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Clear Channel Outdoor, Inc. v. Mayor and City Council of Baltimore

United States District Court, D. Maryland

May 19, 2014

CLEAR CHANNEL OUTDOOR, INC., Plaintiff,
v.
MAYOR AND CITY COUNCIL OF BALTIMORE, Defendant

Page 520

[Copyrighted Material Omitted]

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For Clear Channel Outdoor, Inc., Plaintiff: Benjamin Rosenberg, LEAD ATTORNEY, Elizabeth Moody Shaner, Rosenberg Martin Greenberg LLP, Baltimore, MD; Danielle J Carter, Gordon D Todd, Joseph R Guerra, PRO HAC VICE, Sidley Austin LLP, Washington, DC.

For Mayor and City Council of Baltimore, Defendant: Steven John Potter, LEAD ATTORNEY, Baltimore City Department of Law, Baltimore, MD.

OPINION

Page 522

MEMORANDUM OPINION

George L. Russell, III, United States District Judge.

This constitutional challenge arises from a municipal charge Defendant Mayor and City Council of Baltimore (the " City" ) imposes on outdoor advertising displays. Plaintiff Clear Channel Outdoor, Inc. (" Clear Channel" ), an outdoor media company, alleges the ordinance imposing the charge impermissibly regulates commercial speech in violation of the First and Fourteenth Amendments to the United States Constitution. Currently pending before the Court is the City's Motion to Dismiss the Complaint under Federal Rule of Civil Procedure 12(b) for lack of subject matter jurisdiction and failure to state a claim. (ECF No. 15). Also pending is Clear Channel's Motion for Leave to File Surreply to the City's Motion to Dismiss. (ECF No. 18).

Principally at issue is (1) whether the charge constitutes a tax under the Tax Injunction Act (the " TIA" ), 28 U.S.C. § 1341 (2012), and (2) whether charging outdoor advertising displays directly advances the government's interests in traffic safety and aesthetics as required by the First Amendment. The Court, having reviewed the pleadings and supporting documents, finds no hearing necessary. See Local Rule 105.6 (D.Md. 2011).

For the reasons outlined more fully below, the Court will deny both Motions on the grounds that, at least at this stage of the litigation, the ordinance is a fee, not a tax, for the purposes of the TIA. Next, regarding the First Amendment issue, there is a question as to whether charging displays directly advances the government's interests in traffic safety and aesthetics. Finally, the City raises no novel issue in its pleadings demanding a surreply.

I. BACKGROUND[1]

On June 17, 2013, the City Council of Baltimore passed Ordinance 13-139 levying

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select outdoor advertising displays in the City. Balt., Md., Ordinance 13-139 (Jun. 17, 2013) (codified as amended at Balt., Md., Code art. 28 § § 29 et seq. (2014)). The Mayor of Baltimore signed the ordinance into law on June 20, 2013, and it went into effect thirty days later. Id. § 29-14. The ordinance recitals explain that " [t]he unregulated display of outdoor advertising" is a public nuisance that " harm[s] the health, safety, convenience, and welfare of" City residents. Id. at 1:21-23. They declare that " outdoor advertising endangers public safety by distracting the attention of drivers from the roadway," and " harm[s] the City by creating visible clutter and blight . . . in a way that reduces the City's ability to collect revenue from other sources." Id. at 2:1-6. By enacting the ordinance and imposing the charge, the City hoped to " properly allocat[e] the potential economic burdens caused by the outdoor advertising while reducing these harms." Id. at 2:7-9.

With that purpose, Ordinance 13-139 imposes a $15-per-square-foot charge on electronic displays that change images more than once a day. Id. § 29-3(A)(1). For all other displays, the ordinance imposes a $5-per-square-foot charge. Id. § 29-3(A)(2). " Outdoor advertising displays" include:

[A]n outdoor display of a 10 square foot or larger image or message that directs attention to a business, commodity, service, event, or other activity that is:
(i) sold, offered, or conducted somewhere other than on the premises on which the display is made; and
(ii) sold, offered, or conducted on the premises only ...

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