Municipalities/The Billboard Controversy
Supreme Court upholds sign regulations

By MATHIAS W. DELORT

In a landmark decision, the Illinois Supreme Court has upheld the right of home rule municipalities to regulate unsightly billboard advertising. The long-awaited decision also upholds the right of those municipalities to ban billboards entirely.

The decision was issued on November 19, 1992, shortly before several justices were about to retire from the court. The plaintiffs, Robert Scadron and his family members, operate a small billboard advertising company in Chicago. They held a lease to construct a billboard adjacent to the Tri-State Tollway (1-294) in north suburban Des Plaines. The billboard was to have two 1,200 square foot faces atop a tall pole. Des Plaines' ordinances prohibit billboards over 480 square feet in size, and ban billboards entirely if they are intended to be viewed from a limited-access highway such as 1-294. Des Plaines has long been a target of billboard companies, because several expressways serving busy O'Hare Airport pass through the city. Signs in similar locations rent for thousands of dollars a month. In contrast, the cost of constructing billboards is so low that a company can recoup its investment in less than two years.

Illinois municipalities have long enjoyed the right to regulate street advertising.¹ In fact, ordinances regulating signs have been accepted throughout the country as valid exercises of municipal authority. However, confusion among Illinois courts as to the extent of this power led to the Scadron lawsuit.

Des Plaines denied Scadron's application for a sign permit on the basis that the ordinance prohibited the sign. In late 1989, Scadron filed a three-count complaint in federal court in the United States District Court for the Northern District of Illinois. Scadron charged that Des Plaines' ordinance violated federally guaranteed constitutional rights to free speech and equal protection of the law; that the ordinance amounted to a confiscation of its property without just compensation; that Des Plaines enforced the ordinance in a discriminatory fashion; and that the ordinance was preempted by an Illinois law known as the Highway Advertising Control Act of 1971 ("HACA").² Scadron requested a court order permitting it to build the sign and monetary damages for its lost rents.

The focus of the case was the issue regarding HACA. The HACA law became effective on July 1, 1972, in response to Congress' enactment of the Highway Beautification Act of 1970 ("HBA").³ The HBA is also known as the "Lady Bird Johnson" law, in honor of the First Lady who spearheaded a nationwide drive to control billboards along scenic highways. Under HBA, the various states must enact laws controlling billboards along "federal aid" highways, or face a severe loss of federal highway funds. Unlike most states which quickly adopted strong anti-billboard laws, Illinois stalled as long as it could, and finally enacted HACA, a law which is embellished with pro-billboard language undoubtedly inserted at the behest of advertising lobbyists. Scadron's suit charged that HACA precluded Des Plaines from enacting more stringent billboard laws affecting the area within 660 feet of any "federal aid" highway.

Among other things, HACA declares that outdoor advertising is a "legitimate, commercial use of private property adjacent to roads and highways" and that it "should be allowed to operate in business areas". HACA does limit billboards along federal aid highways to 1,200 square feet in area, 30 feet in height and 60 feet in length. HACA also requires the signs to be located no more than 100 feet apart in incorporated cities. HACA requires the Illinois Department of Transportation to administer the state's billboard control program. However, HACA's controls are so lenient that a billboard company could theoretically place dozens of huge 1,200 square-foot billboards on each mile of highway.

The central issue was, therefore, whether Des Plaines could regulate or even ban billboards along federal aid highways. This issue is hardly a novel one. Municipalities have been embroiled in battles with billboard companies on this issue for over fifteen years. However, these cases have resulted in varying interpretations of HACA, leaving municipal officials uncertain of the extent of their authority to regulate these signs.

In 1977, the Appellate Court for the Third District, which includes central Illinois, ruled against the City of Macomb and held that Macomb, a non home-rule municipality, could not regulate signs within the 660-foot zone.⁴

A circuit court in Champaign County followed suit in 1978, holding that HACA preempted the Village of Rantoul from regulating these billboards.⁵

In the second appellate case, the Appellate Court for the First District, which includes Cook County, ruled against the Village of Indian Head Park. The court held that the Village's ordinance could not be used to prevent the sign company from construction in the 660-foot zone.⁶

The billboard battles moved to federal court in 197——, when a company attacked Rolling Meadows' ordinance. The United States Court of Appeals for the Seventh Circuit, construing Illinois law, held that even a home rule municipality could not alter the "statewide" HACA scheme, because it would "prevent the state as a whole from carrying out the 1971 Act [HBA], which Illinois must to receive federal highway funds."⁷

This string of losses came to an end in 1987, when the Fourth District Appellate Court rejected the previous decisions and ruled in favor of the Village of Mt. Zion. The court found the language in HACA to be self-contradictory and confusing. The court concluded that the overriding purpose of HACA was to control, not to protect billboards, and that the purpose should be given effect over the pro-billboard language in HACA's preamble.⁸

The war moved back to the lucrative Chicago advertising market in the late 1980s. The companies targeted the Village of Downers Grove, which also hosts highly-trafficked federal aid highways. The Appellate Court for the Second District agreed with the Fourth District's decision in the Mt. Zion case, holding that a home rule municipality was free to regulate billboards more stringently than permitted by HACA.⁹

With the billboard companies still ahead in the regulation game by a score of 4-2, Scadron took on Des Plaines' ordinances in federal court. Scadron hoped that the federal forum would be beneficial, since the federal appeals court had already ruled favorably to another company the same issue.

