National Advertising Co. v. State Highway Commission

• Court: Missouri Court of Appeals
• Writing for the Court: SMITH; NORWIN D. HOUSER and ALDEN A. STOCKARD
• Citation: National Advertising Co. v. State Highway Commission, 549 S.W.2d 536 (Mo. App. 1977)
• Decision Date: 22 February 1977
• Docket Number: No. 37498,37498
• Parties: NATIONAL ADVERTISING COMPANY, Plaintiff-Appellant, v. STATE HIGHWAY COMMISSION, Defendant-Respondent. . Louis District, Division Four

Page 536

549 S.W.2d 536

NATIONAL ADVERTISING COMPANY, Plaintiff-Appellant, v. STATE HIGHWAY COMMISSION, Defendant-Respondent.

No. 37498.

Missouri Court of Appeals, St. Louis District, Division Four.

Feb. 22, 1977.

Motion to Modify Opinion Denied April 15, 1977.

Coburn, Croft, Shepherd & Herzog, Patrick C. Dowd, St. Louis, for plaintiff-appellant.

William Darmstaedter, II, State Highway Dept., Manchester, Bruce A. Ring, Chief Counsel, J. David Bechtold, Jefferson City, for defendant-respondent.

Williams & Smallwood, John Z. Williams, Rolla, amicus curiae for Clarence A. Nowak et al.

Neale, Newman, Bradshaw & Freeman, Paul L. Bradshaw, Joseph A. Bohrer, Springfield, amicus curiae, for Pioneer Advertising Co., et al.

Spencer, Fane, Britt & Browne, Dale E. Sporleder, Jefferson City, amicus curiae, for DeSoto Advertising Co., et al.

SMITH, Presiding Judge.

Plaintiff appeals from an adverse declaratory judgment and denial of a permanent injunction arising from proposed actions by defendant pursuant to the Missouri Billboards law, Sections 226.500 to 226.600 RSMo 1969. ¹ It is initially necessary to determine what matters raised on the appeal are still viable in view of the amendment of the law by House Bill 1478 ² effective June 24, 1976. To do that a review of the act and its legislative history and the facts surrounding this litigation is necessary.

In 1965, the Federal Highway Beautification Act of 1965 (23 U.S.C. Section 131 et seq.) was enacted requiring states to effectively regulate outdoor advertising structures within a restricted are (660 feet of the nearest right-of-way of any interstate or primary highway) or be penalized 10% of their federal highway appropriation. The purpose of the legislation was to promote an orderly display of outdoor advertising by, among other things, providing funds to the states for the removal of unsightly outdoor advertising in the restricted area which cluttered open space or was unattractive by its appearance. In the same year the Missouri legislature passed Conference Committee Substitute for Senate Bill 8, ³ Laws 1965 pp. 900-905, (Sections 226.500 to 226.600 RSMo 1969) to meet this state's obligations under the federal act. S.B. 8 was Missouri's first comprehensive outdoor advertising control law. It went into effect January 1, 1968. See generally Whitman v. State Highway Commission, 400 F.Supp. 1050 (W.D.Mo.1975).

The provisions of S.B. 8 relevant to this action declared unlawful all signs erected in non-conformity with the sizing, spacing, lighting and locational standards in the statute. S.B. 8, Laws 1965, Sections 3, 5, 9, pp. 901-904. These unlawful signs could be removed without compensation after written notice to the sign owner or property owner. S.B. 8, Laws 1965, Section 9, p. 904.

Enforcement of S.B. 8 was lax. No comprehensive program to enforce S.B. 8 was effectuated by the defendant and few signs were removed while the law was in effect. Funds from the federal government to pay its share of removal costs were not forthcoming.

On February 10, 1972, the United States Secretary of Transportation declared that S.B. 8 did not provide the "effective control" of signs required by the federal act, and ordered a 10% penalty imposed. The Secretary agreed to suspend the penalty if Missouri would agree to two conditions. First, enter into an agreement with the Federal Highway Administration setting out the guidelines for "effective control." Second, enact legislation by March 31, 1972, implementing the regulatory guidelines stated in the agreement. The agreement, which states that Missouri will enact the necessary legislation in order to receive its full share of federal-aid highway funds, requires that the state "effectively control" outdoor advertising signs, erected after the effective date of the new legislation (March 30, 1972) as required by the federal act.

