A Superior Court’s award of damages to a billboard company that sued over the City of Arcata’s building and sign ordinances has been thrown out.

Humboldt County Superior Court Judge J. Michael Brown had ruled that state law pre-empted the city’s sign ordinance, and he awarded Viacom Outdoor, Inc., $39,000 in attorney fees and nearly $39,000 in damages for lost rent. In overturning Brown, the First District Court of Appeal found that the city’s ordinances were the type that the state law “positively anticipates if not encourages.” The court further ruled that because Viacom never even applied for the permits the city contended the company needed, Viacom’s claim for damages was premature.

During the fall of 2001, windstorms destroyed four Viacom billboards originally built during the 1950s and 1960s next to Highway 101 in Arcata. The company had permits from Caltrans for all four signs. When Viacom began rebuilding the billboards, the city posted “stop work” orders directing the company to halt rebuilding until it applied for permits required by the city’s Building Code and Sign Code.

Viacom stopped rebuilding. But instead of apply for permits, the company sued the city. The company argued that the Outdoor Advertising Act (Business & Professions Code § 5200 et seq.) was the only applicable law and preempted the city’s regulations. Viacom also contended the city violated the company’s rights of equal protection and due process, and took the company’s property without compensation.

Judge Brown ruled for Viacom and ordered the city to pay damages and fees. The city appealed and a unanimous three-judge panel of the First District, Division Two, overturned the lower court.

The city’s Sign Code requires a permit “to erect, construct, enlarge, alter, repair, move, improve, remove, convert, demolish, equip, use or maintain a sign or sign structure.” Viacom argued, and Brown agreed, that the state Outdoor Advertising Act pre-empted such an ordinance, and that California Code of Regulations 2270-2271 gives Caltrans complete authority in this instance. Viacom maintained that municipal regulations could apply “only at the time of placement of billboards.”

The First District read the statute and regulations differently. “[T]he state act makes considerable allowance for past and future county and city ordinances on the subject of advertising displays,” the court ruled. “As shown by the plain language of §§ 5228, 5230, 5231 and 5408.3, the Legislature clearly contemplated that local regulation would augment the state act, and might in some instances go beyond it.”

As for the Code of Regulations, the court determined that re-erection of a billboard is the same thing as “placement,” and, “Placement of an advertising display is an area where local power is expressly recognized by the state act.”

“Moreover,” wrote San Francisco Superior Court Judge Peter Busch, sitting by assignment to the First District, “the language of Regulation 2271 speaks exclusively to the power of Caltrans. It does not address whether any other jurisdiction’s permit might be needed before a billboard is re-erected. Nothing in it suggests a restriction of the traditional power of cities and counties to require construction permits.”

Viacom pointed to Traverso v. People ex rel. Dept. of Transportation, (1993) 6 Ca.4th 1152, in which the state Supreme Court ruled that Caltrans had the authority under Business & Professions Code § 5463 to prohibit the rebuilding of a billboard that had been blown down. But the First District found Traverso of no use here because that case concerned the constitutionality of § 5463, and the Supreme Court did not address the scope of local regulations or whether billboard re-erection was the same thing as placement.

The court also rejected Viacom’s contention that a standard in § 5401 requiring a sign to be built to withstand “20 pounds of pressure per square foot of exposed surface” was evidence the state intended to occupy the entire field of regulating billboard construction and, therefore, bar local regulation.

“The city’s Sign Code provisions,” Judge Busch wrote, “do not conflict with the state act. All of these provisions either address subjects not addressed in the state act or appear fully compatible with the state act’s declared intent to establish only minimum standards, with the clear implication that additional input could come from cities and counties.”

The Case:
Viacom Outdoor, Inc. v. City of Arcata, No. A110628, 06 C.D.O.S. 4910, 2006 DJDAR 7145. Filed June 9, 2006.

The Lawyers:
For Viacom: William Barnum, Barnum & Herman, (707) 442-6405.
For the city: Nancy Diamond, (707) 826-8540.