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Thomas v. Schroer

United States District Court, W.D. Tennessee, Western Division

March 31, 2017

WILLIAM H. THOMAS, JR. Plaintiff,
v.
JOHN SCHROER, Commissioner of the Tennessee Department of Transportation in his official capacity, Defendant.

          ORDER & MEMORANDUM FINDING BILLBOARD ACT AN UNCONSTITUTIONAL, CONTENT-BASED REGULATION OF SPEECH

          JON P. McCALLA UNITED STATES DISTRICT COURT JUDGE.

         This action concerns alleged First Amendment violations that occurred when agents of the State of Tennessee (“the State”) sought to remove Plaintiff William H. Thomas's noncommercial billboard pursuant to the Billboard Regulation and Control Act of 1972 (“Billboard Act”), Tennessee Code Annotated §§ 54-21-101, et seq. For the reasons stated below, the Court finds the Billboard Act is an unconstitutional, content-based regulation of speech. United States Supreme Court authority compels this conclusion.

         There exists an undeniable trend in Supreme Court cases to guard against regulations that selectively ban speech on the basis of its subject matter-e.g., content-based regulations. Police Department of Chicago v. Mosley, 408 U.S. 93 (1972). Distilling a pragmatic and constitutionally-valid definition for content-based regulations has evolved overtime. In the late 1980s, the Supreme Court looked to the governing body's intent to determine whether a regulation constituted a content-based regulation. Ward v. Rock Against Racism, 491 U.S. 781 (1989); City of Renton v. Playtime Theaters, Inc., 475 U.S. 41 (1986). In Reed v. Town of Gilbert, 135 S.Ct. 2218 (2015), however, the Supreme Court revisited its previous approach. Writing for the Court in Reed, Justice Thomas explained, “[a] law that is content based on its face is subject to strict scrutiny regardless of the government's benign motive, content-neutral justification, or lack of ‘animus' toward the ideas contained in the regulated speech.” Id. at 2222.[1] That content-based inquiry has now been further advanced by the Supreme Court's decision in Expressions Hair Design v. Schneiderman, No. 15-1391, 2017 WL 1155913, at *1 (U.S. Mar. 29, 2017), in which the Court remanded a case concerning a regulation that banned some forms of commercial speech for further examination to determine whether the regulation survives First Amendment scrutiny.

         In the instant case, the regulation at issue - the Tennessee Billboard Regulation and Control Act of 1972, Tennessee Code Annotated §§ 54-21-101, et seq. - regulates both commercial and non-commercial speech by banning some forms of both on the basis of content and therefore does not survive First Amendment scrutiny.

         I. BACKGROUND

         The Tennessee Department of Transportation (“TDOT”) promulgates and enforces billboards and outdoor advertising signs under Tennessee's Billboard Regulation and Control Act of 1972, (the “Billboard Act”). (ECF No. 45 ¶ 13.) The State of Tennessee and TDOT also regulate billboards and outdoor advertising signs under to the Federal Highway Beautification Act of 1965, as amended. (Id. ¶ 14.)

         The Federal Highway Beautification Act and the Billboard Act are designed to control the erection and maintenance of billboards and signs along the National Highway System. (See Exs. B, C, Bible Aff, ECF No. 166-2; SUF ¶ 33; Resp. to SUF ¶ 33.)) Regulated billboards and signs under the Billboard Act are subject to location and/or permit and tag restrictions, e.g., they may not be “within six hundred sixty feet (660′) of the nearest edge of the right-of-way and visible from the main traveled way of the interstate or primary highway systems . . . without first obtaining from the commissioner a permit and tag.” T. C. A. § 54-21-104(a). Some signs, however, may be exempted or qualify as exceptions under the Billboard Act's location and/or permit and tag restrictions. See T.C.A. §§ 54-21-103(1)-(3) and §§ 54-21-107(a)(1)-(2). For example, a billboard or sign is exempted from the six-hundred-sixty feet requirement if it qualifies as one of the following types of signs:

(2) Signs, displays and devices advertising the sale or lease of property on which they are located;
(3) Signs, displays and devices advertising activities conducted on the property on which they are located;

         T.C.A. §§ 54-21-103(1)-(3). A billboard or sign is exempted from complying with the permit and tag restrictions if it falls into one of the following categories:

(1) Those [signs] advertising activities conducted on the property on which they are located;
(2) Those [signs] advertising the sale or lease of property on which they are located; and

         T.C.A. §§ 54-21-107(a)(1)-(2).

