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Digital Boards Face Big Legal Fight

January 23, 2013

Digital billboards have been a financial boon to the out of home business. But if Scenic America gets its way in court, it could turn into an expensive bust for companies such as Clear Channel Outdoor and Lamar Advertising. On Tuesday, the organization filed a lawsuit in the U.S. District Court for the District of Columbia to overturn a 2007 decision by the Federal Highway Administration that allowed out of home companies to construct digital billboards along federal highways.

In its complaint against the FHWA and the Department of Transportation, Scenic America alleges that the FHWA's 2007 guidance exempting billboards from the Highway Beautification Act of 1968 prohibiting intermittment lighting gutted the act.

Since the FHWA's decision, digital billboards have spread, leading to a build out of some 4,000 boards, many on federal highways. Because the boards change messages every eight seconds, outdoor companies can sell the same space to multiple advertisers.

But Scenic America said the FHWA, which issued its decision as a "guidance memorandum," overstepped its authority because it failed to follow proper rulemaking procedures soliciting public comment.

"They went so far beyond their powers, it's scary," said Margaret Lloyd, the vice chair of Scenic America's board of directors. "We tried very hard to work through proper channels, but the FHWA just turned a blind eye to us. This is a big deal for us. We've never filed a lawsuit. We're not the Sierra Club. We don't litigate on a regular basis."

The ultimate debate could center on the definition of "intermittent." Scenic America asserts that digital boards are intermittment because the messages change.

The Outdoor Advertising Association of America said the FHWA's decision simply re-affirmed a federal policy that allows digital billboards as long as they don't flash or feature animation. "Digital billboard ads are static, with tight controls on lighting and display times," the OAAA said in a statement.

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