Colorado’s second-highest court concluded last month that the Colorado Department of Transportation did not violate the constitutional rights of an outdoor advertising company by denying two permits for billboards in Adams County.

StreetMediaGroup, LLC argued CDOT violated its right to equal protection under the law by allowing “large, influential competitors” to maintain signs not in compliance with regulations, while denying StreetMedia’s request. A Denver judge initially agreed with the company that the differential treatment constituted a violation, but a three-judge Court of Appeals panel disagreed.

For StreetMedia to claim it fell into a “class of one” in which it experienced less favorable treatment than its peers, wrote Judge Grant T. Sullivan, it would need to show that CDOT acted intentionally in approving noncompliant permits for others but not for StreetMedia.

But an administrative law judge found “CDOT granted at least some of the earlier permits by mistake. Mere mistakes or errors of judgment don’t rise to the level of intentional or purposeful discrimination that will support a claim under the Equal Protection Clause,” Sullivan elaborated in the Nov. 20 opinion.

StreetMedia sought to place two billboards on either side of Interstate 25. In 2018, CDOT denied permits for both, citing the “interchange rule,” which prohibits the placement of advertising devices near an interchange in unincorporated areas.

After holding a hearing, Administrative Law Judge Timothy L. Nemecheck reversed CDOT’s denial, relying on a different rule than the interchange rule. Both sides challenged the decision, and in 2023, CDOT issued a final order finding a denial was appropriate under the interchange rule.

StreetMedia sought judicial review. District Court Judge Sarah B. Wallace rejected one of StreetMedia’s constitutional arguments, that CDOT’s actions violated StreetMedia’s free speech rights under the First Amendment. She noted that the alleged differential treatment was not based on the content of StreetMedia’s billboards and therefore did not constitute a violation.

However, Wallace did find that StreetMedia had shown that at least six permits for competitor companies, Lamar, Outfront, and Mile High, were continuously renewed by CDOT despite violating the interchange rule.

“The Court also cannot find any legitimate state activity that would support such differential treatment,” she wrote. “CDOT offered no concrete explanation for its continued blessing of those devices.”

In its appeal, CDOT noted the administrative law judge had concluded that the issuance of the noncompliant permits was based upon “specific facts and circumstances related to the site in question.” Therefore, he was “unable to conclude from the evidence in the record that Respondent volitionally violated the statute or rules governing outdoor advertising in each of
the specific instances.”

Based on that, contended CDOT, Wallace improperly substituted her own view of the evidence for that of the administrative judge.

But with the exception of one permit, “there really wasn’t any record as to why they were granted, notwithstanding the violation of the interchange rule,” said Judge Craig R. Welling during oral arguments.

“Why should CDOT be given carte blanche to come in and say anything that it wants, as long as it’s not, ‘We gave the exemptions to other companies for reasons that we don’t care to disclose here?'” added Judge Steve Bernard.

Yet, the panel was also concerned that Wallace strayed from the administrative judge’s finding of no “volitional violation.”

“Isn’t it possible that the ALJ decided there was no volition because it’s equally likely CDOT was simply sloppy?” asked Bernard.

“We should not be punished in a situation where other people are getting to do things that we want to do and should be able to do, but are not because of sloppiness from CDOT,” responded attorney Charles R. Whybrew for StreetMedia.

Sullivan observed that even if StreetMedia’s three competitors had the noncompliant permits now through CDOT’s essentially automatic renewal process, they were not necessarily the original applicants.

“The six noncompliant permits that have been discussed at the district court, those three larger companies didn’t own any of those six permits,” he said. “It was McDonald’s and other companies that you don’t complain about favorable treatment. Does that matter?”

Ultimately, the panel held that StreetMedia could not compare its initial permit application to competitors who benefited from the automatic renewal process. Therefore, the administrative law judge’s original finding that CDOT did not intentionally approve noncompliant permits doomed StreetMedia’s equal protection claim.

The case is StreetMediaGroup, LLC et al. v. Department of Transportation et al.