Nat'l Advertising Co. v. City of Raleigh, 947 F.2d 1158 (4th Cir. 1991)

OPINION

ELLIS, District Judge:

Appellant National Advertising Company commenced this action in April 1989 under 42 U.S.C. § 1983 alleging that a 1983 ordinance adopted by the City of Raleigh, North Carolina, restricting off-premise outdoor advertising signs, violated the First and Fourteenth Amendments and also resulted in a taking without just compensation in violation of the Fifth and Fourteenth Amendments. The district court found that National’s suit was barred by North Carolina’s three-year limitations period set forth in G.S.N.C. § 1-52(2). On appeal, National contends that it suffered no injury from the ordinance, and hence no cause of action accrued, until a five-and-one-half (5V2) year grace period provided in the ordinance for nonconforming signs expired. National also contends that its action is timely because the ordinance constitutes a “continuing” constitutional violation. The district court rejected National’s contentions. Finding no error below, we affirm.

I.

On October 18, 1983, the Raleigh city council adopted Ordinance No. 210 TC 198 (“the 1983 ordinance” or “the ordinance”), which by its terms became effective October 23, 1983.1 This ordinance amended a 1979 ordinance that established zoning regulations for signs in Raleigh. The 1979 ordinance allowed “on-premise” signs, defined as signs located on the premises which “direct[] attention to a business, profession, commodity, service, or entertainment conducted, offered, sold, manu-

factored, or provided at a location on the premises where the sign is located or to which it is affixed,” and permitted “off-premise” signs (or “non-point-of-sale” signs) and special category signs, including political signs, real estate signs and governmental and public purpose signs, in certain areas of Raleigh.

The 1983 ordinance modified the 1979 ordinance, inter alia, by reducing the size of permissible off-premise signs from 672 square feet to 150 square feet for signs facing streets with four or more traffic lanes, and to 75 square feet for signs facing streets with fewer than four traffic lanes. A further modification confined the location of such signs to so-called “industrial zones” as defined in the ordinance. Existing signs larger than the specified dimensions were declared nonconforming uses. Furthermore, the. 1983 ordinance prohibited the construction of any new nonconforming signs and, except for ordinary maintenance and poster panel replacements, it also barred any structural alteration, reconstruction, or other material change to existing nonconforming signs unless the signs and their entire structures were brought into conformity with the 1983 ordinance. But existing nonconforming signs were not immediately banned. Rather, they enjoyed a 5V2 year grace period beginning October 23, 1983. At the end of this period nonconforming signs were required to be removed, unless they fell within a state law exception for signs located adjacent to highways on the National System of Interstate and Defense Highways or on the Federal-Aid Primary Highway system. The 5V2 year grace period (referred to in the ordinance as an “amortization” period) was in lieu of any other form of compensation.

National, a national advertising company, owns approximately thirty-six billboards in Raleigh. Sixteen of these billboards are located on federal highway systems and hence are exempted from the 1983 ordinance. National filed its complaint on April 28, 1989, more than three years after adoption of the 1983 ordinance and approximately one-month after expiration of the 5V2 year amortization period. Raleigh responded with.a motion for summary judgment pursuant to Rule 56, Fed. R.Civ.P., contending that the action was barred either by G.S.N.C. § 1-54.1, which establishes a nine-month limitation period for “actions contesting the validity of any zoning ordinance or amendment thereto,” or by G.S.N.C. § 1-52(2), which establishes a three-year limitations period for lawsuits based on “liability created by statute, either state or federal.” The district court determined that the latter statute applied and barred National’s suit. On appeal, National concedes that § 1-52(2) establishes the applicable limitations period. It contends, however, that it was not injured by the 1983 ordinance until the 5V2 year amortization period for nonconforming signs expired and it was forced to remove its signs or contest the validity of the ordinance. Accordingly, National argues that the district court erred in finding that the cause of action accrued upon enactment of the ordinance in October 1983. Instead, National contends the cause of action did not accrue until either the expiration of the amortization period or, at the earliest, January 6, 1989, the date it received a notification letter from Raleigh demanding the removal of its nonconforming billboards by April 1989. Alternatively, National claims that the 1983 ordinance created a continuing constitutional violation and therefore National’s action is timely. We review these claims seriatim.

