-1- 

### STATE OF MICHIGAN

COURT OF APPEALS

INTERNATIONAL OUTDOOR, INC.,

Plaintiff-Appellant, UNPUBLISHED April 26, 2016

v No. 325469 Wayne Circuit Court CITY OF HARPER WOODS, LC No. 14-008545-AA

Defendant-Appellee.

Before: J ANSEN , P.J., and S ERVITTO and M. J. KELLY , JJ.

P ER C URIAM

. Plaintiff appeals by leave granted 1 the order of the circuit court affirming the denial by defendant’s Board of Zoning Appeals (BZA) of plaintiff’s reques ts for special permits under defendant’s sign ordinance, Harper Woods Ordinances, § 21-1 et seq ., and determining that defendant’s sign ordinance was constitutionally valid. We affi rm in part, reverse in part, and remand to the BZA for further development of the record.

I. FACTS

Plaintiff is in the business of building billboards and sellin g advertising on those billboards. Plaintiff wanted to erect billboards in Harper Woo ds. Before build ing, plaintiff sought permission from defendant’s building inspector to obtainpermits for construction. The building inspector denied the permit requests to build the sign s, finding that plaintiff’s proposed billboards violated § 21-6 of defendant’s sign ordinance, whichprovides size, height, and setback requirements for signs. Harper Woods Ordinances, § 21- 6. Specifically, § 21-6 requires that a ground pole or freestand ing sign, a catego ry that includ es billboards, have a maximum area of 200 square feet, maximum hei ght of 22 feet, and minimum setb ack of 25 feet. Id . Plaintiff’s proposed billboards were 672 square feet in ar ea, 70 feet tall, and had no setback.

The sign ordinance contains a provision permitting individuals to seek a “special permit” to build a sign that does not comply with the sign ordinance. Harper Woods Ordinances, § 21-

1 See Int’l Outdoor, Inc v Harper Woods , unpublished order of the Court of Appeals, entered July 22, 2015 (Docket No. 325469).-2- 15. Plaintiff submitted applications for special permits pursu ant to § 21-15(d) of defendant’s sign ordinance. The applications submitted by plaintiff includ ed a document expressing why plaintiff believed the special permits should be granted, citin g, among other reasons, similar signs in the area. Pursuant t o § 21-15, the special permit req uests were considered by the BZA.

The record of the BZA reveals that the BZA received input from a community planner, McKenna Associates, as well as defendant’s fire marshal. The f ire marshal was also the building inspector who initially denied the sign permit requests. Both McKenna Associates and the fire marshal recommended that the BZA deny the special permits. The leasing agent for a local apartment complex and the property manager for a local condomin ium complex submitted letters opposing the special permits for the billboards. McKenna Assoc iates and the citizens asserted that the billboards would not b e appropriate, while the fire marshal stated that defendant’s fire department was not equipped to hand le a fire on th e billboards.

Representatives from plaintiff attended the BZA meeting pertai ning to plaintiff’s requests for special permits. The only official record of that meeting is the meeting minutes. The meeting minutes reveal that plaintiff was present, that several citizens were present to oppose the billboards, and that the two letters were submitted. The minut es do not reflect what evidence was presented or what arguments were made. Nor do the minutes provide any factual findings or any reasoning on behalf of the BZA. Rather, the meeting minute s simply announce that the requests for special permits were denied.

Plaintiff appealed that decision as of right to the circuit co urt, alleging that the BZA failed to provide reasoning and factual findings on the record, and arguing that defendant’s sign ordinance was unconstitutional. After hearing arguments from the parties, the circuit court determined that defendant’s sign ordinance was constitutional a nd that the BZA’s failure to state findings of fact and reasoning on the record was not error requ iring reversal where the record provided by the BZA fully supported the reasoning behind the BZ A’s decision. Subsequently, this Court granted leave to appeal. 2 See Int’l Outdoor, Inc v Harper Woods , unpublished order of the Court of Appeals, e ntered July 22, 2015 (Docket No. 3254 69).

II. FIRST AMENDMENT CHALLENGE

Plaintiff first argues that § 21- 15(d) of defendant’s sign ord inance is an unconstitutional prior restraint on free speech. We disagree.

