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Outfront Media, LLC v. Salt Lake City Corp.

Supreme Court of Utah

October 23, 2017

Outfront Media, LLC, Appellant,
v.
Salt Lake City Corporation, Corner Property, L.C., and Utah Outdoor Advertising, Inc., Appellees.

         On Direct Appeal

         Third District, Salt Lake The Honorable Todd M. Shaughnessy No. 160900413

          Attorneys: Leslie Van Frank, Bradley M. Strassberg, Salt Lake City, for appellant.

          Samantha J. Slark, Katherine N. Lewis, Salt Lake City, for appellee Salt Lake City Corporation.

          Jon H. Rogers, Salt Lake City, for appellees Corner Property, L.C. and Utah Outdoor Advertising, Inc.

          Chief Justice Durrant authored the opinion of the Court, in which Associate Chief Justice Lee, Justice Durham, Justice Himonas, and Justice Pearce joined.

          OPINION

          Durrant, Chief Justice.

         Introduction

         ¶ 1 In this case, we review Salt Lake City's decisions regarding two billboard owners' requests to relocate their billboards. Outfront Media, LLC, formerly CBS Outdoor, LLC, (CBS) came out the worse in the City's decision-making process. The City denied CBS's request to relocate its billboard to an adjacent lot along Interstate 15 (I-15). The same day, the City granted Corner Property, L.C.'s request to relocate its billboard to the lot CBS was vacating.

         ¶ 2 Dissatisfied with the City's decisions, CBS appealed to a land use hearing officer, who upheld both decisions. CBS then sought judicial review in district court under the Municipal Land Use, Development, and Management Act, Utah Code section 10-9a-801. The district court also upheld the City's decisions. CBS now appeals to this court, contending that the City's denial of its relocation request and grant of Corner Property's were arbitrary, capricious, and illegal.

         ¶ 3 CBS's primary argument on appeal is that the City's decision to deny CBS's requested relocation was "illegal" because the City invoked the power of eminent domain to effect a physical taking of CBS's billboard without complying with the procedural requirements that constrain the use of eminent domain. In particular, CBS asserts that the City was required to comply with Utah Code section 78B-6-504(2)(b), which provides that "[p]roperty may not be taken by a political subdivision of the state unless the governing body of the political subdivision approves the taking." For a city, the "governing body" is the city's "legislative body." For Salt Lake City, that legislative body is the city council. It is undisputed that the City's mayor made the decision denying CBS's request to relocate its billboard without the approval of the Salt Lake City Council.

         ¶ 4 At the heart of this case is the proper interpretation of Utah Code section 10-9a-513 (Billboard Compensation Statute), which provides that a municipality is "considered to have initiated the acquisition of a billboard structure by eminent domain" when it denies billboard relocation requests that, like CBS's, meet certain spacing requirements. In CBS's view, under this statute the denial of its relocation request constituted a physical taking of its billboard, which required compliance with the eminent domain procedures. We disagree. The Billboard Compensation Statute does not provide that a municipality has taken a billboard structure when it denies a relocation request. Instead, under that section, a municipality is only considered to have done so for purposes of compensation. We therefore view the Billboard Compensation Statute as creating a standalone compensation scheme that does not incorporate, expressly or impliedly, the procedural requirements that circumscribe the eminent domain power. Accordingly, the mayor of Salt Lake City was not required to seek the approval of the Salt Lake City Council before denying CBS's request to relocate its billboard.

         ¶ 5 We also reject CBS's additional arguments that the Mayor's decision violated the City's billboard ordinance and that the Mayor's decision was arbitrary and capricious. We therefore affirm the district court.

         Background

         ¶ 6 CBS owned a billboard at 726 West South Temple, adjacent to I-15. CBS leased the land at that location from Corner Property. Corner Property also owned land and had a billboard at 280 West 500 South. In the fall of 2014, CBS's lease from Corner Property was about to expire, so CBS sought a means for relocating its billboard. CBS submitted a request-not the one currently before us-to the City to relocate its billboard to an adjacent lot at 738 West South Temple, and to increase its billboard's height. The City denied this request, and this denial was affirmed upon district court review.[1]CBS then voluntarily demolished its billboard to avoid trespassing on Corner Property's land.

