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Lamar Advertising of South Dakota, Inc. v. City of Rapid City

United States District Court, D. South Dakota, Western Division

September 29, 2015

LAMAR ADVERTISING OF SOUTH DAKOTA, INC., a South Dakota corporation, and TLC PROPERTIES, INC., d/b/a Lamar TLC Properties, Inc., a Louisiana corporation, Plaintiffs,
v.
CITY OF RAPID CITY, a South Dakota municipal corporation, Defendant

          For Lamar Advertising of South Dakota, Inc, a South Dakota corporation, TLC Properties, Inc., doing business as, Lamar TLC Properties, Inc., a Louisiana corporation, Plaintiffs: Ryan Nelson Boe, LEAD ATTORNEY, Larkin, Hoffman, Daly & Lindgren, Ltd., Minneapolis, MN; Tamara O'Neill Moreland, PRO HAC VICE, Larkin, Hoffman, Daly & Lindgren, Ltd., Minneapolis, MN.

         For City of Rapid City, a South Dakota municipal corporation, Defendant: G. Verne Goodsell, LEAD ATTORNEY, David S. Barari, Goodsell Quinn, LLP, Rapid City, SD.

         ORDER

         JEFFREY L. VIKEN, CHIEF JUDGE.

         PROCEDURAL HISTORY

         Plaintiffs, Lamar Advertising of South Dakota, Inc. (" Lamar" ), and TLC Properties, Inc., d/b/a Lamar TLC Properties, Inc. (" TLC" ), collectively referenced as (" plaintiffs" ), filed a complaint against defendant City of Rapid City (" City" ). (Docket 1). The complaint asserts two citizen-initiated ordinances, The Citizens' Billboard Control Initiative and The Citizens' Reform Initiative for Billboard Sign Credits (collectively referred to as " Citizen Initiatives" ), were passed into law and directly contradict South Dakota Codified Law provisions, resulting in a taking of private property without just compensation. Plaintiffs also claim the ordinances violate freedom of speech and equal protection as rights secured by the United States and South Dakota Constitutions. Id. Plaintiffs contend they are entitled to recover money damages as well as attorney's fees and costs under 42 U.S.C. § § 1983 and 1988. Id.

         The parties filed cross motions for summary judgment. (Dockets 28 & 34). The court granted in part, denied in part and reserved in part plaintiffs' motion. (Docket 65 at p. 32). The court also reserved ruling on plaintiffs' motion for attorney's fees and costs. Id. at 31. The court granted in part and denied in part defendant's motion. Id. at 32. Following the summary judgment order, the court indicated " the only remaining issues are whether the spacing requirements established by the Citizen Initiatives are reasonable and whether plaintiffs are entitled to damages." Id. at 31. Because neither party requested a jury trial, a court trial was scheduled. Id.; see also Dockets 68 & 69.

         The court made several rulings prior to trial. (Dockets 109 & 114). The court trial commenced on November 10, 2014, and concluded on November 14, 2014. (Docket 115). The court ordered simultaneous briefing, and the parties submitted post-trial briefs. (Dockets 118 & 119). In addition to the express issues left for the court trial (Docket 65 at p. 31), both parties made additional motions at the pretrial conference, immediately before trial, during trial and in post-trial briefing, including: (1) plaintiffs' motion to amend its complaint (Docket 118 at p. 37); (2) the City's renewed motion for summary judgment (made orally); (3) the City's " motion to reconsider declaratory ruling on digital signs" (Docket 119 at p. 35); and (4) the City's motion for a directed verdict (made orally).

         FACTS

         The court incorporates the material facts from its summary judgment order by reference. (Docket 65). Plaintiffs called Doug Rumpca, the general manager of Lamar and a vice president of TLC; Andy Chlebek, a Rapid City code enforcement officer specializing in off-premise sign licensing; and Paul Wright, Jr., an expert witness and commercial real estate appraiser who consulted with the plaintiffs in calculating the extent of their alleged damages. The City cross-examined all of plaintiffs' witnesses. After the completion of plaintiffs' evidence, the City moved for a directed verdict. The court took the motion under advisement. The City called David Gilley, an expert witness on billboard and outdoor advertising issues, to critique Lamar's digital rollout plan. Plaintiffs cross-examined Mr. Gilley. The City rested, and the court adjourned the trial pending receipt of the parties' post-trial briefs. Because of the wide array of pending motions and issues before the court, further recitation of salient facts is included in the appropriate discussion section below.

