United States: Billboard Regulation: The Commonwealth Court’s Recent Top Hits

Last Updated: February 3 2014
Article by Reuben Asia

In the last quarter of the 2013 calendar year, the Commonwealth Court of Pennsylvania decided three cases that provide insight into billboard regulation in Pennsylvania and its municipalities.  These three cases help explain important legal concepts, and an understanding of these concepts can be beneficial to individuals involved with outdoor advertising and land use more generally. 

Smith v. Hanover Zoning Hearing Board: De Facto Billboard Bans in Pennsylvania 

Under Pennsylvania law, a municipality cannot completely ban billboards; a municipality may, however, regulate billboards, including their height, size, use, and location, within its municipal limits. In Smith v. Hanover Zoning Hearing Board, the Commonwealth Court discussed just how much regulation a municipality can institute before the amount of regulation creates a de facto billboard ban and the regulation must be amended.  The plaintiff, Smith, had filed an application for permits to construct two billboards with LED lights in Hanover, Pennsylvania.  The proposed billboards, however, exceeded the permitted height limit and were to be located in districts where Smith's billboards were prohibited.  Because of this, the applications were denied, and Smith appealed.  Smith maintained his proposed billboards would only be economically profitable if they violated Hanover's zoning ordinance, and because the billboards would only be economically profitable if built in violation of the ordinance, Smith argued Hanover had, for all intents and purposes, banned billboards in violation of Pennsylvania law. 

After reviewing the evidence, the Commonwealth Court determined the Hanover ordinance did not create a de facto ban on billboards.  The court explained the borough's zoning code did not function as a ban on billboards simply because it would prevent Smith from making a profit off of his proposed signs; to be a de facto ban, the court reiterated the regulations must make the construction and/or ownership of any billboard economically infeasible.  Smith had only shown that his proposed LED billboards would lose money, not that it was economically impractical for any billboard, including non-LED billboards with lower construction and operating costs, to be built and survive in the permitted district.  With respect to the height limit set forth in the ordinance, the court explained that while it might be reasonable and even beneficial for a municipality to permit billboards to be taller than the limit, this limit was not a ban.  The height limit did not exclude billboards from the municipality, and the limit was therefore permitted. 

Key Takeaway:  A plaintiff can show that a municipality's regulation of billboards is so extensive that it amounts to a de facto ban if the plaintiff can demonstrate the municipality's ordinance makes the construction of all billboards economically impractical.

Smith v. Hanover Zoning Hearing Board continued: An Application of the "Fair Share" Principle to Billboards 

The "fair share" principle was initially created to remedy exclusionary zoning practices against lower income residential developments and is premised on the concept that a municipality, through its zoning regulations, must provide for the land-use needs of all categories of people who might want to live in the municipality.  While some Pennsylvania Commonwealth Court decisions suggest the "fair share" principle should be limited to the residential housing context, other Commonwealth Court decisions have applied the principle to the commercial realm.  In the Smith case, when the borough prohibited Smith from erecting his billboards, he argued the borough's zoning ordinance prevented Hanover from taking on its "fair share" of billboards.  The Commonwealth Court, without definitively concluding the "fair share" principle applies to the commercial realm, determined Smith hadn't shown that the "fair share" principle was even violated. To prove a violation, Smith had to show that the billboard needs of the people in the community were not being met, whereas Smith had only shown that billboards were only permitted in a small area of the municipality.  Because Smith failed to produce the requisite evidence of a "fair share" principle violation, the Commonwealth court found the "fair share" principle was not violated. 

Key Takeaway:  Whether the "fair share" principle definitively applies in the commercial context is still unclear. However, to prove a violation of this principle, a plaintiff must show that the municipality's zoning ordinance prevents the land-use needs of all categories of people who might want to live in the municipality from being met.

Lynn McConville and Dea M. McAlonan v. the City of Philadelphia: The "Standing" Requirement 

In Lynn McConville and Dea M. McAlonan v. the City of Philadelphia, the Commonwealth Court dealt with the significant issue of exactly who is permitted to bring a lawsuit against another party.  McConville and McAlonan both filed lawsuits against the City of Philadelphia, challenging the legality of an agreement the City entered into with a number of billboard owners.  This agreement allowed the billboard owners to resolve disputes with the City through arbitration, as opposed to through the existing administrative and judicial process.  Before dealing with the substance of McAlonan's and McConville's arguments against the agreement, the Commonwealth Court had to determine whether these two individuals had the requisite "standing" to sue. 

To sue another party, a plaintiff must fulfill a legal requirement known as "standing."  A plaintiff frequently has standing when he or she has a substantial, direct, and immediate interest in the lawsuit.  A plaintiff has a substantial interest in the lawsuit when his or her interest is greater than the common citizen's concern in seeing that people follow the law.  A plaintiff has a direct interest in the lawsuit when the matter complained of actually caused harm to the plaintiff's interest.  A plaintiff has an immediate interest if there is a causal connection between the actions complained of and the injury the plaintiff sustained, and the interest is within the zone of interests sought to be protected by the statute or constitutional guarantee at issue. To determine if a plaintiff satisfies these standing requirements, a court analyzes the facts of the case for each separate plaintiff. 

