Scenic America, Inc. v. United States Department of Transportation

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 25, 2015 Decided September 6, 2016

No. 14-5195

SCENIC AMERICA, INC.,

APPELLANT

v.

UNITED STATES DEPARTMENT OF TRANSPORTATION, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:13-cv-00093)

Daniel H. Lutz argued the cause for appellant. With

him on the briefs was Hope M. Babcock. Thomas M.

Gremillion entered an appearance.

William D. Brinton was on the brief for amici curiae The

American Planning Association, et al. in support of petitioner.

Jeffrey E. Sandberg, Attorney, U.S. Department of

Justice, argued the cause for federal appellees. With him on

the brief were Ronald C. Machen Jr., U.S. Attorney at the

time the brief was filed, and Mark R. Freeman, Attorney.

2

Kannon K. Shanmugam argued the cause for

intervenor-appellee Outdoor Advertising Association of

America, Inc. With him on the brief was Allison B. Jones.

Before: PILLARD and WILKINS, Circuit Judges, and

GINSBURG, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge WILKINS.

WILKINS, Circuit Judge: The Highway Beautification

Act (“HBA”), 23 U.S.C. § 131, requires the Federal Highway

Administration (“FHWA”) and each state to develop and

implement individual federal-state agreements (“FSAs”),

detailing, among other things, “size, lighting and spacing”

standards for the billboards now found towering over many of

our country’s interstate highways. One of those adopted

standards, included in most states’ FSAs, prohibits those

states from erecting any billboard with “flashing, intermittent

or moving” lights (the “FSA lighting standards”).

Plaintiff-Appellant Scenic America is a non-profit

organization which “seeks to preserve and improve the visual

character of America’s communities and countryside.”

Compl. ¶ 7, J.A. 10. It challenges a guidance memorandum

issued by the FHWA in 2007, which interpreted that

prohibition on “flashing, intermittent or moving” lights to

permit state approval of those digital billboards that met

certain timing and brightness requirements. Scenic argues

that the guidance memorandum must be invalidated because it

(1) was not promulgated using notice-and-comment

procedures, and (2) violates the HBA, and was therefore

promulgated “contrary to law” in violation of § 706 of the

Administrative Procedure Act (“APA”), 5 U.S.C. §§ 551 et

seq.

3

We hold that we lack jurisdiction to hear Scenic’s

notice-and-comment claim because Scenic has failed to

demonstrate that it has standing to bring that challenge, and

deny its § 706 claim on the merits.

I.

A.

In 1965, Congress enacted the Highway Beautification

Act to control “the erection and maintenance of outdoor

advertising signs, displays, and devices in areas adjacent to

the Interstate System . . . in order to protect the public

investment in such highways, to promote the safety and

recreational value of public travel, and to preserve natural

beauty.” 23 U.S.C. § 131(a). The HBA penalizes those

states that fail to maintain “effective control” over their

advertising signs by permitting the Secretary of

Transportation to reduce their federal highway funds by ten

percent. Id. § 131(b).

To maintain effective control, each state is required to,

among other things, negotiate an FSA with the Secretary that

establishes standards for the “size, lighting and spacing” of

billboards that come within 660 feet of the Interstate. Id.

§ 131(d). The HBA requires that those standards be

“consistent with customary use.” Id. All fifty states

entered into such FSAs, most of which were written in the

1960s and 1970s. See Scenic Am., Inc. v. U.S. Dep’t of

Transp. (Scenic II), 49 F. Supp. 3d 53, 57 (D.D.C. 2014).

FHWA regulations, promulgated under the HBA, require that

states “[d]evelop laws, regulations, and procedures” that

implement the standards contained in each state’s FSA. 23

C.F.R. § 750.705(h). States must submit these laws,

regulations, and procedures to the FHWA’s regional offices,

4

known as Division Offices, for approval. Id. § 750.705(j).

The FHWA has one Division Office located in each state.

Although each of the FSAs was individually negotiated,

most contain similar terms. Nearly all of the FSAs contain a

prohibition against “flashing,” “intermittent,” and “moving”

lights. See, e.g., J.A. 120 (New York FSA); J.A. 131

(Colorado FSA); J.A. 139 (North Carolina FSA).

As billboard technology changed, states began

considering or passing laws that permitted digital billboards to

be displayed along the Interstate. See, e.g., J.A. 422-23

(letter from Indiana Department of Transportation to Indiana

FHWA Division Office informing the Division Office that

Indiana had passed a law permitting certain digital

billboards); J.A. 424 (letter from the Indiana FHWA Division

Office to the Indiana Department of Transportation

acknowledging the letter and agreeing that the digital

billboards discussed in Indiana’s previous letter “do[] not

constitute flashing, intermittent or moving lights”); J.A. 437

(letter from Arkansas Highway Commission to Arkansas

FHWA Division Office noting new regulations permitting

digital billboards); J.A. 183 (United States Department of

Transportation memorandum discussing digital billboard in

Nebraska). These billboards, sometimes referred to as

“commercial electronic variable message signs” (“CEVMS”),

typically use LED lights to display a static advertisement that

remains on the screen for a specified period of time before

quickly transitioning to a different static advertisement.

Advertisements typically remain visible for around ten

seconds, and usually take approximately two seconds to

transition to the next ad.

