CBS Outdoor, Inc. v. City of N.Y.

• Decision Date: 08 September 2015
• Docket Number: 100394/13
• Citation: 16 N.Y.S.3d 411,50 Misc.3d 283,2015 N.Y. Slip Op. 25311
• Parties: CBS OUTDOOR, INC. and The Metropolitan Transportation Authority, Petitioners–Plaintiffs, For a Judgment Pursuant to Article 78 and Section 3001 of the Civil Practice Law and Rules v. The CITY OF NEW YORK, New York City Board of Standards and Appeals, Meenakshi Srinivasan, as Chair of the New York City Board of Standards and Appeals, New York City Department of Buildings and CSX Transportation, Inc., Respondents–Defendants.
• Court: New York Supreme Court

50 Misc.3d 283

16 N.Y.S.3d 411

2015 N.Y. Slip Op. 25311

CBS OUTDOOR, INC. and The Metropolitan Transportation Authority, Petitioners–Plaintiffs, For a Judgment Pursuant to Article 78 and Section 3001 of the Civil Practice Law and Rules

v.The CITY OF NEW YORK, New York City Board of Standards and Appeals, Meenakshi Srinivasan, as Chair of the New York City Board of Standards and Appeals, New York City Department of Buildings and CSX Transportation, Inc., Respondents–Defendants.

100394/13

Supreme Court, New York County, New York.

Sept. 8, 2015.

Baker & Hostetler LLP by John Siegal, Esq., Kendall E. Wangsgard, Esq., New York, for petitioner-plaintiff CBS Outdoor, Inc.

By Peter Sistrom, Esq., New York, for petitioner-plaintiff Metropolitan Transportation Authority.

Herrick, Feinstein, LLP, by David T. Feuerstein, Esq., New York, for petitioner Clear Channel Outdoor, Inc.

Davidoff Hutcher & Citron LLP by Mark D. Geraghty, Esq., Patrick J. Kilduff, Esq., New York, for petitioner-plaintiff Lamar Advertising of Penn, LLC.

McGuireWoods LLP by Michael Driscoll, Esq., New York, for respondent-defendant CSX Transportation, Inc.

Michael A. Cardozo, Corporation Counsel of the City of New York by Sheryl R. Neufeld, Esq., New York, for respondents-defendants City of New York, New York City Board of Standards and Appeals, Meenakshi Srinivasan, as Chair of the New York City Board of Standards and Appeals, New York City Department of Buildings.

Opinion

MICHAEL D. STALLMAN, J.

Three companies in the business of outdoor advertising have each brought lawsuits against the City of New York, challenging the City's authority and jurisdiction to regulate signs erected on railroad rights-of-way or affixed to railroad trestles and overpasses. These three companies, along with the Metropolitan Transportation Authority, maintain that the City's land use law and regulation are preempted by state law.

This decision discusses all three lawsuits, CBS Outdoor v. City of New York, Index No. 100394/2013, Lamar Advertising of Penn, LLC v. The City of New York, Index No. 100397/2013 and Clear Channel Outdoor, Inc. v. The City of New York, Index No. 100398/2013, which involve common issues of law and fact.¹

I.

Petitioners-plaintiffs CBS Outdoor, Inc. (CBS Outdoor), Lamar Advertising of Penn, LLC (Lamar) and petitioner Clear Channel Outdoor, Inc. (Clear Channel) are engaged in the business of outdoor advertising.

CBS Outdoor alleges that, in 2000, its corporate parent purchased the stock of Outdoor Systems, Inc., whose assets included “a significant portfolio of outdoor advertising structures located in the New York City Market, including many advertising signs located on railroad properties.” (CBS Outdoor Second Amended Verified Petition–Complaint ¶ 33.) Lamar similarly alleges that, in 2008, its corporate parent purchased the stock of Vista Media Group, Inc., whose assets also included many advertising signs located on railroad properties. (Lamar Verified Petition–Complaint ¶ 29.)

The signs at issue in these three lawsuits are signs within New York City that are located on, or are affixed to, property owned or leased by either petitioner-plaintiff Metropolitan Transportation Authority (MTA) or respondent-defendant CSX Transportation Inc. (CSXT).² CBS Outdoor specifically alleges that all of its signs on MTA property “are erected on railroad rights-of-way or affixed to railroad trestles and overpasses”, which are “used every day for railroad transportation purposes.” (Id. ¶ 22 n. 4.) According to petitioners-plaintiffs, in 2011, the MTA received more than $116 million in revenue from advertising, which included “signs displayed in subway and commuter rail stations, inside subway and commuter rail cars and buses, on the sides and tails of buses, and on free-standing signs erected on or affixed to MTA property.” (CBS Outdoor Second Amended Verified Petition–Complaint ¶ 79; Lamar Petition–Complaint ¶ 74; Clear Channel Petition ¶ 4.)

A.

