CASE LAW SESSION

2017 NAHBA Conference

Indianapolis, Indiana

April 30-May 4, 2017

QUESTION

Does the Interchange Blackout Rule (where signs are prohibited within 500 feet of an interchange) apply to both interstate and limited access highways on the primary system?

How many say just on interstate?

How many say on limited control access highways

KEGERREIS OUTDOOR ADVERTISING COMPANY

v.

DEPARTMENT OF TRANSPORTATION

Argued: March 7, 2017 - FILED: April 3, 2017

Commonwealth Court of Pennsylvania

NOTICE: THIS OPINION HAS NOT BEEN

RELEASED FOR PUBLICATION IN THE

PERMANENT LAW REPORTS. UNTIL RELEASED,

IT IS SUBJECT TO REVISION OR WITHDRAWAL.

• PennDOT denied permit application because the proposed sign was to be located within 500 feet of the interchange area of I–83 and I–283 in violation of the Outdoor Advertising Control Act of 1971 (Act),

• KEGERREIS appealed the denial of the premit.

• PennDOT issued a supplemental denial on the basis that the proposed sign was to be located within 500 feet of the interchange area of State Route (SR) 322 in violation of the same statute and regulation.

• Petitioner again filed an appeal relating to this supplemental denial.

• Parties entered into a Stipulation of Settlement noting KEGERREIS assertion that the sign would be visible only from I–83 and I–283 and no other controlled highway, and reserved unto PennDOTthe right to inspect the sign after it is constructed and in operation. The Stipulation of Settlement further reserved PennDOT's right to take administrative action should any of the sign's advertising be visible from any controlled highway other than I–83 and I–283.

• KEGERREIS constructed the sign and after completing an investigation of the as-built sign, PennDOT revoked the permit because the southern face of the sign was visible from SR 322, and within 500 feet of Ramps E and F on SR 322.

• The hearing officer found as fact that SR 322 was part of the primary system of roadways, it was a limited access road, the southern face of the sign was visible from the main-traveled way of SR 322 and Ramps E and F, and the sign was within 500 feet of Ramp E.

• Based on these findings, the hearing officer concluded that PennDOT properly revoked the permit and directed that the southern face of the sign be removed

• HELD: Act and its accompanying regulation expressly prohibit the placement of a sign within 500 Feet of an interchange. The obvious purpose of such a prohibition is to protect the safety of the traveling public by reducing distractions to the operators of motor vehicles at significant decision points.

• legislative intent behind the enactment of the “Interchange Prohibition” as seeking “to control the proximity of certain-size signs at the exits from highspeed highways where vehicles are in the process of maneuvering to change directions while reducing speed, so that the distraction such signs would create for the exiting operator would be greatly reduced or diminished, if not eliminated.”

• the agency's interpretation of its statute may not be disregarded by this Court unless it is clearly erroneous or is inconsistent with the intent or purpose of the statute.

• PennDOT's interpretation of the Act, that the location of a given sign must satisfy the requirements of the “Interchange Prohibition” for both interstate and primary highways when both are part of the interchange, is not clearly erroneous and in fact is consistent with the intent and purpose of the Act as noted above.

• KEGERREIS argues that the sign does not violate the “Interchange Prohibition” with respect to SR 322 because Ramps E and F are not interchanges, but merely merge points and/or simply points at which SR 322 continues in a different direction. The court disagree.

• HELD: Term “interchange” is not defined in the Act or PennDOT's regulations. In such cases, “[w]ordsand phrases shall be construed according to rules of grammar and according to their common and approved usage

• While not defined in the Act, the language of the “Interchange Prohibition” itself provides guidance wherein it discusses the measurement of 500 feet as being calculated “from the beginning or ending of the pavement widening at the exit from or entrance to the main-traveled way.”

• KEGERREIS argues that DOT failed to present substantial evidence that the sign was within 500 feet of any interchange. Again, the court disagreed.

