Thomas v. Schroer

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

MICHAEL COLLINS,

Chapter 11 Trustee,

Plaintiff,

v. No. 13-cv-02987-JPM-cgc

CLAY BRIGHT, Commissioner of the

Tennessee Department of Transportation,

in his official capacity,

Defendant.

REPORT AND RECOMMENDATION ON

DEFENDANT’S MOTION TO DISSOLVE THE PERMANENT INJUNCTION ON THE

CROSSROAD FORD SIGN OR, IN THE ALTERNATIVE, FOR CLARIFICATION AS

TO THE SCOPE AND EXTENT OF THE PERMANENT INJUNCTION IN THE EVENT

OF A SALE OF THE CROSSROAD FORD SIGN

Before the Court is Defendant Clay Bright1, in his official capacity as Commissioner of

the Tennessee Department of Transportation’s (“TDOT”) (hereinafter “the State”), Motion to

Dissolve the Permanent Injunction on the Crossroads Ford sign or, in the Alternative, for

Clarification as to the Scope and Extent of the Permanent Injunction in the Event of a Sale of the

Crossroads Ford Sign (“Motion to Dissolve”) (D.E. # 477). The instant motion has been referred

to the United States Magistrate Judge for Report and Recommendation (D.E. # 480). For the

1 This Court’s docket continues to reflect John Schroer (“Schroer”), Commissioner of Tennessee Department of

Transportation, as the Defendant; however, the United States Court of Appeals has ordered that Clay Bright

(“Bright”) be substituted for Schroer as the current Commissioner of the Tennessee Department of Transportation.

(D.E. # 431). Accordingly, it is RECOMMENDED that the Clerk of Court be directed to correct the docket to

reflect this substitution.

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reasons set forth herein, it is RECOMMENDED that the State’s Motion to Dissolve be

GRANTED.

I. Procedural History

This action concerns alleged First Amendment violations that occurred when agents of

the State of Tennessee (“the State”) sought to remove then-Plaintiff William H. Thomas’s

(“Thomas”)2 non-commercial billboard pursuant to the Billboard Regulation and Control Act of

1972 (“Billboard Act”), Tennessee Code Annotated Sections 54-21-101, et seq.

An advisory jury trial was held from September 19, 2016 until September 22, 2016.

(D.E. # 320, 321, 322, 328, 329). On March 31, 2017, the District Court entered its Order &

Memorandum Finding Billboard Act an Unconstitutional, Content-Based Regulation of Speech.

(D.E. # 356); Thomas v. Schroer, 248 F. Supp. 3d 868 (W.D. Tenn. 2017). The District Court

held that the Billboard Act regulated “both commercial and non-commercial speech by banning

some forms of both on the basis of content and therefore does not survive First Amendment

scrutiny.” Thomas, 248 F. Supp. 3d at 872; see also id. 871-78. Specifically, the District Court

set forth that the offending provisions were the exceptions contained in Tennessee Code

Annotated Sections 54-21-103(a)(1)-(3) (2017) and 54-21-107(a)(1)-(2) (2017). Id. at 872-73

(listing these sections as the “provisions at issue”). The Court also found the that the offending

provisions of the Billboard Act were not severable, stating as follows:

The Court notes that if it were clear from the face of the statute that the Tennessee

legislature would have enacted the Billboard Act with the unconstitutional on-

premises / off-premises distinction omitted, the Court could sever the

2 On December 8, 2020, the District Court entered an Order Granting Chapter 11 Trustee’s Motion to Substitute as

Plaintiff. (D.E. # 469). Therein, the Court determined that Michael E. Collins (“Collins”), the Chapter 11 Trustee

of Thomas’ Bankruptcy Estate, should be substituted as Plaintiff as he is now the real party in interest. On February

11, 2021, Collins filed notice of a Suggestion of Death of William H. Thomas, Jr. (D.E. # 475).

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unconstitutional provisions while the Billboard Act’s constitutional provisions

stay in place. The Court, however, is unpersuaded that the Billboard Act, as

written, is severable in this manner.

Id. at 895 n.12 (internal citations omitted).3

On May 17, 2017, the State filed a Rule 54(b) Motion to Reconsider the Court’s Ruling

that the Tennessee Billboard Act is Not Severable (“Motion to Reconsider”) (D.E. # 371). On

September 20, 2017, the District Court entered its Order Denying Motion for Reconsideration

and Order Concerning Remedies. (D.E. # 374); Thomas v. Schroer, No. 13-cv-02987-JPM-cgc,

2017 WL 6489144 (W.D. Tenn. 2017). Therein, the District Court set forth in further detail why

there was neither a clear nor prudent line at which to sever the offending portions of the

Billboard Act. Id. at *1-*5. Specifically, the District Court explained that nothing on the face of

the statute indicates that the Tennessee legislature would have enacted the Billboard Act without

the unconstitutional provisions. Id. at *2-*4. Thus, the Court determined that “it is for the

Tennessee State Legislature—and not this Court—to clarify the Legislature’s intent regarding

the Billboard Act . . . .” Id. at 5.

