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Recent federal court decisions have redefined the limits of the First Amendment’s protections of signs across the country and in Michigan, so municipal review of such regulations is certainly timely. In light of Reed v Town of Gilbert, Ariz, a recent sign decision, Justice Kagan of the United States Supreme Court opined that “many sign ordinances . . .  are now in jeopardy.” See Reed v Town of Gilbert, Ariz, 576 US 155, 180 (2015) (Justice Kagan, E., concurring in judgment). Since Reed, there has been a string of cases interpreting the Reed standards and applying them in different contexts. These cases may also implicate the validity of municipal sign ordinances.

As a result of such decisions, municipalities with existing sign regulations or those considering adopting new ones should review the legality of their controls on these protected forms of expression. This E-Letter will explore some of the recent federal decisions and how they may implicate regulating signs in your community.

DEVELOPMENTS

In regulating signs or any other form of First Amendment protected expression, it is important to understand the distinction between content-based regulations and content-neutral regulations. Content-based regulations of speech target the content of a message, whereas content-neutral regulations target the time, place, and manner that speech occurs. See Reed, 76 US at 155; See also Prime Media, Inc v City of Franklin, 181 F Appx 536, 537 (6th Cir 2006). Municipalities should avoid content-based sign regulations and strive to create a content-neutral regulatory scheme.

The distinction between content-based and content-neutral regulations matters because it controls the level of judicial review a court will use in examining a sign regulation, which in turn directly impacts the likelihood that the challenged regulation will survive. Courts apply “intermediate scrutiny” to content-neutral regulations and “strict scrutiny” to content-based regulations. The differences between these levels of judicial review are critical, since sign regulations subject to intermediate scrutiny often survive the judicial review process when challenged, but sign regulations subject to strict scrutiny are only rarely upheld.

Reed v Town of Gilbert

Today, Reed is ubiquitous in federal jurisprudence involving municipal sign regulations. Reed invalidated municipal sign regulations that distinguished between signs based on content. Reed, 76 US at 171. In that case, the Town of Gilbert’s sign code prohibited the display of outdoor signs without a permit, but exempted “political signs,” “temporary directional signs,” and “ideological signs” from the permit requirement. Id. at 155. The Town of Gilbert defined “temporary directional signs” as “signs directing the public to a church or other qualifying event” and prohibited the display of such signs “more than 12 hours before the qualifying event and 1 hour after.” Id.

Good News Church and its pastor held church services at various temporary locations and posted signs bearing the Church’s name, the time, and the location of the next service early each Saturday. Id. The Town of Gilbert cited the Church for exceeding the time limits for displaying “temporary directional signs” and failing to include an event date on the signs. Id. In response, the Church filed suit alleging that the Town of Gilbert’s sign code abridged their freedom of speech. Id.

When the case was brought before the Supreme Court, it explained that content-based laws are “those that target speech based on its communicative content,” and those laws are presumptively invalid.  Id. The Court reasoned that the Town of Gilbert’s sign code was content-based on its face, as it defined categories of signs (e.g., temporary directional signs) based on their messages and regulated them differently according to those messages. Id.

In Reed, the Court established two tests to determine whether a sign regulation is content-based.  First, a regulation is content-based if an individual must read the sign to understand how the regulation applies (e.g., to distinguish a political sign from an advertising sign). Id. at 156. Second, a regulation is content-based if the underlying purpose of the sign regulation is to regulate certain subject matters. Id. The goal of these tests is to protect “viewpoints and ideas from government censorship and favoritism.” Id. at 168.

In practicality, the decision in Reed invalidated many municipal sign regulations across the country, as it redefined what constituted content-based regulations. Id. at 180. Before Reed, courts often upheld sign regulations that exempted certain subject matters. Now, the mere mention of subject matters in sign regulations almost always renders the regulation invalid. Accordingly, municipalities should review their sign regulations to identify and remove content-based regulations and replace them with content-neutral regulations where possible.

Thomas v Bright

Since the Supreme Court’s decision in Reed, the Federal Sixth Circuit Court of Appeals—where Michigan is located—has strictly adhered to Reed standards compared to other judicial circuits, which have more loosely interpreted Reed. For example, in Thomas v Bright, the Sixth Circuit examined a Tennessee regulation that differentiated between “on-premises signs” and “off-premises signs.” Thomas v Bright, 937 F3d 721, 724 (2019).  Under the regulation, signs that advertised activities conducted on the property where the sign was located (i.e., “on-premises”) could be posted without a permit, whereas signs that advertised activities occurring “off-premises” required a permit.  Id. at 725.  Before Reed, such distinctions were commonplace.

