Tennessee Billboard Law Ruled Unconstitutional

A 45-year-old, outdoor-advertising act in Tennessee has been declared unconstitutional by a Memphis district judge, because of content-neutrality issues. An April 3, 2017 article in U. S. Today states, “U.S. District Judge Jon P. McCalla said the 1972 law ‘does not survive First Amendment scrutiny’ because it bans some forms of commercial and non-commercial speech based on content.” McCalla cited the 2015 Reed v. Gilbert SCOTUS decision in his ruling.

The article also states, “Thomas’ suit attracted allies among limited-government groups such as The Beacon Center of Tennessee, which say that billboard laws, by allowing regulatory exemptions for certain types of messages, impose undue ‘content-based’ regulation of speech.”

To read the entire article, go to: http://www.commercialappeal.com/story/news/courts/2017/04/03/memphis-judge-throws-out-state-billboard-act/99984504/

Hacking of Electronic Billboards Reported in Augusta, Georgia

An electronic billboard owned by Be Still Displays was hacked on the night of January 28 on the main thoroughfare of Washington Road in Augusta, Georgia. A similar hacking occurred in Atlanta in 2015. As of Monday, January 31, neither the display owner, Chris Withers, nor the Richmond Count Sheriff’s Office, could explain how the hacking occurred.

A local television station, WRDW, reported that one billboard “showed a piece of jewelry and said “Look at that nice-a** jewelry. F****** sweet, isn’t it.” One image had the Starbucks logo on it and made a sexual reference.

Withers said he had to pay $10,000 to fix the problem, with new computers and an upgraded system with protection that will cost $2000 annually. He has owned 16 electronic billboards since 2010, and has been in the outdoor-advertising business for 20 years. To read two articles about the incident, go to http://www.wrdw.com/content/news/Washington-Road-billboard-gets-hacked-shows-curse-words-to-describe-jewelry-412169543.html

What has the Federal Highway Administration said about Off-premise Electronic Message Centers?

The 1965 Highway Beautification Act established federal guidelines for off-premise signs (billboards) located within 660 feet of federal highways. When “changeable Electronic Variable Message Signs (CEVMS),” (typically called electronic message centers, or EMCs, in the sign industry), began to become more commonplace, individual states began to establish agreement (Federal/State Agreements — FSAs) with the Federal Highway Administration (FHWA). Terms like “flashing,” “Intermittent” and “moving” were used in an attempt to describe the CEVMS.

In hopes of establishing more standardized criteria, the FHWA’s Office of Real Estate Services, on July 17, 1996  “issued a memorandum to Regional Administrators to provide guidance on off-premise changeable message signs.”

The FHWA states, “The policy espoused in the July 17, 1996, memorandum was premised upon the concept that changeable messages that were fixed for a reasonable time period do not constitute a moving sign (emphasis added). If the State set a reasonable time period, the agreed-upon prohibition against moving signs is not violated. Electronic signs that have stationary messages for a reasonably fixed time merit the same considerations.”

Then, more than a decade later, on September 25, 2007, the FHWA issued a second memorandum, called “Guidance On Off-Premise Changeable Message Signs.” It begins by saying “The purpose of this memorandum is to provide guidance to Division Realty Professionals concerning off-premises changeable message signs adjacent to routes subject to requirements for effective control under the Highway Beautification Act (HBA) codified at 23 U.S.C. 131. It clarifies the application of the Federal Highway Administration (FHWA) July 17, 1996, memorandum on this subject.”

It then states, “Pursuant to 23 CFR 750.705, a State DOT is required to obtain the FHWA Division approval of any changes to its laws, regulations, and procedures (emphasis added) to implement the requirements of its outdoor advertising control program. A State DOT should request and the Division offices should provide a determination as to whether the State should allow off-premises changeable Electronic Variable Message Signs (CEVMS) adjacent to controlled routes, as required by our delegation of responsibilities under 23 CFR 750.705(j).”

It then suggest standards for the timing between messages and the dwell time for messages.

“Based upon contacts with all Divisions, we have identified certain ranges of acceptability that have been adopted in those States that do allow CEVMS that will be useful in reviewing State proposals on this topic. Available information indicates that State regulations, policy and procedures that have been approved by the Divisions to date, contain some or all of the following standards:

  • Duration of Message
    • Duration of each display is generally between 4 and 10 seconds – 8 seconds is recommended.
  • Transition Time
    • Transition between messages is generally between 1 and 4 seconds – 1-2 seconds is recommended.”

What Does a Business Owner Think About the Bozeman, MI Sign Code?

Roger Koopman wrote an editorial for the Bozeman Daily Chronicle a quarter century ago. Does it sound like it could be written today? This appeared in the February 1991 issue of Signs of the Times magazine.

