Arkansas St. Highway & Transportation Dept. v. Lamar Advantage Holding Co.
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Appellant, the Arkansas State Highway and Transportation Department (ASHTD), appealed an order from the circuit court that reversed its denial of a billboard permit to Appellee Lamar Advantage Holding Company (Lamar). Lamar sought a hearing with ASHTD, and the hearing officer affirmed ASHTD’s denial, citing several reasons, most notably, the billboard’s conflict with “Comprehensive Zoning” that governed the area where the billboard would be placed. Lamar appealed to the circuit court, which reversed the hearing officer’s decision. The Supreme Court reversed the circuit court’s decision, finding that “substantial evidence existed” to support the denial of the permit because of the comprehensive zoning set for the billboard’s proposed setting. The Court remanded the case for further proceedings.
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Cite as 2011 Ark. 195
SUPREME COURT OF ARKANSAS
No.
10-932
Opinion Delivered
ARKANSAS STATE HIGHWAY AND
TRANSPORTATION DEPARTMENT,
APPELLANT,
VS.
LAM AR ADVANTAGE
COMPANY,
H OLDIN G
APPELLEE,
May 5, 2011
APPEAL FR O M THE PU LASKI
COUNTY CIRCUIT COURT,
NO. CV 2009-7441,
HON. TIMOTHY DAVIS FOX, JUDGE,
A D M IN ISTR ATIVE DEC ISIO N
A FFIR M E D ; C IR C U IT C O U R T
REVERSED AND REMANDED.
PAUL E. DANIELSON, Associate Justice
Appellant Arkansas State Highway and Transportation Department (ASHTD) appeals
from the order of the circuit court reversing its denial of appellee Lamar Advantage Holding
Company’s application for a permit to erect an electronic billboard. ASHTD asserts that the
circuit court erred in reversing its denial and finding its decision contrary to law and not
supported by substantial evidence. We affirm the denial of Lamar’s permit, and we reverse the
circuit court’s order and remand.
The record reveals that on June 6, 2005, the Environmental Division of ASHTD
received a letter from Lamar, inquiring whether an outdoor advertising permit was required
from ASHTD. Specifically, the letter stated that Lamar currently had in place an outdoor
advertising structure consisting of two poster panels located on the rooftop of the Innerplan
Cite as 2011 Ark. 195
building in downtown Little Rock. The letter noted the possibility that the structure might
be demolished within the next year for a new project and that Lamar had reached an
agreement with the City of Little Rock to reduce the number of panels from two to one and
to install the structure on the north side of the new building. Lamar stated that the new panel
would not be visible to traffic on LaHarpe Boulevard, but would instead directly face the areas
of Riverfront Park and the River Market District. Lamar sought guidance as to whether a
permit from ASHTD was required “since the road it will be visible to is not a state highway
or controlled route.”
On June 21, 2005, ASHTD responded, informing Lamar that a “state billboard sign
permit will be required . . . because the sign will be visible from State Highway 10 and within
660 feet of the Highway 10 right-of-way.” Notwithstanding ASHTD’s response, Lamar
erected its electronic billboard in March 2007 and did not file a billboard-sign-permit
application until July 6, 2007. On September 17, 2007, ASHTD denied Lamar’s permit
application for the following reasons:
Lamar failed to provide a completed application, including zoning information.
Lamar erected the billboard without first securing a state permit, which is in violation
of Section 7, Paragraph B, page 28, of the Regulations for Control of Outdoor
Advertising.
The billboard is located on a residential building which does not comply with
Paragraph F.6, page 5, of the Regulations for Control of Outdoor Advertising.
The property is zoned “Planned Residential Development” (PRD) for Residential use.
State billboard permits require a “Commercial” or “Industrial” zoning classification.
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The billboard was erected adjacent to and visible from a scenic corridor where new
billboard construction is prohibited by city code. The property was issued a variance
for the purpose of circumventing billboard laws.
On October 16, 2007, Lamar requested a hearing to contest the denial of its application,
contending that
the reasons stated [for denial] . . . are contrary to Arkansas Highway & Transportation
Department (“AHTD”) regulations. The relevant AHTD regulation states that permits
are not required for signs or devices within areas of comprehensive zoning.
Regulations for Control of Outdoor Advertising, Section 6.A (Page 25).
“Comprehensive Zoning” is specifically defined in the AHTD regulation. The sign’s
location is in [an] area that is comprehensively zoned by the City of Little Rock.
Therefore, no permit is required.
A hearing was held before a hearing officer, and on October 27, 2009, ASHTD’s denial of
Lamar’s permit application was affirmed.
