OCA & NFIB Join Forces in Support of Private Property Owners in Texas and Nationwide

In July, the National Federation of Independent Business (NFIB) Small Business Legal Center and Owners’ Counsel of America (OCA) joined together to file an amici curiae brief  (copy embedded below) in support of the property owner in State of Texas v. Clear Channel Outdoor, Inc., case number 13-0053, urging the Texas Supreme Court to uphold the award of just compensation to a billboard owner when the land on which its billboards were located was acquired by eminent domain.

The case involves the condemnation of two parcels of land along Interstate 10 leased by Clear Channel Outdoor for its billboards. The state exercised its power of eminent domain to take land for a road expansion project.  It refused, however, to condemn and pay for the billboards located on the land arguing that the billboards were personal property, not “realty,” and could simply be relocated. The State ordered their removal and the billboards were damaged during the removal. The owner, Clear Channel Outdoor, filed an inverse condemnation action to recover just compensation for the taking of its billboards.  [Disclosure: Clear Channel Outdoor is represented in this action by OCA Texas attorney H. Dixon Montague.]

At the center of the litigation are two questions: whether the billboards are improvements to the property and must be paid for, and whether the government should compensate an owner for structures removed or damaged when the government condemns the underlying land for a public project.  The trial court opined that billboards are not moveable personal property but rather realty as they are affixed to the land.  Further, the court concluded that the State should have condemned and paid just compensation to the owner.  The Texas Court of Appeals upheld the trial court’s order and the State of Texas appealed to the Texas Supreme Court.

“As a baseline principle of federal law, the government cannot avoid its obligation to pay compensation under the Fifth Amendment when it invades, destroys, or physically appropriates private property, which it certainly did here” explained Robert H. Thomas, a Director with Damon Key Leong Kupchak Hastert in Honolulu.  Thomas, the Hawaii member of OCA, worked with NFIB attorney Luke Wake in drafting the brief.

The brief filed by OCA and the NFIB argues that billboards are not designed to be moved and that the most valuable part of a billboard is not the materials from which it is made, but rather its ability to generate income. In view of this reality, the brief stresses two points. First, the trial court and the Court of Appeals both correctly concluded 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,” which takes into account the billboard’s ability to generate income, is required by the Just Compensation Clause of the federal and Texas constitutions, which require the “full and perfect equivalent” of the property taken. In those circumstances, just compensation owed the owner must account for future income.

OCA was honored to join with the NFIB as amici in this case because the question before the Texas Supreme Court requires the Court to consider fundamental principles applicable in all eminent domain cases where property valuation is at issue which is of concern not only to commercial billboard owners in Texas, but all property owners in the state and nationwide.

The Texas Supreme Court will hear oral argument on September 17, 2014.

More on the case from Robert Thomas including links to all briefs filed with the Texas Supreme Court is available here and here.

Read NFIB’s statement on the case here.

Brief Amici Curiae of NFIB Small Business Legal Center and Owners’ Counsel of America, Texas v. Clear Chann… by robert_thomas_5

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