The year 2023 was full of legal developments, most of which were dutifully reported by Billboard Insider. For example, as reported in the April 3rd edition, the Fifth Circuit Court of Appeals ruled that Austin’s different treatment for digital on and off-premise signs was constitutional in a 2 to 1 split ruling in Reagan vs Austin. This March 30, 2023 decision followed the Supreme Court’s April 2022 unanimous decision upholding the Austin Sign Code under a strict scrutiny standard, and remanding the case back to the Fifth Circuit, which reached the same conclusion under the intermediate scrutiny standard. A more favorable result for the billboard company was enjoyed in Texas vs Giles and KEM Outdoor, where the Thirteenth Texas Court of Appeals held on November 16th “a lessee is entitled to receive compensation for the difference, if any, between the market rental and the contract rental,” and that a percentage of the advertising revenue is an accepted indicator of such market rent in determining the “lessee’s bonus value” of the leasehold. My partners Mike Falick and Chris Rothfelder handled this billboard condemnation case at the trial and appellate levels, and they will be writing an article on it for Billboard Insider soon. The Texas Legislature passed a couple of impactful and controversial bills affecting the billboard industry, namely HB 2127, under which local sign regulations that conflict with the Texas Highway Beautification Act would be invalidated, and SB 2038, which allows property owners in municipal extraterritorial jurisdiction to present petitions or call for elections to release areas from the city’s ETJ and regulation. I reported more details in Billboard Insider’s June 20th edition on the legislation, both of which have now been challenged by several Texas cities. Cities across the Country, like Bloomington, Indiana and Helena, Montana, also started the process toward eliminating billboards through the constitutionally suspect method of amortization. As reported on September 21st and October 16th, several of these efforts have stalled, due in part to type of legal challenges discussed in my February 26, 2021 article that the billboard industry has successfully employed for decades against the scheme. Finally, the IBO once again held fun and educational conferences, including in my home town of Houston in the Spring, where we presented the Top 10 Legal issues Affecting the OOH Industry, and in Indianapolis in the Fall, where we presented Drafting and Litigating Leases and Easements.
As to legal predictions for 2024, as Biden’s so-called “Infrastructure and Jobs Act” kicks into full gear, prompting highway expansions throughout the Country, look for more billboard condemnations. We certainly have seen an influx of these cases recently in Texas, which should be resolved more favorably to the billboard owners after decisions like in the KEM case. While it almost seems counterintuitive, given the highest inflation and interest rates in decades, my partner and son Chris nevertheless tells me he’s never been busier in billboard acquisitions. As he noted, record prices at 15 times EBITA make it irresistible to stay on the sidelines, regardless of these unfavorable market conditions. And, last but not least, with 2024 being an election year, especially with the two anticipated presidential candidates, expect to see some litigation fireworks. The previous administrations for these controversial and litigious presidents were riddled with constitutional challenges with billboard industry implications, such as First Amendment cases over “public forums” and “forced speech,” and Administrative Procedures Act challenges to executive orders on illegal immigration and student debt forgiveness. Whoever wins the election may conclude they have a mandate to continue this type of bold presidential behavior, only to be challenged in the courts by the States and Congress.
On a personal note, I would be remiss if I failed to reiterate and update my favorite Billboard Insider legal article of 2023, namely the “Meet the Next OOH Legal Expert” appearing in the October 27th edition. I’m glad to report that Dawson Merideth Rothfelder, now two months old, as well as mother Bianca and father Chris, while sleep deprived, are all doing great. Grandpa is too!
Merry Christmas and Happy New Year, Everybody!
To receive a free morning newsletter with each day’s Billboard insider articles email info@billboardinsider.com with the word “Subscribe” in the title. Our newsletter is free and we don’t sell our subscriber list.
Paid Advertisement
