Court Hears Arguments in Austin Sign Case

Steven D. Schwinn, University of Illinois Chicago School of Law

The Supreme Court will hear arguments this morning in a case testing Austin's sign code, which allows digitization of on-premises signs, but not of off-premises signs. Here's my preview, from the ABA Preview of United States Supreme Court Cases, with permission:

Issue

Does Austin’s city code, which distinguishes between on-premises signs (which may be digitized) and off-premises signs (which may not), constitute an impermissible content-based regulation of speech, in violation of the First Amendment?

Case at a Glance

The Austin Sign Code allows sign owners to digitize their on-premises signs (those that are located at the same site as the business or activity to which they relate). But it forbids owners from digitizing their off-premises signs (those that are not located at the same site as the business or activity to which they relate). Applying those regulations, the City denied permission to two corporations to digitize their off-premises signs.

INTRODUCTION

Government speech regulations that are based on the content of the speech are subject to strict scrutiny, and are presumptively invalid, under the First Amendment. But it’s not always clear when a government regulation is content based. The Court sought to clarify this in Reed v. Town of Gilbert, 576 U.S. 155 (2015). In Reed, the Court held that a government speech regulation is based on content if the plain text of the regulation discriminates by the content of speech, or if the government cannot justify the regulation without reference to the content. Applying the first part of test, the Fifth Circuit held that Austin’s sign regulations were content based, because a person would have to read the sign (and its content) in order to determine whether the sign was on premises or off premises.

ISSUE

Is Austin’s distinction between on-premises signs and off-premises signs facially unconstitutional under Reed?

FACTS

The City of Austin regulates signs within its jurisdiction based on their location. Under City regulations, the owner of an “on-premises” sign—a sign that advertises a business or activity that is located on the site where the sign is located—can digitize the sign. But the owner of an “off-premises” sign—a sign that “advertises a business, person, activity, good, products, or services not located on the site where the sign is installed”—cannot. Austin says that these rules protect the aesthetic value of the City and protect public safety.

In April and June 2017, Reagan National Advertising of Austin and Lamar Advantage Outdoor Company filed separate applications to digitize their off-premises billboards. The City denied the applications, citing its sign policy.

Reagan sued the City in state court. Reagan argued that Austin’s sign policy amounted to content-based discrimination of speech, and that it was facially unconstitutional. Austin removed the case to federal court, based on the federal constitutional question.

Then, in August 2017, Austin amended its Sign Code. The amended Code defines an “off-premise sign” as “as sign that displays any message directing attention to a business, product, institution, or other commercial message which is generally conducted, sold, manufactured, produced, offered, or occurs elsewhere than on the premises where the sign is located.” The regulations define an “on-premise sign” as “a sign that is not an off-premise sign.”

The amended Code also includes a new provision, dealing with non-commercial signs. It reads:

(A) Signs containing noncommercial speech are permitted anywhere that signs regulated by this chapter are permitted, subject to the same regulations applicable to the type of sign used to display the noncommercial message. No provision of this chapter prohibits an ideological, political, or other noncommercial message on a sign otherwise allowed and lawfully displayed under this chapter.

(B) The owner of any sign allowed and lawfully displayed under this chapter may substitute noncommercial speech in lieu of any other commercial or noncommercial speech, with no permit or other approval required from the City solely for the substitution of copy.

(C) This section does not authorize the substitution of an off-premise commercial message in place of a noncommercial or on-premise commercial message.

In October 2017, Lamar joined Reagan’s suit as a plaintiff. The district court ruled for the City, but the United States Court of Appeals for the Fifth Circuit reversed. This appeal followed.

CASE ANALYSIS

The Court has long held that government regulations of speech that discriminate based on the content of the speech are subject to strict scrutiny and presumptively invalid. But determining whether a speech regulation discriminates based on content turns out to be much harder than it would seem. For decades, lower courts struggled with this.

In particular, in order to assess the question, lower courts before 2015 applied two different, and sometimes inconsistent, tests to determine whether a law restricted speech based on its content. One test looked to the plain text of a law or regulation and asked whether it discriminated on its face, based on the content or subject-matter of the speech. The other test looked to the purpose of the law or regulation and asked whether the government could justify its restriction “without reference to the content of [the] speech.” Hill v. Colorado, 530 U.S. 703 (2000).