On October 6, 2017, the Court entered its Judgment, which contains the text of the

permanent injunction and states as follows:

JUDGMENT BY COURT. This action having come before the

Court on Plaintiff William H. Thomas, Jr.’s Complaint, filed

December 17, 2013 (D.E. # 1); the issues in this case having been

tried and an advisory jury having rendered a verdict in favor of

Defendant the State of Tennessee (D.E. # 329); the Court having

3 The District Court further explained the terms “on premise” and “off-premise,” which are not contained in either

Tennessee Code Annotated Section 54-21-103 (2017) or 54-21-107 (2017). Specifically, in practice, the State refers

to signs that the Billboard Act regulated as “off-premise” and the signs that it did not regulate as “on-premise.” 248

F. Supp. 3d at 873. State agents utilized Rule 1680-02-030.06 to make this distinction, and that Rule follows the

language contained in the statute that an “on-premise sign” not only must be located “on the same premises as the

activity or property advertised” but must have as its purpose the “identification of the activity, or its products or

services” or “the sale or lease of the property on which the sign is located, rather than the purpose of general

advertising.” Id. (citations omitted). Thus, although the State uses in practice terminology that is not found in these

provisions of the law, it is effectively referring to the same distinction as contained therein.

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entered the Order & Memorandum Finding Billboard Act an

Unconstitutional, Content-Based Regulation of Speech (D.E. #

356); Defendant John Shorer having filed a Rule 54(b) motion to

reconsider the Court’s ruling that the Tennessee Billboard Act is

not severable (D.E. # 371); the Court having denied that motion

(D.E. # 375); and all other matters in the case having been decided,

. . .

IT IS THEREFORE ORDERED, ADJUDGED, AND

DECREED that, in accordance with the Court’s Order Finding

Billboard Act an Unconstitutional, Content-Based Regulation of

Speech (D.E. # 356), the State of Tennessee and its agents are

hereby enjoined from removing or seeking removal of Plaintiff

William H. Thomas, Jr.’s Crossroads Ford sign pursuant to the

Billboard Regulation and Control Act of 1972 (“Billboard Act”),

Tennessee Code Annotated §§ 54-21-101, et seq. Thomas’s other

requests for relief have been denied or are now moot. . . .

On September 11, 2019, the Sixth Circuit affirmed the District Court’s ruling. See

Thomas v. Bright, 937 F.3d 721 (6th Cir. 2019); see also (D.E. # 437). The Sixth Circuit did not

address the severability question because the State did not raise it on appeal. Id. at 728-29.

On June 22, 2020, the Tennessee General Assembly amended the Billboard Act to be

effective immediately. 2020 Tennessee Pub. Acts Ch. 706; see id. § 12 (“This act shall take

effect upon becoming law, the public welfare requiring it.”). In so doing, the Tennessee General

Assembly declared that “Tennessee Code Annotated, Title 54, Chapter 21 [of the Billboard Act],

is amended by deleting the chapter in its entirety and substituting instead the following[.]” 2020

Tennessee Pub. Acts. Ch. 706, § 8. Tennessee Code Annotated Section 54-21-101 (2020) states

that “[t]his chapter shall be known and may be cited as the ‘Outdoor Advertising Control Act of

2020’” (“Outdoor Advertising Control Act”). Id.4

4 The substantive differences between the current provisions of the Outdoor Advertising Control Act and the

provisions of the Billboard Act that were in effect when the District Court’s injunction was issued are discussed,

infra, Sections II.b-e.

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On April 19, 2021, the State filed its Motion to Dissolve. (D.E. # 477). The State argues

that the permanent injunction has been mooted in three ways: (1) by the replacement of the

Billboard Act with the Outdoor Advertising Control Act; (2) by Thomas’s death; and, (3) by

Thomas having been divested of ownership and control of the Crossroads Ford sign prior to his

death. (D.E. # 477). Alternatively, the State requests that, in the event the Court determines that

the permanent injunction should remain in place, it is appropriate that the Court issue an order

that establishes the rights, responsibilities, benefits, and burdens accruing to all parties, including

the State, Plaintiff, and a future purchaser of the Crossroads Ford sign, relative to the

continuation of the permanent injunction in place at the Crossroads Ford sign. Id.