The FHWA’s Division Offices differed on whether

digital billboards complied with the FSA lighting standards.

5

Compare, e.g., J.A. 424 (Indiana Division Office agreeing

that digital billboards “do[] not constitute flashing,

intermittent or moving lights”), with, e.g., J.A. 263 (Texas

Division Office stating that “[w]hile the technology for LED

displays did not exist at the time of the [FSA], the wording in

the [FSA] clearly prohibits such signs”). In 2007, the

national FHWA office weighed in. It issued to its Division

Offices a memorandum entitled “Guidance on Off-Premise

Changeable Message Signs” (the “Guidance” or “2007

Guidance”), a portion of which stated as follows:

Proposed laws, regulations, and procedures that would

allow permitting CEVMS subject to acceptable criteria

(as described below) do not violate a prohibition against

“intermittent” or “flashing” or “moving” lights as those

terms are used in the various FSAs that have been

entered into during the 1960s and 1970s.

J.A. 535. The FHWA went on to identify those “acceptable

criteria” based on “certain ranges of acceptability that have

been adopted in those States that do allow CEVMS.” J.A.

534, 537 (recommending, among other things, that each

display generally remain static for between four and ten

seconds, and transition to a new display in one to four

seconds).

According to a survey the FHWA distributed to states

shortly before issuing the 2007 Guidance, many states with

FSAs that included a ban on intermittent, flashing, or moving

lights permitted digital billboards before the FHWA issued

the Guidance. J.A. 531-32. The Division Office for at

least two states, Texas and Kentucky, did not permit digital

billboards prior to the 2007 Guidance. See Scenic Am., Inc.

v. U.S. Dep’t of Transp. (Scenic I), 983 F. Supp. 2d 170,

6

179-80 (D.D.C. 2013). After the Guidance, Texas began to

permit the use of digital billboards. Lloyd Decl. ¶ 9, J.A. 41.

B.

Scenic brought this suit against the United States

Department of Transportation, the federal executive

department responsible for implementation of the HBA; the

FHWA, which promulgated the 2007 Guidance; Ray LaHood,

the Secretary of Transportation at the time; and Victor

Mendez, the Administrator of FHWA at the time. Scenic did

not include any of the FHWA’s Division Offices in this suit.

Outdoor Advertising Association of America, Inc. (“OAAA”)

intervened as a defendant shortly after Scenic brought suit.

Scenic’s suit alleges two claims relevant to this appeal:

(1) the 2007 Guidance constitutes a legislative, not

interpretive rule, thus violating § 553 of the APA, because it

was not promulgated using notice-and-comment procedures;

and (2) the Guidance violates § 706 of the APA because it

creates a new lighting standard that is not “consistent with

customary use,” as required by the HBA. 1 Compl. ¶¶ 48-53,

57-62, J.A. 17-19.

The FHWA and the OAAA (collectively “Defendants”)

moved to dismiss, contending that Scenic lacked standing,

and that the court lacked jurisdiction over the Guidance

1

Scenic abandoned a third claim on appeal – that the Guidance

improperly creates new lighting standards, in contravention of the

procedures for creating new standards set forth in the HBA. See

Br. for Defendants-Appellees [hereinafter “FHWA Br.”], Scenic

Am., Inc. v. U.S. Dep’t of Transp., No. 14-5195 (D.C. Cir. Feb. 20,

2015), Doc. No. 1538780, at 16 & n.7.

7

because it did not constitute final agency action under the

APA. Scenic I, 983 F. Supp. 2d at 172-73. The District

Court denied Defendants’ motion as to both claims. Id.

Relevant to our decision here, the District Court held, at

the motion to dismiss stage, that Scenic’s requested relief

would redress its harm because “vacating the Guidance would

return the FHWA to agnosticism on the question [of

permitting digital billboards], leaving Division Offices free to

draw their own conclusions.” Id. at 181. According to the

District Court, this would prevent Scenic from “hav[ing] to

police as intensively new digital-billboard construction

around the country.” Id.

Defendants later moved for summary judgment, and the

District Court granted the motions, finding that the Guidance

was not subject to notice-and-comment requirements because

it was an interpretive, not legislative rule, and that it did not

violate the “consistent with customary use” provision of the

HBA. Scenic II, 49 F. Supp. 3d at 59-71. Defendants, in

their summary judgment briefing below, did not again

challenge Scenic’s standing, and the District Court did not

discuss Scenic’s standing in its written Opinion granting

Defendants’ summary judgment motions.

II.

We begin, as we must, by addressing our jurisdiction to

review Scenic’s appeal. Because Scenic must demonstrate its

standing separately as to each of the two claims it brings on

appeal, see Catholic Soc. Serv. v. Shalala, 12 F.3d 1123, 1125

(D.C. Cir. 1994), we find that, although Scenic has standing to

bring its claim concerning FHWA’s alleged § 706 violation,

Scenic has failed to demonstrate it has standing to bring its

notice-and-comment claim.

8

A.

As has been expressed time and time again, “[f]ederal

courts are not courts of general jurisdiction; they have only

the power that is authorized by Article III of the Constitution

and the statutes enacted by Congress pursuant thereto.”

Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541

(1986). As Chief Justice Marshall observed, “[i]f the

judicial power extended to every question under the

constitution it would involve almost every subject proper for

legislative discussion and decision [and] if to every question

under the laws and treaties of the United States it would

involve almost every subject on which the executive could

act.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341

(2006) (quoting 4 PAPERS OF JOHN MARSHALL 95 (C. Cullen

ed. 1984)) (emphases omitted). Thus, without studious

adherence to the metes and bounds of our jurisdiction as

imposed by Article III, Chief Justice Marshall warned that

“the other departments [of the government] would be

swallowed up by the judiciary.” Id. The standing

requirements of Article III are therefore grounded in respect

for the separation of powers tenets that are the foundation of

our system of government, Valley Forge Christian Coll. v.

Ams. United for Separation of Church & State, Inc., 454 U.S.

464, 471-74 (1982), and they help “prevent the judicial

process from being used to usurp the powers of the political

branches,” Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138,

1146 (2013). Observing our Article III limitations is

therefore always important, and particularly so in a case such

as this, where we are asked to invalidate an action of the

Executive branch.

The “irreducible constitutional minimum of standing”

requires that a plaintiff demonstrate three elements: (1) injury

in fact; (2) causation; and (3) redressability. Lujan v. Defs.

9

of Wildlife, 504 U.S. 555, 560-61 (1992). “The party

invoking federal jurisdiction bears the burden of establishing

these elements”; “each element must be supported in the same

way as any other matter on which the plaintiff bears the

burden of proof, i.e., with the manner and degree of evidence

required at the successive stages of the litigation.” Id. at

561.

Thus, the plaintiff must meet this burden at the outset of

each phase. “At the pleading stage, general factual

allegations of injury resulting from the defendant’s conduct

may suffice . . . .” Id. And a court’s determination that a

plaintiff has established standing at the motion to dismiss

stage by alleging sufficient facts in her pleadings is only the

first step, because that finding does not obviate the court’s

responsibility to ensure that the plaintiff can actually prove

those allegations when one or both parties seek summary

judgment. So even where the court denies a motion to

dismiss based on lack of standing, “[i]n response to a

summary judgment motion, . . . the plaintiff can no longer

rest on such mere allegations, but must set forth by affidavit

or other evidence specific facts [establishing standing].” Id.

(internal quotation marks omitted). 2 If, upon review of the

2

Our treatment of standing in cases that come to us directly on

administrative review is instructive. Because these petitions for

administrative review bypass the district court and come to us

directly, we treat them as a district court would in deciding a

motion for summary judgment. See Sierra Club v. EPA, 292 F.3d

895, 899 (D.C. Cir. 2002). In Sierra Club, we held, “mindful of

our independent obligation to be sure of our jurisdiction,” that the

petitioner there had failed to establish its burden as to standing.

Id. at 898, 902. We explained that “[t]he petitioner’s burden of

production in the court of appeals is . . . the same as that of a

plaintiff moving for summary judgment in the district court: it must

10

evidence, the court determines that the plaintiff has not

introduced sufficient evidence into the record to at least raise

a disputed issue of fact as to each element of standing, the

court has no power to proceed and must dismiss the case.

See, e.g., Clapper, 133 S. Ct. at 1148-49 (dismissing case

where plaintiff did not raise an issue of fact as to standing at

summary judgment).

In addition, “every federal appellate court has a special

obligation to ‘satisfy itself not only of its own jurisdiction, but

also that of the lower courts in a cause under review.’”

Bender, 475 U.S. at 541 (quoting Mitchell v. Maurer, 293

U.S. 237, 244 (1934)). If we determine that the District

Court was without jurisdiction, then “we have jurisdiction on

appeal, not of the merits but merely for the purpose of

correcting the error of the lower court in entertaining the

suit.” Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,

95 (1998) (quoting Arizonans for Official English v. Arizona,

520 U.S. 43, 73 (1997)).

We review the District Court’s decision (or lack thereof)

as to standing de novo, Info. Handling Servs., Inc. v. Def.

Automated Printing Servs., 338 F.3d 1024, 1029 (D.C. Cir.

2003), and hold that Scenic has not met its burden of

support each element of its claim to standing ‘by affidavit or other

evidence.’” Id. at 899 (quoting Defs. of Wildlife, 504 U.S. at 561).

Just as we must ensure our jurisdiction over petitions brought to us

directly, so too must the district court assure itself of its jurisdiction

before assessing a summary judgment motion on the merits.

11

establishing its standing to bring its notice-and-comment

claim. 3

3

The FHWA challenged Scenic America’s standing at the motion

to dismiss stage, and though the District Court held in favor of

Scenic, it noted that the issue “presents difficult and close

questions.” Scenic I, 983 F. Supp. 2d at 172. When the FHWA

later moved for summary judgment, therefore, Scenic was already

on notice that its standing might be questioned on appeal, at which

time the record would be closed. Scenic therefore cannot claim to

have been deprived of a fair and “full opportunity to make a record

of [its] standing in the district court.” Swanson Grp. Mfg. LLC v.

Jewell, 790 F.3d 235, 241 (D.C. Cir. 2015). Scenic should have

accompanied its summary judgment materials with evidence of its

standing. See Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 897

(1990) (“[A] litigant’s failure to buttress its position because of

confidence in the strength of that position is always indulged in at

the litigant’s own risk.”).

