Lamar OCI S. Corp. v. Tenn. Dep't of Transp.
| Decision Date | 31 May 2022 |
| Docket Number | 3:21-CV-00226-DCLC |
| Parties | LAMAR OCI SOUTH CORPORATION, and Lamar Tennessee, LLC, Plaintiffs, v. TENNESSEE DEPARTMENT OF TRANSPORTATION, and Clay Bright, in His Official Capacity as Commissioner of Transportation, Defendants. |
| Court | U.S. District Court — Eastern District of Tennessee |
Brandon James Tindell, Lawrence P. Leibowitz, Leibowitz Law Firm, PLLC, Knoxville, TN, for Plaintiffs.
Dawn Jordan, Office of the Attorney General, Nashville, TN, for Defendants.
The Tennessee Department of Transportation ("TDOT") and its Commissioner, Clay Bright ("Commissioner Bright"), have filed a Motion for Judgment on the Pleadings [Doc. 31], arguing the case should be dismissed because they are immune from any action for money damages and because Plaintiffs lack standing to bring their other claims for declaratory and injunctive relief. Plaintiffs have responded. The motion is now ripe for resolution.
In 1965, Congress enacted the Federal Highway Beautification Act ("HBA"), 23 U.S.C. § 131, to "promote the safety and recreational value of public travel, and to preserve natural beauty." Id. "The HBA conditions ten percent of a State's federal highway funds on the State's maintaining ‘effective control’ of signs within 660 feet of an interstate or primary highway...." Thomas v. Bright , 937 F.3d 721, 725 (6th Cir. 2019), abrogated by City of Austin, Texas v. Reagan Nat'l Advert. of Austin, LLC , ––– U.S. ––––, 142 S. Ct. 1464, 212 L.Ed.2d 418 (2022) (quoting 23 U.S.C. § 131(b) ). To comply with the requirements of the HBA, the Tennessee legislature passed the Tennessee Billboard Regulation and Control Act of 1972 (the "Billboard Act"), Tenn. Code Ann. § 54-21-101 et seq. , to regulate outdoor advertising in Tennessee [Doc. 29, ¶ 12]. The Billboard Act required outdoor advertisers to pay annual permit fees to TDOT for each outdoor advertisement [Doc. 29, ¶ 13]. Plaintiffs, outdoor advertisers Lamar OCI South Corporation and Lamar Tennessee, LLC (collectively, "Lamar"), maintain billboards in Tennessee and paid the annual permit fees to TDOT each year until November 19, 2019, when TDOT stopped collecting the fees [Doc. 29, ¶¶ 11, 13, 23]. Lamar filed this action against TDOT and Commissioner Bright alleging all the fees it paid were collected under an unconstitutional Act and should be reimbursed.
Lamar relies on Thomas v. Bright , the recent Sixth Circuit decision that addressed the constitutionality of the Billboard Act. 937 F.3d 721 (6th Cir. 2019), abrogated by City of Austin, Texas v. Reagan Nat'l Advert. of Austin, LLC , ––– U.S. ––––, 142 S. Ct. 1464, 212 L.Ed.2d 418 (2022). In 2006, Thomas, an owner of over 30 billboards in Tennessee, sought a permit to construct a billboard on a vacant lot in west Tennessee, but TDOT denied the permit. Id. at 726. After Thomas constructed the billboard anyway, TDOT sued him in state court, claiming that he was in violation of the Billboard Act. Id. A protracted litigation followed [Doc. 29, ¶ 16, n. 2]. Id.1 In 2013, as the state litigation remained pending, Thomas sued TDOT in federal court alleging the Billboard Act, as applied to his vacant lot sign, was an unconstitutional restriction of free speech in violation of the First Amendment to the United States Constitution. See Thomas v. Schroer , 248 F. Supp. 3d 868, 871 (W.D. Tenn. 2017). The district court applied strict scrutiny to the Billboard Act and found that Tennessee had not shown a compelling state interest in restricting Thomas's sign usage. Accordingly, the court found the Billboard Act unconstitutional as applied to Thomas’ vacant lot billboard and enjoined TDOT from enforcing the Billboard Act as to that particular sign. Id. at 894-95. After the district court issued its opinion, Thomas requested the court enjoin TDOT from enforcing the Billboard Act against all signs, or at least all of his signs. But the district court declined to expand the injunction, finding that Thomas had not alleged the Billboard Act was "unconstitutional in all its applications, or even unconstitutional as to a substantial number of applications." Thomas v. Schroer , No. 13-cv-02987, 2017 WL 6489144, at *7 (W.D. Tenn. Sept. 20, 2017).
On September 11, 2019, the Sixth Circuit affirmed the district court's ruling.
