The City of Tacoma has taken the first step to enforce its new, stricter stance on billboards by asking a judge to formalize the death of its settlement agreement with Clear Channel.
In a court filing this week, lawyers for the city argue that even though both parties have signed it, the agreement is unenforceable and should be invalidated. The year-old agreement envisioned the city changing its code to allow digital billboards, and last week the city banned them.
City attorney Elizabeth Pauli said Friday that the legal move was not in response to any renewed lawsuit against Tacoma by Clear Channel. Pauli called the invalidation request an “independent, proactive, affirmative step to clear any hurdles for enforcement of our ordinance that’s in place.”
That ordinance, passed last week, bans digital billboards and calls for removing at least 190 traditional ones within six months. The ordinance reaffirmed an amortization period that began in 1997 as “more than reasonable” compensation for sign removal.
Clear Channel Outdoors’ Seattle division president Olivia Lippens did not return a call for comment Friday. Lippens said last month that the new code attempts “to re-address just compensation matters that have already been mutually agreed upon within the settlement.”
Money is at the heart of arguments over the settlement. Lippens has said it doesn’t matter whether digital signs are banned because the agreement still would be fully enforceable. That argument is rooted in the idea of “severability,” which allows certain parts of a contract to stand even if others fall.
The settlement says, among other things, that if the company is ordered to remove signs, “the city will compensate Clear Channel for the fair market value of those interests.”
Clear Channel has not yet formally responded to the city’s court filing. Based on Lippens’ remarks last month, Pauli said the city disagrees with Clear Channel’s interpretation.
“You’ve seen their public statements to the effect that, this (new) ordinance means that the city will be paying,” she said. “And this is our step signalling that this is not what it means, and our path should be clear for this ordinance.”
City officials signed the agreement when it passed, in July 2010. Clear Channel didn’t sign it until last month, a year later and long after it was clear that the city was backing away from one of its central tenants. Both parties’ signatures on the legal document have chambered a live round that now gets fired into court.
“This is really unusual,” said John Baker, a Minneapolis-based attorney who represents local governments and is against digital billboards. “That the city signed (the agreement) and it remained unsigned for quite awhile is unusual.”
Baker and Chuck Thompson, executive director of the International Municipal Lawyers Association, said Friday that the settlement agreement won’t live or die on the issue of signatures alone. Thompson said city officials’ signing immediately, followed by Clear Channel’s long delay, could bolster the city’s argument that the agreement was the beginning of a settlement, not the end.
“Let’s say you and I are having a dispute,” Thompson said. “I want to resolve it. I’m not so sure you do. But I send you a (signed) document saying I’ll pay you ten thousand dollars if you agree to resolve this dispute.
“If you sign it, you get ten thousand dollars,” he said. But if you don’t, that implies there’s still work to do. There has to be a meeting of the minds before there’s an effective agreement,” Thompson said.
The city’s legal filing lists several reasons the agreement is invalid, most based on the underlying issue of digital billboards: The agreement envisions them, and they’re now banned. The city also cites Mayor Marilyn Strickland’s remarks at a June 14 council meeting as an effective withdrawal of the offer.
“We now understand that a lot of these terms won’t work,” she said at the time.
Tacoma’s request to invalidate a settlement agreement is the latest novel legal step the city has taken since the 1980s to regulate billboards. In 1997 the city passed an ordinance requiring many billboards to be removed by 2007. Before that went into effect, Clear Channel sued. The city then negotiated a settlement that would have allowed Clear Channel to build some digital billboards in exchange for taking down dozens of traditional signs and giving up permits to more. In exchange for the “cap and trade” program, Clear Channel dropped its lawsuit in September.
Tacoma’s journey is full of potential precedents, including whether its amortization program is adequate compensation.
Anti-billboard activists nationwide and local governments closer to home are watching. Clear Channel has offered a similar cap-and-trade program to University Place, its city attorney has said, but city officials there are keeping an eye on what happens in Tacoma.
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