Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-06539/USCOURTS-cand-3_16-cv-06539-0/pdf.json

Parties Involved:
City and County of San Francisco
Defendant
Contest Promotions, LLC
Plaintiff

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CONTEST PROMOTIONS, LLC,

Plaintiff,

v.

CITY AND COUNTY OF SAN 

FRANCISCO,

Defendant.

Case No. 16-cv-06539-SI 

ORDER ON PLAINTIFF'S MOTION 

FOR PRELIMINARY INJUNCTION

Re: Dkt. No. 8

This Court has presided over several disputes between plaintiff Contest Promotions LLC 

(“Contest Promotions”) and defendant City and County of San Francisco (“San Francisco” or “the 

City”) related to San Francisco’s sign regulations.1 Before the Court is plaintiff’s motion for a 

preliminary injunction.

2

 Plaintiff seeks an injunction to prevent the City from enforcing 

provisions of the San Francisco City Planning Code (“Planning Code”) and from levying 

associated fines.

On December 21, 2016, the Court held a hearing on plaintiff’s motion. After careful 

consideration of papers submitted, the Court hereby DENIES plaintiff’s motion.

BACKGROUND

Contest Promotions organizes and operates contests and raffles whereby individuals are 

invited to enter stores for the purpose of filling out applications and winning prizes. Decl. Shafner 

 

1 Case Nos. 09-cv-04434 (closed Feb. 4, 2013), 15-cv-04365 (closed Mar. 17, 2016), 15-

cv-00093 (closed July 28, 2015), appeal docketed, No. 15-16682 (9th Cir. Aug. 25, 2015), and 16-

cv-06539 (filed Nov. 10, 2016).

2

Plaintiff has also filed a motion for an injunction pending its appeal in Case No. 15-cv00093. This order does not address that motion.

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(Dkt. No. 11) ¶ 2.3 Contest Promotions advertises these contests and the products they promote by 

posting signs on or adjacent to small businesses, directing customers to apply inside. See id. For 

example, Contest Promotions may advertise a film or videogame on its sign, inviting entrants to 

apply inside the store for a chance at free tickets to the film or a free copy of the game. See id.

¶¶ 3-4. Contest Promotions operates by leasing a portion of a business’s permissible on-site 

signage space and some interior space to set up materials related to the contest, describing its lease 

payments to store owners as “typically small,” because “[t]he real benefit to [store owners] is the 

increased in-store traffic driven by the . . . contest[.]” Id. ¶¶ 3, 6.

Article 6 of the Planning Code regulates signs within San Francisco. Article 6 prohibits 

the placement of new “General Advertising Signs,” off-site advertisements such as billboards, 

after March 5, 2002. See Plaintiff’s RJN (Dkt. No. 9) at 341, Ex. II § 611.4 Despite the 

prohibition on new General Advertising Signs, the Planning Code allows “Business Signs” (and 

others) that meet various size, location, permitting, and other requirements set forth in Article 6.5 

Contest Promotions began conducting business in San Francisco in 2004. Decl. Shafner 

(Dkt. No. 11) ¶ 7. In early 2007, San Francisco sought to enforce its ban on General Advertising 

Signs against Contest Promotions. Id. ¶ 8. Contest Promotions resisted; the company had 

developed its model in San Francisco precisely to avoid having its signs categorized as prohibited 

 

3 Unless otherwise noted, ECF docket citations refer to Case No. 16-cv-06539. Pinpoint 

citations are to the page numbers generated by ECF.

4

Plaintiff requests the Court take judicial notice of: San Francisco Planning Department 

Notices of Enforcement and Notices of Planning Department Requirements; state and federal court 

dockets and filings; San Francisco city ordinances and resolutions; and Article 6 of the Planning 

Code. See Dkt. No. 9. Federal Rule of Evidence 201 permits a court to take judicial notice of 

facts “not subject to reasonable dispute.” Fed. R. Evid. 201. Further, a court can “take notice of 

proceedings in other courts, both within and without the federal judicial system, if those 

proceedings have a direct relation to matters at issue.” U.S. ex rel. Robinson Ranchiera Citizens 

Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992) (internal citations omitted). The Court 

finds these items appropriate for judicial notice, and, in the absence of any opposition, GRANTS 

plaintiff’s request.

