while allowing commercial content; thus, that content-based restriction is unconstitutional unless wholly confined within a well established historical exception. The circuit court correctly ruled that the Port failed to demonstrate any such historical exception for "government as proprietor."

         Affirmed on appeal; cross-appeal dismissed at moot.

         [286 Or. 449] DUNCAN, J.

         Defendant Port of Portland (the Port) appeals a judgment declaring that the Port violated Article I, section 8, of the Oregon Constitution when it rejected a proposed advertisement that plaintiff Oregon Natural Resources Council (Oregon Wild) wanted to run at Portland International Airport (PDX). The circuit court reasoned that the Port's advertising policy impermissibly restricts the content of speech by prohibiting political but not commercial advertisements-a ruling based largely on our decision in Karuk Tribe of California v. TriMet, 241 Or.App. 537, 251 P.3d 773 (2011), affd by an equally divided court, 355 Or. 239, 323 P.3d 947 (2014), in which we held that TriMet had violated Article I, section 8, when it similarly restricted advertisements on the side of public busses. On appeal, the Port argues that this case is distinguishable legally and factually from Karuk Tribe because (1) the Port's advertising policy is not a "law" for purposes of Article I, section 8 (an argument that Karuk Tribe did not address); (2) even if the policy is a law, it does not regulate speech based on content but rather based on concerns inherent in managing an international commercial airport, which are very different from concerns about the outside of busses; and (3) even if the policy is a law that regulates speech based on content, the restrictions nonetheless fall within a well established historical exception for municipal corporations acting in a proprietary rather than governmental capacity.

         Oregon Wild responds that this case is moot, because its advertisement has run and it has no present plans to run it again. As for the merits, Oregon Wild argues that we should follow Karuk Tribe, reject any arguments that are not directly controlled by that case, and affirm the circuit court's declaratory judgment.

         As discussed more fully below, we are not persuaded that the case is moot, and we therefore proceed to the merits of the Port's appeal. On the merits, we agree with Oregon Wild that the Port's arguments do not yield a different result [286 Or. 450] from Karuk Tribe and, adhering to our reasoning in that case, affirm the circuit court's declaratory judgment.[1]

         I. BACKGROUND

         The relevant factual background for this appeal is not in dispute. The Port is a port district and municipal corporation created in 1891. See generally Cook v. The Port of Portland, 20 Or. 580, 27 P 263 (1891) (describing the creation of the Port). The Port's purpose is to promote its maritime, shipping, aviation, commercial, and industrial interests, and it is authorized to acquire and convey property, contract with third parties, and generally "do any other acts and things which are requisite, necessary or convenient in accomplishing the purpose described or in carrying out" that purpose. ORS 778.015. The Port owns and operates PDX.

         In 2008, the Port adopted Ordinance No. 423-R, which regulates the operation of PDX. Section 1.1.8 of the ordinance states that the Port finds that "[establishing reasonable Regulations at its Airports limiting commercial and noncommercial activity within the Airport are essential." To that end, section 4.1.1 delegates authority to the Port's director to "adopt Rules governing the operation of Airport facilities for each Port airport."

         In accordance with section 4.1.1, the Port adopted the "Portland International Airport Rules." Chapter 13 of those rules concerns "Advertising, Promotion and Signage." Under that chapter, private parties are permitted to lease advertising space at the airport, but there are restrictions on the content of the advertisements. Most significantly, for purposes of this case, the Port "does not permit the placement of advertising materials at the Airport that contain * * * religious or political messages."[2]

         [286 Or. 451] In 2013, Oregon Wild submitted a request to lease advertising space at PDX. The proposed advertisement contained a photograph of a tree-covered mountaintop, part of which had been clear cut. The caption read, "Welcome to Oregon[-]Home of the Clearcut." (Uppercase altered.) The advertisement also included a website address, www. ClearCutOregon.com.

         The Port denied Oregon Wild's request, deeming the advertisement to be "political advertising." The Port invited Oregon Wild to apply instead for a permit for free speech activities, which the Port allowed in certain areas of PDX.[3]Oregon Wild declined that invitation and filed this action for writ of review and declaratory relief, alleging, among other things, that the Port's rejection of the advertisement, based on its content, violated the free-speech guarantees in Article I, section 8, of the Oregon Constitution and the First Amendment to the United States Constitution.

         Following the return of the writ and the record, the parties filed cross-motions for summary judgment. The cross-motions addressed the import of our decision in Karuk Tribe, review of which was pending at that time in the Supreme Court. Because that decision frames the parties' arguments below and on appeal, we pause to summarize it.

         In Karuk Tribe, the question before us was whether TriMet, a mass transit district, had violated Article I, section 8, by rejecting the petitioners' proposed advertisement [286 Or. 452] based on a policy that allowed commercial but not political advertisements on the sides of its vehicles. TriMet defended its advertising policy on two grounds, both of which related to TriMet's proprietary functions as a municipal corporation.[4] First, TriMet argued that the framework set out in State v. Robertson, 293 Or. 402, 649 P.2d 569 (1982), for evaluating Article I, section 8, claims-a framework in which regulations based on the content of expression are impermissible unless wholly confined to a historical exception- should not apply to TriMet's policy because it was acting in its proprietary rather than regulatory capacity as a transit district. That is, notwithstanding Robertson, TriMet urged the court to construe Article I, section 8, to "allow government-drawn distinctions based on the content of expression where the government acts in its proprietary capacity." Karuk Tribe, 241 Or.App. at 546.[5] Second, in its reply brief, TriMet advanced the alternative argument that, even if the Robertson framework were to apply, a similar "government as proprietor" distinction puts TriMet's advertising policy restrictions within a well-established historical exception to the reach of Article I, section 8. Karuk Tribe, 241 Or.App. at 548.

