Permit Disputes: �Why One Size Doesn’t Fit All When You’re Dealing with the Government.

PREPARED FOR:

IBOUSA – CHARLOTTE, NORTH CAROLINA

SEPTEMBER 21–23, 2022

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Taking the law into your own hands� The government takes a sign – one way or another

Taking the law into your own hands�What happened?

• The State of Texas notifies Out of Home Company that sign has to be removed to accommodate highway widening
• Great traffic counts, exceptional visibility, large nonconforming faces (26’ x 36’) = valuable sign
• TxDOT erroneously denies permit to adjust sign away from expanded ROW
• Out of Home Company takes the law into its own hands and adjusts the sign anyways
• TxDOT sues to cancel sign’s permit and remove sign

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Taking the law into your own hands�What the law says

• Government agencies have discretion when granting or denying permit applications
• State administrative procedures statutes only allow applicants to challenge the validity or applicability of an administrative regulation
• Policy: State agencies don’t have budget or manpower to defend lawsuits challenging every administrative decision
• Lawsuits challenging permit denials are frequently thrown out on sovereign immunity grounds unless legislature grants permission to sue

Taking the law into your own hands�What you should take away

• Think before taking the law into your own hands
• Try to work with government agencies whenever possible
• Resort to litigation as a last resort
• Be confident in your legal standing before taking the law into your own hands
• Lean on your legislators to pass more protections to provide options in permit disputes

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Your word is your bond�The government breaches a contract

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Your word is your bond�The facts

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• State notifies out of home company that four signs will have to be removed to accommodate road widening
• Government issues ”relocation permit” if sign owner timely removes sign before construction begins
• Sign owner and state agency negotiate contracts - payment for sign and issuance of relocation permit in exchange for removal
• Sign owner removes signs
• Government rejects relocation permits

Your word is your bond�The law

• Government agencies are ordinarily immune from lawsuits unless the legislature waives immunity
• Legislature does not waive immunity for ordinary breach of contract disputes
• You can’t sue over erroneous permit denial (refer to Taking the Law into your Own Hands)
• But eminent domain is waiver of immunity, and government can’t avoid waiver by entering into contract in lieu of going through eminent domain

Your word is your bond�The takeaway

• Get it in writing
• Weigh your options before settling with the government
• Make sure government’s obligations are clear
• Make sure you hold up your end of the deal
• Don’t let government break a promise, when you’ve already given up your right to go to court in eminent domain

But she told me I could!�Relying on a city clerk and not the city sign code

But she told me I could!�You’ve all been there before

• You find a great location
• The City’s code is unclear or unavailable
• A city secretary or building official tells you:
• ”We don’t have any billboard regulations.”
• “We don’t have a sign code.”
• ”We allow billboards.”
• “You don’t need a permit.”
• So…you start construction, right?
• The City tells you to STOP

But she told me I could!�So what do you do now?

• Government is immune from liability for administrative decisions, including erroneously issued permits (refer to Taking the Law into your Own Hands), and reliance-based defenses
• Ultra vires claims are typically used but typically fail, unless you can show complete failure to follow code or law
• At the end of the day: The text of the code, not the statements of staff or even permit, are what matters
• Not all hope is lost: a limited exception allows reliance when substantial injustice would result

But she told me I could!�So don’t let them get away with it!

• Even if you might not be able to rely on it, get it in writing
• Try to work with City
• But don’t back down
• Send demand letters
• Appeal
• Consider Litigation
• Consider alternatives (e.g., variance)
• Document your expenses to show injustice
• Know your audience and consult your legal counsel, because not one size fits all

Take ’em to court!�When the government enforces unenforceable laws

Take ’em to court!�When the government enforces unenforceable laws

• Sometimes administrative agencies attempt a shortcut and issue legislative process by implementing rules disguised as “guidelines,” or “guidance,” or “policy memos”
• TxDOT issued “Guidance” in 2016
• Owner must agree to the value of the sign before commissioners hearing or forfeit the right to relocate the sign
• Inconsistent application
• No right to proceed to hearing or court, without forfeiture of relocation rights, if don’t agree on compensation
• Company sued TxDOT challenging enforceability of “Guidance”

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Take ’em to court!�Can they do that??

• State administrative procedures acts require state agency to follow notice, hearing, comment, and other rulemaking procedures when adopting regulations
• When agencies circumvent process, legislature waives government immunity from lawsuits
• Courts may declare improperly passed regulations invalid and unenforceable
• BUT, the government has unlimited resources and doesn’t like to be told its wrong

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Take ’em to court!�So what should you do?

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• There is certainly room for disagreement on the types of political and policy issues that seem to dominate the media and our attention, but most agree that the implementation of sound administrative rules governing our lives and livelihoods ought to follow the checks and balances mandated by constitutional due process and the APA
• Call the government out when it enforces “policy” not properly enforced – it might be enough
• Litigation should be a last option, because government wont back down willingly

Working together�Can cities and OOH companies scratch one another’s back?

Working together�Public incentive in exchange for permits?

• Increasingly, cities and OOH companies are working together, including through private agreements, to construct signs, especially digitals, in exchange for public benefits
• Examples include:
• Advertising agreements
• License fees
• Donations
• These non-traditional approaches can help build trust, but may also draw scrutiny from competitors

Working together�Take your pick

• There are several options and examples of ways in which cities and OOH companies work together, including:
• Development Agreements
• Specific Use Permits
• License and location limitations
• Variances
• Exchange, conversion, and ___ for ___ removals
• But consider
• Cost and financial commitment
• Attention from competitors
• Remember: Not one size fits all

Why One Size Doesn’t Fit All�Conclusion

• Government agencies and municipalities are staffed with individuals, all of which have different personalities, objectives, ideologies, and influences
• The carrot is almost always more cost effective, but sometimes the stick is the only way
• Whether it’s a permit, a contract, or any promise, always get it in writing
• Know your rights and remedies before deciding on a course of action

Why One Size Doesn’t Fit All�Questions?

• Chris Rothfelder
• crothfelder@rothfelderfalick.com
• 713-301-1251
• Mike Falick
• mfalick@rothfelderfalick.com
• 713-553-6614
• Richard Rothfelder
• rrothfelder@rothfelderfalick.com
• 713-962-6300

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