Scenic Am., Inc. v. U.S. Dep't of Transp.
| Decision Date | 20 June 2014 |
| Docket Number | Civil Action No. 13-93 (JEB) |
| Parties | SCENIC AMERICA, INC., Plaintiff, v. UNITED STATES DEPARTMENT OF TRANSPORTATION, RAY LAHOOD, FEDERAL HIGHWAY ADMINISTRATION, and VICTOR MENDEZ, Defendants, and OUTDOOR ADVERTISING ASSOCIATION OF AMERICA, INC., Intervenor-Defendant. |
| Court | U.S. District Court — District of Columbia |
This administrative-law dispute involves a conundrum that has long bedeviled the federal courts: How should rules written in the past apply to new and unforeseen circumstances in the present?
The question arises, surprisingly enough, in the context of Interstate-Highway regulation. Outdoor advertising on the Interstate is governed by the Highway Beautification Act of 1965, as well as a number of regulations and federal-state agreements enacted in accordance with that statute. Many of those agreements have long banned billboards that use "flashing, intermittent, or moving" lights. Advertising science, however, has evolved since the Mad Men era of the 1960s; no longer content to simply mount Don Draper's slogans along the highway, advertisersnow want to reach their audiences via new, digital technology. The Federal Highway Administration, after thorough consideration, issued a Guidance memorandum in 2007 explaining that digital billboards - signs that use light-emitting diodes to display their messages - are not "flashing, intermittent, or moving" lights and thus do not fall within the ban of the old lighting standards.
Plaintiff Scenic America, a group dedicated to preserving the country's visual beauty, filed this suit claiming that FHWA's issuance of the Guidance substantively changed the lighting standards, thereby violating both the HBA and the Administrative Procedure Act. Defendants - the Department of Transportation, the Federal Highway Administration, the Secretary of Transportation, and the Federal Highway Administrator - and an Intervenor - the Outdoor Advertising Association of America - respond that the Guidance merely interpreted the ban on "flashing, intermittent, or moving" lights and thus violated no law. Both sides have now moved for summary judgment.
Although the Court does not pass judgment on whether digital billboards are a boon or a blight, sightly or unsightly, safe or unsafe, it does conclude that Defendants and Intervenor have the better of the argument here. The 2007 Guidance might not have offered the best interpretation of the lighting standards, but it did constitute an interpretation, rather than a substantive change. It was therefore issued lawfully.
To understand the purpose and effect of the 2007 Guidance, the Court begins with its statutory backdrop - the Highway Beautification Act of 1965, 23 U.S.C. § 131 et seq. The HBA aims "to promote the safety and recreational value of public travel, and to preserve natural beauty" along the Interstate Highway System. Id., § 131(a). The Act therefore directs each Stateto negotiate a federal-state agreement (FSA) with the Secretary of Transportation that sets out rules for the "size, lighting[,] and spacing" of billboards that come within 660 feet of the Interstate. Id. § 131(d). All 50 States have entered such agreements, most of them written in the 1960s and 1970s. See AR 472-74.
The HBA next requires each State to "[d]evelop laws, regulations, and procedures" that implement the standards contained in its FSA. 23 C.F.R. § 750.705(h). All 50 States have done this as well. See, e.g., Ark. Code Ann. § 27-74-101 et seq. (The Arkansas Highway Beautification Act); Or. Rev. Stat. § 377.700 et seq. (The Oregon Motorist Information Act); Ariz. Rev. Stat. § 28-7901 et seq. (The Arizona Highway Beautification Act). Each State must obtain FHWA approval before making any changes to its outdoor-advertising regulations so that the agency may confirm that they continue to comply with that State's FSA. See 23 C.F.R. § 750.705(j). States that fail to ensure continuous compliance with their FSAs face a ten-percent cut in their annually allocated federal-highway funds. See id., § 750.705(h); 23 U.S.C. § 131(b).
In the decades since the FSAs were first drafted, however, new outdoor-advertising technology has emerged. See AR 149, 394-96. In the old days, advertisers used to manually mount their messages onto signboards using paint, glue-printed paper, and vinyl. See AR 149, 394. To change advertisements, workers had to climb up the signs and physically switch them, painting over the old "Coke" logo with an updated ad for "New Coke" (and then, a little later, a throwback promotion for "Coke Classic"). These days, however, businesses want to advertise on new, digital billboards - highway signs gilded with light-emitting diodes that serve as pixels making up a much larger image. See AR 339-340, 351, 396. LEDs offer a digital way to display static billboard advertisements and make changing them much easier, since the diodes can be reprogrammed remotely to cycle through multiple ads in a single day. See AR 149, 396. Stateshave thus sought to amend their outdoor-advertising regulations to allow for the erection of digital billboards along the Interstate Highway.
