Issue Preclusion, Not Claim Preclusion, Controls Prior Standing Dismissals; New Self‑Censorship Facts Confer Standing to Challenge Discretionary Billboard Variances

Introduction

This Sixth Circuit decision sits at the intersection of preclusion doctrine and the First Amendment’s prior-restraint jurisprudence, in the familiar context of municipal billboard regulation. Outdoor One Communications LLC (Outdoor), a Michigan billboard company, applied in 2020 to erect a billboard in the Charter Township of Canton. Canton denied the permit because the sign exceeded height and size limits in its sign code. Outdoor sued, alleging (among other things) that Canton’s sign ordinance was an unconstitutional prior restraint. The district court found Outdoor lacked standing, and the Sixth Circuit affirmed in an unpublished decision (Outdoor I).

In 2023, Outdoor sued again—this time reframing its prior-restraint challenge to allege that Canton’s ordinance functions as a de facto prohibition on billboards because no General Industrial (GI) district actually abuts a limited access interstate highway, making a variance effectively mandatory for any billboard. Outdoor alleged that the variance (and earlier, a modification) regime vested officials with “open-ended discretion,” causing Outdoor to self-censor by declining to apply—not just for the originally proposed billboard, but for any billboards in Canton. The district court dismissed on res judicata grounds. The Sixth Circuit now affirms in part, vacates in part, and remands.

The opinion clarifies two important points:

For jurisdictional dismissals (including dismissals for lack of standing), issue preclusion (collateral estoppel)—not claim preclusion—is the proper lens; and it precludes relitigation only as to the same jurisdictional issue on unchanged facts.
In the prior-restraint context, a plaintiff can plausibly allege injury-in-fact through self-censorship where a discretionary variance scheme acts as a gatekeeper for all billboards, even if neutral size/height rules also exist. That injury is redressable notwithstanding separable time, place, and manner limits when the discretionary review is alleged to be “inextricably linked” to any attempt to build a billboard.

Summary of the Opinion

The court draws a careful line. It holds that Outdoor is issue-precluded from relitigating its prior-restraint standing theory to the extent it is based on the same facts as Outdoor I—namely, its refusal to seek a variance for the original billboard application it submitted and had denied. But the court vacates the dismissal insofar as Outdoor now alleges new, post-judgment facts: that it has been declining to apply for other billboard permits in Canton due to the ordinance’s allegedly standardless variance regime. Those new allegations of self-censorship are sufficient, at the pleadings stage, to establish standing (injury, causation, and redressability) for a facial prior-restraint challenge.

The panel further distinguishes International Outdoor, Inc. v. City of Troy, where severability and unchallenged size/height limits deprived the plaintiff of redressability. Here, by contrast, Outdoor alleges that a variance is required for any billboard at all (because no GI district abuts a limited access interstate), so the discretionary variance provisions may be “inextricably linked” to the ordinance’s operation. On this record, the court rejects Canton’s redressability and severability arguments at the pleadings stage. The judgment is thus affirmed in part (preclusion of the “original application” theory), vacated in part (new self-censorship theory proceeds), and remanded.

