Opinion
No. 1-468 / 00-1628.
Filed March 13, 2002.
Appeal from the Iowa District Court for Polk County, GREGORY A. HULSE, Judge.
The petitioner appeals from the district court's ruling on judicial review affirming the respondent's revocation of the petitioner's advertising permit for a billboard and directing its removal pursuant to Iowa Administrative Code rule 761-117.6 when it was modified without a permit. AFFIRMED.
Kasey W. Kincaid and William J. Hunnicutt of Faegre Benson, LLP, Des Moines, for appellant.
Thomas J. Miller, Attorney General, David A. Ferree, Special Assistant Attorney General, and Carolyn J. Olson, Assistant Attorney General, for appellee.
Heard by VOGEL, P.J., and MILLER and EISENHAUER, JJ.
Tri-State Outdoor Media Group appeals from the district court's ruling on judicial review affirming the Iowa Department of Transportation's revocation of its advertising permit for a billboard and directing its removal pursuant to Iowa Code chapter 306C (1999) and Iowa Administrative Code rule 761-117.6 because the billboard was modified without a permit. Tri-State alleges the agency's revocation of its permit was improper because (1) the record did not establish it was the party who made the illegal modification to the billboard, and (2) the removal directive violated its constitutional right to free speech. We affirm.
I. BACKGROUND FACTS
Tri-State Outdoor Media Group (Tri-State) is the owner of the billboard or sign at issue. The billboard is subject to regulation by the Iowa Department of Transportation (DOT) under Iowa Code chapter 306C, The Iowa Junkyard Beautification and Billboard Control Act (1999). The billboard is "nonconforming" because it is located in an area where it could no longer be built. However, because the previous owner made timely application for a permit in 1972 the billboard was "grandfathered" in and allowed to remain on the site. The permit authorized a billboard with fifteen wood posts. Under the act such billboards can be maintained but cannot be substantially modified or improved.
In May 1999 DOT agent Larry Arn conducted a routine field review and discovered the billboard had been modified without submitting a new application and securing a new permit as required by Iowa Administrative Code rule 761-117.6(5). Arn's review revealed six additional posts had been added to the billboard. On September 2, 1999, the DOT informed Tri-State by certified letter that because the sign had been modified without approval its present permit was being cancelled and that because the sign was in an area that was nonconforming, an agricultural zone, a new permit could not be issued for the structure. It asked that the sign be removed.
Tri-State protested the permit cancellation and requested a hearing. A hearing was held before an administrative law judge (ALJ) and the ALJ entered a decision reversing the DOT's cancellation of the permit. The ALJ determined that although the sign had been modified, Tri-State should be allowed sixty days to return the sign to its original condition by removing the modifications. The DOT appealed the decision and a reviewing officer entered a ruling reversing the ALJ's decision and upholding the cancellation of the permit. The reviewing officer found that the ALJ had provided a remedy which was not available under the applicable administrative code provisions and therefore Tri-State was not entitled to a sixty-day period to return the sign to its original condition.
Tri-State filed a timely petition for judicial review challenging the appeal decision. Tri-State alleged the cancellation was improper because there was no evidence it had made the changes to the billboard, and asserted it had purchased the billboard from the prior owner with the additional posts already in place. Tri-State also argued the DOT's directive to remove the billboard violated its free speech rights under the First Amendment. There was a stipulation at the judicial review proceeding that Tri-State had in fact returned the sign to its original condition.
The district court affirmed the DOT's decision to revoke the permit for the billboard. The court determined that Iowa Administrative Code rule 761-117.6(5) did not require the DOT to establish that Tri-State was the one who made the modifications, but only that the modification had been made without a permit. The court also determined that Tri-State's First Amendment rights to free speech were not violated and the DOT could require removal of the billboard. It found the State had a substantial governmental interest in the regulation of such billboards for traffic safety and aesthetic considerations, that the DOT's action directly and materially advanced those interests, and that the action was narrowly drawn to meet the State's interests. Tri-State appeals from the district court's decision.
