Opinion
NO. 2011-CA-000306-MR NO. 2011-CA-000361-MR NO. 2011-CA-000344-MR NO. 2011-CA-000487-MR
08-03-2012
LAMAR ADVANTAGE GP COMPANY, LLC APPELLANT/CROSS-APPELLEE v. COMMONWEALTH OF KENTUCKY, TRANSPORTATION CABINET, DEPARTMENT OF HIGHWAYS APPELLEE/CROSS-APPELLANT LEWISBURG ENTERPRISES, LLC APPELLANT/CROSS-APPELLEE v. COMMONWEALTH OF KENTUCKY, TRANSPORTATION CABINET, DEPARTMENT OF HIGHWAYS APPELLEE/CROSS-APPELLANT
NOT TO BE PUBLISHED
APPEAL AND CROSS-APPEAL FROM FRANKLIN CIRCUIT COURT
HONORABLE THOMAS D. WINGATE, JUDGE
ACTION NOS. 09-CI-01495 AND 09-CI-01612
OPINION
AFFIRMING IN PART AND REVERSING IN PART
APPEAL NO. 2011-CA-000306-MR,
CROSS-APPEAL NO. 2011-CA-000361-MR,
APPEAL NO. 2011-CA-000344-MR, AND
CROSS-APPEAL NO. 2011-CA-000487-MR
BEFORE: LAMBERT, NICKELL, AND TAYLOR, JUDGES. TAYLOR, JUDGE: Lamar Advantage GP Company, LLC, brings Appeal No. 2011-CA-000306-MR and Commonwealth of Kentucky, Transportation Cabinet, Department of Highways (Cabinet) brings Cross-Appeal No. 2011-CA-000361-MR from a January 21, 2011, Opinion and Order of the Franklin Circuit Court affirming the Cabinet's decision that Lamar's billboards violated Kentucky Revised Statutes (KRS) 177.863(4)(a) and 603 Kentucky Administrative Regulations (KAR) 3:080 § 4(3)(g) by being illuminated with intermittent lights and reversing the Cabinet's decision that Lamar's billboards also violated KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) by displaying more than two messages per direction of travel and violated permits by containing substantial changes to the billboards that were prohibited by law. Lewisburg Enterprises, LLC, brings Appeal No. 2011-CA-000344-MR and the Cabinet brings Cross-Appeal No. 2011-CA-000487-MR from the same January 21, 2011, Opinion and Order of the Franklin Circuit Court affirming the Cabinet's decision that Lewisburg's billboard violated KRS 177.863(4)(a) and 603 KAR 3:080 § 4(3)(g) by being illuminated with intermittent lights and reversing the Cabinet's decision that Lewisburg's billboard also violated KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) by displaying more than two messages per direction of travel and violated permits by containing substantial changes to the billboards that were prohibited by law. We affirm in part and reverse in part Appeal No. 2011-CA-000306-MR and Cross-Appeal No. 2011-CA-000361-MR; we affirm in part and reverse in part Appeal No. 2011-CA-000344-MR and Cross-Appeal No. 2011-CA-000487-MR.
These appeals involve whether Lamar's and Lewisburg's respective billboards comply with relevant state statutory and regulatory law governing billboards located along Kentucky highways. In large part, the controversy surrounding the billboards is rooted in the application of a new advertising technology - light emitting diode (LED). Both Lamar's and Lewisburg's billboards are equipped with LED technology.
