[00:00:01] Speaker 00:
Case number 14-5195, Scenic America, Inc.

[00:00:05] Speaker 00:
Appellant versus United States Department of Transportation at L. Mr. Lutz for the appellant, Mr. Sandberg for Appellee's DOT at L, and Mr. Shanmugam for Intervenor Appellee, Outdoor Association of America, Inc.

[00:00:21] Speaker 05:
Good morning, Your Honor.

[00:00:22] Speaker 02:
Good morning.

[00:00:24] Speaker 05:
This case is about how an agency took an invalid shortcut to help digital billboards multiply and shielded its policy-making decision from the scrutiny of those who will suffer from an increase in light pollution and public safety impacts.

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The Federal Highway Administration's 2007 guidance, creating acceptable criteria for state proposals of digital billboards, is both a legislative rule that the agency failed to usher through notice and comment process,

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and a rule that contravenes the customary use provision of the Highway Beautification Act.

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We've appealed the district court's decision on summary judgment.

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So with the court's permission, I'd like to start with the notice and comment claim.

[00:01:04] Speaker 01:
I have a question about standing.

[00:01:07] Speaker 01:
Yes, sir.

[00:01:07] Speaker 01:
And that is, with respect to, I guess, your first claim, if we were to, I guess, set aside the interpretation

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on the grounds asserted in your first claim, we wouldn't really be repudiating it.

[00:01:27] Speaker 01:
We would just be saying that it was invalidly adopted, right?

[00:01:31] Speaker 01:
That's right, Your Honor.

[00:01:32] Speaker 01:
So then how is there any evidence of redressability there?

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I mean, you allege in your complaint, I think it's paragraph 21,

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that vacature of the 2007 guidance would redress your injury by requiring all current digital billboards be removed.

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And for purposes of motion to dismiss, we'd have to accept that, I guess is true.

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But we don't at summary judgment.

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Is there any evidence of that in the record?

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That the billboards would be removed?

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Yes.

[00:02:10] Speaker 05:
No, Your Honor, there's not.

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To answer your question about redressability for the noticing comment claim,

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Well, first, Lujan, footnote 7, points out that for procedural injuries, the burden of showing redressability is reduced.

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But even here, the notice and comment claim, if it did vacate, if the court did vacate the decision,

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Excuse me, sorry.

[00:02:48] Speaker 02:
So if they vacated on procedural grounds, the redress that you'd get is that you'd get a process.

[00:02:54] Speaker 05:
We would.

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We'd get an additional process.

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You'd get an opportunity to go through notice and comment.

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And that itself is a kind of redress, assuming that this is a rule that warrants that.

[00:03:04] Speaker 05:
Yes, sir.

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In addition, there are multiple division offices which had previously rejected

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the reading of the sin.

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And they would now think, oh, we don't have to reject it because central offices told us that this is OK.

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Maybe they would, though, still reject it because, for policy reasons of the state, they don't want to use that latitude.

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So there's a redressability on the procedural claim, but there's also a redressability question on the claim of, the substantive claim about whether the agency has misread the statute.

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And this is a very peculiar case in the sense that we're not looking to

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the language of the federal statute, we're looking to the way the agency has interpreted a group of actions by states to give content to the language of the federal statute.

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And the group of actions by the states is what it is.

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So the fact that the federal government is coming in with this guidance and saying, oh, this is what we see out there, and if they

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took that away and said, sorry, we never meant to say what we see out there.

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It would still be what's out there.

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And so I'm not sure how taking that away redresses your injury.

[00:04:28] Speaker 05:
What it does is it removes this barrier of acceptable criteria.

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So by the billboards still being out there.

[00:04:38] Speaker 02:
But that wasn't a barrier because look at all the states that got approval for the very thing that the Federal Highway Administration is observing is approvable.

[00:04:50] Speaker 05:
Certain states to get approval, that's right.

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But there are also many, right?

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Many, but not all.

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Texas, New York, and Kentucky all had division offices rejecting those.

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And by removing this acceptable criteria decision, they would be able to return to rejecting those digital billboards.

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Or maybe what the guidance says is that was an error for those few

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offices to have rejected that because when we look out there and see the custom, we see that it seems to be consistent with having a certain amount of what is the district judge called dynamic lighting or dynamic billboards.

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Right.

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First, I wouldn't say that those division offices, if they do look

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if they return to be able to reject these digital billboards, they would likely return to that decision because they were not just looking to the custom of what's out there now, but reading the terms of the federal-state agreements and finding that intermittent

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meant intermittent, meant that something that changes its lighting every 4 seconds or 10 seconds.

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Who's the guy that's doing that reading?

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The district offices?

[00:06:04] Speaker 05:
The district offices interpreting the state DOT's proposals and permits.

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So what we saw in Texas, for example, was a division office that had previously rejected

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in 2006, was rejecting state billboard proposals.

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And as soon as this guidance came out, as expressed in the Lloyd Declaration, during appendix 41, there was a significant increase in state permit

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billboard proposals as well as approvals by the division office.

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I think 150 digital billboards have been put in place in Texas.

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Now if the court were to set aside, even on notice and comment grounds, the

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the 2007 guidance, then the Texas office could return to rejecting those proposals.

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change its course?

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What reason is there to be there?

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Just because they used to do it differently.

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Now they've changed with relying on the guidance.

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The guidance is rescinded.

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Right.

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But they have a relationship with the state of Texas.

[00:07:30] Speaker 05:
They do.

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Like with transportation.

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They're also the same people who made the decision that, who previously interpreted the guidance as, or had interpreted the FSAs as.

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Now they know that their superiors in Washington disagree.

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They know that... Rescinded or not, they know what Washington thinks, right?

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Well, I'm not sure that they know what their superior's definition of intermittent is.

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In fact, the main officials who were drafting the guidance the night before

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the guidance came out, we're still having trouble defining the term intermittent.

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In fact, all they did was point to what state, what various states had, other division offices had decided was acceptable criteria.

[00:08:21] Speaker 02:
I know I'm missing something that probably everybody else in the room understands, but we have a statute that under which the Federal Highway Administration is acting that says,

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Signs, it's this crazy long sentence, 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.

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And I'm not sure how to read consistent with customer use in that statute.

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precondition or limit that the secretary or the housing authority, I mean the highway authority, interprets that caps the displays devices whose size, lighting, and spacing is to be determined by agreement?

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Or is customary use something that evolves based on agreement between several states and the secretary?

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There's like a basic kind of

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framing of the issue that I find still a little bit elusive.

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The Highway Beautification Act has asked the states and the highway administration to come to an agreement that sets out the standards consistent with customary use.

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So that determination of the federal state agreement is what is customary use at the time.

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Say that again.

[00:10:00] Speaker 05:
The determination in the FSA is what's customary and that sets out certain parameters.

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within which one can be flexible, a state can be flexible, and within which billboards may evolve.

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So for example, the tri-vision signs, which do not violate the lighting prohibitions on flashing, intermittent moving sites.

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That's a type of evolution which can occur within.

[00:10:28] Speaker 02:
That was evolution of practice, not of an FSA.

[00:10:32] Speaker 02:
So you're saying the FSAs are really the touchstone here.

[00:10:34] Speaker 05:
Yes, it is.

[00:10:36] Speaker 02:
But then it seems like the FSAs in turn are what give content to customer use in the federal statute.

[00:10:44] Speaker 02:
And so if the FSAs over time are amended,

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then that's gonna change what counts as customer use, is that right?

[00:10:55] Speaker 05:
Yes, that's right.

[00:10:56] Speaker 02:
And are they, they're amended with some regularity, no?

[00:11:01] Speaker 05:
Not that often, no, Your Honor.

[00:11:03] Speaker 05:
Most of the FSAs are from, still residual from 1960 and 1970, the 1960s and 70s.

[00:11:10] Speaker 05:
All right.