In response to this agreement Senate Committee Substitute for Senate Bill 382, ⁴ Laws 1972, pp. 856-863 (Sections 226.500 to 226.600 RSMo 1969) was enacted to carry out the state's obligation required by the federal legislation. Standards for sizing, spacing and lighting were enacted along with locational restrictions. Sections 226.520 and 226.540, S.B. 382, Laws 1972, pp. 857-861. Other restrictions relating to the upkeep, erection and placement of signs were also included, a permit system to monitor the enforcement of the controls was adopted, and provision made for removal of unlawful signs. Sections 226.550-226.580, S.B. 382, Laws 1972, pp. 861-863. Compensation was to be paid for the removal of lawful non-complying signs, Section 226.570, S.B. 382, Laws 1972, p. 862, while unlawful signs were to be removed without compensation, Section 226.580, S.B. 382, Laws 1972, pp. 862-863. Removal of signs was authorized only after notice received by the property or sign owner giving him thirty days to remedy the defect or appeal the action of the defendant. Section 226.580, supra.

Section 226.550.2 of S.B. 382 provided that " . . . the state highway commission shall within ninety days of the effective date of this act (March 30, 1972) issue permits and identification tags, upon application and payment of the requisite fee for any structure lawfully in existence on the day prior to the effective date of this act . . . ."

The defendant interpreted this provision to require the applications be made for permits for pre-March 30 lawfully erected signs by June 28, 1972. It was further defendant's position that failure to make such application by that deadline thereafter precluded sign owners from obtaining permits and made such signs subject to removal without compensation pursuant to Section 226.580, S.B. 382. Plaintiff was notified of rejection as untimely of a number of permit applications pursuant to this position. From December 1973, until July 30, 1975, plaintiff received 438 removal notices for 438 separate signs. The sole ground of removal for 419 of these signs was the failure to obtain a permit. The remaining 19 notices either specified a separate ground for removal or listed a separate ground in addition to lack of a permit. Plaintiff requested an administrative hearing on each notice. These hearings were consolidated and at the time suit was filed evidence had been taken in two hearings involving 98 of plaintiff's signs. No decision in those hearings has been rendered because of a restraining order issued by the trial court. That restraining order was continued in effect by the trial court pending resolution of this appeal.

As part of the administrative hearings, defendant propounded interrogatories to plaintiff. Over plaintiff's objection that no authority existed for interrogatories in an administrative hearing, plaintiff was ordered by the hearing examiner to answer the interrogatories.

We will make no attempt to delineate the issues raised in plaintiff's suit for declaratory judgment and injunction, but will rather delineate the issues presented by plaintiff's appeal from the lower court judgment. Those issues are that the trial court erred in:

(1) upholding defendant's rules that required permit applications to be filed prior to June 28, 1972;

(2) finding the law imposes a mandatory permit system;

(3) finding that permits are required as a condition to erecting signs in unzoned business areas;

(4) finding that the law permits the removal without compensation of signs erected in violation of lighting, sizing, spacing or location requirements of S.B. 8. (signs erected between Jan. 1, 1968 and March 30, 1972);

(5) finding that the law does not authorize permits for non-conforming signs after a removal notice has been issued; and

(6) failing to rule on the validity of the use of interrogatories in administrative hearings;

(7) failing to issue an injunction.

After the notice of appeal and most of the briefing in this case, H.B. 1478, Laws 1976, p. --- became effective on June 24, 1976. It has a substantial impact upon the points raised by plaintiff. The most important impact is upon the question of permits for signs lawfully in existence prior to March 30, 1972. S.B. 382 contained the previously quoted language regarding permits and in addition stated:

"226.550.2 . . . For purposes of this act, the terminology 'structure lawfully in existence' or 'lawfully existing' sign or outdoor advertising shall, nevertheless, include the following signs unless said signs violate the foregoing provisions of paragraphs (a) thru (e) of this subsection:

(1) All signs erected prior to January 1, 1968;

(2) All signs erected before the effective date of this act (March 30, 1972) but on or after January 1, 1968, which would otherwise be lawful but for the failure to have a permit for such signs prior to the effective date of this act; provided, however, that any sign or structure which was not in compliance with sizing, spacing, lighting, or location requirements of the act repealed hereby, wheresoever located, shall not be considered a lawfully existing sign or structure; . . . ."

H.B. 1478 added the following language to Sec. 226.580 dealing with removal of unlawful signs:

"3. . . . Notwithstanding any other provisions of sections 226.500 to 226.600, no outdoor advertising structure defined as a 'structure lawfully in existence' or 'lawfully existing,' by subdivisions (1) and (2) or section 226.550 shall be removed for failure to have a permit until a notice, as hereinabove provided, has been issued after August 13, 1976, which shall specify failure to obtain a permit as the basis for alleged unlawfulness, and shall advise that failure to take the remedial action of applying for a permit within thirty days will result in the sign being removed. . . ."

It is conceded by the defendant, and apparent from the language, that these sections have the effect of "forgiving" a prior failure to obtain a permit and affords a sign owner the opportunity to have his sign treated as "lawfully in existence"...