As described in the Cabinet's final order, Lewisburg's billboard:
is a light emitting diode, or LED, sign. It is an electronic sign. Thus the message on the face of the sign is created by light. It is not a static face on which the message is illuminated by a consistent beam. According to Lewisburg's Response, at 14, the lights do not go off and on but "Rather, they change intensity to create the different colors and displays . . . . The Lewisburg sign tricks the human eye into seeing colors by subtly varying the intensity of adjoining lights to create the appearance of different hue of color." According to the Affidavit of David Heidrich of Lewisburg Enterprises, LLC, "TheAnd, as described in the Cabinet's final order, Lamar's three billboards:
Lewisburg billboard displays a static message for a period of eight seconds . . . . This is typically referred to as 'dwell time.'" Response, Exhibit 5. Thus a particular pattern of light lasts for eight seconds and then another pattern of light appears for eight seconds. Ultimately the initial pattern of light creating the initial message will reappear as the billboard completes going through its entire inventory.
are composed of light emitting diodes, or LED's. It is an electronic sign. Thus the message on the face of the sign is created by light. According to Christopher Bates "Each individual pixel is composed of three LED's- red, green and blue. A computer controls the intensity of the light emitted from each of the LEDs such that the combination of light from the three LEDs creates the perception of color from the individual picture element." Lamar s/j ex. K. The signs let the human eye see a variety of colors by varying the intensity of adjoining lights to create the appearance of different hues or colors. The change in colors and thus the change from message to message is controlled through a computer directed alteration of the combination of the three colored LEDs in each picture element. A particular pattern, or message, remains static for 8 seconds and then another pattern, or message, appears. Ultimately the initial pattern of light creating the initial message will reappear as the billboard completes going through its entire inventory. "The electronically controlled LED display messages can be conveniently changed by Lamar's employees via remote computer to accommodate users' messaging needs . . . ." Lamar s/j ex. K.
In its final orders, the Cabinet held that both Lamar's and Lewisburg's billboards violated: (1) KRS 177.863(4)(a) and 603 KAR 3:080 § 4(3)(g) by being illuminated with intermittent lights, (2) KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) by displaying more than two messages per direction of travel, and (3) their respective permits by containing substantial changes to the billboards that were unlawful. Lamar and Lewisburg sought judicial review with the Franklin Circuit Court. By opinion and order, the circuit court affirmed in part and reversed in part the Cabinet's orders. The circuit court concluded that Lamar's and Lewisburg's billboards violated KRS 177.863(4)(a) and 603 KAR 3:080 § 4(3)(g) by being illuminated with intermittent lights. However, the circuit court concluded Lamar's and Lewisburg's billboards did not violate KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) by displaying more than two messages per direction of travel and did not violate permits by containing unlawful and substantial changes thereto. Our review follows.
The circuit court considered both Lamar Advantage GP Company, LLC's, and Lewisburg Enterprises, LLC's petitions for judicial review together.
An administrative agency's decision is entitled to judicial deference. When considering an administrative agency's decision, the judiciary is concerned with arbitrariness. Am. Beauty Homes Corp. v. Louisville and Jefferson Co. Planning and Zoning Comm'n, 379 S.W.2d 450 (Ky. 1964). As an appellate court, we step into the shoes of the circuit court and review the agency's decision for arbitrariness. Arbitrariness has many facets; however, relevant to these appeals are whether the Cabinet's findings are supported by substantial evidence of a probative value and whether the Cabinet properly interpreted statutory and regulatory law. See id.
To resolve these appeals, we must determine whether the Cabinet properly concluded that both Lamar's and Lewisburg's billboards violated: (1) KRS 177.863(4)(a) and 603 KAR 3:080 § 4(3)(g) by being illuminated with intermittent lights, (2) KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) by displaying more than two messages per direction of travel, and (3) their respective permits by containing unlawful and substantial changes thereto. We address each seriatim.
INTERMITTENT LIGHTS VIOLATIONS
The Cabinet concluded that Lamar's billboards were illuminated intermittently by its particular use of LED lights:
The lights of the individual diodes are intermittent as they change in intensity and the pattern of the lights on the billboard face is intermittent as the message changes.Likewise, the Cabinet concluded that Lewisburg's billboard was illuminated intermittently by its particular use of LED lights:
A particular diode is "on" a particular intensity for eight seconds then it dims or brightens to another intensity for another eight second interval, then it dims or brightens to yet another intensity for another eight seconds etc. The "intermittency" of individual diodes is set to be eight seconds. So a particular diode combination creating a message also lasts for 8 seconds. Then the observer sees a new combination of diodes creating a new message for another 8 seconds; then another message in another 8 seconds. The result is that the observer can see changing, or moving, messages in a brief amount of time - or approximately 7 messages in a minute.