5

The Planning Code defines a “Business Sign” as “[a] sign which directs attention to the 

primary business, commodity, service, industry or other activity which is sold, offered, or 

conducted on the pemises upon which such sign is located, or to which it is affixed. . . . The 

primary business, commodity, service, industry, or other activity on the premises shall mean the 

use which occupies the greatest area on the premises upon which the business sign is located, or to 

which it is affixed.” Plaintiff’s RJN (Dkt. No. 9) at 298, Ex. II § 602.3.

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General Advertising Signs under the Planning Code. See id. After unsuccessful negotiations

between Contest Promotions and the City Planning Department, the City served Contest 

Promotions with a number of violation notices. Id. ¶¶ 9-10. In response, Contest Promotions 

removed or modified some of its signs, and commenced its first lawsuit in this Court (the “2009 

Action”), challenging the constitutionality of the S.F. Planning Code’s definitions of “Business 

Signs” and “General Advertising Signs” as impermissibly vague.6 Id. ¶ 12.

The parties eventually settled their dispute in early 2013 and entered into a settlement 

agreement. Id. ¶ 12 & Ex. B. The settlement agreement provided that Contest Promotions’ signs 

would “be deemed Business Signs for all purposes of the Planning Code, including but not limited 

to the filing, processing and approval of permits . . . so long as [the signs] are consistent with the 

dimensional, locational, and other requirements applicable to Business Signs . . . .” Decl. Shafner, 

Ex. B (Dkt. No. 11) at 14. The settlement agreement further provided, in short, that Contest 

Promotions would seek new permits from the City for its existing sign inventory and would pay 

the City $375,000. Id. at 14, 17-18.

In July 2014, soon after the parties settled the 2009 Action, the City amended the definition 

of “Business Sign” in the Planning Code to what is essentially today’s definition. See Plaintiff’s 

RJN, Ex. X (Dkt. No. 9) at 120-21. After the City denied permit applications for some of its signs, 

Contest Promotions commenced Case No. 15-cv-00093 (the “January 2015 Action”) in this Court, 

challenging the constitutionality of the City’s new “Business Sign” definition. The Court 

dismissed the case, finding that the planning code definition was a content-neutral regulation of 

commercial speech that withstood intermediate judicial scrutiny. After the Court’s final dismissal 

order in July 2015, Contest Promotions appealed to the Ninth Circuit. The appeal is fully briefed 

and awaiting oral argument. The parties have continued to litigate other claims in state court.

In September and October 2016, the City served plaintiff with 20 Notices of Enforcement 

(“NOEs”) alleging that certain of plaintiff’s signs violated provisions of Planning Code Article 6.7 

 

6

The 2009 Action concerned an older version of the S.F. Planning Code, which included 

definitions for Business Signs and General Advertising Signs different from those found today.

7

The NOEs allege a variety of violations at different properties. See Plaintiff’s RJN (Dkt. 

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See Plaintiff’s RJN (Dkt. No. 9), Exs. A-T. In response to the City’s NOEs, plaintiff modified 

eleven of its signs to avoid accruing penalties. See Decl. Anon (Dkt. No. 12). Plaintiff then filed 

this lawsuit challenging Article 6 of the Planning Code in its entirety on November 10, 2016 and 

filed a motion for preliminary injunction four days later. See Compl. (Dkt. No. 1); Mot. (Dkt. No. 

8). Plaintiff has since changed at least four of its modified signs back to their original, 

promotional content. See Supp. Decl. Anon (Dkt. No. 23) ¶ 2.

On October 24, 2016, after serving plaintiff with the NOEs, the City passed Ordinance No. 

218-16, amending the S.F. Planning Code to, among other things, clarify that Article 6 of the Code 

“shall [not] apply to . . . [n]oncommercial signs,” and to create harsher penalties for repeat 

violators of Article 6. See Decl. Emery (Dkt. No. 21), Ex. D, at 21, 27, 29-31. The Mayor signed 

the ordinance on November 10, 2016, and it became effective on December 10, 2016. Id. at 31-

33. The City maintains that its amendment exempting all noncommercial speech from the 

regulations in S.F. Planning Code Article 6 only formally codified the rule from City and Cnty. of 

S.F. v. Eller Outdoor Aver., 192 Cal. App. 3d 643 (1st Dist. 1987). See id. at 664-65 (interpreting 

exceptions from Article 6 as “embrac[ing] all categories of noncommercial messages, thereby 

preserving the ordinance’s neutrality[.]”); see also Metro Fuel LLC v. City of S.F., No. 07-6067, 

2011 WL 900318, at *11 (N.D. Cal. Mar. 15, 2011) (citing Eller in finding that “all noncommercial messages are still allowed throughout San Francisco.”).