Because the plaintiff has the burden to establish the evidentiary

basis for its standing at the summary judgment stage in every case,

just as it has the burden to plead sufficient facts at the motion to

dismiss stage in every case, the District Court may wish to consider

amending its local rules to provide that the plaintiff include its

evidentiary basis for standing in the statement of material facts that

every party is required to file either in support of, or in opposition

to, a motion for summary judgment. See Civil Local Rule 7(h)(1).

Such a rule would ensure that the plaintiff is on notice of its

obligation to present such evidence, make the District Court’s job

much easier (as well as ours), and function similarly to our Circuit

Rule 28(a)(7), which we adopted after our ruling in Sierra Club.

12

B.

1.

Scenic’s notice-and-comment claim turns on the

redressability prong of Article III standing. Scenic asserts

that the 2007 Guidance forced certain FHWA Division

Offices to reinterpret the FSA lighting standards – that

billboards may not contain “flashing, intermittent or moving”

lights – so that those offices would thereafter find the FSA

language to permit, rather than bar, digital billboards.

Scenic claims that this alleged change of position made it

easier for states to erect digital billboards, because they no

longer had to worry about being prevented from doing so by

the Division Offices. As a result, Scenic allegedly has to

work harder, and thus spend greater resources, to fight these

billboards – its injury in fact. Scenic claims that vacating the

Guidance will redress that injury.

In this way, Scenic asserts injuries that stem not directly

from the FHWA’s issuance of the 2007 Guidance, but from

third parties not directly before the court – the Division Offices

and the states. When “[t]he existence of one or more of the

essential elements of standing” – in this case redressability –

“‘depends on the unfettered choices made by independent

actors not before the courts and whose exercise of broad and

legitimate discretion the courts cannot presume either to

control or to predict,’” it becomes “‘substantially more

difficult’ to establish” standing. Defs. of Wildlife, 504 U.S. at

562 (quoting ASARCO Inc. v. Kadish, 490 U.S. 605, 615

(1989); Allen v. Wright, 468 U.S. 737, 758 (1984)); accord

Nat’l Wrestling Coaches Ass’n v. Dep’t of Educ., 366 F.3d 930,

938 (D.C. Cir. 2004). “[M]ere ‘unadorned speculation’ as to

the existence of a relationship between the challenged

government action and the third-party conduct ‘will not suffice

13

to invoke the federal judicial power.’” Nat’l Wrestling, 366

F.3d at 938 (quoting Simon v. E. Ky. Welfare Rights Org., 426

U.S. 26, 44 (1976)).

Scenic’s complaint makes only two arguments concerning

the redressability of its notice-and-comment claim. First, it

argues that if we vacate the 2007 Guidance, “Scenic America

and its affiliate members would spend fewer resources

combating new digital billboards.” Compl. ¶ 21, J.A. 12.

This speaks to Scenic’s alleged organizational standing. See

PETA v. U.S. Dep’t of Agric., 797 F.3d 1087, 1093 (D.C. Cir.

2015) (organizational standing “requires [an organizational

plaintiff], like an individual plaintiff, to show actual or

threatened injury in fact that is fairly traceable to the alleged

illegal action and likely to be redressed by a favorable court

decision” (internal quotation marks omitted)). Second,

Scenic contends that if we vacate the 2007 Guidance, “digital

billboards that injure Scenic America members would be

subject to removal or an order to cease operating in a manner

that violates the regulatory prohibition against intermittent

lighting in billboard advertisements.” Compl. ¶ 21, J.A. 12.

This speaks to Scenic’s representational standing. See Hunt v.

Wash. State Apple Advert. Comm’n, 432 U.S. 333, 343 (1977)

(recognizing “that an association has standing to bring suit on

behalf of its members when: (a) its members would otherwise

have standing to sue in their own right; (b) the interests it seeks

to protect are germane to the organization’s purpose; and (c)

neither the claim asserted nor the relief requested requires the

participation of individual members in the lawsuit”).

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2.

a.

Scenic has failed to demonstrate that our vacatur of the

Guidance would redress its alleged organizational injury – that

it is forced to expend greater resources fighting digital

billboards because the 2007 Guidance makes it easier for states

to erect such billboards.

States are required to seek permission from the FHWA

Division Offices before they permit the use of digital

billboards. See 23 C.F.R. § 750.705(j). Prior to the FHWA’s

issuance of the Guidance, those Offices could, and often did,

authorize that use, finding that it accorded with a given state’s

FSA. Scenic has introduced no evidence into the record – as it

must at summary judgment – establishing that if we were to

vacate the Guidance, any Division Office would respond by

preventing the state it oversees from erecting digital billboards;

nor has Scenic submitted evidence establishing that states

would successfully erect, or even seek to erect, fewer

billboards. Without providing any indication that our vacatur

of the Guidance will diminish the number of billboards Scenic

has to fight, Scenic has failed to demonstrate that its requested

remedy would prevent Scenic from having to expend the same

amount of resources fighting these billboards.

