*1 RANCH, LLC, DIAMOND HOBBLE BURCH, SUSAN L. and ROBERT LOWE, JAMES W. wife, husband individual, Appellants, Plaintiffs and v. through MONTANA, OF

STATE DEPARTMENT the MONTANA TRANSPORTATION, OF Appellee. Defendant DA 11-0201. No. 23, 2011. on Briefs November Submitted January Decided 2012. MT 10.

363 Mont. 310. 268 P.3d 31. P.C., Appellants: Tuholske, Office, R. Tuholske

For Jack Law Missoula; Shaffer, Office, P.C., Ryan R. Shaffer Law Missoula. Morris, Appellee: Wilson, Carol Valerie D. Special

For Grell General, Attorneys Montana Department Transportation, Assistant *2 Helena. of the Opinion

JUSTICE COTTER delivered the Court. Ranch, LLC, Burch, and Hobble Diamond Robert and Susan ¶1 Lowe, Neighbors collectively James referred to as the unless otherwise Law, specified, appeal Findings Fact, from the of Conclusions of and County, Order of the First Judicial District Court Lewis and of Clark Montana, affirming Montana of Department Transportation’s the (DOT) decision to issue sign permits billboard under the Montana (MOAA). Advertising Outdoor Act The seek removal of two billboards, arguing that the in compliance billboards are not with MOAA, granting permits unlawful, DOT’s the was and are a public billboards nuisance. We affirm.

ISSUES appeal. briefly The raise six issues on We each ¶2 address however, issue; a of dispositive restatement the issue is: the upholding Whether District Court erred in DOT’s finding ¶3 parcel an entire 270-acre land for being of used a “commercial or activity,” thereby justifying the issuance of two outdoor advertising permits under MOAA.

FACTUAL AND PROCEDURAL BACKGROUND (Bues) 1998, In Christopher purchased Herbert and Bue parcel along unzoned 270-acre land of Interstate 90 Sweet Grass County, year they began Montana. That C & H operating Construction moving on property, doing primarily the earth and excavation work. they began gravel production In 1999 property, on the later built 3,200 square business, foot for the building and utilized connections to power two utilities. (Burches) and Robert Susan Burch the purchased Hobble

Diamond Ranch in The Ranch the property 1998. is north of Bues’ 90, road, from separated railroad, it Interstate the frontage 27,000 approximately Yellowstone River. The Burches own acres of grazing Hobble Diamond Ranch land and approximately 500 acres grazing of other land. reside on They property approximately for 250 acres approximately Lowe owns year. each James three months 90, by Interstate separated is also Bues’ which property, north of the road, the railroad. frontage drilled gravel pit east of the property had their In the Bues gravel. yards million cubic indicated 1.5 samples, which gravel Construction, Riverside Bues contracted with following year, the The Montana mining from the permit open-cut an initial which obtained (DEQ); was then Quality permit of Environmental Department Later, DEQ permit two approved the Bues. transferred gravel expand its modifications, & H Construction allowing C to October the reclamation deadline extending mining in 2002 expanded 12.6 acres and mining began on gravel operation 2016. gravel mining expand continue to The Bues intend to to 23.9 acres. operation. (Lamar) discussed with Advertising Corporation Outdoor Lamar Lamar property. on their placing billboards possibility

the Bues 13,2006, for two to DOT on October permit applications submitted two along property on the Bues’ placed to be outdoor forms stated Though application 384. milepost Interstate 90 near and ‘THIS BE IN FULL” MUST COMPLETED ‘THIS FORM FULL,’’the applications were MUST BE COMPLETED IN DRAWING *3 missing information. Some of the missing required and incomplete information, DOT, certain though filled in information was later the qualifying proposed the and as the distance between such location, applications. applications the The sign was never added to completion. returned to Lamar for were never 1, 2006, Hagadone, Compliance Allen DOT’s On November ¶8 (OAC) MOAA, Advertising Control section of the Outdoor Specialist sign noted that the property, of the Bue and inspection did a site the their locations were too far from not staked and that locations were MCA, §75-15-103(14), the unzoned commercial area. Under gravel pit along the may located must be signs industrial area where be or activity. feet of a commercial or industrial highway and within 600 did not and told Lamar that the location Accordingly, Hagadone called or the qualifier [sic] it “to far from the for a because was permit the site and Hagadone met with Lamar at days A few later gravel pit.” legally placed. could be where the billboards showed Lamar Coordinator, Patrick Advertising and DOT’s Outdoor Hagadone ¶9 5,2006. Bue on site on December Lamar and Herbert Hurley, met with made, Hurley and a sketch was were taken After measurements or commercial & H Construction’s determined that C

