Lamar Outdoor Advertising has filed a lawsuit in federal court challenging the two initiated measures passed by Rapid City voters June 7 that created restrictions on billboards within city limits.
In a 30-page complaint filed Monday in U.S. District Court in Rapid City, Lamar representatives said they cashed in 94 sign credits, the city's currency for sign companies to trade old signs for new, by removing or replacing billboards with smaller signs.
The city vote however, capped the number of credits at 20, preventing the company from erecting more signs within city limits. New measures also prohibit new digital billboards and restrict the size and spacing of static billboards.
"Lamar removed lawfully erected signs in exchange for sign credits under the previous credit ordinance with the expectation that Lamar would be able to use those credits in the future ..." the complaint states.
The company claims the new ordinance results in an unlawful taking of property without compensation under the Fifth Amendment.
The suit also claims the ordinance violates of the First Amendment right to free speech as well as violations of the South Dakota Constitution and statutory laws.
Lamar is seeking at least $75,000 for the lost sign credits or a ruling that the city code is unconstitutional.
Rapid City Mayor Sam Kooiker said the city was served Tuesday and is still reviewing the claims.
"The core issue is the initiated measure was passed by a wide margin by city voters," Kooiker said. "We'll vigorously and enthusiastically defend the citizens against the suit."
The first ballot measure banning new digital billboards and restricting size and space received 66.1 percent of the vote. The second, establishing the 20-year expiration date on sign credits, received 65.5 percent of the vote.
Kooiker said the policy question came before the voters, and "the citizens were well within their rights to bring forward the measure."
Although disappointed he is facing the city's first suit since becoming mayor, Kooiker said he was not surprised by the lawsuit.
"We'll be thoroughly reviewing it; we're in the process already, and a response will be coming soon," Kooiker said.
Earlier this month, another billboard owner, Epic Outdoor Advertising's president Brendan Casey, told the Journal the new ordinances were "legally indefensible."
In April, Casey challenged the measures at a city meeting, suggesting the city seek an outside legal opinion before the vote to save taxpayers the expense of a legal battle.
"You don't have the authority to amortize, you don't have the authority to take and you don't have the authority to ban," Casey said in April. "Both of these petitions, albeit wordy, that's the effect they have. I think the judge will see that in two seconds."
At that time, City Attorney Jason Green said he was confident the two measures would "meet muster under state and federal law."
Contact Nick Penzenstadler at 394-8415 or firstname.lastname@example.org