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City fails to demonstrate rational basis for prohibition of billboard extensions

January 24th, 2011

by Melanie Thwing

Clear Channel Outdoor v. City of St. Paul
(Federal 8th Circuit Court of Appeals, August 25, 2010)

Clear Channel Outdoor has owned and operated billboards in the City of St. Paul, MN since 1925. They regularly use billboard extensions when the customer’s needs require them. In St. Paul billboards until November 2000 were regulated with the zoning code, but were allowed. Then St. Paul, Minnesota Code §64.420 was passed which does not allow for any new billboards to be constructed. Effectively, the standing billboards were allowed as nonconforming uses. St. Paul Code §66.301(g) at the time still regulated the size and length of time for all extensions.

Then in March 2005 concerns about billboard extensions were brought to the city’s Planning Commission. The options of banning extensions altogether and allowing extensions through a permiting process were both discussed.  A resolution in support of the permitting scheme was ultimately adopted and transmitted to the city council. 

In August 2005 at a public hearing the City Council discussed the billboard extension issue, but laid the discussion over until November. During this time the Planning commission again took up the issue and again rejected the outright prohibition of billboard extensions.  Dispite this, in March 2006 the City Council adopted Ordinance 06-160, which prohibited all billboard extensions. The minutes did not reflect any discussion of costs or benefits of the ordinance.

Clear Channel filed a complaint in federal district court claiming (1) unconstitutional and unreasonable use of police power and (2) violation of Clear Channel’s due process and equal protection laws. After two years of mediation the parties were not able to reach an agreement. In January 2009 the district court ultimately found the ordinance arbitrary and capricious and therefore void because no rationale for the City Council’s decision was presented.

The City appealed the district court decision to the 8th Circuit Court of Appeals, arguing that the district court applied the wrong standard. Honn v. City of Coon Rapids was the precedent cited by the district court. Honn declares, “…[t]he municipal body need not necessarily prepare formal findings of fact, but it must, at a minimum, have the reasons for its decision recorded or reduced to writing and in more than just a conclusory fashion…” Clear Channel countered that the city was originally in favor of using the Honn standard, and originally argued it was controlling.

The 8th Circuit agreed with Clear Channel’s argument, citing specific instances where the city said Honn was controlling. Also, the 8th Circuit concurred that Honn was applicable because the procedure it announced should be followed in ‘any zoning matter, whether legislative or quasi-judicial…” Honn has legislative authority fromMinn. Stat. §462.357, subd 1, which gives a municipality the authority to regulate buildings and structures, which is the core of this case. It is concluded that Honn is applicable.

Secondly, the city argues that even if Honn is applicable, the district court was in err because it did not allow a trial that would have allowed the City to demonstrate the rational basis for its decision. The 8th Circuit noted, however, that the City had assured the district court that the record was complete and that a decision could be made. Honn does state that a trial may be allowed, but not required.  A trial is not made available simply “…to provide local governments with a routinized opportunity for a second bite at the apple by neglecting to provide and adequate record for review.” As long as the record is complete, as was the case here, no trial is necessary. The City failed to prove a rational basis for the ordinance prohibiting billboard extensions in any documents provided. The court refused to remand the case and affirmed the district court decision.

Due Process, Federal courts, Signs and billboards , , ,

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