[00:11:11] Speaker 05:
So when we talk about, and that's exactly why the highway administration is

[00:11:17] Speaker 05:
is issuing a 2007 guidance that attempts to interpret these FSAs, which were set back in the 1960s.

[00:11:25] Speaker 02:
Now, there's an amicus that says that the customary use means the use that was customary in the 1960s when the act was passed.

[00:11:36] Speaker 02:
And I don't take that to be your position?

[00:11:42] Speaker 05:
As I see it, the FSAs themselves identify what is customary use.

[00:11:48] Speaker 02:
And so... The FSAs can change though.

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So there's a kind of a dynamism there.

[00:11:54] Speaker 05:
Yes, that's right.

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And so the FSA, the language of the FSAs which are being interpreted, the prohibitions on intermittent flashing and moving lights are mostly the FSAs from the 1960s and 70s, which is not

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really are not all that different from 1960, from 1965 on the after class.

[00:12:20] Speaker 06:
My guidance document here, pardon me, says it's based on actual practices among the divisional offices, right?

[00:12:30] Speaker 06:
So there's been an evolution without necessarily amending the FSAs.

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There's been an interpretation evolving over time among the different offices.

[00:12:41] Speaker 05:
Your Honor, I'm not seeing any interpretation that's going on here, but rather an arbitrary selection between practice that the various division offices have been doing.

[00:12:52] Speaker 06:
Well, I'm saying the divisional offices apparently were interpreting the FSCs to allow various things which are synopsized in the guidance.

[00:13:01] Speaker 05:
To the extent that they have been interpreting them, that didn't make it into the 2007 guidance, and it doesn't seem to be a part of the analysis that the... Well, the last paragraph of the guidance document seems to say this is based on

[00:13:16] Speaker 06:
surveying practices among the divisional offices, correct?

[00:13:20] Speaker 05:
That's right, Your Honor, but that surveying the practices of the divisional offices is just a process.

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It's not actually analyzing the types of interpretation that the divisional offices in turn were applying the FSAs.

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authorizing or not authorizing things pursuant to the FSA.

[00:13:42] Speaker 05:
So if they were interpreting the FSAs and had some interpretive analysis, some logical appellate-type reasoning that Catholic health initiatives construct,

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compels us to look at, that did not make it into the 2007 guidance.

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There's nowhere within the 2007 guidance that even acknowledges that the division offices were performing any sort of interpretation but simply

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probably similarly choosing amongst various numerical criteria.

[00:14:18] Speaker 02:
But it's curious that you say that you're asking for kind of what you refer to as appellate type reasoning because the statute seems to not be looking for that.

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The statute seems to be looking for

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custom.

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So I think that's why, as Judge Ginsburg was saying, well, aren't they precisely, isn't the Federal Highway Administration, in promulgating this guidance, precisely looking at and saying, well, what is custom but what most people do?

[00:14:46] Speaker 02:
And let's go out and look at what the relevant actors that are specified by the statute are doing.

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And it's a little curious, because it's like, what are we doing with them?

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What are we doing with the states, as reflected in FSAs?

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And the, as you say, with the tri-phase thing, and how are they dealing with new sign technology?

[00:15:11] Speaker 02:
And so the notion that you need some more kind of reasoning doesn't seem to necessarily fit this statutory scheme.

[00:15:19] Speaker 05:
I, Your Honor, disagree with you on this.

[00:15:22] Speaker 05:
The interpretation that's occurring here is the interpretation not of customer, not fully of customer use, but also of the FSAs themselves, right?

[00:15:35] Speaker 06:
And so that is- A year ago you just said there wasn't any interpretation.

[00:15:40] Speaker 05:
That's what the 2007 guidance would be doing if it needed to be doing appellate typological reasoning.

[00:15:51] Speaker 05:
Here, those are clearly defined terms.

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So what customary use was determined by the statute has then been defined through a formal rulemaking process, the creation of these FSAs.

[00:16:07] Speaker 05:
And that, in turn, is what the 2007 guidance claims to be interpreting, the prohibitions on intermittent flashing and moving lights.

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And the interpretation there does ask

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This district's case law does ask that we look for appellate type reasoning from finding a line from intermittent to the 2007 guidance.

[00:16:34] Speaker 02:
So what you're saying is, yes, the administration looks out and says, let's look at the FSA's language.

[00:16:42] Speaker 02:
And one dominant category of FSA language is the language on dynamic lighting.

[00:16:50] Speaker 05:
Yes.

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And so the administration can say in the way that I'm talking about in sort of surveying, OK, that's a customized standard, but further,

[00:17:03] Speaker 02:
So that's the customer use.

[00:17:05] Speaker 02:
And then how to read that in a lawyerly way or an agency type way that is rational is a question for the Federal Highway Administration.

[00:17:15] Speaker 05:
how to interpret it in this lawyerly way?

[00:17:18] Speaker 02:
Yeah.

[00:17:19] Speaker 05:
Yes.

[00:17:19] Speaker 02:
And not for the, maybe it could be for the division offices, but only if they were doing it, in your scene, they're doing it basically irrationally.

[00:17:30] Speaker 05:
Well, were they to perform the process of interpretation as opposed to legislation, the arbitrary selection, then they could perform an interpretive rule.

[00:17:41] Speaker 05:
Alternatively, they could go through notice and comment process.

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or if they wanted to amend.

[00:17:46] Speaker 05:
So go through a notice and comment process to set out

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certain numbers if those fell within the customary use without violating the customary use provision.

[00:17:58] Speaker 05:
Or they could amend if they wanted to amend the FSAs.

[00:18:02] Speaker 05:
They could go ahead and amend the FSAs.

[00:18:04] Speaker 05:
What they did here was select arbitrarily amongst various criteria by not going through a notice and comment process, by claiming it to be an interpretive rule.

[00:18:15] Speaker 05:
So avoiding public scrutiny.

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in the process.

[00:18:18] Speaker 05:
And now, actually, the highway administration is seeking our deference for their interpretation and avoiding judicial scrutiny as well.

[00:18:27] Speaker 05:
A second reason for why.

[00:18:30] Speaker 06:
If I may, I'd like to go back to the standing question for a moment, since it's interior and everything else.

[00:18:39] Speaker 06:
You claim, well, what do you claim as, let me start over.

[00:18:44] Speaker 06:
I think we're on common ground.

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that the parties are, that insofar as the actions of being challenged consume or cause you to engage in additional lobbying or litigation, that that's not a cognizable harm.

[00:19:04] Speaker 06:
So what is it that the organization does that is not lobbying?

[00:19:10] Speaker 05:
So Scenic America counsels members and constituents.

[00:19:15] Speaker 06:
Wait a minute, that's counsels them about what?

[00:19:17] Speaker 06:
About lobbying?

[00:19:18] Speaker 06:
About how to get what they want?

[00:19:20] Speaker 05:
About how to fend off digital billboards that are coming to the neighborhood.

[00:19:24] Speaker 05:
So going before zoning boards.

[00:19:26] Speaker 06:
So how is that different from lobbying?

[00:19:29] Speaker 06:
That is... You're pressing, you're advocating your case in other fora.

[00:19:33] Speaker 06:
And now you have to advocate it in more for it than before, because the guidelines have been relaxed.

[00:19:41] Speaker 05:
They're also providing educational material to their members and constituents on how also to protect themselves from digital billboards coming into the neighborhood.

[00:19:53] Speaker 06:
And is that not the same as...

[00:19:55] Speaker 05:
No, I wouldn't say that it is.

[00:19:57] Speaker 05:
It's quite similar to the organization Home and Havens in helping, assisting their members and constituents.

[00:20:08] Speaker 06:
The harm in Havens was that the landlord's conduct was shrinking the supply of housing available for the agency's minority clientele.

[00:20:20] Speaker 06:
Yes.