A brief look at some of our previous decisions in this area

reinforces the point. In National Wrestling, we assessed the

standing of several associations representing men’s wrestling

teams, some of whom had been cut from college athletic

programs. 366 F.3d at 933. Department of Education

regulations, promulgated under Title IX, required college

athletic programs to ensure that they provided equal athletic

opportunities to both sexes, based in part on the resources that

are devoted to various programs. Id. at 934-35. Plaintiffs did

15

not challenge those regulations. Instead, plaintiffs challenged

a Department of Education interpretation of those regulations,

which they claimed caused several athletic programs to

eliminate their wrestling teams. Id. We held that plaintiffs

lacked standing because they were unable to show that a

favorable decision would redress their injuries. Id. at 938.

We noted that the “direct causes of appellants’ asserted

injuries – loss of collegiate-level wrestling opportunities for

male student-athletes – are the independent decisions of

educational institutions.” Id. at 936-37. Even if we vacated

the Department of Education’s interpretation, there was no

indication that it would alter those institutions’ independent

decisions to eliminate their wrestling teams. Id. at 939.

Nothing in the Department’s interpretation required schools to

eliminate their wrestling teams; schools did so in an attempt to

ensure that they were distributing athletic resources equally – a

requirement of Title IX more generally, irrespective of the

interpretation that plaintiffs challenged. See id. at 939-40

(asserting that “nothing but speculation suggest[ed] that

schools would act any differently” if the court vacated the

interpretation). We noted that plaintiffs would only meet

standing requirements if they “took the position that

gender-conscious elimination of men’s sports teams would be

illegal in the absence of the challenged” interpretation, but that

plaintiffs made no such claim. Id. at 941. Finally, we

explained that the “possibility” that wrestling teams would

have “better odds” if we vacated the Department’s

interpretation “falls far short of the mark.” Id. at 942

(emphasis omitted).

We held similarly in Renal Physicians Ass’n v. United

States Department of Health and Human Services. 489 F.3d

1267 (D.C. Cir. 2007). That case involved the Stark Law,

which limited the ability of a physician to refer a Medicare

16

patient to clinical laboratories with which the physician had a

“financial relationship,” but permitted referrals where the

physician’s only financial interest was the receipt of

compensation at “fair market value.” Id. at 1269. The

Department of Health and Human Services, which was

authorized to promulgate regulations under the Law, created a

“safe harbor” provision, describing two methods for

demonstrating that a physician’s hourly rate was at fair market

value. Id. at 1270. The Department also noted, however,

that the safe harbor was voluntary, and that health care

providers could continue to establish fair market value through

other methods. Id. at 1269-71.

After a physicians’ association challenged the safe harbor

provision under the APA, we held that plaintiff lacked

standing because it failed to show that vacating the safe

harbor provision would redress its members’ alleged injuries

– namely that the safe harbor provision caused them to be

paid less for their services than would otherwise be the case.

Id. at 1276-78. Because the safe harbor was merely one way

that hospitals could determine “fair market value,” we noted

that “it is ‘speculative,’ rather than ‘likely,’ that invalidating

the safe harbor will somehow cause these facilities to pay

more,” and that “[t]he effect (if any) of the safe harbor cannot

be simply undone.” Id. at 1277.

As in Renal Physicians, the FHWA created what is, in

essence, a safe harbor provision regarding digital billboards.

The 2007 Guidance made it clear that state laws and

regulations regarding digital billboards meeting the

specifications listed in the Guidance would not be rejected for

violating the FSA lighting standards. Yet even after the

Guidance, Division Offices can still approve state laws and

regulations permitting billboards that fall outside those

specifications, and they can still reject laws and regulations

17

allowing billboards that meet those specifications, but that

violate state FSAs for other reasons. The safe harbor created

by the Guidance is voluntary in the same way as the safe

harbor in Renal Physicians; Division Offices can rely on it to

find certain billboards permissible, but those Offices can find

those billboards permissible for other reasons as well. It is

“speculative,” rather than “likely,” that invalidating the

Guidance would stop any particular billboard from being

constructed. Indeed, many states with FSAs that included a

ban on intermittent, flashing, or moving lights permitted

digital billboards prior to the 2007 Guidance.

In sum, we cannot assume, without more, that vacating

the Guidance would eliminate or lessen the construction of

digital billboards.

Scenic contends that because the Texas Division Office

barred Texas from constructing digital billboards prior to the

Guidance, vacating the Guidance would redress Scenic’s

injuries, at least with respect to Texas. However, Scenic has

introduced no evidence suggesting that Texas, or the Texas

Division Office, would behave any differently in the absence

of the 2007 Guidance. Scenic simply assumes, without any

proof, that Texas will revert to its pre-Guidance position as

soon as the Guidance is invalidated.

Scenic’s assumption is nothing more than “unadorned

speculation.” Simon, 426 U.S. at 44. Several other

possibilities seem just as likely, were we to vacate the 2007

Guidance. The Guidance may have focused the Texas

Division Office on the fact that a majority of states had

already determined that the FSA lighting standards permitted

digital billboards. Knowing as much, Texas’s Division

Office might be more inclined to “jump on the bandwagon”

and permit such billboards going forward, even absent the

18

2007 Guidance. Or the Division Office might be persuaded

to continue allowing digital billboards now that Texas has

already issued permits for at least 150 of them, Lloyd Decl.

