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Coastal Outdoor Advertising Group, L.L.C. v. Township of East Hanover

July 1, 2009


The opinion of the court was delivered by: Katharine S. Hayden, U.S.D.J.


This case centers on the application by plaintiff Coastal Outdoor Advertising Group, L.L.C. (―Coastal‖) for a billboard permit, which was denied by the defendant municipality, Township of East Hanover, New Jersey (―East Hanover‖ or the ―township‖). These events took place in 2007, and have been litigated since that time. Count I of the complaint asserts a claim under the First Amendment attacking the constitutionality of the sign ordinance. Count II asserts a violation of due process and equal protection under the Fourteenth Amendment with regard to East Hanover's sign code. Count III claims violation by East Hanover of the New Jersey Constitution with respect to free speech, due process, and equal protection. Count IV seeks to enjoin the Township from enforcing the sign ordinance in its entirety. In its answer, East Hanover asserts several affirmative defenses, including: that Coastal has insufficient standing based upon lack of redressability and lack of injury; that Coastal fails to fit within the overbreadth doctrine to challenge facial validity of the sign ordinance; that Coastal cannot convert its conditional permit into a permit that would satisfy state law; that the sign ordinance was a reasonable time, place, and manner restriction; that Coastal fails to state a claim because Coastal fails to allege that the sign ordinance is not rationally related to a legitimate government interest; and that the sign ordinance was not an unlawful prior restraint because it provides appeal rights, subject to judicial review.

Here, the Court addresses cross-motions for summary judgment. East Hanover moves for summary judgment dismissing the complaint in its entirety, primarily advancing arguments that Coastal lacks standing to challenge the zoning ordinance that putatively supported the denial of its zoning application. Coastal, through its cross-motion, moves for partial summary judgment ―for the limited purpose of establishing that [East Hanover] was enforcing unconstitutional restrictions on signs at the time Coastal submitted its sign application,‖ and submits that a trial as to damages and other remedies should be scheduled. (Coastal Br. Mot. Summ. J. 1.)


Under Rule 56(c), summary judgment may be granted ―if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.‖ Fed. R. Civ. P. 56(c). The Court is duty-bound to view the ―facts . . . in the light most favorable to the non-moving party and [must draw] all inferences . . . in that party's favor.‖ Gray v. York Newspapers, 957 F.2d 1070, 1078 (3d Cir. 1992). Summary judgment is inappropriate if there is evidence sufficient to allow a reasonable jury to return a verdict for the non-moving party, see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), or if the factual dispute is one which might affect the outcome of the suit under the governing law . . . .‖ Id. The movant's burden, however, ―may be discharged by showing . . . that there is an absence of evidence to support the nonmoving party's case.‖ Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). Additionally, the non-movant ―may not rely merely on allegations or denials [of the] . . . pleading‖; instead, the non-movant, ―by affidavits or as otherwise provided in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial.‖ Fed. R. Civ. P. 56(e)(2); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).


Coastal, a limited-liability company, was formed in early 2006 and has two employees: John Robert Varys, who serves as development director and vice-president, and Anthony Baiamonte III, who serves as general counsel and chief legal officer. (EH App'x 6, 39.) Coastal also has three member-owners, Frank J. Nataro, Camber Ransom-Quigley, and John Robert Varys. East Hanover is a suburban municipality in Morris County, New Jersey, comprising 8.2 square miles with a population of 11,500 residents. East Hanover contends that it prohibits the erection of new billboards and that no one has engaged in outdoor advertising within the township since 1976. (EH App'x 1, ¶¶ 5-9.)

This dispute focuses on Block 1.1, Lot 8 (hereinafter, the ―subject parcel‖), which is located in the township's Light Industry I-3 Zone at 761 Ridgedale Avenue. (EH App'x 1, ¶¶ 11-14.) The subject parcel contains a two-story structure, which the township contends limits the use of the subject parcel due to the I-3 zoning limits. (EH App'x 1, ¶¶ 83, 118-121; App. 37, at § 95-46.B(2).) Coastal wished to apply for a billboard on this parcel, as it abutted Interstate 280, and would be visible from that highway. (Statement of Material Fact, ¶¶ 3-4.) East Hanover adopted the Chapter 95 Land Use Zoning Code (―LUZ Code‖) in 1979, and it was amended from time to time thereafter. (EH App'x 1, ¶ 52.) The township contends that the term ―building,‖ as used in its LUZ Code, included the term ―structure,‖ and that structure encompasses billboard structures. (EH App'x 1, ¶¶ 60-64.)