One of the more interesting hypocrisies of contemporary liberalism is the ease with which its followers can advocate a soft-on-crime posture when traditional issues of justice are involved (violence, theft, etc.), while, at the same time, they can pass the severest of laws against peaceful citizens who never did violence to anyone. They spew forth every possible excuse on behalf of the thug, the murderer and the rapist, but if you are a small businessman who somehow thought you had the right to do with your own property as you saw fit, they’ll nail you to the wall for failing to get the requisite licenses and permissions from the Central Planning Bureau.

So it is with the bullies at City Hall who call themselves commissioners. By way of a “temporary zoning law,” they created a whole new class of “criminals” from among those who failed to realize that independent entrepreneurial thinking has no place in the Brave New Bozeman of 1990. The scapegoat is the business sign, but the issue is freedom.

Under the new sign law, designed to reduce something they call “visual clutter,” they have totally banned new billboards and portable signs, and have mandated the removal of portable signs within two years. Various other bans and restrictions have been decreed. Violators of the sign law (criminals all) will be fined up to $500 and jailed up to six months for every day of non-compliance. In other words, if a businessman was using an “illegal” sign for a month, these fair-minded, tender-hearted City Commissioners could fine him $15,000 and lock him up for 15 years.

Meanwhile, your tax dollars are being used to pay city employees to patrol our streets in search of these dastardly sign violators. And our commissioners are preparing to spend another $20,000 of our money to hire an out-of-state “expert” to design Bozeman’s “streetscapes” of the future.” (They spent $50,000 last year to have some Denver consultant “plan” our community for us.)

The question must be asked: Just who are our city commissioners representing — the people of Bozeman or a narrow political constituency that noisily espouses their radical agenda?

Because the commission has no intention of surveying our opinions on this or any other issue, I conducted my own survey, using a confidential questionnaire that was given to every client/customer who entered my business in May.

My business displays an 8-ft., four-color, lighted sign that conforms to city regulations. Part of my survey dealt with specific attitudes toward that sign, while the remainder addressed general sign regulation issues. Here are the results from my 189 responses:

  • 99.3% said my sign didn’t bother them at all.
  • 97.2% said the sign was useful in locating my business.
  • 81% thought the size of my sign was fine; 19% thought it should be made “larger and more visible,” and 0% thought it should be smaller.
  • 65.5% “seldom, if ever” think about the visual appearance of business signs.

When asked what they would do about a “highly offensive sign,” 78.6% said they would express their displeasure to the business owner or do business elsewhere. Only 29.8% thought government officials should handle the matter.

These results clearly state that people put their faith in individual responsibility and in the marketplace, but this is a concept our elitist city government can’t even begin to understand.  And so they legislate to the approximately 10% who are bothered by the signs and want to see the government do something. In so doing, they ignore the 90% who just want to be left alone.

All the criticisms I received from my last editorial came from educators. Many of the “sign whiners” have little appreciation of what it takes for a town like Bozeman to build a business, meet a payroll and otherwise scratch out a meager and insecure living.

A free society is not a perfect society, but it is the freedom to choose, and to accept responsibility for our choices, that brings out the best in all of us. It creates a society that is dynamic, ever-changing and rich with diversity. Beware of those who would shatter our community by seeking to politically impose not diversity, but uniformity, not growth, but control, not change but resistance to all things different and new.

A look at the 2016 Bozeman sign code shows a ban on LED, inflatable and rooftop signs. Additionally, “A comprehensive sign plan shall be submitted for all commercial, office, industrial, and civic uses consisting of two or more tenants or occupant spaces on a lot(s) subject to a common development permit or plan.” The application fee is $220. 

How Can the Value of an On-Premise Sign Be Calculated?

Richard Bass is a certified appraiser in Sarasota, Florida. During his more than 30 years in business, he has testified in court as to how a sign’s value can be appraised. In a presentation for The Signage Foundation, bass outline three case histories where the absence of a sign could be measured economically. Planners, Signs and A Community’s Economic Well Being (Powerpoint) – Rick Bass

In a 1995 case in Decatur, Georgia, a Days Inn was allowed to use an electronic message center for four years that was actually situated on a third party’s property. Property ownership changes occurred, so a payment needed to be determined. Three approaches were used: comparable sales, income and cost.

For the “comparison” method, the sign was compared to a billboard, Based on outdoor-advertising prices, for the 49 months, the price was calculated to be approximately $1.6 million.

The “income” approach examines Days Inn’s income for the same time period: $8.4 million. The percentage of this attributable to the sign was calculated at 25%, which made it $2.1 million. Because half of the guests already had reservations (which meant the sign didn’t draw them in), the figure was reduced to $1.050 million. Adding a 10% for interest earned, the final figure became $1.2 million.

The “cost” approach considers how else the property could be used. based on 238 units, the value of each motel room was set at $31,765. If they were all converted to apartments, their value would be $25,000 each. The value difference, $6765, multiplied by 238, becomes approximately $1.6 million.  The full story, with detailed calculations, appeared in the April 1999 issue of Signs of the Times magazine.

