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Wednesday, June 27, 2007

Fifth Circuit: Newspapers Have Standing To Challenge City Ordinance Regulating Street Vendors

The U. S. Court of Appeals for the Fifth Circuit has ruled that two newspapers, the Houston Chronicle and the Daily News, have standing to challenge a city's ordinance regulating street vendors, even though the city repealed the constitutionally impermissible restrictions of the ordinance after entry of the trial court's ruling. However, the appellate court ruled that "[b]ecause the remaining provision, §78-39, has never been applied to the newspapers, however, and, because its plain language is non-discriminatory and content-neutral, we reverse the district court's holding it unconstitutional, both facially and as applied. Pursuant to the newspapers’ cross-appeal, we reverse the district court's refusal to award attorney's fees to them, because they remain prevailing parties on their claim, pursuant to 42 U.S.C. §1983."

...

"The instant dispute post-dates a related Texas state-court action, in which the Houston Chronicle sued City officials for prosecuting its street vendors for violating Texas Transportation Code §552.007(a) (prohibiting street solicitations, except by charitable organizations). That state-court action ended in March 2004 with a consent judgment permanently enjoining the City from prosecuting Houston Chronicle vendors under this state law....The Ordinance is similar to the above Texas law....The Ordinance required, inter alia, any “solicitor, peddler, canvasser, or itinerant vendor”, prior to engaging in any “business and related activities”, to: register with the City; submit to a criminal background check; pay a $30 fee; and post a $1,000 bond. League City, Tex., Ordinances art. II, §§78-32 and 78-33 (2004). The Ordinance exempted “[m]inors conducting fundraising activities who represent a youth organization, including, but not limited to Boy Scouts, Girl Scouts, Little League groups, and school groups”....A year after the 2004 state-court consent judgment, and several months after §78-39 was added, the City, using a related Ordinance provision (§78-38), issued citations to two Houston Chronicle vendors selling newspapers at the intersection of State Highway FM 518 and Interstate 45, for “soliciting without a permit”. Id. at §78-38(12) (making it “unlawful for any peddler, solicitor, canvasser or itinerant vendor” to conduct business “on any public roadway, public roadway median, public sidewalk … or other public property within the city without written authorization from the city”). As a result, the Houston Chronicle and the Daily News filed this action in August 2005, pursuant to 42 U.S.C. § 1983, claiming the Ordinance violated the First and Fourteenth Amendments....That October, the district court permanently enjoined enforcement of the Ordinance, holding it unconstitutional, both facially and as applied to prohibit newspaper sales on public streets....The district court did not find, however, that the City ever prosecuted, or threatened to prosecute, the newspapers under §78-39. But implicit in its findings is the suggestion that the City will do so....In any event, the district court held: “Section 78-39 … cannot be justified as a valid time, place and manner restriction because the City de facto discriminates in enforcing it based on the content of the message being conveyed”...."

After finding that the newspapers had standing, the Court began an inquiry into whether they could demonstrate injury. "Toward this end, the newspapers rely on a 28 April 2005 letter from the City's attorney, which indicated the City would prosecute them under §78-39. The letter acknowledged possible constitutional problems with subjecting the newspapers to the Ordinance's later-repealed permitting requirements, pursuant to, e.g., §78-38, but stated:

