• Can You Plead The 5th in a Sign Case?
• 2023 CSA Update Reagan National - Revisited - WHY it Matters
• Are Signs Part of Essential Infrastructure?
• What is the Permit Streamlining Act - and how can it help
• Court's Free-Speech Expansion Has Far-Reaching Consequences
• Supreme Court rules against city in sign case
• A "Public Road" is Not Necessarily a "Public Right of Way"
• Mechanic's Lien Law - Brief Recap
• 10 Lobbying Tips in Difficult Budget Years - And Just About Any Other Time of Year
• FOR SALE Signs - Some Basics of Commercial Speech
• Legality of Moratoriums
• May a City require CEQA approval for On-Premise Signs?
• Sign Law Update - Is Intentionally False Speech Protected?

Latest Article Posted Below . . .

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Reversing the 9th Circuit Court of Appeals in a much anticipated decision, the US Supreme Court ruled June 17 that the city of Gilbert, AZ sign code was an unconstitutional restriction on speech. The court held, among many other points, that the code is an example of content-based discrimination, which "singles out specific subject matter for differential treatment, even if it does not target viewpoints within that subject matter." The court also ruled that a code which is content-based on its face is nonetheless subject to "strict scrutiny" analysis, regardless of the government's motive, content-neutral justification, or lack of disagreement with the ideas contained in the regulated speech.

As a result, sign codes which include provisions favoring certain messages based on who is "speaking" will be subject to constitutional attack.

Complete decision:

http://www.supremecourt.gov/opinions/14pdf/13-502_9olb.pdf

Eventually, a property developer, Barratt American Incorporated, planned to develop a condominium project on the Aragon parcel in three phases, corresponding to three condominium buildings. The three condominium buildings would share certain common areas and amenities and be governed by a single homeowners association. Barratt financed the project through a revolving credit agreement with Bank of America, as administrative agent for a group of lenders.

Barratt began construction on the project and completed two of the three buildings. As part of that development, Barratt graded and paved the easement area for a private roadway, named "Troy Lane," which provides access from El Cajon Boulevard on the north to a parking garage for the project.

At the end of the roadway, on the Schmidt parcel, Barratt installed a locked gate which prevented traffic from using Troy Lane as a throughway between El Cajon Boulevard and the public street on the south. Underneath Troy Lane (within the easement area), Barratt constructed sewer pipes, storm drains, oil and sand separators, and special retention nails designed to hold steep dirt slopes in place.

After phases 1 and 2 of the condominium project was completed, Barratt deeded portions of the Aragon parcel to the newly created Aragon Homeowners Association. Barratt did not complete phase 3 of the project, and defaulted on its credit agreement with Bank of America. Eventually, Bank of America took title to various portions of the project.

The owners of the Schmidt parcel filed a lawsuit again the Aragon Homeowners' Association, Bank of America, and others, alleging that the easement construction exceeded and violated the scope of the easement, and trespassed upon and/or created and maintained nuisances affecting the Schmidt parcel by (1) improperly installing oil and sand separators, storm drains, fire lanes, fire gates, and tiebacks in and along the easement; (2) improperly constructing and maintaining a driveway apron and a similarly improper garage entryway along the easement; and (3) failing to put in place a road maintenance agreement for the roadway on the easement. The Schmidts sought damages for loss of reasonable use and enjoyment of their property, diminished market value of the property, compensatory and punitive damages; and they demanded that the structures and improvements at issue be removed. In Schmidt v. Bank of America (2014), the primary issue on appeal was whether the phrase "for public road purposes" created a public right-of-way over the easement. If a public right-of-way was intended by the grantor, then the easement may be used for any infrastructure that accompanies normal development, including the various structures and improvements that the Schmidts challenged. However, if the language was construed as a private road easement, and created only a "right of ingress and egress" that restricts the dominant Aragon parcel to use only the surface of the easement -- and not for non-roadway purposes -- then the various structures and improvements may constitute a nuisance and trespass.

