Ala. Dep't of Transp. v. Lee Outdoor Adver., LLC

Citation: 275 So. 3d 542Docket: 2170774; 2170792; 2170793

Court: Court of Civil Appeals of Alabama; October 26, 2018; Alabama; State Appellate Court

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The Alabama Department of Transportation (ALDOT) and New South Outdoor, LLC appeal a Montgomery Circuit Court judgment that reversed ALDOT's revocation of an outdoor-advertising permit issued to Lee Outdoor Advertising, LLC. The circuit court mandated the reinstatement of Lee's permit. Key facts include Shon Lee, owner of Lee, applying for the permit while under a contract to purchase property for an electronic billboard, although he mistakenly stated that Lee owned the property. Before finalizing the purchase, the adjacent landowner, BFHK, LLC, exercised a right of first refusal and acquired the property. Lee did not inform ALDOT of this change. Subsequently, ALDOT revoked the permit, citing the inaccurate ownership claim as the sole reason and failing to notify Lee prior to revocation. Lee contested the revocation, arguing that ALDOT did not follow statutory notice requirements under the Alabama Highway Beautification Act and the Alabama Administrative Procedure Act (AAPA). The relevant statutes stipulate that permits can only be revoked after a public hearing with prior written notice, allowing the permit holder the opportunity to address compliance issues.

On October 27, 2017, following a hearing with both oral and documentary evidence, the Administrative Law Judge (ALJ) issued a recommended order stating that the Alabama Department of Transportation (ALDOT) had not properly notified Lee of a public hearing regarding the revocation of its permit. Although the ALJ acknowledged that the hearing allowed Lee to present its case, he concluded that Lee's due process rights were initially violated. The ALJ found that Lee's application was misleading since it claimed ownership of the property, despite Lee not having closed the property purchase.

Lee appealed ALDOT's permit revocation to the circuit court, which appointed a special master to review the hearing materials and conducted oral arguments. On April 11, 2018, the circuit court reversed ALDOT's decision, citing a violation of Lee's due process rights due to inadequate notice and hearing prior to revocation. The court noted that while ALDOT and New South acknowledged this initial violation, they argued it was remedied by the subsequent hearing. However, the court disagreed, stating that the primary issue was whether ALDOT properly revoked the permit, not the original issuance of the permit.

The circuit court found that ALDOT had no precedent for revoking a permit based on a claim that the permit holder lacked legal property rights and determined that the reason for revocation—allegedly false or misleading application—was not substantiated. Consequently, the court ruled that ALDOT acted beyond its statutory authority and reversed the revocation, reinstating Lee's permit. ALDOT and New South subsequently appealed, challenging the circuit court's findings regarding due process violations and the assertion that these violations were rectified by the evidentiary hearing held by the ALJ.

Judicial review of administrative agency decisions, as established in Mobile County Personnel Board v. Tillman, mandates that such decisions can only be reversed if deemed arbitrary, capricious, or legally incorrect. Courts must afford substantial deference to an agency's interpretation of its rules, provided the interpretation is reasonable. Under the Alabama Administrative Procedure Act (AAPA), circuit courts presume agency correctness and limit review to the record from the agency. This standard extends to appellate reviews, as supported by relevant case law.

The AAPA stipulates that agency decisions are prima facie just and reasonable, barring trial de novo circumstances. Courts can affirm, remand for further proceedings, or reverse agency actions if they violate constitutional or statutory provisions, exceed agency authority, breach rules, follow unlawful procedures, involve legal errors, lack substantial evidence, or are deemed unreasonable or capricious. 

In the case at hand, ALDOT revoked Lee's permit without legally required notice or a hearing, raising due process concerns. The circuit court found that a post-revocation hearing did not rectify these infringements. It concluded that, regardless of procedural propriety, Lee's victory would be unenforceable due to his lack of property interest for the proposed billboard. Thus, the permit issued to Lee on March 15, 2017, remains unenforceable.

Lee's permit to erect a billboard does not confer an unconditional right to do so, as Lee lacks both ownership of the property and permission from the property owner. Lee acknowledged it has no property interest and intended to use the permit as leverage in negotiations with BFHK for property rights, but this intention does not constitute a legally protected right. The Highway Beautification Act does not necessitate property interest for permit applicants, yet the application requires proof of permission to erect the billboard, which Lee could not provide. Although there was no malicious intent in the application process, the issued permit was based on false premises since Lee was neither the property owner nor had permission to erect the billboard at the time of issuance. Consequently, Lee is not entitled to the permit issued on March 15, 2017, and has no legal remedy for its revocation, as it possessed no substantive rights to begin with. The discussed precedent cases emphasize that procedural due process violations do not guarantee remedies if no substantive rights exist. Additionally, there is no basis for injunctive relief since Lee has not shown any performance to enjoin, and claims for damages related to constitutional violations are moot without effective remedies. Overall, the court cannot issue advisory opinions on claims that lack substantive grounds for relief.

An appeal cannot proceed if the original justiciable controversy has become moot due to subsequent events. This principle is supported by case law, including *Case v. Alabama State Bar* and *Underwood v. Alabama State Bd. of Educ.*, which establish that courts typically refrain from deciding moot questions. In this case, Lee is unable to demonstrate entitlement to a permit, resulting in a lack of available remedy since the case's inception, and thus no justiciable controversy exists for the courts to resolve. Consequently, the appeals are dismissed, with specific instructions for the circuit court to vacate its April 11, 2018 judgment and to reinstate ALDOT's decision revoking Lee's permit. Additionally, the excerpt references *Stallworth*, where the Alabama Supreme Court emphasized that a post-termination hearing cannot rectify the lack of due process in a pre-termination hearing, underscoring the importance of proper procedures in employment dismissals.