Photo by Charlie Deets on Unsplash
Logan Kline, Blog Editor, University of Cincinnati Law Review
I. Introduction
Populating nearly every thoroughfare and street corner, billboards are a ubiquitous presence in American life. From the latest blockbuster thriller to public service announcements, billboard advertising serves a pivotal function in communicating with the public at large. As streaming services have become increasingly prevalent, fewer and fewer families are finding their favorite shows interrupted by commercial breaks. Similarly, newspaper print advertisements are a near extinct vestige of a world that feels prehistoric. And yet, billboards persist. Whether it towers over Time Square or marks your local convenience store, a billboard is a timeless and persisting facet of the American advertising landscape.
Thus, the United States Supreme Court granting cert to rule on a First Amendment issue tied to the heart of billboard advertising marks a significant landmark in the world of advertising jurisprudence. The stakes of the conversation are higher than most would imagine, as billions of dollars are spent in the United States alone each year on billboard advertisements.[1]
In late June of this year, the United States Supreme Court agreed to rule on whether the advertising laws of Austin, Texas violated the First Amendment by distinguishing between use of digital billboards on-premises versus off-premises.[2] This petition for a writ of certiorari arose out of the U.S. Fifth Circuit Court of Appeals in Reagan Natl. Advert. of Austin, Inc. v. City of Austin. [3] The question at the heart of the dispute is whether the City of Austin’s distinction between on-premises and off-premise signs constitutes a facially unconstitutional content-based regulation. In layman’s terms, the question is whether a city can regulate billboards differently based on whether they are on the property of what they are advertising or elsewhere. For instance, if a restaurant placed a billboard in its parking lot for its new dinner special, can the local ordinances regulate it differently than the same billboard down the street or on the highway?
This article will examine the jurisprudential framework that gave rise to this question and prognosticate on the U.S. Supreme Court’s upcoming decision. In Part I, this article outlines the legal background that sets the stage for Reagan Natl. Advert. of Austin, Inc. v. City of Austin. Part II then analyzes the Fifth Circuit’s holding in Reagan that will be reviewed by the U.S. Supreme Court. Finally, Part III sets forth an argument for how the Supreme Court should rule in the upcoming decision, and policy arguments to support that position.
II. Legal Background
While a long history of case law sets the stage for the upcoming decision in Reagan, the most prominent and directly influential will be the United States Supreme Court’s 2015 decision in Reed v. Town of Gilbert, Arizona.[4] In Reed, the Court ruled on whether the Town of Gilbert’s sign code could place different restrictions on signs based on the messages they conveyed.[5] Some categories of signage were far more strictly regulated than others, and the subject of this legal action was the town’s regulation of temporary directional signs directing the public to a church meeting.[6] Specifically, the town cited a church for putting up signs that let the community know when and where services would be held each week, and the church and it’s pastor filed a complaint, alleging that this regulation abridged their First Amendment right to freedom of speech.[7]
Justice Clarence Thomas delivered the unanimous decision of the Court reversing the lower court’s decision and stating that Gilbert’s sign code placing restrictions on the size, duration, and location of temporary directional signs violated the Free Speech Clause of First Amendment because it constituted a content-based regulation of speech.[8] Content-based restrictions are those that regulate speech based on the content being communicated, and a presumptively unconstitutional under the First Amendment.[9] Thus, any law that is found to restrict speech based on content must pass the stringent bar of strict scrutiny, and the Town of Gilbert’s sign code failed to pass muster.[10]
The Court held that, on its face, the town’s sign code was unconstitutional, because the restrictions that applied to the sign were entirely dependent upon the “communicative content” of the sign.[11] If a sign communicated an ideological message, it was treated under the code differently than a sign that set forth the location of the next book club meeting. In this way, the content of the sign’s message dictated the associated restriction, and the associated restrictions were highly variable based on this content.