[00:20:21] Speaker 06:
It had nothing to do with – the harm was not that they had to litigate more or that they had to do more persuasive activities.

[00:20:32] Speaker 05:
Right.

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And similarly, the harm here is the increase in digital billboards in members' and constituents' neighborhoods.

[00:20:40] Speaker 05:
which Scenic America believes to be unlawful as well.

[00:20:45] Speaker 05:
And this 2007 guidance.

[00:20:47] Speaker 06:
So it's the actual increase in the billboards.

[00:20:50] Speaker 06:
That's the harm.

[00:20:50] Speaker 05:
Yes.

[00:20:51] Speaker 05:
So I would point you to Metropolitan Washington.

[00:20:55] Speaker 05:
There was not only making it more difficult for that organization to advocate to reduce aircraft noise.

[00:21:04] Speaker 06:
So who have you got as a member?

[00:21:06] Speaker 06:
Who's exposed to more billboards as a result of the guidance?

[00:21:11] Speaker 05:
Nikki Lalibert.

[00:21:12] Speaker 05:
In Minnesota?

[00:21:14] Speaker 05:
In Minnesota.

[00:21:14] Speaker 05:
Joined appendix 5152.

[00:21:16] Speaker 05:
So she not only helps support the organizational standing, but I think we're on strong grounds with associational standing as well.

[00:21:25] Speaker 05:
This court has found that aesthetic injuries of the type that Ms.

[00:21:30] Speaker 05:
Lalibert has suffered of having an increased number of flashing target bullseyes and McDonald's arches flashing off of a pond into her house would amount to aesthetic standing.

[00:21:49] Speaker 05:
which her being a member is germane to the interests of scenic America.

[00:21:55] Speaker 06:
What was the status of Minnesota's divisional office before the guidance?

[00:22:01] Speaker 05:
They had not taken a position.

[00:22:03] Speaker 05:
They had not taken a position.

[00:22:04] Speaker 05:
They said that they were, if you look at administrative record, page 188, they said that they were going to follow the lead of the Federal Highway Administration

[00:22:17] Speaker 05:
This was just in advance of the 2007 guidance, and that digital billboards may be permitted on state and federal highways within the bounds of the federal regulations.

[00:22:27] Speaker 05:
So they were waiting for the 2007 guidance to make a determination.

[00:22:32] Speaker 06:
But they were essentially saying, whatever is allowed by the feds, we're going to allow it.

[00:22:36] Speaker 05:
Yes, Your Honor.

[00:22:37] Speaker 05:
Yes, Your Honor.

[00:22:38] Speaker 05:
And the billboard that is causing Ms.

[00:22:41] Speaker 05:
Lalibert to suffer aesthetic injury has been constructed since then.

[00:22:46] Speaker 05:
It was built in 2010.

[00:22:55] Speaker 06:
Why didn't you bring a list that was a 706 violation of the APA?

[00:23:06] Speaker 05:
We believe that we had it on the rules.

[00:23:09] Speaker 06:
Right.

[00:23:09] Speaker 06:
Suggests that you think of their opportunity to purchase, but you don't make that claim.

[00:23:14] Speaker 05:
No, we didn't.

[00:23:15] Speaker 05:
We focused solely on the customary use provision, finding that it was contrary to law.

[00:23:21] Speaker 06:
It seems a little odd, doesn't it?

[00:23:23] Speaker 06:
I mean, reading the brief, you're building up to the 706 claim, which was never there.

[00:23:30] Speaker 05:
No, we did not present that yet.

[00:23:34] Speaker 05:
However, we have presented the notice and comment claim.

[00:23:40] Speaker 05:
And not only was this an interpretive rule, a legislative rule, because it imposed arbitrary numeric criteria.

[00:23:51] Speaker 06:
There we go.

[00:23:52] Speaker 05:
But it also is 100.

[00:23:55] Speaker 06:
It's a missing claim, so that's not in there.

[00:23:57] Speaker 02:
Well, go ahead.

[00:23:58] Speaker 05:
Yes, so the district court did mention that that was a backdoor argument for our claim.

[00:24:03] Speaker 05:
It's been presented here in the notice of comment context.

[00:24:09] Speaker 06:
I'm sorry.

[00:24:10] Speaker 06:
What do you mean?

[00:24:10] Speaker 06:
You're now raising it on appeal?

[00:24:11] Speaker 05:
We're not raising it on appeal.

[00:24:13] Speaker 05:
We're making the arbitrary and capricious arguments arbitrary, particularly with the second argument for why this is a legislative rule, which is that it's 180 degrees counter to the interpretation that it claims to interpret.

[00:24:29] Speaker 06:
So you think the word intermittent is not susceptible to interpretation?

[00:24:35] Speaker 05:
It may be susceptible to interpretation.

[00:24:37] Speaker 05:
It's not susceptible to this interpretation, Your Honor, which is so the definition of intermittent is that something that starts and stops at intervals.

[00:24:47] Speaker 05:
And what the 2007 guidance has allowed is light to start for four seconds, stop, and then start again for four seconds again.

[00:24:58] Speaker 05:
Other courts that have looked at this have found that that meets the plain meaning of intermittent.

[00:25:02] Speaker 05:
So this essentially writes intermittent out of the statute.

[00:25:08] Speaker 05:
Analogous to the National Family Planning case where a subsequent interpretation which allowed for doctors to counsel their patients on abortion claimed to be interpreting a regulation that prohibited doctors from counseling the patients on abortion.

[00:25:26] Speaker 05:
What we have here is the allowance of something that is clearly prohibited in the regulation.

[00:25:34] Speaker 02:
So going back to the question I had about the relationship between the definition of customary use and the state practices.

[00:25:48] Speaker 02:
You are basically saying, what is happening at the permitting level is not supposed to inform the highway administration's notion of what's customary use.

[00:25:58] Speaker 02:
What the highway administration looks to is language in FSAs.

[00:26:02] Speaker 02:
And then once that's been settled on in the sum of the FSAs, that is something that the highway administration

[00:26:16] Speaker 02:
can sum up in a guidance, but it's a legal task.

[00:26:22] Speaker 02:
And given that the furthest they go in permitting lighted billboards is to prohibit intermittent flashing, dynamic lighting, that they have to actually do something that prohibits that.

[00:26:40] Speaker 05:
Right, their interpretation would have to honor that.

[00:26:43] Speaker 05:
Yes, it can't go beyond the bounds of the federal state agreements.

[00:26:46] Speaker 05:
Is there any other question?

[00:26:48] Speaker 06:
I think you acknowledged, or maybe not in the briefs, that the lighting that's on 12 hours and off 12 hours is not inconsistent.

[00:26:59] Speaker 05:
I think you're talking about the New York Division Office's position.

[00:27:05] Speaker 05:
No, Your Honor, our position is that something that would remain on steady in lunch, beyond that, so that would remain steady continuously.

[00:27:18] Speaker 02:
So it can't come on at dawn and go off at dusk.

[00:27:21] Speaker 02:
I thought you were saying that was totally fine.

[00:27:25] Speaker 05:
No, I don't think we took that position in the briefs.

[00:27:29] Speaker 06:
Well, do you think that's intermittent or not intermittent?

[00:27:32] Speaker 05:
No, it would be intermittent because that again is starting and stopping at intervals.

[00:27:37] Speaker 06:
So that's why you think the word intermittent is not subject to interpretation.

[00:27:43] Speaker 06:
It means simply on or off all the time.

[00:27:47] Speaker 05:
On or off, continuously, yes.

[00:27:49] Speaker 05:
Yeah, what about the date and time?

[00:27:54] Speaker 05:
Thanks, Your Honor.

[00:27:55] Speaker 05:
That's a way to interpret what was customary use at the time.