Plaintiff’s motion in this case seeks to enjoin the City’s assessment of penalties until the 

lawsuit is fully resolved. Because plaintiff has not demonstrated a likelihood of success on the 

merits, the Court DENIES plaintiff’s motion for a preliminary injunction.

 

No. 9), Exs. A-T. The majority of the NOEs cite violations of district-specific size or location 

requirements. At least four NOEs state that plaintiff’s signs are located on, or adjacent to, vacant 

businesses. Others cite violations of restrictions on signs in historic, conservation, or residential 

districts without proper approval. None of the NOEs state that plaintiff’s signs do not fit the 

definition of onsite business signs, just that the signs are, inter alia, too large, located too far from 

the business, lack district-specific permits, or are affixed to vacant businesses. At the hearing on 

this matter, the City suggested that it carefully cited only those Contest Promotions signs violating 

provisions other than Planning Code section 602.3, in an effort to “clean up” some of Contest 

Promotions’ inventory during the appeal of the January 2015 Action.

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LEGAL STANDARD

Federal Rule of Civil Procedure 65 governs the issuance of preliminary injunctions. In 

order to obtain a preliminary injunction, a plaintiff “must establish that he is likely to succeed on 

the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the 

balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. 

Natural Res. Defense Council, 555 U.S. 7, 20 (2008) (citations omitted). Courts have also applied 

an alternative “sliding scale” or “serious questions” test, requiring that the plaintiff raise “serious 

questions going to the merits” and show that “the balance of hardships tip[s] sharply in plaintiff’s 

favor.” See Alliance for Wild Rockies v. Cottrell, 632 F.3d 1127, 1131-32 (9th Cir. 2011); id. at 

1135 (stating plaintiff must also show a “likelihood of irreparable injury and that the injunction is 

in the public interest.”). The sliding scale approach allows courts to balance the factors, offering 

flexibility where, for example, the plaintiff makes a weaker showing of likelihood of success, but a 

strong showing of irreparable harm. Id. at 1131. Regardless of the approach, a preliminary 

injunction is an “extraordinary remedy that may only be awarded upon a clear showing that the 

plaintiff is entitled to such relief.” Winter, 555 U.S. at 22; see also Earth Island Inst. v. Carlton, 

626 F.3d 462, 469 (9th Cir. 2010) (plaintiffs “face a difficult task in proving that they are entitled 

to this ‘extraordinary remedy[.]’”).

DISCUSSION

I. Standing 

Contest Promotions brings this action challenging, facially and as-applied, the 

constitutionality of Article 6 of the Planning Code. See Mot. (Dkt. No. 8) at 12. The City argues 

that Contest Promotions lacks standing to challenge Article 6 in its entirety as Contest Promotions 

has only been cited for violations of a handful of provisions in Article 6. Opp’n (Dkt. No. 20) at 

12-13. In its Reply, Contest Promotions concedes that a challenge to the entire Article 6 is 

inappropriate – Contest Promotions therefore narrows its challenge to focus on sections 602.3, 

604(a), 604(i), 606, 607.1, 607.2, and 610 of the Planning Code. Reply (Dkt. No. 22) at 6.

“To seek injunctive relief, a plaintiff must show that he is under threat of suffering ‘injury 

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in fact’ that is concrete and particularized; the threat must be actual and imminent, not conjectural 

or hypothetical; it must be fairly traceable to the challenged action of the defendant; and it must be 

likely that a favorable judicial decision will prevent or redress the injury.” Summers v. Earth 

Island Institute, 555 U.S. 488, 493 (2009). The Ninth Circuit has held that a sign company only 

has standing to challenge the provisions applied to it, and “cannot leverage its injuries under 

certain, specific provisions to state an injury under [a] sign ordinance generally.” Get Outdoors II, 

LLC v. City of San Diego, Cal., 506 F.3d 886, 892 (9th Cir. 2007) (citation omitted).