Then, in 2015, the Court sought to clarify the confusion. The Court in Reed v. Town of Gilbert 135 S. Ct. 2218 (2015), adopted a two-part test to determine when a speech regulation is based on content. First, courts must read the text of the regulation to determine whether it distinguishes between speech based on its content, or message. Under Reed, a speech regulation that discriminates based on content on its face is automatically subject to strict scrutiny and presumptively invalid. This holds even if the regulation is based on a content-neutral purpose.

Next, if the facial text of the regulation is content-neutral, courts must examine the purpose of the regulation. If the regulation “cannot be ‘justified without reference to the content of the regulated speech,’” or if the government adopted the regulation “because of disagreement with the message [the speech] conveys,” then the court must treat the regulation as content based. Such a regulation is subject to strict scrutiny, and it is presumptively invalid.

The parties frame their arguments around Reed.

Austin argues first that its distinction between on-premises signs and off-premises signs is content neutral on its face. The City says that its distinction draws on a long, well recognized, and validated (even “ubiquitous”) tradition in zoning and sign-code practices, in which all levels of government distinguish in different ways between on-premises and off-premises signs. It claims that this traditional distinction is based upon the substantial government interests in regulating off-premises signs (like highway billboards), which pose especial traffic, safety, and even aesthetic concerns. Austin contents that digital billboards only add to those concerns. On the other hand, the City claims that on-premises signs are generally smaller, less distracting, and well-integrated into the existing property; it says that they also “implicate the compelling interest of businesses and property owners to advertise their goods and services on their own property.”

Austin contends that laws and regulations distinguishing between off-premises and on-premises signs, including its own, are content neutral. According to the City, that’s because the distinction is based on a sign’s location, not its content, subject, or viewpoint. It says that its sign regulation “singl[es] out no subject or viewpoint as a regulatory target.”

Austin argues next that the Fifth Circuit wrongly applied Reed in striking this provision of its Sign Code. The City claims that the lower court interpreted Reed to require a “read the sign” test, where a sign regulation is content-based if a person must read the sign itself in order to know if the regulation applies. But Austin contends that Reed does not support this test. It points to Justice Samuel Alito’s concurrence in Reed, joined by Justices Anthony Kennedy and Sonia Sotomayor, which provided examples of “some rules that would not be content based,” including “[r]ules distinguishing between signs with fixed messages and electronic signs with messages that change” and “[r]ules distinguishing between on-premises and off-premises signs”—exactly the rules at issue in this case.

Moreover, Austin contends that Reed’s reasoning itself refutes the Fifth Circuit’s read-the-sign test. The City claims that Reed relied on cases holding that laws were content neutral even when a person would have to read the sign to determine the law’s content-neutrality. Austin claims that Court cases instead turn on whether speech regulations “single out topics or subjects for distinct regulations” and thus “favor[] or disfavor[] particular topics or viewpoints.” The City says that the Fifth Circuit’s rule, which “would subject virtually all distinctions in sign regulation to strict scrutiny,” would perversely lead to less speech, because government officials, to avoid this, “may regulate with a far broader brush, thus suppressing more speech.” Alternatively, the City claims, courts would dilute strict scrutiny in order to uphold sensible laws (“like house-number identifications or event-related sign regulation”), thus undermining the law and creating further uncertainty.

Finally, Austin argues that its sign regulations are subject to intermediate scrutiny, and that they pass. It claims that because its regulations are content neutral, the proper test is intermediate scrutiny, not strict scrutiny. And it says that its regulations are sufficiently tailored to meet its important interests in safety and aesthetics. Alternatively, the City claims that because it validly rejected the plaintiffs’ requests to digitize their signs under the commercial-speech doctrine (which also uses intermediate scrutiny), the plaintiffs can only argue that the regulations are unconstitutionally overbroad (with respect to commercial speech). Austin says that the plaintiffs never raised this argument, and the evidence doesn’t support it.

The government weighs in as amicus to support Austin, emphasizing many of the same points. In particular, the government echoes the City’s arguments that its regulations are content neutral, and that they easily satisfy intermediate scrutiny. The government also claims that any “constitutional infirmities” in the regulations do not justify striking the regulations on their face.

The plaintiffs counter that Austin’s regulations are content based on their face, because they “depend on the communicative content of the signs—specifically whether they advertise activities on the premises . . . .” They point to the language of the regulation defining off-premises signs: those signs that “advertise a business, person, activity, goods, products, or services not located on the site where the sign is installed.” They say that this definition turns on a sign’s content. Moreover, the plaintiffs contend that the regulations’ consideration of the location of the signs (a concededly content-neutral consideration) does not save them; instead, it merely makes the regulations a content-based restriction on speech, not an all-out ban. According to the plaintiffs, the regulations still turn on the content of a sign.

