Lamar Outdoor Advertising, Inc. v. Arkansas State Highway and Transportation Department

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CA 03-413

May 5, 2004


[NO. CV 01-5203]




Terry Crabtree, Judge

This is an appeal from the circuit court's order affirming the decision of the appellee Arkansas State Highway and Transportation Department which denied appellant's application for a permit to erect a billboard. Appellant, Lamar Outdoor Advertising, Inc., argues on appeal that the Commission's1 decision violates Ark. Code Ann. § 27-74-204(a)(2) (Repl. 1994) and that the circuit court erred in refusing to conduct a de novo hearing as required by Act 800 of 2001. We find no merit in either argument and affirm.

This case involves the Federal Highway Beautification Act of 1965 (FHBA) and the Arkansas Highway Beautification Act (AHBA). The FHBA, found at 23 U.S.C. § 131 et seq., requires states to provide effective control of outdoor advertising devices along certain highways or suffer a reduction in federal aid for highways. Yarbrough v. Arkansas State Highway Comm'n, 260 Ark. 161, 539 S.W.2d 419 (1976). The purposes of the FHBA are to protect the public investment in highways, to promote the safety and recreational value of public travel, and to preserve natural

beauty. Files v. Arkansas State Highway & Transp. Dep't, 325 Ark. 291, 925 S.W.2d 404 (1996). The AHBA, found at Ark. Code Ann. §§ 27-74-101 - 502 (Repl. 1994 & Supp. 2003), was enacted in 1967 to bring Arkansas into compliance with the federal act. Arkansas State Highway & Transp. Dep't v. Kidder, 326 Ark. 595, 933 S.W.2d 794 (1996). The stated policy of the AHBA is to "protect the public interest; to promote the public health, safety, and welfare; to preserve natural beauty; and to promote reasonable, orderly, and effective display of outdoor advertising in the State of Arkansas." Ark. Code Ann. §27-74-201(a) (Repl. 1994). The AHBA is considered remedial in nature and is thus liberally construed so as to effectuate the purposes sought to be accomplished by its enactment. Arkansas State Highway Comm'n v. Roark, 309 Ark. 265, 828 S.W.2d 843 (1992).

The General Assembly has vested the Commission with regulatory authority to enforce the AHBA. Files v. Arkanas State Highway & Transp. Dep't, supra. Additionally, in order to conform with federal law, the legislature authorized the Highway Commission to enter into a regulatory agreement with the Secretary of Transportation. Ark. Code Ann. § 27-75-209 (Repl. 1994). Such an agreement was entered into in January 1972, and that agreement resulted in the adoption of a series of regulations referred to as the Regulations for Control of Outdoor Advertising on Arkansas Highways.

At issue in this case are the provisions contained in Ark. Code Ann. § 27-74-204(a)(2) (Repl. 1994) and Regulation 1(F)(4). Arkansas Code Annotated section 27-74-204(a)(2) provides:

(a) With the exception of and excluding those highways, or portions of highways, which are designated by the State Highway Commission as scenic byways, nothing contained in this chapter shall prohibit the erection and maintenance of outdoor advertising signs, displays, and devices consistent with customary use within six hundred sixty feet (660') of the nearest edge of the right-of-way of interstate, primary, and other state highways designated by the State Highway Commission:

(2) Within those unzoned commercial or industrial areas which may be determined by agreement between the commission and the United States Secretary of Transportation.

The Regulation in question states:

F. Commercial or industrial activities mean those activities generally recognized as commercial or industrial by public zoning authorities in Arkansas, except that none of the following activities shall be considered commercial or industrial.

4. Activities not visible from the main traveled way.

Reading the statute and regulation together, the Department may not prohibit the erection of a billboard sign within 660 feet of the interstate in an unzoned commercial or industrial area. However, an area is not considered commercial or industrial if its activities are not visible from the main traveled way.

The proposed site of appellant's billboard was on the west side of Interstate 40 in Faulkner County at Log Mile 136.8 on property occupied by American Maintenance and Coating Corporation (AMCC). The property lies in an unzoned area outside the Mayflower corporate limits on which AMCC operates a sandblasting and painting business.

At the hearing, Ike Salater, the owner of AMCC, testified he had five employees and that his facility consisted of a small, portable office building and a forty-by-sixty-foot metal shop building that sat on a concrete slab. Its parking and operating lots were enclosed by a fence. Scattered about the area were several trucks, tractor-trailer beds that were utilized for storage, and various pieces of equipment and materials that were used in the business. With the exception of the shop building, all of the equipment was semi-mobile. A cellular tower also sits on the property. Mr. Salater said that his business does some work at the facility but that other jobs were performed off-site. The company had sandblasted and painted a hundred or so bridges; among its clients were the appellee, Kimberly-Clark, International Paper and Georgia Pacific. He testified that they are usually at the site from 5:00 to 6:00 a.m. every morning to load the equipment before traveling to the job site and that they returned every evening to unload from 6:00 to 7:00 p.m.