¶ 9, J.A. 41. See Renal Physicians, 489 F.3d at 1278 (“[T]he

word is already out, and therefore it is too late to reverse

course. . . . [T]he undoing of the governmental action will

not undo the harm, because the new status quo is held in place

by other forces.”).

Scenic has introduced no evidence that would make any

one of these possibilities more likely than another.

Particularly given the difficulty of establishing standing based

on the actions of third parties not before the Court, see Defs.

of Wildlife, 504 U.S. at 562, Scenic’s lack of any evidentiary

basis for its redressability contentions requires us to reject its

standing as to its notice-and-comment claim.

As a final argument, Scenic relies on Village of Arlington

Heights v. Metropolitan Housing Development Corp., 429

U.S. 252 (1977), and contends that vacating the 2007

Guidance would remove one of several barriers to Scenic’s

anti-digital billboard efforts, and that this is sufficient for

redressability purposes. However, Arlington Heights is

inapposite here.

As an initial matter, Arlington Heights involved a party

directly harmed by the challenged action, not one harmed by

the actions of a third party not before the Court. See id. at

254. Moreover, Arlington Heights involved a developer’s

challenge to a zoning ordinance that prevented it from

building low-income housing. Id. at 255-58. The Supreme

Court characterized the zoning ordinance as an “absolute

barrier.” Id. at 261. Although the developer still needed to

secure financing and qualify for federal subsidies, the

challenged zoning ordinance ensured that the developer could

19

not proceed with its goal of constructing low-income housing.

Id. at 261-62. A court decision to remove that barrier would

redress the developer’s injury because a major impediment to

the developer’s efforts would be eliminated.

Scenic has introduced no evidence showing that vacating

the 2007 Guidance would remove an “absolute barrier” to its

efforts. As we have already stated above, absent the 2007

Guidance, states remain free to pursue digital billboard

construction, and Division Offices remain free to permit such

construction. Thus, Scenic has not established that

invalidating the Guidance would improve or ease Scenic’s

efforts in any way. 4

b.

Scenic’s representational standing claim fares no better.

Scenic argues that vacating the 2007 Guidance will redress its

members’ injuries because it will cause the digital billboards

allegedly injuring those members to be removed. Compl.

¶ 21, J.A. 12. Scenic came dangerously close to forfeiting this

argument. See Huron v. Cobert, 809 F.3d 1274, 1279-80

(D.C. Cir. 2016).

Presumably because the District Court had upheld

Scenic’s standing at the motion to dismiss stage, and

Defendants had not contested Scenic’s standing before the

4

Scenic did not argue that the FHWA’s failure to undertake notice

and comment before promulgating the Guidance constitutes a

procedural injury, and we express no opinion on such an argument.

Although a party cannot forfeit a claim that we lack jurisdiction, it

can forfeit a claim that we possess jurisdiction. See Huron v.

Cobert, 809 F.3d 1274, 1279-80 (D.C. Cir. 2016).

20

District Court at the summary judgment stage, Scenic did not

address its standing in its opening brief on appeal. In their

responding brief, however, the FHWA challenged anew

Scenic’s standing. The FHWA contended that Scenic had

offered “no basis for expecting that vacating the Guidance

would cause any existing digital billboards to be dismantled.”

See FHWA Br. 29. In reply, Scenic appeared to abandon the

allegation. It repeated the FHWA’s contention and responded

that “Plaintiff need only show that vacatur would reduce

Plaintiff’s continuing injury of diverting limited resources to

counteract billboard approvals.” Reply Br. for Appellant 10.

Nonetheless, Scenic appears to have preserved its

representational standing argument by painting it in a

somewhat different light. It argues that the alleged injuries of

one of its members – Nikki Laliberte – are “traceable to the

Guidance” because the Guidance prohibits the Division

Office in Minnesota, where Laliberte lives, from considering

whether digital billboards violate the FSA lighting standards.

See Reply Br. for Appellant 12. Scenic’s implication seems

to be that vacating the Guidance might cause Minnesota’s

Division Office to remove some digital billboards. Although

Scenic’s argument is couched in terms of causation,

“causation and redressability are closely related, and can be

viewed as two facets of a single requirement.” Newdow v.

Roberts, 603 F.3d 1002, 1012 n.6 (D.C. Cir. 2010) (internal

quotation marks omitted). Thus, Scenic’s assertion is

sufficient to preserve its representational standing claim.

As we noted above, however, Scenic has introduced no

evidence demonstrating that our vacatur of the Guidance

would cause Division Offices or states to prohibit the

construction of new digital billboards. See supra Part

II.B.2.a. It is even less plausible, given Scenic’s complete

lack of any evidentiary showing on the matter, that Division

21

Offices or states would require extant billboards to be

dismantled.

By neglecting to “set forth by affidavit or other evidence

specific facts” establishing its representational standing, Defs.

of Wildlife, 504 U.S. at 561 (internal quotation marks

omitted), Scenic has failed to meet its burden to demonstrate

its representational standing to bring its notice-and-comment

claim.

3.

Scenic does fare better, however – at least as to standing –

on its claim that the Guidance violated § 706, although barely.

a.