The Court of Appeal explained that an easement "is a restricted right to specific, limited, definable use or activity upon another's property which "must be less than the right of ownership." Therefore, it is fundamental that "the language of a grant of an easement determines the scope of the easement." Easements are interpreted like contracts; and so the court places itself in the position of the contracting parties in order to ascertain their intent at the time of the grant. The court further stated that the phrase "right of ingress and egress" has been used to describe one of the easements that a landowner has over a public street that the land abuts. As one 1907 decision stated: "These private easements are, [first,] [t]he right of ingress and egress to and from the lot over and by means of the adjacent portion of the street."

Applying these general principles of easement law, the court in this case found that the easement reserved in 1941 "is limited to a 'right of ingress and egress... over, along and across' a portion of the Schmidt parcel. The phrase 'for public road purposes' reflects the intent of the parties and is a qualification of, and limitation on, the right of ingress and egress reserved in the grant. It does not expand the right to include activities other than ingress and egress."

The court continued: "Just as an abutting landowner has '[t]he right of ingress and egress to and from [his] lot over and by means of the adjacent portion of the street,' [the] reservation established the right of ingress and egress to and from the reserved (Aragon) parcel over and by means of the specified portion of the Schmidt parcel "for public road purposes," that is, in order to reach a public road.

In light of that analysis, the court held that the phrase "for public road purposes" did not create a public right-of-way over the easement. The court stated: "Here, the reserved easement exists purely between private parties. There is no evidence that the public at large has any rights to the reserved easement or that the use of the easement is regulated by any governmental entity as a public right-of-way. The mere inclusion of the phrase 'for public road purposes' does not transform an otherwise private easement into a public right-of-way...The phrase 'for public road purposes' is qualified both by the right granted ('ingress and egress') and by its application to the Schmidt parcel ('over, along and across'). The grant here was not simply 'for public road purposes'; that phrase must be read in context with the remainder of the grant language."

In addition, a private easement for "ingress and egress" does not include the right to use the easement for any other purpose. "The owner of a dominant estate [the party wishing to use or access the adjacent parcel] may do that which is reasonably necessary to enjoy the easement and, as an incident thereto, keep it in repair and fit for use. But the easement may not be substantially altered without the consent of the owner of the servient estate" [the burdened parcel].

The lesson to be learned from the Schmidt case is that an easement does not, in and of itself, result in the establishment of a public right-of-way, even when the easement is for "the right of ingress and egress for public road purposes." Bottom Line: If you're working in, on, near or across from an easement -- Check before you dig!

A mechanic's lien is a lien on real property for goods and services rendered to the property for permanent "works of improvement," which, if not paid, entitles the contractor to foreclose on the property. A mechanic's lien is a very effective tool for receiving and securing payment. It is essentially an encumbrance on title. What are the required basic procedures?

1. Preliminary Notice. A 20-day preliminary notice is required to be served upon the owner, landlord, general contractor and construction lender, if any, within 20 days of the commencement of work. A 20-day notice is generally not required if you are under "direct contract" with the owner, but is nonetheless good practice to do so. (It is also a good idea to record the prelim notice with the county recorder.)

2. Record the Mechanics Lien. After completion of your portion of the work, if you are not paid promptly the mechanic's lien must be recorded within 90 days with the county recorder in each county where the work was performed, i.e., where the property is located. If the owner has recorded a Notice of Completion or Cessation, the time is reduced to 60 days for general contractors and 30 days for subs. Under the 2010 amendments, a copy of the lien, along with a new statutory form notice, must be served on the owner prior to recording the lien (this can be done on the same day); so it is important to gather all the owner data well in advance. If you can't find the owner, the lien can be served upon the general contractor or the construction lender. Note: Lien rights generally are waived if not timely recorded, even if you are in negotiations.

3. After the Lien is Recorded. If payment is received, contractor must execute a "lien release" or partial release, if not paid in full. What if payment is not received?

1.A lawsuit can be filed to foreclose on the lien. A mechanic's lien binds the property for only 90 days and expires automatically if no suit is filed. There are various exceptions, however, depending on whether a notice of completion or cessation was not recorded, but the better and most efficient practice is to file suit no later than the 90th day after the mechanic's lien is recorded. Also, the recordation of a notice of completion by the owner after filing of your mechanic's lien does not extend the 90-day deadline to file suit. Don't forget, if you miss the deadline, although your mechanic's lien rights will have terminated you can nonetheless sue for breach of contract (4-year statute of limitations for written agreements).