II. STANDARD OF REVIEW
Our review of agency action is governed by Iowa Code chapter 17A and is for correction of errors of law. Iowa Code § 17A.19 (1999); Pointer v. Iowa Dep't of Transp., Motor Vehicle Div., 546 N.W.2d 623, 625 (Iowa 1996). When determining whether an agency made an error of law, we give some weight to the agency's construction of a statute, but are not bound by it. Super Valu Stores, Inc. v. Iowa Dep't of Revenue and Fin., 479 N.W.2d 255, 258 (Iowa 1991). We will uphold the agency's action if supported by substantial evidence in the record made before the agency when the record is viewed as a whole. Iowa Code § 17A.19(8)(f). Evidence is substantial if a reasonable person could accept it as adequate to reach the same findings. Pointer, 546 N.W.2d at 625.
Conversely, evidence is not insubstantial merely because it would have supported contrary inferences. Nor is evidence insubstantial because of the possibility of drawing two inconsistent conclusions from it. The ultimate question is not whether the evidence supports a different finding but whether the evidence supports the findings actually made.City of Hampton v. Iowa Civil Rights Comm'n, 554 N.W.2d 532, 536 (Iowa 1996). Therefore, if the agency's findings of fact are supported by substantial evidence, those findings are binding on us. Id.
III. MERITS A. Substantial Evidence
It is uncontroverted that the permit for this sign only allows a structure with fifteen posts and the sign had twenty-one posts at the time of the inspection in 1999. Thus, the sign was not in conformance with the permit at the time of inspection. It is also clear from the record there was no application to, or approval by, the DOT for any modification of this sign as required by administrative rule 761-117.6(5). However, Tri-State argues that under the relevant administrative code provisions revocation of a permit is authorized only when it is established that the current permit holder was the one who reconstructed or modified the sign without first obtaining agency approval to do so. Tri-State contends the DOT has failed to present any evidence Tri-State was the entity that modified the sign, or that it had any knowledge the modifications had been added, and therefore the revocation of its permit was improper.
The pertinent administrative regulation is Iowa Administrative Code rule 761-117.6(5) which provides,
New permit required for reconstruction or modification. A new permit is required from the department prior to the reconstruction or modification of an advertising device subject to the permit provisions of this rule.
a. To obtain a new permit, the owner of the advertising devise shall submit a new application to the department, accompanied by the initial application fee.
b. A reconstructed or modified advertising device is subject to the provisions of this chapter as if it were a new advertising device.
c. Reconstruction or modification of an advertising device prior to the issuance of the required permit shall result in revocation of any permit that has been issued for the advertising device and removal of the advertising device in the manner specified in subrule 117.8(2) or 117.8(3), as applicable.
Iowa Admin. Code r. 761-117.6(5).
It is uncontested that Tri-State was not responsible for placing any of the six additional posts on the sign. Therefore, either the previous owners of the sign or some other third party must be the entity responsible for modifying the sign. However, this is irrelevant for purposes of revocation of its permit under the plain language of the administrative rule. We agree with the district court that the clear language of the administrative rule simply does not require that the current permit holder be the entity responsible for the modification in order for the DOT to revoke the permit. Rather, the rule merely requires the DOT to establish that a sign was modified without prior approval. Based on the uncontroverted evidence in the record the DOT has established that six additional posts were added to the sign without prior approval. The fact these modifications were not made by Tri-State and most likely were made prior to Tri-State's purchase of the sign is of no relevance. Under the provisions of rule 761-117.6(5) such unapproved modification requires the revocation of any permit that has been issued and removal of the advertising device. Tri-State's argument that the DOT had to show Tri-State was the one who made the modifications in order to revoke its permit is without merit. The district court did not err in rejecting Tri-State's contention on judicial review.
Furthermore, we agree with the reviewing officer and the district court that it appears from the plain language of the rule that once it determined a sign had been modified without prior approval the DOT is required to revoke the permit and require the removal of the sign. The ALJ's suggested remedy of allowing Tri-State to bring the billboard back into compliance with the permit instead of requiring its removal is not a remedy allowed by the plain language of the rule.
B. Commercial Speech
Tri-State argues however, that by requiring removal the administrative rule is an impermissible restriction on its First Amendment right to free speech and is therefore unconstitutional. We review this constitutional issue de novo. Soo Line R.R. v. Iowa Dep't of Transp., 521 N.W.2d 685, 688 (Iowa 1994).
The First Amendment, as applied to the states through the Fourteenth Amendment, protects commercial speech from unwarranted governmental regulation. Central Hudson Gas Elec. Corp. v. Public Serv. Comm'n of New York, 447 U.S. 557, 561, 100 S.Ct. 2343, 2349, 65 L.Ed.2d 341, 348 (1980). However, the Constitution "accords a lesser protection to commercial speech than to other constitutionally guaranteed expression. The protection available for particular commercial expression turns on the nature both of the expression and of the governmental interests served by its regulation." Id. at 563, 100 S.Ct. at 2350, 65 L.Ed.2d at 348-49.