[00:27:59] Speaker 05:
So the only types of signs that were turning on and off intermittently, flashing light, emitting lights on and off intermittently, were what's in the exceptions of the FSAs, which is

[00:28:13] Speaker 05:
time, date, and temperature.

[00:28:16] Speaker 05:
Everything else was prohibited.

[00:28:17] Speaker 06:
So those were written into the FSAs in all the states?

[00:28:22] Speaker 05:
In most of all – if not all of the states, I would expect that they're in all of the states that similarly have the prohibitions on intermittent moving and flashing lights, which the 2007 guidance claims to be interpreting.

[00:28:38] Speaker 06:
So how is that exception written in the FSA consistent with your position?

[00:28:45] Speaker 06:
I'm not sure, Claire.

[00:28:47] Speaker 06:
Maybe I'm losing grasp of where the prohibition comes from, from the FSAs or from the regulation or from the statute.

[00:28:56] Speaker 05:
From the regulation.

[00:28:58] Speaker 05:
So the customary use sets out the standard and asks the federal state agreements to set out the standard.

[00:29:05] Speaker 05:
And the prohibition is within the federal state agreements themselves, the regulations themselves.

[00:29:09] Speaker 06:
So is it your position that when the FSAs were entered into, that was already customary?

[00:29:14] Speaker 05:
Yes, that was after holding a hearing.

[00:29:17] Speaker 05:
That was what the public who'd been able to participate had determined was customary.

[00:29:24] Speaker 02:
Thank you, Mr. Lux.

[00:29:27] Speaker 02:
Mr. Sandberg.

[00:29:35] Speaker 04:
May it please the court, Jeff Sandberg for the federal defendants.

[00:29:39] Speaker 04:
The guidance suggests a set of general principles based on existing practices in the division offices.

[00:29:45] Speaker 04:
For the agency's division offices to use in going about the task of interpreting 52 different federal state agreements, each of which are slightly different, with reference to digital billboards.

[00:29:55] Speaker 04:
The guidance on its face clearly does not impose any new legal requirements and thus is interpretive and did not have to pass through notice and comment rulemaking.

[00:30:02] Speaker 06:
At the threshold, though, the guidance prohibit the divisional office from simply saying categorically, no, nothing.

[00:30:17] Speaker 04:
As a strictly legal matter your honor.

[00:30:19] Speaker 04:
Yes, of course the purpose of the guidance is to inform the discretion of division offices But this guidance read as a whole as this court's instruction Decisions instructing to do makes clear that it is intended as advice to the division office

[00:30:37] Speaker 04:
Even the bold-faced sentence says that proposed laws, regulations, and policies that would allow permitting CEVMS, subject to acceptable criteria as described below, would not violate a prohibition on flashing intermittent or moving lights.

[00:30:52] Speaker 04:
So it's incorporating by reference.

[00:30:54] Speaker 06:
How could an office categorically disallow flashing lights that meet the criteria below?

[00:31:02] Speaker 06:
And just saying, you know, we're going to be a non-flashing state.

[00:31:06] Speaker 04:
because the agency can speak to its division offices at the level of policy guidance or can speak to its division offices at the level of a legally binding order.

[00:31:14] Speaker 04:
And this guidance suggests an interpretation by headquarters, but it does not legally mandate them to take action.

[00:31:18] Speaker 04:
And in that way, this is similar to the guidances that this court has passed upon and concluded were not final in the National Mining Association case and in the Association of Flight Attendants case.

[00:31:31] Speaker 04:
But I did want to pick up on the discussion about standing.

[00:31:36] Speaker 02:
Are you saying, for example, I would assume if I were representing a state before the 2007 guidance and I told the state, I were in a division office and I told the state, you can't have intermittent lighting in the sense that Mr. Lutz thinks intermittent means you just can't have it.

[00:31:58] Speaker 02:
That the state would believe that if they went ahead and had CEVMS,

[00:32:07] Speaker 02:
that they might be subject to having some of their funding withheld.

[00:32:12] Speaker 02:
And that was just an illusion, you're saying, before 2007?

[00:32:18] Speaker 02:
Or that is still true after 2007?

[00:32:21] Speaker 02:
that, in fact, because this is just to guide and sort of, this is sort of the gist of things as we see it, that actually if Texas, you know, now changes, it's, have at it, flash away, and you turn around and say, wait a minute, that's highway blight, and withhold their funding, that that would still be legally permissible for the administration to do.

[00:32:44] Speaker 04:
That's right.

[00:32:45] Speaker 04:
I think the state may well have a good argument that the agency was acting arbitrarily and capriciously if it was acting inconsistently with its own guidance.

[00:32:52] Speaker 04:
But as a strictly legal matter, this is guidance to the field.

[00:32:55] Speaker 04:
And it is a good thing that agencies are allowed to provide guidance to the field and engage in policy discussion short of engaging in final agency action.

[00:33:04] Speaker 04:
Remember, there are 52 different federal state agreements here.

[00:33:06] Speaker 04:
Each of them have to be read as a whole.

[00:33:08] Speaker 04:
Many of them contain this prohibition on flashing, intermittent, and removing lights.

[00:33:10] Speaker 04:
But they also contain other provisions that will need to be read in pari materiae with these.

[00:33:14] Speaker 01:
What would it have to say to be more than guidance and to be binding?

[00:33:19] Speaker 01:
What would the memo have to say to be more than guidance and to actually be binding?

[00:33:25] Speaker 04:
Well, I think it would need to say something other than this is intended to provide advice.

[00:33:29] Speaker 04:
Here are some considerations for you to look at, including but not limited to the duration of the sign and the spacing.

[00:33:35] Speaker 01:
No, I don't want you to say it would need to say something other than.

[00:33:38] Speaker 01:
What would it need to say?

[00:33:39] Speaker 04:
I think it would have to speak categorically, as the guidance did in the Appalachian Power Company case, a set of dictates saying, these are your marching orders, essentially.

[00:33:51] Speaker 04:
That's not the form that this guidance takes.

[00:33:53] Speaker 04:
But even if you think that this one sentence, which is not how the agency reads its own guidance, but even if you think that the one boldface sentence that Judge Ginsburg asked me about

[00:34:03] Speaker 04:
was a legally binding order, it's still clear here that this guidance is not the consummation of the agency's decision-making about whether digital billboards are permitted in any particular circumstance.

[00:34:12] Speaker 06:
What the guidance is saying is you need... What is there to come up?

[00:34:15] Speaker 06:
Something ongoing?

[00:34:17] Speaker 04:
Well, the question here is, are digital billboards consistent with FSA prohibitions on flashing, intermittent, or moving lights?

[00:34:23] Speaker 04:
And the answer is, it depends, and it requires a state-by-state interpretation.

[00:34:27] Speaker 04:
And this guidance is saying, agencies, you have to engage in a decision-making process that will culminate in final agency action.

[00:34:33] Speaker 04:
The very point of this is there needs to be an agency process.

[00:34:37] Speaker 04:
And in the same way that this court concluded that the guidance of the National Mining Association and the Association of Flight Attendants was not final, it was because these principles can be reviewed not at the pre-enforcement stage, but upon the application of these principles to a concrete set of facts.

[00:34:52] Speaker 04:
That is when the agency undertakes its final agency action.

[00:34:56] Speaker 02:
But it's not permitting, because the permitting is done by the states.

[00:35:02] Speaker 02:
Approval of an FSA or the final agency action in your view is going to be something that the district office does?

[00:35:10] Speaker 04:
That's right.

[00:35:11] Speaker 04:
So under the regulations implementing the Highway Beautification Act, states are required to, whenever they're going to change their statutes or regulations or procedures implementing the HBA, they have to put forward a proposal to the federal division office, which will review it.

[00:35:29] Speaker 04:
And this is short of amending the FSA itself.

[00:35:31] Speaker 04:
This is the state amending its implementing laws.