         In practice, State agents label signs the Billboard Act regulates as “off-premise” signs and label unregulated signs as “on-premise” signs. (See ECF No. 64 at PageID 917.) The State's agents use the following Rule to make their determinations:

A sign will be considered to be an on-premise sign if it meets the following requirements.
(a) Premise - The sign must be located on the same premises as the activity or property advertised.
(b) Purpose - The sign must have as its purpose (1) the identification of the activity, or its products or services, or (2) the sale or lease of the property on which the sign is located, rather than the purpose of general advertising.

         (ECF No. 46-6 at PageIDs 718-19 (quoting Rule 1680-02-03-.06(2); see also ECF No. 121 at 15-16.) Rule 1680-02-03-.06 further expands on the ‘Purpose Test'

[t]he following criteria shall be used for determining whether a sign has as its purpose (1) the identification of the activity located on the premises or tis products or services, or (2) the sale or lease of the property on which the sign is located rather than the business of outdoor advertising.
(a) General
1. Any sign which consists solely of the name of the establishment is an on-premise sign.
2. A sign which identifies the establishment's principle or accessory product or services offered on the premises is an on-premise sign.
3. An example of an accessory product would be a brand of tires offered for sale at a service station.
(b) Business of Outdoor Advertising
1. When an outdoor advertising device (1) brings rental income to the property owner, or (2) consists principally of brand name or trade name advertising, or (3) the product or service advertised is only incidental to the principle activity, it shall be considered the business of outdoor advertising and not an on-premise sign. An example would be a typical billboard located on the top of a service station building that advertised a brand of cigarettes or chewing gum which is incidentally sold in a vending machine on the property.
2. An outdoor advertising device which advertises activities conducted on the premises, but which also advertises, in a prominent manner, activities not conducted on the premises, is not an on-premise sign. An example would be a sign advertising a motel or restaurant not located on the premises with a notation or attachment stating “Skeet Range Here, ” or “Dog Kennels Here.” The on-premise activity would only be the skeet range or dog kennels.
(c) Sale or Lease Signs
A sale or lease sign which also advertises any product or service not located upon and related to the business of selling or leasing the land on which the sign is located is not an on-premise sign. An example of this would be a typical billboard which states "THIS PROPERTY FOR SALE- SMITHS MOTEL; 500 ROOMS, AIR CONDITIONED, TURN RIGHT 3 BLOCKS AT MA IN STREET."

         Rule of Tennessee Department of Transportation Maintenance Division, Control of Outdoor Advertising, 1680-02-03.06(4) (2008). Although the Billboard Act and the State's Rule reference “advertising” in the commercial context, the State contends the Billboard Act's regulations, exceptions, and exemptions apply with equal force to commercial and noncommercial messages. (See ECF No. 64 at PageID 917.)

         Plaintiff Thomas's business involves posting outdoor advertising signs. (ECF Nos. 1 ¶ 11; 45 ¶ 11.) Thomas erects these signs on the various tracts of real property he owns throughout Tennessee. (ECF No. 45 ¶ 10.) Thomas's sign at issue in this case is located off Interstate-40 West in Memphis, Tennessee (hereinafter the “Crossroads Ford sign”). (Id. ¶ 21.) Thomas has posted various messages on this sign over the years. (Id.) For example, in 2012, he displayed an image of an American flag with Olympic rings, in support of that year's U.S. Olympic team. (ECF No. 38 ¶ 23.) Later that year, in the “beginning of fall, ” he “displayed content referencing the upcoming holiday season with a picture of an American Flag.” (ECF No. 45 ¶ 24.) Thomas erected his Crossroads Ford sign without a permit. (ECF No. 46-6 at PageID 721 (citing Tennessee v. Thomas, 336 S.W.3d 588, 593 (Tenn. Ct. App. 2010).)

         Since approximately 2006, the State has sought to remove Thomas's signs that did not comply with the Billboard Act-including the Crossroads Ford sign-through an ongoing enforcement action in Chancery Court in Shelby County, Tennessee. (ECF Nos. 1 ¶¶ 62, 77; 45 ¶ 27; see ECF Nos. 96-1 at PageID 1399-1404; 46-2 - 46-5; see also Tennessee v. Thomas, 336 S.W.3d 588, 593 (Tenn. Ct. App. 2010).) In 2006, TDOT denied Thomas's permit and building application for his Crossroads Ford sign because it was less than 1, 000 feet from a competitor's billboard. (ECF No. 166-1 at PageID 2595 (citing Thomas v. TDOT, 336 S.W.3d 588, 592 (Tenn. Ct. App. 2010).) Nonetheless, Thomas began construction on his Crossroads Ford sign in 2007, and TDOT then brought an enforcement action in March 2007. (Id.) In April and October of 2011, the State removed two of Thomas's outdoor advertising signs (the “Kate Bond” signs). (ECF No. 45 ¶¶ 33, 37; ECF No. 79 ¶¶ 33, 37.) Throughout 2012 and 2013, Thomas defended his signs in administrative proceedings before the Commissioner of TDOT. (See ECF Nos. 263-18-263-20.)

