United States Court of Appeals, District of Columbia Circuit
September 25, 2015
from the United States District Court for the District of
Columbia (No. 1:13-cv-00093)
H. Lutz argued the cause for appellant. With him on the
briefs was Hope M. Babcock. Thomas M. Gremillion entered an
William D. Brinton was on the brief for amici curiae The
American Planning Association, et al. in support of
Jeffrey E. Sandberg, Attorney, U.S. Department of Justice,
argued the cause for federal appellees. With him on the brief
were Ronald C. Machen Jr., U.S. Attorney at the time the
brief was filed, and Mark R. Freeman, Attorney.
K. Shanmugam argued the cause for intervenor-appellee Outdoor
Advertising Association of America, Inc. With him on the
brief was Allison B. Jones.
Before: Pillard and Wilkins, Circuit Judges, and Ginsburg,
Senior Circuit Judge.
WILKINS, CIRCUIT JUDGE.
Highway Beautification Act ("HBA"), 23 U.S.C.
§ 131, requires the Federal Highway Administration
("FHWA") and each state to develop and implement
individual federal-state agreements ("FSAs"),
detailing, among other things, "size, lighting and
spacing" standards for the billboards now found towering
over many of our country's interstate highways. One of
those adopted standards, included in most states' FSAs,
prohibits those states from erecting any billboard with
"flashing, intermittent or moving" lights (the
"FSA lighting standards").
Scenic America is a non-profit organization which "seeks
to preserve and improve the visual character of America's
communities and countryside." Compl. ¶ 7, J.A. 10.
It challenges a guidance memorandum issued by the FHWA in
2007, which interpreted that prohibition on "flashing,
intermittent or moving" lights to permit state approval
of those digital billboards that met certain timing and
brightness requirements. Scenic argues that the guidance
memorandum must be invalidated because it (1) was not
promulgated using notice-and-comment procedures, and (2)
violates the HBA, and was therefore promulgated
"contrary to law" in violation of § 706 of the
Administrative Procedure Act ("APA"), 5 U.S.C.
§§ 551 et seq.
that we lack jurisdiction to hear Scenic's
notice-and-comment claim because Scenic has failed to
demonstrate that it has standing to bring that challenge, and
deny its § 706 claim on the merits.
1965, Congress enacted the Highway Beautification Act to
control "the erection and maintenance of outdoor
advertising signs, displays, and devices in areas adjacent to
the Interstate System . . . in order to protect the public
investment in such highways, to promote the safety and
recreational value of public travel, and to preserve natural
beauty." 23 U.S.C. § 131(a). The HBA penalizes
those states that fail to maintain "effective
control" over their advertising signs by permitting the
Secretary of Transportation to reduce their federal highway
funds by ten percent. Id. § 131(b).
maintain effective control, each state is required to, among
other things, negotiate an FSA with the Secretary that
establishes standards for the "size, lighting and
spacing" of billboards that come within 660 feet of the
Interstate. Id. § 131(d). The HBA requires that
those standards be "consistent with customary use."
Id. All fifty states entered into such FSAs, most of
which were written in the 1960s and 1970s. See Scenic
Am., Inc. v. U.S. Dep't of Transp. (Scenic
II), 49 F.Supp.3d 53, 57 (D.D.C. 2014). FHWA
regulations, promulgated under the HBA, require that states
"[d]evelop laws, regulations, and procedures" that
implement the standards contained in each state's FSA. 23
C.F.R. § 750.705(h). States must submit these laws,
regulations, and procedures to the FHWA's regional
offices, known as Division Offices, for approval.
Id. § 750.705(j). The FHWA has one Division
Office located in each state.
each of the FSAs was individually negotiated, most contain
similar terms. Nearly all of the FSAs contain a prohibition
against "flashing, " "intermittent, " and
"moving" lights. See, e.g., J.A. 120 (New
York FSA); J.A. 131 (Colorado FSA); J.A. 139 (North Carolina
billboard technology changed, states began considering or
passing laws that permitted digital billboards to be
displayed along the Interstate. See, e.g., J.A.
