Earlier this year, a federal district court in Washington granted the City of Port Orchard’s motion for summary judgment with respect to alleged violations of the First Amendment rights of Engley Diversified, Inc., a billboard company. Engley sought damages under federal and state law for what it alleged were wrongful denials of billboard permits by the city.

The case, which has a lengthy and twisted procedural history, stems from the submission of six permit applications by Engley to the city in 2010. Engley sought to construct three billboards in the city. The city’s code enforcement officer denied the permits, interpreting the sign code as prohibiting them. Engley appealed to the city’s hearing officer. During the pendency of the appeal, the city council enacted an ordinance prohibiting all off-premises advertising billboards throughout the city. The city’s hearing examiner subsequently denied the appeal on the merits, finding that the code enforcement officer’s interpretation of the sign code was not clearly erroneous. In December 2010, Engley appealed to the city council, which denied the appeal as untimely. Engley then appealed to state district court pursuant to the Washington Land Use Petition Act, seeking damages under state law and Section 1983. The court ruled that the appeal was timely, and remanded the case back to the city council. In September 2011, the city council reversed the hearing examiner’s decision on the merits, but found that the permit applications submitted by Engley were not vested. The following month, Engley filed another complaint seeking damages against the city, which was removed to federal district court. Finally, in late 2012, the city council granted the requested permits. The city subsequently removed the matter to federal district court. The case has continued, as Engley is seeking damages for the delay in permitting as well as attorneys’ fees.

Several matters were before the court on summary judgment motions. The court denied the city’s argument that the billboard company’s claims were barred by collateral estoppel. The court also disagreed with the city’s argument that it could not be found liable under Section 1983, finding instead that the city council had sufficient final policy-making authority so as to give rise to liability under Section 1983.

On the First Amendment matters, Engley argued that the city’s prohibition of its billboards was an unconstitutional restriction on commercial speech. The court found no First Amendment violation. According to the court, because the city council ultimately vacated the interpretations of the code enforcement officer and hearing examiner and issued the billboard permits, there was no unconstitutional act by the final policy-making authority so as to give rise to a First Amendment violation. According to the court:

Although Engley attempts to fault the City for the actions of the Code Enforcement Officer and the Hearing Examiner, it fails to show that these officers were more than appointed authorities with delegated authority to make certain discretionary decisions. *1070 In such circumstances, the City is not liable even if the appointed authority exercises his or her discretion in an unconstitutional manner.

The court granted the city’s motions for summary judgment on Engley’s First Amendment and due process claims. The court denied Engley’s motion for summary judgment on state law issues associated with the question of whether the city council’s unlawful denial of the permit was done with knowledge.

Engley Diversified, Inc. v. City of Port Orchard, 178 F. Supp. 3d 1063 (W.D. Wash. 2016).