McAlonan filed her claim against the City of Philadelphia after a billboard collapsed onto and damaged her property.  After the collapse, the billboard owner began to reconstruct the billboard, and McAlonan notified the City, arguing the billboard was in violation of the zoning ordinance and could therefore not be rebuilt.  After receiving McAlonan's complaint, the City issued a violation to the billboard owner, but the City later rescinded that violation and issued a building permit without notifying McAlonan. When McAlonan learned the City had issued the permit to rebuild, McAlonan filed this lawsuit, seeking to invalidate the previously mentioned agreement that she learned the owner had entered into with the City.  She did not, however, file a proper complaint over the actual issuance of the permit before the appropriate agency or court. 

McConville owned property in the City and could see the remains of a billboard from her land.  McConville believed the billboard she could see was not in compliance with the City zoning ordinance, so when she noticed that the billboard was being reconstructed, she filed a complaint with the City.  After receiving McConville's complaint, the City issued a violation to the billboard owner, and the billboard owner appealed the issuance of this violation.  While the appeal was pending, the billboard owner entered into the previously mentioned agreement with the City, and after entering into the agreement, withdrew its appeal at the next hearing and moved to have the issue resolved via arbitration pursuant to the agreement.  McConville subsequently filed this lawsuit, arguing the agreement unlawfully permitted the billboard owner to continue to litigate the violation even after the billboard owner withdrew its appeal, and McConville argued that the withdrawal of the appeal had resolved the matter in her favor. 

While the billboard owner argued McConville did not live close enough to the offending billboard to have standing to sue, the Commonwealth Court determined McConville did in fact have standing.  The court noted the case was not about whether the billboard was lawful; it was about whether the agreement the billboard owner and the City entered into was legal.  When the billboard owner withdrew its appeal of the violation, the court determined McConville arguably obtained some measure of relief.  Then, when the billboard owner moved the issue into arbitration pursuant to the agreement with the City, the relief McConville arguably received was nullified, and McConville was thereby potentially harmed.  Because McConville could show the agreement potentially caused her harm, she demonstrated a substantial, direct, and immediate interest in seeing the agreement invalidated. 

The court determined, on the other hand, that McAlonan did not have standing.  The harm McAlonan suffered was a result of the billboard falling on her property and her subsequent failure to file a proper complaint; the harm was not a result of the agreement.  Though McAlonan argued the existence of the agreement caused her to lose faith in the system and persuaded her not to file her complaint properly, the court determined this did not create a sufficient causal link between McAlonan's harm and the potential illegality of the agreement.  Because McAlonan did not have a sufficient interest in the agreement, the court determined she did not have standing. 

Key Takeaway: An individual must fulfill a legal requirement known as "standing" to sue a party.  Standing frequently requires the suing party to have a substantial, direct and immediate interest in the lawsuit. A substantial interest is any interest greater than the average citizen's interest in seeing that people follow the law.  A direct interest exists when the matter complained of caused the suing party harm.  A plaintiff has an immediate interest if there is a causal connection between the actions complained of and the injury the plaintiff sustained, and the interest is within the zone of interests sought to be protected by the statute or constitutional guarantee at issue.

MC Outdoor, LLC v. Board of Commissioners of Abington Township: The Effect of a Township Commissioners' Resolution on  a Pending Challenge before the Township's Zoning Hearing Board 

In MC Outdoor, LLC v. Board of Commissioners of Abington Township, the Commonwealth Court examined the interplay between a zoning board's authority to resolve challenges brought before it and the board of commissioners' ability to alter ordinances.  MC Outdoor wanted to construct five advertising signs on properties in Abington Township, but the applicable sections of the zoning ordinance only permitted the signs if they advertised goods or services that were available on the property on which they were located.  MC Outdoor therefore filed a challenge to the applicable sections of the ordinance with the Township's Zoning Hearing Board and argued the ordinance was an impermissible ban on off-site advertising signs. 

Three months after MC Outdoor filed its challenge and while the challenge was still pending before the Zoning Hearing Board, the Township's Board of Commissioners adopted a resolution declaring the challenged ordinance sections invalid.  According to Pennsylvania statute, the Commissioners then had 180 days either to 1) enact a curative amendment or 2) reaffirm the ordinance's validity.  Within approximately two months of the decision to invalidate, the Commissioners rescinded the resolution and reaffirmed the ordinance's validity.  MC Outdoor subsequently filed suit in court, arguing the Commissioners' resolution resolved its challenge before the Zoning Hearing Board in its favor. 

The Commonwealth Court held the Commissioners' resolution of invalidation did not resolve the challenge before the Hearing Board in MC Outdoor's favor.  The court explained that even though the Commissioners had declared the ordinance invalid, the Commissioners had rescinded that resolution.  Moreover, even if the Commissioners hadn't rescinded the resolution, the Commissioners' resolution of invalidation still wouldn't have rendered MC Outdoor's challenge moot.  If the Commissioners pass a resolution invalidating an ordinance after a challenge to the ordinance is pending before the Zoning Hearing Board, that resolution does not establish that the ordinance is invalid as a matter of law.  The resolution is only persuasive evidence that the Zoning Hearing Board can consider at its hearing concerning the ordinance's validity. 

Key Takeaway: A resolution passed by the commissioners is NOT a final decision and can be reversed.  Parties should wait for the commissioners to pass the curative amendment to the ordinance before relying on the resolution.  If a resolution invalidating an ordinance is passed after a challenge to the ordinance is pending before the Zoning Hearing Board, the resolution does not establish that the ordinance is invalid as a matter of law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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