313 acres, including involved the 270 both the activities entire construction operation. consulting Hurley, and the mining business After with Hagadone agreed permit and that the applications determined because acres, were the entire and the acres to for entire 270 was deemed commercial activities, include industrial or was not necessary it 2006, any particular 7, measure 600 feet from On feature. December granted permits the to Lamar for locations the where the are currently billboards located. 2007, April and Lamar May placed In billboards on the Bues’ two $75,000. at a

property approximately total cost of The face of each is square feet, apart billboard the billboards are feet from each other, 2,380 sign gravel and the closest feet from actual pit. the The every evening billboards are lit for hours until In p.m. several 11:30 2008, early Lamar lights constructed shields around the to reduce in brightness response complaints from the that the lights evening light night Hurley interfered with the natural and stars. 16,2008, made another site visit on December signs and confirmed the conformed to DOT’s requirements. Lamar has a the keeping lease with Bues for billboards on $1,500 year $1,750 for property per years year

Bues’ for five and per years, for an additional for a total years. five lease term of ten It would $20,000 approximately cost Lamar to remove relocate each billboard. complaint 14, 2008, The filed against July DOT on 2009, May 18,

and an amended on for complaint removal of the (1) Among things, Neighbors alleged billboards. other that: DOT’s permits decision to issue arbitrary, capricious, evidence, unsupported and in violation MOAA and its (2) implementing regulations; public billboards constituted a (3) nuisance; private Neighbors’ DOT violated right of public The Court participation. public District dismissed the participation claim this challenged decision is not on appeal. parties engaged discovery. in The Neighbors complained discovery

DOT officials introduced during evidence that was outside of the material included record at administrative the time the permits approved. Following were of discovery, conclusion a non- 13, jury trial was conducted October 12 on 2010. On March *4 2011, the District Court In affirmed DOT’s decision. its of Findings Fact, Law, Order, Conclusions of court found that complied with MOAA and that failed arbitrarily, establish that DOT acted or in capriciously, violation of the 314 also concluded The court permits. the two billboard it issued

law when claim. their nuisance prove failed to that the Neighbors appeal. The ¶14 REVIEW OF

STANDARD Kiely plenary. is conclusions oflaw court’s review of a district Our 52, 241, 69, 312 Mont. MT Lodge, 2002 City ¶ v. Red Constr. L.L.C. of an on review of decision is based district court’s [a] 57 P.3d 836. “When (MAPA)] Act Procedure Administrative action, [the Montana agency Citizens is limited. scope of review review,” and our our governs 13, Rev., 10, 355 2010 MT ¶ v. Mont. Bd. Awareness Network of Envtl. State Dept. Assn. v. 583; Fork Preservation 60, 227 P.3d N. Mont. of (1989). We review 451, 465, P.2d Lands, 238 Mont. arbitrarily, or capriciously, acted agency if the to determine record 458-59, 867; Kiely 778 P.2d at Fork, 238 Mont. at unlawfully. N. omitted). (citations Constr., 69¶

DISCUSSION finding that upholding in DOT’s Court erred the District Whether a “commercialor being land was used parcel 270-acre an entire of two outdoor the issuance thereby justifying activity,” of under MOAA. advertising permits the District Court appeal on Neighbors argue The an was the site of property entire 270-acre Bue

erroneously found the in fact used for only 3% of the land was activity” when “industrial it was consistent with that the evidence before mining. DOT counters 270-acre that the entire made, and the determination decision it DOT activity” legitimate. also ‘industrial was used for property properly the District Court was considered that the evidence argues at the to determine what knew allow the court admitted so as to arbitrary, decision, determine if the decision was its and to time of or unlawful. capricious, regulated are highways in Montana along interstate Billboards safety, regulation promote is “to purpose

under MOAA. public convenience, protection travel on and enjoyment preserve and to th[e] within state highways in investment beauty aesthetic features of the natural scenic enhance 75-15-102, Generally, MCA. areas.” Section adjacent highways under highways prohibited advertising proximity outdoor MOAAstates: exception applies. MOAAunless that is (1) or maintained may not be erected Outdoor *5 within 660 feet of the nearest edge right-of-way and that is any place way visible from on the main-traveled of an interstate primary system, or except:

(e) signs, displays, and devices located in unzoned commercial areas, or industrial which areas must be determined from actual land by agreement uses and between the department and the secretary by and defined adopted by rules the commission. The exception granted by signs this subsection is limited to two may not apply signs, displays, and devices located within an unzoned area in which the commercial or activity used in defining the area has ceased for a period of 9 months.