[00:35:33] Speaker 04:
And the federal division office will act on that.

[00:35:35] Speaker 04:
It will say yay or nay.

[00:35:36] Speaker 04:
There are examples of that in the appendix.

[00:35:38] Speaker 04:
There's one from the Indiana office at JA 423 to 424, for example.

[00:35:44] Speaker 04:
So that is the final agency action that the Federal Highway Administration undertakes.

[00:35:48] Speaker 04:
It is a concrete proposal for a specific state interpreted in light of a specific FSA that yields a specific result.

[00:35:54] Speaker 04:
And the plaintiff

[00:35:55] Speaker 04:
has disclaimed any intent to seek review of any of those individual proposals.

[00:36:00] Speaker 04:
It's instead seeking pre-enforcement review of principles that haven't been applied to any particular federal state agreement.

[00:36:06] Speaker 04:
So that's the finality problem here.

[00:36:09] Speaker 04:
There is at the threshold, of course, a standing problem, and it may be even easier to dispose of this case on that basis.

[00:36:15] Speaker 04:
Because this court started off asking about redressability, which I think is a fine inquiry.

[00:36:21] Speaker 04:
would vacating this guidance, which doesn't change the legal landscape in any way, actually do anything to change the conduct of division offices or states?

[00:36:29] Speaker 04:
And I would submit to you that a plaintiff hasn't come close to making a showing that that would be the case.

[00:36:35] Speaker 04:
This court in the renal physicians case, for example, said that

[00:36:38] Speaker 04:
striking a voluntary safe harbor from the Stark law under which hospitals had paid clinicians a little bit lower, that there was no redressability there because hospitals might continue to pay clinicians lower even after the voluntary safe harbor was taken back.

[00:36:50] Speaker 01:
But renal physicians also said that it would be a different story if we as a court were to repudiate the agency action.

[00:37:02] Speaker 01:
because it wouldn't be just vacating it, but we would be repudiating the reasoning of the agency so they, in effect, couldn't go back.

[00:37:12] Speaker 01:
The agency couldn't, you know, the legal landscape would have changed.

[00:37:19] Speaker 01:
So if we were to grant relief on the second claim of Scenic America, which is basically the customary use claim,

[00:37:31] Speaker 01:
wouldn't that be give them redress because in that sense if we were to repudiate the 2007 memo in that fashion by accepting that claim

[00:37:49] Speaker 01:
the division offices would be forced to prohibit the digital billboards?

[00:37:54] Speaker 02:
And or at least permitted to.

[00:37:56] Speaker 02:
I'm not sure that you've made a clear, you've really defended the notion that they are no longer allowed to refuse, but I didn't mean to interrupt you.

[00:38:03] Speaker 02:
Go ahead and answer.

[00:38:05] Speaker 04:
First I want to know, I'm meeting into my co-counsel's time.

[00:38:08] Speaker 02:
No, we'll give him his full time.

[00:38:09] Speaker 04:
Okay.

[00:38:11] Speaker 04:
So the

[00:38:13] Speaker 04:
As the discussion before picked up on this, the second claim in this case is really quite strange.

[00:38:18] Speaker 04:
As it was framed to the district court, it was essentially an alternative argument that if you agree with me that this is a legislative rule, then please don't just send it back for notice and comment rulemaking so the agency can do it again.

[00:38:28] Speaker 04:
Please say that, you know,

[00:38:30] Speaker 04:
The product of such a notice and comment rulemaking would be inconsistent with the federal state agreements.

[00:38:34] Speaker 04:
And it was clearly stated in plaintiff's briefing that if they lost on the interpretive versus legislative, that their customary use claim would go away.

[00:38:43] Speaker 04:
So I think this court should take plaintiff at its word and conduct the interpretive versus legislative inquiry first.

[00:38:50] Speaker 04:
And I think if you undertake that inquiry, you would necessarily conclude that this is an interpretive document.

[00:38:57] Speaker 04:
And so I think that there would be no ability to give redress on the second claim here.

[00:39:04] Speaker 04:
I want to point out that the only injury, the only cognizable Article 3.

[00:39:09] Speaker 06:
What you just said seems to be consistent with the way in which the case has been briefed by the physicians.

[00:39:16] Speaker 06:
I do think that seems to be consistent.

[00:39:20] Speaker 04:
That's right.

[00:39:20] Speaker 04:
That's right.

[00:39:21] Speaker 04:
And the district court itself said, I'm somewhat surprised that this wasn't framed as an independent 706-2A argument.

[00:39:27] Speaker 04:
But I will take plaintiffs at their word and say that if I rule against them on the first claim, I also rule against them on the second.

[00:39:34] Speaker 04:
So focusing on the injury prong of standing for a moment, the ground on which the district court found there to be standing was that the district court thought that some of the activities that the organization engaged in might be called something other than advocacy.

[00:39:46] Speaker 04:
But what this court's cases make clear is that it doesn't matter whether you call something counseling or education or advocacy, the defendant's conduct has to cause some injury to the plaintiff's activities.

[00:39:58] Speaker 04:
And the fact that the defendant's conduct is inconsistent with the ultimate policy goals

[00:40:03] Speaker 04:
of the plaintiff is not an Article III injury in the same way that if I as an individual don't like digital billboards and decide to stand, to sort of commit all my free time to the cause of opposing digital billboards, I would not, through the expenditure of those resources, be allowed to come into court and claim standing.

[00:40:19] Speaker 04:
So too for organizations.

[00:40:20] Speaker 04:
The cases that they rely on in which organizations were held to have standing were cases in which the defendant's conduct actually injured the organization in some way by depriving it of information, by depriving it of places for the organization's clients to live.

[00:40:35] Speaker 04:
A number of the cases are these cases where you have private landlords that are withholding information or discriminating against.

[00:40:41] Speaker 02:
Or places free of flashing lights for their members to live.

[00:40:45] Speaker 04:
That would be true.

[00:40:46] Speaker 04:
If they could show a plaintiff who had a member of plaintiff who had standing, then they would have associational standing.

[00:40:55] Speaker 04:
Yes, so Minnesota, the problem with Minnesota is that Minnesota already permitted digital billboards before 2007.

[00:41:01] Speaker 04:
So even though the digital billboard that was near Ms.

[00:41:05] Speaker 04:
Lalabert's home wasn't erected until after, the legal landscape was already in place for digital billboards to be permitted in 2007.

[00:41:11] Speaker 04:
And there is, at a minimum, a serious readjustability problem here.

[00:41:15] Speaker 04:
If you vacate this guidance, what is the basis for believing that either the state of Minnesota or the division office in Minnesota is going to take action to

[00:41:24] Speaker 04:
Conclude that the flashing intermittent or moving light prohibition can't be interpreted.

[00:41:29] Speaker 06:
Mr. Letts pointed us to a document, I think, from Minnesota, but anyway, taking the position that they would do whatever the feds allowed.

[00:41:40] Speaker 04:
I believe you signed into a page in the administrative record that's not in the appendix, and I'm afraid I don't have it in front of me.

[00:41:48] Speaker 04:
But that would at most speak to causation, right?

[00:41:50] Speaker 04:
The division office saying, we'll generally follow headquarters lead, whatever they happen to tell us, right?

[00:41:56] Speaker 04:
But if you pull away this guidance now, and so you go back to a regime in which division offices are allowed to interpret

[00:42:01] Speaker 04:
FSAs as they see fit.

[00:42:04] Speaker 04:
Who's to say that the division office in Minnesota is now going to conclude that they can't interpret the FSAs in a way that would permit digital billboards that look very much like static billboards of yesterday in their effect and that they're not flashing or lights moving?

[00:42:20] Speaker 04:
I don't think plaintiffs come close to showing that that is what would happen.

[00:42:24] Speaker 04:
And so there's a readressability problem with the one Article III injury that they've identified.