Des Plaines, however, defended its ordinances against all of Scadron's attacks. In particular, it urged the federal district

Page 20 / Illinois Municipal Review / January 1993

court judge not to follow the Rolling Meadows decision handed down by the federal appeals court. Since federal appellate decisions are usually binding on the lower courts, Des Plaines was taking a considerable risk. Des Plaines argued that the later, pro-regulation, cases were the applicable precedents that should be followed. Even while the case was being argued, another decision was issued on the subject.

In early 1990, the Appellate Court for the First District declined to follow its earlier decision in Indian Head Park and held that one of Des Plaines' neighbors, Elk Grove Village, could regulate billboards more stringently than permitted by HACA.¹⁰ The court found that HACA did not specifically preempt home rule authority and rejected the Rolling Meadows and earlier decisions.

To this point, the Illinois Supreme Court had declined to hear any of the appeals filed by the municipalities or billboard companies in these cases. This inaction left municipal officials uncertain of the true effect of HACA. In effect, municipalities in different parts of the state had different regulatory authority, depending on how their local appellate court had ruled.

After both sides filed written briefs, United States District Court Judge Ilana Rovner issued a lengthy opinion upholding the ordinances in all respects. She expressly rejected the federal appellate decision in Rolling Meadows and found that the Elk Grove, Downers Grove and Mt. Zion cases were correct interpretations of Illinois law.¹¹ Scadron appealed to the United States Court of Appeals, arguing that Judge Rovner should have adhered to the appeals court's earlier ruling in Rolling, Meadows.

A Court of Appeals panel consisting of Judge Joel Flaum, Judge ___________ and Judge ___________, a retired judge from Michigan, heard argument in late 1991. Of the three, only Flaum was on the panel which heard the original Rolling Meadows case. Apparently puzzled by the conflicting decisions, the court took the extraordinary step of requesting that the case be transferred to the Illinois Supreme Court so that the HACA preemption issue could be resolved once and for all. The appeals court asked the Illinois Supreme Court to consider three questions: (1) whether HACA preempts the authority of home rule municipalities to regulate billboards adjacent to federal aid highways; (2) if HACA does preempt home rule authority, if HACA nonetheless authorizes home rule municipalities to regulate more stringently than HACA otherwise provides; (3) if home rule municipalities can totally ban billboards in HACA-covered areas. The Illinois Supreme Court, which had declined to hear the same issues when raised in earlier cases, accepted the Seventh Circuit's invitation to consider them in the Des Plaines case.

The case was argued in Springfield in May, 1992. The Supreme Court issued a unanimous opinion on November 19, 1992, upholding all of Des Plaines' regulations as valid exercises of home rule authority. While Des Plaines and Scadron each argued that the conflicting language of HACA supported its position, the Court ruled on a broader basis, holding simply that HACA did not preempt home rule authority, and that Des Plaines was thus free to regulate the billboards.

Justice Thomas Moran's opinion recognizes that the powers of home rule units must be construed liberally, that the sign regulations did pertain to Des Plaines' own governmental and affairs, and that if the legislature wished to preempt home rule authority when enacting HACA, it should have said so explicitly. Justice Moran also stated:

Simply because the proliferation of billboards may be a national and State problem, it does not then immediately follow that the problems posed by billboard advertising is of no concern to home rule municipalities.

He also stated:

Given the potential problems that may arise with the erection of outdoor advertising signs, municipalities have a substantial interest in the kinds of structures that are erected and where those structures are intended to be placed. To find the local interest in the regulation of outdoor advertising signs, we need look no further than the sign regulations themselves, in which sign standards were set with the following findings in mind: a multiplicity of signs is distracting and hazardous to motorists; the proliferation of off-premise commercial signs thwarts the efforts of local businesses to identify their products or services; and regulation would enhance the appearance and preserve the beauty of the landscape.

The Supreme Court did not answer the second question posed by the federal appeals court because the question was preconditioned on a negative answer to the first question. Turning to the third question, whether home rule municipalities could ban billboards entirely, the Supreme Court focused on the same analysis it used in answering the first question. The Supreme Court noted that municipal ordinances should be upheld under these circumstances unless "in the clearest cases of oppression, injustice, or interference by local ordinances with vital state policies." The court rejected Scadron's arguments that Illinois would lose federal highway funds if Des Plaines and other home rule units could ban billboards entirely. To the contrary, the court held, Des Plaines' ordinance furthered the goals of the federal law.

The Scadron case finally resolves the issue of home rule municipal authority to regulate billboards along federal aid highways. While the Supreme Court did not directly address whether the same result would hold true with respect to non-home rule municipalities, the broad language used by the Scadron court as it explained why municipalities may ban billboards appears to be equally applicable to non-home rule units, as well.

While Des Plaines won this important "war", billboard companies will certainly start other battles with Illinois municipalities. Industry reaction to the decision was prompt. Even before the decision was issued by the Illinois Supreme Court, the General Assembly adopted an amendment to the eminent domain statute, requiring municipalities to reimburse billboard companies and landowners for the cost of the billboard if the municipality used its regulatory power to remove a "lawfully constructed" billboard. The Illinois Municipal League unsuccessfully urged Governor Edgar to veto this ill-conceived legislation. Those municipalities which desire to use their new-found powder to clean up their highways will certainly face requests from companies for reimbursement.

Additionally, the billboard industry will likely turn its attention to locations in non-home rule municipalities or in unincorporated areas, in an attempt to avoid the affect of the new decision. In the meantime, however, home rule municipalities have approval from Illinois' highest court to regulate and ban billboard advertising. •

January 1993 / Illinois Municipal Review / Page 21