Clear Channel Outdoor, LLC v. City of New Rochelle

Background

Clear Channel Outdoor, LLC and Vector Media, LLC sued the City of New Rochelle, Luiz Aragon in his official capacity as Commissioner of Development, and Paul Vacca in his official capacity as Building Official. The claims concerned the New Rochelle City Code and a September 2020 order requiring removal of several billboards. The two related lawsuits were consolidated, with Clear Channel’s case designated as the lead action.

Count IX sought a declaration about the scope of New Rochelle Code § 270-16, called the Billboard Ordinance, and a permanent injunction against applying that ordinance to the plaintiffs’ billboards built or enlarged after March 20, 2001. The dispute concerned five billboards along the Interstate 95 corridor. The parties did not dispute that four were constructed between 2003 and 2005 and that the fifth was enlarged after March 20, 2001.

The magistrate judge’s report and recommendation concluded that the billboards were not covered by the ordinance but recommended denying partial summary judgment because the defendants had raised a fact question about laches. Laches is a defense based on an unreasonable and prejudicial delay in bringing a claim. The parties objected to different portions of the recommendation.

Court’s Analysis

The court agreed with the magistrate judge’s interpretation of the earlier settlement agreement, entered on October 16, 2000. The agreement’s definition of “Remaining Billboards” did not treat the five Interstate 95 billboards as having existed when the agreement was entered. The court also agreed that the settlement agreement was clear and unambiguous, so the defendants could not use outside communications to create ambiguity in the agreement.

The court then interpreted the Billboard Ordinance. The ordinance applied to legally existing billboards that existed on March 20, 2001, without later enlargement. Because four of the five billboards did not exist on that date and the fifth was enlarged afterward, the court held that the ordinance did not require their removal. The court declined to consider the defendants’ separate zoning arguments because they had not previously been raised and were outside the scope of Count IX.

The court reversed the magistrate judge’s conclusion concerning laches. The settlement agreement stated that nothing, including the agreement or an applicable limitations period, would prevent the plaintiffs from challenging a City rule or regulation requiring removal of covered billboards without payment of just compensation. The court held that this language waived the defendants’ ability to assert laches because laches can bar a lawsuit. The court otherwise agreed with the magistrate judge’s analysis that the defendants had shown the elements of laches, including a potential fact question concerning prejudice, but the defense was unavailable because it had been waived.

The court rejected the plaintiffs’ argument that laches could not apply because Count IX sought declaratory relief rather than an equitable remedy. Because the plaintiffs also sought a permanent injunction, the court treated the request as equitable in nature. The court did not consider the plaintiffs’ unclean-hands argument because it had not been presented to the magistrate judge. It also rejected the argument that laches required equitable estoppel, explaining that the two defenses have different elements.

The court separately rejected the defendants’ equitable-estoppel defense. That defense required a material misrepresentation by the plaintiffs, reliance by the defendants, and resulting harm. The defendants did not identify an actionable misrepresentation. Their assertions concerned the plaintiffs’ understanding of their legal rights, and an opinion or disagreement about legal interpretation was not enough. The plaintiffs’ silence also did not support the defense because the defendants did not identify a duty requiring the plaintiffs to disclose an intention to sue.

The court found no clear error in the magistrate judge’s rejection of two other arguments: that the court should delay ruling under Federal Rule of Civil Procedure 56(d), and that summary judgment should be denied because the City might later amend its Code to require removal of the billboards.

Disposition

The court reversed the report and recommendation’s finding that the defendants’ laches defense was not waived, adopted the report and recommendation in all other respects, and granted the plaintiffs’ motion for partial summary judgment as to Count IX. The clerk was directed to terminate the motion at ECF No. 97.