II.

Because there is no.federal statute of limitations applicable to suits under § 1983, “it is the rule that the applicable ‘provision limiting the time in which an action [under § 1983] must be brought, must be borrowed from the analogous state statute of limitations.’ ” Bireline v. Seagondollar, 567 F.2d 260, 262 (4th Cir. 1977), quoting Cox v. Stanton, 529 F.2d 47, 49 (4th Cir.1975). The parties take the view that the analogous state limitations period is the three-year limitations period established in G.S.N.C. § 1-52(2) for actions based on “liability created by statute, either state or federal.” While we agree

that a three-year limitations period is applicable, we find that this limitations period is supplied by G.S.N.C. § 1-52(5), relating to personal injury actions, and not § l-52(2).2

The selection of the appropriate statutory limitations period is only the first step in the analysis. There remains the question of when National’s cause of action accrued. While the statutory limitations period for § 1983 actions is borrowed from state law, “[t]he time of accrual of a civil rights action is a question of federal law.” Id. at 50; Campbell v. Haverhill, 155 U.S. 610, 15 S.Ct. 217, 39 L.Ed. 280 (1895); Bridgford v. United States, 550 F.2d 978, 981 (4th Cir.1977). “Federal law holds that the time of accrual is when plaintiff knows or has reason to know of the injury which is the basis of the action.” Cox, 529 F.2d at 50; see Urie v. Thompson, 337 U.S. 163, 170, 69 S.Ct. 1018, 1024-25, 93 L.Ed. 1282 (1949) (“statutes of limitations ... conventionally require the assertion of claims within a specified period of time after notice of the invasion of legal rights”); Blanch v. McKeen, 707 F.2d 817, 819 (4th Cir.), cert. denied, 464 U.S. 916, 104 S.Ct. 279, 78 L.Ed.2d 258 (1983); Young v. Clinchfield Railroad Co., 288 F.2d 499, 503 (4th Cir.1961).

The basis of a takings claim is the assertion that a regulation’s “interference with appellants’ property is of such magnitude that ‘there must be an exercise of eminent domain and compensation to sustain [it].’ ” Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 136, 98 S.Ct. 2646, 2665, 57 L.Ed.2d 631 (1978), quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413, 43 S.Ct. 158, 159, 67 L.Ed. 322 (1922). In determining whether a taking has occurred, courts examine several factors, including “the economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations.” Penn Central, 438 U.S. at 124, 98 S.Ct. at 2659. Courts conducting a takings analysis in the zoning context “have traditionally looked to the existing use of property as a basis for determining the extent of interference with the owner’s ‘primary expectation concerning the use of the parcel.’ ” Esposito v. South Carolina Coastal Council, 939 F.2d 165, 170 (4th Cir.1991),3 quoting Penn Cen

tral, 438 U.S. at 136, 98 S.Ct. at 2665. Interference with the primary uses of a property is the touchstone of the analysis. In the zoning context, “diminution in property value, standing alone, [cannot] establish a ‘taking’.... [T]he ‘taking’ issue in these contexts is resolved by focusing on the uses the regulations permit.” Penn Central, 438 U.S. at 131, 98 S.Ct. at 2662-63. The same principle applies in the present case. Hence, National’s cause of action arose when the ordinance was enacted because it was then, if at all, that National suffered the regulatory interference with the primary uses of its property.

