Land Use Update

The Supreme Court Speaks on Billboards

Land Use Update Editor: Daniel R. Mandelker, Washington University School of Law, Stamper Professor of Law Emeritus, St. Louis, Missouri. sign.”

In a surprising decision, City of Austin v. Reagan National Advertising of Austin, LLC, 142 S. Ct. 1464 (2022), the Supreme Court upheld a sign ordinance that treated off-premise and on-premise signs differently, a difference that could have proven fatal as a contentbased distinction. In a recent article in this magazine, I discussed this case while it was on appeal to the Supreme Court. Daniel R. Mandelker, The Changing Landscape for Billboard Regulation, 36 Prob. & Prop. 40 (Mar./Apr. 2022). This column updates and reviews the Reagan decision and what it means for free speech law and sign regulation.

The trend toward the conversion of static signs to digital signs created the problem in the Reagan case. Digital signs have electronically controlled changeable copy and are more distracting than static signs, which do not have changeable copy. Concerned about the distracting effect created by off-premise digital signs, which include billboards, the city enacted a sign ordinance allowing on-premise signs to be digitized but not off-premise signs.

This distinction created a problem because the ordinance defined each type of sign differently. It defined an off-premise 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.” A footnote in Justice Alito’s concurring and dissenting opinion quoted the definition of an on-premise sign as “a sign that is not an off-premise

This definition means that an on-premise sign can advertise on-site activities. In Reagan, the sign company argued that the distinction between off-premise and on-premise signs was content-based, which probably would have made it fatal.

History and Practice

Three themes dominated Justice Sotomayor’s majority opinion. One theme placed heavy weight on history and practice. Justice Sotomayor found a regulatory tradition that supports the different treatment of signs “that promote ideas, products, or services located elsewhere and those that promote or identify things located onsite.” She noted that different treatments proliferated with the adoption of the federal Highway Beautification Act of 1965, 23 U.S.C. § 131, which includes it and has been adopted by two-thirds of the states. “Tens of thousands of municipalities nationwide” have analogous distinctions in their sign codes.

This is resourceful use of history, but its reach is not clear. Is it limited only to the off-premise versus on-premise distinction? What weight should be given to history and practice for free speech issues raised by other sign regulations? These are open questions.

Justice Thomas, dissenting, asserted that the Austin off-premise sign definition was content-based and therefore violated the First Amendment. Justice Sotomayor disagreed because sign ordinances have treated on-premise and off-premise signs differently for more than half a century, and the Court has repeatedly reviewed and has never questioned this distinction. Nothing in Reed v. Town of Gilbert, 576 U.S. 155 (2015), the Court’s most recent free speech decision on sign ordinances, casts doubt on it.

The “Read-the-Sign” Rule

Justice Sotomayor next considered what she called the “read-the-sign” rule. As explained by the court of appeals in Reagan, which rejected the off-premise sign definition, a regulation is contentbased if a government official has to “read a sign’s message to determine the sign’s purpose.” Several federal courts adopted this rule, but a greater number rejected it. The rule has an absolute effect. It is an automatic trigger that makes every sign ordinance contentbased because government officials must always read signs to determine their purpose. The only signs that would be free of content are blank signs.

The read-the-sign rule requires rejection, and Justice Sotomayor rejected it. It was “too extreme” an interpretation of Court precedent because the off-premise sign definition in the Austin sign ordinance required an examination of speech only to draw “neutral, location-based lines.” As she explained, “[R]estrictions on speech may require some evaluation.” Court precedent supported her decision because it rejected the view that “ any examination of speech or expression inherently triggers heightened First Amendment concern.” This statement is not quite accurate, because two earlier Supreme Court cases split on whether the read-the-sign rule should be adopted. Justice Sotomayor did not discuss these cases. Rejection of the read-the-sign rule means that an automatic trigger cannot turn a sign ordinance into a content-based regulation.

The Content-Based Regulation Question

The Austin ordinance raised a contentbased regulation question because it applied not only to commercial speech, which goes under different rules, but also to noncommercial speech, which must be content-free. The answer to this question is decisive. A contentbased law is subject to strict judicial scrutiny, is presumptively unconstitutional, and must be supported by a compelling governmental interest. This test is a high bar, as strict scrutiny often becomes strict in theory but fatal in fact.