On May 3, 2021, Collins filed the Chapter 11 Trustee’s Objection to Defendant’s Motion

to Dissolve the Permanent Injunction. (D.E. # 478). Collins argues as follows: (1) that the

enactment of the Outdoor Advertising Control Act5 does not moot, vacate, or dissolve the

permanent injunction; (2) that Collins stands in the shoes of Thomas such that his death does not

alter the bankruptcy estate’s rights; (3) that the permanent injunction runs for the benefit of the

bankruptcy estate; (4) that Thomas’s pre-death divestiture is irrelevant; (5) that the Motion to

Dissolve the Permanent Injunction constitutes a violation of the automatic stay; and, (6) that the

permanent injunction’s scope should be enlarged to include successors to the bankruptcy estate

and commercial speech. (D.E. # 478).

5 Collins refers to the Outdoor Advertising Control Act as the “2020 Billboard Act”; however, as the Tennessee

General Assembly has expressly titled it the “Outdoor Advertising Control Act of 2020” and has stated that it should

be cited as such, see Tenn. Code Ann. § 54-21-101 (2021), this Court will refer to it accordingly.

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II. Applicable Law

a. Law Governing Dissolution of Permanent Injunctions

Rule 60(b) of the Federal Rules of Civil Procedure governs motions to dissolve

permanent injunctions. Rufo v. Inmates of Suffolk Jail, 502 U.S. 367, 380 (1992); Déjà vu of

Nashville, Inc. v. Metro. Gov’t of Nashville & Davidson Cty., Tennessee, 274 F.3d 377, 403 (6th

Cir. 2001). Rule 60(b) states that, “[o]n motion and just terms, the court may relieve a party or

its legal representative from a final judgment, order, or proceeding” when “the judgment has

been satisfied, released, or discharged,” when “applying it prospectively is no longer equitable,”

and when “any other reason . . . justifies relief.” Fed. R. Civ. P. 60(b)(5)-(6).6

“‘[I]f a party seeks to have a decree set aside entirely, he or she has to show that the

decree has served its purpose, and there is no longer any need for the injunction.” Déjà Vu, 466

F.3d at 394 (citing Moore’s Fed. Practice § 60.47(2)(c) (3d ed. 2005) (additional citations

omitted)). One basis for the dissolution of an injunction is that “[t]he foundation upon which the

claim for injunctive relief was built has crumbled.’” Déjà vu, 466 F.3d at 394 (citing Sweeton v.

Brown, 37 F.3d 1162, 1164 (6th Cir. 1994) (en banc)). In Sweeton, the Sixth Circuit further

acknowledged that “[t]he law changes and clarifies itself over time” and that the “proper respect

for previously entered judgments” does not require that “old injunctions remain in effect when

the old law on which they were based has changed.” 37 F.3d at 1164.

6 It is worth noting, as the Sixth Circuit has done, that, “even before the Federal Rules of Civil Procedure were

enacted, the prospective features of injunctions were subject to modification by the district court.” Déjà vu of

Nashville, Inc. v. Metro. Gov’t of Nashville & Davidson Cty., 466 F.3d 391, 394 (citing United States v. Swift & Co.,

286 U.S. 106, 114 (1932) (stating that “a continuing decree of injunction directed to events to come is subject as

always to adaptation as events may shape the need”).

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b. The Billboard Act’s Location Restrictions on Billboards and Signs

The Billboard Act contained location restrictions for billboards and signs but excepted

certain signs pursuant to Tennessee Code Annotated Section 54-21-103(1)-(5) (2017).

Specifically, the law as in effect when the permanent injunction was issued by the District Court

was as follows:

§ 54-21-103. Restrictions; exceptions

No outdoor advertising shall be erected or maintained within six hundred sixty

feet (660’) of the nearest edge of the right-of-way and visible from the main

traveled way of the interstate or primary highway systems in this state except the

following:

(1) Directional or other signs

(2) Signs, displays and devices advertising the sale or lease of property on which

they are located;

(3) Signs, displays and devices advertising activities conducted on the property

on which they are located;

(4) Signs, displays and devices located in the areas that are zoned industrial or

commercial under authority of law and whose size, lighting and spacing are

consistent with customary use as determined by agreement between the state and

the secretary of transportation of the United States; and

(5) Signs, displays and devices located in unzoned commercial or industrial areas

as may be determined by agreement between the state and the secretary of

transportation of the United States.

Tenn. Code Ann. § 54-21-103(a) (2017).

c. The Outdoor Advertising Control Act’s Location Restrictions

The Outdoor Advertising Control Act states as follows:

§ 54-21-103. Restrictions on outdoor advertising devices on interstate and

primary highways

(a) An outdoor advertising device shall not be erected or maintained within six

hundred sixty feet (660’) of the nearest edge of the right-of-way and visible

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from the main traveled way of the interstate or primary highway systems in

this state except the following:

(1) Outdoor advertising devices located in areas that are zoned industrial

or commercial under authority of local government law and whose

size, lighting, and spacing are consistent with customary use as

determined by agreement between the state and the secretary of

transportation of the United States; and

(2) Outdoor advertising devices located in unzoned commercial or

industrial areas as may be determined by agreement between the state

and the secretary of transportation of the United States.