[00:42:30] Speaker 02:
You ready to hear from interviews now?

[00:42:33] Speaker 04:
If there are no further questions, we would ask that the court vacate with instructions to dismiss for life and standing.

[00:42:37] Speaker 06:
It might be.

[00:42:38] Speaker 06:
Just give me a moment.

[00:42:48] Speaker 06:
What did you have to say on the customary point?

[00:42:51] Speaker 04:
I'm afraid I can't shed that much light on it because the way that the customary use claim has been pitched here is one that is a derivative of

[00:43:06] Speaker 04:
of the interpreter versus legislative.

[00:43:09] Speaker 04:
The plaintiffs have said, essentially, customary use, we think, is supplanted by the federal-state agreement, such that if you're legitimately interpreting the FSA, then it's OK.

[00:43:17] Speaker 04:
It's consistent with customary use.

[00:43:18] Speaker 04:
It's only if you've, quote, redefined the FSA that there will be a problem with customary use.

[00:43:24] Speaker 06:
You know, we did address in a few pages of our brief that the sub- The question raised in that by their citation of the Daniel Ball case is whether the statute freezes the custom as of 1965.

[00:43:40] Speaker 04:
Well, whatever else may be true about customary use, it does not do that.

[00:43:45] Speaker 04:
It's very clear from the legislative history of the act that the consistent with customary use requirement was added in order to ensure that the federal government wouldn't try to impose nationwide standards on all states that may be much more strict than what was there before.

[00:44:00] Speaker 02:
But I think they're making a slightly more nuanced argument, which is

[00:44:05] Speaker 02:
Yes, it's not frozen.

[00:44:06] Speaker 02:
We look at the FSAs, and that's a dynamic process it allows for updating only when the states and the federal government negotiate an update.

[00:44:19] Speaker 02:
And in practice, it's actually been pretty static, they're saying.

[00:44:23] Speaker 02:
But whatever, whether it's static or not, there is some

[00:44:29] Speaker 02:
stability to what the FSAs reflect.

[00:44:32] Speaker 02:
So it's a little bit of both.

[00:44:34] Speaker 04:
I think Your Honor's take is hinting at a third claim that they had made in the district court and have been abandoned on appeal, which is that the problem, their theory was that the problem here is that the state and the federal government didn't amend the FSAs in a way to make this kosher.

[00:44:46] Speaker 04:
I think everyone, in the posture in which this case is on appeal, everyone agrees that you're allowed to interpret the FSAs.

[00:44:50] Speaker 04:
And the only question is whether this is a permissible interpretation, but that itself is kind of a backdoor.

[00:44:57] Speaker 04:
argument, not a straightforward 706.2a argument.

[00:45:00] Speaker 02:
Backdoor in what?

[00:45:02] Speaker 02:
I mean, backdoor because it's bringing a question of lack of arbitrariness in.

[00:45:07] Speaker 02:
That's the backdoor you're finding.

[00:45:08] Speaker 04:
Right.

[00:45:08] Speaker 04:
So their theory for why this is an interpretive rule rather than a legislative rule, as I understand it, is that it adopts an interpretation that is 180 degrees counter

[00:45:20] Speaker 04:
to the text of the FSAs.

[00:45:22] Speaker 04:
And I don't think that's right.

[00:45:23] Speaker 04:
I think that terms like intermittent and flashing are necessarily subject to interpretation.

[00:45:28] Speaker 04:
In their petition for rulemaking to the agency, they said intermittent means not more frequently than once every 12 hours.

[00:45:35] Speaker 04:
We happen to have a different interpretation of intermittent, but those are both valid interpretations of the term.

[00:45:39] Speaker 06:
I thought I heard, Mr. Let's say that no change, even after 12 hours, would be allowed.

[00:45:47] Speaker 06:
Any change would be intermittent.

[00:45:49] Speaker 04:
That may be the position that he's taken here and in their briefs, but in the rulemaking petition, and there's a footnote in our brief, in the government's brief, that points... In a petition for rulemaking that was submitted to the Federal Highway Administration.

[00:46:03] Speaker 04:
So I think there's broad agreement here that terms like intermittent have to be... Okay, well, I haven't heard them dispute that the term intermittent is

[00:46:16] Speaker 04:
subject to interpretation.

[00:46:17] Speaker 04:
I don't think they would dispute that, for example, a traditional billboard with paper and paint buckets could be illuminated by a light that turns on at dusk and turns off at dawn.

[00:46:30] Speaker 04:
And that is an intermittent light.

[00:46:32] Speaker 06:
The New York situation was once every 24 hours.

[00:46:41] Speaker 02:
Thank you.

[00:46:48] Speaker 02:
Mr. Shanmugam.

[00:46:52] Speaker 03:
Thank you Judge Fillard and may it please the court.

[00:46:54] Speaker 03:
OAAA agrees with the government submissions in this case and in the remaining time I'd like to focus on

[00:47:00] Speaker 03:
two principal points.

[00:47:02] Speaker 03:
First is the district court correctly determined here all four of the familiar American mining factors support the conclusion that the 2007 guidance is an interpretive rather than legislative rule and in particular an adequate basis for agency enforcement existed apart from the guidance and the guidance did not effectively amend a prior legislative rule.

[00:47:26] Speaker 03:
Second, as the district court also correctly determined, the 2007 guidance is consistent with the language of the HBA concerning customary use.

[00:47:35] Speaker 03:
And Judge Pillard, since you asked about the meaning of that reference to consistency with customary use, let me offer an attempt at an affirmative interpretation.

[00:47:45] Speaker 03:
In our view, that language at most imposed a restraint on the federal government.

[00:47:50] Speaker 03:
in including in the federal state agreements in the first place novel limitations.

[00:47:57] Speaker 03:
And so while I would acknowledge that the language is structurally a little bit confusing, I do think that as Mr. Sandberg suggested, the legislative history makes clear that the concern that animated Congress

[00:48:10] Speaker 03:
when this language was added to the bill that became the HBA in 1965, was a concern with the federal government going too far in imposing restrictions on billboards in the federal-state agreements.

[00:48:24] Speaker 06:
Now, we think that the district court correctly analyzed... Is there any way to get to that without legislative history?

[00:48:29] Speaker 03:
Well, I do think that it is a fair interpretation of the text standing alone because, leaving aside for the moment this question of what customary and customary use actually means, I do think that the first reference to customary use in section 131D, and there are actually two,

[00:48:48] Speaker 03:
operates on and limits the federal state agreement.

[00:48:52] Speaker 03:
And there's no dispute here that the relevant provisions of the federal state agreements, that is to say the provisions prohibiting flashing intermittent or moving lights, are themselves consistent with customary use.

[00:49:05] Speaker 03:
Now, I think what I heard Mr. Lutz to be suggesting today is that once a provision is included in an FSA, that somehow becomes the baseline against which customary use is measured.

[00:49:18] Speaker 03:
I really don't think that that language can be read in that fashion.

[00:49:21] Speaker 03:
And again, I think the legislative history really suggests that what Congress was concerned about was the terms of the federal-state agreements themselves.

[00:49:31] Speaker 02:
I'm not sure that

[00:49:33] Speaker 02:
That's what he's saying.

[00:49:35] Speaker 02:
I think he's saying that there's a process between the feds and the states, and your clarification is helpful, that approves FSAs that may not stray from customary use, but that once those are in place, sort of the work of customary use is done and that it's reflected in those FSAs, that they are the

[00:50:00] Speaker 02:
They now instantiate customary use.

[00:50:02] Speaker 02:
And so then what the FHA is doing in offering guidance is just saying back to them, OK, this is custom.

[00:50:09] Speaker 02:
This is what we see.

[00:50:10] Speaker 02:
And to the extent that what shows up in custom is a bar on dynamic lighting,

[00:50:17] Speaker 02:
This is what it means.