(2) Outdoor advertising (l)(a), authorized under subsections (l)(e) (l)(d), and must conform with standards contained in and must bear permits required in adopted by rules that are commission part. and this

(3) Outdoor advertising may not be erected or maintained beyond 660 feet of edge the nearest of the right-of-way of an primary interstate or highway outside of an if urban area outdoor advertising is or purpose was erected with the of its message being read from the way main-traveled and visible from way main-traveled unless the outdoor advertising meets the (l)(c). (l)(a), (l)(b), criteria of subsections If the outdoor criteria, meets that it must conform with standards contained in rules that are adopted by the commission and with this part. added).

Section 75-15-lll(l)(e), (2), (3), MCA (emphasis The issue before us is whether the entire 270 acres anis unzoned commercial or industrial area based on the actual uses of the land. Pertinent definitions for this section include:

(1) ‘Commercial or industrial activities”means those activities generally recognized as commercial or industrial zoning state, authorities in this except that none following of the activities are considered commercial or industrial:

(a) agricultural, forestry, grazing, farming, and related activities, including wayside produce stands; fresh

(b) activities; transient or temporary (c) activities not visible from the way; main-traveled (d) activities building conducted in a principally used as a residence;

(e) sidings; minor railroad tracks and (f) edge nearest than 660 feet from the activities more right-of-way.

(14) means an area or industrial area” “Unzoned commercial law, regulation, or ordinance not zoned state or local activities, or industrial other by one or more commercial occupied highway for a advertising, along on the lands than outdoor immediately adjacent to the activities. distance of 600 feet 75-15-103(1), (14), Rules of Montana MCA. The Administrative Section (ARM) further provide:

(7) 75-15-103, activity”is or industrial defined at “Commercial MCA, meaning of an which is and has the additional *6 in a or industrial zone or a less permitted only commercial state, authority zoning zone the nearest within restrictive or following that none of the is a commercial except activity:

(a) advertising maintenance of an outdoor any erection or structure;

(b) any agricultural, forestry, ranching, grazing, farming or activity, operation wayside related or of a stand for sale of fresh fruit, products, produce; their or

(d) activity; any temporary transit or (e) any not from the traffic lanes of the main activity visible way; traveled

(f) any activity edge more than 660 feet from the nearest right-of-way; any in a

(g) building principally conducted used as residence;

(h) tracks, any operation siding of railroad a minor or a passenger depot;

(i) any activity year. that has been business less than one 18.6.202(7) (2007). Admin. R. M. regulates through by issuing permits MOAA its OAC section qualifying advertising enforcing outdoor compliance

with Montana’s outdoor statutes and rules. DOT utilizes On Operations permitting process. Manual for its enforcement review, in the place a court is not allowed to stand of a “commission or body”; may as an the court try board to a matter anew administrative

