Ind. Dep't of Transp. v. FMG Indianapolis, LLC
| Decision Date | 26 March 2021 |
| Docket Number | Court of Appeals Case No. 20A-PL-215 |
| Citation | 167 N.E.3d 321 |
| Parties | INDIANA DEPARTMENT OF TRANSPORTATION, Appellant-Respondent, v. FMG INDIANAPOLIS, LLC, Stephen Roudebush, and Jeffory Roudebush, Appellees-Petitioners. |
| Court | Indiana Appellate Court |
Attorneys for Appellant: Theodore E. Rokita, Attorney General of Indiana, Benjamin M. L. Jones, Deputy Attorney General, Indianapolis, Indiana
Attorneys for Appellee FMG Indianapolis: Bryan H. Babb, Alan S. Townsend, Sarah Parks, Bose McKinney & Evans LLP, Indianapolis, Indiana
Attorney for Appellees Stephen & Jeffory Roudebush: Stephen W. Cook, Cook & Cook, Noblesville, Indiana
Attorneys for Amicus Curiae Outdoor Advertising Association of Indiana: A. Richard M. Blaiklock, Charles R. Whybrew, Lewis Wagner LLP, Indianapolis, Indiana
[1] Since the system of Interstate and Defense Highways was created during the Eisenhower administration, Indiana and every other state has participated in the program under which billions of federal gas tax dollars have been distributed for construction. As a condition for receiving these dollars, states must agree to various federal standards covering topics that run from highway design to highway beautification.
This case arises from the standards applicable to billboards.
[2] The signs at issue in this case were built adjacent to State Road 32 in 1974. The signs are located next to each other, and each sign is supported by two steel posts. The signs do not touch, and they are not structurally connected to each other. In 1989, Stephen Roudebush and Jeffory Roudebush acquired the real estate where the signs are located and subsequently leased the signs to FMG Indianapolis.
[3] In 1993, the Roudebushes and FMG ("Owners") registered the signs with the Indiana Department of Transportation and applied for a sign permit pursuant to Indiana Code section 8-23-20-25 (1993), that required all outdoor advertising signs in existence on July 1, 1993 along federally-regulated and interstate highways be registered by December 1993. In January 1996, a representative of the Indiana Department of Transportation inspected the signs and recommended approval. In 1998, INDOT approved the application and issued a permit. The Owners then entered into a thirty-year lease for the signs.
[4] In June 2016, INDOT informed the Owners that one of the signs is illegal and must be removed. Owners sought administrative review, and the parties cross-moved for summary judgment. An Administrative Law Judge granted summary judgment for the Owners. The ALJ stated she was leaving undecided issues such as the statute of limitations and equitable estoppel, basing her decision instead on what she termed a "fundamental fairness doctrine." Appellant's App. Vol. 2, p. 43.
[5] INDOT objected to the ALJ's order and requested review by the Department's Commissioner. In April 2019, the Commissioner reversed the ALJ's order and entered summary judgment in favor of INDOT. The Commissioner determined that the statute of limitations did not bar revocation of the permit and that the Department was not equitably estopped from revoking it.
[6] Owners then sought judicial review. Following briefing and argument at a hearing, the court issued findings of fact and conclusions of law vacating the Commissioner's order and entering judgment for the Owners. The court concluded that the statute of limitations is a complete bar to revocation and that INDOT is estopped from revoking the permit. The court also agreed with the ALJ that "fundamental fairness requires that INDOT not be allowed to revoke the [p]ermit after so many years." Id. at 14. INDOT now appeals.
[7] INDOT presents four issues for our review, which we restate as:
[8] When we consider the decision of an administrative agency, our standard of review is governed by the Administrative Orders and Procedures Act (the Act). The Act provides that a court may grant relief only if it determines that a party seeking judicial review has been prejudiced by an agency action that is:
Ind. Code § 4-21.5-5-14(d) (1987).