Tenn. Code Ann. § 54-21-103(a)(1)-(2) (2021).

d. The Billboard Act’s Permit and Tag Restrictions on Billboards and

Signs

The Billboard Act further exempted certain billboards and signs from complying with the

permit and tag restrictions found in Tennessee Code Annotated Section 54-21-104 (2017). These

exemptions were set forth in Tennessee Code Annotated Section 54-21-107 (2017):

§ 54-21-107. Exemptions

. . .

(1) Those advertising activities conducted on the property on which they are

located;

(2) Those advertising the sale or lease of property on which they are located; and

(3) Those that are official as established under authority of any statute or

regulation promulgated with respect to the outdoor advertising.

. . . .

Tenn. Code Ann. § 54-21-107(a)(1)-(3).

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e. The Outdoor Advertising Control Act’s Deletion of Permit and Tag

Exemptions

The Outdoor Advertising Control Act continues to have permit and tag restrictions as set

forth in Tennessee Code Annotated Section 54-21-104 (2021). However, the law does not

contain any exemptions; instead, Tennessee Code Annotated Section 54-21-107 (2021) now

contains unrelated regulations on the commissioner’s acquisition of outdoor advertising devices

along the interstate and primary highway systems.

III. Proposed Analysis and Conclusions of Law

The District Court’s Order & Memorandum Finding Billboard Act an Unconstitutional,

Content-Based Regulation of Speech focused on the content-based restrictions in Tennessee

Code Annotated Sections 54-21-103(1)-(3) (2017) and 54-21-107(a)(1)-(2). The District Court’s

Judgment ordered that, in accordance with the aforementioned Order, “the State of Tennessee

and its agents are hereby enjoined from removing or seeking removal of Plaintiff William H.

Thomas, Jr.’s Crossroad Ford sign pursuant to the Billboard Regulation and Control Act of 1972

. . . .”

Put simply, the Billboard Act is no longer in effect, and the Outdoor Advertising Control

Act does not contain the provisions the District Court found to be constitutionally objectionable.

Although the District Court concluded at that time that the offending provisions were not

severable because the face of the Billboard Act did not evidence that the Tennessee General

Assembly intended them to be so, the Tennessee General Assembly has now spoken by

amending its law to remove them. Further, the parties do not argue that any of the amended

language in the Outdoor Advertising Control Act effectively replaces or replicates any of the

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offending content-based restrictions. Thus, because the offending portions of the law are no

longer in effect, it is RECOMMENDED that dissolution of the injunction is appropriate pursuant

to Rule 60(b) of the Federal Rules of Civil Procedure.7 8 9

SIGNED this 12th day of October, 2021.

s/ Charmiane G. Claxton

CHARMIANE G. CLAXTON

UNITED STATES MAGISTRATE JUDGE

ANY OBJECTIONS OR EXCEPTIONS TO THIS REPORT MUST BE FILED WITHIN

FOURTEEN (14) DAYS AFTER BEING SERVED WITH A COPY OF THE REPORT.

28 U.S.C. § 636(b)(1)(C). FAILURE TO FILE THEM WITHIN FOURTEEN (14) DAYS

MAY CONSTITUTE A WAIVER OF OBJECTIONS, EXCEPTIONS, AND ANY

FURTHER APPEAL.

7 Collins argues that the District Court should apply an exception set forth by other Circuit Courts that the repeal or

amendment of a statute should not moot an injunction “when a party has a vested right established by the

unconstitutionality of a statute.” See, e.g., Crown Media, LLC v. Gwinnett Cty., Georgia, 380 F.3d 1317, 1328 (11th

Cir. 2004); Nat’l Advert. Co. v. Town of Babylon, 900 F.2d 551, 554 n.2 (2d Cir. 1990). As the Sixth Circuit has not

recognized such an exception, the Magistrate Judge will not recommend otherwise.

8 Collins further argues that, “if TDOT seeks to remove the Crossroad Ford sign as non-conforming” under the

Outdoor Advertising Control Act, “it must provide just compensation to the Bankruptcy Estate under the takings

clause of the Constitution.” Not only has Collins not raised this request by motion, but Defendant has also not had

an opportunity to respond to this argument. There is also no indication that TDOT has sought to act in any way with

respect to the Crossroad Ford sign, thus raising questions as to the ripeness of such a request. Further, it is not clear

that issues raised in a Response rather than by motion would be properly considered by a Magistrate Judge on

referral. See 28 U.S.C. § 636(b)(1)(A) (discussing the referral of “motion[s].”) Accordingly, this Report and

Recommendation has not addressed this question.

9 This Report and Recommendation does not express any views or make any recommendations relating to the

constitutionality of the Outdoor Advertising Control Act, as this question was not raised in Defendant’s Motion to

Dissolve the Permanent Injunction.

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