Digital Billboard Lawsuit Background

Why did Scenic Nevada sue the City of Reno?

For 17 years the City of Reno approved one billboard after another, despite a vote of the people to ban new construction. After a while, we felt we had no choice. We sued the city to get the vote enforced.

Scenic Nevada was the author of R-1, the 2000 ballot initiative in which over 32,700 people voted to ban new billboard construction and permits. In a nutshell, we were trying to preserve the people’s vote from further degradation as well as stop further intrusion of billboard advertising on our public roads.

The City Council’s Billboard Agenda

When it comes to billboards, the city council, from 2000 to 2012 had a different agenda than the people. Within a month of the people’s vote, the city granted 12 new permits to a billboard company in a lawsuit settlement, despite the ban on new permits.

The ballot initiative approved by the voters said:

“The construction of new off-premises advertising displays/billboards is prohibited, and the City of Reno may not issue permits for their construction. (Approved by the voters at the November 7, 2000, General Election, Question R_1 – The results were certified by the city council on November 14, 2000).”

Once the ballot initiative passed, the city council had no choice but to add the billboard ban to city code. During those hearings, which took 14 months, the city council agreed with the billboard industry that the new law didn’t prohibit new billboards after all; it just prohibited “additional” billboards.

Banking and Relocating: How the City Council Got Around the Ballot Results

The city council decided in 2002, over the objections of Scenic Nevada, that billboards would be capped at the number in existence in 2000, when the ballot initiative passed. The city council also added two exceptions to the cap; billboards acquired through annexations and permits granted to billboard companies in lawsuit settlements.

And this is how the city council got around the people’s vote. A billboard could be taken down in one spot and its owner could get a new permit to construct a new billboard in another allowed location. If there was no new location available when the billboard came down, the owner would get credit or “banked receipt” for use later.

According to the city, even though it is a new billboard, it isn’t an “additional” billboard. The billboard cap wasn’t exceeded. It was known as the banking and relocation scheme and for the entire decade after the people’s vote, the city routinely handed out new permits for new construction in this way.

Digital Billboards: The Tipping Point

Because of lawsuit settlements and annexations, the cap kept going up. There were 278 permits in 2000 and the city testified in February 2014 that there were now 294 permits allowed within the city limits. Of those, 93 were banked receipts, leaving 201 existing billboards.

The tipping point came in 2008 when the city council agreed to consider adding digital billboards. For the next four years, Scenic Nevada was present at every workshop and public hearing with studies, letters, and a voter survey all opposing digital billboards. We consistently brought up the people’s vote of 2000.

Scenic Nevada’s Arguments against Digital Billboards

We said when it comes to billboards the city keeps moving in the wrong direction, moving farther away from the people’s vote. Perpetuating billboards with “relocation” eliminated the long-term benefit; gradual attrition. Digitals would further erode the people’s vote and are even more obnoxious, intrusive and distracting than traditional signs. All of our arguments were ignored.

The digital billboard ordinance was passed on October 24, 2012, and we filed our lawsuit on November 16. The bench trial was held on February 24, 2014, and the court upheld the city’s ordinance. We filed our appeal on March 28, 2014, to the Nevada Supreme Court the day after the district court’s ruling was released.

A Moratorium on Signs

These electronic signs in Reno would have flipped every eight seconds with a different ad, night and day. But, while the appeal was pending, the city council adopted a moratorium prohibiting staff from accepting digital billboard permit applications.

With good reason. In the event that a digital billboard was erected, and the Nevada Supreme Court agreed with Scenic Nevada, the city would have to pay millions of taxpayer dollars to have it removed. Nevada state law requires payment for the removed board and the lost advertising revenue. Taxpayers in Minnesota in 2013 paid $4.3 million to industry giant Clear Channel Outdoor for one digital billboard, removed from a bridge during a road improvement project.

The Nevada Constitution says ballot initiatives can’t be amended, annulled, repealed, or set aside until three years after the vote. The city council set it aside one month after the vote when it handed out 12 permits in a lawsuit settlement. They amended it 14 months after the vote when they approved the ordinance allowing billboard “relocations.” All the while the city protested that it was upholding the vote by enforcing a billboard cap; a cap that keeps moving north.

The Nevada Supreme Court Weighs In

We asked the Nevada Supreme Court to decide if the people’s vote meant something. If it did, the digital billboard ordinance should be voided. It was based on the unconstitutional ordinances passed in 2002 allowing new construction less than three years after the people’s vote. It relies on taking some down to put new ones back up, which calls for new billboard permits and, obviously, new construction.

The digital ordinance requires billboard owners to take down some existing billboards and surrender the permits to get a digital permit. Another reason, the city says, it was upholding the ballot initiative. Multiple traditional boards would be exchanged for one digital, reducing their numbers.

Considering the Exceptions

But there are plenty of exceptions. Billboard owners can also surrender “banked” permits, the credits they received by the city for billboards taken down for one reason or another and are waiting for a new permitted location. The most stringent part requires a takedown of four billboards. But that’s only within the ten areas where billboards have been allowed to cluster over the years. And billboard owners can surrender eight banked permits, instead of taking any existing billboards down. In the rest of the city, the requirement is reduced to two billboards or two banked receipts.

Would the digital billboard ordinance reduce billboard clutter? We knew it wouldn’t. Owners may surrender a few boards from the less-traveled roads citywide to get a digital along the highway. But, most likely, owners would turn in the unused permits to get a digital billboard instead of taking a traditional billboard down. Clutter would remain and digitals would be added to the mix, spoiling the views from our public roads with flashing rotating ads during the day and perhaps shining into people’s homes at night.

Digitals are far more expensive than traditional. They cost between $250,000 and $500,000 apiece. But they reap much higher profits than traditional billboards because owners collect revenues from eight ads flipping every eight seconds as opposed to one stationary ad.

Supreme Court Unanimously Upholds Digital Ordinance

The Supreme Court held oral arguments on November 3, 2015, and issued its unanimous opinion June 30, 2016. The justices upheld the digital ordinance but in a stunning declaration said that the banking and relocation ordinances had violated the state constitution and were void. It was the first time anyone said that Scenic Nevada was right. The people had enacted a billboard ban that was amended by the city council’s actions and that was unconstitutional.

However, there was a twist. The justices said that when the city adopted the digital billboard ordinance it re-enacted the relocation ordinances long after the three-year limit, therefore all of the ordinances were now valid.

That didn’t matter to us because now we knew we were right. The people’s billboard ban had never been enacted. And we were able to convince the city council in 2017 that it was up to them to right a wrong committed 17 years ago.

A Scenic Victory at Last

After an incredible effort that included many meetings, a voter survey, a citizen petition, a letter-writing campaign, and even a second lawsuit, the Reno City Council voted unanimously to enact the people’s vote. A new ordinance was drafted and approved on September 15, 2017. It ended the practice of banking and relocation and it prohibits new billboards, digital billboards, and new permits.

Learn More

To view and download documents associated with the case, click here.

To view the timeline of the case, click here.