William H . Thomas, Jr. v. Tennessee Department of Transportation ( 2012 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
August 24, 2012 Session
WILLIAM H. THOMAS, JR. v. TENNESSEE DEPARTMENT OF
TRANSPORTATION ET AL.
Appeal from the Chancery Court for Davidson County
No. 100038-IV Russell T. Perkins, Chancellor
No. M2011-02530-COA-R3-CV - Filed November 27, 2012
Petitioner challenges the decision of the Tennessee Department of Transportation denying
his application for a billboard permit because his proposed location was within 1000 feet of
another permit location. He contends the Department erroneously deviated from its regulation
requiring permit applications for locations within 1000 feet of each other to be considered
on a “first come first served” basis, insisting he submitted a “complete” application before
the applicant who was granted a permit for the nearby location. The Chancery Court
summarily dismissed the petition, finding it constituted an impermissible collateral attack on
the Department’s decision to grant a permit to the other applicant. The court also found that
the Department complied with its rules in issuing the permit to the other applicant and
denying the petitioner’s application because petitioner’s location was less than 1000 feet
away from the other applicant’s location. We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
F RANK G. C LEMENT, J R., J., delivered the opinion of the Court, in which A NDY D. B ENNETT
and R ICHARD H. D INKINS, JJ., joined.
William H. Thomas, Jr., Memphis, Tennessee, Pro Se, and Jonathan L. Miley, Nashville,
Tennessee, Oral Argument for the appellant, William H. Thomas, Jr.
Robert E. Cooper, Attorney General & Reporter, and Bruce M. Butler, Assistant Attorney
General, for the appellee, Tennessee Department of Transportation.
Robert L. J. Spence, Jr., Memphis, Tennessee, for the appellee, Clear Channel Outdoor, Inc.
OPINION
This controversy arose in 2005 after two competing applications for Outdoor
Advertising Device Permits (permits for billboards) were filed with the Beautification Office
of Respondent Tennessee Department of Transportation (“the Department” or “TDOT”).
Outdoor Advertising Device Permits are required by the Billboard Regulation and Control
Act of 1972 for the construction or maintenance of any billboard located within 660 feet of
an Interstate or State Highway. See Tenn. Code Ann. §§ 54-21-101 through -121.1 Existing
permits are required to be renewed on an annual basis. See id. at -104(c).
In the fall of 2005, the Department notified Clear Channel Outdoor, Inc. (“Clear
Channel”) that its permits for an existing double-sided billboard located at log mile 14.65 on
Alcy Road off of Interstate 240 in Memphis had expired, and that Clear Channel needed to
apply for new permits or remove the billboard.2 Clear Channel submitted its application to
renew the permits on October 19, 2005. Three weeks later, on November 7, 2005, William
H. Thomas, Jr. (“Thomas”) submitted an application for a double-sided billboard to be
located at log mile 14.48, which was 938 feet from the location that was the subject of Clear
Channel’s pending application. Both sites were on the same side of Interstate 240.
Thomas’s application sparked the current controversy because TDOT Rule 1680-2-3-
.03(1)(a)4(i)(I) provides that billboards shall not be spaced “less than 1000 feet apart on the
same side of the highway.” Thus, only Clear Channel or Thomas, but not both, could receive
the requested permits. TDOT Rules also provide that applications for billboard permits are
to be “considered on a first come first served” basis. Tenn. Comp. R. & Regs. 1680-2-3-
.03(1)(a)5(i) (2005).3 As a consequence, the Department first considered the application of
Clear Channel, which applied three weeks before Thomas did. The review process took
several months, significantly longer than most, due in part to several intervening grievances
filed by Thomas.
On September 18, 2006, the Department granted Clear Channel’s application and
issued permits 79-3214 and 79-3215 for its existing double-sided billboard. That same day
1
Tennessee’s Billboard Regulation and Control Act of 1972 was enacted to comply with the
mandatory provisions of Federal Highway Beautification Act of 1965. 23 U.S.C. § 131.
2
Clear Channel and its predecessors have owned and maintained billboards in this location since
1992.
