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 ruling that reversed ALDOT's decision to revoke an outdoor-advertising permit issued to Lee Outdoor Advertising, LLC (Lee) and ordered the permit's reinstatement. Shon Lee, owner of Lee, applied for the permit after entering a purchase agreement for property intended for an electronic billboard, indicating ownership in the application despite disclosing to ALDOT that the closing had not yet occurred. ALDOT approved the permit on March 15, 2017. However, two days before the closing, BFHK, LLC exercised its right of first refusal on the property and purchased it on June 9, 2017. Lee did not notify ALDOT of this change. On June 28, 2017, BFHK informed ALDOT of its purchase and negotiations with New South for billboard rights. ALDOT revoked Lee's permit on July 5, citing the misrepresentation of property ownership as the sole reason and failing to provide prior notification. Lee appealed, arguing that ALDOT did not comply with notice requirements under the Alabama Highway Beautification Act, which mandates a public hearing and 30 days' written notice for permit revocation based on false statements in the application.

ALDOT, as a state agency, is governed by the Alabama Administrative Procedure Act (AAPA), which mandates that any revocation of a license must include prior notice and an opportunity for the licensee to comply with requirements. Following a hearing, an Administrative Law Judge (ALJ) found that ALDOT failed to provide adequate notice to Lee before revoking its permit but concluded that Lee's due process rights were ultimately satisfied through the administrative appeal process. The ALJ also determined that Lee's application was misleading because Lee falsely claimed to be the property owner after a failed purchase.

Lee appealed the permit revocation to the circuit court, which found that ALDOT violated Lee's due process rights by not providing proper notice and a hearing prior to the revocation. Although ALDOT and New South argued that the subsequent hearing remedied the initial violation, the circuit court disagreed, stating that the procedural error required a reversal for proper notice and hearing. The court emphasized that the case's focus was whether ALDOT's revocation was justified, not the initial issuance of the permit. It noted that ALDOT had no precedent for revoking a permit based solely on the permit holder's lack of ownership of the property. The circuit court ultimately concluded that Lee's application was neither false nor misleading and that ALDOT acted beyond its authority in revoking the permit. Therefore, it reversed ALDOT's decision and reinstated Lee's permit, finding the revocation was made through unlawful procedures and in violation of constitutional and statutory provisions.

ALDOT and New South appealed a circuit court judgment regarding ALDOT's revocation of Lee's permit, which the court found violated Lee's due-process rights due to the lack of notice and a hearing as mandated by relevant statutes. ALDOT argued that the evidentiary hearing conducted by an Administrative Law Judge (ALJ) after the revocation rectified any due-process violations. The judicial review standard emphasizes that an administrative agency's decisions should only be overturned if deemed arbitrary, capricious, or legally incorrect, with substantial deference given to the agency's interpretations. The Alabama Administrative Procedure Act (AAPA) presumes agency correctness and limits judicial review to the agency's record. The court can affirm, remand, or reverse agency decisions based on specific statutory criteria, including violations of constitutional or statutory provisions or other legal errors. In this case, the circuit court found that the absence of pre-revocation notice and a hearing raised questions about whether the post-revocation ALJ hearing resolved the due-process violation, referencing Stallworth v. City of Evergreen, which cast doubt on the effectiveness of the subsequent hearing. Consequently, the court deemed it unnecessary to further address the appeal issues due to the unique circumstances surrounding the case.

The circuit court reversed the ALJ's decision on the revocation of Lee's billboard permit, noting uncertainty about the ruling's implications since Lee lacks permission from the current landowner to erect a sign. Despite this reversal, the court concluded that Lee's permit is ultimately unenforceable due to the absence of any property interest in the billboard location. Lee acknowledged it does not own the property or have the landowner's consent. The court emphasized that a permit does not grant an unconditional right to erect a billboard without such an interest or lease. Lee's intention to use the permit as leverage in negotiations does not constitute a legally protected right deserving constitutional protections. Although the Highway Beautification Act does not explicitly require a property interest for permit applicants, the application form necessitates proof of permission to erect the billboard through ownership or lease. An application submitted by Shon incorrectly stated that Lee owned the property, despite it not having permission or ownership at the time of the permit's issuance. The court found no wrongdoing in Shon's actions but determined that the application was false. Consequently, Lee is not entitled to the permit issued on March 15, 2017, and has no legal remedies for its revocation, as it never held substantive rights to the permit. This aligns with the precedent set in Enterprise Fire Fighters' Ass’n v. Watson and Fowler v. Johnson, where the courts upheld that lack of substantive rights precludes remedies for due process violations.

Lee has not established any performance to enjoin, making injunctive relief unavailable in this case. The referenced case, Ex parte Carter, highlights that courts cannot grant relief not sanctioned by law, and rendering opinions on alleged rights violations without a remedy is considered an advisory opinion. Consequently, claims for compensatory damages related to constitutional violations are deemed moot if no effective remedy is available. The court maintains that matters become moot when subsequent events eliminate the possibility of relief, emphasizing that it will not address questions rendered useless. Since Lee failed to demonstrate entitlement to the permit from the outset, no justiciable controversy exists for judicial determination. The appeals are dismissed with instructions for the circuit court to vacate its previous judgment and reinstate ALDOT's permit revocation decision. Additionally, in the Stallworth case, the court ruled that a lack of due process in the initial pre-termination hearing undermined any subsequent post-termination hearing, reaffirming that procedural fairness must be upheld at every stage.