On November 25, 2009, Lamar filed a petition for review of the Commission’s
decision in the Pulaski County Circuit Court, and on April 19, 2010, a hearing was held on
the petition. After considering the pleadings filed, the transcript of the administrative hearing,
and the arguments of counsel, the circuit court entered its order, reversing ASHTD’s denial
and finding that ASHTD’s decision was contrary to law and was not supported by substantial
evidence. ASHTD now appeals.
ASHTD argues that its decision was based on the Federal Beautification Act, the
Arkansas Highway Beautification Act, and the Regulations of the Arkansas State Highway
Commission for the Control of Outdoor Advertising on Arkansas Highways and was not
contrary to law. It asserts that the Arkansas Highway Beautification Act is to be broadly
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construed, and accordingly, its interpretation of its regulations should not be overturned unless
clearly wrong. It maintains that there was substantial evidence to support each of its bases for
denying Lamar’s permit application.
Lamar responds that ASHTD’s decision ignored section 6(A) of ASHTD’s regulations,
which it asserts exempted it from the required permit due to the fact that the area in which
its sign was located was comprehensively zoned by the City of Little Rock. It further
contends that the administrative decision was not supported by substantial evidence.
Review of administrative agency decisions, by both the circuit court and the appellate
courts, is limited in scope. See Seiz Co. v. Arkansas State Highway & Transp. Dep’t, 2009 Ark.
361, 324 S.W.3d 336. The standard of review to be used by both the circuit court and the
appellate court is whether there is substantial evidence to support the agency’s findings. See
id. The appellate court’s review is directed, not toward the circuit court, but toward the
decision of the agency, 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. See id. When reviewing such decisions, we uphold
them if they are supported by substantial evidence and are not arbitrary, capricious, or
characterized by an abuse of discretion. See id. We review issues of statutory interpretation de
novo; however, the interpretation placed on a statute or regulation by an agency or
department charged with its administration is entitled to great deference and should not be
overturned unless clearly wrong. See id.
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As a threshold matter, we must determine whether a permit was in fact required under
the regulations of ASHTD. Based on our review of the regulations at issue, we agree that a
permit was required.
As this court has previously observed, the Arkansas Highway Beautification Act,
currently codified at Arkansas Code Annotated §§ 27-74-101 to -502 (Repl. 2010), was
adopted pursuant to a congressional directive, and its purpose is to promote the reasonable,
orderly, and effective display of outdoor advertising, to promote the safety and recreational
value of public travel, and to preserve natural beauty. See Ark. Code Ann. § 27-74-201(a)
(Repl. 2010); Files v. Arkansas State Highway & Transp. Dep’t, 325 Ark. 291, 925 S.W.2d 404
(1996). We have held that the Arkansas Highway Beautification Act is remedial in nature and
must be liberally construed so to effectuate the purpose sought to be accomplished by its
enactment. See Arkansas State Highway Comm’n v. Roark, 309 Ark. 265, 828 S.W.2d 843
(1992). Moreover, the General Assembly has vested the State Highway Commission with
regulatory authority to enforce the Act. See Ark. Code Ann. §§ 27-74-203, 27-74-211.
Pursuant to the regulations in effect at the time of Lamar’s application permit, “any
existing device within 660 feet of the nearest right of way limit of any Interstate or Primary
highway must have a permit issued by the Arkansas State Highway Department. . . . Permits
shall not be required for signs exempt under Par. 6 of these regulations.” Regulations for Control
of Outdoor Advertising on Arkansas Highways, Revised Regulations for Issuance of Permits for Outdoor
Advertising Devices & Signs, § 2. Pursuant to section 6(A) of the Revised Regulations, a permit
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“shall not be required for . . . [s]igns or devices in areas with comprehensive zoning.”
“Comprehensive zoning” is defined within the regulations, in pertinent part, as “a zoning plan
established by . . . ordinance, which includes regulations consistent with customary use and
the provisions of the agreement controlling the erection and maintenance of signs in the
zoned areas.” Revised Regulations, § 1(J). Here, it is undisputed that the property on which
Lamar’s sign was located was rezoned by the City of Little Rock from UU to PRD, or a
planned residential district, pursuant to Ordinance 19,282, and Lamar claims that this rezoning
constituted comprehensive zoning, thereby exempting it from having to obtain a permit.
A review of the regulations reveals that contained within them is an agreement with
the Federal Highway Administrator “for carrying out national policy relative to control of
outdoor advertising in areas adjacent to [the] national system of interstate and defense
highways and the federal-aid primary system.” According to that agreement, local control is
indeed permitted:
The State of Arkansas and local political subdivisions shall have full authority under
their own zoning laws to zone areas for commercial or industrial purposes and the
action of the State and local political subdivisions in this regard will be accepted for the
purposes of this agreement. At any time that a political subdivision adopts
comprehensive zoning which includes the regulating of the size, lighting, and spacing
of outdoor advertising signs within the zoned commercial and industrial areas
consistent with the purposes of the Highway Beautification Act of 1965 and with
customary use, the Arkansas Highway Commission may certify to the Administrator
as notice of effective control of signs within the zoned area.