What has the Supreme Court Said about On-premise Signage?

Supreme Court cases that involve on-premise signage

The First Amendment

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

The 14th Amendment

Section 1.

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

As far back as 1923, in Meyer v. Nebraska, SCOTUS ruled that the 14th Amendment protects the rights of citizens to, among myriad things, “acquire useful knowledge” and, based on Virginia Pharmacy, can’t restrict speech based on who the speaker is (“equal protection”).

Unquestionably, the Reed v. Gilbert Supreme Court (SCOTUS) case from July 2015 was the most important court case for the sign industry of the 21st Century (see related story). But several other SCOTUS cases have established sign-code standards still in effect today.

Time, Place and Manner

In 1976, SCOTUS ruled that pharmacies were allowed to announce their prices for drugs in Virginia State Board of Pharmacy v. Virginia Citizen Consumer Council, Inc. Essentially, this case substantiated First Amendment freedom-of-speech protection for advertising messages. Most importantly, the case established the tent of “time, place and manner” for restricting the words on signs.

Virginia established that sign can’t arbitrarily restrict the time a sign can be displayed (“when”), place (“where”) or manner (“how”) a sign can be displayed. Any limitations on these three characteristics are permitted only if the restrictions are shown to be:

  • Justified without reference to the speech’s content
  • Serve a significant governmental interest, and
  • Allow ample alternatives for communicating the information.

Directly Advances, Narrowly Tailored

Four years later (1980), Central Hudson Gas & Electric Corp. v. Public Service Commission further strengthened Virginia’s tenets by adding that any restrictions, to withstand a constitutional challenge, also had to

  • Directly advance the governmental interest, and
  • Be narrowly tailored to achieve that interest.

Soon after Central Hudson, the SCOTUS case of Metromedia Inc. v. City of San Diego involved the allowance of on-premise signage, but the banning of off-premise outdoor advertising (billboards). Although five separate opinion emerged, a 6-3 vote declared the ordinance unconstitutional.

Advertising Bans
In 1996, in 44 Liquormart v. Rhode Island, the state tried to ban the advertising of liquor prices anywhere but at the actual stores. Essentially, SCOTUS upheld the right for merchants to advertise truthful, non-misleading commercial information. First Amendment protections superecede “vice” oriented restrictions.

The Fallacy of “Rational Basis Test” 
The above cases collectively negated the broad police powers that became known as the Rational Basis Test that followed Village of Euclid v. Amber Realty (1926). It basically allowed cities to enact legislation that promoted health, moral, safety and general welfare objectives. This is the basic rationale for virtually all sign codes. Cities only needed to show the regulation wasn’t arbitrary and could be rationally linked to a governmental objective.

Other First Amendment Cases
In 1977, the township of Willingboro, NJ, banned “for sale” signs on residential lawns in an attempt to prevent “white flight” from racially integrated neighborhoods. This also falls under the tenets of a “content neutrality” violation because it was based solely on the signs’ messages.  In Linmark Associates v. Township of Willingboro, SCOTUS ruled this to be unconstitutional because it unduly restricted the free flow of information. The defendants tried to use the “time, place and manner” defense, but it was overruled. The court ruled that the sign provides an immediate way to react.

Can the Location of Signs Make Them Worth More than the $1.3 Million Building they Identify?

In Cincinnati, OH, in 1997, a building was situated on Pete Rose Way in an ideal location, proximate to the confluence of I-71 and I-75. The building housed Caddy’s, a 50s style entertainment complex. The Cincinnati Bengals NFL football team was about to build its $400 million Paul Brown Stadium, and the land and building were being taken by Hamilton County under eminent domain. The county offered $1.3 million in just compensation for the taking.

However, the five-story standalone building, which had three sides readily visible from the interstate, included five exterior signs. Three of the signs were murals that spanned approximately 2,500 sq. ft. each.

Outdoor advertising is different than on-premise signs in that it is sold as advertising; rates are based on “reach” — the traffic count for the nearby road. Traffic counts are well established for thoroughfares, and this particular stretch of road was traveled daily by an average of 170,000 to 190,000 vehicles. The standard multiplier is 1.6 people per car, so the signage received approximately six million “exposures” monthly.

Given these statistics, the standard rate for the signs would have been $3,000 each ($180,000 annually) if they were sold as outdoor advertising. Total advertising value was subsequently based on a multiplier of 10. (Because the signs branded the building on which they were located, they were not considered outdoor advertising. However, the value of the space was calculated based on the fact that it could be sold as outdoor advertising.)

For the prior decade, Caddy’s had averaged $2.5 million in annual sales, with a net annual income of $840,000. Caddy’s owners originally asked for $5.5 million in compensation. The jury awarded Caddy’s owners $3.1 million. So the $1.8 million the owners received exactly matched the $1.8 million that was deemed to be the value of the advertising space.