In Thomas, a billboard owner posted a sign on a billboard on an otherwise vacant lot supporting the US Summer Olympics Team. Id. Tennessee ordered him to remove the sign because the State denied him a permit, and the sign did not qualify for the permit exception, as it did not advertise activities conducted on the property. Id. The billboard owner sued, alleging that Tennessee’s “on-premises signs” and “off-premises signs” regulations violated the First Amendment. Id.

The Court in Thomas noted that the regulation distinguishing between on- and off-premises signs treated commercial speech more favorably than non-commercial speech. Id. The Court also recognized that an official would have to read the sign to determine its “meaning, function, and purpose” and apply the regulation accordingly. Id. at 730. As a result, the Court held Tennessee’s on-and off-premises regulation was content-based and struck down its sign restrictions as unconstitutional.

Applying the Thomas holding, municipalities should review their sign regulations to determine whether they regulate on- and off-premises signs, as such regulations are often unconstitutional. That is not to say that it is impossible to regulate on- and off-premises signs, as municipalities may still regulate such signs with a content-neutral definition based on their location (e.g., 500 ft from a store) rather than their content (e.g., advertising a business). Defining sign types in a content-neutral manner is key to regulating them properly. Municipalities seeking to regulate on- and off-premises signs in this manner should contact their counsel to determine whether their regulations are content-neutral.

LD Mgmt Co v Gray

Likewise, in LD Mgmt Co v Gray, the Sixth Circuit Court held that Kentucky’s on- and off-premises sign regulations were content-based and in violation of the First Amendment. LD Mgmt Co v Gray, 988 F3d 836, 838 (6th Cir 2021). In that case, the Kentucky regulation prohibited off-premises billboards when the advertisement was not securely affixed to the ground, the sign was attached to a mobile structure, and no permit had been obtained, but none of those requirements applied to an on-premises billboard. Id.

The Lion’s Den, an adult superstore, installed a billboard advertising the store from a tractor-trailer parked on a former employee’s neighboring property. Id. The Kentucky Department of Transportation ordered the Lion’s Den to remove the sign, as it was attached to a mobile structure, which violated the on- and off-premises sign regulations. Id. In reviewing Kentucky’s regulation, the Court explained that it was content-based because it treated on-premises advertisements more favorably than off-premises regulations. Id. The Court struck down Kentucky’s regulations, reasoning on-premises advertisements posed no greater eyesore or traffic safety risk than off-premises advertisements. Id. at 840.

Interestingly, the Supreme Court granted certiorari to hear an appeal on a Federal Fifth Circuit Court decision in this area. So, the Supreme Court may clarify whether on- and off-premises distinctions are necessarily content-based. See Austin, TX v Reagan Nat Advert, No 20-1029, 2021 WL 2637836, at p *1 (US June 28, 2021). If the Supreme Court finds on- and off- premises distinctions content-neutral, municipalities will have a great deal more flexibility regulating signs.

International Outdoor v City of Troy

Presently, there is a dispute between federal circuit courts as to whether intermediate scrutiny applies to content-based regulations on commercial signs in the wake of Reed. In the past, the Supreme Court applied intermediate scrutiny to content-based regulations of commercial speech, meaning that such regulations usually survived review. See Central Hudson Gas & Elec Corp v Pub Serv Comm of New York, 447 US 557, 561 (1980). This lesser scrutiny has been historically justified by the reduced constitutional value of commercial messages compared to noncommercial expression, like political or religious speech, which is closer to the “core” of the First Amendment, and the government’s increased interest in regulating commercial speech (e.g., to prevent false or misleading advertising).

But once again, the Sixth Circuit rigorously interpreted Reed and applied strict scrutiny even to content-based commercial speech regulations. In International Outdoor v City of Troy, the Sixth Circuit reversed the district court’s decision applying intermediate scrutiny to content-based regulations of commercial speech. International Outdoor v City of Troy, 974 F3d 690 (2020). In that case, the City of Troy’s ordinance treated commercial signs differently from non-commercial signs by exempting certain non-commercial messages from permitting requirements. Id. Despite regulating commercial speech, the Sixth Circuit Court in International Outdoor held that the City of Troy’s commercial speech regulations were content-based and subject to strict scrutiny under Reed. Id. at 703.