2. File a "lis pendens." A lis pendens is a notice of lawsuit recorded against the property. While it was always the practice to do so, the 2010 amendments now make mandatory the recording and serving of the lis pendens on the parties within 20 days of filing the mechanic's lien lawsuit.

3. Attorney fees. Attorney fees are not recoverable in a mechanic's lien foreclosure suit; however, they are recoverable in a breach of contract action, if an attorney fees provision exists in writing in the contract. Important: This article should not be considered comprehensive nor deemed a substitute for competent legal advice. If you have collections or mechanic's lien questions, contact your attorney or call my office at 916.395.6000, jeff@calsign.org.

So, whether it's a sign ordinance revision or a new project, what can you or your staff do on a daily basis to educate government officials about the benefit of signs and their significant impact on local coffers in terms of revenue, jobs and community vitality?

1. INTRODUCE OR RE-INTRODUCE OFFICIALS TO YOUR BUSINESS
Invite them to your place of business so you can educate them one-toone on what you do - so they can see firsthand your employees at work and the finished product you produce.

2. TALK IT UP ABOUT SIGNS
Explain to officials what signs do and how they work - not only the mechanical but the scientific aspects as well.

3. DEAL IN FACTS
Evidence is key to proving your point.

4. STAY THE COURSE - CLARITY OF MESSAGE
A well organized presentation with a short agenda that shows your issue clearly and concisely will reflect favorably upon you and your business as the knowledgeable "local expert."

5. SHOW HOW SIGNS GENERATE JOBS, REVENUE AND TAXES
The sign industry talks about this a lot, but many do not understand the connection and don't know how to make it work.

6. W ORK WITH COALITIONS
Our experience in California shows that while CSA is the statewide spokesperson, it's our participation with our customers and their associations that hold significant sway with local and state officials.

7. DON'T BE AFRAID TO CONTRIBUTE and PAY COMPLIMENTS WHEN APPROPRIATE (WITHOUT ANY QUID PRO QUO)
This is a bit touchy for some.

8. GIVE THE CITY A "ROADMAP" TO DEAL WITH ITS SIGNAGE CONCERNS
Often officials do not know what they really want to do; nor do they understand the problem they're trying to solve; they've only heard from consultants, a complaining citizenry or other special interests.

9. STAY ON TOP OF AGENDAS
One of the regular challenges we face as industry doing work in multiple jurisdictions is keeping tabs on city council or supervisor meetings.

10. DON'T GIVE UP
Continue to keep your community leaders and elected officials informed about the impact of an issue, even after it has passed or a vote taken. This is just a taste of Jeff's "10 Lobbying Tips." For the full content and even more great information, please visit the CSA website State Legislation page at http://www.calsign.org/stateleg.html.

Generally, commercial speech regulations, including sign codes, are subject to analysis under criteria set forth by the US Supreme Court in Central Hudson v. Public Service Commissioner [447 US 557 (1980)]: (1) whether the expression is protected by the First Amendment, which means that the expression at least must concern lawful activity and not be misleading; (2) whether the asserted governmental interest is substantial; then, if yes to both, (3) whether the regulation directly advances the governmental interest asserted; and (4) whether it is not more extensive than is necessary to serve that interest. [See also Gerawan v. Kawamura (2004) 33 Cal.4th 1, 30 (Cal Supreme Court)].

Courts around the country have applied Central Hudson with differing results, but the case is the bedrock for constitutional analysis. Under Central Hudson, "the State must demonstrate that the challenged regulation advances the Government interest in a direct and material way. That burden is not satisfied by mere speculation or conjecture; rather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree." [Florida Bar v. Went for It, Inc (1995) 515 US 618, 625-26]

It's NOT Obvious
With regard to For Sale signs, we often see problems arise in communities which prohibit temporary signs by category, e.g., vehicle signs, real estate signs, window signs, banners and other promotional signs, etc. For example, in Pagan v. Fruchey, an Ohio case, the 6th Circuit Court of Appeal found unconstitutional a prohibition of For Sale signs on vehicles parked on city streets. The city claimed its interests in traffic safety and aesthetics justified the ban, but the court held the ordinance was not content-neutral and the city failed to adduce any meaningful evidence of how the ban materially resolved the problem. Notably, the city asked the court to adopt a standard of "obviousness" or "common sense" under which a court could uphold a speech regulation. Fortunately, the court reasonably declined.

