Antitrust Law Daily Wrap Up, ANTITRUST NEWS: County allegedly imposed unfair competitive restraints on advertising sign company, (Oct 30, 2014)

By Linda O’Brien, J.D., LL.M.

A Pennsylvania county engaged in unfair competition by denying an outdoor advertising sign company’s zoning application to raise the height of its billboard above sound barriers constructed along a state highway, after entering into an exclusive lease with a competitor for an outdoor advertising sign on county owned property, the company charged in a complaint filed in the federal district court in Philadelphia (Anter Associates, LLP v. H.A. Steen Industries, Inc., October 24, 2014).

Anter Associates owns unimproved property that is zoned for business and commercial use and is adjacent to Interstate 95 (I-95). In 1988, Anter obtained a variance from the Borough of Ridley Park to erect a 1,200 square foot double-faced outdoor advertising sign on the property. Subsequently, Anter entered into a lease agreement with H.A. Steen Industries for the purpose of erecting and leasing the sign to third-party advertisers. Construction of the sign was completed in 1989.

According to the complaint, in 2007, Lockridge Outdoor Advertising filed suit against the Borough of Ridley Park, alleging that the Borough had prohibited it from erecting five outdoor advertising signs and that its zoning restrictions were unconstitutional. Pursuant to a consent order entered in the litigation, the Borough enacted a Sign Code, permitting the erection of only one billboard anywhere in the Borough and only on one piece on property that was owned by the Borough. Lockridge was then given an exclusive lease by the Borough for the erection of a 1,200 square foot billboard on the county-owned property that was 120 feet in height.

The complaint states that, in 2013, the Pennsylvania Department of Transportation completed the construction of sound barriers along I-95, directly in front of the sign, which interferes with the site lines of the sign for southbound traffic on I-95 at the sign’s current height. Because of the blockage of the sign by the sound barriers, Steen has been unable to lease the southbound face of the sign to third-party advertisers. Under the terms of the lease between Anter and Steen, Steen is no longer obligated to pay the full rental amount to Anter for the sign.

In October 2013, Steen filed an application with the Borough to raise the sign approximately 28 feet, which would bring it above the sound barriers. At the proposed height, the sign would be less than the 120 feet that is permitted under the Sign Code. After Steen’s application was denied by the Borough building inspector, Anter and Steen appealed to the Borough Zoning Hearing Board. The appeal was denied in May 2014, the complaint alleged.

The Borough continues to receive rent for a 120 foot high billboard erected on the county property leased to Lockridge. By denying Steen the right to raise the height of its sign, the Borough, through Lockridge, allegedly competes unfairly with Anter and Steen in the outdoor advertising business, since Lockridge has the only sign permitted to be 120 feet high that can be viewed by motorists traveling southbound on I-95. In drafting the Sign Code, the Borough was alleged to have imposed unfair competitive restraints and precluded Anter and Steen from fairly competing in the outdoor advertising market.

The plaintiffs assert claims for ultra vires conduct, illegal spot zoning, and violations of Section 1 of the Sherman Act and the First Amendment of the U.S. Constitution. The action seeks declaratory relief, damages, and any other just and proper relief.

The case is No. 2:14-cv-06082-WY.

Attorneys: Leslie M. Gerstein for Anter Associates, LLP and H.A. Steen Industries, Inc.

Companies: Anter Associates, LLP; H.A. Steen Industries, Inc.

News: Antitrust Advertising PennsylvaniaNews