DC Court of Appeals Holds Guidance Memorandum Issued by the FHWA Addressing Digital Billboards was Not Promulgated Contrary to Law

Pertinent to this case, the Highway Beautification Act (“HBA”), required the Federal Highway Administration (“FHWA”) and each state to develop and implement individual federal-state agreements (“FSAs”), detailing, among other things, “size, lighting and spacing” standards for the billboards now found over many of our country’s interstate highways. One of those adopted standards, included in most states’ FSAs, prohibits those states from erecting any billboard with “flashing, intermittent or moving” lights. Plaintiff-Appellant Scenic America is a non-profit organization which “seeks to preserve and improve the visual character of America’s communities and countryside.” In this case, it challenged a guidance memorandum issued by the FHWA in 2007, which interpreted that prohibition on “flashing, intermittent or moving” lights to permit state approval of those digital billboards that met certain timing and brightness requirements. Scenic argued that the guidance memorandum must be invalidated because it was not promulgated using notice-and-comment procedures, and violated the HBA, and was therefore promulgated “contrary to law” in violation of § 706 of the Administrative Procedure Act (“APA”).

Scenic asserted that the 2007 Guidance forced certain FHWA Division Offices to reinterpret the FSA lighting standards that billboards may not contain “flashing, intermittent or moving” lights, so that those offices would thereafter find the FSA language to permit, rather than bar, digital billboards. Scenic further claimed that this alleged change of position made it easier for states to erect digital billboards, because they no longer had to worry about being prevented from doing so by the Division Offices. As a result, Scenic allegedly was forced to work harder, and thus spend greater resources, to fight these billboards: its injury in fact. Scenic claims that vacating the Guidance would redress that injury. The court, however, found that Scenic failed to demonstrate that the vacatur of the Guidance would redress its alleged organizational injury, as it was “speculative,” rather than “likely,” that invalidating the Guidance would stop any particular billboard from being constructed. The court reasoned that many states with FSAs that included a ban on intermittent, flashing, or moving lights permitted digital billboards prior to the 2007 Guidance. Accordingly, Scenic’s lack of any evidentiary basis for its redressability contentions required the court to reject its standing as to its notice-and-comment claim, since it failed to introduce any evidence showing that vacating the 2007 Guidance would remove an “absolute barrier” to its efforts.

Likewise, as to Scenic’s representational standing claim, Scenic argued that vacating the 2007 Guidance would redress its members’ injuries because it would cause the digital billboards allegedly injuring those members to be removed. However, as with the argument for standing as to its notice-and-comment claim, Scenic failed to introduce any evidence demonstrating that the courts vacatur of the Guidance would cause Division Offices or states to prohibit the construction of new digital billboards.

Lastly, Scenic alleged that FHWA’s actions, in promulgating the Guidance, were “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, in violation of the APA. Scenic argued that the Guidance was invalid because it failed to comport with the HBA’s “customary use” provision. That provision stated that “signs, displays, and devices whose size, lighting and spacing, consistent with customary use was to be determined by agreement between the several States and the Secretary, may be erected” within 660 feet of the Interstate. Although the court noted that it might be possible to read the FSA lighting standards to prohibit digital billboards, those standards did not foreclose other interpretations, including the FHWA’s here. Because the FHWA’s interpretation of the FSA lighting provision was reasonable, the interpretation could not be found “contrary to customary use.”

Scenic Am., Inc. v. U.S. Dept. of Transp., 14-5195, 2016 WL 4608153 (D.C. Cir. Sept. 6, 2016)