         On March 25, 2013, Thomas filed an initial Complaint and Request for Declaratory Judgment. (Thomas v. Tennessee Department of Transportation, No. 2:13-cv-2185-JPM-cgc (W.D. Tenn. 2013), ECF No. 1.) Thomas sought relief under 28 U.S.C. § 1983 for violations of his First and Fourteenth Amendment rights under the United States Constitution. (Id. ¶ 3.) The Complaint also alleged Thomas's Crossroads Ford sign was entitled to First Amendment protection as a display of non-commercial speech. (Id. ¶ 39.) On July 24, 2013, TDOT filed a Motion to Dismiss the Complaint, alleging TDOT is immune from suit and that Thomas's claims fail to state a claim. (ECF No. 18.) Thomas sought to avoid TDOT's Rule 12(b)(1) and 12(b)(6) defenses by requesting leave to file an Amended Complaint adding individual defendants. (See ECF No. 26.) On October 28, 2013, the Court dismissed Thomas's claims, based on TDOT's Eleventh Amendment immunity. (ECF No. 31 at PageID 180.) Thomas appealed (ECF No. 33), and on August 6, 2014, the Sixth Circuit Court of Appeals affirmed, holding that had Thomas named a state official in his or her official capacity, his claims would have survived dismissal (ECF No. 35 at PageID 204).

         On December 17, 2013, while this first action was on appeal, Thomas filed his Complaint in this action, which named multiple Tennessee state officials in their official capacities. (Thomas v. Schorer et al, No. 13-2987 (W.D. Tenn.), ECF No. 1.) The Complaint alleged Thomas's Crossroads Ford sign was entitled to First Amendment protection as a display of non-commercial speech. (Id. ¶ 52.) Thomas filed an Amended Complaint on October 27, 2014. (See ECF Nos. 22, 34, 38, 45.) Thomas's Amended Complaint also argued that “in March of 2014, TDOT, through Commissioner Schroer, filed an action against Mr. Thomas in the Twentieth Judicial District Chancery Court for the State of Tennessee in retaliation for Mr. Thomas exercising his rights to petition this Court for redress of his grievances against Defendants.” (ECF No. 45 ¶ 65.)

         Thomas' initial fillings also included additional claims against the State: First Amendment, Retaliation, Equal Protection and Declaratory Judgment. (ECF Nos. 1, 45.) Following the Court's Order on the State's motion to dismiss, (ECF No. 170), and summary judgment (ECF No. 233), Thomas's only remaining claim is whether the removal of his billboards under the Billboard Act violated his First Amendment rights. This Order concerns only this issue.

         In October 2014, the State removed another of Thomas's outdoor signs (the “Perkins Road sign”), even though, according to Thomas, “[the] billboard was displaying exclusively on-premise, noncommercial content and therefore exempt from the permitting requirements of T.C.A. § 54-21-107(a)(1).” (ECF No. 45 ¶ 40; ECF No. 79 ¶ 40.)

         On May 26, 2015, TDOT sent Thomas a letter stating that Thomas must remove the Crossroads Ford sign by June 26, 2015. (ECF No. 96-1 at PageID 1399.) Thomas also received a proposed order of judgment “declaring an unlawful billboard to be [a] public nuisance and granting permanent injunction for removal of the unlawful billboard, ” to be subsequently submitted in Chancery Court in Shelby County, Tennessee. (Id. at PageID 1401-03.)

         On June 10, 2015, Plaintiff filed an Emergency Motion for Temporary Restraining Order (“TRO”) to prevent Defendants from removing his Crossroads Ford sign. (ECF No. 96.) He also sought to enjoin Defendants from executing any judgments “resulting [from] or associated with the Crossroads Ford billboard sign until such time as a hearing can be held on the issues . . . .” (Id. at 1.) On June 11, 2015, Defendant opposed the TRO. (ECF No. 99.) On June 18, 2015, the Court held a Motion Hearing on TRO motion. (ECF No. 104.)

         On June 24, 2015, the Court granted Thomas's TRO motion and ordered the State to “refrain from seeking to execute on any judgments, orders, or other monetary judgments resulting from or associated with the Crossroads Ford billboard sign until such time as the Court deems it appropriate to lift the TRO.” (ECF No. 110 at PageID 1464.) The Court found “a strong likelihood that multiple sections of the Billboard Act are facially content-based and subject to strict scrutiny under” Reed v. Town of Gilbert, 135 S.Ct. 2218, 2227 (2015). (Id. at PageID 1455.) The Court also found “a strong likelihood that at least §§ 54-21-103(1)-(3) and §§ 54-21-107(a)(1)-(2) of the Billboard Act are unconstitutional.” (Id. at PageID 1456.) On September 8, 2015, the Court granted a preliminary injunction. (ECF No. 163.)