The city tried to argue that under Metromedia v. City of San Diego [US Supreme Court] the collective judgment of various legislative bans on billboards was sufficient justification. However, the court determined there was no such wisdom supporting a ban on For Sale signs posted on cars. "The position advocated [assumes] that billboards and "For Sale" signs posted on parked cars raise practically indistinguishable aesthetic and traffic safety issues." The court also rejected the city's suggestion that its municipal "aesthetic objectives carries with it some talismanic quality that legitimizes all signage regulation and relieves them from making a showing . . ."

In Foti v. Menlo Park, the 9th Circuit Court of Appeal addressed, among other matters, the city's prohibition of any signs on cars (Foti used his car to protest abortion). The court held:

"The exemption pertaining to signs on vehicles is, quite frankly, somewhat odd. . . The ordinance exempts from the ban those signs on vehicles "provided [t]he vehicle is not parked in order to ... attract the attention of the public ...." (emphasis in original). This exception-within-an-exception really means that the ordinance prohibits signs on vehicles that are parked to attract attention. For our purposes, we will consider this "exemption" a ban.

"Even odder is the target of this ban. The ordinance does not prohibit signs on parked vehicles; it does not even prohibit signs on parked vehicles that were placed on the car to attract attention. Rather, the target of the ban appears to be the driver's subjective intent. If the driver intends to demonstrate or attract attention with a sign when parking a vehicle, the sign is banned. If the driver intends to demonstrate or attract attention with a sign when placing the sign on a vehicle but not when parking, the sign is permitted. Thus, to enforce the ordinance, a Menlo Park law enforcement officer must decipher the driver's subjective intent to communicate from the positioning of tires and the chosen parking spot.

"Although creative, this ban runs afoul of the First Amendment in two important respects. First, it is unconstitutionally vague. "A fundamental requirement of due process is that a statute must clearly delineate the conduct it proscribes." [citations]. A statute must be sufficiently clear so as to allow persons of "ordinary intelligence a reasonable opportunity to know what is prohibited." [citations]. Statutes that are insufficiently clear are void for three reasons: (1) to avoid punishing people for behavior that they could not have known was illegal; (2) to avoid subjective enforcement of the laws based on "arbitrary and discriminatory enforcement" by government officers; and (3) to avoid any chilling effect on the exercise of First Amendment freedoms. Moreover, when First Amendment freedoms are at stake, an even greater degree of specificity and clarity of laws is required."

Perpetual Sale = Deceptive Business Practice?

We've all seen ads for merchandise "on sale," but what happens when the "regular price" is always the sale price? In Hinojos v. Kohls, the retailer was sued for false advertising and violation of various unfair business practices. Even though the buyer received the sale price and there was no actual financial loss, he claimed the advertising was a material inducement to purchase; and, but for the ad he wouldn't have shopped in the store. California courts have long-recognized this style of marketing as deceptive. In this case, the Federal 9th Circuit Court of Appeal affirmed class action status against Kohl's (no decision yet on the merits).

Real Estate For Sale Signs - Protected Under California Law

In addition to other rules pertaining to temporary signage, California Civil Code Section 713 provides that regardless of any other law, a sign advertising real property for sale or lease can be placed on the property or on property owned by others (with consent), provided it is of reasonable dimension and does not adversely affect traffic safety. No appellate court has yet to interpret Section 713.

There is an express exemption under CEQA for on-premise signs. Public Resources Code Section 21084 includes a list of classes of projects "which have been determined not to have a significant effect on the environment and which shall, therefore, be exempt from the provisions of CEQA." See 14 Cal Code of Regulations Section 15300, et seq (CEQA Guidelines).

Pursuant to 14 CCR Section 15311, dealing with Accessory Structures (Class 11), on-premise signs are categorically exempt and a negative declaration should issue. The authority cited for this provision is Public Resource Code sections 21083 and 21087.