         ¶ 7 In its letter denying CBS's first request, the City told CBS it could "modify its application to either bank its billboard credits [for the now demolished sign] . . . or request to relocate the sign under Utah Code 10-9a-511(3)(c)(i)." The City reserved the right, however, to condemn the sign under Utah Code section 10-9a-513(2). CBS accepted this invitation to modify its relocation request ten months later.[2] Its modified relocation request conformed to the requirements of Utah Code section 10-9a-511(3)(c)(i) (the Billboard Relocation Statute). That statute provides that a municipality may, despite a prohibition in its zoning ordinance, agree to a mutually acceptable relocation of a billboard. But if the City denies a billboard owner's request to relocate, and the request meets certain spacing requirements, the City "is considered to have initiated the acquisition of [the] billboard structure by eminent domain."[3] CBS's requested relocation, from the 726 lot to the 738 lot, was within the spacing requirements.

         ¶ 8 Shortly after CBS first applied to relocate its billboard, Corner Property also requested to relocate a billboard under the Billboard Relocation Statute. Corner Property asked the City to permit it to relocate its billboard from 280 West 500 South to 726 West South Temple. This move failed to satisfy the spacing requirements in the Billboard Compensation Statute, so the City would have been free to deny it without paying just compensation. The City could not grant both CBS's and Corner Property's requests to relocate, because state law prohibits freeway-oriented billboards from being located within 500 feet of each other, [4] and the two South Temple lots are within that spacing restriction. Both relocations were also technically prohibited under the City's zoning ordinance pertaining to billboards, Salt Lake City Code section 21A.46.160(N). That ordinance prohibits the construction of new billboards in a "gateway" area, which includes I-15 and the area of 500 South where Corner Property's billboard was previously located.[5]

         ¶ 9 The City, acting through its then-mayor, Ralph Becker, and without seeking the approval of the city council, denied CBS's request to relocate its billboard and approved Corner Property's. The City stated that its reason for denying CBS's request was that the requested location fell within a gateway under the City's zoning ordinances, and the ordinance prohibits construction of a billboard in a gateway area. The City acknowledged that it had authority under the Billboard Relocation Statute to waive this zoning ordinance, but it informed CBS that it was unwilling to do so because it "has a longstanding policy in favor of retiring and removing billboards as the opportunity to do so arises."

         ¶ 10 The City granted Corner Property's request to relocate on the same day it denied CBS's. Though, like CBS's request, Corner Property's requested relocation would have been in violation of the "gateway" zoning ordinance, the City waived this ordinance for Corner Property. Mayor Becker submitted a declaration stating that he decided to deny CBS's request, and grant Corner Property's, in order to achieve a net reduction in the number of billboards located in "gateway" areas by one. His decisions resulted in the permanent removal of Corner Property's 500 South billboard.

         ¶ 11 CBS sought review of these decisions before the City's appeal authority, a land use hearing officer.[6] The hearing officer ultimately upheld the City's decisions to deny CBS's request and approve Corner Property's. CBS then sought judicial review in district court.[7] The district court rejected CBS's arguments and concluded that the City's decisions were not arbitrary, capricious, or illegal, and affirmed the decision. CBS now appeals, pressing the same arguments it made below. We have jurisdiction under Utah Code section 78A-3-102(3)(j).

         Standard of Review

         ¶ 12 This is an appeal from a district court's review of an administrative appeal challenging a municipal land use decision.[8] "When a district court reviews an order of a local land use authority and we exercise appellate review of the district court's judgment, . . . we afford no deference to the district court's decision."[9] The legislature has directed that "[t]he courts shall . . . presume that a decision, ordinance, or regulation made under the authority of this chapter is valid; and [] determine only whether or not the decision, ordinance, or regulation is arbitrary, capricious, or illegal."[10] "A determination of illegality requires a determination that the decision, ordinance, or regulation violates a law, statute, or ordinance in effect at the time the decision was made or the ordinance or regulation adopted."[11] The proper interpretation of a set of statutes presents a question of law, which we review for correctness.[12] We review the interpretation of ordinances for correctness as well.[13] A decision is arbitrary and capricious only if it is not supported by "substantial evidence, " which is "that quantum and quality of relevant evidence that is adequate to convince a reasonable mind to support a conclusion."[14]

         Analysis

         ¶ 13 CBS levels three challenges at the City's decision denying its billboard relocation request.[15] First, CBS contends that the decision to deny its request was illegal because Mayor Becker did not obtain the approval of the city council before making that decision. In CBS's view, such a denial is an exercise of the eminent domain power. We reject this argument and hold that the procedural requirements of eminent domain mandated by Utah Code section 78B-6-504 do not apply because, under the Billboard Compensation Statute, relocation denials are merely "considered" to be the acquisition of a billboard structure by eminent domain for compensation purposes, but these denials do not actually involve the formal exercise of the eminent domain power and the concomitant procedures the legislature has prescribed to restrain the exercise of that power.

