Antitrust Law Daily Wrap Up, ADVERTISING—N.D. Ind.: Ordinance prohibiting erection of billboards did not violate First Amendment, (Jan 26, 2015)

By Dan Selcke, J.D.

A town ordinance that prohibited the erection of new billboards did not violate the First Amendment right to commercial free speech, a federal district court in Indiana held, because it advanced the town’s stated interest in improving aesthetics in a way that was narrowly tailored. The town did not deprive View Outdoor Advertising, a company that wanted to erect a new billboard, of its right to due process by failing to inform it of a hearing on its petition for variance of use, since View already had the opportunity to be heard on all the issues that factored into the petition’s denial. View claimed that its free speech rights were being violated, that it did not receive proper due process, and that the town’s decision to deny one of its requests was arbitrary and capricious (View Outdoor Advertising, LLC v. Town of Schererville Board of Zoning Appeals, January 22, 2015, Simon, P).

Permit process. View applied for a building permit to erect a billboard on a parcel of land located near a busy intersection, but was denied because the parcel was not zoned for that kind of activity. Over the next year, View was successful in getting the parcel rezoned, but by the time it again applied for a permit, the town had passed a new ordinance forbidding any new advertising billboards anywhere in town. Once again, View’s application was denied.

Variance petition and suit. After the town denied View’s appeal of its decision, View filed a petition for variance of use with the town’s board of zoning appeals. After hearing View’s arguments, the board recommended that the town council deny the petition. The council did so during a public meeting about which View was not informed, even though it had previously received notice whenever one of its requests was going to be discussed. Its options exhausted, View filed this action in state court, although the case was quickly removed to federal court because it involved a number of Constitutional claims. The town filed a motion for summary judgment.

First Amendment claim. First, the court considered View’s claim that the ordinance, which prohibited all “[b]illboards, outdoor advertising structures, and similar free standing signage,” deprived it of its right to commercial free speech under the First Amendment. The purpose of the ordinance was to improve the aesthetics of the town. To determine whether the resulting restriction on commercial free speech was valid, the court applied the four-part test developed by the Supreme Court in Central Hudson Gas & Elec. Corp., 447 U.S. 557 (1980). The first two factors were not at issue—it was undisputed that View’s proposed billboard would not contain any unlawful or misleading speech and that the government had a substantial interest in improving the town’s aesthetics. Thus, it came down to whether the ordinance actually advanced the town’s stated interest and whether it was narrowly tailored to do so.

Ordinance passes test. The ordinance did advance the town’s interest in improving aesthetics. The Supreme Court had already held that visual clutter was an adequate reason to completely ban signs on public property. Members of the City Council of Los Angeles v. Taxpayers for Vincent, 466 U.S. 789, 807 (1984). View argued that the town had to present evidence that the ordinance actually improved the aesthetics of the town, but when the interest at stake was something as subjective as “aesthetics,” detailed proof was unnecessary.

The ordinance also was narrowly tailored to achieve its goal. It aimed to “improve aesthetics…by eliminating signage” and did exactly that by forbidding new billboards anywhere in town. The fact that the ordinance could have been narrowed even further did not matter, as the mere presence of a plausible alternative did not render an ordinance unconstitutional.

Due process claim. Next, the court addressed View’s claim that the town deprived it of its right to due process under the Fourteenth Amendment by failing to give it notice of the council meeting where his petition for variance was denied. View’s interest in obtaining a zoning variance was small compared to the government’s interest in regulating land use, so the question came down to whether the failure to inform View risked the erroneous deprivation of its property rights. In this case, it did not. Even though View missed the council meeting, it argued extensively in front of the zoning board, which passed the evidence and its recommendation along to the council. In short, View had an opportunity to be heard on the issues that ultimately led to the denial of its request for variance. That was enough to satisfy the due process requirements, especially considering that there was usually a small amount of process afforded to parties seeking zoning appeals.

Conclusion. Although the court granted summary judgment for the town on View’s implied Fourteenth Amendment claim, View’s complaint never mentioned the Fourteenth Amendment by name. Instead, it alleged that View was deprived of due process because the council did not follow its proscribed state law procedures. The court remanded the state law portion of the due process claim back to state court. The same went for View’s claim that the town’s denial of his variance request was arbitrary and capricious. This claim appeared to be challenging the decisions made by the town and zoning board, which presented questions better answered by a state court. Finally, the court granted summary judgment for the town with respect to View’s First Amendment claim.

The case number is: 2:13 CV 219

Attorneys: James L. Wieser (Wieser & Wyllie LLP), and Timothy E. Ochs (Ice Miller LLP) for View Outdoor Advertising LLC. Byron D. Knight (Knight Hoppe Kurnik & Knight Ltd.) for Town of Schererville Board of Zoning Appeals.

Companies: View Outdoor Advertising LLC; Town of Schererville Board of Zoning Appeals

Cases: Advertising IndianaNews