[00:50:18] Speaker 03:
So Judge Pollard, we would agree with that, I think, in part, which is to say that we think that the work of that first reference to customer use is done when the FSAs are adopted.

[00:50:28] Speaker 03:
But leaving aside the question of whether or not they do further work, I think Mr. Lutz would have to concede as his brief makes clear that his argument under the HBA

[00:50:38] Speaker 03:
turns on the notion that any interpretation adopted in the guidance somehow constituted a redefinition of the terms of the FSAs themselves.

[00:50:49] Speaker 03:
In other words, that the interpretation has to be so out of whack with the terms of the FSAs as to be tantamount to the adoption of new terms that therefore have to be measured against the customary use requirement.

[00:51:03] Speaker 03:
And if you take a look at the Statement of Issues on the very first page of the brief,

[00:51:07] Speaker 03:
it bakes into the question presented, this notion that there is somehow a redefinition.

[00:51:12] Speaker 03:
And of course, that's how Judge Boasberg understood the HBA claim.

[00:51:16] Speaker 03:
And as a result of that, I think as Mr. Sandberg rightly said, the HBA claim really stands or falls with the argument on whether this is an interpretive or legislative rule, because as your honors will be aware, one of the principal arguments that Scenic America makes in that regard is that this interpretation is

[00:51:35] Speaker 03:
180 degrees counter to the language of the relevant FSAs and therefore essentially constitutes the adoption of a new legal norm which is sufficient to tip it into the category of legislative rules.

[00:51:50] Speaker 03:
Now, whatever you think about the meaning of flashing, moving, or intermittent lights, I really don't think that it can be said that this is not within the range of permissible interpretations of those terms.

[00:52:02] Speaker 03:
And Judge Ginsburg, while it may not strictly speaking be binding on scenic America, that in a petition for rulemaking, seeking rulemaking on this very issue, they suggested that a 12-hour period would not be intermittent.

[00:52:17] Speaker 03:
I think it reflects the fact that it isn't the only permissible interpretation of those terms that a sign can never change.

[00:52:25] Speaker 03:
And that is really all that's required under the uber-deferential standard of review for purposes of determining whether something is an interpretive or legislative rule.

[00:52:36] Speaker 02:
I thought you were going to offer me the, when you say it's within the range of permissible interpretations, I was

[00:52:44] Speaker 02:
waiting to hear you give the sort of lawyerly analysis of how you get there that Mr. Letts was saying is missing.

[00:52:52] Speaker 02:
Do you have that?

[00:52:55] Speaker 03:
Well, if we were here on an arbitrary or capricious challenge, I would be perfectly prepared to talk about this in terms of our deference.

[00:53:04] Speaker 02:
Just about its non-arbitrariness.

[00:53:05] Speaker 02:
Just run it by us.

[00:53:06] Speaker 02:
As soon as there's some level of deference,

[00:53:11] Speaker 02:
Why is it not arbitrary to say that where there's a ban on flashing or intermittent lighting, it's okay to flash at four-second intervals or eight-second intervals?

[00:53:22] Speaker 03:
Well, I think it's important, and not to quibble, but I'm going to quibble briefly.

[00:53:26] Speaker 03:
These are not flashing signs in the sense that they are

[00:53:31] Speaker 03:
flashing in the way that my light would be flashing here.

[00:53:35] Speaker 03:
These are signs that are static billboards that then change over specified intervals.

[00:53:42] Speaker 03:
And our submission is much like Mr. Sandberg's submission in the sense that we simply don't think that by virtue of the fact that a sign changes, that renders it flashing, intermittent, or moving.

[00:53:55] Speaker 03:
And again, we think that this is a sort of classic issue of agency deference, where the agency taking into account considerations such as safety can make determinations about the point at which something becomes intermittent.

[00:54:08] Speaker 02:
And this raises... You can do... I think you can probably do better than that.

[00:54:11] Speaker 02:
I hope you can do better than that.

[00:54:13] Speaker 02:
Because, I mean, it changes.

[00:54:15] Speaker 02:
A movie screen, the pixels are changing.

[00:54:19] Speaker 02:
I would say that's...

[00:54:22] Speaker 02:
flashing, moving, or intermittent, you would not?

[00:54:24] Speaker 03:
I think one might disagree with that, particularly given the fact that these are terms that were obviously adopted at a time when this technology did not exist.

[00:54:33] Speaker 03:
But leaving all of that, well, actually not leaving all of that aside, because it does go to the analysis on

[00:54:38] Speaker 03:
interpretive versus legislative rules in one other sense.

[00:54:42] Speaker 03:
It goes to the other principle argument that Mr. Letts made and that Scenic makes in the brief, this argument about the impermissibility of numerical standards and the suggestion that by virtue of the fact that there are numerical standards in the guidance that this constitutes a legislative rule.

[00:54:59] Speaker 03:
I want to say just a couple of things about that which are hopefully responsive to your questions Judge Pillard.

[00:55:03] Speaker 03:
The first is that it's of course important to realize that to the extent that the guidance sets out these ranges and recommendations that division offices have previously adopted.

[00:55:14] Speaker 03:
It does not purport to bind division offices going forward.

[00:55:18] Speaker 03:
One can dispute whether the guidance was binding to the extent that it said that these prohibitions do not categorically prohibit digital billboards.

[00:55:28] Speaker 03:
That was one part of the analysis, and in the boldface language to which Judge Ginsburg referred,

[00:55:33] Speaker 03:
It is true that FHWA suggested that that interpretation is off the table, but with regard to these ranges, all that FHWA purported to do was to say, this is what division offices have done in the past, it may be useful to you division offices in considering future proposals.

[00:55:50] Speaker 02:
Second, on this question of numerical standards, I don't think that- We have identified, this is on JA 537, we have identified certain ranges of acceptability.

[00:56:01] Speaker 02:
And so they're saying, these have been adopted by states.

[00:56:05] Speaker 02:
We're going to accept them.

[00:56:07] Speaker 03:
But if you continue on to the end of that sentence, it does go on to say- That have been adopted by the states would be useful.

[00:56:13] Speaker 03:
That will be useful in reviewing state proposals on this topic, which does suggest, I think consistent with other language in that section of the guidance, that the division offices retain the discretion to determine that particular proposals

[00:56:27] Speaker 03:
are inconsistent with the prohibitions on flashing intermittent or moving lights.

[00:56:32] Speaker 03:
And division offices retain the authority to assess those proposals on any of these five specified criteria.

[00:56:38] Speaker 02:
But for the most part, the division offices aren't going to see the things at this level of granularity.

[00:56:43] Speaker 02:
That's permitting, and that's done by the states, and that doesn't have to be run through the division office.

[00:56:47] Speaker 03:
Well, the specific permitting decisions don't.

[00:56:49] Speaker 03:
But the regulations adopted by states on digital billboards certainly do.

[00:56:54] Speaker 02:
So a state presumably, though, could just

[00:56:56] Speaker 02:
work all of these terms, 4 and 10 seconds, 1 and 4 seconds, into their regulation, and the, presumably, the administration, the Federal Highway Administration would say, great, that's just what we expected.

[00:57:08] Speaker 03:
Well, they could, and that would be a matter for the division offices, and to be sure, I think the division offices have generally consistent with the past practice, now approve regulations that have these features.

[00:57:19] Speaker 03:
But in some sense, let me get to my second point, because even if you disagree with me on the first point, I think that the second point is an important one.

[00:57:26] Speaker 03:
I think if you look at the cases on numerical standards that scenic primarily relies, and it's really primarily the Seventh Circuit's decision in Hawker, but also this court's decision in the Catholic Health Initiatives case, I think that those cases make clear that numerical standards are not in and of themselves sufficient to tip some agency action into the legislative rule category.