The City of New York regulates outdoor advertising. The history of such regulation was extensively recounted in a 2009 decision in a federal lawsuit started in 2006 between Clear Channel and the City of New York, Clear Channel Outdoor, Inc. v. City of New York, 608 F.Supp.2d 477, 481–484 (S.D.N.Y.2009), affd. 594 F.3d 94 (2d Cir.2010), cert. denied sub nom. Metro Fuel LLC v. City of New York, 562 U.S. 981, 131 S.Ct. 414, 178 L.Ed.2d 323 (2010). The decision states, in relevant part:

“In 1940, New York City restricted outdoor advertising signs in districts zoned for residential use and in all areas within 200 feet and in view of arterial highways and City parks larger than one-half acre. At that time the City Planning Commission (CDP1') determined that billboard regulation was needed because [b]illboards and signs not only dominate our business streets ... but they take advantage of every opportunity to crowd in upon public places, established and maintained by public funds, including civic centers, parks, and especially express highways and bridge approaches.'

* * *

In 1961 the City adopted a comprehensive Zoning Resolution which carried on the general framework from the 1940 regulations.... In 1979–80, as the City's fiscal crisis was coming to an end, the City faced a loss of $25 million in federal highway aid, unless it complied with the Federal Highway Beautification Act and enforced provisions of its Zoning Resolution. In 1980, after determining that enforcement was economically impracticable, the City grandfathered the outdoor signs that did not comply with the Zoning Resolution but did comply with less restrictive federal and state standards. Thus, many signs existing on or before November 1, 1979 were granted non-conforming use' status and remain exempt to this day from the ban on arterial advertising.

* * *

From 1980 until the late 1990s the City minimally enforced the arterial advertising restrictions.

In 1998 the City amended the Zoning Resolution to clarify that non-commercial signs were permitted wherever any other types of signs were permitted.

* * *

In February 2001, the New York City Council amended the Zoning Resolution to reduce and limit the size of all accessory signs near arterial highways and to establish size, height, and projection requirements for all signs in districts zoned as manufacturing....

At the same time that it amended the Zoning Resolution, the City Council also amended the Administrative Code to provide for an enhanced enforcement and penalty scheme for sign regulation.... Mayor Giuliani signed the amendment as Local Law 14/2001 (Local Law 14') on March 19, 2001. Local Law 14 created a registration scheme requiring all outdoor advertising companies to register their arterial signs with the Department of Buildings (DOB').

* * *

[I]n 2003, the City Council again amended the registration requirements. The amendments were relatively minor, but they clarified that outdoor advertising companies were required to provide the DOB with an inventory of all signs within 900 feet and within view of an arterial highway. The amendments were eventually signed into law by Mayor Bloomberg in 2005 as Local Law 31.

As before, Local Law 31 did not take effect until the DOB promulgated a rule, which it did by publishing the proposed rules in the City Record on August 15, 2005. The DOB eventually held public hearings and the regulations—now known as Rule 49—went into effect on August 25, 2006....”

(Clear Channel Outdoor, Inc., 608 F.Supp.2d at 482–84 [footnotes and internal citations omitted].)

According to petitioners-plaintiffs, throughout the history of the City's regulation of outdoor advertising, the City had never previously taken enforcement actions against advertising signs on railroad properties, under the belief that signs on MTA property and facilities were not subject to the jurisdiction of the City's Department of Buildings (DOB). (CBS Outdoor Second Amended Verified Petition–Complaint ¶¶ 62–71.) CBS Outdoor states that DOB had compiled a citywide inventory of arterial highway signs, and that headings on pages from that inventory state, “Railroad Arterial Highway Signs No Jurisdiction by this Department.” (Id. ¶ 67; Id., Ex J.) CBS Outdoor also submits a purported copy of a dismissal of a violation issued from DOB in Queens (Id., Ex K.) The dismissal, which appears to be dated July 25, 1986, states, “This is Railroad Property and it is our belief it does not come under the zoning regulations of New York City.” (Id. )

According to petitioners-plaintiffs, the City reversed its position in the Clear Channel federal lawsuit, ostensibly to defeat Clear Channel's arguments in the federal lawsuit that Local Law 14 and Local Law 31 were unconstitutional.

B.

The New York City Building Code requires outdoor advertising companies to register with DOB, and to provide DOB with an inventory of their outdoor advertising signs, sign structures, and sign locations that are within 900 feet and within view of an arterial highway. (Administrative Code of City of N.Y. § 28–502.4; 1 RCNY 49–15[a].)

CBS Outdoor submitted registrations for nine signs on property owned or under control of the MTA and twelve signs on property owned by CSXT; Clear Channel submitted registrations for three signs on MTA property; Lamar submitted a registration for one sign on MTA property.

On March 26, 2012, May 10, 2012 and August 8, 2012, DOB Borough Commissioners for Queens and the Bronx issued Notice of Sign Registration Rejection letters denying registration for these signs. According to the City, these signs are located in areas of the city where advertising is generally not allowed because the sign is too close to an arterial highway, and in some instances, because the sign is also in a residential or low-density commercial zoning district. (City's Answer to CBS Outdoor Second Amended Verified Petition–Complaint ¶ 98.)

CBS Outdoor, Lamar, and Clear Channel appealed the denials to the Board of Standards and Appeals (BSA), which held a public hearing and then a public...