600 P.2d 258 (N.M. 1979), 11946, Stuckey's Stores, Inc. v. O'Cheskey

Docket Nº:11946.
Citation:600 P.2d 258, 93 N.M. 312, 1979 -NMSC- 060
Opinion Judge:[11] Sosa
Party Name:STUCKEY'S STORES, INC., a Delaware Corporation, Individually and as Representative on behalf of its Franchisees in the State of New Mexico, George Bassett, Robert B. Gottlieb and Shelby C. Phillips, Jr., Plaintiffs-Appellants, v. Fred O'CHESKEY, Chief Highway Administrator, State Highway Department, Defendant-Appellee.
Attorney:Olmsted & Cohen, Charles D. Olmsted, G. Gary Duncan, Santa Fe, for plaintiffs-appellants., Jeff Bingaman, Atty. Gen., V. Henry Rothschild, Stephen S. Hamilton, Asst. Attys. Gen., State Highway Dept., Santa Fe, for defendant-appellee., Sutin, Thayer & Browne, Raymond W. Schowers, NMCLU, Albuquerqu...
Judge Panel:PAYNE and FEDERICI, JJ., concur.
Case Date:August 06, 1979
Court:Supreme Court of New Mexico
 
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Page 258

600 P.2d 258 (N.M. 1979)

93 N.M. 312, 1979 -NMSC- 060

STUCKEY'S STORES, INC., a Delaware Corporation, Individually

and as Representative on behalf of its Franchisees in the

State of New Mexico, George Bassett, Robert B. Gottlieb and

Shelby C. Phillips, Jr., Plaintiffs-Appellants,

v.

Fred O'CHESKEY, Chief Highway Administrator, State Highway

Department, Defendant-Appellee.

No. 11946.

Supreme Court of New Mexico.

August 6, 1979

Page 259

Rehearing Denied Sept. 11, 1979.

Page 260

[93 N.M. 314] Olmsted & Cohen, Charles D. Olmsted, G. Gary Duncan, Santa Fe, for plaintiffs-appellants.

Jeff Bingaman, Atty. Gen., V. Henry Rothschild, Stephen S. Hamilton, Asst. Attys. Gen., State Highway Dept., Santa Fe, for defendant-appellee.

Sutin, Thayer & Browne, Raymond W. Schowers, NMCLU, Albuquerque, amicus curiae.

OPINION

SOSA, Chief Justice.

The questions we address in this appeal are:

1) Does the New Mexico Highway Beautification Act, §§ 67-12-1 to 14, N.M.S.A.1978 (hereinafter referred to as the Act), abridge plaintiffs' freedom of speech in violation of the first 1 and fourteenth amendments[93 N.M. 315]

Page 261

2 to the United States Constitution and Article II, § 17 3 of the New Mexico Constitution?

2) Do the permit provisions of the Act violate the just compensation and due process clauses 4 of the United States and New Mexico Constitutions?

3) Are plaintiffs' outdoor advertising signs erected prior to the 1971 amendments to the Act "lawfully erected" under state law and thus entitled to compensation in the event the State condemns them under the Act?

4) Did the State Highway Department waive any right to claim it can destroy all of plaintiffs' lawfully erected signs for which 1976 permit fees had been paid by reason of the Department's acceptance of the fees?

5) Is the State Highway Department equitably estopped from claiming that certain of the plaintiffs' signs may be taken by it without the payment of just compensation?

On August 9, 1976, plaintiff Stuckey's Stores, Inc. (hereinafter referred to as Stuckey's), a Delaware corporation, individually and as a representative of its New Mexico franchisees, filed this action in the District Court of Santa Fe County seeking a judgment declaring the Act and certain regulations adopted thereunder unconstitutional. Stuckey's also sought a preliminary injunction enjoining defendant from destroying plaintiffs' outdoor advertising signs pursuant to the Act.

On January 11, 1978, after a three-day non-jury trial, the district court entered its judgment against plaintiffs on all issues. The court concluded that the Act is a valid exercise of the State's police power. It also concluded that enforcement of the Act against plaintiffs does not deny them due process of law or freedom of speech in violation of the United States and New Mexico Constitutions. Plaintiffs appeal.

Plaintiffs Bassett, Gottlieb and Phillips own lands adjacent to the rights-of-way of interstate and primary highways in New Mexico. Outdoor advertising signs relating to plaintiffs' stores are situated on these lands, which are located outside of any zoned industrial or commercial areas. Plaintiffs' businesses consist of furnishing and selling gasoline and other motor products, food, candy, souvenirs and novelties to motorists using the interstate and primary highways along which their businesses are located. Plaintiffs' stores are rurally located and, in most instances, are a substantial distance from the closest town along the same interstate or primary highway at which similar goods or services are available. Approximately 80 percent of plaintiffs' customers are out-of-state passenger car motorists; 15 percent are in-state passenger car motorists from other parts of New Mexico; and 5 percent are local passenger car motorists.