The Reed decision is the most recent Supreme Court case before Reagan to deal with content-based sign regulation, and so Justice Sotomayor considered it. She explained how Reed influenced her opinion. Reed struck down the sign ordinance in that case, and she distinguished it as “a very different regulatory scheme” that applied “distinct size, placement, and time restrictions” to 23 different types of signs, with some signs regulated more restrictively than others. She quoted Reed as holding that the ordinance was content-based because it “singl[ed] out specific subject matter for differential treatment,” and because its restrictions were a “prohibition of public discussion of an entire topic.” She also quoted Reed as holding that a regulation of speech is content-based if it “applies to particular speech because of the topic discussed or the idea or message expressed.”

Reed adopted another rule, not quoted by Justice Sotomayor, that turns on facial distinctions and that applies to the off-premise sign definition in Reagan. It holds that “[s]ome facial distinctions based on a message are obvious, defining regulated speech by particular subject matter.” The offpremise sign definition in the Austin sign code could have been held content-based under the obvious facial distinction rule. The code defines an off-premise sign with obvious contentbased facial distinction as a sign that advertises “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.” Justice Thomas dissented because he would have found the definition content-based under this rule.

Justice Sotomayor disagreed. In her view, the off-premise sign definition was constitutional because it did not “single out any topic or subject matter for differential treatment,” as Reed required. Qualifying Reed, she held that “[a] sign’s substantive message itself is irrelevant to the application of the provisions.” There were no contentdiscriminatory sign classifications, as in the ordinance struck down in Reed. Instead, the off-premise sign definition made a distinction based on location. The message on the sign mattered only to the extent that it provided information about “the sign’s relative location,” and Reed does not require strict scrutiny for location-based regulations. The offpremise versus on-premise definition, she concluded, is similar to ordinary time, place, and manner restrictions.

Justice Sotomayor also downgraded a “function or purpose” rule adopted by Reed. This rule holds that speech regulated by its “function or purpose” is content-based on its face. The sign company argued that the sign code was content-based on its face under this rule because it defined off-premise signs based on their function or purpose. Justice Sotomayor disagreed. The company’s argument took the rule too far, as it was only intended to address subtler forms of discrimination. The rule means only that a law cannot escape facially content-based classification “simply by swapping an obvious subject-matter distinction for a ‘function or purpose’ proxy that achieves the same result,” though not every function or purpose classification is contentbased. This is a clarification of a rule that caused some confusion when it was announced.

Justice Sotomayor remanded the case because she held that the First Amendment inquiry is not ended when a law is content-neutral. There may be evidence of an impermissible purpose or justification, and a restriction on freedom of speech or expression must be “narrowly tailored to serve a significant governmental interest,” which is one of the requirements for time, place, and manner regulations. They must also leave alternative channels of communication open, a requirement she did not mention.

What Reagan Means

Reagan revised Reed. It qualified Reed’s requirement that obvious facial distinctions based on message are content-based and upheld an off-premise sign definition that could have been held content-based under this rule. The question is what Reagan means for free speech restrictions on sign ordinances. There is a broad and a narrow reading.

A broad reading rejects or at least revises the Reed decision by downgrading Reed’s function or purpose rule for determining what speech is contentbased. A narrow reading limits Reagan to the off-premise versus on-premise distinction because it concentrated on that distinction, the history and practice that supports it, and the location exception for the off-premise sign definition problem.

The question is how far the location exception for off-premise sign definitions extends that is carved out by the narrow reading. One of the purposes of every sign ordinance is to regulate the location of signs. Take the simple real estate sign. Sign codes usually define these signs as “signs advertising property for sale.” This is messagebased content under Reed. What if a sign ordinance defined these signs as “signs located on property offered for sale”? This definition should fall within the location exception. What if the definition is changed to allow “signs advertising and located on property offered for sale”? Is this definition within the location exception?

Interested in sign regulation? Download my handbook, Free Speech Law for On-Premise Signs, which is available on my website.

Published in Probate & Property, Volume 36, No 5 © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

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