Lamar Central Outdoor, LLC d/b/a Lamar Advertising of Central Wisconsin and TLC Properties, Inc., Petitioners-Appellants-Petitioners,
State of Wisconsin Division of Hearings & Appeals, Respondent-Respondent, State of Wisconsin Department of Transportation, Other Party.
ARGUMENT: September 4, 2019
Circuit Court Portage County L.C. No. 2016CV196. John M.
OF DECISION OF THE COURT OF APPEALS Reported at 385 Wis.2d
211, 923 N.W.2d 168 (2018 - unpublished)
the petitioners-appellants-petitioners, there were briefs
filed by Thomas S. Hornig, Kraig A. Byron, and von Briesen
& Roper, . S.C., Madison. There was an oral argument by
Thomas S. Hornig.
the respondent-respondent, there was a brief filed by Thomas
C. Bellavia, assistant attorney general; with whom on the
brief was Joshua L. Kaul, attorney general. There was an oral
argument by Thomas C. Bellavia.
was an amicus curaie brief filed on behalf of Wisconsin
Manufacturers & Commerce, Midwest Food Products
Association, Outdoor Advertising Association of Wisconsin,
Wisconsin Cheese Makers Association and Wisconsin Dairy
Alliance by Robert I. Fassbender and Great Lakes Legal
Foundation, Madison. There was an oral argument by Robert J.
J., delivered the majority opinion of the Court, in which
ROGGENSACK, C.J., ANN WALSH BRADLEY, ZIEGLER, REBECCA GRASSL
BRADLEY, DALLET, and HAGEDORN, JJ., joined.
From time to time an administrative agency changes its
interpretation of a statute in a manner that adversely
affects a regulated activity. Here, an agency developed a new
statutory interpretation that prohibited the owner of a
roadside sign from remedying a modification that caused the
sign to lose its "legal, nonconforming" status. In
this case we address whether Wis.Stat. § 227.10(1)
(2015-16) required the agency to promulgate a rule
containing the new statutory interpretation before applying
it against the sign owner. We conclude that our statutes do
require promulgation of a new rule under circumstances
presented by this case, and therefore we reverse the decision
of court of appeals.
On a piece of property next to Interstate 39 in Stevens
Point, Wisconsin, there is a sign. It has been there since
1991 when Orde Advertising obtained a permit to build it.
Upon its completion, the sign (we will refer to it as the
"Billboard") complied with the terms of its permit
and all applicable laws (the "permit"). The
Billboard has two faces and cumulatively measures 1, 344
square feet. Orde Advertising sold the Billboard to Lamar
Central Outdoor, LLC ("Lamar") in
For purposes of this case, the Billboard came to the
attention of the Wisconsin Department of Transportation (the
"Department") in 2012 when Lamar applied for a
permit to remove vegetation that partially obscured the
Billboard from view (the "Application") . As part
of the permitting process, the Department reviewed historical
photographs, at least one of which depicted the addition of
an extension panel that increased the Billboard's total
advertising area. But the added panel was temporary, and
Lamar had already removed it several years before filing the
Application. With the panel removed, the Billboard returned
to its originally-permitted size. Nothing in the record
suggests that, at the time Lamar filed the Application, the
Billboard failed to comply with the terms of the permit or
any applicable laws that existed at the time the permit
But circumstances have changed, and the laws no longer allow
the Billboard where it is presently located. As relevant
here, the Billboard may exist only on property defined as a
"business area." See Wis.Stat. §
84.30 (governing outdoor advertising signs). What qualifies
as a business area depends on whether the property is
adjacent to an interstate highway or, instead, a
non-interstate highway. § 84.30(2)(a), (b). In 1996, the
stretch of road next to the Billboard was redesignated from
U.S. Highway 51 to Interstate Highway 39. The parties agree
that, although the property on which the Billboard is located
qualified as a business area when the adjacent highway was
designated U.S. Highway 51, it no longer qualified once the
highway became Interstate 39. Consequently, the highway's
redesignation changed the Billboard's status from legal
to "legal, nonconforming."
The Billboard's status is important in this case because
the Department says that "legal, nonconforming"
signs like the Billboard may not be enlarged. And if they are
enlarged, the Department says, they become illegal and are
subject to removal. On that basis, the Department denied
Lamar's Application. The Department's amended
decision said that "records show this sign was
1344 square feet in area when it became nonconforming in
1996. Since then, the sign was enlarged, subjecting the sign
to removal as an illegal sign."
Shortly after denying the Application, the Department sent
Lamar an order requiring it to remove the Billboard (the
"Order"). The operative part of the Order said:
NOTICE: Under the authority provided in Wisconsin
Statutes, [§] 84.30(11) and Wisconsin Administrative
Code, [§] TRANS 201.09, you are hereby ordered to remove
the above-described outdoor advertising sign within 60 days
of the date of this notice.
REASON FOR THIS ACTION: This sign does not comply
with applicable federal and/or state laws and agreements, as
detailed below: This sign has been enlarged, in violation of
Wisconsin Administrative Code [§] Trans 201.10(2)(e) and
Wisconsin Statute 84.30(5)(bm) .... This is an illegal sign.