By comparison, the Ninth Circuit Court in Lone Star Security & Video, Inc v City of Los Angeles recently opined that “although laws that restrict only commercial speech are content based (citation omitted), such restrictions need only withstand intermediate scrutiny (citation omitted).” Lone Star Security & Video, Inc v City of Los Angeles, 827 F3d 1192, 1200 (9th Cir 2016) The discrepancy between judicial circuits makes this area of the law fertile for a challenge. If the Supreme Court were to revert to the Central Hudson test for regulations of commercial signs (i.e., intermediate scrutiny), municipalities would have a great deal more flexibility in regulating signs in their communities, as regulations subjected to intermediate scrutiny are often upheld. Such a holding would open the door to many forms of content-based regulations of commercial speech, including on- and off- premises distinction, as those regulations are currently struck down under strict scrutiny, in part, for targeting commercial speech. See Thomas, 937 F3d at 725 (noting that the regulation distinguishing between on- and off-premises signs treated commercial speech more favorably than non-commercial speech). Aside from on- and off-premises signs, municipalities would be able to target more general forms of advertisement.

Prime Media, Inc v City of Franklin

As distinguished from the cases involving content-based regulations above, content-neutral regulations restrict the “time, place, and manner” that signs are displayed rather than their content.  For example, in Prime Media, the Sixth Circuit Court of Appeals upheld the City of Franklin’s amended sign regulation prohibiting “free-standing signs” from exceeding “six feet in height and 32 square feet per side.” 181 F Appx at 538. In that case, the City of Franklin’s sign ordinance neither allowed off-premises signs (signs directing attention to a business which is not conducted upon the same lot of record) nor signs exceeding 72 square feet per side to be erected within 1,500 feet of I–65. Id.

A company in the business of erecting and operating signs sought the City of Franklin’s permission to construct three off-premises, 14–foot by 48–foot billboards along I-65. Id. The City of Franklin denied the company’s request explaining that such signs were not allowed. The company sued, alleging that the regulation was unconstitutional. Id. In response, the City of Franklin amended its sign ordinance, eliminating the permit requirement and the distinction between on-premises and off-premises signs. The City also tightened the free-standing sign provision providing that “signs may not exceed six feet in height and 32 square feet per side.” Id.

Although the original ordinance was unconstitutionally content-based, the Court in Prime Media upheld the amended ordinance. The Court reviewed the City of Franklin’s regulation of free-standing signs under intermediate scrutiny because the regulation was content-neutral, as it only restricted the physical characteristics of the sign. Id.  Thus, Prime Media illustrates how municipalities can regulate signs by physical characteristics, such as their size, rather than their content. Municipalities seeking to regulate signs should think about the signs’ characteristics and how those characteristics may impact their community.

APPLICATION

The following set of questions and answers is designed for you to apply the legal developments to simulated real-world situations.

Question 1. Municipality A prohibits the display of political signs in every district 72-hours after an election. One resident has a sign that says, “[Politician] is a moron!” An election occurred four days ago, and the resident’s sign is still displayed. Can Municipality A require the resident to remove the sign?

Answer 1. No. Under Reed, Municipality A’s enforcement officer would have to read the sign to understand whether the prohibition on political signs applied to the resident’s signs. That is to say, the enforcement officer would have to read the sign to know whether the sign was political. Therefore, Municipality A’s sign regulation is content-based, subject to strict scrutiny, and presumptively invalid. Municipalities should avoid regulating signs in this manner.

Question 2.  Municipality B’s sign regulation prohibits more than two temporary signs announcing any annual or semi-annual public, charitable, educational or religious event or function in the commercial district. A Church located in the commercial district has three temporary signs announcing an annual Christmas pageant on the premises. Can Municipality B’s enforcement officer cite Church for violating the regulation and require the Church to take one sign down?

