Carole Media LLC v. New Jersey Transit Corp.

550 F.3d 302, 2008 U.S. App. LEXIS 25818, 2008 WL 5303456
CourtCourt of Appeals for the Third Circuit
DecidedDecember 22, 2008
Docket07-3966
StatusPublished
Cited by16 cases

This text of 550 F.3d 302 (Carole Media LLC v. New Jersey Transit Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carole Media LLC v. New Jersey Transit Corp., 550 F.3d 302, 2008 U.S. App. LEXIS 25818, 2008 WL 5303456 (3d Cir. 2008).

Opinion

OPINION OF THE COURT

SLOVITER, Circuit Judge.

In 2004, after a scandal involving the licensing of billboards on New Jersey property, New Jersey took steps to revamp its billboard program. Thereafter, two of the companies that had licenses to display those billboards filed suit against the New Jersey Transit Corporation (“NJ Transit”), the lessor, and All Vision LLC (“All Vision”), its managing agent. The suit was initiated by CBS Outdoor Inc., which held licenses for 240 billboards. This suit was dismissed by the District Court. CBS Outdoor Inc. filed a brief appealing the District Court’s order dis *304 missing its claim but subsequently advised this court that it had settled with defendants. The remaining plaintiff, Carol Media LLC, whose suit was also dismissed, and who has licenses for 3 billboards, did not file a brief on appeal but advised this court it would rely on portions of CBS’ brief. It has not settled, and thus its appeal from the District Court’s dismissal of its claim that NJ Transit violated the Takings Clause is before us. See CBS Outdoor Inc. v. New Jersey Transit Corp., No. 06-2428, 2007 WL 2509633 (D.N.J. Aug. 30, 2007).

The premise of Carole Media’s appeal is that the defendants took without a valid public purpose certain of Carole Media’s property rights arising from its operation of billboards on NJ Transit’s land.

I.

A. Background

NJ Transit is a public corporation organized by the State of New Jersey in order to establish and provide public transportation services. See N.J. Stat. Ann. §§ 27:25-1-27:25-24. NJ Transit is statutorily authorized to lease its property, N.J. Stat. Ann. § 27:25-5(o), including specifically to “lease or otherwise contract for advertising in or on the equipment or facilities of the corporation,” N.J. Stat. Ann. § 27:25 — 5(s). Accordingly, NJ Transit (through a managing agent) has long issued “licenses” to private parties that allow such parties to use NJ Transit land for the erection and maintenance of billboards and other forms of outdoor advertisement.

Carole Media obtained two licenses in 2001 (to operate one billboard in Wayne, New Jersey and another in Bridgewater) and a third license in 2002 (again in Wayne). Although the licenses expressly provide for a renewable term of one year and termination upon thirty-days notice, Carole Media alleges, as summarized by the District Court, that the “general industry practice is for railroads not to terminate a license with an outdoor advertising company that is performing its obligations under the license, unless the railroad needs to use the land for development ... or is going to sell the land.” CBS Outdoor, 2007 WL 2509633, at *1. Further, Carole Media alleges that, in reliance upon this industry practice, it has invested in excess of $1 million in the licensing, permitting, and development of its three billboard sites on NJ Transit property. Indeed, Carole Media contends that, prior to the new billboard program, its property rights in these billboards were valued in excess of $4 million.

Carole Media identifies several property interests allegedly protected by the Takings Clause arising out of its operation of billboards on NJ Transit land. First, Carole Media contends that the licenses issued by NJ Transit constitute property. Second, pursuant to the New Jersey Roadside Sign Control and Outdoor Advertising Act (“Outdoor Advertising Act”), N.J. Stat. Ann. §§ 27:5-5-27:5-28, billboard operators must obtain a license and permit from the New Jersey Department of Transportation (“NJ DOT”) in order to erect, use or maintain any sign for outdoor advertising. N.J. Stat. Ann. § 27:5-8. Carole Media contends that the NJ DOT permits it obtained for its billboards on NJ Transit land also constitute property. Further, Carole Media contends that its “rights to operate billboards in [Wayne and Bridgewater] today constitute very valuable property rights” because recent amendments to the Outdoor Advertising Act not applicable at the time of its permit applications provide that NJ DOT cannot issue a permit without the applicant first obtaining local approval, and these municipalities would not approve new billboards in those locations. Complaint at ¶ 41. Finally, Carole Media *305 alleges that it possesses property rights in the physical billboard structures themselves.

The series of events leading to NJ Transit’s alleged taking of the above property rights began with a 2003 scandal that Carole Media refers to as “Billboardgate.” Billboardgate involved allegations that two top aides to the governor of New Jersey “used political clout to arrange for permits to build billboards in locations that would be highly lucrative, even though some of the locations were governed by ordinances prohibiting all outdoor advertising.” CBS Outdoor, 2007 WL 2509633, at *3. In response, then-Governor James McGreevey created the Billboard Policy and Procedure Task Force (“Task Force”), which reviewed New Jersey’s existing policies for the sale, lease, development, construction and siting of billboards. The Task Force ultimately made numerous recommendations, including a proposal that state entities adopt competitive bidding for the lease of all billboard sites on public property.

Shortly after the Task Force issued its recommendations, NJ Transit solicited bids by those seeking to act as NJ Transit’s billboard managing agent. The District Court stated that the five-year contract was eventually awarded to All Vision in 2004 because the company, in light of its proposed “Monetization Program” discussed below, was the bidder most responsive to NJ Transit’s desire to “maximize income, foster innovative strategies, and execute the Task Force recommendations.” CBS Outdoor, 2007 WL 2509633, at *6.

Subsequently, the New Jersey legislature amended the Outdoor Advertising Act and related statutes in response to the Task Force’s recommendations (the “2004 Amendments”). The 2004 Amendments provide that “a State entity ... shall not enter into any contract or agreement for the sale, lease or license of real property owned or controlled by it ... with any person ... for the purpose of displaying any advertisement ... without publicly advertising for bids.” N.J. Stat. Ann. § 52:31-l.la. However, the 2004 Amendments allowed state entities to renew existing licenses without public bidding for up to five years. Id.

In addition to requiring public bidding for billboard sites on state-owned land, the 2004 Amendments also imposed new requirements on the NJ DOT permitting process. Specifically, NJ DOT may not issue a permit for a new billboard “unless a public hearing has been held ... and, where the permit applicant is a private entity, all relevant approvals required by the municipality [in which the billboard will be located] have been received by the private entity seeking the permit.” N.J. Stat. Ann. § 27:5-8(b). Finally, the 2004 Amendments imposed a cap on the aggregate square footage of outdoor advertising permissible on various state entities’ property, including NJ Transit. N.J. Stat. Ann. § 27:5-27.

Consistent with the 2004 Amendments, NJ Transit renewed Carole Media’s existing licenses in 2004 and 2005.

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550 F.3d 302, 2008 U.S. App. LEXIS 25818, 2008 WL 5303456, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carole-media-llc-v-new-jersey-transit-corp-ca3-2008.