The lights of the individual diodes are intermittent as they change in intensity and the pattern of the lights on the fact is intermittent as the message changes.
A particular diode is "on" a particular intensity for eight seconds then it dims or brightens to another intensity for another eight second interval then it dims or brightens to yet another eight seconds etc. The "intermittency" of individual diodes appears to be eight seconds. The dwell time, or "intermittency" of a particular pattern creating a particular message depends on how long it takes for the face to return to the same message. A message is "on" for eight seconds and then it is "off" while the inventory rotates then it is "on" again. the intermittency of a particular message would depend on the inventory of the sign.
The Cabinet cited to KRS 177.863(4)(a) and 603 KAR 3:080 § 4(3)(g) as the bases for prohibiting intermittent lights on the billboards and based both Lamar's and Lewisburg's specific violations thereupon. KRS 177.863(4)(a) reads:
Advertising devices which contain, include or are illuminated by any flashing, intermittent, or moving light or lights are prohibited, except those giving public service information such as time, date, temperature, weather, or similar information.And, 603 KAR 3:080 § 4(3)(g) reads:
(3) The erection or existence of an advertising device shall not be permitted in a protected area of an interstate or parkway highway if it:
(g) Includes or is illuminated by flashing, intermittent, or moving lights, except for an on-premise device that meets the requirements of Section 3(9)(h) of this administrative regulation[.]
KRS 177.863(4)(a) was expressly held unconstitutional by our Supreme Court in Fyling J Travel Plaza v. Commonwealth, 928 S.W.2d 344 (Ky. 1996). Although Flying J was decided in 1996, it does not appear that the General Assembly has amended or otherwise modified the language of KRS 177.863(4)(a), thus its constitutional infirmity continues. Id.
The parties dispute the applicability of Flying J to these appeals; however, we view Flying J as dispositive. See id. In Flying J, the billboard was an on-premise sign; by contrast, in our appeals, both Lamar's and Lewisburg's billboards were off-premise signs. The on-premise/off-premise distinction is simply irrelevant to the ultimate holding of the Supreme Court in Flying J. Id. Therein, the unconstitutionality of KRS 177.863(4)(a) was based upon factors unrelated to whether the billboard was an on-premise sign or an off-premise sign. Id. Rather, the Supreme Court held that KRS 177.863(4)(a) was an unconstitutional restriction on commercial speech by reasoning:
It is uncontroverted that both Lamar's and Lewisburg's billboards are considered off-premise billboards.
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The electronic billboards in question which comply with the technical requirements of the regulation may display "temperature—99 degrees" but may not display "regular unleaded $1.07." When the regulation prohibits commercial speech but allows time, date, temperature or weather information to be displayed, the regulations become substantially broader than necessary to protect the governmental interest of highway safety.Flying J, 928 S.W.2d at 348-349. Also, the Supreme Court held KRS 177.863(4)(a) was an unconstitutional restriction upon noncommercial speech by reasoning:
. . . .
An examination of KRS 177.863 reveals that the statute has much to recommend it. It indeed advances legitimate governmental interests. Section 4(a) of KRS 177.863 gives rise to the problem presented here. That section of the statute attempts to regulate the content of the signs to public service information or similar information. The regulations promulgated in response to the statute in 603 KAR 3:010 § 3(1)(h) prohibit any
message other than time, date, temperature or weather. The regulation contradicts the statute which allows "public service information" similar to time, date, temperature and weather. Both the statute and the regulation clearly permit electronic billboards, but make an improper attempt to limit the content of the message on such boards.