317 only “stayed ascertain if the or the statutory commission board within arbitrarily, bounds and has acted capriciously unlawfully.” not or Langen Grazing v. Badlands Coop. State Dist., 302, 308, 234 125 Mont. (1951) (citations omitted). 467, 470 Likewise, P.2d it is well established judicial that “a court will not substitute a discretion for the discretion officer, body acting of an board or the scope within of his or its Adjustment, Freeman v. Bd. authority.” 342, 357, exclusive 97 Mont. (1934). 534, 34 P.2d 539 proceeding The MOAA was not a contested case proceeding under MAPA, duties, as it did not require legal rights, “determination of privileges” party of a after the opportunity hearing. for a Section 2- 4-102(4), agency MCA. When an such as DOT makes an informal agency decision, we review the decision if to determine the decision is “arbitrary, unlawful, capricious, or not supported substantial evidence.” Clark Quality, Fork Coalition v. Mont. Dept. 2008 of Envtl. 407, 21, MT Skyline Sportsmen’s 197, 197 482; 347 Mont. Assn. P.3d ¶ Commrs., v. Bd. Land (1997). 108, 113, 29, 286 Mont. 951 P.2d 32 When making the factual inquiry agency about whether an decision arbitrary or capricious, we “consider whether the decision was based on a consideration of the relevant factors and whether there has Fork, N. judgment.” 465, been a clear error of 238 Mont. at 778 P.2d at Citizens to Preserve Overton Park v. (quoting 871 Volpe, 402, 401 U.S. (1971)). 416, 814, 91 S. Ct. inquiry ‘This must searching ‘be careful,’ but ‘the ultimate standard of narrow one.’ ”N. is a review Fork, 465, Park, Overton 238 Mont. at P.2d (quoting at 871 823). 416, 91 S. Furthermore, U.S. at Ct. at cannot Tw]e substitute our judgment [agency] by for that of the determining whether its decision Fork, was ‘correct.’ ”N. 238 Mont. at 778 P.2d at 871. It is undisputed that the 270-acre parcel is not zoned within the

meaning of this DOT chapter. concluded that the entire parcel contained activity. commercial or industrial The Neighbors argue that DOT made this decision plans based on the future of the Bues rather than 75-15-lll(l)(e), However, on the “actual land uses.”Section MCA. it is evident that DOT applications (though used the incomplete), visits, multiple site information parties, received from the and the mining combination of the construction and operations property on the to reach the conclusion. Neighbors The argue that based on the mining permit the Bues

hold, mine they only are allowed to parcel, small area of the entire only and therefore that small area determining should be considered in the activity. location of the commercial or industrial The District Court exhibits, and all the evidence considering After argument. this

rejected to the actual not limited mining operation was that the it concluded storing the crushing area for encompassed but also gravel pit, site, storing area for the and an material, roads into the access activities that the business further concluded The court equipment. mining operation included both of the billboards near the location business, ‘Industrial comprised and that these and the construction of MOAA. It therefore meaning activities within commercial” not permits the billboard decision to issue that DOT’s concluded of the law. or in violation arbitrary, capricious, ruling upholding the the District Court’s cannot conclude that We stated in or unlawful. As we arbitrary, capricious, DOT decision was 329, 335, Falls, 852 P.2d 258 Mont. City Silva v. Columbia of an action under (1993), court or this Court “areview a district merely a reversal permit does not ‘arbitrary capricious’ standard or evidence which contains inconsistent evidence the record because Rather, being challenged the decision a different result. might support unmotivated, random, seemingly unreasonable or to be appear must decision does Because the District Court existing on the record.” based level, decline to disturb it. not reach this we or industrial also assert that the commercial The and therefore should temporary on the is activity taking place property activity according to §75- a commercial or industrial not be considered Court, 15-103(l)(b), However, noted the District MOAA MCA. as unzoned commercial or To as an ‘temporary.” does not define 18.6.203(l)(c) (2007), the R. M. industrial area under Admin. at least must have been business commercial or as a commercial or industrial year may qualify the area one before have both continued for mining The construction and activities area. did not err in year; therefore the District Court more than one according to the ARM. concluding they “temporary” not were permit applications that the argue also billboard returned to Lamar for incomplete and should have been were incomplete having accept rather than completion, modify them. DOT’s subsequently approve applications (Manual) describes Advertising Operations Control Manual Outdoor The Manual states that permit. for a billboard application process zoning sign government meets local proposed it that the ‘Imperative control,” “personnel and that DOT are not allowed or land use It zoning requirements applicant.” or land use interpret local unzoned, sign site is it is proposed Ti]f to state that goes on

319 right-of-way agent’s responsibility to determine whether the area qualifies placement sign permit. for the of a and the issuance of a It is responsibility applicant identify activity presumed placement sign.” permit the area for the of a If a is application incomplete, the Manual directs DOT to return it ‘to the applicant together explanation with an of the deficiencies.” review, On the District Court “[although concluded that ¶27 face,” applications incomplete they were on their were in “substantial regulations conformance” DOT’s “substantially with and were complete.” necessary obtained information that the court decision, deemed “sufficient”to make an informed and then made an ‘informed decision permit requirements about whether were satisfied.” We will not disturb this conclusion. complain unlawfully also that the District Court

