Clear Channel Outdoor wants its lucrative digital billboards scattered all over Los Angeles, and it’s not taking “no” as an answer from the California Courts.  

In an 11-page letter to the city, lawyers for the communications company threatened to sue Los Angeles for more than $100 million if the city doesn’t get over its judicial victory in December and strike a new, favorable deal with the company. The court invalidated a settlement between the city, Clear Channel, CBS Outdoor and Regency Outdoor that allowed the companies to convert hundreds of standard billboards to digital.

The dispute began in 2002 when Clear Channel, along with Vista Media, CBS Outdoor and Regency Outdoor, sued the city over its off-site sign ban and a program to conduct a fee-based inventory and inspection of all existing billboards. The city won in federal court but the companies fought on, taking their battle to state courts where they argued that a $386 fee for the proposed billboard inventory-inspection program was confiscatory and illegal.

The city settled with Clear Channel and CBS Outdoor and in 2006 agreed to allow the conversion of more than 800 conventional billboards to digital, and grandfathered in hundreds of billboards erected or modified illegally. Summit Media, a smaller sign company that felt slighted by the negotiations it wasn’t a party to, sued and won a Superior Court ruling in 2009 invalidating the agreement. However, the court allowed 100 digital billboards that were already in operation to continue. That decision was reversed by a three-judge panel of the California's 2nd District Court of Appeal.

The case has been appealed to the California Supreme Court, but in the meantime, a 32-member working group, which includes the city, billboard companies and community activists, is trying to craft a new agreement proposal by March.

Clear Channel is not waiting for the group. If the company doesn’t win a reversal in the high court, it will sue to have recognized as valid permits that were already issued and which, it claims, “may be maintained independent of the settlement agreement under other provisions of the Los Angeles Municipal Code.” Clear Channel values those permits at more than $100 million, and it wants a new deal or compensation for its loss.

Digital billboards are controversial. Some people find them unsightly, annoying and a distraction to motorists. Nearby residents complain of having their homes bathed in intrusive light and describe them as a blight on their neighborhoods.

Billboard companies argue that their free-speech rights are being stepped on, a lot of people find the signs interesting and entertaining, and the billboard provide a public service. Clear Channel opened its letter to the city by touting its digital role in disseminating information about fugitive ex-cop Christopher Dorner, Carmegeddon and Amber Alerts.

–Ken Broder

To Learn More:

Digital Billboard Company Issues $100-Million Threat against L.A. (by David Zahniser, Los Angeles Times)

Eric Garcetti Owned Clear Channel Stock When He Voted For Digital Billboard Giveaway (by Gene Maddaus, LA Weekly)

Billboard Company Threatens City with $100 Million Lawsuit over Digital Signs (by Karen Foshay, KCET)

Appeals Court Voids “Poison” Deal, Orders Lights Out for L.A. Digital Billboards (by Ken Broder, AllGov California)