Together, Through Thick and Thin

In their March Legal Report, OAAA Counsel Eric Rubin explores the ties that bind all outdoor advertising companies. A shared interest in the core legal and legislative issues transcends size and geography.

OAAA members range in size from closely-held independent companies that serve a limited number of markets to public and privately owned members with a broader regional or national focus. Member companies also have differing operating characteristics and priorities that are a function of their ownership structure, the nature of their sign inventory, and the media markets in which they do business. In those respects, the size of a member’s operations often yield different perspectives on issues involving sales and marketing.

The circumstances are very different when it comes to the legal issues. OAAA members share the same fundamental interests where judicial decisions and legislation are involved. That commonality of interest stems from the fact that outdoor advertising legal issues almost invariably involve one universal concern, protection of the outdoor advertising industry’s most basic and important capital asset: its sign inventory. The issue may manifest itself through a matter involving the First Amendment, government takings, just compensation, zoning, or other regulatory constraints. When it comes to these areas of the law, the interests of all outdoor advertising companies are intertwined.

The reason for this industry interdependence results from the fact that ultimately, law revolves around precedent. A court decision, ordinance, or statute that becomes law in one state immediately impacts every other company in that state. But that same decision or legislation often becomes precedent for similar actions in other states as well. And that’s just state law. The impact of decisions by the federal courts and legislative actions by the Congress obviously have an even more immediate and profound impact nationwide.

Some of this quickly becomes lost in the heat of competition and the differing business dynamics of individual outdoor advertising companies. The purpose of this Legal Report is to step back for a moment to consider just how interdependent OAAA members are and how important it is for the industry to marshal resources to protect those interests when legal issues are at stake.

One current legal issue where the interests of all outdoor companies clearly merge concerns the impact of the Supreme Court’s decision in Reed v. Town of Gilbert on the fundamental dichotomy between the regulation of signs that disseminate on-premise and off-premise messages. Prior Legal Reports have reviewed in detail the Court’s decision in Reed. Reed began as a local zoning enforcement dispute over a small unaffiliated church’s ability to post temporary signs with non-commercial messages advertising the time and location of its Sunday services. Nevertheless, the vague nature of the Court’s majority opinion has created uncertainty about the extent to which the decision impacts general sign regulations as well as the specific provision that govern outdoor advertising signs.

Local regulatory disputes and ordinance proposals are perhaps the most common legal matters that impact OAAA members. The fallout from Reed has become a central focus for many of these requests for assistance.

In December, Grand Junction, CO, was considering amendments to its sign code in response to the city attorney’s confused interpretation of the Reed decision. As a result, Grand Junction was in the process of re-writing its sign code to strike provisions that authorize the construction of off-premise signs within the city. With material assistance from OAAA, including an opinion letter OAAA previously secured from Professor Laurence Tribe, Colorado Western Outdoor and its local counsel were successful presenting a reasoned explanation of why the Court’s decision in Reed does not in fact impact off-premise sign regulations. The amendment was withdrawn.

At first glance, an amendment to the Grand Junction sign code would not seem particularly relevant to outdoor companies operating in such disparate places as Cincinnati, OH; Chico, CA; or Atlanta, GA. But what happens in Grand Junction does not necessarily stay in Grand Junction. Given the general uncertainty about the holding in Reed in municipalities across the country, a miss-step in Grand Junction on an issue as complex as Reed’s applicability to off-premise signs could easily spread to Denver, other cities in Colorado or beyond.

OAAA has been instrumental in helping to contain these local fires. Nevertheless, Reed has spawned claims by the owners of unpermitted signs challenging the constitutionality of local off-premise sign regulations and state HBA mirror laws as a defense to enforcement actions by local and state regulatory authorities. In one case, a federal court in Memphis has found that the Tennessee HBA mirror law is in fact a content-based regulation that conflicts with the majority opinion in Reed. Other courts have disagreed, holding that Reed only pertains to noncommercial content and does not extend to off-premise sign regulations. Nonetheless, an intermediate court of appeals has adopted the Memphis court’s reasoning to support a finding that the Texas Outdoor Advertising Control Act also conflicts with the holding in Reed. Obviously, these cases should command the attention of the outdoor advertising industry because ultimately the validity of the HBA and state mirror laws is at stake.

There are many other examples of how broad industry interests are intertwined in seemingly isolated legal issues. However, there are also matters where the interests of virtually every member of the industry are directly on the line.

Digital signs provide virtually every outdoor advertising company with the potential to expand capacity and prove broader opportunities to disseminate messages to the public. So, there was no question about the impact on industry-wide interests when Scenic America filed suit in the US District Court challenging the validity of the FHWA’s 2007 Guidelines governing the operation of digital outdoor advertising signs.

The Department of Justice (DOJ) was responsible for defending the FHWA regulation. However, Scenic America’s challenge to the guidelines was so inimical to industry interests that instead of taking a role as amicus curiae, OAAA sought to intervene directly in the case as a co-equal party with the Department. It’s one thing to provide support for the FHWA guidance through a single amicus brief. The standards for securing status as a direct Intervenor is another thing entirely.

The reason that DOJ was willing to agree to OAAA’s intervention, and ultimately the reason that the District Court granted OAAA’s motion for leave to intervene, stemmed directly from the fact that OAAA represented the broad interests of a diverse membership that held a common and direct interest in the litigation. For those same reasons, the Association could justify the $1.3 million in legal fees to present the outdoor industry’s separate interests before the US District Court, the US Court of Appeals for the DC Circuit, and now in opposing Scenic America’s attempt to secure review of their case by Supreme Court.

Of course, the outdoor industry’s unified interests are most broadly on display when the fundamental regulatory structure and just compensation mandate established under the HBA, comes into play before the Congress. It is axiomatic that “all politics are local.” Ultimately, what makes the outdoor industry an effective lobby is the diversity of the Association’s membership and the industry’s deep geographic penetration across the entire country.

These are the ties that bind OAAA members when outdoor advertising laws are at stake. Inevitably, all outdoor advertising companies have a shared interest in the legal and legislative issues that are at the core of OAAA concerns.

Prepared by Eric Rubin (Rubin, Winston, Diercks, and Harris & Cooke) for the OAAA on March 3, 2017.


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