During 2004, Coastal representatives, including Varys, sought to develop sites for the erection of billboards. (EH App'x 9, 55.) Coastal entered into a lease on December 31, 2004 with the owners of the subject parcel for the erection of an outdoor advertising structure. (EH App'x 55, 12.) East Hanover points out that this lease was assignable, and was made contingent upon Coastal obtaining all necessary final zoning permits, and by its terms did not commence until 90 days after all permits were obtained. (EH App'x 55, 12, Exh. 2.) On February 24, 2006, the New Jersey Department of Transportation (―NJDOT‖) issued Coastal a license to engage in outdoor advertising, after which Coastal submitted an application (Application No. 69257) to the NJDOT to erect a billboard on the subject parcel in March 2006. (EH App'x 7, 56.) On April 21, 2006, the NJDOT issued a notice of approval for Coastal's application on the subject parcel, and on May 10, 2006, NJDOT issued a conditional permit. (EH App'x 7.) In May 2007, Coastal engaged an engineering firm, ENTEC, to develop drawings for purposes of securing a variance. (EH App'x 14, p. 80.) East Hanover emphasizes that ENTEC and its principals were aware of the township's billboard regulations (the same ones at issue here), and incorporated those limitations into the initial draft of the site plan. (EH App'x 14.)

On July 31, 2007, Baiamonte, on behalf of Coastal, submitted to the township an application signed by Varys for a zoning permit to erect a 100-foot high billboard on the subject parcel. (EH App'x 1, ¶¶ 31, 32.) This was followed by a letter from Baiamonte on August 7, 2007, this time accompanied by the requisite $50 fee, after which Coastal's application was stamped received on August 9. (EH App'x 1, ¶ 34.) Shortly thereafter, on August 10, 2007, John Orlich, the township's director of land use, reviewed the application for the billboard and disapproved the application, signed the denial of application, and sent the denial to Coastal. (EH App'x 1, ¶¶ 35-36.) The August 10, 2007 denial letter sent to Coastal cited no authority, but simply stated: ―Dear COASTAL OUTDOOR ADVERTISING, The following comments were made during the denial process: ‗BILLBOARD' SIGNS ARE PROHIBITED. Sincerely, [/s/] John Orlich, DIRECTOR OF LAND USE.‖ Coastal ostensibly received the denial on August 13, 2007. (EH App'x 1, ¶ 37.)

Coastal opted not to file an appeal with the township within 20 days, as provided for under Article IV of Chapter 95, but instead commenced this action on September 10, 2007. Coastal filed a motion for a temporary restraining order and preliminary injunction on September 12, 2007, seeking to have East Hanover enjoined from enforcing its sign ordinance on the basis that the township violated the First Amendment and analogue protections under the New Jersey Constitution.

On October 29, 2007, Coastal and East Hanover entered into a consent order granting Coastal's requested injunction such that ―the Township w[ould] not take any action to alter the Sign Ordinance until further Order of this Court,‖ and ―Coastal [would] refrain from submitting any additional sign applications to the Township during this same period of time.‖ (D.E. 14.) On November 30, 2007, the township entered into a second consent order extending the injunction against enforcement of the sign ordinance through December 31, 2007 and preventing Coastal from submitting any further sign applications. (D.E. 16.) A third consent order was entered on January 3, 2008, extending the injunction against through and including the township's consideration of new sign regulations, set to begin within 90 days. (D.E. 18.)

Pursuant to the third consent order, East Hanover considered the overhaul of its sign regulations. See Coastal's Exh. D (Minutes of Apr. 1, 2008 Council Meeting). On May 6, 2008, the township conducted a public hearing on Ordinance 5-2008, which provided for adoption of a new set of sign regulations. Thereafter, Ordinance 5-2008 was formally adopted and published.

Thus, approximately nine months after commencement of this action, the sign ordinance at issue was superseded by a new ordinance instituted by East Hanover. Counsel have advised the Court that the language of the new ordinance is not at issue here; rather the focus of the lawsuit is the alleged unconstitutionality of the former ordinance and the consequences to Coastal of being denied its application under the former ordinance.

In addition to partial summary judgment, Coastal seeks a trial as to damages and any other relief.


A. Challenges to Coastal's Standing to Sue

East Hanover seeks dismissal of Coastal's law suit on the basis of defective standing. In the federal courts, standing centers on whether Article III, Section 2 of the U.S. Constitution is satisfied by the existence of an actual ―case or controversy.‖ See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). The ―core‖ constitutional requirements for standing are: (1) an injury-in-fact; (2) a causal connection between the injury and the conduct; and (3) a likelihood the injury will be redressed by a favorable decision. Id. Standing is a threshold matter, and cannot be waived. Public Interest Research Group v. Powell Duffryn Terminals, 913 F.2d 64, 85 (3d Cir. 1990). In addition to the constitutionally-required standing factors, prudential factors also apply, which constitute ―judicially self-imposed limits on the exercise of federal jurisdiction.‖ Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11-12 (2004) (internal cites omitted).