         DISCUSSION

         The court first addresses plaintiffs' motion to amend the complaint. Second, the court considers whether plaintiffs' regulatory takings claims are ripe. Third, the court considers whether it has supplemental jurisdiction over plaintiffs' state law claims.

         1. Plaintiffs' Motion to Amend the Complaint

         Plaintiffs' motion to amend the complaint is denied. Plaintiffs' motion to amend the complaint is in response to the court's pretrial ruling granting the City's second motion in limine. (Dockets 86 & 114). In its motion in limine, the City sought " to exclude any evidence, testimony or argument of Plaintiffs regarding damages incurred by the denial of six billboard applications made two months prior to the vote on the initiated ordinance at issue in this case." (Docket 86 at p. 1). The court granted the City's motion and found " plaintiffs failed to plead a plausible claim for entitlement to damages due to the six denied billboard applications." (Docket 114 at pp. 1-2). Plaintiffs orally moved to amend their complaint pursuant to Fed.R.Civ.P. 15(a) and (b) immediately prior to the start of trial. The court took the motion under advisement. In post-trial briefing, plaintiffs again sought to amend the complaint (Docket 118 at p. 1) and submitted an amended complaint with the alterations underlined. (Docket 118-2). Fed.R.Civ.P. 15(a)

         Plaintiffs ask the court to grant their motion to amend based solely on Fed.R.Civ.P. 15. However, " [a] schedule may be modified only for good cause and with the judge's consent." Fed.R.Civ.P. 16(b)(4). " When the district court has filed a Rule 16 pretrial scheduling order, it may properly require that good cause be shown for leave to file an amended pleading that is substantially out of time under that order." In re Milk Products Antitrust Litig., 195 F.3d 430, 437 (8th Cir. 1999) (citing Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992)); see also Popoalii v. Corr. Med. Servs., 512 F.3d 488, 497 (8th Cir. 2008) (" If a party files for leave to amend outside of the court's scheduling order, the party must show cause to modify the schedule." ) (citing Fed.R.Civ.P. 16(b)). " The primary measure of Rule 16's 'good cause' standard is the moving party's diligence in attempting to meet the case management order's requirements." Bradford v. Dana Corp., 249 F.3d 807, 809 (8th Cir. 2001).

         " If [the court] considered only Rule 15(a) without regard to Rule 16(b), we would render scheduling orders meaningless and effectively would read Rule 16(b) and its good cause requirement out of the Federal Rules of Civil Procedure." In re Milk Products,195 F.3d at 437-38 (internal quotation marks omitted) (quoting Sosa v. Airprint Sys., Inc., 133 F.3d 1417, 1419 (11th Cir. 1998)). " A decision whether to allow a party to amend her complaint is left to the sound discretion of the district court and should be overruled only if there is an abuse of discretion." Popoalii, 512 F.3d at 497 (citing Bell v. Allstate Life Ins. Co., 160 F.3d 452, 454 (8th Cir. 1998)).

A court abuses its discretion when it denies a motion to amend a complaint unless there exists undue delay, bad faith, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the non-moving party, or futility of the amendment. . . . When late tendered amendments involve new theories of recovery and impose additional discovery requirements, appellate courts are less likely to hold a district court abused its discretion. . . . If a party files for leave to amend outside of the court's scheduling order, the party must show cause to modify the schedule.

Popoalii, 512 F.3d at 497 (emphasis added) (citing Fed.R.Civ.P. 16(b)).

