Judge Gives Green Light to Clear Channel Lawsuit In Baltimore

Clear Channel Outdoor’s lawsuit against the city of Baltimore over its proposed fee on billboard advertising may proceed, following a Maryland federal judge’s rejection this week of the city’s motion to dismiss the case.
 
In a ruling issued on Monday of this week, Judge George L. Russell, III, rejected the motion brought by the mayor and city council of Baltimore to toss the Clear Channel lawsuit. It alleges that the city’s law levying a fee on billboard advertising (passed in June of last year) represents an attempt to illegally regulate commercial speech in violation of the First and Fourteenth Amendments.
 
Clear Channel first brought the lawsuit in August 2013, and the city filed a motion to dismiss in September of last year. The city’s lawyers asked that Judge Russell dismiss the Clear Channel lawsuit on the grounds of civil procedure, arguing that the court doesn’t have jurisdiction over this local tax issue, and also arguing Clear Channel failed to state a legal claim based on its constitutional arguments.
 
However, Russell ruled that the case may proceed because the proposed charge is a “fee,” not a tax, meaning the city is not protected by the Tax Injunction Act, which prevents the federal government from interfering with the collection of state taxes when state courts can handle any legal challenges. Russell concluded that the charge is a fee because its stated purpose is to regulate billboards for aesthetic and safety purposes.
 
Russell also found that Clear Channel did present a legal claim, since the law could be seen as an arbitrary interference with free speech, especially as the aesthetic and safety issues it is supposed to address have already been dealt with by the city’s zoning laws.
 
The law passed in June 2013 would charge billboard operators a fee of $5 per square foot for static billboards and $15 per square foot for digital displays. Clear Channel, which operates 95% of the billboards in Baltimore, claims it would have to pay $1.5 million in extra fees, on top of the real-estate taxes it already pays.
 
Clear Channel had previously offered the city more than $1 million in free outdoor advertising if it would withdraw the billboard tax, but this proposal was rejected the city government, which needed cash to fill a budget shortfall of around $30 million. At the same time, Clear Channel warned that it may decide not to carry free PSAs in Baltimore if the tax stays on the books.

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