Thomas , 937 F.3d at 738. It found that Billboard Act's "on-premises exception scheme [to be] a content-based regulation of ... free speech." Id. at 729. It noted that "[t]he Billboard Act's on-premises exception allows a property owner to avoid the permitting process and proceed to post a sign without any permit, so long as the sign is ‘advertising activities conducted on the property on which [the sign is] located.’ " Id. (citing Tenn. Code Ann. § 54-21-103(3) ). The court deemed this exception scheme to be content based because TDOT had to read the message on the sign to determine whether it violated the Billboard Act. Id. Applying strict scrutiny review, the court found the Billboard Act was "not narrowly tailored to further a compelling interest[,]" and held the Act was an "unconstitutional restriction on non-commercial speech." Id. at 733, 737. On November 19, 2019, TDOT stopped collecting fees under the Billboard Act [Doc. 22, ¶ 22]. The Tennessee legislature eventually repealed the Billboard Act and replaced it with the Outdoor Advertising Control Act of 2020, Tenn. Code Ann. § 54-21-113 (2020) [Doc. 29, ¶¶ 23, 24]. Lamar requested TDOT reimburse the annual permit fees Lamar had paid under the Billboard Act or to "otherwise prospectively [credit the fees] to the companies promptly." [Doc. 29, ¶ 27]. Lamar filed this lawsuit after TDOT refused [Id. ].
Lamar alleges TDOT and Commissioner Bright violated Lamar's rights under 42 U.S.C. § 1983, the Fourteenth Amendment to the United States Constitution, and Article I, Section 8 of the Tennessee Constitution when TDOT collected fees from Lamar "under the color of an unconstitutional Act" and refused to reimburse or credit those fees [Doc. 29, ¶¶ 30-47]. Lamar seeks a "declaratory judgment by this Court ordering Defendants to reimburse, restore, or prospectively credit [Lamar's] fees unlawfully collected under apparent authority of a law which has been adjudged to be unconstitutional in its entirety." [Doc. 29, ¶ 50]. Lamar also seeks "extra ordinary relief" in the form of a Court order requiring TDOT to provide a complete accounting of all fees paid by Lamar under the Billboard Act [Doc. 29, pg. 10, ¶ 3]. TDOT and Commissioner Bright have moved the Court to dismiss Lamar's complaint on several grounds [Doc. 31]. First, they argue they are immune from suit under the Eleventh Amendment to the U.S. Constitution. Second, they argue Lamar lacks Article III standing to challenge the Billboard Act.
Since the Defendants filed their motion to dismiss, the United States Supreme Court has abrogated the Sixth Circuit's decision in Thomas v. Bright. See City of Austin, Texas v. Reagan Nat'l Advert. of Austin, LLC , ––– U.S. ––––, 142 S. Ct. 1464, 212 L.Ed.2d 418 (2022). In Austin , the Supreme Court held that strict scrutiny review does not apply to restrictions on outdoor signs even where a state must examine the content of the sign to determine compliance with a state law or regulation. Id. at 1468. In accordance with the Austin ruling, strict scrutiny no longer applies to Tennessee's content-based review of outdoor signs under the Billboard Act. TDOT and Commissioner Bright argue this case should be dismissed on the premise that Austin "eviscerates" Lamar's claims [Doc. 38]. Lamar disagrees, arguing that Austin does not "retroactively apply" to Thomas [Doc. 39, pg. 2].
A motion for judgment on the pleadings tests the sufficiency of the complaint. The standard of review is the same as that for a motion to dismiss under Fed. R. Civ. P. 12(b)(6). JPMorgan Chase Bank, N.A. v. Winget , 510 F.3d 577, 581 (6th Cir. 2007). In reviewing the complaint on a motion for judgment on the pleadings, "all well-pleaded material allegations ... must be taken as true, and the motion may be granted only if the moving party is nevertheless clearly entitled to judgment." Id.
To survive a motion to dismiss (or a motion for judgment on the pleadings), the complaint's "factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ; Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio , 502 F.3d 545, 548 (6th Cir. 2007). In considering the motion, the court "need not accept as true legal conclusions or unwarranted factual inferences." JPMorgan Chase Bank, N.A. , 510 F.3d at 581. "[M]ore than bare assertions of legal conclusions or personal opinions are required to satisfy federal notice pleading requirements." Grinter v. Knight , 532 F.3d 567, 577 (6th Cir. 2008). Albright v. Oliver , 510 U.S. 266, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994) ; Bower v. Fed. Express Corp. , 96 F.3d 200, 203 (6th Cir. 1996).
TDOT and Commissioner Bright argue the Eleventh Amendment bars all claims against TDOT as a state agency and bars any claims for monetary damages against Commissioner Bright . Lamar counters that "Eleventh Amendment immunity does not automatically attach to a state subdivision," therefore "cities, municipalities, and other subdivisions of the state cannot assert Eleventh Amendment immunity." [Doc. 35, pg. 5]. Lamar reasons that, since TDOT is not a state, and since Eleventh Amendment immunity is only available to "one of the United States," TDOT and Commissioner Bright do not enjoy sovereign immunity [Id...
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