[9] A court may not overturn an administrative determination because it would have reached a different result. Walker v. State Bd. of Dentistry , 5 N.E.3d 445 (Ind. Ct. App. 2014), trans. denied. "An interpretation of statutes and regulations by an administrative agency charged with the duty of enforcing those regulations and statutes is entitled to great weight unless this interpretation would be inconsistent with the law itself." Id. at 448. Although this Court defers to an agency's findings of fact, no such deference is accorded to its conclusions of law. Hotmer v. Ind. Family & Soc. Servs. Admin. , 150 N.E.3d 705 (Ind. Ct. App. 2020). The burden of demonstrating the invalidity of the agency's action is on the party asserting such. Ind. Code § 4-21.5-5-14(a).
[10] About a decade into the interstate program, President Lyndon B. Johnson signed the Highway Beautification Act of 1965 (HBA),1 the purpose of which, in large measure, was to remove billboards along the interstate highway system in order to promote safe travel and preserve natural beauty. In this regard, President Johnson said: " " 3 AM. LAW ZONING Highway Beautification Act § 26:2 (5th ed. 2020).
[11] To achieve its stated objectives, the Beautification Act authorized the U.S. Secretary of Transportation to reduce federal highway funds to states that did not effectively control the erection and maintenance of billboards located in areas adjacent to certain federally-assisted highways. 23 U.S.C. § 131(b). It also provided for establishing federal-state agreements concerning billboard regulations on size, lighting, spacing, and other issues. 23 U.S.C. § 131(d).
[12] In 1967, Indiana adopted the Highway Advertising Control Act to accommodate HBA requirements. See Ind. Code §§ 8-12-2-1 to -17 (formerly Acts 1967, ch. 293; repealed by P.L.18-1990, SEC. 299, eff. March 13, 1990). Recognizing the state's obligation to comply with the HBA's terms, it directed the governor to negotiate an agreement with the federal government regarding the size, lighting, and spacing of signs. See Ind. Code §§ 8-12-2-1, -4.
[13] In 1971, Governor Edgar Whitcomb entered into an agreement ("1971 Agreement") with the Secretary of the U.S. Department of Transportation covering these topics.
[14] In 1990, the General Assembly repealed the Highway Advertising Control Act and replaced it with the Billboard Act. See Ind. Code §§ 8-23-20-1 to -24.
[15] In April 1993, Indiana Code section 8-23-20-25(a) tasked the Department with permitting of outdoor advertising signs in order to regulate their erection and maintenance along certain of our state's highways.
INDOT was directed to adopt rules to carry out the statute's provisions and to implement the HBA. Ind. Code § 8-23-20-25(e). Accordingly, in 1994 INDOT promulgated administrative rules to regulate signs and billboards. See 105 Indiana Administrative Code §§ 7-3-1 to - 13 (repealed and replaced by 105 I.A.C. §§ 7-4-1 to - 23 on July 24, 2019).
[16] Although acknowledging its initial mistake in issuing a permit to the Owners, the Department asserts that it has the authority to now revoke the permit and order removal of one of the signs. The Owners dispute that.
[17] Before turning to the challenge of INDOT's authority, we address a threshold issue Owners raise throughout their brief. INDOT's permitting task concerned signs along the interstate and primary system, as such was defined in 23 United States Code section 131(t) on June 1, 1991. Ind. Code § 8-23-20-25(a). As Section 25(a) indicates, the entire billboard regulating and permitting system is based on the location of a sign. If a sign is located adjacent to a highway that is in a category of roads subject to regulation, sometimes referred to as a "control area," the sign is subject to the regulations on outdoor advertising. Conversely, if a highway is not in one of those categories, the sign is not subject to regulation.
[18] Here, while Owners concede that State Road 32 is a highway in a control area (i.e., subject to regulation), they claim it was not designated as such until 1994. Specifically, they assert that State Road 32 (and thus their signs) was not subject to regulation until 1994 when INDOT promulgated 105 Indiana Administrative Code section 7-3-5(c) and listed State Road 32 as a control area.
[19] Section 7-3-5 provides:
(a) The territory under the jurisdiction of the department for the purposes of this article shall include all interstates and the Federal-Aid Primary System as defined on June 1, 1991, and any other highways where control of outdoor advertising is required by 23 U.S.C. 131 in effect on December 18, 1991. Where additional roadways become subject to the requirements of 23 U.S.C. 131, as effective on December 18, 1991, such are deemed added to the control areas...
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