City of Tucson v. Clear Channel Outdoor, Inc. – 4/2/2008

April 15, 2008

Arizona Court of Appeals Division Two Exercises Both Special Action and Appellate Jurisdiction to Resolve Zoning and Use Issues for Billboards in Tuscon.

The City of Tucson and Clear Channel Outdoor, Inc. (“CCO”) appealed and cross-appealed from a judgment of the superior court resolving the City’s complaints regarding 10 billboards owned by CCO.  The superior court had ordered trials on these 10 billboards, selected as representative of problems raised by over 100 other CCO billboards, to provide the parties a roadmap from which to reach a settlement about the remaining billboards.

Division Two first agreed to address a statute of limitations question not presented by the judgment below but raised by the parties because it pertained to many other disputed billboards.  The Arizona appeals court agreed to reach this issue through its special action jurisdiction.  CCO argued that A.R.S. § 9-462.02(C) imposed a two year limitations period from the date Tucson knew or should have known of alleged city code violations relating to certain billboards.  Rejecting this argument based on the plain language of the statute, the Court held that the limitations period runs only from the date of actual discovery of the violation by the City.

Under its traditional appellate jurisdiction, the Court then addressed CCO’s argument that the trial court erred in permitting the City to use repealed ordinances, which contained no savings clauses, as the basis for its allegations regarding certain billboards.  The Court first noted that the current ordinances prohibit, among other things, maintaining a sign in violation of City code and provide that such signs are a public nuisance.  Division Two also acknowledged that a nonconforming land use, in other words a lawful use maintained after the date of a zoning ordinance prohibiting that use, is a vested property right, which may not be subsequently impaired.  Here, however, CCO conceded that the billboards in question violated the zoning codes when they were erected.  Thus, the billboards were never legal and the City could enforce the new restrictions, which the billboards violated.

The Court then considered whether 4 billboards lost their status of a legal, nonconforming use, when CCO added a second face to them, allowing more advertising to be displayed.  As to one such billboard, the Court found CCO’s argument to be unfounded in fact and thus waived.  As to the remaining billboards, the Court ruled that adding a second face resulted in losing nonconforming use status under both the 1980 and 1987 versions of the City code.

The Court next considered the City’s argument that the superior court erred in ordering any remedy other than removal as a sanction for the unlawful billboards.  Rejecting that argument, the Court held that because unlawful billboards are public nuisances, and proceedings to enforce the zoning ordinance are proceedings in equity, the superior court has discretion to fashion a remedy other than removal.

Reviewing each of the billboards in question, the Court found that the superior court erred as to the first one (count 11) because it wrongly concluded that the billboard had achieved lawful nonconforming use status.  After then holding that the City’s “laxity of enforcement” could not justify equitable estoppel to save the superior court’s judgment on this count, the appeals court remanded it to the lower court.  As to the second billboard, the Court also remanded, this time for the lower court to determine whether estoppel applied in light of the City’s erroneous issuance of a permit allowing the billboard to be constructed.  As to the third billboard, the Court affirmed the superior court’s decision that the billboard had achieved legal, non-conforming use status because it was lawful when built.  The Court also ruled that the superior court did not err in holding that City was estopped from challenging the fourth billboard (count 97), because a sign inspector and a city board had approved the billboard, even though erroneously.  Finally, the Court ruled that the billboard challenged in count 114 of the complaint could remain because its violations of the zoning ordinance were unintentional and de minimis.

In closing, the Court of Appeals addressed CCO’s argument that the superior court erred in ordering removal of four billboards, rather than remediation.  These billboards lost their nonconforming use status when a second face was added to them without a permit.  Thus, the Court explained, they violate the zoning ordinance, can support no relief based on nonconforming use and were properly ordered removed. 

Judge Howard authored the decision in which Judges Pelander and Brammer joined.