Arizona Court of Appeals Holds That Arizona's Highway Beautification Act Prohibits Electronic Billboards With Changing Advertisements Because They Display “Intermittent” Light.

In 2008, American Outdoor Advertising, Inc., applied for a zoning adjustment to allow it to operate an electronic billboard.  After a hearing, the zoning adjustment officer approved the billboard subject to certain conditions on the use of lights on the billboard.  Scenic Arizona appealed to the full Board of Adjustment but the Board affirmed and issued a use permit.

Scenic petitioned for special action at the superior court.  The court determined that Scenic had standing but denied its claims on the merits.  Scenic appealed the decision on the merits and American Outdoor cross-appealed the standing issue.

The Court of Appeals unanimously affirmed as to standing and reversed on the merits.  Jurisdiction for Scenic’s petition was based on A.R.S. § 9-462.06(k), which allows a “person aggrieved” by a Board decision to file a special action in the superior court.  The Court held that the “person aggrieved” language gave standing to a broader class of parties than is allowed in other administrative contexts.  Accordingly, the Court held that Scenic had standing because it had alleged “sufficient facts to establish that the interests of its members would be adversely affected by the decision of the Board,” including that the billboard “creates increased safety risk” and “affects their aesthetic enjoyment” of the nearby streets.

Turning to the merits, the Court examined whether the billboard displays “intermittent light” within the meaning of the Arizona Highway Beautification Act.  The Act restricts the use of lights on billboards by, among other things, prohibiting billboards that “display[] a red, flashing, blinking, intermittent or moving light or lights likely to be mistaken for a warning or danger signal.”  A.R.S. § 28-7903(A)(4). 

Using LED lights, the billboard changes the display every eight seconds.  Although American Outdoor argued that its billboard displayed “constant” light and merely “changed copy,” the Court held that the changing lighted images meant that the billboard had “intermittent” lights under the plain meaning of the term.  American Outdoor further argued that, even if intermittent, the act prohibited only lights that are “likely to be mistaken for a warning or danger signal.”  The Court rejected this argument.  First, American Outdoor’s interpretation would make other parts of the statute superfluous, such as the exception allowing lighting intended to display non-emergency public information.  Second, to the extent the statute’s text is ambiguous, interpreting the “warning or danger signal” clause as an additional prohibition and not a limitation on the other prohibitions is consistent with the historical background and purpose of the Act.  The Act is concerned with both safety and beautification and thus it made little sense to read the Act to allow any kind of intermittent or flashing lights, so long as they could not be confused with a warning signal.  Finally, the Court noted that the Arizona legislature had twice failed to pass amendments to the Act which would have allowed the type of lighted sign at issue here.

American Outdoor alternatively argued that the billboard was still permissible because various agencies had approved electronic billboards so long as the lights did not change more frequently than every eight seconds.  The Court was not persuaded.  Although federal regulatory guidance indicated that the use of intermittent lighting on billboards would not be prohibited under federal law, that fact would not trump the plain meaning of Arizona’s statute.  Likewise, the Court held that the Arizona Department of Transportation’s view that such signs may be permissible did not deserve judicial deference because ADOT’s position had never been the subject of formal rulemaking and had changed over the years.

Judge Brown authored the unanimous opinion; Judges Johnsen and Downie concurred.