The 3rd Court of Appeals in Austin has cleared the way for a lawsuit that alleges a former Texas Department of Transportation official rigged the bidding for a multimillion-dollar statewide contract for road signs.

The ruling last week revives a lawsuit by Texas Logos LP, a subsidiary of outdoor media giant Lamar Advertising Co., which held the state contract from 1993 through 2006.

Under the contract, Texas Logos sold advertising space on the familiar blue highway signs that tell motorists what restaurants, hotels, gas stations or tourist destinations are nearby.

Texas Logos alleges that Gregory Brinkmeyer of Taylor, a former Transportation Department engineer who was in charge of the signs contract, solicited business from the bidders for a private consulting company he was starting and that he allowed the winning bidder — LoneStar Logos & Signs LLC — to submit "false and misleading material" in its bid.

LoneStar, a joint venture of Quorum Media Group LLC of Dallas and Austin-based Media Choice, took over the contract Jan. 1, 2007.

Vince Hazen, a vice president at Media Choice, said the claims in the lawsuit are "complete, whole-cloth fabrication by Lamar."

"There is absolutely not one shred of anything to support the claims," he said.

Hazen said LoneStar had not decided whether to appeal the appeals court's decision to the Texas Supreme Court.

Brinkmeyer, who left the Transportation Department in 2006 after 17 years, said, "Everything on that contract was done as it was supposed to be done."

Brinkmeyer, who established a consulting company with his wife shortly before he left the agency, said he has not solicited or done any work for any of the contract bidders, either before or after leaving his state job.

Texas Logos has not yet produced evidence of its allegations against Brinkmeyer or LoneStar.

Everett Stewart, president of another Lamar Advertising subsidiary, Interstate Logos LLC, said the evidence will come to light as the case proceeds.

The sign business is big business, especially since the program was revamped by the Legislature and the transportation agency in recent years.

LoneStar generated $3 million for the state in the first 16 months it held the contract.

The Transportation Department said the contract calls for the state to collect between 15 percent and 51 percent of the fees that LoneStar charges to businesses, depending on the level of traffic. LoneStar is required to pay a minimum of $10 million to the state over five years.

Lawmakers added new businesses such as 24-hour pharmacies to the list of eligible advertisers and expanded the number of tourist-oriented businesses — wineries, marinas, amusement parks — that can advertise on roadside signs.

Businesses pay between $900 and $3,000 a year to advertise on the blue signs, depending on the traffic. Bidders for the contract also submitted new pricing structures, some tied to the amount of traffic that passes by sign locations.

Under the old contract, Texas Logos paid the state 5 percent of sign revenue, the department said, and charged flat fees. The company generated $1.4 million for the state over the entire 13 years of the contract.

The Texas Logos lawsuit, filed in state District Court in Williamson County, is the company's second suit against Brinkmeyer and the winning contractor. Its first suit, filed in state District Court in Travis County, also named the Texas Department of Transportation and asked the court to void the state's contract with LoneStar.

The 3rd Court upheld the District Court's dismissal of that first lawsuit, ruling that a claim to invalidate a completed contract was barred by sovereign immunity, a doctrine that prevents suing states unless they grant permission.

In the second lawsuit revived last week, Texas Logos isn't seeking to overturn the contract but is asking for unspecified financial damages.