3
The current version of the Rule, effective December 2008, retains the “first come first served”
provision at Tenn. Comp. R. & Regs. 1680-2-3-.03(1)(a)7(v). Unless otherwise noted, this opinion refers to
the version of the Rule in effect in 2005.
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the Department denied Thomas’s application because his proposed location was less than
1,000 feet away from the Clear Channel location, for which permits had been issued, and
because his proposed location was not comprehensively zoned for commercial and industrial
use.
Thomas requested an administrative hearing on October 12, 2006 to challenge the
denial of his application. Upon Thomas’s motion, Clear Channel was joined as an additional
respondent (along with the Department). All three parties filed motions for summary
judgment. Administrative Law Judge Randall LaFevor granted Respondents’ motions and
denied Thomas’s motion by order dated October 24, 2008. The Commissioner of TDOT,
Gerald Nicely, subsequently affirmed Judge LaFevor’s decision by order dated November
12, 2009. Thomas timely filed a Petition for Judicial Review of Commissioner’s Final Order
in the Davidson County Chancery Court pursuant to the Tennessee Uniform Administrative
Procedures Act, Tennessee Code Annotated § 4-5-322.
On September 22, 2011, the trial court entered an order affirming the Department’s
decision to grant the permits to Clear Channel and deny the permits to Thomas. Thomas
subsequently filed a Motion for Reconsideration, which the trial court denied on October 24,
2011. Thomas appealed.
A NALYSIS
The cornerstone of Thomas’s Petition for Judicial Review is that the Department erred
in issuing permits to Clear Channel instead of issuing permits to Thomas. He argues the
Department should have rejected Clear Channel’s application as incomplete upon receipt,
refused to process that application and processed Thomas’s application on the “first come
first served” basis, contending his application was the first complete application filed for the
location at issue.
The Department asserts that Thomas is collaterally attacking the Department’s
issuance of permits to Clear Channel; Thomas insists he is not. We have concluded the
Department is correct on this point because in order for Thomas to prevail, the Department
must rescind the permits issued to Clear Channel and Thomas lacks standing to directly
challenge the Department’s decision to issue the permits to Clear Channel.
I. C OLLATERAL A TTACK
For Thomas to be issued permits for the location at issue the Department must first
rescind the permits issued to Clear Channel. This is because state law prohibits the issuance
of two permits for billboard locations within 1000 feet of each other on the same side of the
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highway, Tenn. Comp. R. & Regs. 1680-2-3-.03(4), and it is undisputed that Thomas’s
proposed location is less than 1000 feet from that of Clear Channel on the same side of
Interstate 240. It is for this reason that Thomas is attempting to impeach, overturn or declare
invalid the Department’s 2006 decision to issue the permits to Clear Channel.
The Tennessee Supreme Court explained the distinction between direct attacks, which
generally are permissible, and collateral attacks, which generally are not, in Turner v. Bell,
198 S.W.2d 71 (1955). The opinion states:
If an action or proceeding is brought for the very purpose of impeaching or
overturning a judgment, it is a direct attack upon it. . . . On the other hand, if
the action or proceeding has an independent purpose and contemplates some
other relief or result, although the overturning of the judgment may be
important, or even necessary to its success, then the attack upon the judgment
is collateral.
Id. at 75; see also 47 Am. Jur. 2d Judgments § 744 (2012) (“[I]f a party is not entitled to the
relief sought in a proceeding unless the judgment in another action is adjudicated invalid, it
constitutes a collateral attack.”). The rule was applied to decisions of administrative agencies
in State v. Sandefur, 389 S.W.2d 266 (Tenn. 1965).
The Uniform Administrative Procedures Act (“UAPA”) only provides for judicial
review of administrative decisions in contested cases. Tenn. Code Ann. § 4-5-322(a)(1).
Clear Channel’s application for a permit and the procedure or protocol by which the
Department issued the permits to Clear Channel was not a contested case proceeding as that
term is defined in the UAPA. This is because the Department was not required to grant
Thomas a hearing before acting on Clear Channel’s application. Tenn. Code Ann. § 4-5-
102(3) (“‘Contested case’ means a proceeding, . . . in which the legal rights, duties or
privileges of a party are required by any statute or constitutional provision to be determined
by an agency after an opportunity for a hearing.” (emphasis added)); see also Mid-South
Indoor Horse Racing, Inc. v. Tenn. State Racing Comm’n, 798 S.W.2d 531, 537 (Tenn. Ct.
