Newman Signs, Inc. v. Hjelle, 9394

• Decision Date: 03 July 1978
• Docket Number: No. 9394,9394
• Citation: 268 N.W.2d 741
• Parties: 8 Envtl. L. Rep. 20,890 NEWMAN SIGNS, INC., a North Dakota Corporation, Plaintiff, Appellee, and Cross- Appellant, v. Walter R. HJELLE, as North Dakota State Highway Commissioner, and North Dakota Highway Corridor Board, Defendants, Appellants, and Cross-Appellees. Civ.
• Court: North Dakota Supreme Court

Page 741

268 N.W.2d 741

8 Envtl. L. Rep. 20,890

NEWMAN SIGNS, INC., a North Dakota Corporation, Plaintiff, Appellee, and Cross- Appellant, v. Walter R. HJELLE, as North Dakota State Highway

Commissioner, and North Dakota Highway Corridor

Board, Defendants, Appellants, and

Cross-Appellees.

Civ. No. 9394.

Supreme Court of North Dakota.

July 3, 1978.

Rehearing Denied Aug. 3, 1978.

Edmund G. Vinje II, of Hjellum, Weiss, Nerison, Jukkala & Vinje, Jamestown, for plaintiff, appellee, and cross-appellant Newman Signs, Inc.

Albert A. Wolf, Sp. Asst. Atty. Gen., Bismarck, for defendant, appellant, and cross-appellee Hjelle.

Max D. Rosenberg, Sp. Asst. Atty. Gen., Bismarck, for defendant, appellant, and cross-appellee North Dakota Highway Corridor Board.

VOGEL, Justice.

This appeal involves the interpretation of the Federal "Highway Beautification Act All parties appealed from the judgment of the district court. In addition to questions of interpretation of the Federal and State statutes, constitutionality of the latter is also challenged. We reverse the judgment of the district court in part and remand for further proceedings.

of 1965," 23 U.S.C. § 131, and the North Dakota Highway Beautification Act, Chapter 24-17, North Dakota Century Code. There were three actions in the district court, two commenced by Newman Signs, Inc. (hereinafter Newman), and one by Walter R. Hjelle, as North Dakota State Highway Commissioner (hereinafter Commissioner). The North Dakota Highway Corridor Board (hereinafter Board) was a defendant in an action brought by Newman. By agreement, the three actions were consolidated into one, in which an amended complaint was filed, and the consolidated action was tried in Cass County district court. The amended complaint in the consolidated action contains five counts, each relating to a separate category of outdoor advertising signs, with a sixth count as to damages. The trial related only to the first five counts, with the sixth count reserved for future determination.

The Federal Act was enacted in 1965 and was designed to persuade the States, by means of financial incentives, to use their police power to control the erection and maintenance of outdoor advertising structures adjacent to the Interstate and primary highway systems. In order to avoid losing 10 percent of the State's share of Federal-aid highway funds (approximately $3,000,000 per year in North Dakota, we are advised), each State must provide for "effective control" of advertising structures situated within 660 feet of the nearest edge of the right-of-way and visible from the main traveled way of the system. ¹

Effective control had to be provided by January 1, 1968, in order to comply with the Act as originally drafted. "Effective control" was defined in the Act, 23 U.S.C. § 131(c), as meaning that:

" . . . after January 1, 1968, such signs, displays, and devices shall, pursuant to this section, be limited to (1) directional and other official signs and notices, which signs and notices shall include, but not be limited to, signs and notices pertaining to natural wonders, scenic and historical attractions, which are required or authorized by law, which shall conform to national standards hereby authorized to be promulgated by the Secretary (of Commerce, later by the Secretary of Transportation) hereunder, which standards shall contain provisions concerning the lighting, size, number, and spacing of signs, and such other requirements as may be appropriate to implement this section, (2) signs, displays, and devices advertising the sale or lease of property upon which they are located, and (3) signs, displays, and devices advertising activities conducted on the property on which they are located." ²

Section 131(b) allowed the Secretary to waive the 10-percent penalty if a State had not complied with requirements for effective control, under certain conditions. It provided:

"Whenever he determines it to be in the public interest, the Secretary may suspend, for such periods as he deems necessary, the application of this subsection to a State."