“We review constitutional issues de novo.” Kloian v Schwartz , 272 Mich App 232, 244; 725 NW2d 671 (2006). An individual or business seeking to erec t a sign in Harper Woods must comply with defendant’s sign ordinance. Section 21-1 of the si gn ordinance announces the purpose of the ordinance:

2 Plaintiff also argued that the B ZA engaged in improper ex part e communication with McKenna Associates without allowing plaintiff to respond to the McKennaAssociates report. The trial court determined that there was no due-process violation. Plai ntiff does not challenge this portion of the trial court’s opi nion in its brie f on appeal.-3- The purpose of this chapter is to permit such signs as will no t, by reason of their size, location, constructio n or manner of display endange r life and limb, confuse or mislead traffic, obstruct vision necessary for traff ic safety or otherwise endanger the public morals, health or safety; and further, to r egulate such permitted signs in such a way as to create land use patterns co mpatible with other major land use objectives and to prevent such signs from causin g annoyance or disturbance to the residents of the city. [Harper Woods Ordinances, § 21-1.]

The sign ordinance then defines d ifferent types of signs, with a billboard falling under the definition of a “[g]round pole or freestanding sign[.]” HarperWoods Ordinances, § 21-2. Specifically, such a sign is “[a] display sign supported by upr ights or braces permanently implanted in the ground or permanently attached to the ground s urface.” Id . Section 21-5 of defendant’s sign ordinance reflec ts that billboards are permitt ed on land zoned C1, and it is undisputed that both of the subjec t properties are so zoned. H arper Woods Ordinances, § 21-5. Section 21-6 provides for area, height, and placement regulatio ns. Harper Woods Ordinances, § 21-6. Ground pole or freestanding signs are limited to a max imum area of 200 square feet, a maximum height of 22 feet, and a minimum setback of 25 feet. Id . The ordinance also provides the building inspector power to remove noncompliant signs after providing the landowner with written notice of the violation. H arper Woods Ordinances, § 21 -13(c).

It is undisputed that plaintiff sought to erect billboards on property located in Harper Woods. It is further undisputed that two signs, as proposed, w ere in violation of the maximum area, maximum height, and minimu m setback requirements of § 21- 6. Consequently, when plaintiff sought permits from defendant to build the billboards , defendant’s building inspector denied the permits. Plaintiff does not dispute the determinati on with regard to § 21-6. Defendant’s sign ordinance, however, has an appeals process for when a sign is in violation of a section of the sign ordinan ce. Specifically, the BZA “ may grant a special permit for a sign which does not comply with the provisions of this chapter[.]” Harper Woods Ordinances, § 21-15(d) (emphasis added). For the BZA to even consider granting a spec ial permit, the proposed sign must conform to four separate requirements:

(1) The particular sign will be in harmony with the general pu rpose and intent of this chapter;

(2) The sign will not be injurious to the immediate neighborho od or adjacent land use;

(3) The sign is sufficiently compatible with the architectural and design character of the immediate neighborhood;

(4) The sign will not be hazardous to passing traffic or other wise detrimental to the public safety and welfare. [ Id .]

Even if a sign conforms with those four requirements, the discr etion regarding whether to grant the special permit still lies with the BZA because § 21-15(d). Once again, it is undisputed that plaintiff filed applications for special permits pursuant to § 21-15(d) of defendant’s sign-4- ordinance. It is also undisputed that the applications for spe cial permits were denied for two signs.

Plaintiff argues on appeal that this Court should reverse the decision of the BZA and the trial court because § 21-15(d) is a violation of the First Amen dment to the United States Constitution. “The First Amendment’s guarantee of ‘the freedom of speech, or of the press’ prohibits a wide assortment of government restraints upon expre ssion . . . .” Thomas v Chicago Park Dist , 534 US 316, 321; 122 S Ct 775; 151 L Ed 2d 783 (2002). “It i s well established that in the area of freedom of expression an overbroad regulation may be subject to facial review and invalidation . . . .” Forsyth Co v Nationalist Movement , 505 US 123, 129; 112 S Ct 2395; 120 L Ed 2d 101 (1992). “[A]ny permit scheme controlling the time, p lace, and manner of speech must not be based on the content of the message, must be narrowly ta ilored to serve a significant governmental interest, and must leave open ample alternatives f or communication.” Id . at 130.