Analysis

Precedents Cited and Their Influence

Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc., 590 U.S. 405 (2020) – Distinguishes claim preclusion from issue preclusion. The panel relies on this taxonomy to frame its preclusion analysis and to emphasize the distinct operation of collateral estoppel on jurisdictional rulings.
American Surety Co. v. Baldwin, 287 U.S. 156 (1932) – Establishes that res judicata principles apply to jurisdictional questions. This supports the court’s premise that earlier standing dismissals can have preclusive effects.
Shaw v. Merritt-Chapman & Scott Corp., 554 F.2d 786 (6th Cir. 1977) – Earlier Sixth Circuit case applying “res judicata” in the jurisdictional context. The panel acknowledges Shaw’s nomenclature but clarifies that issue preclusion is the better analytical fit.
Hooker v. FEC, 21 F. App’x 402 (6th Cir. 2001) – Sixth Circuit applied issue preclusion to bar a third suit previously dismissed for lack of standing. The opinion leans on Hooker as the circuit’s closest guidance and aligns with it by adopting an issue-preclusion framework.
Bank of Louisiana v. FDIC, 33 F.4th 836 (5th Cir. 2022) and Wright & Miller, Federal Practice and Procedure § 4436 – Persuasive authority supporting the view that issue preclusion is the better tool for jurisdictional determinations. The panel cites these to reinforce its doctrinal choice.
Arkansas Coals, Inc. v. Lawson, 739 F.3d 309 (6th Cir. 2014) – Recites the elements for issue preclusion, which the court applies to assess whether Outdoor’s prior suit forecloses its current standing theory on unchanged facts.
National Ass’n of Home Builders v. EPA, 786 F.3d 34 (D.C. Cir. 2015) and Park Lake Resources Ltd. v. USDA, 378 F.3d 1132 (10th Cir. 2004) – Establish and illustrate the “changed facts” exception: new post-judgment circumstances can cure jurisdictional defects and defeat preclusion. The panel uses this to separate Outdoor’s “original application” theory (precluded) from its “new self-censorship” theory (not precluded).
Pogue v. Principal Life Ins. Co., 979 F.3d 534 (6th Cir. 2020) – Preclusive effect follows the appellate decision when a district court is affirmed on alternative grounds. The panel uses this to correct the district court’s focus on its own prior reasoning and to anchor preclusion in the Sixth Circuit’s Outdoor I disposition.
United States v. Binford, 818 F.3d 261 (6th Cir. 2016) – An appellate court may affirm on any basis supported by the record. This gives the panel latitude to resolve preclusion under the appellate rationale in Outdoor I.
City of Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750 (1988) – The Supreme Court’s leading case on facial prior-restraint challenges: when a licensing scheme grants unbridled discretion, a speaker subject to the scheme may mount a facial challenge without first applying for and being denied a license, because self-censorship itself is the injury. This is the backbone of Outdoor’s theory and the court’s acceptance of self-censorship as injury.
Phillips v. DeWine, 841 F.3d 405 (6th Cir. 2016); MacDonald v. Safir, 206 F.3d 183 (2d Cir. 2000); CAMP Legal Defense Fund v. City of Atlanta, 451 F.3d 1257 (11th Cir. 2006); Osediacz v. City of Cranston, 414 F.3d 136 (1st Cir. 2005) – These cases frame when a plaintiff is “subject to” a licensing scheme and how self-censorship satisfies injury-in-fact in prior-restraint litigation. The panel draws from this body of law to find Outdoor’s allegations adequate.
Prime Media, Inc. v. City of Brentwood, 398 F.3d 814 (6th Cir. 2005) and Prime Media, Inc. v. City of Brentwood, 485 F.3d 343 (6th Cir. 2007) – Confirm billboards as protected expression and address how prior interactions with permitting indicate a plaintiff is subject to the scheme.
Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) – Articulates the three-part standing test (injury in fact, causation, redressability). The panel applies this to Outdoor’s new allegations.
Tucker v. Middleburg-Legacy Place, 539 F.3d 545 (6th Cir. 2008) – De novo review of pleadings, accepting well-pleaded facts as true. Guides the procedural posture.
Uzuegbunam v. Preczewski, 592 U.S. 279 (2021) – Nominal damages supply redress for completed violations, helping to satisfy redressability in First Amendment cases.
International Outdoor, Inc. v. City of Troy, 974 F.3d 690 (6th Cir. 2020) and International Outdoor, Inc. v. City of Troy, 77 F.4th 432 (6th Cir. 2023) – Address severability and redressability where neutral size/height limits exist. The panel distinguishes these decisions because, in Canton, Outdoor plausibly alleges that any billboard requires discretionary approval, rendering the variance provisions “inextricably linked” with the ordinance’s operation.

Legal Reasoning

Choosing the Correct Preclusion Doctrine
The district court applied claim preclusion. The Sixth Circuit, guided by Hooker and authoritative treatise commentary, holds that issue preclusion is “the more applicable doctrine” for prior jurisdictional determinations (including standing). A dismissal for lack of jurisdiction does not adjudicate the merits of the claim, so claim preclusion is ill-fitting. Issue preclusion, by contrast, bars relitigation of the same jurisdictional issue actually litigated and necessary to the prior judgment.
Applying Issue Preclusion to Outdoor’s Two Factual Theories
- Recycled facts are precluded. To the extent Outdoor’s prior-restraint claim is based on its refusal to seek a variance for the original billboard application (the one denied for size/height), Outdoor I already decided that Outdoor failed to allege injury because it did not self-censor; it actually engaged with the permitting process. Those facts are unchanged, so issue preclusion bars relitigation of injury for that theory.
- New facts can defeat preclusion. Outdoor now alleges that, since Outdoor I, it has avoided applying for any billboard permits in Canton due to the allegedly standardless variance regime. The passage of time and new conduct plausibly represent post-judgment developments. Under Home Builders and Park Lake, such changes can cure prior jurisdictional deficiencies, so issue preclusion does not bar this new theory.
Standing on the New Self-Censorship Allegations
- Injury in fact. Under Lakewood and related cases, a plaintiff “subject to” a licensing scheme that vests unbridled discretion in government officials may bring a facial challenge without applying. Outdoor is a billboard company, previously applied once, and now alleges it must obtain a variance for any billboard because no GI district abuts a limited access interstate, and that the variance decision-makers possess “complete discretion.” Outdoor alleges it is self-censoring by not applying for any billboards in Canton. These allegations suffice to plead injury-in-fact via self-censorship.
- Causation. The causal link is the “prospect of having to submit” to officials’ unbridled discretion, which is alleged to be the reason Outdoor refrains from applying.
- Redressability. Canton argued that striking discretionary provisions would not redress Outdoor’s inability to erect its earlier, oversized sign. But Outdoor’s present injury is not the inability to build a noncompliant billboard; it is self-censorship induced by an allegedly standardless variance gatekeeper. A declaration and nominal damages (Uzuegbunam) would redress that injury. The court also rejects Canton’s severability argument at this stage because the variance regime may be “inextricably linked” to the ordinance’s operation where a variance is necessary for any billboard, distinguishing International Outdoor (where neutral limits independently foreclosed the plaintiff’s proposals).
Pleading and Preservation Nuances
Although Canton pleaded “res judicata / claim preclusion,” the panel deems the defense adequately preserved for issue preclusion in light of Shaw’s terminology and Rule 8(e)’s command to construe pleadings to do justice. Outdoor was not prejudiced because its responses would apply to either preclusion label.
Scope of the Decision
The court does not resolve the underlying First Amendment merits. It decides only that issue preclusion bars part of Outdoor’s standing theory, that changed facts allow the new self-censorship theory to proceed, and that Outdoor has standing on that theory at the pleadings stage. The panel also notes that Canton amended its ordinances after briefing—altering variance criteria and eliminating a modification clause—and leaves the legal implications of those amendments to the parties and the district court on remand.