The plaintiffs assert that this interpretation reflects the correct reading of Reed. That case, they say, “made clear that a law may be subject to strict scrutiny either because it draws facial distinctions based on content or because it is motivated by an impermissible content-based purpose.” The plaintiffs contend that Austin’s regulations fall squarely into the first category. They claim that Justice Alito’s examples are not to the contrary: a regulation that defines “off-premises” by its distance from a building, for example, is still content neutral; but a regulation that also depends on a sign’s content (as here) is content based. Contrary to the City, the plaintiffs contend that this is consistent with the Court’s prior opinions, and will not lead to courts striking laws that regulate speech based on its medium. They write, “A regulation is content-based when it depends on the content of the message expressed through a particular medium, not when it regulates the medium itself.”

Having established that strict scrutiny applies, the plaintiffs contend that Austin’s regulations fail. They say that even assuming that Austin’s interests in safety and protecting aesthetics are compelling government interests, the regulations are not narrowly tailored, because Austin “has provided no reason to think that digitizing the limited number of . . . off-premises signs would be more problematic than the unrestricted digitization of on-premises signs, which the [City] currently permits.” In other words, the plaintiffs say that Austin’s interests apply equally to on-premises signs, but Austin does not similarly restrict on-premises signs. The plaintiffs assert, contrary to the City, that this does not mean that all other premises regulations must fail, only that they cannot distinguish based on the content of the sign (as Austin’s do).

The plaintiffs argue next that even if the Court were to apply intermediate scrutiny, Austin’s regulations would fail. They say that the City has better tailored ways to achieve its interests in safety and aesthetics. For example, they contend that the City could simply “limit[] the frequency of message changes for both on-premises and off-premises signs” in order to meet the City’s concern about “periodically changing” off-premises signs that could threaten safety and aesthetics.

Finally, the plaintiffs argue that the City is wrong to say that their claims fail under the commercial-speech doctrine. The plaintiffs contend that their signs contain both commercial and non-commercial speech, and that the challenged regulations distinguish between off-premises and on-premises signs for both commercial speech and non-commercial speech. Based on these two facts, the plaintiffs assert that the commercial-speech test simply does not apply. In any event, for the same reasons as above, the plaintiffs claim that the regulations fail the commercial-speech test, intermediate scrutiny.

SIGNIFICANCE

While Reed sought to clarify the approach that courts must use in determining whether a government speech regulation is content based, the case instead generated mass confusion among the lower courts and often led to results that are inconsistent with the Court’s own pre-Reed precedents.

As most relevant here, lower courts have adopted very different approaches to Reed’s first question, whether the government regulation is content based on its face. For example, while the Fifth Circuit has adopted a broad understanding of Reed, reflected in its read-the-sign approach, other circuits have adopted narrower understandings that might tolerate regulations like Austin’s.

The confusion and uncertainty around Reed maybe shouldn’t surprise us. After all, the Reed Court itself seemed a little uncertain about its ruling. That’s why Justice Alito wrote his concurrence, joined by Justices Kennedy and Sotomayor, providing a list of longstanding and traditional content-neutral speech regulations that Reed would not overturn. Among these, Justice Alito explicitly included premises regulations, like Austin’s. The fact that the Fifth Circuit expressly distinguished Austin’s actual premises regulations from Justice Alito’s idealized premises regulations only further illustrates the confusion over Reed’s first question.

This case will (hopefully) provide some clarity and guidance. Still, this is no easy feat. The Court can readily see how a fixed, determinate rule, like the Fifth Circuit’s read-the-sign rule, may give courts clear guidance, but could also apply in an overly rigid way to strike speech regulations that don’t really have anything to do with the content of the speech. At the same time, the Court also understands that a more flexible rule—for example, one that looks to the purpose behind a government speech regulation—may more accurately reveal a government’s intent to discriminate by content, but is also much harder to measure with certainty, and may invite governments to implement content-based regulations under the guise of facial content neutrality.

Some of the amici offer suggestions. For example, the Knight Center and Professor Genevieve Lakier suggest that the Court adopt a more nuanced approach, in the form of a multi-factor test. Under this approach, courts would determine whether a regulation is content based by looking at the two questions in Reed, along with several other considerations that can help reveal when a government regulation actually discriminates by content. Look for the Court to road test these ideas, and others, at oral argument, as it seeks to clarify Reed and bring determinacy to the doctrine.