The EIR process requires first the local agency to determine whether the project is exempt. Second, if it is not exempt, an initial study must be conducted to determine whether the project may significantly affect the environment. If there is no significant effect, a "neg dec" is prepared. If there is a significant impact, an EIR is prepared. A project not otherwise exempt may nonetheless be found to be excepted under the "common sense" exception for projects where it is shown that there is no possibility that the activity may have a significant impact on the environment. 14 CCR Section 15061(b)(3).

Some planners nonetheless call for an EIR to be prepared based on the erroneous conclusion that because Section 15311 refers to "minor structures," certain on-premise signs, based on their height and size, are not included within the categorical exemption. However, neither State law nor the CEQA guidelines recognize such distinction. Moreover, "minor" within the context of CEQA does not relate so much to the height and size, but to the environmental impact caused by the activity.

In McQueen v. Mid-Peninsula (1988) 202 Cal.App.3d 1136, the court held that the categorical exemptions are to be strictly construed and may not used unless there is substantial evidence of unusual circumstances resulting in significant impacts which threaten the environment. Unless and until a city or county can demonstrate such unusual circumstances or can show substantial harm threatened to the environment, an EIR should not be required.

In cases where the agency already approved the project, any existing or prior EIR on that project would apply to the sign permit. Moreover, any purported harm to the environment would have already been addressed by the prior land use approval. The regs require the local agency to use previously prepared EIRs, so that a secondary project qualifies for a negative declaration. 14 CCR Section 15006. Regardless of sign's size, once the land use was allowed originally, a second EIR is not necessary. If a negative declaration issued initially, then that should also apply to a subsequent application for a new sign. If an existing sign is being replaced, there will be no changed environmental impact justifying an EIR.

The CEQA Guidelines further provide that public agencies "may not require EIRs for projects described in the [exempt] classes," except: (a) when the project is "in a particularly sensitive environment . . . where the project may impact on an environmental resource of hazardous or critical concern where designated, precisely mapped, and officially adopted pursuant to law ...," (b) when the cumulative impact of successive projects of the same type in the same place over time is significant, or (c) when there is a "reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances." CEQA Guidelines, 14 CCR Sections 15300.2, 15300.4. None of these factors usually exist, if ever, with regard to sign installations.

Courts have held numerous projects to have no significant impact on the environment, including street-widenings, building permits for construction of new houses on existing lots, condemnation of property, and expansion of parking zones, to name just a few. All these projects have in common a pre-existing use or activity. Significantly, no court has held that a sign - of any dimension - poses a significant impact on the environment.

This is so because an agency must prepare an EIR when it finds substantial evidence that the project may significantly affect the environment. 14 CCR Section 15064. "Environment" is defined as the "physical conditions that exist within the area which will be affected by a proposed project including land, air, water, minerals, flora , fauna, ambient noise, and objects of historic or esthetic significance," including natural and man-made conditions. 14 CCR Section 15360.

Unless the proposed sign is being installed in a vernal pool, it's hard to imagine how construction of a sign, regardless of height, would significantly negatively affect the "environment" factors. Given that the primary land use is well established, the city simply cannot require an EIR without first identifying some potential significant environmental harm caused by the sign's construction.

Further, under State law, any fee charged for the issuance of the "neg dec" must not exceed the reasonable value of the service rendered. Gov Code Section 66014. Since on-premise signs are categorically exempt, there should be no fees charged in this regard.

For more information, call Jeff Aran at 916.395.6000

When asked what "sign law" is, I like to respond it is an area of law at the intersection where commercial speech and First Amendment freedoms bang heads with administrative, criminal, regulatory, municipal, trademark, zoning and real estate law, as well as private property rights and aesthetics. While that may sound more like a multi-car accident, it's clearly an area of law rife with challenges for lawyers, sign companies, government, end users and individuals. A recent case highlights the difficulty when the First Amendment is exploited to defend criminal acts.

