A billboard company sued the city yesterday, saying a law that restricts private outdoor advertising near parks and highways while exempting the city’s own commercial signs is illegal.

The lawsuit, filed by OTR Media Group Inc. in Manhattan’s state Supreme Court, says the law imposes an illegal restraint on trade and violates the company’s rights to equal protection and free speech.

The OTR lawsuit attacks Local Law 31, passed in 2005 by the City Council and signed by Mayor Bloomberg. OTR’s papers say the law creates permit requirements for commercial advertising signs that impose a practical ban on all new privately owned signs and threaten many existing ones.

In brief, the law bans signs within 900 feet and within view of arterial highways or within 200 feet and within view of public parks. The law affects private advertising near 72 major roadways and bridges and more than 1,000 parks, OTR’s court papers say.

At the same time, the court papers say, the city, which owns and rents thousands of commercial advertising signs to raise revenue, is exempt from the new requirement. OTR wants the court to declare the distance requirements illegal and to bar the city from enforcing them.

The city’s law department said yesterday that two other complaints were filed recently in federal court on behalf of outdoor advertising companies to challenge the constitutionality of rules for the size and location of advertising signs near highways. The city said it believed there was “absolutely no merit to these claims.”

“The city’s regulation of outdoor signs addresses important public interests in minimizing visual clutter and reducing unnecessary distractions to drivers on its major roadways,” city attorney Sheryl Neufeld said in a statement.

The law department said it had not received the OTR legal papers and could not comment on that case.

OTR says the number of private signs will decrease because of the law. It says this will not only limit work opportunities for union members who install and maintain the signs but also will have a negative impact on small businesses in the city.

The CEO of New York-based OTR, Ari Noe, said in a statement released by lawyer Daniel Alter, “The city has violated our state Constitution’s guarantees of freedom of speech and equal protection in order to monopolize the outdoor advertising business.”

Mr. Noe said it was “necessary to take legal action against the city’s overreaching” to protect OTR, labor unions, small businesses and consumers.