Regulations for Control of Outdoor Advertising on Arkansas Highways, Revised Regulations for
Issuance of Permits for Outdoor Advertising Devices & Signs, Agreement, § III(E). While ASHTD
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acknowledges the possibility for local control, it maintains that certification is within its
discretion and that it must certify such a plan to the Federal Highway Administrator before
an area will be considered comprehensively zoned. We agree.
Where the State of Arkansas’s agreement with the Federal Highway Administrator
permits control by a local political subdivision, that control is in fact subject to certain
requirements, including certification:
(1) The local zoning authority’s controls must include the regulation of size, of
lighting and of spacing of outdoor advertising signs, in all commercial and industrial
zones.
(2) The regulations established by local zoning authority may be either more
restrictive or less restrictive than the criteria contained in the agreement, unless State
law or regulations require equivalent or more restrictive local controls.
(3) If the zoning authority has been delegated, extraterritorial, jurisdiction under
State law, and exercises control of outdoor advertising in commercial and industrial
zones within this extraterritorial jurisdiction, control by the zoning authority may be
accepted in lieu of agreement controls in such areas.
(4) The State shall notify the FHWA [Federal Highway Administration] in writing
of those zoning jurisdictions wherein local control applies. It will not be necessary to furnish
a copy of the zoning ordinance. The State shall periodically assure itself that the size,
lighting, and spacing control provisions of zoning ordinances accepted under this
section are actually being enforced by the local authorities.
(5) Nothing contained herein shall relieve the State of the responsibility of
limiting signs within controlled areas to commercial and industrial zones.
23 C.F.R. § 750.706(c) (emphasis added). Here, Al Collins, an employee of ASHTD, testified
that ASHTD had not certified to the Federal Highway Administrator the comprehensive
zoning of the City of Little Rock. Indeed, the record contains no evidence that a
comprehensive zoning plan by the City of Little Rock was certified by ASHTD. Because
certification of such local control was required by the agreement between the State of
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Arkansas and the Federal Highway Administration to constitute comprehensive zoning, and
because no such certification was made with respect to the property on which Lamar’s sign
was located, the property was not comprehensively zoned as defined by the regulations. For
this reason, Lamar was not exempt from obtaining a permit and was therefore required to do
so under ASHTD’s regulations.
We turn then to whether there was substantial evidence to deny Lamar’s application
for a permit. In determining whether a decision is supported by substantial evidence, we
review the record to ascertain if the decision is supported by relevant evidence that a
reasonable mind might accept as adequate to support a conclusion. See State of Louisiana v.
Joint Pipeline Grp., 2010 Ark. 374, ___ S.W.3d ___. In doing so, we give the evidence its
strongest probative force in favor of the administrative agency. See id. The question is not
whether the testimony would have supported a contrary finding, but whether it supports the
finding that was made. See id.
In this case, ASHTD denied Lamar’s permit on five different bases, as already set forth
above. Accordingly, if there is substantial evidence to support even one of the bases, we will
affirm the administrative decision. Here, substantial evidence exists to support the denial of
Lamar’s permit application because the property at issue was zoned PRD, and a zoning
classification of industrial or commercial is required for a permit.
A review of the record reveals that it is undisputed that the property on which Lamar’s
electronic billboard was located was zoned PRD, or planned residential district. However,
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pursuant to Ark. Code Ann. § 27-74-204(a), billboards may be erected (1) within those areas
zoned industrial or commercial under state law, or (2) within unzoned commercial or
industrial areas that are determined by agreement between the State Highway Commission
and the United States Secretary of Transportation. See Ark. Code Ann. § 27-74-204(a); Seiz
Co., 2009 Ark. 361, 324 S.W.3d 336. Here, Al Collins, testified that the building on which
Lamar’s sign was located was zoned PRD and that ASHTD did not allow billboards in
residentially zoned areas. He further testified that billboards were confined, pursuant to
ASHTD’s regulations, to commercial or industrial areas by the regulations.
It is clear to this court that substantial evidence existed to support ASHTD’s denial of
Lamar’s permit application on the basis that the property was not zoned commercial or
industrial. Accordingly, we affirm ASHTD’s denial of the permit application and reverse the
circuit court’s order and remand.
Administrative decision affirmed; circuit court reversed and remanded.
B AKER, J., not participating.
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