         The Court entered an Amended Scheduling Order on May 31, 2016 (ECF Nos. 170, 233) to reflect the narrowing of issues, and set a jury trial for September 12, 2016. (ECF No. 237.) The parties filed timely pretrial motions. (See ECF Nos. 280-86.)

         On September 6, 2016, the Court entered an Order Regarding Defendants' Motion in Limine as to Money Damages (ECF No. 280). (ECF No. 301.) The Court stated that the jury would decide two issues: “(1) whether the State has a compelling interest that is furthered by the Billboard Regulation and Control Act of 1972 (“Billboard Act”), as set forth at Tennessee Code Annotated §§ 54-21-101 to -123 (2008); and (2) whether the Billboard Act is narrowly tailored to the State's interest.” (Id. at PageID 5964.) The jury would not decide the ultimate constitutionality question. (Id.) The jury trial was then rescheduled to September 19, 2016. (Min. Entry, ECF No. 305.)

         On September 9, 2016, Thomas filed a Written Objection to Allowing the Jury to Decide the Issues of “Compelling State Interest” and “Narrow Tailoring.” (ECF No. 307.) On September 16, 2016, the Court entered an Order Concerning Plaintiff's Objection to the Jury Determining “Compelling Interest” and “Narrow Tailoring.” (ECF No. 314.) The Court clarified the jury would serve as an advisory jury on the issues before them. (Id. at PageIDs 6140, 6146.)

         A four-day, advisory-jury trial began on September 19, 2016. (Min. Entries, ECF Nos. 320-21, 322, 328.) Seven witnesses testified on behalf of the State: Paul Degges, Chief Engineer for TDOT; John Schroer, Commissioner of TDOT; Robert Shelby, retiree from the Highway Beautification Department at TDOT; John Carr, Assistant Commissioner of Administration at TDOT; Colonel Tracy Trott, highway patrol law enforcement officer; Jason Moody, Assistant Regional Traffic Engineer at TDOT; and Shawn Bible, Beautification Coordinator at TDOT. (See ECF No. 331.) On September 22, 2016, a jury found the State had a compelling interest, and that the Billboard Act was narrowly tailored to that interest. (ECF No. 329.) On the same day, Thomas filed a Rule 52 Motion for Verdict as a Matter of Law. (ECF No. 325.) The State responded in opposition on October 7, 2016. (ECF No. 336.) Thomas replied on October 21, 2016. (ECF No. 340.)

         On October 26, 2016, the Court entered an Order Concerning Least Restrictive Means, ordering the parties to file supplemental briefing on the issue of least restrictive means. (ECF No. 342.) Both parties timely briefed the issue. (ECF Nos. 343-44.)

         On November 23, 2016, Amici Curiae National League of Cities, International Municipal Lawyers Association, Tennessee Municipal Attorneys Association, International City/County Management Association, Scenic America, Inc., Scenic Tennessee, Inc., Tennessee Conservation Voters, League of Women Voters of Knoxville/Knox County, Trees Knoxville, Keep Knoxville Beautiful, City of Knoxville, Tennessee Chapter of the American Planning Association, and Tennessee Federation of Garden Clubs, Inc. (collectively, “Movants”)'s filed a Motion for Leave to File the Brief of Amici Curiae. (ECF No. 346.) On November 30, 2016, Thomas opposed. (ECF No. 347.) Because the amicus brief sought to address standing and the differentiation between on- and off-premises signs, both of which the parties did not adequately brief, the Court granted the Motion for Leave to File the Brief of Amici Curiae (ECF No. 346) on December 7, 2016. (ECF No. 348.) The Court granted in part Thomas's request to respond to the standing issue, which Thomas timely briefed. (ECF Nos. 352, 354.)[2]

         II. LEGAL STANDARD

         A. Federal Rule of Civil Procedure 52

         Federal Rule of Civil Procedure 52 provides,

[i]n an action tried . . . with an advisory jury, the court must find the facts specially and state its conclusions of law separately. The findings and conclusions may be stated on the record after the close of the evidence or may appear in an opinion or a memorandum of decision filed by the court.

         Fed.R.Civ.P. 52(a)(1). In the instant case, the Court makes its findings of fact and conclusions of law following the advisory jury's verdict below.

         B. First Amendment Protection: Commercial Versus ...


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