What Happened in the Denny’s v. Agoura Hills Pole-sign Case?

In 1985, the city of Agoura Hills, California enacted a sign ordinance that prohibited all pole signs, with the exception of a few that were less than 6 feet tall. It included an amortization period that ended in March 1992, at which time all of the pole signs would have to come down, without any cash compensation.

Agoura Hills is bisected by US Highway 101, which runs significantly high above the city. Thus, the only way highway motorists could know that gas stations and restaurants were located below was due to the high-rise pole signs.

Burger King, for example, conducted a traffic-flow study and discovered that 88% of the motorists who passed its restaurant did so on the highway. Only 12% passed it on the road below. The Burger King was specifically built to serve highway customers. Burger King determined that 60% of its sales were directly attributable to its sign. It calculated that the loss of the pole sign would constitute a $2 million loss in profit over a 15-year period.

As for other end users, the court found that the removal of pole signs would cause 35% loss of gross revenue for both Texaco and McDonald’s. This would mean $336,000 less revenue for Texaco in the first year the pole sign was removed, and $1.1 million loss for McDonald’s in its first year.

In 1983, California attorney Bob Aran authored a statute called Section 5499, which stated, “No city or county shall require the removal of any on-premise advertising display on the basis of its height or size by requiring conformance with any ordinance or regulation introduced or adopted on or after March 12, 1983, if special topographic circumstances would result in a material impairment of visibility of the display or the owner’s or user’s ability to adequately and effectively continue to communicate with the public.”

Although the city contended that it banned all pole signs, the court found that the ordinance “plainly discriminated between tall signs and short signs.”┬áThe court also ruled that “special topographic circumstances” referred not only to natural surface contours, but also to “all non-temporary surface conditions of whatever origin.” As for visual impairment, the court said more than natural impairments (hills, trees) had to be considered, such as buildings, utility poles, etc.

The court concluded, “The evidence clearly establishes that these special topographic circumstances would materially impair the visibility of conforming signs for each plaintiff. The plaintiffs are entitled to prevail, first of all, based on the material impairment of raw visibility.” Furthermore, if the ban were enforced, the court said conforming signs would not be visible at all from the area’s freeway, and that conforming signs would not be visible to freeway motorists in time to safely exit at the off ramp.