It is our position that in all other respects the ordinance represents a reasonable exercise of the City's police power… . As the [City's Police] Chief made clear in his comments [at a meeting that April], [Houston Chronicle] salespeople are, in certain instances, setting up shop in the center of a painted, unimproved median on a busy farm-to-market road intersecting Interstate 45 South. Enforcement of the ordinance will minimize the possibility of serious bodily injury or death for these individuals. In the face of these known circumstances, I cannot imagine that either the [ Houston] Chronicle or Daily News would wish to be recognized for having advocated a repeal of these safety measures at the risk of their employees’ safety and well-being.
"Concerning the Houston Chronicle, the City issued two citations to its vendors at the above-referenced intersection, pursuant to the Ordinance's now-repealed permitting requirements in §78-38 and related sections. Although the above-quoted correspondence intimates the City would not further prosecute both newspapers under §78-38, it clearly indicated it will do so under §78-39. The Houston Chronicle has demonstrated sufficient injury to establish standing for the repealed provisions and, as discussed below, for §78-39. Regarding the Daily News, and contrary to the City's contentions, it has demonstrated it engages in sales in the City that would subject its vendors to prosecution under the Ordinance in general and §78-39 in particular. In addition to the evidence the district court found sufficient (which finding the City does not show was clearly erroneous), this court granted the Daily News’ 9 February 2006 motion to supplement the record on appeal, adding evidence that, following entry of the injunction, the Daily News began selling newspapers at the above-referenced intersection....Chilling a plaintiff's speech is a constitutional harm adequate to satisfy the injury-in-fact requirement....Although, unlike the Houston Chronicle, the Daily News has not been issued a citation under the Ordinance, it has shown a chilling of its First Amendment activities under the repealed Ordinance provisions. Both newspapers have shown such effect for §78-39, and both have shown imminent future prosecution if the City is not enjoined. Therefore, each newspaper has demonstrated specific injury beyond mere subjective chill....
"The City asserts: its repealing parts of the Ordinance renders the newspapers’ earlier challenge to those parts moot; and, as a result, the injunction should be vacated. The newspapers concede their challenge to the repealed provisions is obviously moot; but, they claim the City should not be permitted to evade the injunction by selectively repealing provisions. We reject the City's vacatur-due-to-mootness contention. It goes without saying that disputes concerning repealed legislation are generally moot...."
However in the case, the Court pointed out, the only part of the ordinance left unrepealed "was held unconstitutional by the district court. The City contends §78-39 is a constitutionally permissible, content-neutral time, place, and manner restriction, narrowly tailored to achieve a compelling governmental interest....Despite its ultimately holding §78-39 unconstitutional, the district court found §78-39 “has no content-based discriminatory intent”....Consistent with the above-quoted letter from the City attorney, the City relies on this finding to maintain its content-neutral purpose is one of public safety: to prohibit the dangerous activity of solicitors’ entering busy traffic intersections. Toward this end, the City demonstrated at trial that newspaper street-vendors in nearby cities had been seriously injured at intersections similar to FM 518/I-45. According to the City, §78-39 was deliberately drafted to restrict solicitations only at intersections controlled by traffic-signal lights in order to narrowly tailor the restriction, while leaving open adequate alternative channels for solicitation....Despite its above-quoted finding that §78-39 “has no content-based discriminatory intent”, the district court held the section “cannot be justified as a valid time, place and manner restriction because the City de facto discriminates in enforcing it based on the content of the message being conveyed”.... It further held §78-39 was not applied in a content-neutral manner because the City “allows charitable organizations to solicit donations for their causes at the intersection of FM 518 and Interstate 45 while prosecuting the newspapers’ vendors for engaging in constitutionally protected activity”....And it held §78-39 was neither narrowly tailored nor designed to serve a compelling government interest....
"Injunctive relief is reviewed for an abuse of discretion....In that regard, a district court abuses its discretion when it: “(1) relies on clearly erroneous factual findings when deciding to grant or deny the permanent injunction[,] (2) relies on erroneous conclusions of law when deciding to grant or deny the permanent injunction, or (3) misapplies the factual or legal conclusions when fashioning its injunctive relief”....The district court correctly stated the applicable law: streets are traditional public forums...the sale of newspapers is a First-Amendment-protected activity...therefore, in order to prohibit such activity in a quintessential public forum, a content-based regulation must be “necessary to serve a compelling state interest and … narrowly drawn to achieve that end”; and, when the regulation is content-neutral, it must also be “narrowly tailored to serve a significant government interest, and leave open ample alternative channels of communication”....
However, the appellate court concluded that the district court made an error when it concluded that the city "de facto discriminates in enforcing [§78-39] based on the content of the message being conveyed”. The city enforced a different provision which has since been repealed. The newspapers argued instead that "a Texas law, Texas Transportation Code § 552.0071, obligates the City to discriminate against them in applying §78-39. That law requires local governments to allow municipal employees, such as firefighters, “to stand in a roadway to solicit a charitable contribution”, so long as such solicitors comport with other local requirements, such as posting a bond or obtaining a permit. Tex. Transp. Code Ann. §552.0071 (Vernon 2005). The newspapers argued: this state law imports discrimination into §78-39 against non-municipal, non-charitable organizations; because the City would violate §552.0071 by applying §78-39 against charitable-municipal-employee street-solicitors, a mandatory exception to §78-39 is created by operation of law; and this contention is sufficient to uphold the district court's finding §78-39 “de facto discriminatory”. However, they apparently made this argument for the first time (if at all) in oral argument. Therefore the 5th Circuit reversed the district court's finding on this issue. Finally, the Court also reversed the denial of attorneys' fees to the newspapers, since they prevailed on all issues.

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