“Billboards, then, like other m edia of communication, combine communicative and noncommunicative aspects.” Metromedia, Inc v San Diego , 453 US 490, 502; 101 S Ct 2882; 69 L Ed 2d 800 (1981) (opinion by W HITE , J.). “As with other media, the government has legitimate interests in controlling the noncommunicative aspect s of the medium . . . but the First and Fourteenth Amendments foreclose a similar interest in contr olling the communicative aspects.” Id . (citation omitted). “A government regulation that allows arb itrary application is ‘inherently inconsistent with a valid time, place, and manner r egulation because such discretion has the potential for becoming a means of suppressing a particu lar point of view.’ ” Forsyth Co
, 505 US at 130 (citation omitted). The United States Supreme Co urt has explained, “At the root of [a] long line of precedent is the time-tested knowledge that in the area of free expression a licensing statute placing unbridle d discretion in the hands of a government official or agency constitutes a prior restraint and may result in censorship.” Lakewood v Plain Dealer Publishing Co , 486 US 750, 757; 108 S Ct 2138; 100 L Ed 2d 771 (1988).

“To curtail that risk, a law s ubjecting the exercise of First Amendment freedoms to the prior restraint of a license must contain narrow, objective, an d definite standards to guide the licensing authority.” Forsyth Co , 505 US at 131 (citations and quotation marks omitted). As th e United States Supreme Court ackn owledged, “[E]ven content-neutr al time, place, and manner restrictions can be applied in such a manner as to stifle free expression.” Thomas , 534 US at 323. “We have thus required that a time, place, and manner reg ulation contain adequate standards to guide the offici al’s decision and render it subjec t to effective judicial review.” Id

. Plaintiff argues that § 21-15(d) is a licensing scheme that am ounts to a prior restraint on speech and does not have sufficiently objective standards to av oid the dangers of censorship, as referred to in Lakewood , 486 US at 757. We disagree with that assessment of the ordin ance. As has been discussed, it is clear that defendant’s sign ordinance permits signs, including billboards, that comply with the area, height, and setback requirements found in § 21-6, and that this section is a constitutional time, place, and manner restriction on sign s. Section 21-15(d) merely permits the BZA to waive those requirements and grant a special permit for the reasons stated within that section. Defendant’s sign ordi nance does not bar billboards en tirely and then only permit them once a special permit is obtained. There is nothing in the rec ord to suggest that if plaintiff’s proposed billboards had been compliant with § 21-6, that plaint iff would have even had to seek a variance, let alone be g ranted one by defendant.-5- Contrary to the argument by plaintiff, the United States Supre me Court has considered similar waiver provisions, although briefly. In Thomas , the Chicago Park District “adopted an ordinance that require[d] a pers on to obtain a permit in order to ‘conduct a public assembly, parade, picnic, or other event i nvolving more than fifty indivi duals,’ or engage in an activity such as ‘creat[ing] or emit[ting] any Amplified Sound.’ ” Thomas , 534 US at 318 (second and third alterations in original). The Chicago Park ordinance contained 13 grounds upon which an application for a permit could be denied. Id . The Chicago Park District was only permitted to deny applications for one of those 13 reasons, was required to process the application within 28 days, and was required to clearl y explain the reasons for a den ial, which satisfied the Court that there were “reasonably specifi c and objective” grounds that wer e guiding the Park District. Id . at 324.

The ordinance, however, did not require that permits be denied for one of those reasons, but only that they may be denied. Thomas , 534 US at 324. The petitioners alleged that this permissive language allowed the Park District “to waive the per mit requirements for some favored speakers, while insis ting upon them for others.” Id . The Court referred to the oral argument by the Park District e xpressing that the intent of the waiver option written into the ordinance was “to permit overlooking only those inadequacies th at, under the circumstances, do no harm to the policies furthere d by the applica tion requiremen ts.” Id . at 324-325. In sum, the Court determined that ridding th e ordinance of the waiver langu age would do more harm to free speech than if there were no waiver provision. Id . at 325. The Court explained further:

The prophylaxis achieved by insisting upon a rigid, no-waiver a pplication of the ordinance requirements would be far outweighed, we think, by th e accompanying senseless prohibition of speech (and of other activity in the p ark) by organizations that fail to meet the technical requirements of the ordinance b ut for one reason or another pose no risk of the evils that those requirements are d esigned to avoid. [ Id .]