A four-part test is used to determine the validity of governmental restrictions on commercial speech.
At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.
Id. at 566, 100 S.Ct. at 2351, 65 L.Ed.2d at 351; see also Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 507, 101 S.Ct. 2882, 2892, 69 L.Ed.2d 800, 815 (1981). In this analysis, the State bears the burden of identifying a substantial interest and justifying the challenged restriction. Greater New Orleans Broad. Ass'n v. United States, 527 U.S. 173, 183, 119 S.Ct. 1923, 1930, 144 L.Ed.2d 161, 174 (1999).
The four parts of the Central Hudson test are not entirely discrete. All are important and, to a certain extent, interrelated: Each raises a relevant question that may not be dispositive to the First Amendment inquiry, but the answer to which may inform a judgment concerning the other three parts.
Id. at 183-84, 119 S.Ct. at 1930, 144 L.Ed.2d at 174.
We, like the district court, note that the DOT does not assert the commercial speech at issue here concerns an unlawful activity or is misleading and thus assume the first element of the Central Hudson test is met and that the speech is protected by the First Amendment. Therefore, we begin our inquiry with the question of whether there is a substantial governmental interest in restricting this protected speech.
The Iowa legislature enacted Iowa Code chapter 306C, the Iowa Junkyard Beautification and Billboard Control Act, following enactment of the Federal Highway Beautification Act of 1965, Pub.L. 89-285, 79 Stat. 1028, 23 U.S.C.A. § 131 (1990 Supp. 2000). See 1972 Iowa Acts ch. 1068. In enacting the federal act Congress found and declared
"The federal Highway Beautification Act of 1965 . . . requires that States eliminate billboards from areas adjacent to certain highways constructed with federal funds." Metromedia, 453 U.S. at 510 n. 16, 101 S.Ct. at 2894 n. 16, 69 L.Ed.2d at 816 n. 16.
that the erection and maintenance of outdoor advertising signs, displays, and devices in areas adjacent to the Interstate System and the primary system should be controlled in order to protect the public investment in such highways, to promote the safety and recreational value of public travel, and to preserve natural beauty.23 U.S.C.A. § 131(a).
In interpreting a city ordinance which prohibited outdoor advertising billboards, the United States Supreme Court in Metromedia determined there was no substantial doubt "that the twin goals that the ordinance seeks to further — traffic safety and the appearance of the city — are substantial governmental goals. It is far too late to contend otherwise with respect to either traffic safety, or esthetics." Metromedia, 453 U.S. at 507-08, 101 S.Ct. at 2892-93, 69 L.Ed.2d at 815 (citations omitted). Based on the legislative purpose behind the enactment of Iowa Code chapter 306C and the Supreme Court's determination in Metromedia, it is clear that the State's twin interests in regulating commercial speech under this statute, traffic safety and aesthetic values, are in fact substantial governmental interests which satisfy the second element of the Central Hudson test.
The next inquiry under Central Hudson focuses on whether the regulation "directly advances" the asserted governmental interest. "[T]he regulation may not be sustained if it provides only ineffective or remote support for the government's purpose." Central Hudson, 447 U.S. at 564, 100 S.Ct. 2350, 65 L.Ed.2d at 350. The Supreme Court has declined to uphold regulations that only indirectly advance the State interest involved. Id.
This burden is not satisfied by mere speculation or conjecture; rather a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree.
Greater New Orleans, 527 U.S. at 188, 119 S.Ct. at 1932, 144 L.Ed.2d at 177 (quoting Edenfield v. Fane, 507 U.S. 761, 770-71, 113 S.Ct. 1792, 1800, 123 L.Ed.2d 543, 555 (1993)). The Supreme Court determined in Metromedia that it is not unreasonable for legislatures and local lawmakers to regulate billboards in furtherance of the goals of traffic safety and aesthetics. Metromedia, 453 U.S. at 509-10, 101 S.Ct. at 2893-94, 69 L.Ed.2d at 815-16. Our supreme court has also determined that the statute involved here furthers the governmental interests of public safety and aesthetics.