         We rejected both of those "government as proprietor" arguments. The first we rejected on the merits, concluding that "TriMet's arguments before us that this is not a Robertson case are unpersuasive." Karuk Tribe, 241 Or.App. at 547. The second, however, we concluded had been raised [286 Or. 453] too late in the litigation. We explained that "[w]e do not reach the merits of that [historical exception] argument for two reasons: not only did TriMet fail to preserve that argument below, but, as we have often had occasion to remind others, a party may not raise an issue for the first time in a reply brief." Id. at 548 (internal quotation marks, alterations, and citations omitted).

         In the process of rejecting those arguments, we also identified but did not address yet another possible "government as proprietor" issue under Article I, section 8-that is, whether TriMet's advertising policy was even a "law" for purposes of that constitutional provision. We noted:

"TriMet does not contend that an advertising policy adopted by a governmental officer that only affects contractual relationships of that government does not enact or implement a 'law' under Article I, section 8. Indeed, TriMet eschewed any such contention at oral argument. ***. Neither we nor the Supreme Court have decided whether a governmental policy adopted by an executive officer that only affects contractual relationships of that government, and does not enact or implement a general rule of civil conduct, qualifies as a 'law, ' whose enactment or enforcement is constrained by Article I, section 8. It may be that the relevant 'law' here is ORS 267.140(2), empowering the general manager to adopt the policy in question. As we have said, however, any legal distinction about the meaning of a 'restricting' or 'restraining' 'law' under Article I, section 8-although related to TriMet's 'government as proprietor' thesis-is outside the legal questions presented to the reviewing court below and advanced on appeal."

Karuk Tribe, 241 Or.App. at 547 n 7.

         In October 2011, the Supreme Court allowed review of our decision, and it remained pending in that court at the time that Oregon Wild and the Port filed their summary judgment motions in this case in 2013. In its motion, Oregon Wild argued that this case was "nearly identical" to Karuk Tribe: "The issue in both cases is whether the government can regulate the content of advertising on government-owned property that has been opened to the public for that purpose." Oregon Wild urged the circuit court to simply [286 Or. 454] follow that decision-at least until the Supreme Court said otherwise.

         The Port, in its cross-motion, argued that Karuk Tribe resolved only one of the grounds upon which the Port defended its advertising policy. The Port's motion advanced four bases for granting summary judgment in its favor under Article I, section 8: (1) The Port's advertising policy is not a "law, " and therefore Article I, section 8, does not apply; (2) the Robertson framework does not apply because the Port was acting in a proprietary rather than regulatory capacity; (3) even if Robertson applies, the Port's policies are reasonable time, place, and manner restrictions that regulate, not proscribe, speech at PDX; and (4) again assuming Roberson applies, the advertising policy falls within a historical exception for conduct taken by a municipal corporation acting in its proprietary capacity. Only the second argument, the Port argued, was controlled by our decision in Karuk Tribe, and the rest were open questions-the first and fourth, expressly so.

         In its letter opinion on the cross-motions, the circuit court ruled in favor of Oregon Wild. The court explained:

"The protection given to freedom of speech by Article I, Section 8 of the Oregon Constitution has its own body of case law. I am persuaded that this case is controlled by [Karuk Tribe]. Defendant argues that, at the time of adoption of the Oregon Constitution in 1857, the framers had in mind an exception to the freedom of speech guarantee for governments to limit speech on premises operated in their proprietary capacity. There is a heavy burden on [the Port], which proposes to restrict speech, to demonstrate the existence of this exception. The cases and examples cited by [the Port] do not satisfy this burden.
"Unless the Oregon Supreme Court tells us otherwise when it decides Karuk Tribe, [the Port's] policy regulates the content of speech and not simply its effects. For that reason, plaintiff is entitled to the relief sought under the Oregon Constitution."

         The court then entered a judgment, in accordance with its ruling, declaring that the Port "violated Article I, section 8, of the Oregon Constitution * * * when it rejected [Oregon [286 Or. 455] Wild's] proposed advertisement, as alleged in [Oregon Wild's] complaint." The judgment further stated, "in accordance with the writ of review statutes, ORS 34.010 to 34.102, the court reverses [the Port's] decision to reject the advertisement and, instead, orders [the Port] to accept it."

         The Port subsequently filed its appeal and, before the parties had filed their briefs, the Supreme Court issued its decision in Karuk Tribe-a per curiam opinion that affirmed by an equally divided court, with only six justices participating. 355 Or. 239. Shortly after that decision, the Port asked this court to certify the case directly to the Supreme Court, so that the issues presented in Karuk Tribe could be addressed by a full seven-member court. Oregon Wild opposed the motion, ...


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