• KEGERREIS’ General Manager introduced a copy of a site plan, drawn to scale, with respect to the location of the sign. This site plan clearly reveals that the sign is well within 500 feet of Ramp E. Thus, there is substantial evidence in the record that KEGERREIS's sign was in violation of the “Interchange Prohibition.”

• PennDOT's interpretation of the “Interchange Prohibition” is applicable to both interstate and limited access highways on the primary system, such as SR 322. Because the southern face of Petitioner's sign is located within 500 feet of Ramp E, an interchange, the sign is violative of the “Interchange Prohibition.”

QUESTION

Is customary use determine just by how long a sign is erected?

Yes

No

MASSACHUSETTS DEPARTMENT OF TRANSPORTATION

v.

HAT 9 BOWDOIN REALTY, LLC & another.

January 9, 2017

90 Mass.App.Ct. 1124 - Appeals Court of Massachusetts.

Unpublished Disposition

• MassDOT sought injunctive relief and civil penalties for their continued display of outdoor advertising without a permit

• Hat 9 is the owner of a multistory building in Boston. For about 2 years, two signs, owned and maintained by Sponsor, have been attached on the outside of the building. The signs advertised various alcoholic beverages and other products. The signs are within 660 feet of the nearest right of way, and are visible from the “main travelled way of a highway in the interstate or primary systems.”

• MassDOT never issued a permit for the signs, and has made several written demands for their removal.

• Two years after erection, HAT 9 submitted an application for a permit that did not comply with the DOT's regulations and was later returned. No other applications seeking permitting for the signs have been received by the MassDot

• HAT 9 appears to take the position that since the signs have been erected for about 2 years, they have established a “customary use” argument to allow their signs to remain.

• 23 usc 131(d) PROVIDES: In order to promote the reasonable, orderly and effective display of outdoor advertising while remaining consistent with the purposes of this section, signs, displays, and devices whose size, lighting and spacing, consistent with customary use is to be determined by agreement between the several States and the Secretary, may be erected and maintained within six hundred and sixty feet of the nearest edge of the right-of-way within areas adjacent to the Interstate and primary systems which are zoned industrial or commercial under authority of State law, or in unzoned commercial or industrial areas as may be determined by agreement between the several States and the Secretary.

• HELD: The claim has no merit, particularly where HAT 9 submitted nothing, other than their own assertions, to contradict the DOT's evidence. HAT 9' claim that they are entitled to a permit as a matter of right is equally without merit.

• Because no State, county, or local zoning authority has made a determination of the defendants' “customary use” of the signs that appears in the record, any grounds for their entitlement to a customary use by right is without foundation. See 23 U.S.C. § 131(d) (2012).

QUESTION

If commercial and industrial uses predominates in a multi-use zone, does that mean it is a predominately commercial and industrial use area?

Sun Outdoor Advertising, LLC, a Washington limited liability company,

• v.

Washington State Department of Transportation,

FILED: August 29, 2016

381 P.3d 169, 195 Wash.App. 666

Court of Appeals of Washington

• SUN appeals the denial of a permit to erect a billboard along a designated scenic highway. Under the Scenic Vistas Act, billboards are generally prohibited along scenic roads, but an exception applies if:• (1) the area is zoned by the county for predominantly commercial and

industrial uses and • (2) the area contains development which is visible from the highway.

• SUN argues that because a majority of the itemized permitted uses in the applicable zoning designation can be categorized as commercial or industrial in nature, those uses “predominate.”

• Because the applicable zoning designation allows broad categories of uses and prohibits very few categories of uses, no particular category of use predominates.

• Therefore, WashDOT properly concluded the proposed billboard location was not an area zoned for predominantly commercial or industrial uses.

• Two Pronged Test to determine if area no part of scenic system:• Sections of highways specifically excluded as scenic by

legislature, or

• located within areas zoned by the governing county for predominantly commercial and industrial uses, and having development visible to the highway, as determined by WashDOT

• When this two-prong test is met, the area is no longer part of the “scenic system” and billboards are permitted.