App. 1990).
Thomas has not identified any provision of the Billboard Regulation and Control Act
of 1972, see Tenn. Code Ann. §§ 54-21-101 through -123, the Department’s Rules and
Regulations, Tenn. Comp. R. & Regs. 1680-2-3-.03, or any other regulation or statute which
required the Department to grant Thomas a hearing - a contested case hearing - before issuing
the permits to Clear Channel. Thus, Thomas is not entitled to judicial review of the
Department’s decision to grant permits to Clear Channel under the UAPA, Tennessee Code
Annotated § 4-5-322.
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Therefore, Thomas does not have standing to directly attack the Department’s decision
to issue the permits to Clear Channel and a determination of an administrative agency with
jurisdiction and authority of law is not subject to a collateral attack in the absence of fraud
or bad faith. Sandefur, 389 S.W.2d at 271.
Thomas’s assertion that the Department mishandled Clear Channel’s application
constitutes a collateral attack on the Department’s decision to issue permits to Clear Channel
in 2006 and the record contains no evidence of fraud or bad faith in regard to that decision;
thus, Thomas’s collateral attack on that decision must fail.
Although the foregoing decision renders Thomas’s challenge to the following issue
futile, for purposes of completeness we have decided, as the trial court did, to discuss
Thomas’s assertion that he should have been issued the permits at issue because the
Department failed to comply with Rule 1680-2-3-.03(1)(a)5(i) when it decided to issue the
permits to Clear Channel.
II. T ENN. C OMP. R. & R EGS. 1680-2-3-.03(1)(a)5(i)
Thomas asserts the Department violated Rule 1680-2-3-.03(1)(a)5(i) when it allowed
Clear Channel to submit additional documentation in support of its application after Thomas
submitted his application. Thomas argues that when the Legal Office determined the
documentation Clear Channel originally submitted was not sufficient to establish that it had
the right to erect and maintain billboards at the location, the Department was required to
declare the application “incomplete” and return it “without action.”
The rule in effect at the time provided:
An application for an outdoor advertising permit must be filed with the
Highway Beautification Headquarters Office in Nashville accompanied by
check or money order made payable to the Tennessee Department of
Transportation for the seventy-five ($75.00) dollar application fee. A detailed
sketch of the location must be provided. Permit applications will be considered
on a first come first serve basis. The applicant must either show proof of
ownership of the property or submit a valid land lease or an affidavit signed
by the property owner stating that permission has been given to erect this
particular outdoor advertising device. The property owner’s signature must be
notarized. If a permit is issued, then one of the above types of permission must
remain in effect for the life of the permit. If not, the permit may be revoked.
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No location will be considered unless the application has been filed in the
Highway Beautification Headquarters Office. Incomplete applications with
accompanying fees will be returned without action.
Tenn. Comp. R. & Regs. 1680-2-3-.03(1)(a)5(i).
Clear Channel submitted the application, along with the fee and other supporting
documentation, to the Department’s Nashville Office on October 19, 2005. On the
application, Clear Channel listed itself as the “property owner.” The application was received
by the Department, reviewed for completeness, and the application was then forwarded to
the Department’s Region IV Office, which covers the Memphis area. Once received there,
personnel began to substantively review the application to determine whether Clear Channel
was eligible to receive the permits and whether the proposed location complied with spacing
and other applicable rules. When the Department’s Legal Office determined that Clear
Channel was not the owner of the property in fee simple, but rather the owner of a perpetual
easement on the property, Clear Channel was instructed to submit additional documentation
and it promptly submitted a copy of a recorded “Grant of Perpetual Easements and
Declaration of Restrictions.” The Perpetual Easement, which was granted in 2001,
established that Clear Channel has the right to build and maintain billboards on the proposed
site in perpetuity.4 After also determining the location did not encroach on any state highways
or other right-of-ways or violate the spacing rule, the Department issued permits to Clear
Channel. The Department then denied Thomas’s applications based on the spacing rule.
