Home » Case Summaries » 1997 » Keith v. Volpe


Keith v. Volpe



Robert L. Kudler, a billboard advertising developer, appealed the district court’s entry of a preliminary injunction prohibiting the California Department of Transportation (Caltrans) from issuing him a permit to place billboards along the Interstate 105 freeway (I-105) in Los Angeles County. The district court injunction was granted when the plaintiffs, environmental and civil rights activists, sought to enforce a consent decree and environmental impact statement (EIS) resulting from earlier litigation on the I-105 project. The question for the Ninth Circuit was whether this federal consent decree properly barred construction of billboards on I-105.

The consent decree and EIS formed a settlement agreement whereby federal and state agencies were permitted to proceed with the construction of I-105 while mitigating negative aesthetic effects on motorists and surrounding neighborhoods. The consent decree required that I-105 be constructed as a landscaped freeway to create a park-like atmosphere. The issue on appeal was whether this consent decree superseded the California Outdoor Advertising Act (COAA),[1] the state law regulating billboard placement.

From 1993 to 1996, Kudler applied for several permits authorizing him to place billboards along I-105. Caltrans denied all of these applications. Kudler wanted to place billboards along unplanted sections of the highway that were over 200 feet in length, and he also sought to have Caltrans reclassify these sections of the freeway as nonlandscaped. Caltrans denied these requests. Kudler then filed an action in state court seeking peremptory writs of mandate requiring Caltrans to reclassify the unplanted segments of the freeway as nonlandscaped and issue him permits to place billboards along those segments. Kudler argued that Caltrans had violated the COAA, which provides that permits to construct billboards shall be issued unless the billboard is to be constructed in a landscaped segment of the freeway. The law also mandates that a planted segment of the freeway must be at least 1000 feet in length to be classified as landscaped, and that if such a segment is followed by a gap of 200 feet or less and adjoins a planted section that is at least 500 feet in length, the “landscaped freeway” designation will apply to the planted segment, the gap, and the next planted segment.[2] Kudler argued that because he sought to place billboards in unplanted segments of the freeway that were over 200 feet in length, Caltrans was required to issue him the permits. Caltrans believed that the COAA was superseded by the consent decree, which prohibited erection of billboards along I-105.

On July 12, 1996, the Los Angeles Superior Court issued a peremptory writ of mandate requiring Caltrans to reclassify the disputed segments of I-105 as nonlandscaped and to grant Kudler permits to construct his billboards. The plaintiff groups then filed an ex parte application for an order to show cause why an injunction to enforce the consent decree should not issue and for a temporary restraining order in federal district court. After briefing and a hearing on the order to show cause, in which nonparty Kudler participated, the district court ruled that the consent decree prohibited billboards anywhere along the freeway and granted a preliminary injunction preventing Caltrans from issuing Kudler’s permits. Nonparty Kudler then appealed this decision to the Ninth Circuit.

The Ninth Circuit first considered whether it had subject matter jurisdiction and whether the parties had standing to bring this action both in district court and on appeal. Kudler argued that the district court did not have subject matter jurisdiction. The Ninth Circuit disagreed, citing SEC v. G.C. George Securities, Inc.,[3] where the court found that the district court could properly enjoin state administrative proceedings raising issues already resolved in a federal court settlement agreement. Also, the consent decree itself provided that the parties could apply to the district court for relief if any party failed to comply with the terms of the decree.

The Ninth Circuit determined that nonparty Kudler had standing to bring the appeal in the Ninth Circuit. Nonparties are permitted to appeal district court orders in the Ninth Circuit where the appellant participated in the district court proceedings, even though not a party, and the equities in the case weigh in favor of hearing the appeal. At the district court’s request, Kudler had responded to the order to show cause by filing a memorandum of points and authorities and participating in oral argument. The Ninth Circuit found that equities clearly weighed in favor of Kudler’s right to appeal because the plaintiffs had hailed him into the proceeding against his will and were then trying to prevent his appeal by arguing that he lacked standing.

The Ninth Circuit then turned to the merits of the case, concluding that the district court properly found that the consent decree and EIS prohibit billboards along I-105. The Ninth Circuit discussed the terms of the consent decree, which permitted construction of the freeway but required mitigating measures, including the order that I-105 be constructed as a landscaped freeway. The parties who negotiated the consent decree, and the district judge who had presided over the case for twenty-five years, agreed that the language of the consent decree precluded billboards along the freeway. The Ninth Circuit discussed some of the language of the consent decree and the EIS and concluded that substantial evidence supported the district court’s finding that the consent decree’s designation of I-105 as a landscaped freeway prohibited billboard construction.

The Ninth Circuit then considered whether a contractual consent decree entered by a federal district court could supersede state laws regulating billboards, when those laws are not in conflict with any federal law. The Ninth Circuit held that while the district court correctly determined that the consent decree precluded billboard construction on I-105, it erred in concluding that the consent decree overrode state law. The district court lost sight of its limitations under the Constitution. The Ninth Circuit held that the district court could not supersede California law unless it conflicted with a federal law, and that in this case there were no conflicting federal laws that justified overriding state law. The district court had relied on the policy concerns of the National Environmental Policy Act of 1969 (NEPA),[4] but the Ninth Circuit held that because NEPA imposes only procedural requirements, and does not dictate a substantive environmental result, the district court erred in relying on NEPA’s generalized environmental purpose.

The Ninth Circuit concluded that the parties to the consent decree did not have the authority to agree to terms that exceeded their authority under state law. The court cited a number of cases, including Perkins v. City of Chicago Heights,[5] for the proposition that the parties to a consent decree cannot agree to do something together that they lack the authority to do individually. The Ninth Circuit held that the doctrine of federalism precluded the district court from overriding valid state laws regulating outdoor advertising. The court reversed the district court decision and vacated the preliminary injunction.  

[1]Cal. Bus. & Prof. Code §§ 5200-5499 (West 1990 & Supp. 1994).

[2]Cal. Code Regs. tit. 4, § 2511 (1997).

[3]637 F.2d 685, 687-88 (9th Cir. 1981).

[4]42 U.S.C. §§ 4321-4347 (1994).

[5]47 F.3d 212, 216 (7th Cir. 1995).

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