• The term “predominantly” is not defined in the Act. “Undefined words in a statute are accorded their ordinary meanings

• SUN premise is that to determine whether an area is predominantly zoned for any particular use turns on counting up the number of specific uses allowed in a particular zoning designation. It claims that because “95 of the 97” itemized permitted uses can be categorized as “plainly commercial or industrial in nature,” those uses predominate

• But the plain meaning of “predominant” requires a more carefully calibrated comparison of uses permitted. If every use is permitted, then no particular use predominates. Similarly, in analyzing whether a particular use predominates in a multi-use zone, we have to compare equivalent categories of uses.

• Here, the proposed billboard location is not within an area zoned by the County as a specific commercial or industrial district. Rather, it is zoned to permit a wide variety of uses, including but not limited to commercial and industrial uses.

• Because the zoning allows such a broad range of uses and prohibits only a very few uses, there is no particular category of use that predominates. Commercial and industrial uses do not predominate

QUESTION

Should a DOT deny a permit based on 3rd party information

received that the permit does not comply with regulations?

SPELLMAN OUTDOOR ADVERTISING SERVICES, LLC

v.

OHIO DEPARTMENT OF TRANSPORTATION c/o Outdoor Advertising Device Control Section, Division of Construction Management et al.

Rendered on March 16, 2017

2017 WL 1026246

Court of Appeals of Ohio

• On March 16, 1953,the Mullet family conveyed a strip of land from a larger piece of property to the Ohio TurnpikeCommission (“OTC”) to be used for the planned construction of the Ohio Turnpike. This strip of land consisted of approximately 14.5 acres and it cut through 80 acres leaving Mullett family property on both sides of the Turnpike

• At that time, a deed was recorded prohibiting signs on the remaining lands which is visible from the Turnpike and which is not at that date in existence. The covenant shall run with the land. (hereinafter “Mullett Restriction”)

• At the same time, the Mulletts sold the south side property to the Spellmans, hereinafter the “Spellman property”

• Since 1953, the Spellman Property has been sold sold 3xs

• In 1989, the Mulherns bought it, but none of the transfers in the chain of title mentioned the MullettRestriction.

• In 2007, the Mulherns leased it for a sign site and lessor applied to ODOT for 4 OA permits.

• ODOT issued the permits for 4 signs visible from the turnpike.

• They then applied for 4 additional OA permits that would be visible on the reverse side of the billboards for WB readers on turnpike

• ODOT approved those applications as well.

• One sign was built. The others not built due to economic conditions.

• 2009, lessor sought renewal of 3 permits for the signs that had not been constructed and DOT issued the renewals – valid until 2011

• 2012, lessor applied for further renewal.

• 2014, ODOT denied the permits when discovered the Mullett Restriction because the lessor had no “site control”

• Lessor appealed

• ODOT requires applicant to demonstrate legal control or site control over the property on which the applicant has applied to place the sign.

• Despite the applicant providing an acknowledgement of site control, ODOT took the position that it was entitled to look beyond the acknowledgement and deny the permits based on recognition of an unresolved question concerning site control from a 3rd party (OTC).

• Question: Can ODOT deny a permit based on 3rd

parties allegation of lack of site control?

1. Statute list 8 grounds for denial, none included current situation

2. ODOT does not have authority to decide property disputes/ rights.

• HELD: when substantive real property rights are at issue (applicability of a deed restriction), ODOT does not have authority to decide such a dispute, and the appropriate course of action is to file an action in the court of common please.

• ODOT’s permit function pertain only to the enforcement of height and distance requirements mandated by Federal law. Its duties have nothing to do with the enforcement of independent deed restrictions.

• Ohio courts, not ODOT, have jurisdiction to determine substantive real property questions concerning whether a particular deed restriction encumbers a particular piece of property.

THE END

QUESTIONS