Lamar requested a hearing before the Division of Hearings and
Appeals (the "DHA") to review the Order and the
Department's denial of the Application. The DHA said the
Billboard lost its "legal, nonconforming" status
when Lamar added the temporary panel. It also said that
removing the temporary panel could not recapture the
Billboard's prior status. Therefore, it concluded, Lamar
must remove the entire Billboard.
Lamar filed a petition for judicial review of the DHA's
decision pursuant to Wis.Stat. § 227.52. The circuit
court affirmed the DHA's final decision "in all
respects." The court of appeals affirmed. We granted
Lamar's petition for review and now reverse.
STANDARD OF REVIEW
Our duty in this case is to review the DHA's decision, as
opposed to that of the circuit court. Hilton ex rel.
Pages Homeowners' Ass'n v. DNR, 2006 WI 84,
¶15, 293 Wis.2d 1, 717 N.W.2d 166 ("When an appeal
is taken from a circuit court order reviewing an agency
decision, we review the decision of the agency, not the
circuit court."). In performing that review, we do
"not substitute [our] judgment for that of the agency as
to the weight of the evidence on any disputed finding of
fact," but we do not rely on "any finding of fact
that is not supported by substantial evidence in the
record." Wis.Stat. § 227.57(6). And we "accord
no deference to the agency's interpretation of law."
§ 227.57(11); see also Tetra Tech EC, Inc. v.
DOR, 2018 WI 75, ¶108, 382 Wis.2d 496, 914 N.W.2d
21 ("We have . . . end[ed] our practice of deferring to
administrative agencies' conclusions of law.").
The specific issue before us also presents a question of law.
"Whether an agency's action constitutes a
'rule' under Wis.Stat. § 227.01(13) presents a
question of law, which we review de novo." Homeward
Bound Servs., Inc. v. Office of Ins. Comm'r, 2 00 6
WI.App. 208, ¶27, 296 Wis.2d 481, 724 N.W.2d 380.
Our opinion today addresses whether the Department may order
Lamar to remove the Billboard because it temporarily exceeded
its permitted size. The Department's position on the
consequences of temporary violations of a "legal,
nonconforming" sign's permit has morphed over the
years. This is not necessarily problematic. It is to be
expected that an administrative agency might, from time to
time, change the manner in which it applies and enforces our
State's statutes and regulations. Sometimes a prudential
reordering of priorities or other discretionary factors
prompt the change. But sometimes the change arises from a
reevaluation of what the agency believes a particular statute
or regulation requires. This case implicates the latter
circumstance and addresses whether it was necessary for the
Department to promulgate a rule before implementing its new
understanding of the applicable statute's requirements.
The Department says that when Lamar added the temporary
extensions to the Billboard, the sign's status changed
from "legal, nonconforming" to "illegal,"
thereby subjecting it to removal. And, more importantly, the
Department says the change in status is irreversible-that is,
the sign owner has no opportunity to "cure" the
violation. A permit program supervisor who recently worked
for the Department, Ms. Deborah Brucaya, explained the
Department's current position. She said that "if the
extension was placed on the sign after it became
nonconforming and was later removed, [the Department's]
interpretation [is] that the sign lost its nonconforming
status" and "became illegal." According to the
Department, this result necessarily follows from the terms of
Wis.Stat. § 84.30(11), which say:
Any sign erected in an adjacent area after March 18, 1972, in
violation of this section or the rules promulgated under this
section, may be removed by the department upon 60 days'
prior notice by registered mail to the owner thereof and to
the owner of the land on which said sign is located,
unless such sign is brought into conformance within said
60 days. No notice shall be required to be given to the
owner of a sign whose name is not stated on the sign or on
the structure on which it is displayed, or whose address is
not stated thereon or is not on file with the department.
§ 84.30(11) (emphasis added). Lamar cannot exercise this
cure option, the Department says, because changed
circumstances make it impossible to conform the Billboard to
the law. It concludes that, because the redesignation of the
adjacent highway means the property may no longer host signs
like the Billboard, "conformance" actually requires
the sign's removal.
Lamar says the Department's current understanding of
Wis.Stat. § 84.30(11) represents a sharp break from its
prior practice. Previously, it says, the Department granted
the owner of a "legal, nonconforming" sign 60 days
to cure whatever condition caused the sign to violate the
permit. One of the Department's former permit program
supervisors, Mr. Robert Hardie, confirmed that this is how
the Department handled changes to signs like the Billboard.
He said that "[i]f a sign was either permitted at a
certain size or legal nonconforming at a certain size, if an
extension went up, it would be considered illegal and have to
be removed or taken back to where it was before." And if
the owner removed the extension "within the 60-day
period allotted, the remainder of the sign could continue
unimpeded[.]" That is, the sign returned to the
"legal, nonconforming" status it enjoyed before the
violation. This practice, the supervisor said, was based on
the Department's interpretation of § 84.30(11)-the
same statute on which the Department relies for its current,
but contradictory, position.
Lamar argues that the Department may not eliminate the
opportunity to cure a violation until it first promulgates a
rule to that effect using the Wis.Stat. Ch. 227 rulemaking
procedure. The Department does not deny that its
"no-cure" position differs from its prior practice,
but says no rulemaking is necessary ...