In evaluating the code under strict scrutiny, the Court found that the town failed both to establish a compelling governmental interest and to prove that the restriction was narrowly tailored to achieve that interest.[12] The town offered two governmental interests served by the sign code: the preservation of the town’s aesthetic appeal and traffic safety.[13] However, the Court rejected each in turn.[14] First, regarding aesthetics, the church’s directional signs were “no greater an eyesore” than the political signs that were far less regulated.[15] The Court held that the town could not place strict restraints on one type of sign to maintain the aesthetic appeal of the town while at the same time allowing other types of signs with the same aesthetic effect.[16] In the same way, temporary directional signs do not present a higher risk to traffic safety than political or ideological signs, so the town’s argument to regulate one and permit the other undermines their claimed governmental interest.[17]
While the majority in Reed did not directly address the issue of on-premises and off-premises sign regulations, Justice Alito wrote in his concurring opinion that rules distinguishing between on- and off-premises signs should not be considered content-based.[18] Justice Alito was not alone in holding this position as he was joined by Justice Kennedy and Justice Sotomayor.
The Reed decision did not claim to create new First Amendment jurisprudence, but instead sought to clarify the existing law surrounding content-based regulations of speech. However, despite the Court not actively seeking to change the jurisprudential framework, subsequent lower courts have noted that it did just that. The United States Third Circuit Court of Appeals has called Reed a “drastic change in First Amendment jurisprudence.”[19] Similarly, Justice Tjoflat in an Eleventh Circuit dissent opined that “Reed announced a sea change in the traditional test for content neutrality under the First Amendment, and, in the process, expanded the number of previously permissible regulations now presumptively invalid under strict scrutiny.”[20] Finally, in perhaps the most extreme interpretation of Reed, the Fourth Circuit declared that the “Reed has made clear that, at the first step [of a strict scrutiny analysis], the government’s justification or purpose in enacting the law is irrelevant.”[21]
III. Reagan Natl. Advert. of Austin, Inc. v. City of Austin
In 2020, the United States Fifth Circuit Court of Appeals applied an analysis based on the Supreme Court’s decision in Reed, finding the City of Austin’s Sign Code to be facially-content based, and thus subject to strict scrutiny.[22] Ultimately in Reagan, the Fifth Circuit found that the city’s billboard regulations failed strict scrutiny, and were thus unconstitutional.[23]
A. Factual Background
The plaintiffs in Reagan were outdoor advertising businesses that own and operate digital billboards containing a wide range of commercial and noncommercial messages.[24] When these businesses applied for a permit to convert existing off-premises billboards to digital billboards, the City denied the applications because the digital signs would violate the Sign Code regulations regarding off-premises billboards. Chapter 25-10 of the Austin City Code defined an “off-premise[s] sign” as “a sign advertising a business, person, activity, goods, products, or services not located on the site where the sign is installed, or that directs persons to any location not on that site.”[25] The code placed a prohibition on changing the method or technology used to convey messages on off-premises signs, and thus banned the digitalization of the plaintiff’s billboards. However, had the signs been on-premises, the Sign Code would have allowed such an update.[26]
The plaintiffs challenged the constitutionality of the Sign Code, arguing that an enforcer of the statute would necessarily have to read the sign in order to determine whether it was on-premises or off-premises.[27] Therefore, the content of the sign was the determining factor as to whether the stricter regulations were in effect.[28]
B. Level of Scrutiny
In deciding Reagan, the Fifth Circuit first determined what level of scrutiny would be appropriate: either strict scrutiny if the restrictions were content-based or intermediate scrutiny for commercial speech.[29] Ultimately, the court found the strict scrutiny should be applied to the Sign Code, because the regulations constituted content-based restrictions on speech and were thus not subject to the lesser degree of scrutiny afforded to commercial speech.[30]
The City of Austin’s argument relied heavily on Justice Alito’s concurrence in Reed, in which he provided “a few words of further clarification” on the majority’s holding by stating that “[r]ules distinguishing between on-premises and off-premises signs” should not be considered content-based.[31] However, the Fifth Circuit disagreed, stating the Justice Alito’s language did not actually support the City of Austin’s position.[32] Instead, the Fifth Circuit agreed with an earlier opinion of the Sixth Circuit stating that:
[I]t is possible for a restriction that distinguishes between off-and on-premises signs to be content-neutral. For example, a regulation that defines an off-premise[s] sign as any sign within 500 feet of a building is content-neutral. But if the off-premises/on-premises distinction hinges on the content of the message, it is not a content-neutral restriction. A contrary finding would read Justice Alito’s concurrence as disagreeing with the majority in Reed.[33]
Based on this, the Fifth and Sixth circuits agree that sign codes must be evaluated under the clear rules set forth by the Reed majority, rather than by an extrapolated interpretation of part of Justice Alito’s concurrence.[34]
The Fifth Circuit reasoned that in order to determine whether a sign was on-premises or off-premises, one must read the content of the sign and ask whether it advertises for an entity on that site or not.[35] Therefore, when Austin regulated off-premises signs more stringently than on-premises signs, it did so based on the content of the sign, triggering strict scrutiny.[36] The Sixth Circuit has employed similar reasoning in Thomas v. Bright, in which the court “explained that to determine whether the on-premises exception applied, the government official had to read the message written on the sign and determine its meaning, function, or purpose.”[37]
However, not all courts across the nation have interpreted Reed in this way. For instance, the DC Circuit has held that “a distinction between event-related signs and those not related to an event was content neutral because it was ‘not a regulation of speech, but a regulation of the places where some speech may occur.’”[38] The DC Circuit reasoned that just because an official may look at a sign to determine whether or not it is event-related, this does not render the District’s sign regulation content-based.[39] The DC Circuit Court instead held that “such ‘cursory examination’ did not render the statute facially content based.”[40]
While the Fifth Circuit acknowledges the DC Circuit’s different interpretation, the Reagan court does not recognize an exception to content-based discrimination for investigations that are “cursory.”[41] If the content of the sign must be read to determine how the law is applied to it, then differences in regulation based on this content trigger strict scrutiny.[42]
C. Applying Strict Scrutiny
After establishing the strict scrutiny applied to the City of Austin’s Sign Code, the Fifth Circuit evaluated the compelling governmental interests served by the regulations and narrowly tailored means of achieving those interests.[43] The City claimed that the regulation protected both the aesthetic value of the city and public safety. [44] These interests are identical to those asserted in Reed, so the Fifth Circuit employed the same analysis as the Supreme Court.
The Fifth Circuit held that the City had not proven that there was any discrepancy in the effects of on-premises and off-premises billboards on the aesthetics and public safety of the area.[45] If the billboards are an eyesore or a safety hazard, then they would be equally so on the premises as they would elsewhere.[46] Thus, the Fifth Circuit rejected both of the City’s alleged compelling interests. Finally, the court found that the City failed to make any showing that the Sign Code was narrowly tailored to achieve these interests.[47]
Ultimately, the Fifth Circuit held that the on-premises versus off-premises determination within the City of Austin’s Sign Code was an unconstitutional content-based distinction and failed strict scrutiny.
IV. Upcoming Supreme Court Decision
The upcoming Supreme Court decision in Reagan will provide much needed clarification surrounding what constitutes content-based discrimination, particularly with respect to billboards and other signs.[48] The Court will have the opportunity to resolve a circuit split with potentially multi-billion dollar implications on the outdoor advertising market.
On one hand, the Court could affirm the Fifth Circuit’s holding in Reagan. This would codify the interpretation of Reed as a substantial change to First Amendment jurisprudence. In this case, the result would inevitably be more billboard regulations being struck down as unconstitutional across the country. Even without a Supreme Court ruling, the momentum is already building across the country. As previously mentioned, the Sixth Circuit employed a very similar interpretation of Reed in Thomas v. Bright, which struck down Tennessee’s billboard regulations as unconstitutional due to content discrimination.[49] Just a few months ago in February 2021, the Sixth Circuit Court of Appeals continued to apply this reading of the Reed decision, striking down the Kentucky Billboard Act as unconstitutional due to content-based discrimination.[50] With a Supreme Court decision affirming the Fifth and the Sixth Circuit’s interpretation of the Reed decision, the majority if not all states and countless municipalities would very likely rush to amend their billboard regulation to preempt the ensuring tidal wave of litigation.