[00:57:48] Speaker 03:
And I think in particular, if you take a look at Judge Posner's opinion in the Hochter case, that opinion really has a very strong flavor of arbitrary and capricious review about it, because Judge Posner repeatedly referred to the fact that there was something arbitrary about the notion that an agency could establish a height requirement for fences when the underlying regulatory obligation was simply that fences be of a particular structural strength.

[00:58:16] Speaker 03:
Here, by contrast, you have these terms, flashing, intermittent, or moving, that necessarily contemplate a durational element.

[00:58:23] Speaker 03:
And one might quibble about what the appropriate durational period is to render something flashing, intermittent, or moving.

[00:58:33] Speaker 03:
But that is the classic sort of issue on which an agency gets deference.

[00:58:36] Speaker 03:
And sure, if Scenic America had come into court and argued that the particular choices here were arbitrary or capricious because the agency failed to provide a sufficient policy justification for choosing the ranges that it did, that would be a classic arbitrary and capricious challenge with which this court is well familiar.

[00:58:56] Speaker 03:
But that is really not what is going on here.

[00:58:58] Speaker 03:
And I would just note, circling back to my first point, that to the extent

[00:59:02] Speaker 03:
that the guidance does not contain a detailed policy analysis or the sort of lawyerly appellate type exegesis that CNIC seems to think is required.

[00:59:11] Speaker 03:
That is simply because what FHWA was doing was simply, precisely summarizing what division offices had previously done.

[00:59:20] Speaker 03:
And that goes to the question of whether there is final agency action, but it certainly suggested a minimum that what FHWA did here was interpretive.

[00:59:27] Speaker 02:
Thank you, Mr. Chamberlain.

[00:59:29] Speaker 02:
I know we used up all your time, but we'll give you a couple of minutes, Mr. Lutz.

[00:59:34] Speaker 06:
Can you clarify the New York, what your position is about the New York 12 hours?

[00:59:41] Speaker 05:
Our position is that it needs to remain steady continuously, not just the 12 hours.

[00:59:47] Speaker 05:
And in fact, it was very nice of the Highway Administration to reference Scenic America's rulemaking petition because they haven't responded to it yet.

[00:59:56] Speaker 05:
Scenic America filed it in 2010 in another attempt to get

[01:00:02] Speaker 05:
the ability to comment on the question of whether digital billboards are allowed under the federal-state agreements and have not gotten any response from the administration.

[01:00:16] Speaker 06:
And briefly, what is your response to the government's argument that the final agency action comes when the divisional office makes the decision?

[01:00:27] Speaker 05:
I would point to the language of the guidance itself.

[01:00:35] Speaker 05:
Your Honor, the highway administration has done us all a favor of highlighting in bold what's the important language here, which they use in the words of Appalachian Power Company.

[01:00:49] Speaker 05:
They use mandatory, not permissive language by saying that acceptable criteria

[01:00:56] Speaker 05:
do not violate a prohibition against intermittent flashing or moving.

[01:01:01] Speaker 05:
This was not only in the guidance itself but in the email that was sent out attaching the guidance from headquarters office and on Joint Appendix page 538 the conclusion asks that or explains that they're sending out the guidance memorandum to achieve national consistency which

[01:01:23] Speaker 05:
indicates to me that it's trying to get those pesky division offices in line that aren't remaining consistent.

[01:01:34] Speaker 05:
This is really on all fours with NRDC, the EPA, which has not been mentioned yet here.

[01:01:42] Speaker 05:
In that case, the EPA had sent out a headquarters guidance that was aimed at regional offices

[01:01:48] Speaker 05:
It removed their discretion to reject implementation plans that didn't meet a statutory fees provision by allowing an alternative.

[01:01:59] Speaker 05:
And the court found that that had bound regional offices and was a final agency action.

[01:02:05] Speaker 05:
The district court thought that that was nearly analogous to here.

[01:02:10] Speaker 05:
I also just wanted to make one point with regards to redressability.

[01:02:14] Speaker 05:
Judge Wilkins, you mentioned Renal Physicians Association and the point where if the court were to repudiate a physician, that that could give redressability.

[01:02:32] Speaker 05:
Two of the reasons for why you would find this to be a violation

[01:02:37] Speaker 05:
the notice and comment provisions is that the 2007 guidance has created arbitrary numeric criteria and is 180 degrees counter to the regulations and claims to interpret.

[01:02:52] Speaker 05:
Both of those would be repudiations of the 2007 guidance and would tell the division offices that they could not select

[01:03:01] Speaker 05:
something along the lines of four to ten seconds.

[01:03:03] Speaker 05:
Thank you.

[01:03:04] Speaker 06:
Oh, I'm sorry.

[01:03:08] Speaker 06:
Mr. Blutz, you're familiar with the post-properties case, I trust?

[01:03:13] Speaker 06:
Yes.

[01:03:15] Speaker 06:
We said they're referring back to

[01:03:21] Speaker 06:
A couple more of these injury questions.

[01:03:28] Speaker 06:
In both BMC and SPaN, the plaintiff organizations chose to redirect their resources to counteract the effects of the defendant's allegedly unlawful acts.

[01:03:37] Speaker 06:
They could have chosen instead not to respond.

[01:03:39] Speaker 06:
In neither case did our standing analysis depend on

[01:03:43] Speaker 06:
the voluntariness or involuntariness of their expenditures.

[01:03:47] Speaker 06:
Instead, we focused on whether they undertook the expenditures in response to and to counteract the effects of the defendant's alleged discrimination, rather than in anticipation of legislation or litigation.

[01:04:00] Speaker 06:
So how is your claim on standing to injury for the organization consistent with that?

[01:04:12] Speaker 06:
I think it's explained well, so the voluntariness or non-voluntariness.

[01:04:28] Speaker 06:
undertaken to counteract the effects of the defendant's decisions here?

[01:04:36] Speaker 05:
Yes, so two things have happened to Scenic America since the 2007 guidance.

[01:04:40] Speaker 05:
Not only, like in Metropolitan Washington, has it been more difficult for them to rely on division offices' reasonings

[01:04:48] Speaker 05:
in front of zoning boards.

[01:04:51] Speaker 05:
That's back to lobbying.

[01:04:55] Speaker 05:
But there's also the increase in digital billboards in the members and constituents' neighborhoods.

[01:05:01] Speaker 05:
So it's not only that it's become more difficult for them, so they're running uphill.

[01:05:08] Speaker 05:
against the tide of digital billboards, but the 2007 guidance has pulled away the ability for them to rely on the 2007, on the division office's interpretations to reject.

[01:05:24] Speaker 06:
I don't think that's consistent with the Havens requirement that the lobbying litigation and so on is not a cognizable injury.

[01:05:34] Speaker 06:
In Havens it was the diminution of the stock of housing.

[01:05:38] Speaker 05:
Here it's the increase in the number of digital billboards.

[01:05:44] Speaker 05:
That is the same type of harm to the members.

[01:05:48] Speaker 06:
That's the harm you invoke for the individual.

[01:05:53] Speaker 05:
Yes.

[01:05:54] Speaker 05:
Not only is it a harm for the individual members, but it's a harm for the organization because the organization had previously had a portfolio of other programs, a conservation director.

[01:06:05] Speaker 06:
Resource allocation decision about

[01:06:07] Speaker 06:
moving your resources from other programs to this, it doesn't tell us whether the this is still just advocacy.

[01:06:16] Speaker 05:
It's not only advocacy, it's counseling and education along the lines of what HOME was providing its constituents, it was providing services to.

[01:06:30] Speaker 05:
Very similar to how, if you read the Lloyd Declaration, Joint Appendix 39 to 42, since the 2007 guidance, she's had to provide counseling, educational materials, manage websites, et cetera.

[01:06:45] Speaker 07:
Thank you.

[01:06:47] Speaker 02:
Thank you so much.

[01:06:47] Speaker 02:
Cases submitted.