The Federal Act further provides, in subsection (d), that advertising signs, displays, and devices could be maintained within 660 feet of the nearest edge of the right-of-way, but only in areas 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, provided that the signs, displays, and devices conform in size, lighting, and spacing to the agreement between the several States and the Secretary which is The Act also provides for payment of just compensation to the owners of outdoor advertising signs along the Interstate and primary highway system upon the removal of certain enumerated advertising structures, with the Federal Government providing 75 percent of the compensation. However, in order to be eligible for the 75-percent share, a State must have entered into an agreement with the Federal Government to control the erection and maintenance of outdoor advertising signs, displays, and devices in areas adjacent to the Interstate system (subdivision (j)).

consistent with customary use. In the case of North Dakota, there was considerable controversy over several years as to the contents of any agreement to be signed in conformity with this subsection, and the agreement was finally signed on January 19, 1972. The district court determined that there was no control over advertising signs until the latter date.

Subdivision (e) provides for a grace period until July 1, 1970, of signs lawfully in existence on September 1, 1965, and for a five-year grace period of nonconforming signs later erected lawfully.

The first session of the North Dakota Legislature after the passage of the Federal Act was the 1967 legislative session. Between the passage of the Federal Act and the convening of the 1967 legislative session, the Commissioner, after obtaining an opinion of the North Dakota Attorney General that he was authorized to do so, issued rules and regulations governing outdoor advertising along Interstate and primary highways and prohibiting

" . . . establishment of billboard advertising along interstate and primary highways in the State of North Dakota . . . within 660 feet from the nearest edge of the right of way unless permission . . . is requested in writing and . . . granted in writing by the North Dakota State Highway Commissioner."

This was on December 3, 1965.

In April 1966 the Commissioner issued an interim policy to provide for controlled erection of advertising structures until final standards were promulgated by the Board in agreement with the Secretary of Commerce. It provided for permits to be issued under certain circumstances "for a term extending to January 1, 1970, unless sooner invalidated by agreement between the State Highway Commissioner and the Secretary of Commerce or by standards adopted by the Secretary of Commerce, at which time the sign must be removed by the permittee unless extended by the State Highway Commission. The permittee must agree to save the State harmless from any costs or liabilities arising from the removal of the sign and cancellation of the lease between sign owner and landowner."

The North Dakota Legislature enacted the North Dakota Act, with an emergency clause which made it effective February 28, 1967. The Act was codified as Chapter 24-17, N.D.C.C.

Section 1 of the Act (24-17-01, N.D.C.C.) declared a public policy to regulate, but not prohibit, outdoor advertising

"through zoning principles and standards consistent with the public policy relating to the areas adjacent to the state highway system pursuant to title 23, United States Code, section 131 and section 319 and rules and regulations promulgated thereunder."

Section 24-17-03, N.D.C.C., provided:

"Subject to the provisions of this Act, no sign shall, after January 1, 1968, be erected or maintained within six hundred and sixty feet from the nearest edge of the right-of-way and visible from the main traveled way of any highway which is a part of the state highway system in this state except the following:

"1. . . .

"2. . . .

"3. . . .

"4. Signs in areas which are now or hereafter zoned industrial, commercial, or the like by the board as provided in this Act.

"5. Signs in unzoned commercial or industrial areas, which now or hereafter "6. . . .

qualify as such, pursuant to the agreement between the board and the secretary of transportation according to title 23, United States Code, section 131.

"7. . . .

"8. . . . "

Section 24-17-04, N.D.C.C., contained provisions for removal of signs.

Compensation was provided for removal of certain signs in Section 24-17-05, N.D.C.C., which will be discussed later in this opinion.

The North Dakota State Highway Corridor Board was created as an agency of the State and was composed of five members, one of whom was a representative of the North Dakota Outdoor Advertising Association. The first such representative was Harold Newman, the president of Newman Signs, Inc. The duties and powers of the Board were set forth in Section 24-17-09, N.D.C.C., and, where relevant, will be discussed later in this opinion.

Section 24-17-11, N.D.C.C., declares illegal any signs which violate Chapter 24-17 or the Corridor Board's regulations, provides for notice to the owner to remove prohibited signs, and provides that the Commissioner may remove such signs if the owner fails to act or if the sign is abandoned.

Section 24-17-15, N.D.C.C., sets forth the manner in which one aggrieved by a decision of the Board may appeal. Appeals from such decisions are to the district court and Supreme Court in accordance with Sections 28-32-15 through 28-32-21 (which are the parts of the North Dakota Administrative Agencies Practice Act relating to appeals), but no other sections of Chapter 28-32 apply to the proceedings of the Board.

The ...