On the other hand, if the Supreme Court agrees with the DC Circuit, and overturns the Sixth Circuit’s holding in Reagan, the Court would be placing particular emphasis on Justice Alito’s “words of clarification” in his Reed concurrence. The results of this approach would affect far less change and would instead bolster the state’s right to enact different regulations for on-premises and off-premises signs. This would stem the rising tide of litigation surrounding this issue around the country, and maintain a pre-Reed status quo.
While both approaches are justifiable, the Court should affirm the Sixth Circuit’s holding. In order to know whether a billboard in the parking lot of a grocery store is on-premises or off-premises, the inspector must read the content of the billboard. Thus, the common sense conclusion is that disparate treatment based on this content would constitute content-based discrimination and strict scrutiny. This holding would not affect regulations that were truly content-neutral, such as a law that no billboard may be within a certain distance of a motorway or over a certain size.
Further, the Freedom of Speech protections afforded by the First Amendment far outweigh the state interests served by the restrictions. As the Supreme Court noted in Reed and both the Fifth and Sixth Circuits have reiterated, there is no aesthetic or safety related justification for regulating on-premises and off-premises signage differently. If one presents problems, then they both do.
Finally, as the Fifth Circuit notes in Reagan, “[t]he rule in Reed is broad, but this is not an unforeseen consequence.”[51] In their concurring opinions, many of the justices predicted the breadth of the opinion’s application.[52] For example, Justice Breyer wrote in a concurrence that “the Reed majority opinion cannot ‘avoid the application of strict scrutiny to all sorts of justifiable governmental regulations.’”[53] In this way, the justices understood that by unanimously deciding Reed, they were creating a potentially far-reaching precedent.
V. Conclusion
While the Supreme Court’s upcoming decision on the constitutionality of certain billboard regulations may not captivate the minds of millions across the country, the implications on a multi-billion-dollar industry should not be understated. An affirmation of Reagan would signal an immense win for the outdoor advertising industry. More importantly, an affirmation of the broad protections established by Reed would serve as an important protection against laws that encroach on First Amendment protections guaranteed by the Freedom of Speech Clause.
[1] Ryan C. Black and David L. Hudson Jr., Billboards, The First Amendment Encyclopedia (September 2017), https://www.mtsu.edu/first-amendment/article/982/billboards; Number of Digital Billboards in the United States from 2016 to 2020, Statista Research Department (April 28, 2021), https://www.statista.com/statistics/659381/number-billboards-digital-usa/. (In 2020, advertisers spent $3.5 billion on digital billboard advertising alone.).
[2] Debra Cassens Weiss, Supreme Court Will Decide Whether Ban on Some Digital Billboards Violates First Amendment, ABA Journal (June 28, 2021), https://www.abajournal.com/news/article/supreme-court-to-decide-whether-ban-on-some-digital-billboards-violates-first-amendment.
[3] Reagan Natl. Advert. of Austin, Inc. v. City of Austin, 972 F.3d 696 (5th Cir. 2020), cert. granted sub nom. Austin, TX v. Reagan Nat. Advert., 20-1029, 2021 WL 2637836 (U.S. June 28, 2021).
[4] Reed v. Town of Gilbert, Ariz., 576 U.S. 155 (2015).
[5] Id.
[6] Id. at 159; See also Gilbert, Ariz., Land Development Code, Ch. 1, § 4.402 (2005).
[7] Id. at 161-62.
[8][8] Id. at 163citing U.S. Const., Amdt. 1 (“The First Amendment, applicable to the States through the Fourteenth Amendment, prohibits the enactment of laws ‘abridging the freedom of speech.’”).
[9] Id. citing R.A.V. v. St. Paul, 505 U.S. 377, 395 (1992); Simon & Schuster, Inc. v. Members of N.Y. State Crime Victims Bd., 502 U.S. 105, 115 (1991) (“Content-based laws—those that target speech based on its communicative content—are presumptively unconstitutional and may be justified only if the government proves that they are narrowly tailored to serve compelling state interests.”).
[10] Id.
[11] Id. at 164.
[12] Id. at 171-73.
[13] Id. at 171.
[14] Id.
[15] Id. (quoting Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 425 (1993)).