422-23 (letter from Indiana Department of Transportation to
Indiana FHWA Division Office informing the Division Office
that Indiana had passed a law permitting certain digital
billboards); J.A. 424 (letter from the Indiana FHWA Division
Office to the Indiana Department of Transportation
acknowledging the letter and agreeing that the digital
billboards discussed in Indiana's previous letter
"do not constitute flashing, intermittent or moving
lights"); J.A. 437 (letter from Arkansas Highway
Commission to Arkansas FHWA Division Office noting new
regulations permitting digital billboards); J.A. 183 (United
States Department of Transportation memorandum discussing
digital billboard in Nebraska). These billboards, sometimes
referred to as "commercial electronic variable message
signs" ("CEVMS"), typically use LED lights to
display a static advertisement that remains on the screen for
a specified period of time before quickly transitioning to a
different static advertisement. Advertisements typically
remain visible for around ten seconds, and usually take
approximately two seconds to transition to the next ad.
FHWA's Division Offices differed on whether digital
billboards complied with the FSA lighting standards.
Compare, e.g., J.A. 424 (Indiana Division Office
agreeing that digital billboards "do not constitute
flashing, intermittent or moving lights"), with,
e.g., J.A. 263 (Texas Division Office stating that
"[w]hile the technology for LED displays did not exist
at the time of the [FSA], the wording in the [FSA] clearly
prohibits such signs"). In 2007, the national FHWA
office weighed in. It issued to its Division Offices a
memorandum entitled "Guidance on Off-Premise Changeable
Message Signs" (the "Guidance" or "2007
Guidance"), a portion of which stated as follows:
Proposed laws, regulations, and procedures that would allow
permitting CEVMS subject to acceptable criteria (as described
below) do not violate a prohibition against
"intermittent" or "flashing" or
"moving" lights as those terms are used in the
various FSAs that have been entered into during the 1960s and
J.A. 535. The FHWA went on to identify those "acceptable
criteria" based on "certain ranges of acceptability
that have been adopted in those States that do allow
CEVMS." J.A. 534, 537 (recommending, among other things,
that each display generally remain static for between four
and ten seconds, and transition to a new display in one to
to a survey the FHWA distributed to states shortly before
issuing the 2007 Guidance, many states with FSAs that
included a ban on intermittent, flashing, or moving lights
permitted digital billboards before the FHWA issued the
Guidance. J.A. 531-32. The Division Office for at least two
states, Texas and Kentucky, did not permit digital billboards
prior to the 2007 Guidance. See Scenic Am., Inc. v. U.S.
Dep't of Transp. (Scenic I), 983 F.Supp.2d
170, 179-80 (D.D.C. 2013). After the Guidance, Texas began to
permit the use of digital billboards. Lloyd Decl. ¶ 9,
brought this suit against the United States Department of
Transportation, the federal executive department responsible
for implementation of the HBA; the FHWA, which promulgated
the 2007 Guidance; Ray LaHood, the Secretary of
Transportation at the time; and Victor Mendez, the
Administrator of FHWA at the time. Scenic did not include any
of the FHWA's Division Offices in this suit. Outdoor
Advertising Association of America, Inc. ("OAAA")
intervened as a defendant shortly after Scenic brought suit.
suit alleges two claims relevant to this appeal: (1) the 2007
Guidance constitutes a legislative, not interpretive rule,
thus violating § 553 of the APA, because it was not
promulgated using notice-and-comment procedures; and (2) the
Guidance violates § 706 of the APA because it creates a
new lighting standard that is not "consistent with
customary use, " as required by the HBA. Compl. ¶¶ 48-53, 57-62, J.A.
FHWA and the OAAA (collectively "Defendants") moved
to dismiss, contending that Scenic lacked standing, and that
the court lacked jurisdiction over the Guidance because it
did not constitute final agency action under the APA.
Scenic I, 983 F.Supp.2d at 172-73. The District
Court denied Defendants' motion as to both claims.
to our decision here, the District Court held, at the motion
to dismiss stage, that Scenic's requested relief would
redress its harm because "vacating the Guidance would
return the FHWA to agnosticism on the question [of permitting
digital billboards], leaving Division Offices free to draw
their own conclusions." Id. at 181. According
to the District Court, this would prevent Scenic from
"hav[ing] to police as intensively new digital-billboard
construction around the country." Id.
later moved for summary judgment, and the District Court
granted the motions, finding that the Guidance was not
subject to notice-and-comment requirements because it was an
interpretive, not legislative rule, and that it did not
violate the "consistent with customary use"
provision of the HBA. Scenic II, 49 F.Supp.3d at
59-71. Defendants, in their summary judgment briefing below,
did not again challenge Scenic's standing, and the