Answer 2. No. Municipality B’s enforcement officer would not know that the Church’s three signs announcing the annual Christmas pageant violated the two-sign limit in the commercial district unless the enforcement officer read the signs to know they were announcing an annual event in the first place. Therefore, Municipality B’s regulation is content-based, subject to strict scrutiny, and presumptively invalid. Additionally, the regulation may implicate the Free Exercise Clause of the First Amendment or the Religious Land Use and Institutionalized Persons Act, 42 USC 2000cc et seq., as it targets religious activities and treats them differently than nonreligious activities, which can be an additional stumbling block for municipalities with these types of regulations.

Note that while Municipality B’s regulation of temporary signs is content-based, not all regulations of temporary signs are necessarily so. Had Municipality B defined temporary signs by their physical characteristics and the duration that they are displayed, rather than by their content, the regulation would likely be a valid content-neutral regulation of signs.

Question 3.  Municipality C bans “electronic changeable message signs,” which are defined as “signs that change displays more than once every 8 seconds.” Municipality C further justifies this restriction to prevent distracted driving, as a traffic study revealed that signs that change messages rapidly tend to cause accidents. Bob’s Sandwich Shop, a business in the municipality, has an electronic billboard that alternates once per second between eight pictures, one picture of each of his eight grinder sandwiches. Municipality C’s enforcement officer issues Bob, the owner, a citation for having an impermissible electronic changeable message sign. Can Municipality C enforce this restriction?

Answer 3. Yes. Municipality C’s regulation involves the physical characteristics of the sign rather than the sign’s content. Content-neutral regulations are those regulations that target the time, place, and manner of signs. Here, Municipality C’s regulation involves the way electronic changeable message signs display their content, rather than the content itself.  Thus, the regulation is content-neutral. Traffic safety is likely sufficient to justify this regulation. See Int’l Outdoor, Inc v City of Roseville, unpublished per curium opinion Michigan Court of Appeals, Docket No. 313153, issued May 1, 2014, WL 1778381, at *5 (upholding regulation of signs to avoid danger from sign collapse and to avoid traffic hazards from sign location and size). Bob’s electronic sign changes eight times in an eight-second period, therefore it is prohibited under Municipality C’s sign regulation.

CONCLUSION

If your municipality is in the process of adopting new sign regulations or has not reviewed its sign ordinance in recent years, we strongly recommend consulting with legal counsel. At a minimum, legal counsel can help you establish the general parameters of review, including: 1) recognizing content-based regulations; 2) removing content-based regulations; and 3) regulating signs in a content-neutral manner. As your municipality commences regulating signs, remember that on- and off-premises sign regulations are generally prohibited, as they target the content of the signs. Though, with the help of counsel, your municipality may still regulate on- and off-premises signs with carefully tailored, content-neutral sign regulations. Also, content-based regulations targeting commercial speech are treated as any other content-based regulation and likely will not survive judicial review. Finally, if you have to read the sign to know how the regulations apply, the regulation is content-based, subject to strict scrutiny, and presumptively invalid!
For more comprehensive issues related to regulating signs, legal counsel may draft content-neutral sign regulations for your community or advise on the application of certain regulations.  Please do not hesitate to contact Fahey Schultz Burzych Rhodes for any sign-related issues.

– Matthew J. Stokes and Jacob N. Witte

This publication is intended for educational purposes only. This communication highlights specific areas of law and is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.

Upcoming Webinars

Content-Based Regulations of Signage | Friday, September 24th, 12-1 pm

Signs are a form of expression protected by the Free Speech Clause of the First Amendment. Due to the constitutional protections that signs are afforded, many municipalities struggle with crafting and enforcing legal sign regulations. Compounding that difficulty, the United States Supreme Court recently issued a decision in Reed v Town of Gilbert, Ariz, which significantly impacted the lawfulness of municipal sign regulations. Recent developments from the Federal Sixth Circuit Court – the circuit in which Michigan is located – further jeopardize the legality of existing regulations, such as certain on-premises and off-premises designations and certain regulations of commercial speech.

Join attorneys Matthew Stokes and Jacob Witte as they discuss the latest legal developments in sign regulation and the practical steps to take in implementing enforceable sign regulations in your community, while preserving First Amendment rights.

The webinar will touch on:

• Distinguishing between content-based and content-neutral sign regulations
• Recent legal updates on sign regulations
• On- and off- premises regulations of signs
• Commercial sign regulations
• Defining and regulating signs in a content-neutral manner
• Simulated real world examples of content-based and content-neutral sign regulations
• Questions and answers from attendees

Click here to Register

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