National contends that its cause of action did not accrue until the expiration of the 5V2 year amortization period in April 1989, when it faced the City’s demand that the nonconforming signs be removed. Until then, National asserts, it suffered no actual injury because the 1983 ordinance was neither applied nor enforced against it. Given this, National contends that no “as applied” challenge to the ordinance was possible before April 1989; at best only a facial challenge to the ordinance’s validity was possible prior to April 1989.4

National’s contentions miss the mark. Immediately upon enactment, the 1983 ordinance interfered in a clear, concrete fashion with the property’s primary use. Thus, on October 23, 1983, National’s signs became “nonconforming outdoor advertising signs.” As such, those signs became immediately subject to the restriction that “[a]ll nonconforming outdoor advertising signs shall be discontinued or made conforming (amortized) within five and one-half (6%) years from the date of this ordi-nance_” The ordinance therefore interfered in a concrete fashion with National’s primary use of its existing signs by mandating that this use change or cease within five years.

Moreover, National suffered actual, concrete injury on October 23, 1983. On that date, the useful lives of National’s nonconforming signs were shortened from 30 years5 to 5V2 years. Thus, the present value of the nonconforming signs was re

duced accordingly. Had National sought to sell its nonconforming Raleigh signs between October 1983 and April 1989, a buyer would have discounted the value of these signs to account for their shortened life. Hence, on the date of the ordinance’s enactment, there was both substantial interference with the property’s primary use so as to affect distinct investment-backed expectations and also actual concrete injury accompanying that interference. Whether that interference was of such magnitude as to constitute an actual “taking” could have been determined upon the enactment of the statute in 1983. We do not reach the issue here of whether the interference “was of such a magnitude that ‘there must be an exercise of eminent domain and compensation to sustain [it].’ ” Penn Central, 438 U.S. at 136, 98 S.Ct. at 2665, quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. at 413, 43 S.Ct. at 159. We hold only that the injury suffered by National, an injury that might or might not rise to the level of a taking, occurred upon enactment of the ordinance at issue.6 National contends that its injury was not “concrete” in October 1983 because uncertainty allegedly then existed as to which of National’s signs were subject to removal upon expiration of the amortization period. National alleges that as late as January 1989, City officials were unsure whether certain of National’s signs located along the National System of Interstate Defense Highways and the Federal-Aid Primary Highway System were subject to removal. This claim is refuted on the face of the ordinance itself. It makes clear that signs along the federal highway systems were exempted from the 5V2 year amortization scheme.7 Hence, it was clear when the ordinance was approved in 1983 that of National’s thirty-six Raleigh signs, the sixteen signs located on federal highway systems were exempt from the specific provision requiring removal within 5V2 years.8 Equally clear was

that the twenty remaining signs were not so exempted. Because the ordinance applied in clear, specific ways to National’s thirty-six signs when enacted, and because any injury to National was real and could be calculated in terms of reduced present value on October 23,1983, National’s cause of action arose on that date.

National’s cited authority is not to the contrary. This authority emphasizes that takings challenges normally focus on a statute’s application to specific property, rather than attacking a statute or ordinance on its face. See, e.g., Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 495, 107 S.Ct. 1232, 1247, 94 L.Ed.2d 472 (1987); Hodel v. Virginia Surface Mining and Reclamation Ass’n, 452 U.S. 264, 294-96, 101 S.Ct. 2352, 2369-70, 69 L.Ed.2d 1 (1981). In this regard, the Supreme Court has explained that the very nature of takings inquiries usually necessitates an “as applied” rather than a “facial”9 takings challenge:

