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Does your municipality’s Zoning Ordinance regulate off- and on-premises signs? The constitutionality of these types of signs has been an open question since 2015 when the United States Supreme Court issued a decision regarding content-based restrictions on signage in Reed v Town of Gilbert. The Supreme Court recently clarified the scope of its holding in Reed in its recently released decision in City of Austin, Texas v Reagan Natl Adver of Austin, LLC. This e-letter will explore the Supreme Court’s holding in the City of Austin case and provide key takeaways for municipalities to consider in reviewing their current sign regulations or drafting and adopting new sign regulations

Introduction

For purposes of this e-letter, it is important to understand that sign regulations can raise unique First Amendment implications. The First Amendment prohibits the enactment of laws “abridging the freedom of speech.” U.S. Const., Amdt. 1. Under the First Amendment, a municipality cannot restrict expression because of its content. When a municipality enacts laws related to signs, it must be careful not to regulate signs based on their content. If a regulation is “content-based,” a reviewing court will apply a higher scrutiny, which is difficult to meet and often results in such regulations being impermissible. This higher level of scrutiny is called “strict scrutiny.” Courts also apply a slightly more forgiving level of scrutiny, identified as “intermediate scrutiny,” for content-neutral regulations.

Municipalities want to design regulations to be content-neutral since a court is more likely to hold a regulation invalid if it is content-based as opposed to content-neutral. Sign regulations subject to “intermediate scrutiny” often survive the judicial review process.

Prior to the Supreme Court’s recent decision, one area of confusion that remained was how municipalities should handle off- and on-premises signs. An off-premises sign generally refers to a sign that pertains to something not related to, located on or available at the premises where the sign is located, and an on-premises sign is the opposite. It was unclear whether off- and on-premises sign regulations were considered content-based or content-neutral. This was a key issue as the potential to defend off- and on-premises sign regulations if they were deemed content-based was unlikely. The Supreme Court’s recent ruling in City of Austin, Texas v Reagan Natl Adver of Austin, LLC makes clear that such regulations can survive judicial review.

Background– Reed v Town of Gilbert

We have discussed Reed v Town of Gilbert, Ariz, 576 US 155 (2015) (referred to in this e-letter as “Reed”) in previous e-letters concerning sign regulations. The Supreme Court’s recent decision modifies Reed. In Reed, a church attempted to advertise the time and location of their church services by placing temporary signs throughout the Town of Gilbert. The town had enacted a sign code that prohibited the display of outdoor signs generally, except for certain categories of signs. One exempted category was “Temporary Directional Signs Relating to a Qualifying Event.” The code also exempted “Political Signs” and “Ideological Signs.” These signs were all treated differently under the code.

The Reed Court found that the town’s code was content-based on its face. With regard to temporary directional signs specifically, the Reed Court indicated that such signs were defined on the basis of whether they conveyed a message of directing the public to a certain place or event. A question as to whether the town’s code could apply could not be answered without “depending entirely on the communicative content of the sign.”

The Reed Court ultimately held that “a speech regulation is content-based if the law applies to particular speech because of the topic discussed or the idea or message expressed.” The Reed Court explained this holding as follows:

“[T]he Code singles out signs bearing a particular message: the time and location of a specific event. This type of ordinance may seem like a perfectly rational way to regulate signs, but a clear and firm rule governing content neutrality is an essential means of protecting the freedom of speech, even if laws that might seem entirely reasonable will sometimes be struck down because of their content-based nature.” (emphasis added).

However, Reed analyzed Temporary Directional Signs under a statutory framework that contained a general prohibition on outdoor signs and that created a list of exemptions thereto (such as Political Signs, Ideological Signs, and Temporary Directional Signs). That statutory framework, on its face, was content-based because it “single[d] out specific subject matter for differential treatment, even if it d[id] not target viewpoints within that subject matter. Ideological messages are given more favorable treatment than messages concerning a political candidate, which are themselves given more favorable treatment than messages announcing an assembly of like-minded individuals.”

Because the regulations were content-based on their face, the Reed Court reviewed the regulations under strict scrutiny. The regulations were ultimately held invalid and unconstitutional under that standard of review.

Reed did not explicitly address off- and on-premises sign regulations, but its holding did cast doubt as to how municipalities could regulate them. Reed was subsequently interpreted by some courts to mean that if someone has to read the sign to understand whether the regulation applies, the regulation is content-based. The most conservative approach in light of Reed (and its interpretations) was to regulate off- and on-premises signs based on their location (e.g., 500 ft from a store) or through the speaker (e.g., a sign installed by the individual or business occupying the premises where the sign is located).

