Rapid City, South Dakota – United States District Court Chief Judge Jeffrey L. Viken has ruled in the matter of Lamar Advertising of South Dakota, Inc., a South Dakota corporation, and TLC Properties Inc., d/b/a Lamar TLC Properties, Inc., a Louisiana corporation vs. the City of Rapid City, a South Dakota municipal corporation.
In 2011, a group of citizens known as Scenic Rapid City proposed two citizen-initiated ordinances, The Citizens’ Billboard Control Initiative and The Citizens’ Reform Initiative for Billboard Sign Credits, known as the “Citizen Initiatives” in this case. The design of the Citizen Initiatives was to impose reasonable regulation with respect to new construction of electronic or digital illuminated signs in Rapid City. On June 7, 2011, a City, election was held and the Citizen Initiatives were placed on the ballot. Following a public vote, approximately 65 percent of the electorate favored the Citizen Initiatives that constituted a substantial majority of the electorate.
On Aug. 26, 2011, Lamar Advertising Company (NASDAQ:LAMR) and TLC Properties Incorporated., d/b/a Lamar TLC Properties, Inc., a Louisiana corporation, commenced an action against the City, asserting that the Citizen Initiatives were contrary to South Dakota Codified Law, the United States Constitution, and the South Dakota Constitution. The City retained the law firm of Goodsell Quinn to defend Plaintiff Lamar’s damage claim, preserve the voice of the electorate, and uphold the law.
The crux of plaintiff Lamar’s case rested on the assumption that the Citizen Initiatives, passed into law, resulted in a taking of private property without just compensation and violated the plaintiff’s freedom of speech and equal protection rights secured by the United States and South Dakota Constitutions. Plaintiff Lamar alleged significant damage by the City of Rapid City.
Four years later in early November 2014, trial commenced in the Western District of the United States District Court of South Dakota before Chief Judge Jeffrey L. Viken.
On conclusion of the four-day trial, Viken requested briefs from Plaintiff Lamar and the City to clarify legal positions and motions presented before, during and following trial. The plaintiff and City filed their respective briefs with the court in December 2014.
On Sept. 29, 2015, the court ruled.
First the trial court (Judge Viken’s Court) found that the “plaintiffs failed to plead a plausible claim for entitlement to damages,” which was supported by legal precedent by the trial court’s ruling.
Next, the Plaintiff allegation that the City’s law favoring reasonable regulation constituted a regulatory taking was unfounded. Essentially a regulatory taking is the taking of private property without equitable compensation by a government entity, and is protected by the Taking Clause of the Fifth Amendment and available to the South Dakota through the Due Process component of the Fourteenth Amendment of the United States Constitution.
The plaintiff’s claim that the City illegally took property, was refuted by defense counsel’s examination of the plaintiff’s general manager and vice president. At trial, defense counsel exposed the fact that the plaintiff did not even apply for the permits necessary to convert eleven signs to digital, an essential element of the plaintiff’s damage claim.
The City was exposed to nearly $11 million of alleged damages as asserted by Plaintiff Lamar, which was reduced through pretrial proceedings to approximately $600,000.
Through the trial courts findings and the Sept. 29 Order of the Court, the City has no liability for damages to Lamar or TLC Properties and the case has been dismissed.
“Cases like this take a lot of time to resolve,” says attorney G. Verne Goodsell, partner of the Goodsell Quinn law firm in Rapid City and lead counsel for the City. In this case, we rigorously defended the City and the electorate from a variety of issues brought by Lamar in an effort to penalize the electorate and City in their support of reasonable regulation.
“This is a monumental moment for the citizens of Rapid City who overwhelmingly voted to support reasonable regulation of digital and vinyl signs through the Citizen Initiatives in 2011. The court’s ruling sends a clear message to large, out of state businesses, that they cannot simply come into our city and bully their way through the judicial system in a concerted effort to penalize the City and its electorate for enacting reasonable regulations and law. The citizens have spoken in favor of reasonable regulation of outdoor signs and we defended. Ideally, Lamar has learned that our citizens and City’s leadership is resolved to defend reasonable regulation and law,” adds Goodsell.
The plaintiff has 30 days to appeal the trial court’s decision to the Eighth Circuit Court of Appeals.
About Goodsell Quinn – Trial Lawyers
Goodsell Quinn Trial Lawyers represent clients in business and commercial litigation, municipal regulation, accident and injury law and securities law. Attorney G. Verne Goodsell is a partner in the Rapid City law firm of Goodsell Quinn, LLP. To learn more visit www.goodsellquinn.com.
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