High court upholds ruling invalidating digital billboard permits in L.A.
By Gary Walker
Outdoor advertising firms Clear Channel Communications and CBS Outdoors were dealt a severe blow in their quest to keep over 80 converted digital signs in place after the state Supreme Court chose not to review an appellate court ruling Feb. 27 that reversed an earlier ruling and revoked the permits of dozens of digital billboards.
The state high court’s decision upholds a Dec. 9 ruling invalidating an agreement between Los Angeles, Clear Channel and CBS Outdoors in 2002 that allowed the billboard companies to convert 840 of their signs from static to digital.
Venice resident David Ewing was thrilled with the judge’s ruling but is still concerned that the billboard companies will not fade into the night without a fight.
“Clear Channel has just threatened the city with a lawsuit for ‘substantially in excess of $100 million’ if it messes with their digital billboards,” he said.
Ewing was referring to a Feb. 22 letter to Mayor Antonio Villaraigosa, City Attorney Carmen Trutanich and City Council President Herb Wesson from Sara Lee Keller, Clear Channel’s executive vice president and general counsel. In her letter, Keller outlined the outdoor advertising firm’s intention to protect the signs that they have erected, including through litigation.
“Clear Channel has submitted (on Feb. 22) the city’s required form for monetary damages, which provides notice of Clear
Channel’s potential claims against the city. These would accrue if the city seeks to revoke Clear Channel’s permits or to have Clear Channel turn off or take down its signs,” Keller wrote.
“If the city takes any such action, it would be exposed to liability to Clear Channel for the fair market value of such signs, which substantially exceeds $100 million.”
Trutanich’s office denied Clear Channel’s application to relocate 79 of its 84 digital signs and rejected a determination in Keller’s letter that the outdoor advertising firm’s 84 digital signs have “vested rights.”
“The appellate decision concludes that Clear Channel has no rights to these digital signs or digital permit signs, vested or otherwise,” the city attorney wrote in response to Keller’s letter. “Without a valid permit, vested rights are not created.”
Trutanich instead invited the company to participate in a working group called the Digital Signage Visioning Group, which is working in tandem with the city Planning Department in crafting digital sign legislation that will be part of Los Angeles’ new sign ordinance.
The case was brought by Santa Monica-based Summit Media, which contended that the 2002 settlement was unfair to them.
Summit Media vs. Los Angeles was the latest victory for the city against billboard companies.
In addition to the city prevailing in court Dec. 9, U.S. District Court Judge Audrey Collins ruled against Liberty Media Company Sept. 28, 2009 in a case where the billboard firm was seeking to enjoin Los Angeles from imposing a ban on all new supergraphics, billboards and other outdoor signage.
The City Council had previously issued three moratoriums on digital signs during the time that it was working on a new sign ordinance.
Clear Channel representatives accused city officials of dismissing their overtures to reach an out of court agreement.
“We are disappointed in the court’s decision, and disappointed that the city has rejected out of hand our proposed options including non-binding arbitration and relocation applications,” said James Cullinan, a Clear Channel spokesman.
“Nevertheless, Clear Channel Outdoor continues to be an active, committed participant in the working group created by the City Council that is working to find solutions that allow for the reasonable use of digital signs while addressing the concerns raised by community groups.”
Ewing joined dozens of others, including Councilman Bill Rosendahl, in identifying unpermitted billboards in Venice, Mar Vista and West Los Angeles four years ago and has been a longtime critic of outdoor advertising firms for what he and others feel are their attempts to influence city officials through campaign donations in exchange for allowing them to erect their signs.
He feels Summit may seek to exploit the high court ruling for its own advantage.
“Summit Media brought the lawsuit because the settlement which allowed the digital billboards froze Summit out,” he noted. “So I wouldn’t be surprised to see Summit and others pushing to level the playing field by opening up to allow more digital billboards instead of removing the existing ones.”
An anti-billboard group, Take ThemDownLA, is pushing for the billboards that were converted to digital by the outdoor advertising companies to have their permits invalidated and taken down.
“The settlement agreement between the Los Angeles City Council and CBS Outdoor and Clear Channel Outdoor led to the city’s landscape being littered with over 100 digital billboards, none of which were allowed under our city’s own laws,” the organization wrote on its website after the ruling.
“After almost six years of litigation, the Court of Appeal has finally ruled that the agreement was illegal and that the permits for those illegal billboards must be revoked.”
Representatives of Clear Channel said the company will work with city officials to reach an agreement favorable to all parties, but warned that the threat of litigation was still a possibility.
“We prefer a comprehensive legislative solution that protects the critical economic and public safety benefits which digital signs deliver to the city, Los Angeles residents, local businesses and the economy,” Cullinan said. “However, these digital signs are valuable company assets and if we are forced to turn them off or take them down, we will, as a last resort, seek appropriate compensation.”