The legislative determination that Chapters 306B and 306C bear a substantial relationship to public safety and the general public welfare is not clearly erroneous. These statutes relate to public safety in that billboards could distract drivers and cause accidents. Also, the statutes promote the general welfare in that they provide the comfort, convenience, and peace of mind of those using the highways by removing annoying intrusions on that use. Further, these statutes promote the general public welfare as they promote aesthetic values.
Iowa Dep't of Transp. v. Nebraska-Iowa Supply Co., 272 N.W.2d 6, 13 (Iowa 1978) overruled on other grounds by Estate of Grossman v. McCreary, 373 N.W.2d 113, 114 (Iowa 1985).
Based on both the Iowa Supreme Court's and United States Supreme Court's determinations regarding the purposes of billboard regulations, we conclude Iowa Code chapter 306C and Iowa Administrative rule 761-117.6(5) directly advance the substantial governmental interests of traffic safety and aesthetics. Therefore, the third element of the Central Hudson test has been met.
The only close question in the case at hand is the fourth element of the Central Hudson test, whether the governmental regulation is more extensive than is necessary to serve the substantial interests of traffic safety and aesthetics. If the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restriction cannot survive. Central Hudson, 447 U.S. at 564, 100 S.Ct. at 2350, 65 L.Ed.2d at 350. This criteria recognizes that the First Amendment mandates commercial speech restrictions be narrowly drawn. Id. at 565, 100 S.Ct. at 2351, 65 L.Ed.2d at 350.
The regulatory technique may extend only as far as the interest it serves. The State cannot regulate speech that poses no danger to the asserted state interest, nor can it completely suppress information when narrower restrictions on expression would serve its interest as well.
Id.
The Government is not required to employ the least restrictive means conceivable, but it must demonstrate narrow tailoring of the challenged regulation to the asserted interest — "a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is in proportion to the interest served."
Greater New Orleans, 527 U.S. at 188, 119 S.Ct. at 1932, 144 L.Ed.2d at 177 (citations omitted).
Tri-State argues a potential remedy recognized by the ALJ in his proposed decision, that Tri-State restore the sign to its original condition, is a less restrictive alternative than total removal of the billboard but would still further the State's interests. Tri-State alleges the DOT has failed to meet its burden of showing the enabling regulations are no more restrictive than necessary to serve the proffered governmental interests of traffic safety and aesthetic values and thus failed to satisfy the fourth element of the Central Hudson test.
Based on our determination that the State has a sufficient basis for concluding that billboards are traffic hazards and are aesthetically displeasing, the most obvious, direct, and perhaps only effective means of solving these problems is to require their removal. See Metromedia, 453 U.S. at 508, 101 S.Ct. at 2893, 69 L.Ed.2d at 815. However, the State has in fact stopped short of seeking to fully accomplish its ends in the immediate or near future in that it has not prohibited all billboards or required that all of them be removed. When Iowa enacted the Junkyard Beautification and Billboard Control Act it allowed existing, non-conforming billboards to be "grandfathered" in and remain standing for their natural lifespan rather than requiring their immediate removal. In exchange for allowing these billboards, such as the one in this case, to remain standing the State required that no modification be made to the billboard to extend its life. An underlying purpose of the Act has been and remains the ultimate removal of all non-conforming billboards. In furtherance of this goal the administrative rule prohibits modifications that can extend such a billboard's life unless a permit is first secured, and as a sanction for violation of the rule and its underlying policy provides for removal of the billboard. We conclude the State has gone no further than necessary in seeking to serve its legitimate interests and the directive ordering removal as well as the administrative rule upon which it is based satisfy the fourth element of the Central Hudson test.
IV. CONCLUSION
For all of the reasons set forth above, we conclude the clear language of Administrative Code rule 761-117.6(5) does not require the DOT to establish the current permit holder was the entity responsible for the modification to the billboard in order for the DOT to revoke the permit. Rather this section merely requires that the DOT establish the sign was modified without prior approval. The DOT proved six additional posts were added to the billboard without prior approval. Under the provisions of rule 761-117.6(5) such modification results in the revocation of any permit that has been issued and removal of the advertising device. We further conclude the State has met its burden to show that traffic safety and aesthetics are substantial governmental interests, the statute and regulation at issue here regulating billboards directly advance those interests, and the State has gone no further than necessary to serve these interests. Therefore, the district court's order affirming the DOT's decision to revoke Tri-State's outdoor advertising permit and require removal of the billboard in question is affirmed.
AFFIRMED.