In its complaint, Scenic alleges that FHWA’s actions, in

promulgating the Guidance, are “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law, in

violation of the APA.” Compl. ¶ 62, J.A. 19. That language

appears to be taken from § 706(2)(A) of the APA, which sets

forth the well-known “arbitrary and capricious” standard, and

which would likely provide an effective cause of action for

Scenic to challenge the FHWA’s alleged failure to comport

with the HBA. Confusingly, however, Scenic does not cite

§ 706 as part of its second claim, but rather cites § 553, the

provision that concerns notice-and-comment rulemaking. See

id. ¶¶ 57-62, J.A. 18-19.

Construing the complaint liberally, as is sometimes

appropriate, but cf. Settles v. U.S. Parole Comm’n, 429 F.3d

1098, 1104, 1106 (D.C. Cir. 2005) (explaining that although

“the complaint – particularly a complaint filed by a pro se

prisoner – should be construed liberally,” “the rule of liberal

construction of complaints applies to factual allegations,” and

22

refusing to liberally construe a counseled plaintiff’s complaint

so as to include new defendants (quoting Fletcher v. District of

Columbia, 370 F.3d 1223, 1227 n.* (D.C. Cir. 2004))), it might

be possible to construe Scenic’s complaint as having relied

upon § 706 rather than, or in addition to, § 553. At oral

argument, however, counsel for Scenic was specifically asked

whether its second claim included a § 706 challenge to

FHWA’s promulgation of the guidance, and Scenic’s counsel

replied “no, we did not present that.” Counsel went on to state

that to the extent it brought anything resembling an

arbitrary-and-capricious challenge it did it through the

“backdoor” of its notice-and-comment claim, specifically

highlighting its argument that that the Guidance is a legislative

rule because it is 180 degrees counter to the FSA text it alleged

to be interpreting. Thus, it appears that Scenic disclaimed any

arbitrary-and-capricious challenge to FHWA’s alleged failure

to comport with the HBA.

Nonetheless, during that same colloquy at oral argument,

Scenic did state, with respect to its § 706 claim, that it “focused

solely on the customary use provision, finding that it was

contrary to law.” Giving Scenic the benefit of the doubt,

Scenic’s papers and statements at oral argument are sufficient

for us to eke out a § 706 claim.

b.

Scenic has standing to bring such a § 706 claim. First,

Scenic has offered sufficient evidence that it has suffered a

representational injury in fact. The record at summary

judgment demonstrates that at least one of its members, Nikki

Laliberte, has suffered a concrete injury because a digital

billboard near her home “generates a bright flash when its

display transitions from one advertisement to another.”

Laliberte Decl. ¶ 4, J.A. 52. She asserts that the billboard “has

23

marred the view from [her] home[],” and that she is “concerned

that the billboard has negatively affected the value of [her]

property.” Id. ¶¶ 6, 9, J.A. 52-53. This sort of harm to an

individual’s property is sufficient to constitute a concrete

injury in fact. See Idaho, By & Through Idaho Pub. Utils.

Comm’n v. ICC, 35 F.3d 585, 591 (D.C. Cir. 1994) (noting that

a private landowner “suffers concrete injury if [her] property is

despoiled”).

The causation and redressability prongs of our standing

analysis are equally clear here. Scenic’s § 706 claim is that

the Guidance runs afoul of the statute’s “customary use”

requirement as that requirement has been interpreted in the

FSAs. If we were to find for Scenic on the merits of its claim,

a point we must assume for standing purposes, see LaRoque v.

Holder, 650 F.3d 777, 785 (D.C. Cir. 2011), we could only do

so by effectively repudiating the FHWA’s interpretation of the

FSAs. Repudiation would provide much more robust relief

than vacatur. Not only would it prohibit the agency from

relying on that interpretation in any future rulemakings, it

would also require the agency to subject extant billboards to

either removal or an order requiring those billboards to operate

in a manner that does not violate the FSAs, for instance by

keeping the image displayed by the billboard constant and

unchanging. Scenic’s injury, clearly caused by the Guidance,

is therefore redressable. See Renal Physicians, 489 F.3d at

1278 (holding that “the only way to prevent” a finding that

redressability is lacking in the third-party context is “for a court

not only to invalidate [the contested agency action] but also to

repudiate” it).

24

III.

FHWA argues that the Guidance is not a final agency

action and is therefore not reviewable under the APA. We

disagree.

An agency action will be deemed final if it “mark[s] the

consummation of the agency’s decisionmaking process” and is

an action “by which rights or obligations have been

determined, or from which legal consequences will flow.”

Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (internal

quotation marks omitted). “The most important factor” in

determining whether an agency action is one “from which legal

consequences will flow” “concerns the actual legal effect (or

lack thereof) of the agency action in question on regulated

entities.” Nat’l Mining Ass’n v. McCarthy, 758 F.3d 243, 252

(D.C. Cir. 2014).

The Guidance marks the consummation of FHWA’s

decision-making process. It comes to a definitive conclusion:

the FSA’s prohibition on “flashing, intermittent or moving”

lights does not prevent states from permitting digital

billboards, so long as they meet certain prescribed

requirements. Although the Guidance does state that the

FHWA “may provide further guidance in the future as a result

of additional information” FHWA might receive, J.A. 535,

such a statement is fairly read as a “boilerplate” indication that

the agency may issue further interpretations in the future. See

Appalachian Power Co. v. EPA, 208 F.3d 1015, 1022-23 (D.C.

