Newman Signs, Inc. V. Hjelle

No. 9394 (268 N.W.2d 741) (N.D. July 3, 1978)

ELR Digest

In an appeal of three consolidated cases, the court considers six issues relating to the proper interpretation and constitutionality of the North Dakota Highway Beautification Act, N.D. Century Code ch. 24-17. That statute, enacted in 1967 to comply with the Federal Highway Beautification Act, 23 U.S.C. § 131, forbad the erection of advertising signs within 660 feet of major highways and provided for the mandatory removal of all such signs within five years of the date of enactment, subject to just compensation by the state where the sign removed was lawfully erected. In anticipation of the statutory prohibition, defendant commissioner of highways imposed substantially identical prohibitions through regulations issued over one year earlier. The regulations provided for the issuance of permits for the erection of highway signs but required that the permittee promise to remove any such sign by 1970 and expressly waive any right to compensation therefor. Regulations subsequently issued by the Highway Corridor Board, which was created by the state Act, were analogous in all material respects.

The court first holds that the effective date of the state Highway Beautification Act is January 1, 1968, notwithstanding ambiguous language therein which, plaintiff urged, left the effective date contingent upon a date to be set in the future by act of the United States Congress. Plaintiff next asserted that signs erected under permits issued the Commissioner and the Corridor Board were lawfully erected under the Act and require compensation for their removal because the policy of obtaining a waiver of right-of-compensation from permittees was adopted contrary to state law. The court, while agreeing that the rules relating to the waiver of compensation rights were invalidly adopted, finds that plaintiff is estopped from raising this defense because it was not raised when the permits were first sought. One who obtains the advantage of a statute or administrative regulation cannot later challenge its validity. This ruling makes it unnecessary to consider whether plaintiff is estopped from challenging alleged inaction on the part of the Corridor Board on the ground its owner was a member of that board. Plaintiff also challenged the state's refusal to pay compensation for that portion of the value of signs otherwise eligible for compensation which was due to sign enlargement or reconstruction subsequent to the effective date of the Act. Declaring that an award of compensation in such cases would violate the general rule that enlargement of nonconforming uses is disfavored and would defeat the statutory purpose of phasing out such uses, the court remands the case for further factual findings on this issue. In addition, the court remands to the district court the question of whether plaintiff is entitled to compensation for signs which were removed from property the advertising rights to which had been acquired by the state.

Finally, the court upholds the constitutionality of the state Highway Beautification Act. In order to constitute a taking requiring compensation, a regulatory scheme must be unrelated to a proper state purpose or deprive a property owner of all or substantially all of the beneficial use of the property. The Statute in question is clearly aimed at preserving the public's safety and restoring the scenic beauty of the public highways, a valid objective of the state police power. The Act does not deprive plaintiff of the beneficial use of its property because it provides for amortization of nonconforming uses, an accepted means of ameliorating the economic impact of regulatory measures. Nor does the statute's discrimination between off-premise and onpremise signs violate equal protection guarantees; rather, it is reasonably designed to accommodate valid business interests. The court also rejects plaintiff's contention that the statute abridges First Amendment freedoms, finding the regulatory scheme to be reasonable in that it is not directed at the content of the restricted communication, it leaves open alternative means of transmitting the same information, and it serves a significant governmental interest.

The full text of this opinion is available from ELR (19 pp. $2.25, Order No. C-1162).

Counsel for Plaintiff
Edmund G. Vinje
Hjellum, Weiss, Nerison, Jukkala & Vinje
Suite 200, Jamestown Mall, P.O. Box. 1568, Jamestown ND 58401
(701) 252-2090

Counsel for Defendants
Albert A. Wolf, Max D. Rosenberg, Special Ass't Attorneys General
State Capitol, Bismarck ND 58505
(701) 224-2201

Vogel, J.

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]