In addition to lost revenues from the signs it has changed, plaintiff faces daily fines from 

the City for each of its signs in violation of the code; the threat of accruing fines is actual and 

imminent, and redressable through a favorable judicial decision. Plaintiff has standing to 

challenge the provisions of the Planning Code cited in its Reply, as well as provisions directly 

impacting the interpretation or enforcement thereof. 

Having resolved the threshold inquiry of standing, the Court turns to the parties’ 

substantive arguments on plaintiff’s motion for a preliminary injunction. Plaintiff asserts it is 

entitled to a preliminary injunction under both the standard and sliding scale approaches. Either 

approach involves an assessment of all four Winter factors, beginning with the plaintiff’s 

likelihood of success on the merits. 

II. Likelihood of Success

“The first factor under Winter is the most important—likely success on the merits.” Garcia 

v. Google, Inc., 786 F.3d 733, 740 (9th Cir. 2015) (citation omitted). Courts treat likelihood of 

success as a “threshold inquiry,” disregarding the other factors when a plaintiff fails to show a 

likelihood of success on the merits. See id.

A. First Amendment

The First Amendment provides that “Congress shall make no law . . . abridging the 

freedom of speech.” U.S. Const. amend. I. States and local governments are bound by this 

prohibition through the Fourteenth Amendment to the Constitution. Reed v. Town of Gilbert, 

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Ariz., 135 S. Ct. 2218, 2226 (2015). The First Amendment protects both commercial and 

noncommercial speech. See Bigelow v. Virginia, 421 U.S. 809, 818 (1975). However, the 

“Constitution accords less protection to commercial speech than to other constitutionally 

safeguarded forms of expression.” Bolger v. Youngs Drugs Prods. Corp., 463 U.S. 60, 64 (1983) 

(citing Central Hudson Gas & Electric Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 562-63 

(1980)); see also Florida Bar v. Went For It, Inc., 515 U.S. 618, 623 (1995) (“[The Supreme 

Court] ha[s] always been careful to distinguish commercial speech from speech at the First 

Amendment’s core.”). 

Courts typically evaluate regulations affecting commercial speech using a form of 

intermediate scrutiny established by the Supreme Court in Central Hudson, whereas content-based 

regulations of noncommercial, fully protected speech are presumptively unconstitutional and must 

withstand strict scrutiny. Central Hudson, 447 U.S. at 556. Contest Promotions argues that in 

light of recent Supreme Court and Ninth Circuit precedent, Central Hudson no longer applies to 

restrictions that distinguish between commercial and noncommercial speech, and the Court must 

instead apply either strict scrutiny or “heightened” scrutiny to the Planning Code.

1. Level of Scrutiny

First, the Court must determine which level of constitutional scrutiny applies to the 

challenged provisions of the Planning Code. Contest Promotions asserts that the portions of 

Article 6 the City seeks to enforce against it are facially unconstitutional content-based restrictions 

on speech. Contest Promotions argues that under Reed, regulations such as Article 6 that 

distinguish between commercial and noncommercial speech are “content-based” and subject to 

strict scrutiny. Mot. (Dkt. No. 8) at 20-23, 25-26; Reply (Dkt. No. 22) at 6-9; Reed, 135 S. Ct. 

2218. Contest Promotions further argues that under Sorrell v. IMS Health Inc. and City of 

Cincinnati v. Discovery Network, Inc., content-based restrictions on commercial speech are 

subject to at least “heightened” scrutiny. Mot. (Dkt. No. 8) at 24-25; Reply (Dkt. No. 22) at 7-9; 

Sorrell, 564 U.S. 552 (2011); Discovery Network, 507 U.S. 410 (1993). The City argues that none 

of the cases plaintiff cites to have changed the constitutional framework applicable to regulations 

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suppressing or burdening commercial speech, and that Central Hudson and Metromedia, Inc. v. 

City of San Diego, 453 U.S. 490 (1981), continue to govern the sign regulations at issue here. 

Opp’n (Dkt. No. 20) at 15-20. For the reasons set forth below, the Court agrees with the City. 