The location of a Stuckey's store along an interstate or primary highway is made known to motorists of such highways by means of outdoor advertising signs located outside, but within 660 feet of, the right-of-way of such highways on privately owned [93 N.M. 316]

Page 262

land pursuant to agreements between the store owner and the owner of the land on which the signs are situated. Advertising signs are spaced at intervals along the highway in both directions from plaintiffs' stores.

The New Mexico Highway Beautification Act was promulgated in 1966 in response to the federal Highway Beautification Act of 1965, As amended, 23 U.S.C. §§ 131, 136, 319 (1966 & Supp.1979). See N.M. Laws 1966, ch. 65, §§ 1-17. The federal Act specifies that unless a state provides for effective control over outdoor advertising along its interstate and primary highways, federal-aid highway funds will be reduced by amounts equal to 10 percent of the amounts which would otherwise be apportioned to that state. 23 U.S.C. § 131(b).

The New Mexico Act conforms with the requirements of the federal Act. It provides that:

In order to promote public safety, health, welfare, convenience and enjoyment of public travel, to protect the public investment in public highways and to preserve and enhance the scenic beauty of lands bordering public highways, it is the public policy of this state to regulate the erection and maintenance of outdoor advertising . . . in areas adjacent to the interstate and primary systems in accordance with the Highway Beautification Act (67-12-1 to 67-12-14 NMSA 1978). The legislature finds that regulation of outdoor advertising . . . is for a highway purpose.

§ 67-12-3.

The Act only applies to New Mexico's federal-aid interstate and primary highway systems. It does not apply to New Mexico's secondary system or to other state highways. According to State Highway Department surveys, approximately 5.6 percent of the total highways and roads in New Mexico are currently designated as interstate and primary highways. The Act prohibits the erection and maintenance, after 1966, of any outdoor advertising within 660 feet of the nearest edge of the right-of-way of an interstate or primary highway, unless it is an on-premise sign, an off right-of-way sign located in areas which are zoned industrial or commercial 5 under authority of law, or in unzoned industrial or commercial areas 6 as defined by regulations promulgated by the State Highway Commission (hereinafter referred to as Commission). § 67-12-4.

The Act also provides that the Commission shall establish and collect uniform fees for the issuance of permits for outdoor advertising. § 67-12-5(C). Failure of timely payment of the permit fee renders the outdoor advertising subject to removal by the Commission without compensation and at the owner's expense. § 67-12-5(D).

I. Whether the Act Abridges Plaintiffs' Freedom of Speech

In their first point, plaintiffs claim that the Act impermissibly infringes upon the first amendment guarantee of freedom of speech made applicable to the states by the fourteenth amendment to the United States Constitution and Article II, § 17 of the New Mexico Constitution. Plaintiffs challenge the court's findings which provide, in effect, that:

[93 N.M. 317]

Page 263

1) outdoor advertising signs limited to locations on the premises or within 1,000 feet of a Stuckey's store or to commercially or industrially zoned areas along interstate or primary highways in New Mexico afford a reasonable means of informing the motorist on such highways of the presence and location of a Stuckey's store;

2) the Act sets forth a regulatory scheme for outdoor advertising which is reasonable, tends to promote the purposes of the Act, and does not impose an undue burden upon any class of persons; and

3) the regulatory scheme constitutes a reasonable regulation as to time, place and manner of plaintiffs' communications of commercial information through outdoor advertising.

Plaintiffs argue that these findings are not supported by substantial evidence. They contend that the limited advertising allowed by the Act does not afford timely, adequate or feasible means of informing traveling motorists on interstate and primary highways of the presence of, or the goods and services available at, its stores. Plaintiffs argue that the evidence supports their requested finding that patronage, sales and property values have been substantially reduced by the limited advertising allowed under the Act. Defendant counters that the court's findings are supported by substantial evidence.

We have previously addressed the issue of the Act's constitutionality. In National Advertising Co. v. State, Etc., 91 N.M. 191, 571 P.2d 1194 (1977), sign owners brought suit seeking a declaratory judgment that they should be compensated for the value of their signs which had been removed pursuant to the Act, or alternatively, if their signs were not compensable, that the Act be held unconstitutional as applied to them. This Court specifically held that the Act "is a constitutional enactment by the Legislature." Id. at 193, 571 P.2d at 1196. The Court said:

(I)t was implicit in the Memorandum Opinion that the Act was considered a valid exercise of the state's police power. Property is always held subject to the fair exercise of the state's police power, and reasonable regulations enacted for the benefit of the public health, convenience, safety, or general welfare are not unconstitutional. (Citations omitted.)

Id. at 193, 571 P.2d at 1196.

Plaintiffs argue that the holding in National Advertising is inapplicable to the case at bar because the Act was challenged on due process, rather than first amendment, grounds. For the purpose of clarification, we now hold that the Act does not abridge plaintiffs' guarantee of freedom of speech in violation of the United States and New Mexico Constitutions.

Like the federal Highway Beautification Act, the state Act restricts the place and manner of erection of plaintiffs' outdoor advertising structures. It does not regulate the...

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