Judicial review of decisions of administrative agencies, when those agencies are
acting within their area of specialized knowledge, experience, and expertise, is governed by
the narrow standard contained in Tennessee Code Annotated § 4-5-322(h) rather than the
broad standard of review used in other civil appeals. Willamette Indus., Inc. v. Tenn.
Assessment Appeals Comm’n, 11 S.W.3d 142, 147 (Tenn. Ct. App. 1999) (citing Wayne
Cnty. v. Tenn. Solid Waste Disposal Control Bd., 756 S.W.2d 274, 279-80 (Tenn. Ct. App.
1988)). “Where an administrative action is reasonable, it is not for the courts to dictate to the
administrative authority a different action which . . . the courts might deem more reasonable.”
Crites v. Smith 826 S.W.2d 459, 466 (Tenn. Ct. App. 1991).
The trial court may reverse or modify the decision of the agency if the petitioner’s
rights have been prejudiced because the administrative findings, inferences, conclusions or
decisions are:
4
The current version of the Rule recognizes the owner of a permanent easement as a “property
owner.” Tenn. Comp. R. & Regs. 1680-2-3-.03(1)(a)6(iv)(III)I (2012).
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(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Arbitrary or capricious or characterized by abuse of discretion or
clearly unwarranted exercise of discretion; or
(5)(A) Unsupported by evidence which is both substantial and material in the
light of the entire record.
Tenn. Code Ann. § 4-5-322(h)(1)-(5)(A). However, the trial court may not substitute its
judgment concerning the weight of the evidence for that of the agency as to questions of fact.
Tenn. Code Ann. § 4-5-322(h)(5)(B); see also Jones v. Bureau of TennCare, 94 S.W.3d 495,
501 (Tenn. Ct. App. 2002). The same limitations apply to the appellate court. See Humana
of Tenn. v. Tenn. Health Facilities Comm’n, 551 S.W.2d 664, 668 (Tenn. 1977) (holding the
trial court, and this court, must review these matters pursuant to the narrower statutory
criteria).
Courts generally defer to decisions of administrative agencies when those agencies
are “acting within their area of specialized knowledge, experience, and expertise.” Willamette
Indus., Inc., 11 S.W.3d at 146 (quoting Wayne County, 756 S.W.2d at 279). Whether Clear
Channel’s application was complete when filed on October 19, 2005, is a decision within the
Department’s area of specialized knowledge, experience, and expertise, as is the
Department’s decision to request additional information from Clear Channel and the
Department’s decision that the later-submitted proof was adequate to establish Clear
Channel’s right to maintain a billboard on the property. Accordingly, we defer to the
Department’s decisions on these matters.
Thomas is correct that the Department instructed Clear Channel to submit proof of
permission from the fee simple property owner; however, there is no rule or regulation
prohibiting the Department from requesting or gathering additional information when
determining whether to grant an application. To the contrary, the rules require the
Department to gather additional information to determine whether the applicant is eligible
to receive the permits and whether the proposed location violates the spacing rule. See e.g.,
Tenn. Comp. R. & Regs. 1680-2-3-.03(1)(a)5(ii) (“The location on the application will be
inspected in the field by the Department’s outdoor advertising personnel.”). Applying the
deferential standard of review applicable to this appeal, we find no basis upon which to
conclude that the Department’s decision to request additional proof of Clear Channel’s right
to maintain a billboard on its proposed site violated Department procedure or rules or any
other statutory or constitutional provisions. See Tenn. Code Ann. § 4-5-322(h).
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Based upon the foregoing, we find no basis upon which to conclude that, by issuing
the permits to Clear Channel in 2006, the Department acted in excess of the statutory
authority of the agency; it made its decision upon an unlawful procedure; the decision was
arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise
of discretion.
The foregoing rulings by this court render any remaining issues moot.
I N C ONCLUSION
The judgment of the trial court is affirmed, and this matter is remanded with costs of
appeal assessed against the petitioner, William H. Thomas, Jr.
______________________________
FRANK G. CLEMENT, JR., JUDGE
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