While there were few major cases decided by the US or various state Supreme Courts directly effecting the billboard industry in 2024, the year was full of cases indirectly effecting the industry. For example, the Supreme Court issued a couple of cases that seem to further the judicial and perhaps societal trend to increase restraints on administrative agencies, sometimes derisively characterized as the “Deep State.”
First, in its decision on June 28, 2024 in Loper Bright Enterprises vs Raimondo, the Supreme Court effectively eliminated the deference afforded federal administrative agencies in their interpretation of ambiguous federal statutes. The case therefore overturned the so-called Chevron Doctrine, which had been in place and observed by courts since 1984. While the case involved federal instead of state agencies, Loper Bright might be used as a precedent to examine the rulings of State Departments of Transportation and their administrative rules.
Second, just one day earlier on June 27, 2024, the Supreme Court issued its opinion in Jarkesy vs SEC, holding that the Seventh Amendment guarantees a jury trial in administrative proceedings brought by the Securities & Exchange Commission seeking monetary penalties. While the decision is limited to SEC enforcement actions seeking civil penalties for violations of its antifraud statutes, the Dissent warns that the “decision is a massive sea change. Litigants seeking further dismantling of the ‘administrative state’ have reason to rejoice in their win, [and] today’s ruling is a part of a disconcerting trend: When it comes to the separation of powers, this Court tells the American public and its coordinate branches that it knows best.” Thus, the Dissent suggests the trend of diminishing the powers of federal administrative agencies might be extended, for example, to administrative proceedings brought by State Departments of Transportation, which enact and enforce administrative regulations on the height, size, location, and virtually every other aspect of billboard operation, and often seek to impose administrative penalties over $1,000/day in proceedings before administrative law judges without juries.
Lower courts also issued decisions important to the billboard industry, such as Ryan vs FTC, decided by the Dallas Division of the Northern District of Texas on August 20, 2024. The Federal Trade Commission passed a new administrative rule on April 23, 2024, effectively rendering unenforceable non-competition agreements, which are often used in the billboard as well as other industries. District Court Judge Ada Brown, a Trump appointee, granted a summary judgment, ruling that the FTC lacked the statutory authority and acted arbitrarily and capriciously in passing the rule, thereby invalidating and preventing it from becoming effective on a nation-wide basis.
In addition to these cases, coincidentally on the excesses of administrative agencies, the Texas Transportation Commission, the administrative agency promulgated under the Texas Department of Transportation, passed new administrative rules effective September 1, 2024. The new rules are found in 43 Texas Administrative Code Sections 21.142 et seq, applicable to commercial (off-premise) signs adjacent to federal interstate and primary highways, and 43 Texas Administrative Code Section 21.409 et seq, applicable to signs adjacent to rural roads. The new rules mostly renumber and reorganize previous rules, but an important addition is the procedure outlined for the removal and relocation of signs condemned and removed to accommodate highway projects under 43 TAC Section 21.198.
The legal predictions for the billboard industry for next year follow many of these of these trends from 2024, such as the continued scrutiny on administrative rules and executive orders expeditiously enacted without the checks and balances of the legislative process. Recall from the first Trump Administration the judicial invalidation of numerous policies, such as travel bans directed at specific religious groups, as well as First Amendment challenges implicating the billboard industry more directly on social media and public forums. Expect, however, the legal challenges to be even more aggressive and consuming under the upcoming Trump Administration, where a “mandate” for passing measures when Congress can’t or won’t act will justify such executive action.
Other promises made by President-elect Trump on the campaign trail, which may have implications for the billboard industry, include the elimination or relaxation of the malice standard currently required in libel and slander cases for public officials under the First Amendment and NYT vs Sullivan. He has also threatened to eliminate or curtail the “administrative state,” namely the several federal agencies like the Department of Education. However, it’s doubtful that President-elect Trump would advocate the elimination of the Department of Transportation, for which he has nominated Shawn Duffy (a former Fox New commentator) as Secretary, and the Federal Highway Administration, which would be disadvantageous for the billboard industry in disrupting the HBA and its just compensation requirement upon the removal of signs from federal funded highways.
President-elect Trump has also indicated his affection for the Government’s power of eminent domain, with The Wall being the most obvious example. The Biden Administration’s “Infrastructure and Jobs Act” still remains largely unfulfilled, so there will likely continue to be major highway projects, including condemnation cases requiring the removal and compensation for billboards.
Finally, and regrettably, the hyper partisan and often divisive attitude of the Country has rendered many reluctant to exercise their right to speak under the First Amendment, and that may be exacerbated in this political climate. It was recently reported that a billboard displaying the message of one of the presidential candidates, located in an area where there was predominant opposition to that particular candidate, was removed by the billboard operator after it and the lessor/landowner received numerous complaints from those in the community.
Merry Christmas and Happy New Year to All!
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