[16] Id.
[17] Id. (“The Town has offered no reason to believe that directional signs pose a greater threat to safety than do ideological or political signs. If anything, a sharply worded ideological sign seems more likely to distract a driver than a sign directing the public to a nearby church meeting.”)
[18] Reed v. Town of Gilbert, Ariz., 576 U.S. 155 (2015) (Alito, J. concurring).
[19] Free Speech Coal., Inc. v. Att’y Gen. U.S., 825 F.3d 149, 160 n.7 (3d Cir. 2016).
[20] Wollschlaeger v. Governor of Florida, 848 F.3d 1293, 1332–33 (11th Cir. 2017) (en banc) (Tjoflat, J., dissenting).
[21] Cahaly v. Larosa, 796 F.3d 399, 405 (4th Cir. 2015).
[22] Reagan Natl. Advert. of Austin, Inc. v. City of Austin, 972 F.3d 696 (5th Cir. 2020), cert. granted sub nom. Austin, TX v. Reagan Nat. Advert., 20-1029, 2021 WL 2637836 (U.S. June 28, 2021).
[23] Id.
[24] Id. at 699.
[25] Id. at 699-700; Chapter 25-10 of the Code of the City of Austin, Texas. (Notably, the City of Austin amended its code in 2017 after this legal action was initially filed. However, the Fifth Circuit held that the subject of the lawsuit was not moot and thus still litigable.).
[26] Id. at 700.
[27] Id. at 701.
[28] Id.
[29] Id. at 702; Reed v. Town of Gilbert, Ariz., 576 U.S. 155 (2015) (Strict scrutiny for content-based discrimination); Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 561 (1980) (Intermediate scrutiny for regulation of commercial speech).
[30] Id. (“If the distinction is content based, then it is ‘presumptively unconstitutional’ and subject to strict scrutiny… If the Sign Code is content neutral, then it is subject to intermediate scrutiny.”)
[31]Id. at 704(quoting Reed supra at note 18).
[32] Id.
[33] Id. citing Thomas v. Bright, 937 F.3d 721, 732–33 (6th Cir. 2019) (Batchelder, J.) (alteration in original) (quoting Thomas v. Schroer, 248 F. Supp. 3d 868, 879 (W.D. Tenn. 2017)); see also Note, Free Speech Doctrine after Reed v. Town of Gilbert, 129 Harv. L. Rev. 1981, 1993 (2016) (explaining the potential “inconsistency between the Reed majority’s far-ranging reasoning and Justice Alito’s attempt to identify exceptions”).
[34] Id.
[35] Id. at 704-05.
[36] Id.
[37] Id. citing Thomas, 937 F.3d at 731.
[38] Id. (quoting Act Now to Stop War and End Racism Coal. & Muslim Am. Soc’y Freedom Found. v. District of Columbia, 846 F.3d 391, 404 (D.C. Cir. 2017)).
[39] Act Now, 846 F.3d at 404.
[40] Id. (quoting Hill v. Colorado, 530 U.S. 703, 719 (2000)).
[41] Reagan, 972 F.3d at 705.
[42] Id.
[43] Id. 709.
[44] Id.
[45] Id. 709-10.
[46] Id.; See also Republican Party of Minn. v. White, 536 U.S. 765, 780 (2002) (quoting Florida Star v. B.J.F., 491 U.S. 524, 541–42 (1989) (Scalia, J., concurring in the judgment) (A “law cannot be regarded as protecting an interest of the highest order, and thus as justifying a restriction upon truthful speech, when it leaves appreciable damage to that supposedly vital interest unprohibited.”)
[47] Id. at 710.
[48] Both Justice Clarence Thomas and Justice Samuel Alito are still on the Court, so one would imagine that one of them will author the opinion.
[49] Thomas v. Bright, 937 F.3d 721, 732–33 (6th Cir. 2019).
[50] L.D. Mgt. Co. v. Gray, 988 F.3d 836 (6th Cir. 2021).
[51] Reagan, 972 F.3d at 707.
[52] Id.
[53] Id. (quoting Reed, 576 U.S at 178) (Breyer, J., concurring in the judgment).
