Thomas v. Schroer

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TENNESSEE

WESTERN DIVISION

MICHAEL COLLINS, Chapter 11 Trustee, )

)

Plaintiff, )

) Case No. 2:13-cv-02987-JPM-cgc

v. )

)

CLAY BRIGHT, Commissioner of the )

Tennessee Department of Transportation in )

his official capacity, )

)

Defendant. )

ORDER ADOPTING THE REPORT AND RECOMMENDATION FOR DISSOLVING

THE PERMANENT INJUNCTION

Before the Court is the Report and Recommendation filed by U.S. Magistrate Judge

Charmiane G. Claxton on October 12, 2021 (ECF No. 481) with respect to Defendant’s 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 (ECF No. 477). The Magistrate Judge submits that Defendant’s

Motion should be granted. (ECF No. 481 at PageID 8629.) The Magistrate Judge recommends

“that dissolution of the injunction is appropriate pursuant to Rule 60(b) of the Federal Rules of

Civil Procedure.” (Id. at PageID 8637.) For the reasons discussed below, the Court

OVERRULES Plaintiff’s objections and ADOPTS the Magistrate Judge’s Report and

Recommendation in its entirety.

I. PROCEDURAL AND FACTUAL BACKGROUND

On October 6, 2017, the Court issued a Judgment enjoining “the State of Tennessee and

its agents . . . 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.” (ECF No. 377.)

(emphasis added.) This Judgment came after the Court’s Order Finding Billboard Act an

Unconstitutional, Content-Based Regulation of Speech, filed on March 31, 2017, and the

Court’s Order Denying Motion for Reconsideration and Order Concerning Remedies, filed on

September 20, 2017. (ECF Nos. 356, 374.) This Court’s constitutionality ruling was then

upheld by the Sixth Circuit. Thomas v. Bright, 937 F.3d 721 (2019), cert. denied, 141 S. Ct.

194 (2020).

William H. Thomas, Jr. (“Mr. Thomas”) was the original plaintiff in this action. Mr.

Thomas later filed for bankruptcy, and the Court granted a motion to substitute Michael E.

Collins (Mr. Collins), the Chapter 11 Trustee of Mr. Thomas as the plaintiff. (ECF No. 469.)

Mr. Thomas passed away on February 7, 2021. (ECF No. 475.)

On April 19, 2021, Defendant filed a 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. (ECF No. 477.)

Plaintiff filed a Response in Opposition on May 3, 2021. (ECF No. 478.) The Motion was

referred to the Magistrate Judge on August 6, 2021. (ECF No. 480.) The Magistrate Judge’s

Report and Recommendation, which recommended granting the Motion, were filed on October

12, 2021. (ECF No. 481.) Plaintiff filed objections to the Report and Recommendation on

October 26, 2021. (ECF No. 482.) Defendant filed a Response to Plaintiff’s objections on

October 26, 2021. (ECF No. 483.) Defendant then filed a Supplement to that Response on

November 1, 2021. (ECF No. 484.)

II. LEGAL STANDARD

“Within 14 days after being served with a copy of the recommended disposition, a party

may serve and file specific written objections to the proposed findings and recommendations.”

Fed. R. Civ. P. 72(b)(2). “When no timely objection is filed, the court need only satisfy itself

that there is no clear error on the face of the record in order to accept the recommendation.”

Fed. R. Civ. P. 72(b) advisory committee note.

When a timely objection has been filed, “[t]he district judge must determine de novo

any part of the magistrate judge’s disposition that has been properly objected to.” Fed. R. Civ.

P. 72(b)(3). The portions of a magistrate judge’s recommendation as to which no specific

objections were filed are reviewed for clear error. See Fed. R. Civ. P. 72(b) advisory committee

note; Howard v. Sec’y of Health & Human Servs., 932 F.2d 505, 509 (6th Cir. 1991) (noting

that when a party makes a general objection, “[t]he district court’s attention is not focused on

any specific issues for review, thereby making the initial reference to the magistrate useless”).

“A general objection to the entirety of the magistrate’s report has the same effects as would a

failure to object.” Howard, 932 F.2d at 509. Moreover, the “failure to properly file objections

constitutes a waiver of appeal.” See id. at 508 (citing United States v. Walters, 638 F.2d 947,

950 (6th Cir. 1981)).

III. ANALYSIS

The Court reviews de novo the portions of the Report and Recommendation to which

Plaintiff objects. The Court reviews the remainder of the Report and Recommendation for clear

error. Fed. R. Civ. P. 72(b)(3).

Plaintiff has three objections to the Report and Recommendation: (1) that the enactment

of the Outdoor Advertising Control Act does not moot the permanent injunction, (2) that the

permanent injunction is an asset of the bankruptcy estate and thus protected by the automatic

stay, and (3) that even if the permanent injunction is dissolved, the change to the permanent

injunction does not alter the Court’s determination that the Billboard Act was unconstitutional.

(ECF No. 482 at PageID 8644–47.)

A. The Enactment of the Outdoor Advertising Control Act

Plaintiff contends that “[t]he enactment of the Outdoor Advertising and [sic] Control

Act does not moot or establish a basis for the dissolution of the permanent injunction.” (Id. at

PageID 8644.) In Defendant’s initial Motion to Dissolve, he states, “The permanent injunction

specifically enjoins [the Tennessee Department of Transportation, (“TDOT”)] ‘. . . from

removing or seeking removal of Plaintiff Willliam H. Thomas, Jr.’s sign pursuant to the

Billboard Regulation and Control Act of 1972 . . .’” (ECF No. 477-1 at PageID 8578.)

