Once again, a controversial and national judicial ruling will effect billboard law. This time, United States District Court Judge for the Southern District of Texas Andrew Hanen issued on July 16, 2021 an injunction against the enforcement of the Deferred Action for Childhood Arrivals, commonly known as DACA. In the lawsuit, Texas and other States sued the United States alleging the 2012 Executive Order issued by President Obama violated the Federal Administrative Procedures Act (APA). Judge Hanen agreed, finding that DACA effectively created an administrative rule, which required observance of the hearing, publication, notice, comment, and other procedures outlined in the APA to impose such a legislative policy.
Of course, judicial challenges to these executive orders seeking a shorter cut to the desired policy than the one proscribed by the law aren’t limited to a particular political party. In addition to Obama’s DACA program, we just finished four years of challenges to President Trump’s executive orders on the wall, travel bans, and immigration.
Abuses of the APA aren’t limited to the federal government either. In the September 11, 2019 and October 19, 2020 editions of Billboard Insider, I discussed the Texas administrative rules making process, including how the Texas Administrative Procedures Act encourages public participation and transparency throughout this process, by mandating where and when to publish proposed rules, and opportunity for public comment on them in hearings and writings. I went on to explain, however, that sometimes government agencies, like the Texas Transportation Commission, attempt to implement the types of rules covered by these procedural safeguards, by calling them mere “guidance” or “policy memos.” In doing so, the agency argues, it need not involve the public as required under the APA, thereby taking a short cut to the implementation of the regulation.
Texas billboard operators are painfully aware of such an example in the March 2016 “Guidance” on the relocation and compensation due for billboards displaced by TxDOT highway projects. This two page memo was authored by the former Director of the Right of Way Division of TxDOT, and most importantly, it did not follow the notice, hearing, publication, and other due process protections mandated by the APA. It did, however, drastically change the procedure in the condemnation of billboards, including by eliminating sign relocation rights if the owner failed to agree with TxDOT’s offer for the cost of his sign before the condemnation special commissioners’ hearing. The practical result, therefore, is the grossly unfair bargaining power afforded TxDOT in dealing with owners who are losing their billboards to accommodate TxDOT’s highway projects.
A Texas billboard operator, John Gannon, Inc., challenged this Guidance in a lawsuit against TxDOT filed in Travis County District Court in 2018. In the case, Gannon argued that the APA (in Section 2001.038) itself explains when some sort of agency enactment will still be subject to its procedural safeguards, even where the agency attempts to disguise an administrative rule as a mere guidance: “The validity or applicability of a rule…may be determined in an action for declaratory judgment if it is alleged that the rule or its threatened application interferes with or impairs, or threatens to interfere with or impair, a legal right or privilege of the plaintiff.” Gannon also cited the Texas Courts that have attempted to preserve public participation and transparency in reviewing these agency efforts under the APA: “The Legislature, through the APA, has enabled affected citizens to invoke judicial jurisdiction… to test the ‘validity’ or ‘applicability’ of agency pronouncements that rise to the level of ‘rules’-including those that ‘interpret’ law or policy-and required that the further checks of transparency, public participation, and reasoned justification must precede such assertions of agency authority.” Teladoc, Inc vs Texas Medical Board.
After the trial court granted TxDOT’s motion and dismissed the case on sovereign immunity grounds, the Texas Court of Appeals, Third District at Austin, reversed and remanded in an opinion rendered on October 9, 2020. In reversing the trial court’s dismissal, the appellate court found that the Guidance was a “Rule” under the APA, which in turn expressly confers jurisdiction against governmental entities like TxDOT to determine whether such rules were enacted with the procedural safeguards mandated by the APA. TxDOT has filed a petition for review with the Texas Supreme Court, which in turn has requested briefing to determine whether to accept TxDOT’s application and adjudicate the case.
There is certainly room for disagreement on the types of political and policy issues that seem to dominate the media and our attention, but most agree that the implementation of sound administrative rules governing our lives and livelihoods ought to follow the checks and balances mandated by constitutional due process and the APA-including on controversial issues like the wall, travel bans, immigration, DACA, and even billboard regulation.
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