The neverending lawsuit

by Mike Kroll

While governments at all levels are struggling to pay their bills and provide essential services, the City of Galesburg has spent nearly $175,000 defending a decade-old ordinance that essentially prohibits most billboards within the city limits. The case is nowhere near resolution despite a July 1, 2009 deadline and there is no end in sight to the mounting legal fees and court costs.

The effectiveness of billboards as a form of advertising can be debated but their ugliness cannot. Most people with an opinion about billboards will tell you that they are often a blight on the rural highway landscape and an ugly scar when encountered in cities and towns. This is undoubtedly what motivated the Galesburg City Council to pass an ordinance in 1996 that strictly regulated billboards within the city limits and made it almost impossible to construct new ones in town. Under this ordinance, nearly all then-existing billboards became non-conforming uses under Galesburg zoning rules. Three years later in 1999, the city council amended that ordinance to require those non-conforming billboards to be brought into conformance by July 1, 2009 (yesterday).

Most of Galesburg's billboards are owned and serviced by a single sign company, Key Outdoor, with a local office on N. Henderson St. Not surprisingly, they were very unhappy with the original 1996 ordinance but their unhappiness grew into a very hot anger following passage of the 1999 amendment. They hired Galesburg attorney John Rehn and filed a lawsuit against the City of Galesburg in June, 2001. The Key lawsuit contends that the city ordinance, as amended, amounts to an unjust taking without any fair form of compensation as required under both Illinois law and the state constitution.

The actual lawsuit is detailed and complicated but it notes that all 33 of the Key Outdoor billboards in Galesburg were non-conforming in 1996 and under the 1999 amended ordinance 28 of those signs would be required to be either significantly altered or removed without any compensation from the City to Key Outdoor despite essentially destroying their Galesburg business with the stroke of a pen. Rehn has likened the new sign restrictions to a form of eminent domain where a unit of government forces a property owner to give up their property for the greater community good and is compensated by the government for the loss of said property. Only in this instance, the compensation is missing.

When this story began, Fred Kimble was mayor of Galesburg and Gary Goddard was City Manager (current City Manager Dane Bragg was 22 and fresh out of college). The city had paid a high powered Chicago law firm, Holland & Knight, to draft the new sign ordinance and there was strong support from the then-sitting city council despite months of animated discussion prior to passage of this ordinance. Ultimately only a single alderman (Gene Rude) dissented in the final vote.

The ordinance was very comprehensive and created meticulous standards for the legally permissible size, height, shape, concentration and location of billboards within Galesburg. The ordinance prohibits construction of billboards within 750 feet of one another; within 500 feet of any park, playground, church or school; or within 150 feet of a residentially zoned area. Billboards cannot reach a height exceeding 26 feet nor be more than 300 square feet in size nor may any sign location contain more than two facings. Those two facings cannot be double stacked either vertically or horizontally so they must be either back-to-back or in a V-configuration. Additionally, billboards cannot be illuminated between 1am and 6am if they are located within 500 feet of any residentially zoned property.

Taken together, these restrictions leave very few legal possibilities within the Galesburg city limits to construct a billboard. Key Outdoor was unhappy with the 1996 ordinance but since it allowed preexisting signs to be maintained as legal non-conforming uses, the biggest impact was on their inability to install new billboards. But the 1999 amendment changed everything for Key Outdoor. In their legal brief, Key Outdoor states “...the city's enforcement of this ordinance will eliminate much of Key Outdoor's property and business and fails to compensate Key Outdoor for costs relating to lost business, removal and/or alteration of the [billboards].”

One month after Rehn filed the Key Outdoor lawsuit in Knox County Circuit Court, Peter Friedman of Holland & Knight filed a motion on behalf of the city requesting that the case be transferred to Federal Court; U.S. District Court, Central District of Illinois in Peoria; and requesting a summary dismissal of the Key Outdoor suit. In January 2002, Federal Magistrate Judge John Gorman recommended that no federal action take place until the matter was settled in the circuit court and denied the city's request for summary dismissal.

In the federal system this recommendation went to Federal Judge Michael Mihm who initially accepted and adopted Gorman's recommendations in their entirety on February 8, 2003. The city’s attorneys almost immediately objected to Mihm's action in March 2003. In an unexpected turn, Mihm later reversed himself that August and granted the city's motion to dismiss. Key Outdoor immediately appealed and the case was off to the races in complicated and convoluted motions and responses that defy understanding by mere mortals. In May 2003, the U.S. Court of Appeals overturned Mihm's dismissal of the lawsuit and sent the lawsuit back to the Federal District Court. Mihm once again ruled that the case be returned to Knox County Circuit Court later that month.

The seemingly never-ending motions, counter-motions and responses kept on at a somewhat slower pace thereafter. In the last significant decision on the actual points of the lawsuit, Circuit Judge Harry Bulkeley ruled in April 2004 to dismiss some but not all of Key Outdoor’s complaint points but a number of critical issues remain unresolved to this day. Most recently the lawsuit has been sent back to Knox County Circuit Court once again as that July 1, 2009 deadline passes without resolution as to the primary issue of compensating Key Outdoor for elimination of the non-conforming billboards.

When he was Mayor, Bob Sheehan tried to work out a compromise that traded existing non-complying signs in residential areas within the city for locations on city-owned property at the fringes along Interstate-74 and U.S. Highway 34. Representatives of Key Outdoor were reportedly amenable to the plan but the City Council rejected it in executive session.

The Zephyr submitted a Freedom of Information request to the City earlier this month requesting an accounting of all expenses related to the on-going court battle over the billboard ordinance. We asked for a total of court costs, legal fees, consultant fees, expert fees, transportation costs, and so on from day one. What we received was something less than requested but nonetheless revealing. Galesburg Finance Director Gloria Osborn provided a heavily redacted printout of what appears to be all of the related legal expenses with the Holland & Knight law firm but nothing else. As of September, 2008 the city had paid nearly $175,000 to these lawyers. That doesn’t include the significant fees they were initially paid to advise in the initial drafting of the ordinance.

Most of the Key Outdoor billboards still stand as the deadline passes. Despite repeated attempts by Rehn to seek some kind of settlement, the Galesburg City Council and administration apparently remain opposed to any form of compensation for the forced removal of the company's existing billboards. So far the only winners seem to be the lawyers; big surprise!

7/2/09