Bill Bailey testified that he was employed with the Beautification Section of the Highway Department and that he worked on appellant's application, which was filed in September 1998. From that time until November 29, 2000, the date of the hearing, he visited the site eighteen times. However, he found people there on only three of those occasions. Usually, the gate was locked. In July 1999, he encountered workmen who were building the shop building. Later that month, he met with Mr. Salater and a representative of Donrey, appellant's predecessor. He visited again in December 1999, and although no one was at the site, he found Mr. Salater at another business owned by Salater and was able to inspect the property. Bailey said that, other than the persons who were constructing the building, he never saw any activity at the site. He added that there was no water at the site and that it had no restroom facilities. He found numerous personal items, including a bass boat, stored in the shop building.

Bailey testified that the land surrounding the site was either forested, agricultural, or wetlands and that south and east of the site lies the Bell Slough State Wildlife Management Area. He said that, when approaching the site heading west, the business was not visible because of the vegetation and topography of the area. There is a retaining wall that divides the west and eastbound lanes of the interstate, and the wall blocks motorists' view of the business until one is directly perpendicular to the business, and then, only "at a glance," can the roof of the shop building and the side of the office be seen for several seconds. Driving eastbound and again directly perpendicular to the site, motorists speeding by can obtain a one to three-second view, "as a blur," of the buildings and equipment.

The Commission denied appellant's application based on a finding that the proposed site did not qualify as a commercial or industrial area because the business was not visible from the main traveled way. The Commission found:

The testimony, evidence and site inspection of this property show that the proposed qualifying business is almost completely obstructed from view until traffic is immediately opposite the location of the proposed qualifying business. There is only a slight glimpse of structures through the trees and vegetation along the highway. The scenery along the highway has not been broken. As a conclusion of law, the commercial or industrial activity that [appellant] is using to qualify the area as an unzoned commercial or industrial, is not visible from the main traveled lanes of I-40 as defined on page 5 of the Regulation for Control of Outdoor Advertising on Arkansas Highways and that the AHTD Environmental Division's denial of the subject permit is proper and consistent with those Regulations.

Appellant argues on appeal that the site is visible, however briefly, and that the Commission erred by arbitrarily expanding the definition of the term "visible" beyond its ordinary definition.

Our standard of review is well settled.

Our review is directed not toward the circuit court but toward the decision of the agency. That is so because administrative agencies are better equipped by specialization, insight through experience, and more flexible procedures than courts to determine and analyze legal issues affecting their agencies. Our review of administrative decisions is limited in scope. Such decisions will be upheld if they are supported by substantial evidence and are not arbitrary, capricious, or characterized by an abuse of discretion.

Lamar Outdoor Advertising, Inc. v. Arkansas State Highway & Transp. Dep't, ___ Ark. App. ___, ___ S.W.3d ___ (Dec. 3, 2003) (Lamar I). It is also settled that an administrative agency's interpretation of a statute or its own rules will not be overturned unless it is clearly wrong. Arkansas Dep't of Human Servs. v. Hillsboro Manner, 304 Ark. 476, 803 S.W.2d 891 (1991). On review of agency decisions, we determine whether an agency's interpretation of its regulations is reasonable; and although not binding on us, an agency's interpretation of its own rules is persuasive. Beverly Enterprises v. Arkansas Health Servs. Comm'n, 308 Ark. 221, 824 S.W.2d 363 (1992).

It is evident from the record that this small business operation is tucked inside an area that is predominantly wooded and pastoral. Motorists traveling along the highway are not able to see the business as they approach the site, and then only a brief glimpse of it can be seen "as a blur" when passing directly in front of it. With deference to the Commission and in light of the purposes and goals of the AHBA, we can find no fault with the Commission's application of the regulation to the facts of this case. Our supreme court has recognized that the statutory scheme of the Act is to limit billboards to commercial and industrial areas:

The statutory scheme contemplated an exemption for those areas which were already heavily commercialized or industrialized and sought to prevent areas devoted mainly to agricultural activities or forestry land from becoming glutted with signs, which would obstruct the view and detract from the beauty of the landscape. Few aesthetic features will be found in zoned or unzoned commercial or industrial areas, while rural and residential areas are more likely to include places of scenic beauty an historic interest. This classification to preserve pastoral scenery and eliminate disharmonious advertising has a substantial, fair and reasonable relation to the object of the legislation.

Yarbrough v. Ark. State Hwy. Comm'n, 260 Ark. 161, 166, 539 Ark. 419, 423 (1976). We hold that the Commission's decision is consonant with the Act, is supported by substantial evidence, and is not arbitrary and capricious, or an abuse of discretion.

Appellant's second argument is that the trial court erred by not conducting a de novo review of the Commission's decision. This same argument was rejected in Lamar I, supra. We need not address it any further.


Robbins and Neal, JJ., agree.

1 The State Highway Commission (Commission) is the administrative arm of the appellee, Arkansas Highway & Transportation Department. Ark. Code Ann. § 27-65-102 (Repl. 1994).