         Plaintiffs filed their complaint on August 29, 2011. (Docket 1). The court entered a scheduling order on October 31, 2011. (Docket 15). Plaintiffs were given until December 30, 2011, " to move to join additional parties and to amend the pleadings." Id. at 2. The court entered its summary judgment order on February 21, 2014. (Docket 65). The court twice continued the court trial. (Dockets 68 & 69). The court already determined " plaintiffs failed to plead a plausible claim for entitlement to damages due to the six denied billboard applications." [1] (Docket 114 at pp. 1-2). Nowhere in plaintiffs' oral or written arguments do they identify a reason, let alone demonstrate good cause, for their failure to include a theory of recovery based on the City's denial of Lamar's six billboard applications made two months prior to the vote on the Citizen Initiatives.

         Plaintiffs assert " the City knew for over two years that Plaintiffs would be requesting damages for the six signs." (Docket 118 at p. 11). If true, plaintiffs, in addition to having until December 30, 2011, to move to amend their pleadings, would also have been aware of their theory of damages for over two years and yet did not seek to amend their complaint. Plaintiffs now seek to recover damages for the City's " de facto" application of the Citizen Initiatives vis-à-vis the six denied billboard applications which constitutes $260,833 of plaintiffs' overall $770,758 damage request, a not insubstantial amount for a claim that was not pled. (Dockets 118 at pp. 1, 30-35; 114).

         The court will not ignore Fed.R.Civ.P. 16(b) and re-start the complaint and answer proceedings, re-open discovery, or require further briefing on these threshold issues at this late date. The plaintiffs filed their complaint in 2011 and the issues, as contained in the 2011 complaint, were well-developed and refined.[2] Plaintiffs' request to amend the complaint to include a claim for the City's de facto application of the Citizen Initiatives is denied. In addition, plaintiffs' motion to amend their complaint is denied as moot because plaintiffs' regulatory takings claims are not ripe.

         2. Plaintiffs' Regulatory Takings Claims Are Not Ripe

         A. Regulatory Takings Claims and Lingle

         " The Takings Clause of the Fifth Amendment, made applicable to the States through the Fourteenth . . . provides that private property shall not 'be taken for public use, without just compensation.'" Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 536, 125 S.Ct. 2074, 161 L.Ed.2d 876 (2005) (quoting U.S. Const. amend. V).[3] " [T]he Takings Clause 'does not prohibit the taking of private property, but instead places a condition on the exercise of that power.'" Id. at 536 (quoting First English Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S. 304, 314, 107 S.Ct. 2378, 96 L.Ed.2d 250 (1987). " In other words, [the Takings Clause] 'is designed not to limit the governmental interference with property rights per se, but rather to secure compensation in the event of otherwise proper interference amounting to a taking.'" Id. at 536-37 (emphasis in original) (quoting First English, 487 U.S. at 315). The Court " emphasized [the] role [of the Takings Clause] in 'bar[ring] Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.'" Id. at 537 (quoting Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 4 L.Ed.2d 1554 (1960) (further citations omitted).

         The Supreme Court identified two categories of regulatory action which constitute per se takings under the Fifth Amendment. " First, where government requires an owner to suffer a permanent physical invasion of her property--however minor--it must provide just compensation." Id. at 538 (citing Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982)). Second, regulations that " completely deprive an owner of ' all economically beneficial use' of her property. . . . [require] the government [to] pay just compensation for such 'total regulatory takings,' except to the extent that 'background principles of nuisance and property law' independently restrict the owner's intended use of the property." Id. (original brackets omitted) (quoting Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019, 1026-32, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992)).

         The Lingle Court explained that outside of these two categories of regulatory action, and the special context of land-use exactions, see Nollan v. California Coastal Comm'n,483 U.S. 825, 107 S.Ct. 3141, 97 L.Ed.2d 677 (1987); Dolan v. City of Tigard,512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994), " regulatory takings challenges are governed by the standards set forth in Penn Central Transp. Co. v. New York City,438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978)." Lingle, 544 U.S. at 538. The Penn Central Court instructs lower courts to engage in " ad hoc, factual inquiries" when evaluating regulatory takings claims. Penn Central, 438 U.S. at 124; see also Lingle, 544 U.S. at 538; Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Planning Agency,535 U.S. 302, 326, 122 S.Ct. 1465, 152 L.Ed.2d 517 (2002) (" In the decades following [Pennsylvania Coal Co. v. Mahon,260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322 (1922)], ...


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