Cir. 2000). The fact that a regulation might be interpreted

again at some point in the indeterminate future cannot, by

itself, prevent the initial interpretation from being final.

The Guidance is also an action “from which legal

consequences will flow.” It creates a safe harbor such that

Division Offices and states may not deny a digital billboard

25

permit for violating the FSA lighting standards where that

billboard meets the timing and other requirements set forth in

the Guidance. In this way, the Guidance withdraws some of

the discretion concerning billboard permitting the Division

Offices and states previously held. See NRDC v. EPA, 643

F.3d 311, 320 (D.C. Cir. 2011) (concluding that where agency

action withdraws an entity’s previously-held discretion, that

action “alter[s] the legal regime,” “binds” the entity, “and thus

qualifies as final agency action”). That safe harbor has a clear

legal effect on the regulated entities here – the Division Offices

and the states – and the Guidance is therefore a final agency

action.

IV.

Having concluded that Scenic has standing to bring its

§ 706 claim, and that the Guidance constitutes final agency

action, we now review the merits of the claim de novo, see

Khan v. Parsons Glob. Servs., Ltd., 428 F.3d 1079, 1082 (D.C.

Cir. 2005), and find them lacking.

Scenic argues that the Guidance is invalid because it fails

to comport with the HBA’s “customary use” provision. That

provision states that “signs, displays, and devices whose size,

lighting and spacing, consistent with customary use is to be

determined by agreement between the several States and the

Secretary, may be erected” within 660 feet of the Interstate.

23 U.S.C. § 131(d) (emphasis added). Scenic contends that

the FHWA, in issuing the Guidance, changed the FSA lighting

standards to such an extent that those standards are no longer

“consistent with customary use.” According to Scenic

“[a]nything outside the scope of what an FSA meant at the time

it was created cannot be ‘customary use.’” Opening Br. for

Appellant 36.

26

In Cajun Electric Power Cooperative, Inc. v. FERC, we

clarified that

[a]ny agreement that must be filed and approved by

an agency loses its status as a strictly private contract

and takes on a public interest gloss. That means that

when the agency reconciles ambiguity in such a

contract it is expected to do so by drawing upon its

view of the public interest. And, therefore, the

agency to which Congress entrusted the protection

and discharge of the public interest is entitled to just

as much benefit of the doubt in interpreting such an

agreement as it would in interpreting its own orders,

its regulations, or its authorizing statute.

924 F.2d 1132, 1135 (D.C. Cir. 1991) (internal citations

omitted); see also Nat’l Fuel Gas Supply Corp. v. FERC, 811

F.2d 1563, 1569-71 (D.C. Cir. 1987) (treating an agency

interpretation of a settlement agreement as entitled to

deference similar to that owed under Chevron where the

settlement agreement had to be approved by the agency). The

FSAs, as agreements between the FHWA and individual states,

see 23 U.S.C. § 131(d), were thus approved by the FHWA as

described in Cajun Electric.

Further, as the District Court explained, “[b]oth

Defendants and Scenic America recognize . . . that all FSA

lighting provisions were established consistent with customary

use.” Scenic II, 49 F. Supp. 3d at 71 (quoting or citing both

parties’ briefing) (internal quotation marks omitted); see also

Opening Br. for Appellant 36; FHWA Br. 51-52. Thus, so

long as the FHWA has merely interpreted in a reasonable

fashion, rather than amended, those lighting standards, that

interpretation must itself be “consistent with customary use,”

whether or not it is precisely the interpretation that would have

27

been given to the standards at the time the FHWA and states

first agreed upon them. Cf. Ass’n of Am. R.Rs. v. Surface

Transp. Bd., 162 F.3d 101, 107 (D.C. Cir. 1998) (“Our

deference to an agency’s reasonable interpretation of its

governing statute ‘is a product both of an awareness of the

practical expertise which an agency normally develops, and of

a willingness to accord some measure of flexibility to such an

agency as it encounters new and unforeseen problems over

time.’” (quoting Int’l Bhd. of Teamsters v. Daniel, 439 U.S.

551, 566 n.20 (1979))).

We agree with the District Court’s conclusion that the

FHWA’s interpretation of the FSA lighting standards is not

one that “‘runs 180 degrees counter to the plain meaning of

the’ FSAs,” and that it therefore “construes, rather than

contradicts” the FSAs. Scenic II, 49 F. Supp. 3d at 62-63, 70

(quoting Nat’l Family Planning & Reprod. Health Ass’n v.

Sullivan, 979 F.2d 227, 235 (D.C. Cir. 1992)). Although it

might be possible to read the FSA lighting standards to prohibit

digital billboards, those standards do not foreclose other

interpretations, including the FHWA’s here. Because the

FHWA’s interpretation of the FSA lighting provision was

reasonable, the interpretation cannot be “contrary to customary

use.” Accordingly, Scenic’s claim that the Guidance violates

§ 706 must fail.

***

For the foregoing reasons, we affirm the District Court’s

grant of summary judgment as to Scenic’s § 706 claim, vacate

its judgment as to Scenic’s notice-and-comment claim, and

remand with instructions to dismiss Scenic’s

notice-and-comment claim.

So ordered.