The Reed Court addressed a restriction on noncommercial speech. Reed concerned a law 

banning outdoor signs without a permit, with some 23 exemptions for specific types of signage.

135 S. Ct. 2218 (2015). The exemptions placed varying restrictions on signage depending on 

which exemption a sign fell into. For example, the law exempted “ideological signs” or “political 

signs” from the outright ban. Plaintiffs, a local church, challenged the law after the Town of 

Gilbert repeatedly cited them for failure to comply with the requirements imposed by the 

“Temporal Directional Signs Relating to a Qualifying Event” exemption. The exemption 

encompassed signs directed at motorists or other passersby that advertised for events sponsored by 

a non-profit. Id. at 2225. The law imposed certain size, location, and duration restrictions on 

these types of signs that were more severe than the restrictions placed on ideological signs or 

political signs. Id.

Justice Thomas, joined by five other Justices, struck down the law, finding that the 

exemptions were content-based on their face, and could not withstand strict scrutiny. In arriving 

at this conclusion, the Court emphasized three guiding principles that compelled the result. First, 

a content-based restriction on speech is subject to strict scrutiny regardless of the government’s 

motive; therefore “an innocuous justification cannot transform a facially content-based law into 

one that is content neutral.” Id. at 2222. Second, “‘[t]he First Amendment's hostility to contentbased regulation extends not only to restrictions on particular viewpoints, but also to prohibition of 

public discussion of an entire topic.” Id. at 2230 (quoting Consolidated Edison Co. of N.Y. v. 

Public Serv. Comm'n of N. Y., 447 U.S. 530, 537 (1980)). Therefore, the mere fact that a law is 

viewpoint neutral does not necessarily insulate it from strict scrutiny. Third, whether a law is 

speaker-based or event-based makes no difference for purposes of determining whether it is 

content-based. Id. at 2231 (“A regulation that targets a sign because it conveys an idea about a 

specific event is no less content based than a regulation that targets a sign because it conveys some 

other idea.”). 

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Justice Alito, joined by Justices Sotomayor and Kennedy, took part in the majority opinion 

but wrote separately to “add a few words of further explanation.” Id. at 2233 (Alito, J., 

concurring). Therein, Justice Alito noted that “the regulations at issue” were “replete with 

content-based distinctions, and as a result [had to] satisfy strict scrutiny.” Id. Justice Alito stated 

that the decision “does not mean, however, that municipalities are powerless to enact and enforce 

reasonable sign regulations,” and outlined a non-exhaustive list of signage regulations that would 

not trigger strict scrutiny. Id. These included, inter alia, “[r]ules distinguishing between onpremises and off-premises signs” and “[r]ules distinguishing between the placement of signs on 

commercial and residential property.” Id. Justice Alito concluded by writing that “[p]roperly 

understood,” the “decision will not prevent cities from regulating signs in a way that fully protects 

public safety and serves legitimate esthetic objectives.” Id. at 2233-34. Justices Kagan, Ginsburg, 

and Breyer rejected the notion that a content-based regulation must necessarily trigger strict 

scrutiny, and concurred only in the judgment. Id. at 2234-39. 

Four years before Reed, in Sorrell v. IMS Health Inc., the Supreme Court held that contentor speaker-based restrictions on protected expression must undergo “heightened judicial scrutiny.” 

564 U.S. 552, 565-66 (2011). There, the Court invalidated a Vermont law restricting the sale, 

disclosure, and use of pharmacy records for marketing purposes. Id. at 557-58. On its face, the 

law was both content- and speaker-based. In fact, Vermont enacted the law with the avowed 

purpose of “diminish[ing] the effectiveness of marketing by manufacturers of brand-name drugs.” 

Id. at 565. After determining that heightened judicial scrutiny of the law was likely required, the 

Court did not actually define or apply heightened scrutiny. Id. at 571. The Court concluded that it 

need not “determine whether all speech hampered by [the Vermont law]” was commercial, 

because “the outcome [would be] the same whether a special commercial speech inquiry or a 

stricter form of judicial scrutiny [was] applied.” Id. at 571. The Court applied intermediate 

Central Hudson scrutiny and struck down the Vermont statute. Nowhere in the opinion did the 

Court overrule Central Hudson or declare that intermediate scrutiny should no longer apply to 

restrictions burdening only commercial speech.