The Court noted that there might be situations where waivers we re provided to favored speakers or denied to disfavored speakers. Id . The Court said such application of the waiver would be clearly unconstitutional. Id . However, the Court stated tha t “this abuse must be dealt with if and when a pattern of unlawful favoritism appears, rather than by i nsisting upon a degree of rigidity that is found in few legal arrangements.” Id . In sum, the Court held that, where there was the possibility of waiving content-ne utral restrictions for some fo rm of speech, even when those waivers relied on the government’s discretion, the waiver was p ermissible. Id . “On balance, we think the permissive nature of the ordinance furthers, rather than constricts, free speech.” Id

. The present case is analogous to the situation presented in Thomas . Here, this Court is presented with an ordinance sche me that regulates signs in defe ndant city based solely on the size, height, and placement of those signs. If a sign complies with those standards, it is permitted. Likewise, in Thomas , someone seeking to have a specif ied public event at a Chicago Park was required to get a permit. Thomas , 534 US at 324-325. If the person seeking the permit complied with the 13 requirements listed therein, the permit wa s granted. Id . at 318-319. If a person failed to comply with one or more of those requirements, then the Chicago Park District was allowed to deny the permit, but could allow a waiver of tho se requirements in its discretion.-6- Id . Here, if a sign failed to meet the requirements of § 21-6, d efendant’s BZA could waive those requirements if the four fact ors in § 21-15(d) were met.

The Court in Thomas was satisfied that the Park District had construed its permiss ive ordinance to only allow waivers when an applicant was not in te chnical conformity with the ordinance’s requirements, but the waiver otherwise was not obje ctionable to the purpose of the ordinance. Notably, the ordinance in Thomas did not contain language that limited the Park District to follow that requirement. In the present case, howe ver, § 21-15(d) of the ordinance limited defendant’s BZA to only grant waivers, or special permi ts, when a noncompliant sign would “be in harmony with the general purpose and intent of” th e sign ordinance, “not be injurious to the immediate nei ghborhood or adjacen t land use,” be “sufficiently compatible with the architectural and design char acter of the immediate neighbo rhood,” and “not be hazardous to passing traffic or otherwise detri mental to the public safety and welfare.” In other words, the Court in Thomas was content to rely on the gover ning body’s expre ssion that itwould only grant waivers based on upholding the purpose and intent of the ordina nce, while defendant here actually set out those requireme nts in the sign ordinance.

The Court in Thomas even recognized the possibilitythat the discretion provided t o the governing body might be used to favor preferred speech, or more problematically, disfavor speech that was not preferred by the governing body. Thomas , 534 US at 325. That danger alone, however, was not enough for the Court to determine that the ordinance was unconstitutional. Id . Rather, the Court was clear that a challenger to such a waiv er provision would be required to allege an unconstitutional application of the wavier provision. Id . In other words, a challenger would be required to show a history of favo ritism in applying the waiver, permitting certain types of sp eech while blocking others. Id

. In the present case, plaintiff does not allege that defendant’ s BZA engaged in an unconstitutional application of § 21-15(d), but only that the w aiver section of the ordinance was unconstitutional on its face. The Court’s decision in Thomas construing constitutional law is binding on this Court. See Abela v Gen Motors Corp , 469 Mich 603, 606; 677 NW2d 325 (2004). Because the Court in Thomas held that even implied rules within the governmental body’s discretion were enough to sur vive First Amendment review , we conclude the same. We therefore affirm the trial court’s determination that § 21-15(d ) was consti tutional.

III. DUE-PROCESS CHALLENGE

Plaintiff next argues that it wa s denied due process because the BZA failed to make a proper record. We agree.

“This Court reviews de novo a tr ial court’s decision in an app eal from a city’s zoning board, while giving great defere nce to the trial court and zoni ng board’s findings.” Norman Corp v East Tawas , 263 Mich App 194, 198; 687 NW2d 861 (2004). “All final decis ions, findings, rulings and orders of a ny administrative officer or a gency existing under the constitution or by law, which are judicial or quasi-judicial an d affect private rights or licenses, shall be subject to direct review by the courts as provided by law.” Const 1963, art 6, § 28. Relying on that constitutional mandate, this Court has held that “[t]he decision of a zoning board should be affirmed by the courts unless it is (1) contrary to l aw, (2) based on improper-7- procedure, (3) not supported by competent, material, and substantial evidence on the record, or (4) an abuse of discretion.” Reenders v Parker , 217 Mich App 373, 378; 551 NW2d 474 (1996). “Meaningful judicial review of whether there was competent, mat erial, and substantial evidence on the record to support a zoning board decision requires ‘a kn owledge of the facts justifying the board’s . . . conclusion.’ ” Id . (citation omitted). “[T]he board of zoning appeals must stat e the grounds upon which it just ifies” its decision. Tireman-Joy-Chicago Improvement Ass’n v Chernick , 361 Mich 211, 219; 105 NW2d 57 (1960). “It is insufficient f or the zoning board to merely repeat the conclusionary language of the zoning ordinanc e without specifying the factual findings underlying the determination that the requirements of the ordinance were satisfied in the case at hand.” Reenders , 217 Mich App at 378-379.