In US v. Strandlof, the Federal 10th Circuit Court of Appeals had the opportunity to examine the Stolen Valor Act in light of the First Amendment. The SVA makes it illegal to falsely claim to have received a military award or honor. By all accounts, Rick Strandlof was an impostor. According to the decision, over a multi-year period he "concocted a ruse" whereby, although he never served in the armed forces, he founded the Colorado Veterans Alliance (a commercial enterprise),* frequently falsely told vets he graduated from the US Naval Academy, was a former Marine Corps Captain, had been wounded in Iraq, received the Purple Heart for being wounded, the Silver Star for gallantry, used the alias "Captain Rick Duncan," and created online phony profiles about himself.

When charged by Federal prosecutors, he argued in defense that the SVA was unconstitutional under the First Amendment because even though his speech was false, the SVA was an unlawful content-based restriction on speech (words not unfamiliar to those in the sign industry). While it may seem laughable that such a con artist could get away with it, or that these false statements of fact should be protected speech, the Colorado District court shockingly agreed with Strandlof. The court was not alone; two other District Courts, as well as the 9th Circuit Court of Appeals, reached similar conclusions in other cases. (The 9th Circuit case, US v. Alvarez, is pending before the US Supreme Court).

Fortunately, the 10th Circuit Court judicial panel wrested some clarity from this quagmire, holding "the Constitution does not foreclose laws criminalizing knowing falsehoods, so long as the laws allow "breathing space" for core protected speech - as the Supreme Court calls it, "speech that matters."" Essentially, where certain speech is intended to deceive it is not protected by the First Amendment, nor is a statute which makes it illegal, such as the SVA, unconstitutional. The court clarified, however, that a statute which seeks to criminalize satirical, rhetorical, theatrical, literary, ironic or "hyperbolic statements" could not survive. "Just because Congress can criminalize some lies does not imply that it can attack opinions [. . .] ideologically inflected statements [. . .] or anything else that is not knowingly a false factual statement made with an intention to deceive."

The court cited numerous cases as precedent, including several notable in this season of electioneering. "Intentional or reckless falsehood, even political falsehood, enjoys no First Amendment protection." Colson v. Grohman (5th Circuit); "False speech, even political speech, does not merit constitutional protection if the speaker knows of the falsehood or recklessly disregards the truth." Solano v. Playgirl (9th Circuit).

Importantly, as the 10th Circuit panel described it, the US Supreme Court recently "cautioned lawmakers to think twice" before crafting new, as-of-yet unrecognized categories of unprotected speech. In sum, "a restriction on knowingly false factual statements is constitutional so long as it has some limiting characteristic that prevents it from suppressing constitutionally valuable opinions and true statements."

While the sign industry rarely deals with false speech issues, we frequently deal with content-control which operates as restrictions on our ability to display messages. As the sign industry evolves with its own brand of new "as-of-yet unrecognized" products, which government will surely seek to regulate (e.g., digital sign technology), we need to remain ever-vigilant that such speech is not suppressed.

Many years ago, the US Supreme Court established a four-part test for determining whether the regulation of commercial speech is lawful (also affirmed in California) - - (1) "whether the expression is protected by the First Amendment," which means that the expression "at least must concern lawful activity and not be misleading"; (2) "whether the asserted governmental interest is substantial"; if yes to both, then (3) "whether the regulation directly advances the governmental interest asserted"; and (4) "whether it is not more extensive than is necessary to serve that interest." Gerawan Farming v. Kawamura (2004) 33 Cal.4th 1, 20-24, citing Central Hudson v. Pub Serv. Commsn (1980) 447 US 557, 561.

This is the test by which local and state commercial speech regulations must be judged.

Of course, when it comes to signs most cities argue that they're not regulating speech at all - they're merely regulating the time, place and manner of a display. Under those circumstances, the code must be examined to determine if in fact it is content-based. If so, TPM regulations need only satisfy a legitimate governmental purpose to be found valid. While aesthetics is a factor in sign control, particularly with regard to types of permitted signs (i.e., pole, wall, monument), the basis for what limitations are permissible must be "reasonable" and, in the case of height, size, dimension, etc., grounded upon some empirical basis for the restrictions (e.g., setback, legibility, speed of traffic, etc).

*Colorado Veterans Alliance claimed it was "the Centennial State's premiere policy and advocacy organization dedicated to representing the interests of 32,000 Colorado's post 9/11 Veterans, active duty service members and their families."