Posted by: Patricia Salkin | March 16, 2014

Fed. Dist. Ct in SD Holds Sign Code Credit System Applies Prospectively Under its Sunset Provision

Lamar Advertising leases sign spacing for outdoor advertising and TLC has an ownership interest in several parcels of real property which Lamar leases for its outdoor advertising signs. In 2002, Rapid City made several changes to its Sign Code, including changes to the Off–Premises Sign Credit System (“Credit System”). This Credit System permitted owners of off-premises signs to receive “Off Premises Sign Credits” (“credits”) for removing an off-premises sign within the City or reducing the size of an off-premises sign to comply with the newly-enacted restrictions. Under it, an off-premises sign owner would receive 2 credits for removing a sign that did not conform to the Sign Code and 1 credit for removing a sign that did conform. Lamar contended the sunset provision of the Sign Code made it impossible for Lamar to use its sign credits before they expire, rendering them worthless. Lamar and TLC commenced this action against the City, asserting the Citizen Initiatives directly contradict the South Dakota Codified Laws, result in a taking of private property without just compensation, and violate their rights to freedom of speech and equal protection under the law provided in the United States and South Dakota Constitutions.

In its analysis of these claims the court noted that “fundamental rule of statutory construction that statutes are to be construed as having only a prospective operation unless the purpose and intention of the legislature to give them retrospective effect clearly appears.” In re Scott’s Estate, 133 N.W.2d 1, 3 (S.D.1965); see also Gasper v. Freidel, 450 N.W.2d 226, 233 (S.D.1990) (“statutes are presumed to have prospective application and may be construed as retroactive only when such intention plainly appears.”). Since the sunset provision of the Sign Code contained no language signifying retroactivity, did not mention a specific date the provision should be applied, nor include any form of the word “retroactive ”, the court concluded that there is no language in § 15.28.250(F) to get the sunset provision past the fundamental rule regarding prospective operation. The court therefore found the plain language of the sunset provision to only apply prospectively, and thus granted the Defendant’s motion for summary judgment in regarded to this claim.

The court found an issue of material fact exists regarding whether the amended spacing requirements for off-premises signs contained in § 15.28.160(D) of the Sign Code are reasonable, since the issue of whether the increased spacing requirements were reasonable was a material fact to be decided at trial. Finally, the court found that the Sign Code did not restrict speech based on content nor does it create an arbitrary classification between Lamar and other outdoor advertisers since all off-premises advertisers are treated the same and there is no classification between Lamar and other outdoor advertisers.

Lamar Advert. of S. Dakota, Inc. v. City of Rapid City, 2014 WL 692956 (D.S.D. 2/21/2014)

The opinion can be accessed at:

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