¶28 received at trial evidence that was outside the administrative record and relied on post-decision justifications for DOT’s decision. agency While of an generally review action is limited to the record agency decision, before the at the time of reviewing may its court accept clarify new evidence in order to matters that occurred before the agency, agency and to determine whether the properly considered all Ranch, reaching relevant factors in its decision. Aspen Trails LLC v. Simmons, 79, 53, 356 41, 230 MT Mont. P.3d (citing Skyline ¶ 32). Assn., Sportsmen’s 286 Mont. at 951 P.2d at We conclude the court did not abuse its discretion in for admitting evidence these purposes. Finally, Neighbors public claims, state citing nuisance §75-15-

133, MCA,for the proposition that outdoor which does not conform to requirements of MOAA a public nuisance. Because we will not disturb the decision of DOT and the District Court to the effect that the permit applications MOAA, were in conformance with public nuisance claims of the must fail. We conclude that DOT based its decision that the entire 270- acre parcel included commercial or industrial on sufficient evidence. We do not find this decision subsequent or DOT’s decision to issue permits arbitrary, unlawful, the two billboard capricious, or we judgment will not substitute our for that of DOT or the District Court.

CONCLUSION reasons, foregoing For the affirm we the decision of the District Court. concur. BAKER, and NELSON MORRIS

JUSTICES dissents. JUSTICE WHEAT establish, that the DOT failed to grounds on the I would reverse a reasonable basis process, review

during permit application its commercial or qualifying 270 acres as a designating the entire *9 primary qualifying that the The record is clear industrial site. acres in the approximately an area of mining) is confined to (gravel signs are located more property. ofthe The billboard northwest corner mining 2,000 boundary gravel the away than feet from highways must be along interstate operation. Because billboards unzoned commercial or qualifying 600 feet of a located within area, signs the location of the only way approve the to the entire 270 acres. this case was designation of the entire 270 acres as a affirming In the DOT’s site, the District Court relied on commercial or industrial qualifying following findings the of fact:

(1) property, C&H Construction on the operate The landowners The construction gravel mining operation. includes a which excavation; moving earth primarily business (2) utilities and has power C&H Construction is connected to two 3,200 building part that is of the construction square a foot built business;

(3) gravel the current just The landowners had their land east of mining started pit gravel samples. gravel operation drilled for expanded another 11.3 acres. subsequently out on 12.6 acres and anticipated expanding operation The land owners projects', new accommodate

(4) have, beginning since Evidence indicates that the land owners mining operation, operate their intended to continue to future; into the expand gravel mining operation their (as (5) Placing gravel pit the billboards within 600 feet of 18.6.203) §75-15-lll(l)(e), MCA, and Admin. R. M. required by gravel mining operation, would have with the as well as interfered costly expansion. required It would have anticipated its mine', every expansion with relocation the billboards of of feet) (6) (2,380 pit The area between the actual storage of for C&H Construction and also equipment is used for being developed for use C&H. The entire area spring includes for the around and at the location of the billboards is used business, mining operation, includes the areas construction which storage equipment, of construction and access roads. for billboards, There is no evidence to support conclusion that the if placed within 600 feet of the gravel pit, would interfere with the operation of the pit every pit would need to be moved time the expanded, Furthermore, if ever. there is no evidence that the entire pit distance between the and the park billboards is needed to equipment. construction 75-15-lll(l)(e), MCA, Section prohibits placement of billboards

within 660 feet of the interstate highway, except ‘In unzoned areas, commercial or industrial which areas must be determined from actual land by agreement uses and between the department and the secretary and defined adopted by rules the commission....” added.) (Emphasis 75-15-103(14), MCA, Section defines an unzoned commercial or industrial area as “an area occupied not zoned... that is by one or activities, more commercial or industrial other than outdoor advertising, on the lands along highway a distance feet ” added.) immediately adjacent to the activities. (Emphasis There is no dispute existing gravel pit (approximately 23 acres) in the northwest corner of the property qualifies as a commercial or industrial purposes area for question the statute. The is whether the entire 270 qualifies, acres and on the basis of the record, evidence in the I maintain Therefore, it does not. I would *10 reverse the District Court decision and remand the case back to the DOT for additional evidentiary hearings related to the area of land would as a commercial or industrial area.