         ¶ 14 Second, CBS contends that Salt Lake City's billboard ordinance prohibited the City from denying CBS's request to relocate. That ordinance provides that "[e]xcept as otherwise authorized herein, existing billboards may not by relocated except as mandated by the requirements of Utah State law."[16] In CBS's view, this means that if a relocation denial would trigger just compensation under the Billboard Compensation Statute, then the relocation is "mandated by . . . State law, " and the City must approve the relocation request. We find no support for this interpretation of the ordinance in its plain language, and in any event, even if that were the proper interpretation, it would be preempted by state law.

         ¶ 15 Finally, CBS argues that Mayor Becker's decision to deny CBS's request and approve Corner Property's was arbitrary and capricious because, in CBS's view, a city's mayor cannot act according to an unwritten policy to reduce the number of billboards in the city. We disagree. There is substantial evidence in the record that Mayor Becker's administration had a goal of reducing the number of billboards in the city, and his decision to deny CBS's request and approve Corner Property's resulted in the net reduction of one billboard from a gateway area in the City, directly furthering that goal.

         I. The City's Decision to Deny CBS's Billboard Relocation Request Was Not Illegal, Because the Eminent Domain Statutes Do Not Apply to Such Denials

         ¶ 16 CBS argues that the City's decision to deny its request to relocate its billboard was illegal because the decision was made by the City's mayor without the approval of the City's legislative body, the city council. In CBS's view, the provisions of Utah Code sections 78B-6-501 through 522 (the Eminent Domain Statutes), especially section 78B-6-504's requirement of legislative approval of a taking, apply to the decision to deny a relocation request that triggers the requirement of just compensation under the Billboard Compensation Statute.

         ¶ 17 We disagree. The Billboard Compensation Statute neither expressly nor impliedly incorporates the Eminent Domain Statutes, so the procedures specified there do not apply to the denial of relocation requests submitted under the Billboard Relocation Statute. Instead, the Billboard Compensation Statute functions as a standalone scheme, mandating the payment of compensation upon the occurrence of certain triggering events.

         ¶ 18 We begin with the text of the statutes. The Billboard Relocation Statute provides:

Notwithstanding a prohibition in its zoning ordinance, a municipality may permit a billboard owner to relocate the billboard within the municipality's boundaries to a location that is mutually acceptable to the municipality and the billboard owner . . . . If the municipality and billboard owner cannot agree to a mutually acceptable location within 90 days after the owner submits a written request to relocate the billboard, the provisions of Subsection 10-9a-513(2)(a)(iv) apply.[17]

         The Billboard Compensation Statute provides, in pertinent part:

A municipality is considered to have initiated the acquisition of a billboard structure by eminent domain if the municipality prevents a billboard owner from . . . relocating a billboard into any commercial, industrial, or manufacturing zone within the municipality's boundaries, if [certain spacing requirements are met]; and . . . the billboard owner has submitted a written request under Subsection 10-9a-511(3)(c); and . . . the municipality and billboard owner are unable to agree, within the time provided in Subsection 10-9a-511(3)(c), to a mutually acceptable location[.][18]

         ¶ 19 In sum, the Billboard Relocation Statute permits a municipality to agree to a billboard relocation request that would otherwise be prohibited by the city's zoning ordinance. But if the city does not agree to a relocation request, and that request meets certain spacing requirements, the city is "considered" under the Billboard Compensation Statute to have "initiated the acquisition of the billboard structure by eminent domain."

         ¶ 20 The Eminent Domain Statutes, on the other hand, offer a host of procedural protections for property owners. Particularly relevant here, Utah Code section 78B-6-504(2)(b) provides that "[p]roperty may not be taken by a political subdivision of the state unless the governing body of the political subdivision approves the taking." The parties agree that the "governing body" here is the Salt Lake City Council and ...


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