UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT DEC 12 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
PARAMOUNT CONTRACTORS AND No. 17-55620
DEVELOPERS, INC, a California
corporation, D.C. No.
2:15-cv-06153-FMO-PJW
Plaintiff-Appellant, Central District of California,
Los Angeles
v.
ORDER
CITY OF LOS ANGELES, a California
municipal corporation and DOES, 1-10,
inclusive,
Defendants-Appellees.
Before: IKUTA and OWENS, Circuit Judges, and GILLIAM,* District Judge.
The memorandum disposition filed on October 17, 2018, and reported at 740
F. App’x 135 is hereby amended. The superseding amended opinion will be filed
concurrently with this order.
The Petition for Panel Rehearing is DENIED (Dkt. No. 37). No further
petitions for rehearing or petitions for rehearing en banc will be entertained.
*
The Honorable Haywood S. Gilliam, Jr., United States District Judge
for the Northern District of California, sitting by designation.
NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 12 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
PARAMOUNT CONTRACTORS AND No. 17-55620
DEVELOPERS, INC., a California
corporation, D.C. No.
2:15-cv-06153-FMO-PJW
Plaintiffs-Appellants,
AMENDED
v. MEMORANDUM *
CITY OF LOS ANGELES, a California
municipal corporation and DOES, 1-10,
inclusive,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Fernando M. Olguin, District Judge, Presiding
Argued and Submitted October 9, 2018
Pasadena, California
Before: IKUTA and OWENS, Circuit Judges, and GILLIAM,** District Judge.
Paramount Contractors and Developers, Inc. (“Paramount”) appeals from the
district court’s order granting the City of Los Angeles’s (“City’s”) motion to
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Haywood S. Gilliam, Jr., United States District Judge
for the Northern District of California, sitting by designation.
dismiss. 1 Paramount alleges that the City failed to properly apply its signage
regulations when it denied Paramount’s permit applications for “supergraphic
signs” and “wall signs.” The district court determined that res judicata barred the
claims because of the preclusive effect of Paramount’s prior actions against the
City in pursuit of permits to erect large signs on the same two commercial
properties in Hollywood. We have jurisdiction under 28 U.S.C. § 1291, and
review the district court’s dismissal on res judicata grounds de novo. Furnace v.
Giurbino, 838 F.3d 1019, 1023 n.1 (9th Cir. 2016). We affirm in part, reverse in
part, and remand. 2
Res judicata applies when there is (1) identity or privity between parties;
(2) a valid final judgment on the merits; and (3) identity of claims. See Blonder-
Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 323-24 (1971). Here, the
parties agree that the first two elements are met. The only dispute is over the third
element: identity of claims.
This court applies four factors to determine whether successive actions have
identity of claims: “(1) whether rights or interests established in the prior judgment
would be destroyed or impaired by prosecution of the second action; (2) whether
1
The Folb Partnership was also party to the appeal, but has since
withdrawn. We dismiss the appeal as brought by the Folb Partnership.
2
We grant the City’s Motion for Judicial Notice in Support of
Opposition Brief.
2
substantially the same evidence is presented in the two actions; (3) whether the two
suits involve infringement of the same right; and (4) whether the two suits arise out
of the same transactional nucleus of facts.” Costantini v. Trans World Airlines,
681 F.2d 1199, 1201-02 (9th Cir. 1982) (citation omitted). The “same
transactional nucleus of facts” inquiry “is the most important.” Id. at 1202.
The district court did not err in determining that res judicata barred
Paramount’s claim concerning supergraphics. Paramount alleges that the City
should have granted its permit applications for supergraphics because the
applications qualify for the “grandfathering” exception to the City’s ban on
supergraphics under the 2010 amendment of the Hollywood Signage Supplemental
Use District (“Amended SUD”). See L.A. Ordinance No. 181340 §§ 5(B)(11),
6(K) (amending L.A. Ordinance No. 176172). Paramount asserts that this claim
did not arise from the same transactional nucleus of facts as prior actions because
the current action presents Paramount’s first permit applications since the City
enacted the Amended SUD. We disagree. Paramount already challenged the
Amended SUD in Paramount Contractors & Developers, Inc. v. City of Los
Angeles, 516 F. App’x 614 (9th Cir. 2013) (“Paramount II”). Moreover,
Paramount argued in Paramount II that its permit applications for supergraphics
should be considered “grandfathered” under the Amended SUD, and the district
court rejected this argument. See Paramount Contractors & Developers, Inc. v.
3
City of L.A., 805 F. Supp. 2d 977, 1002 (C.D. Cal. 2011), aff’d, 516 F. App’x. 614.
Thus, we affirm the district court’s dismissal of Paramount’s claim concerning
supergraphics.
However, the district court erred in determining that res judicata barred
Paramount’s claim concerning wall signs. Paramount’s challenge to the alleged
wrongful denial of its permit applications for wall signs did not arise from the
same transactional nucleus of common facts because the prior actions did not
involve any dispute over wall signs. Paramount applied for wall sign permits for
the first time after the prior actions concluded. Wall signs are distinct from
supergraphics because the Los Angeles Municipal Code expressly defines
supergraphics as a type of sign that “does not comply” with the parameters for wall
signs. L.A. Mun. Code § 14.4.2 (cross-referencing § 14.4.10, “Wall Signs”). In
other words, wall signs cannot be supergraphics. In addition, the Amended SUD
bans supergraphics, with limited exceptions, but not wall signs. See L.A.
Ordinance No. 181340 § 5(B). Therefore, we reverse the district court’s dismissal
of Paramount’s claim concerning wall signs, and remand.
Because Paramount withdrew its constitutional claims on appeal, the only
remaining claim is a purely local one. Thus, the district court has discretion to
either exercise supplemental jurisdiction over this claim or remand the action to
state court. See 28 U.S.C. § 1367; Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343,
4
350 (1988). 3
Each party shall bear its own costs on appeal.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
3
In its petition for panel rehearing, the City argues for the first time that
Paramount waived its claims concerning wall signs by waiving its first cause of
action. The City asserts that Paramount’s wall sign claims were only part of the
first cause of action, and were not part of the remaining cause of action. Because
the City failed to raise waiver in its answering brief or at oral argument, we decline
to address it. See Norwood v. Vance, 591 F.3d 1062, 1068 (9th Cir. 2010).
5
The Folb Partnership v. City of Los Angeles
Combined Opinion