Additionally, in Discovery Network, the Court struck down a Cincinnati ordinance which 

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banned newsracks containing “commercial handbills,” but not newsracks containing newspapers. 

The Court applied Central Hudson intermediate scrutiny. 507 U.S. 410 (1993). The Court found 

that the ordinance Cincinnati relied on for its ban was enacted at a time “long before any concern 

about newsracks[,]” and rather than regulate the “size, shape, appearance, or number” of racks, the 

city resorted to outright prohibition. Id. at 417. The Court also found an insufficient “fit” between 

the city’s goals, safety and aesthetics, and its method of achieving those goals, an outright ban on 

commercial newsracks, because commercial newsracks comprised a very small percentage of the 

city’s total newsracks. Id. Much of the Court’s discussion centered on the city’s inability to 

provide a basis for distinguishing between newspapers and commercial handbills in this manner. 

Id. at 424-28.

In brief, a regulation that suppresses or burdens noncommercial speech based on its 

content or the speaker must undergo strict scrutiny after Reed. Similarly, Sorrell dictates that a

regulation that suppresses or burdens protected expression, based on the speaker or content

thereof, must undergo “heightened” scrutiny. See Sorrell, 564 U.S. 552. Discovery Network

demonstrates that intermediate scrutiny is a searching inquiry, and that courts should examine 

whether a regulation actually advances the government’s interests. Plaintiff may be correct that, 

after Reed, a restriction merely distinguishing between speech based on whether it is 

“commercial” or “noncommercial” is “content-based,” even if it does not target a particular topic 

or speaker. However, it is not clear that such a generalized restriction on commercial speech need 

withstand anything more than Central Hudson’s intermediate scrutiny. See Lone Star Security & 

Video, Inc. v. City of L.A., 827 F.3d 1192, 1198 n.3 (9th Cir. 2016) (dictum) (“But, although laws 

that restrict only commercial speech are content based, see Reed III, 135 S. Ct. at 2232, such 

restrictions need only withstand intermediate scrutiny. See Central Hudson . . . .”). Plaintiff cites 

to no authority that a regulation burdening only commercial speech, without restricting a particular 

commercial speaker or subject, must undergo a higher level of scrutiny. 

Subjecting content-based restrictions of noncommercial speech to strict scrutiny ensures 

that a particular speaker, viewpoint, or subject cannot be treated less favorably than other 

speakers, viewpoints, or subjects, except in the most extreme circumstances. Commercial speech, 

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however, has historically been afforded lesser First Amendment protection. See Sorrell, 564 U.S. 

at 582-83 (Breyer, J., dissenting) (citations and internal quotation marks omitted) (“[S]peechrelated risks and offsetting justifications differ depending upon context,” and “the First 

Amendment offers considerably less protection to the maintenance of a free marketplace for goods 

and services.”); Metromedia, 453 U.S. at 505 (1981) (citing Valentine v. Chrestensen, 316 U.S. 52 

(1942)) (“The extension of First Amendment protections to commercial speech is a relatively 

recent development in First Amendment jurisprudence. Prior to 1975, purely commercial 

advertisements of services or goods for sale were considered to be outside the protection of the 

First Amendment.”). Since Central Hudson, regulations suppressing or burdening commercial 

speech must withstand intermediate judicial scrutiny. 447 U.S. at 566. This rule presently 

remains undisturbed. 

Under Central Hudson, First Amendment protections apply to commercial speech only if 

the speech concerns a lawful activity and is not misleading. 447 U.S. at 563-66. Once it has been 

established that the speech is entitled to protection, any government restriction on that speech must 

satisfy a three-part test: (1) the restriction must seek to further a substantial government interest; 

(2) the restriction must directly advance the government’s interest; and (3) the restriction must 

reach no further than necessary to accomplish the given objective. Id. Here, the City does not 

contend that plaintiff’s signs are either unlawful or misleading. Accordingly, the Court will 

presume the commercial speech at issue is entitled to First Amendment protection and apply the 

Central Hudson framework.