East Hanover contends that Coastal lacks standing under the redressability prong of constitutional standing. The township recites a recent history of decisional law on standing in ―billboard suits,‖ and points out that Coastal's out-of-state counsel has represented plaintiffs ―in many, if not most,‖ of the recent major billboard disputes. (EH Br. Mot. Summ. J. 27.)

East Hanover also argues that one of the prudential limitations on standing-concerning the ―general prohibition on a litigant's raising another person's legal rights, Allen v. Wright, 468 U.S. 737, 751 (1984)-applies here. The township asserts that Coastal does not qualify for the exception to this prudential limitation known as the ―overbreadth doctrine,‖ which permits a litigant to raise the rights of third parties where there is a substantial danger that a statute constitutionally applied to the litigant may be unconstitutionally applied to others who are not before the Court. (EH Br. Mot. Summ. J. 24 (citing Broadrick v. Oklahoma, 413 U.S. 601, 615 (1973).)

In support of its redressability argument, East Hanover contends that because Article VII of its newly-enacted LUZ Code prohibits the height and location of Coastal's ―proposed structure‖ (i.e., billboard), then Coastal's challenge to former Articles XI (signs) and XII (temporary signs) are not redressible. As the township points out, the height of Coastal's structure was to be 100 feet. The new LUZ Code (§§ 95-45, 46) in the Light Industrial I-3 Zone imposes a limit of 35 feet. East Hanover also argues that because the parcel opposite the subject parcel on Ridgedale Avenue has been zoned residential (R-20) since 1997, and because the corresponding minimum setback for the subject parcel would accordingly be 200 feet, then Coastal's proposed billboard could not be erected because it would not be adequately set back 200 feet from the street. The township also argues that Coastal was planning to erect the billboard closer than 60 feet to the property line along I-280, which is not permissible under the LUZ Code (§§ 95-45, 46.) Thus, on the basis that the proposed height and front and rear setbacks of Coastal's billboard are impermissible under its new LUZ Code, the township maintains that Coastal's challenges to former Article XI (signs) and former Article XII (temporary signs) are not redressible, and that Coastal's standing is therefore deficient.

Second, East Hanover argues that Coastal's challenge to former Articles XI and XII are not redressible because under the township's new LUZ Code, Coastal's proposed use of the subject parcel constitutes a ―second principal structure.‖ According to the township, the principal structure has been standing since 1976, and another ―principal structure‖ could not be built without a use variance because outdoor advertising is not a permitted use in the Light Industry I-3 Zone. In addition, East Hanover states that the subject parcel is presently non-conforming because its size is smaller than the minimum lot size, and that the addition of a nonconforming structure and nonconforming use is prohibited by the LUZ Code (§ 95-46).

Third, East Hanover argues that former Article XI (95-113.B), as it related to Light Industry I-1 and I-3 Zones, prohibited the height, width, and size of Coastal's proposed freestanding sign structure. The township argues that because of those restrictions, Coastal's challenge to former Article XI or other sections of former Article XI or XII are not redressible. Specifically, East Hanover states that former Article XI, at § 95-113.B, limited the height of a freestanding sign to five feet, the width to 10 feet, and the overall size to 40 square feet, and that those restrictions, ―[c]ollectively or individually . . . bar . . . the redressibility‖ of Coastal's claims. (EH Br. Mot. Summ. J. 31.)

For its part, Coastal argues that standing its proper because Coastal was injured when East Hanover denied its sign application, and the denial was attributable to the township's enforcement of its former sign ordinance. Coastal posits ―the invalidity of the former ordinance and the application denial can be redressed through equitable relief, damages, and attorneys' fees. Thus, the three elements of standing are met.‖ (Coastal's Br. Opp'n 3 (citing Advantage Media, LLC v. City of Hopkins, 379 F. Supp. 2d 1030, 1037 (D. Minn. 2005) (finding that denial of application can serve as injury for purposes of standing analysis).)

Coastal also argues that standing exists where outdoor advertising businesses challenge zoning ordinances that restrict commercial and noncommercial signs. See Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 504 (1981).

―In order for an injury to be redressible, ‗it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.'‖ Covenant Media of Ga., LLC v. City of Lawrenceville, 580 F. Supp. 2d 1313, 1316 (N.D. Ga. 2008) (quoting KH Outdoor, LLC v. Clay County, 482 F.3d 1299, 1303 (11th Cir. 2007)); accord Advantage Media, L.L.C. v. City of Eden Prairie, 456 F.3d 793, 801 (8th Cir. 2006) (stating that redressability must be ―established by a more than ‗merely speculative' showing that the court can grant relief to redress the plaintiff's injury.‖). Even assuming former § 95-106 (prohibiting billboards) were deemed invalid, East Hanover shows that its current and superseded LUZ Code would otherwise prevent erection of a billboard on the subject parcel by Coastal due to height, use and setback provisions, and, thus that a decision on the merits would ...

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