After years of extending the power of aldermanic privilege to oversized billboard approvals, the Chicago city council recently dispatched with an aspect of that practice, to the evident disappointment of at least one of its beneficiaries.  Under that longstanding policy, an alderman (Chicago’s term for a city council member) could recommend, and the council would order, that the city’s building commissioner issue or deny a permit for an oversized billboard proposed in the alderman’s ward—the requirements of the city’s zoning ordinance notwithstanding.  In an effort to create a more cohesive scheme, however, the city council recently eliminated the portion of that policy which had allowed it to order approval of oversized billboards conflicting with the zoning ordinance.

This change created something of a predicament for Image Media Advertising because it also repealed the council’s prior approval of several Image Media signs, and the city’s building commissioner refused to permit them on the grounds that they violated the city’s zoning ordinance.  In reliance on the original council vote, Image Media had taken certain actions and made certain expenditures, all of which were for naught under the council’s changed practice.

Image Media sued.  In its complaint, it alleged several theories of liability, chief among them that the new ordinance effected a Fifth Amendment taking because (1) it rendered Image Media’s sign space valueless, (2) it deprived Image Media of the sign permits it had hoped to receive, and (3) Image Media had relied to its detriment on the expected approvals.  The company also argued that the new ordinance violated its rights under the Due Process, Equal Protection, and Contracts Clauses, as well as the First Amendment.

Chicago moved to dismiss the complaint, and the district court denied and granted the motion in part, devoting most of its attention to the takings claim.  The city agreed that Image Media’s first takings theory—that it held a property interest in the sign space itself—supplied a cognizable property interest, and the court further concluded that Image Media’s allegation that the ordinance had rendered its sign space valueless sufficed to shield its regulatory takings claim against the motion to dismiss.  The court took a dimmer view of the other property interests alleged, however, and concluded that neither could support a claim for just compensation under the Fifth Amendment.

The court granted the city’s motion to dismiss as to all of Image Media’s other claims reasoning that (1) the city alleged a plausible theory justifying its new ordinance sufficient to defeat Image Media’s due process claim; (2) Image Media’s equal protection claim failed because the company could not identify a similarly situated party receiving different treatment; (3) there could be no First Amendment violation because the new ordinance did not, as Image Media had alleged, affect any person’s ability to petition city council; and (4) Image Media’s Contracts Clause claim could not succeed because the company could have foreseen the regulatory change, and, in any event, that change was reasonable and necessary to combat an important social problem.