Hodel, 452 U.S. at 295, 101 S.Ct. at 2370. Yet no such inquiry, National argues, could have been conducted until 1989 because the 1983 ordinance was not applied to any specific property until National was required to remove its signs in April 1989. Hence, it contends that an “as applied” challenge favored by Hodel, Keystone and similar cases could not have been mounted until 1989 and, at best, only a fruitless facial challenge could have been made in 1983. But the present matter is easily distinguished from cases involving premature facial challenges.10 Here, the 1983 ordinance applied when enacted to specific property— National’s thirty-six off-premise signs in the Raleigh area. The ordinance’s language made clear that its 5V2 year amortization scheme applied to twenty of the thirty-six National signs, i.e., those signs not located along federal highway systems. Thus, the “ad hoc, factual inquiries” that “must be conducted with respect to specific property, and the particular estimates of economic impact and ultimate valuation” relevant to a takings analysis, Hodel, 452 U.S. at 295, 101 S.Ct. at 2370, could have been conducted in 1983. There is, therefore, no error or injustice in holding that

National could have mounted an “as applied” challenge in October 1983 and therefore its cause of action arose at that time.11

Decisions holding takings challenges to be “premature” because of the availability of administrative compensation and review mechanisms12 are also inappo-site. The 1983 ordinance did not establish any variance or administrative review procedures through which sign owners might obtain relief. Instead, it provided for immediate compliance without exception.13 Moreover, the ordinance provided for no compensation other than what it referred to as “amortization.” It stated that “amortization of nonconforming outdoor signs, in contrast to grandfathering these noncon-formities, will eliminate the excessive number and amount of outdoor advertising signs and signage.” Hence, just as there are no variance or compensation procedures which National must exhaust now before bringing its suit, none existed in 1983 to prevent ripeness of its suit.

Finally, National is mistaken in relying on cases holding that no taking occurs where regulations permit the current use of property to continue unhindered. See Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 136, 98 S.Ct. 2646, 2665, 57 L.Ed.2d 631 (1978); Mac-Leod v. Santa Clara County, 749 F.2d 541 (9th Cir.1984). The regulations challenged in Penn Central and MacLeod had no impact on the current uses (a railroad station and a cattle ranch, respectively) of the properties at issue. Unlike those regulations, the 1983 ordinance had a specific and immediate impact on the current use of certain signs. It mandated that the current and perhaps sole use of twenty of National’s nonconforming signs cease within *5lk* years, thus having a specific and immediate impact on the primary use of National’s property.

In sum, when enacted the 1983 ordinance interfered in concrete ways with National’s primary use of specific property — thirty-six signs. The district court therefore did not err in determining that National’s takings cause of action arose in October 1983.

III.

National’s second appeal ground is that its suit is timely because the 1983 ordinance created a continuing constitutional violation. This ground, too, fails because this is not a continuing violation case. As has been observed many times: “A continuing violation is occasioned by continual unlawful acts, not continual ill effects from an original violation.” Ward v. Caulk, 650 F.2d 1144, 1147 (9th Cir. 1981); accord Ocean Acres Ltd. v. Dare County Bd. of Health, 707 F.2d 103, 106 (4th Cir.1983). Here, any taking occurred at the time of the ordinance’s enactment; what continued was the ill effect of the ordinance’s enactment and the alleged taking. No continuing unlawful acts have been shown.

In general, “[t]o establish a continuing violation ... the plaintiff must establish that the unconstitutional or illegal act was a ... fixed and continuing practice.” Perez v. Laredo Junior College, 706

F.2d 731, 733 (5th Cir.1983), cert. denied, 464 U.S. 1042, 104 S.Ct. 708, 79 L.Ed.2d 172 (1984). The challenged action must be repeated within the statute of limitations period. As the Perez court observed in the context of employment discrimination:

Id. at 733-34 (footnotes omitted).

