Reversal reinstates INDOT revocation of Hamilton County billboard permit

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The Indiana Department of Transportation was within its authority to revoke longstanding permits for nonconforming billboards along State Road 32 in Hamilton County, an appeals court ruled, reversing regulatory and trial court rulings in favor of the billboard owners. A trade group had warned such a ruling could lead to billboard permit revocations “any time, for any reason.”

Stephen and Jeffory Roudebush and FMG Indianapolis have had an INDOT permit for a pair of billboards along SR 32 and a 30-year lease since 1998. The billboards have stood since 1974.

However, the state highway department in June 2016 informed the owners that one of the signs was illegal and must be removed. The owners challenged that determination and an administrative law judge sided with them under what she called a “fundamental fairness doctrine,” and the Hamilton Superior Court agreed, leading INDOT to appeal.

The Indiana Court of Appeals reversed Friday in Indiana Department of Transportation v. FMG Indianapolis LLC, et al., 20A-PL-00215.

Senior Judge Randall Shepard wrote that INDOT had the authority to revoke the permit and order one of the billboards removed, noting among other violations that the structures were not side-by-side billboards as permitted, but separate structures, making it a public nuisance under Ind. Code § 8-23-20-26(a) (1993).

Likewise, the panel held the statute of limitations did not bar INDOT’s efforts to remove a nuisance and the department cannot be estopped from regulating the signs because doing so could risk the receipt of federal highway funding if the state were found to be in violation of the Highway Beautification Act of 1965 and other federal laws and regulations covering billboards.

Finally, the panel addressed the “fundamental fairness” rulings below, noting that the Outdoor Advertising Association of Indiana joined this suit as amicus in support of the billboard owners.

“The Association contends that if the Court accepts INDOT’s arguments, it would have a ‘profound effect’ on Indiana’s outdoor advertising industry in that INDOT would be allowed ‘to revoke a permit at any time, for any reason.’” Shepard wrote. “… While we recognize the outdoor advertising industry’s reliance on INDOT’s permitting of billboards, we do not agree with its extreme prediction of random, baseless revocations. Far from being unjustified, INDOT’s action in revoking the Owners’ permit is authorized because of the Owners’ representations in their permit application that were inconsistent with the statutes and regulations in effect at that time. Furthermore, a sign not conforming to the statutes and regulations is a continuing public nuisance, for which an action to abate is not barred by the statute of limitations.”

The COA declined to address the association’s constitutional arguments that were not raised by either party and therefore may not be raised by friends of the court.

“We conclude that INDOT’s order revoking the Owners’ sign permit and ordering that one of the signs be removed is not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance law, and the Owners, whose burden it was to show such, have failed. The trial court’s reversal of the order of the Commissioner was in error,” the panel concluded, reversing and thereby reinstating INDOT’s permit revocation.

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