Impact

Preclusion doctrine clarified in the Sixth Circuit. Litigants facing prior jurisdictional dismissals should analyze future suits through issue preclusion. Plaintiffs cannot replead the same facts to repair standing, but bona fide post-judgment factual developments can open the courthouse door.
First Amendment standing via self-censorship remains robust. The court reaffirms Lakewood’s principle that being subject to a standardless licensing scheme creates cognizable injury without submitting an application, especially where discretionary review is unavoidable for any speech (here, any billboard).
Redressability and severability are context-sensitive. Municipal defendants cannot automatically defeat redressability by pointing to neutral, severable provisions (e.g., size/height limits) if plaintiffs plausibly allege that a discretionary variance regime is an indispensable gatekeeper for any expressive activity. International Outdoor does not control when the challenged discretion is “inextricably linked” to the ordinance’s operation.
Pleading practice for municipalities. While “res judicata” may suffice to preserve an issue preclusion defense, municipalities should plead preclusion with precision to avoid briefing detours.
Sign-code drafting and enforcement. Local governments should closely scrutinize variance and modification provisions for “unbridled discretion” risks, particularly when zoning maps render categorical allowances illusory (e.g., if the only permitted billboard districts do not actually exist in the required adjacency). Amendments that cabin discretion and clarify criteria may mitigate prior-restraint exposure.
Remand considerations. Because Canton amended its ordinance after briefing (altering variance standards and eliminating a modification clause), the district court may confront questions of mootness, severability under current law, and the scope of available relief (including nominal damages) for any past injury.

Complex Concepts Simplified

Prior restraint: A law or policy that requires government permission before speech occurs. If officials have “unbridled discretion” to grant or deny that permission, speakers may self-censor rather than risk arbitrary denial. The Supreme Court permits facial challenges to such schemes without forcing speakers to apply and be denied first.
Self-censorship as injury: In First Amendment cases, choosing not to speak because of a credible threat of discretionary suppression is itself a concrete injury that satisfies Article III standing.
Issue preclusion (collateral estoppel): Bars relitigation of a specific issue (e.g., whether the plaintiff lacked standing) that was actually litigated and necessary to a final judgment. For jurisdictional rulings, it applies only when the facts are unchanged.
Claim preclusion (res judicata): Bars a new lawsuit involving the same parties and the same claim that was or could have been raised previously after a final judgment on the merits. It does not fit dismissals for lack of jurisdiction because those are not merits adjudications.
Redressability: The requirement that a favorable court decision will likely remedy the plaintiff’s injury. In First Amendment cases, even nominal damages can redress a completed violation.
Severability: Whether an unconstitutional provision can be cut from an ordinance while leaving the rest intact. If a challenged discretionary provision is indispensable to the ordinance’s operation (e.g., a universal gatekeeper), severability may not defeat redressability at the pleadings stage.
Variance vs. modification: Mechanisms allowing deviation from strict code requirements. Variances are typically granted by a zoning board under defined criteria; “modification” provisions can be broader. If criteria are vague or open-ended, they risk being prior restraints when applied to protected speech.
“Subject to” a scheme: A plaintiff shows it is subject to a permitting/licensing regime when it plausibly alleges that it intends to engage in regulated speech and cannot do so without running the gauntlet of the challenged process (even if no new application is filed).

Conclusion

Outdoor One Communications LLC v. Charter Township of Canton refines Sixth Circuit law on the preclusive effect of prior standing dismissals and reinforces core prior-restraint principles. Jurisdictional dismissals trigger issue preclusion, not claim preclusion, and only as to unchanged facts. Where post-judgment developments lead a speaker to self-censor under an allegedly standardless variance regime, a facial prior-restraint challenge can proceed at the pleadings stage because self-censorship is a cognizable injury, caused by the licensing discretion, and redressable through declaratory relief and nominal damages. The opinion also provides a careful and practical distinction from International Outdoor: when a variance is allegedly required for any billboard, severability of neutral size/height limits does not automatically defeat redressability.

Practically, municipalities should ensure that their variance criteria meaningfully constrain discretion, especially where zoning maps make nominal billboard allowances impossible without discretionary relief. Plaintiffs, for their part, should recognize that while they cannot relitigate standing on the same facts, new facts of self-censorship can sustain standing for a renewed facial challenge. The case proceeds on remand to test those allegations against the ordinance as now configured.