 

2. Application of Scrutiny

Having determined that Central Hudson’s intermediate scrutiny applies to the Planning 

Code restrictions at issue here, the Court must now determine whether: (1) the restriction seeks to 

further a substantial government interest; (2) the restriction directly advances the government’s 

interest; and (3) the restriction reaches no further than necessary to accomplish the objective. 

Cent. Hudson, 447 U.S. at 563-66. 

First, the sign regulations at issue must seek to further a substantial government interest. 

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S.F. Planning Code section 601 lists the purposes of Article 6 in regulating signs. See Plaintiff’s 

RJN (Dkt. No. 9) at 297, Ex. II § 601. Article 6 aims to, among others, “safeguard and enhance 

property values in residential, commercial, mixed use, and industrial areas”; “protect public 

investment in and the character and dignity of public buildings, open spaces and thoroughfares”; 

“protect the distinctive appearance of San Francisco . . .”; “encourage sound practices and lessen 

the objectionable effects of competition in respect to size and placement of signs”; “aid in the 

attraction of tourists and other visitors . . .”; and “reduce hazards to motorists and pedestrians 

traveling on the public way; and thereby to promote the public health, safety and welfare.” Id. In 

essence, Article 6 seeks to promote safety and aesthetics. This Court has previously held that the 

City’s interest in promoting traffic safety and aesthetics is a substantial governmental interest. See

Contest Promotions, 100 F. Supp. 3d at 842 (citing Metromedia, 453 U.S. at 507-09). Moreover, 

as in the previous litigation, plaintiff appears to concede that regulation of safety and aesthetics are 

substantial governmental interests. See, e.g., Compl. (Dkt. No. 1) ¶¶ 2, 48. The Court finds that 

the City has satisfied the first factor.

Second, the sign regulations must directly advance the government’s substantial interests 

in safety and aesthetics. The Supreme Court has held that ordinances differentiating between onsite and off-site advertisements, as the San Francisco scheme does here, are directly related to the 

interests of safety and aesthetics.8 Metromedia, 453 U.S. at 507-09; see also Nat’l Adver. Co. v. 

 

8

Plaintiff contends that Metromedia is not binding because the decision, which split 4-2-3,

had no clear majority. However, Justice Stevens joined in much of the plurality’s opinion,

including those portions upholding distinctions between onsite and offsite commercial signs. 

Metromedia, 453 U.S. at 541 (Stevens, J., dissenting in part) (“I agree with the conclusion that the 

constitutionality of this prohibition is not undercut by the distinction San Diego has drawn 

between onsite and offsite commercial signs . . . and I therefore join Parts I through IV of [the 

plurality opinion.]”). Plaintiff argues that dissenting opinions “do not count” when applying the 

Supreme Court’s guidance from Marks v. United States, 430 U.S. 188 (1977), to extract a majority 

view from fractured Supreme Court decisions.

The Court rejects plaintiff’s contention that Justice Stevens’s opinion cannot be used to 

demonstrate a majority as to those sections of Metromedia in which he joined. Whether courts 

may rely on a dissent to form a Marks majority is an open question in this Circuit. See United 

States v. Davis, 825 F.3d 1014, 1025 (9th Cir. 2016) (en banc) (“[W]e assume but do not decide 

that dissenting opinions may be considered in a Marks analysis.”); see also id. at 1029 (Christen, 

J., concurring) (“[W]e leave unanswered whether our court will take into account dissenting 

opinions when applying Marks.”). In this Court’s view, because Justice Stevens expressly joined 

the plurality in Metromedia with respect to the first four sections, at least those four sections 

represent the opinion of a majority of the Court. 

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City of Orange, 861 F.2d 246, 248 (9th Cir. 1988) (“The City may prohibit billboards entirely in 

the interest of traffic safety and aesthetics, and may also prohibit them except where they relate to 

activity on the premises on which they are located.”). Here, the City has created regulations that 

directly advance its interests in safety and aesthetics. The City’s classification of business signs, 

with accompanying restrictions on size and location, undoubtedly reduce the overall number and 

square footage of signs in San Francisco, preventing additional distraction of motorists and 

pedestrians, and promoting aesthetics. The Court finds that the City has satisfied the second 

factor.

