Antitrust Law Daily Wrap Up, ADVERTISING—2nd Cir: Lifting of injunction barring ad on city buses upheld, (Mar 4, 2016)

By Linda O’Brien, J.D., LL.M.

In an action by an advocacy group against a city transportation authority over its refusal to display the group’s advertisement on its buses, the district court properly dissolved a preliminary injunction as moot after the agency amended its advertising standards, the U.S. Court of Appeals in New York City has ruled (American Freedom Defense Initiative v. Metropolitan Transportation Authority, March 3, 2016, Per Curiam).

Metropolitan Transportation Authority (MTA) accepts paid advertisements to be displayed on its subway and buses. In 2014, advocacy organization American Freedom Defense Initiative (AFDI) submitted an ad for display on MTA buses. The MTA, invoking a provision in its advertising standards barring the display of any advertisement reasonably likely to incite violence, refused to display the ad. AFDI filed suit, claiming violations of the First Amendment, and moved for a preliminary injunction.

The district court granted an injunction barring the enforcement of the incitement provision as to the ad in question. MTA subsequently amended its advertising standards to include a prohibition on any ad that was political in nature and moved to dissolve the preliminary injunction as mooted. The district court agreed and granted the motion. AFDI timely appealed.

The appellate court found that the district court did not err in dissolving the preliminary injunction on the ground that the underlying claim became moot. The appellate court rejected AFDI’s contention that MTA failed to satisfy the test for mootness under the voluntary cessation doctrine since its new advertising policy was unconstitutional as was the provision that was already enjoined. Under the voluntary cessation doctrine, a case is moot after a defendant voluntarily discontinues the challenged conduct only if there is “no reasonable expectation” that the violation will recur and interim relief has completely eradicated the effects of the challenged conduct.

In this case, the MTA has altered its conduct in a manner that was sufficient to present a fundamentally different controversy than the one that existed when the suit was filed, the court explained. Although the prohibition on incitement remains in MTA’s new advertising standards, there is no reasonable expectation that MTA will revert to applying it to AFDI’s ad. Moreover, the effects of MTA’s conduct have been completely eliminated, and AFDI suffers no ongoing harm from MTA’s initial rejection of the ad.

AFDI’s argument that its claim was not moot because it had a vested right to display the ad also was rejected. The “special facts” exception—a decision must be based upon the law as it exists at the time—did not apply, since the MTA’s refusal to display the ad even if it hypothetically knew that no violent act would result due to the ad was not an indication of bad faith. Instead, the MTA’s evidence indicated that the agency’s rejection of the ad was based on a good faith application of its advertising standards, the court concluded.

The case is No. 15-1997.

Attorneys: David Yerushalmi (American Freedom Law Center) for American Freedom Defense Initiative. Victor A. Kovner (Davis Wright Tremaine LLP) for Metropolitan Transportation Authority.

Companies: American Freedom Defense Initiative

Cases: Advertising ConnecticutNews NewYorkNews VermontNews