Not surprisingly, then, FHWA Division Offices began to receive State proposals to modify their regulations to permit these signs. Some proposals, however, seemed in tension with lighting provisions found in a majority of FSAs, which ban off-premise signs (signs that do not advertise activities conducted on the property on which they are located, see 23 U.S.C. § 131(c)(3); AR 150) that use "flashing, intermittent, or moving" lights. See, e.g., AR 519 (California FSA); AR 582 (Florida FSA); AR 620 (Illinois FSA); AR 653 (Kansas FSA); AR 709 (Massachusetts FSA); AR 811 (New Mexico FSA); AR 913 (South Carolina FSA).
The Division Offices initially took a variety of approaches to this issue. The Indiana Division, for example, saw no contradiction between digital billboards and its State's FSA, which, like many others, forbids off-premise signs with "flashing, intermittent, or moving" lights, AR 630, so long as each digital ad remained static for at least eight seconds and the transition period between ads took less than two seconds. See AR 325, 330-31. The New York Division, by contrast, concluded that digital billboards violated identical language found in the Empire State's FSA, see AR 823, unless they were limited to displaying only one message every 24 hours. See AR 320. The Texas Division went even further, warning that the exact same ban in the Texas FSA, see AR 962, "clearly prohibit[ed]" digital billboards in all circumstances. AR 128. The Mississippi Division, finally, thought the same lighting provision in the Magnolia State's FSA ambiguous, see AR 744, and, fearing inconsistency with the other Offices, contacted the agency's Associate Administrator in Washington, DC, in search of "an interpretation . . . at the national level." See AR 371. All in all, 22 FHWA Division Offices approved States' digital-billboard proposals as consistent with their FSAs. See AR 472-73.
Concerned by these varied readings, Congressman Brian Higgins of New York wrote the FHWA Administrator, inquiring about a uniform interpretation of the relevant FSA language as applied to digital billboards. See AR 292. FHWA pledged to canvass its Division Offices on the matter. See AR 293. The agency then mailed a survey to each Division Office, asking whether each Office's State had decided to permit digital billboards, if the State had justified that decision, if the Office had concurred with that justification, and if the State had regulations to govern the time that ads had to remain static or the transition time between ads. See, e.g., AR 302-06. FHWA considered the results of this survey, see AR 471-74, as well as studies, AR 47-122, 134, 184, 195-284, 443-454, reports, AR 134-84, 191-94, 413-29, news articles, AR 287-89, 351, 365-66, 368-70, 409-12, 465-67, 469-70, and positions presented by outside groups, AR 338-50, 367-70, 388-400, 439-42, 458-64 - including Scenic America, see AR 338-350, 460-63 - in formulating the 2007 Guidance at issue here.
FHWA issued the Guidance, entitled "Guidance on Off-Premise Changeable Message Signs," to its Division Offices on September 25, 2007. AR 474. The document announces in bolded typeface: "Proposed laws, regulations, and procedures that would allow permitting [digital billboards] subject to acceptable criteria (as described below) do not violate a prohibition against 'intermittent' or 'flashing' or 'moving' lights as those terms are used in the various FSAs that have been entered into during the 1960s and 1970s." Id. It goes on to define the "acceptable criteria" that State proposals should contain, including regulations for the duration of the billboards' messages, the transition times between messages, the billboards' brightness, the spacing between the signs, and the locations of the signs. See AR 476-77.
The Guidance therefore instructs that Division Offices weighing State proposals to permit digital billboards within their borders should approve them so long as they (1) are otherwiseconsistent with the State's FSA and (2) address certain public-safety concerns. See AR 474. It closes by noting that it is "intended to provide information to assist the Divisions in evaluating proposals and to achieve national consistency given the variations in FSAs, State law, and State regulations, policies, and procedures," and that it is "not intended to amend applicable legal requirements." AR 477.
Scenic America subsequently filed this lawsuit alleging that the Guidance violated procedural and substantive provisions of the Administrative Procedure Act, 5 U.S.C. § 701 et seq., and the HBA. Defendants - the Department of Transportation, the Federal Highway Administration, the Secretary of Transportation, and the Federal Highway Administrator - along with an Intervenor - Outdoor Advertising Association of America - moved to dismiss Scenic...
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