With respect to statutory or regulatory challenges, we have previously found a continuing violation where regulations continued to be applied to persons within the statutory limitations period. Virginia Hospital Ass’n v. Baliles, 868 F.2d 653, 663 (4th Cir.1989), affirmed, — U.S. —, 110 S.Ct. 2510, 110 L.Ed.2d 455 (1989). Yet we have found no continuing violation where any harm to the plaintiff stemmed only from the initial application of a regulatory prohibition. Ocean Acres Ltd. v. Dare County Bd. of Health, 707 F.2d at 106. This distinction is well illustrated in the facts of the two cases. In Virginia Hospital Ass’n v. Baliles, we affirmed a district court opinion holding that “[t]he continued enforcement of an unconstitutional statute cannot be insulated by the statute of limitations.” 868 F.2d at 663 (emphasis added). There, we held that plaintiffs claim that Virginia’s procedures for reimbursing hospitals for the cost of treating Medicaid patients violated the Medicaid Act, 42 U.S.C.A. § 1396 et seq., although brought four years after adoption of the procedures, was not barred by Virginia’s applicable two-year statute of limitations. This conclusion rested on the holding that “the limitations period cannot protect an allegedly unconstitutional program.” Id. On the other hand, in Ocean Acres, we determined that the “continuing wrong” exception did not apply to municipal ordinances banning the installation of septic tanks on certain properties. 707 F.2d at 105-07. In reaching this conclusion, we applied the two-part analysis outlined in Cooper v. United States, 442 F.2d 908 (7th Cir.1971) for determining whether a continuing wrong exists: “The particular policies of the statute of limitations in question, as well as the nature of the wrongful conduct and harm alleged, must all be considered.” Id. at 912. Ultimately, we concluded there that plaintiff’s allegations of harm focused “on the initial actions taken by defendants, not on a continuing course of conduct.” Ocean Acres, 707 F.2d at 106. Moreover, statute of limitations policies were satisfied in Ocean Acres because at the time of the ban’s enactment “[pjlaintiff was aware of the actions taken by the county and of the impact of those actions on its proposed [real estate] development.” Id. at 107. Application of this two-part analysis leads to the same conclusions here.

National’s claimed harm is that the 1983 ordinance restricted the use of its property without providing just compensation. The challenged municipal action, however, does not amount to a continuing wrong. The restriction on use and the economic loss of which National complains occurred upon enactment of the ordinance. No City action since then has added to National’s alleged injury or otherwise constituted a taking. Seeking to avoid this conclusion, National points to a January 1989 letter from Raleigh, informing it that its nonconforming signs would have to be removed by April 1989, as a later wrongful act committed by the City within three years of National’s suit. This argument misses the mark. The letter was not a new wrongful act, but merely a reminder of the restriction placed on National’s signs in 1983. It caused National no additional injury, and is not itself the source of the alleged taking. The fact that National’s signs ultimately were required to be removed or brought into conformity by April 1989 was one of the effects of their being deemed nonconforming upon enactment of the ordinance, not a separate violation.

Compare Delaware State College v. Ricks, 449 U.S. 250, 258, 101 S.Ct. 498, 504, 66 L.Ed.2d 431 (1980) (plaintiffs loss of teaching position was merely “one of the effects” of alleged discriminatory denial of tenure; no “continuing violation” shown); Abramson v. University of Hawaii, 594 F.2d 202, 209 (9th Cir.1979) (“[t]he proper focus is upon the time of the discriminatory acts, not upon the time at which the consequences of the acts became most painful”). This is not an instance of a statute’s repeated enforcement against different individuals or even the same parties, but of a statute applied once to a discrete set of individuals with a foreseeable, ascertainable impact. In sum, an examination of the “nature of the wrongful conduct and harm alleged,” Ocean Acres, 707 F.2d at 106, points persuasively to the absence of a continuing wrong.

Finally, an examination of the “particular policies of the statute of limitations in question,” Id. at 107, supports the conclusion that no unfairness results from finding that the continuing wrong exception is inapplicable here. National was aware of the 1983 ordinance from at least the date of its enactment. National participated in rulemaking proceedings prior to adoption of the ordinance and clearly knew of its terms in 1983; moreover, National was required by law to be cognizant of the numerous restrictions placed on its signs upon the ordinance’s enactment. Upon the adoption of the ordinance, National was in a position to challenge it. “[A] ‘continuing wrong’ theory should not provide a means of relieving plaintiff from its duty of reasonable diligence in pursuing its claims.” Ocean Acres, 707 F.2d at 107. Permitting National to challenge the 1983 ordinance’s amortization scheme more than fh years after its adoption would enable National to retain its signs well beyond expiration of the amortization period and would be unfair to the City. Hence, statute of limitations policies militate against finding a continuing violation.