City of Austin v Reagan National Advertising of Austin

The Supreme Court’s most recent announcement on sign regulations is in City of Austin, Texas v Reagan Natl Adver of Austin, LLC, 142 S Ct 1464, 1466 (2022) (referred to in this e-letter as “Reagan”). In this case, the City of Austin chose to regulate its off-premises signs by defining them to mean:

“[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.”

The City’s sign code prohibited the construction of new off-premises signs but allowed grandfathered off-premises signs to remain as nonconforming signs that could not be altered in ways that would increase their nonconformity. The City’s code had no similar restrictions for on-premises signs.

The question before the Supreme Court in Reagan was whether the City’s distinction between off-premises signs and on-premises signs was content-based in light of its holding in Reed. It held that Reed cannot be interpreted to mean “that if a reader must ask: ‘who is the speaker and what is the speaker saying’ to apply a regulation, then the regulation is automatically content based.” The Reagan Court considered this interpretation “too extreme.”

The Court therefore rejected the assertion that the City’s off-premises sign regulations were content-based simply because someone would have to read the sign to apply the regulation. Instead, the Reagan Court indicated that the “Reed Court confronted a very different regulatory scheme.” Unlike in Reed, off-premises signs and on-premises signs were not listed as exceptions to a prohibited category of signs (such as outdoor signs). The Reagan Court instead limited its review only to the City’s definition of an off-premises sign, which did not contain subparts or exceptions that treated off-premises signs differently based on the content of the off-premises sign.

Unlike in Reed, under the City’s statutory scheme, all off-premises signs, no matter the content, were treated the same. There was no discrimination among viewpoints or prohibition on any certain topic on the face of the definition of an off-premises sign. For example, the City would not deny a sign because it contained an advertisement for a car as opposed to a bag of chips. Rather, “a given sign is treated differently based solely on whether it is located on the same premises as the thing being discussed or not.” Unlike in Reed where enforcement depended entirely on the content of the sign, enforcement of the City’s provisions required “reading a billboard to determine whether it directs readers to the property on which it stands or to some other, offsite location.” The Reagan Court also relies on other past precedents and the “Nation’s history of regulating off-premise signs” to support its holding.

The Reagan Court considers this a “common sense” approach. If the regulation does not, on its face, single out specific subject matter for differential treatment, the regulation is likely content-neutral. However, “if there is evidence that an impermissible purpose or justification underpins a facially content-neutral restriction, for instance, that restriction may be content based.”

Key Takeaways:

•  It is clear that a regulation is not content-based simply because the sign must be read to know if a regulation applies. There is more needed to determine whether a regulation is content-based.
•  The scheme of a Zoning Ordinance could affect whether a certain regulation is or is not content-based.

• • If your regulations create a category of signs (e.g., temporary signs) and the regulations apply differently based on the content of the sign (e.g. garage sale signs are treated differently than lost pet signs), the regulations are likely content-based under Reed.
  • If the regulation is location based and content-agnostic, i.e., it does not single out specific subject matter for differential treatment, it may be content-neutral under Reagan.

• Proof of historical regulation of categories of speech may bolster an argument that a regulation concerning that category is content-neutral.
• Reagan may provide more support to municipalities that have their regulations challenged as content-based, but it is an open question as to how the Courts will apply Reagan moving forward.
• Even if a regulation is not content-based, the regulation still must survive intermediate scrutiny by showing that the regulation is “narrowly tailored to serve a significant governmental interest.”

To be narrowly tailored, a regulation must not “burden substantially more speech than is necessary to further the government’s legitimate interests.” A regulation does not need to be the least restrictive means of achieving the governmental interest, but the burden on speech cannot be so great that the regulation fails to substantially advance the goal of the regulation.

If your municipality is in the process of adopting new sign regulations or has not reviewed its sign ordinance in recent years, we recommend consulting with legal counsel.

The Court’s holding in Reagan has provided some clarity only in so much that it is now clear that on- and off-premises sign regulations are not presumptively content-based. Further, a regulation may be content-neutral even if someone has to read a sign to know if the regulation applies.

However, the terms utilized to define what constitutes an on and off-premises sign or the ordinance’s framework may still result in a content-based regulation. Municipalities will want to carefully tailor their sign regulations so as to avoid any unintended consequences.

Please do not hesitate to contact us for any sign-related issues.

By:  Kendall O’Connor and Jacob 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.