Defendant contends that “the provisions for content-based regulation of speech in the Billboard

Act that this court found unconstitutional as applied to non-commercial speech . . . have been

amended and replaced by content-neutral provisions in the Outdoor Advertising Control Act of

2020.” (Id. at PageID 8578–79.) As a result, Defendant contends that the issues in this case

are now moot, and the permanent injunction should be dissolved. (Id. at PageID 8579–80.)

In response, Plaintiff contends that the Outdoor Advertising Control Act does not moot

the permanent injunction because “[b]ut for the 1972 Billboard Act, the Crossroads Ford Sign

could exist, that is the raison d´etre for the permanent injunction.” (ECF No. 478 at PageID

8594.) As a result, Plaintiff contends that “if TDOT seeks to remove the Crossroads Ford sign

as non-conforming under the 2020 Billboard Act, it must provide just compensation to the

Bankruptcy Estate under the takings clause of the Constitution.” (Id.) In support of his

argument that the change in law fails to moot the injunction, Plaintiff asserts that one of the

exceptions to a repeal of a law mooting an injunction “is when a party has a vested right

established by the unconstitutionality of the statute.” (Id. at PageID 8594–95.) (citing Crown

Media, LLC v. Gwinnett Cty., Ga., 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).)

In the Sixth Circuit, permanent injunctions should be dissolved when:

[T]hey no longer meet the requirements of equity. The law changes and clarifies

itself over time. Neither the doctrine of res judicata or waiver nor a proper respect

for previously entered judgments requires that old injunctions remain in effect when

the old law on which they were based has changed.

Déjà Vu of Nashville, Inc. v. Metro. Gov’t of Nashville & Davidson Cty., 466 F.3d 391, 395

(6th Cir. 2006) (quoting Sweeton v. Brown, 26 F.3d 1162, 1166–67 (6th Cir. 1994)).

Additionally, because there is no controlling Sixth Circuit authority that recognizes

Plaintiff’s asserted exception to dissolving an injunction when the law on which it was based

has changed, the Court will not create such an exception here. The permanent injunction

enjoined removal of the “Crossroads Ford sign pursuant to the Billboard Regulation and Control

Act of 1972” (ECF No. 377), and it is undisputed that the portions of that law the Court found

unconstitutional are no longer in effect pursuant to the Outdoor Advertising Control Act of 2020

(see ECF No. 477-1 at PageID 8579; ECF No. 478 at PageID 8594). As a result, the permanent

injunction, which enjoins TDOT from removing the sign pursuant to a law that has since been

replaced, is DISSOLVED AS MOOT.

B. The Effect of the Automatic Stay on this Motion

Plaintiff also objects to the Magistrate Judge’s Report and Recommendation because

“[t]he filing of the Dissolution Motion constitutes a violation of the automatic stay protecting

property of the Bankruptcy Estate.” (ECF No. 482 at PageID 8646.) In his response to

Defendant’s Motion, Plaintiff contends that “[t]he permanent injunction and the Crossroads

Ford sign are both property of the Bankruptcy Estate that are shielded by the automatic stay.”

(ECF No. 478 at PageID 8601.) In Defendant’s Supplemental Response to Plaintiff’s

Objections to the Report and Recommendation, Defendant contends that, based on Tennessee

law, the permanent injunction was not a property interest of Mr. Thomas or subsequently, the

Bankruptcy Estate, because it “was designed not to protect a sign, but to protect the First

Amendment rights of the deceased.” (ECF No. 484 at PageID 8662.) As a result, Defendant

contends, this permanent injunction is not property of the Bankruptcy Estate and thus not subject

to the automatic stay. (Id. at PageID 8659.)

A bankruptcy estate is comprised of “all legal or equitable interests of the debtor in

property as of the commencement of the case.” 11 U.S.C. § 541(a) (emphasis added). The

Court’s permanent injunction was to protect Mr. Thomas’s First Amendment rights in freedom

of speech, not to protect his property interests in the billboard itself. (See ECF No. 374 at

PageID 7208–10.) Because the permanent injunction did not implicate Mr. Thomas’s property

interests, a dissolution of the permanent injunction does not violate the automatic stay.

C. The Unconstitutionality of the Billboard Act

Plaintiff’s final objection to the Report and Recommendation is that “any change [such

as this dissolution] should confirm the res judicata character of this Court’s determination of

the unconstitutionality of the Billboard Act remains in effect.” (ECF No. 482 at PageID 8647.)

Neither the Defendant’s Motion to Dissolve nor the Report and Recommendation of the

Magistrate Judge, however, indicates that the Court’s determination of the Billboard Act’s

constitutionality would be or should be overturned by the dissolution of the injunction. (See

generally ECF Nos. 477-1, 481.) Dissolving the permanent injunction because it is now moot

does not change the Court’s holding that the Billboard Act was unconstitutional. As such, this

objection does not affect or alter the conclusions of the Magistrate Judge and is overruled as

moot.

IV. Conclusion

After a de novo review of the portions of the Report and Recommendation to which

Plaintiff objects and the record related thereto, the Court has reached the same conclusions as

the Magistrate Judge. Plaintiff’s objections are overruled. Upon review of the remainder of the

Magistrate Judge’s Report and Recommendation, the Court has not identified any clear error

and concurs with the Magistrate Judge’s findings. The Report and Recommendation is,

therefore, ADOPTED in full. Defendant’s Motion to Dissolve the Permanent Injunction on the

Crossroads Ford Sign (ECF No. 477) is GRANTED.

SO ORDERED, this 9th day of November, 2021.

/s/ Jon P. McCalla

JON P. McCALLA

UNITED STATES DISTRICT JUDGE