Here the content-based restrictions as applied to the electronic message billboard violates Section Two of the Kentucky Constitution. The distinction made by the statutes and regulations regarding the content of messages which may be displayed on the board has no relationship to the protection of health, safety or the general welfare of the people of Kentucky or of those driving through the state. There is no reasonable relation between the mere content of the message itself and the safety of the driving public.Flying J, 928 S.W.2d at 350. Equally important, the Supreme Court declared KRS 177.863(4)(a) an unconstitutional delegation of legislative power :
In this situation the legislature has given no guidance to the Cabinet by defining the words "public service information" and "similar information." This part of the statute amounts to an unconstitutional delegation of the legislative power to the Cabinet in violation of Sections 27 and 28 of the Kentucky Constitution.Id. at 350.
The Cabinet argues that to the extent the Supreme Court declared KRS 177.863(4)(a) unconstitutional in Flying J, it only intended to strike that portion of the statute pertaining to content of billboards, not those provisions pertaining to flashing or intermittent lights. However, the unquestionable effect of KRS 177.863(4)(a) being declared unconstitutional is that the statute is wholly invalid. The Supreme Court could have severed part of KRS 177.863(4)(a) in Flying J; however, the Supreme Court declined to do so. Consequently, it was error for the Cabinet to base any violation upon KRS 177.863(4)(a). Moreover, the prohibition contained in 603 KAR 3:080 § 4(3)(g) against billboards being illuminated by flashing, intermittent, or moving lights is undoubtedly based upon KRS 177.863(4)(a) and is, likewise, invalid. Accordingly, we hold that the Cabinet erred by concluding that Lamar's and Lewisburg's billboards violated KRS 177.863(4)(a) and 603 KAR 3:080 § 4(3)(g).
MESSAGES DISPLAYED VIOLATIONS
The Cabinet also concluded that Lamar's and Lewisburg's billboards violated KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) by displaying more than two messages per direction of travel. As to Lamar's billboards, the Cabinet specifically found:
Lamar argues that the messages change instantaneously and thus a traveler sees only one message at a time. Lamar is inserting "at a time" into the statute. The billboard contains however many messages that are in the billboard's inventory. The traveler sees the number of 8 second messages that can be seen at the speed limit. In his affidavit, Myron Liable, Vice President of State, Local, and Regulatory Affairs of the Outdoor Advertising Association of America, a trade association, indicates that 8 seconds is generally the duration of a message because it promotes highway safety by minimizing visualAs to Lewisburg's billboard, the Cabinet specifically found:
clutter and distraction. The 8 second dwell time is considered, by Liable, to be a replacement for the limitation on the number of advertisements per facing. Lamar s/j ex X. However, Lamar cannot unilaterally replace one legally adopted law or regulation with a method of spacing of its own choosing. The billboards violate KRS 177.863(3)(b) and 603 KAR 3:080 Section 3(8)(c).
[KRS 177.863(3)(b)] as written prohibits more than two messages on the facing of a billboard per direction of travel and Lewisburg is inserting "at a time" into the statute. As Heidrich's Affidavit states: "The Lewisburg billboard typically displays 7.5 messages a minute . . . ." The aim of a LED billboard would appear to be to present as many messages to as many travelers as possible while the travelers are passing the billboard. Or, as Lewisburg's Response states, at 8, the billboard "rotates through its entire inventory of ads." The inventory clearly includes more than 2 messages.In both instances, the Cabinet clearly relied upon KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) as its legal bases for the violations.
It is concluded that the billboard violates and KRS 177.863(3)(b) and 603 KAR 3:080 Section 3(8)(c) by presenting more than two messages per line of travel.
KRS 177.863(3)(b) provides:
An advertising device structure may contain one (1) or two (2) advertisements per facing, not to exceed the maximum area.And, 603 KAR 3:080 § 3(8)(c) provides:
(8) Criteria for off-premise advertising devises. The following criteria are applicable to any off-premise advertising device located in a protected area:
(c)A billboard advertising device may contain two (2) messages per direction of travel if the device does not exceed the maximum size stated in KRS 177.863(3)(a)[.]