The BZA did not make factual findings on the record, nor did i t supply any form of reasoning regarding its decision. Reenders provides this Court with b inding and determinative case law on the issue. In that case, the petitioners lived nex t door to a homeowner who was requesting a zoning variance that would allow the homeowner to build a home addition that would encroach on the setback from the petitioners’ property. Reenders , 217 Mich App at 374- 375. The petitioners reported to the zoning board hearing and opposed the variance, but the variance was granted. Id . at 375.

This Court, on appeal, noted that the zoning board’s decision provided reasoning for some of the variance requirements, but not all. Reenders , 217 Mich App at 378-379. Further, some of the reasons provided were merely artful restatements of the zoning ordinance without any supporting facts to be gleaned from the record. Id . at 380-381. For some variance requirements, there were no findings at all. Id . at 381. This Court concluded that “the record developed by the zoning board is inadequate to allow us to dete rmine whether the board’s decision was supported by competent, material, and substantial evidence.” Id . For that reason, this Court remanded to the zoning b oard to announce the facts and reasoning on the record. Id

. The present case reveals an even more egregious lack of factua l findings than that in Reenders . Here, defendant’s BZA did not make a single factual finding on the record, nor did it provide any reasoning for why pl aintiff’s special permits were denied. The BZA simply announced its position that the special permits were denied. P ursuant to the binding decision in Reenders , that action by the BZA is not permitted. As this Court state d in Reenders , 217 Mich App at 381, “we cannot affirm a decision where the record is as devoid of factual or logical support as is the case here.”

To agree with defendant that findings of fact and reasoning is not required by the BZA where the evidence provided to the BZA supports the decision wo uld be inapposite to the standard announced in Reenders . Indeed, this appeal presents an even more compelling case fo r reversal, considering that, as j ust discussed, plaintiff could only challenge § 21-15(d) on the grounds that it was unconstitutionally applied. Without a factual and logical record provided by the BZA, plaintiff is left without any manner of proving that § 21-15(d) is being applied with favoritism based on the content of speech. This decision is su pported by our Supreme Court’s decision in Chernick , 361 Mich at 211, in which the Court held that the lack of anyreasoning or facts on the record was a denia l of due process and required re versal. Accordingly, remand is required in order for the BZA to develop the record related to its factual findings and reasoning for its decision.-8- Affirmed in part, reversed in part, and remanded to the BZA to develop the record consistent with this opinion. The supplementary record and deci sion shall be filed with this Court. We retain jurisdiction.

/s/ Kathleen Jansen /s/ Deborah A. Servitto /s/ Michael J. Kelly**Court of**  **Appeals, State**  **of Michigan** 

**ORDER**

**International Outdoor**  **Inc v**  **City of**  **Harper Woods** 

**Docket No.**  **325469**

**LC No. 2014-008545-AA**  **Kathleen Jansen**  **Presiding Judge** 

**Deborah A.**  **Servitto**

**Michael J.**  **Kelly Judges** 

**Pursuant to**  **the opinion**  **issued concurrently**  **with this**  **order, this**  **case is**  **REMANDED to**  **the defendant's**  **Board of**  **Zoning Appeals**  **(BZA) to**  **develop the**  **record related**  **to its**  **factual findings**  **and reasoning**  **for its**  **decision to**  **deny plaintiffs**  **application for**  **a special**  **permit under**  **defendant's sign**  **ordinance, Harper**  **Woods Ordinances,**  **§ 21-1.** 

**The BZA**  **should complete**  **the proceedings**  **consistent with**  **the Court's**  **opinion within**  **56 days**  **of the**  **Clerk's certification**  **of this**  **order.**

**The supplementary**  **record and**  **decision shall**  **be filed**  **with this**  **Court within**  **21 days**  **after completion**  **of the**  **proceedings. The**  **parties may**  **file a**  **supplemental brief**  **on appeal**  **within 21**  **days after**  **completion of**  **the proceedings**  **on remand.** 

**We retain**  **jurisdiction.**

**A true**  **copy entered**  **and certified**  **by Jerome**  **W. Zimmer**  **Jr., Chief**  **Clerk, on** 



### APR l. 6 **2016**

**Date**