IV.

National contended before the district court that the 1983 ordinance on its face violates the First Amendment because it (i) restricts speech without promoting a legitimate government interest, (ii) is over-broad, and (iii) is unconstitutionally vague. The district court specifically addressed only the first of these claims, and found that it was barred by the three-year statute of limitations because “plaintiff had reason to know of this alleged injury at the time the ordinance became effective.” Because it is doubtful that an ordinance facially offensive to the First Amendment can be insulated from challenge by a statutory limitations period, and since National’s First Amendment claims raise purely legal issues which are well-settled, we review National’s First Amendment claims on the merits.

National contends that the 1983 ordinance does not substantially advance a legitimate state interest and is overbroad because the effect of its size limitations will be to eliminate all outdoor off-premise advertising. Settled authority compels rejection of these claims. In Major Media of the Southeast v. City of Raleigh, 792 F.2d 1269 (4th Cir.1986), we recognized that the Supreme Court “determined in Metromedia [Inc. v. City of San Diego, 453 U.S. 490, 508-11, 101 S.Ct. 2882, 2893-94, 69 L.Ed.2d 800 (1981) ] ... that a city may justifiably prohibit all off-premise signs or billboards for aesthetic and safety reasons.” 792 F.2d at 1272; see also Suffolk Outdoor Advertising Co. v. Hulse, 439 U.S. 808, 99 S.Ct. 66, 58 L.Ed.2d 101 (1979) (summarily upholding ordinance banning all off-premise billboard advertising); Metromedia, 453 U.S. at 508-11, 101 S.Ct. at 2893-94; at 540-41, 101 S.Ct. at 2909-10 (Stevens, J., dissenting in part); at 570, 101 S.Ct. at 2924 (Rehnquist, J., dissenting) (“the aesthetic justification alone is sufficient to sustain a total prohibition on billboards within a community”). Because the 1983 ordinance was enacted to promote aesthetic and safety concerns,14 National’s

first two First Amendment claims fail under Metromedia.

National’s remaining First Amendment claim is that the ordinance is unconstitutionally vague because in certain limited instances it requires city officials to determine whether the contents of an advertisement are “commercial” or “non-commercial.”15 National contends that since the ordinance contains no definition of “commercial” or “non-commercial,” insufficient guidance is given city officials. We rejected this precise contention in Major Media of the Southeast v. City of Raleigh, 792 F.2d at 1272, finding that the Supreme Court has already sufficiently defined these terms. See Central Hudson Gas & Electric Corp. v. Public Service Comm’n of New York, 447 U.S. 557, 561, 100 S.Ct. 2343, 2348-49, 65 L.Ed.2d 341 (1980) (commercial speech is “expression related solely to the economic interests of the speaker and its audience”); Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 762, 96 S.Ct. 1817, 1825-26, 48 L.Ed.2d 346 (1976) (commercial speech “does ‘no more than propose a commercial transaction’ ”), quoting Pittsburgh Press Co. v. Human Relations Comm’n, 413 U.S. 376, 385, 93 S.Ct. 2553, 2558-59, 37 L.Ed.2d 669 (1973); Board of Trustees of the State University of New York v. Fox, 492 U.S. 469, 109 S.Ct. 3028, 3031, 106 L.Ed.2d 388 (commercial speech “propose[s] a commercial transaction”). We further observed in Major Media that:

Id. at 1272-73. We find no reason to depart from our previous holding.16 In sum, we reject National’s First Amendment claims on the merits.

Accordingly, we affirm the decision of the district court granting summary judgment to Raleigh.

AFFIRMED.