The interpretation of a statute or regulation presents an issue of law and is generally subject to de novo review by the Court. In administrative law, it is recognized that the judiciary accords deference to an administrative agency's interpretation of an ambiguous regulation or statute within its area of expertise. Nonetheless, an impermissible or improper interpretation will be always subject to judicial review and reversal. Bd. of Tr. of Judicial Form Ret. Sys. v. Att'y. Gen. of Com., 132 S.W.3d 770 (Ky. 2003); Camera Center, Inc. v. Revenue Cabinet, 34 S.W.3d 39 (Ky. 2000).
KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) are both inherently ambiguous. To resolve the ambiguity, the Cabinet interpreted KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) as prohibiting "a billboard from subjecting a motorist traveling under normal travel conditions to more than two messages." Cabinet's Brief at 10. However, the interpretation offered by the Cabinet is fundamentally flawed. The term "motorist traveling under normal travel conditions" is patently vague and fails to put a reasonable person on notice as to prohibited activity. Thus, the Cabinet's interpretation of KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c) must be rejected.
Under the circumstances presented in these appeals, we do not interpret either KRS 177.863(3)(b) or 603 KAR 3:080 § 3(8)(c) as prohibiting the LED advertising as currently being displayed on Lamar's and Lewisburg's billboards. To regulate such advertising, specific statutory or regulatory law is needed. It is clear that neither KRS 177.863(3)(b) nor 603 KAR 3:080 § 3(8)(c) was intended or envisioned to control LED advertising as currently practiced by Lamar and Lewisburg. Consequently, we are of the opinion that the Cabinet erred by concluding that Lamar's and Lewisburg's billboards violated KRS 177.863(3)(b) and 603 KAR 3:080 § 3(8)(c).
PERMIT VIOLATIONS
We perceive all issues relating to violations of the permits as moot based upon our particular disposition herein.
In sum, we hold that the Cabinet erred by concluding that Lamar's and Lewisburg's billboards violated KRS 177.863(4)(a), 603 KAR 3:080 § 4(3)(g), KRS 177.863(3)(b), 603 KAR 3:080 § 3(8)(c), or the issued permits.
For the foregoing reasons, Appeal No. 2011-CA-000306-MR and Cross-Appeal No. 2011-CA-000361-MR are affirmed in part and reversed in part; Appeal No. 2011-CA-000344-MR and Cross-Appeal No. 2011-CA-000487-MR are affirmed in part and reversed in part.
ALL CONCUR. BRIEF FOR APPELLANT/CROSS-
APPELLEE LAMAR ADVANTAGE
GP COMPANY, LLC:
R. Guy Taft
Timothy B. Theissen
Andrea E. Yang
Covington, Kentucky
BRIEF FOR APPELLANT/CROSS-
APPELLEE LEWISBURG
ENTERPRISES, LLC:
Joseph L. Baker
Debra S. Pleatman
Daniel A. Hunt
Covington, Kentucky
ORAL ARGUMENT FOR
APPELLANT/CROSS-APPELLEE
LAMAR ADVANTAGE GP
COMPANY, LLC:
R. Guy Taft
Covington, Kentucky
ORAL ARGUMENT FOR
APPELLANT/CROSS-APPELLEE
LEWISBURG ENTERPRISES, LLC:
Joseph L. Baker
Covington, Kentucky
BRIEF FOR APPELLEE/CROSS-
APPELLANT COMMONWEALTH
OF KENTUCKY,
TRANSPORTATION CABINET,
DEPARTMENT OF HIGHWAYS:
T. Scott White
Taylor M. Hamilton
Lexington, Kentucky
ORAL ARGUMENT FOR
APPELLEE/CROSS-APPELLANT
COMMONWEALTH OF
KENTUCKY, TRANSPORTATION
CABINET, DEPARTMENT OF
HIGHWAYS:
Taylor M. Hamilton
Louisville, Kentucky
BRIEF AND ORAL ARGUMENT
FOR APPELLEE/CROSS-
APPELLANT COMMONWEALTH
OF KENTUCKY,
TRANSPORTATION CABINET,
DEPARTMENT OF HIGHWAYS:
John S. Harrison
Frankfort, Kentucky