Finally, the restrictions must reach no further than necessary to accomplish the City’s 

objectives. This element bears the most scrutiny. Here, the City “is not required to employ the 

least restrictive means conceivable, but it must demonstrate narrow tailoring of the challenged 

regulation to the asserted interest—a fit that is not necessarily perfect, but reasonable; that 

represents not necessarily the single best disposition but one whose scope is in proportion to the 

interest served.” Greater New Orleans Broad. Ass’n, Inc. v. U.S., 527 U.S. 173, 188 (1999) 

(internal citation and quotation marks omitted). Contest Promotions argues that the contested 

provisions fail this prong because “[t]he City has exempted certain content and speakers, rather 

than regulating the ‘size, shape and appearance’ of signs.” Mot. (Dkt. No. 8) at 31. The Court 

disagrees. The City exempts all noncommercial signs from the regulations in Article 6; Article 6

manages the size, shape, and appearance of Business Signs and other commercial signs. The 

City’s restrictions on Business Signs appropriately balance the needs of business owners to 

identify their businesses and advertise certain products sold on-site with the City’s interest in 

promoting aesthetics and safety by reducing the additional visual clutter and distractions 

associated with commercial signage and off-site advertising. See Metromedia, 453 U.S. at 512 

(citations omitted) (“As we see it, the city could reasonably conclude that a commercial 

enterprise—as well as the interested public—has a stronger interest in identifying its place of 

business and advertising the products or services available there than it has in using or leasing its 

available space for the purpose of advertising commercial enterprises located elsewhere.”); see 

also id. at 501 (“Each method of communicating ideas is ‘a law unto itself’ and that law must 

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reflect the ‘differing natures, values, abuses and dangers’ of each method.”). As such, “[t]he 

[C]ity has gone no further than necessary in seeking to meet its ends. Indeed, it has stopped short 

of fully accomplishing its ends: It has not prohibited all billboards, but allows onsite advertising 

and” noncommercial speech. See Metromedia, 453 U.S. at 508. The Court finds that the City has 

satisfied the third factor.

Plaintiff has failed to make a threshold showing of likelihood of success on the merits. 

Plaintiff’s request for a preliminary injunction would ordinarily end here; however, plaintiff 

separately argues that it is entitled to an injunction under a line of cases beginning with Ex Parte 

Young, 209 U.S. 123 (1908).

B. Due Process / Ex Parte Young

Contest Promotions argues that it is forced to risk substantial daily penalties while 

litigating this action in violation of due process. Contest Promotions seeks an injunction under Ex 

Parte Young to prevent the imposition of penalties under the Planning Code while it obtains a 

determination as to the code’s validity. The City argues that plaintiff is not entitled to Ex Parte 

Young relief because violation of the planning code is not the sole avenue of judicial review, the 

penalties are not severe enough to deter litigation, and determination of plaintiff’s compliance 

does not require a complicated factual analysis.

A state cannot force a party to risk severe penalties to obtain a judicial determination if that 

determination involves a complicated or technical question of fact. Ex Parte Young, 209 U.S. 

at 145, 148. A statutory scheme that imposes penalties on those seeking judicial review is 

unconstitutional if “the penalties for disobedience are fines so enormous . . . as to intimidate the 

company and its officers from resorting to the courts to test the validity of the legislation.” Id.

at 147. The right to judicial review “is merely nominal and illusory if the party to be affected can 

appeal to the courts only at the risk of having to pay penalties so great that it is better to yield to 

orders of uncertain legality rather than to ask for the protection of the law.” Wadley S. Ry. Co. v. 

Georgia, 235 U.S. 651, 661 (1915).

The Court finds that the risks to plaintiff here are insufficient to justify relief under Ex 

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Parte Young. As the City points out, plaintiff can apply for a permit and contest the denial of that 

permit on the same grounds, without incurring daily penalties. Contest Promotions need not 

violate the Planning Code in order to challenge its constitutionality. Moreover, years of ongoing 

litigation between the parties also demonstrate that plaintiff has not been deterred by “prohibitive 

penalties.” Accordingly, plaintiff’s motion for preliminary injunction is DENIED.

CONCLUSION

For the foregoing reasons, the Court hereby DENIES plaintiff’s motion for a preliminary 

injunction.

This order resolves Dkt. No. 8.

IT IS SO ORDERED.

Dated: January 9, 2017

______________________________________

SUSAN ILLSTON

United States District Judge

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