The Texas Supreme Court has agreed to review Texas v. Clear Channel Outdoor, Inc., a decision in which the Court of Appeals held that the owner of billboards was entitled to compensation when the land on which the billboards were located was condemned.
Texas needed to widen the freeway, and condemned the land on which the billboards were located. It refused to pay just compensation on the grounds that the billboards were personal property and not "realty," and thus the owner could simply move them. The State issued a removal order. In response, the owner filed an inverse condemnation action to recover just compensation for the billboard takings.
The court concluded the billboards are not moveable property, but are fixed to the ground, and that the state should have condemned and paid for them. It also overruled the state's objection to the method of determining just compensation, which allowed the jury to consider the "income capitalization" approach (i.e., how much income from the billboards would generate). The State argued that only the raw material value of the billboards should be considered. The Court of Appeals affirmed.
We're eventually going to post all of the briefs in the case (stay tuned for posts on that later this week), but we're going to start with the amici brief that National Federation of Independent Business Small Business Legal Center and Owners' Counsel of America filed. [Disclosure: we had a small part in writing the brief on behalf of OCA.] Here's the summary of our arguments:
Billboards are not designed to be moved. And the most valuable part of a billboard is not steel, concrete, and wood -- but its potential to generate income. In view of this reality, Amici stress two points in this filing.First, the Court of Appeals was correct in holding that the State must compensate the owner when it orders a billboard removed if the billboard was previously affixed to the ground, or if removal results in damage or destruction of the billboard. Second, the income capitalization approach is required by the Just Compensation Clause -- especially where, as is often the case in billboard valuation cases, there is a dearth of data to determine comparable sales. The U.S. Supreme Court has recognized that the Just Compensation Clause requires the "full and perfect equivalent" of the property taken, which means that where the taken property generates income, the compensation awarded must account for future income.
Brief at 18 (footnote omitted).
In the coming days, we will post the full set of merits and amicus briefs which have been filed in the case. In the meantime, here's more on the issue here ("Texas Justices Take Up Clear Channel's Condemnation Case"), and here ("Hey Look at Me!": A Glance at Texas' Billboard Regulation and Why All Roads Lead to Compromise, 44 Texas Tech L. Rev. 429 (2010)).
