Is the City of Austin’s sign code, which distinguishes between on- and off-premises signs, an unconstitutional content-based regulation of speech?
This case asks the Supreme Court to consider whether a city sign code’s differential treatment of on-premises and off-premises signs constitutes a content-based regulation of speech. The City of Austin’s sign code permits on-premises, but not off-premises, signs to be digitized, and bans the construction of new off-premises signs. Austin argues that this distinction is a lawful, content-neutral regulation. Reagan National Advertising of Texas counters that Austin’s on- versus off-premises distinction constitutes an unlawful, content-based restriction under Reed v. Town of Gilbert and the Court’s First Amendment jurisprudence. The outcome of this case has important implications for governments considering roadway safety measures and for entities who advertise through off-premises signs like billboards.
Questions as Framed for the Court by the Parties
Whether the Austin city code’s distinction between on-premises signs, which may be digitized, and off-premises signs, which may not, is a facially unconstitutional content-based regulation under Reed v. Town of Gilbert.
Respondents Reagan National Advertising of Austin, LLC. (“Reagan”) and Lamar Advantage Outdoor Company, L.P. (“Lamar”), are involved in the outdoor advertising business. Reagan National Advertising of Austin, Inc. v. City of Austin, at 699. In April and June 2017, Reagan applied for permits to convert their existing off-premises signs into digital signs. Id. The City of Austin (“Austin”) denied Reagan’s applications based on Section 25-10-152 of the Code of the City of Austin, Texas (“Code”), which prohibits the digitization of existing off-premises, non-digital signs, as this would “increase the degree of nonconformity with current regulations relating to off-premises signs.” Id. Similarly, in June 2017, Lamar applied for permits to convert their existing off-premises signs into digital signs. Id. Austin denied the applications for the same reasons it denied Reagan’s. Id.
Under the Code at the time, new on-premises signs could be built, but new off-premises signs could not. Id. at 700. An “off-premises” sign was defined as an advertising sign that is not located on the site for which that sign advertises. Id. at 699–700. Existing off-premises signs were considered “nonconforming signs,” meaning that the signs were installed lawfully, but failed to comply with current Code regulations. Id. at 700. Austin explained that the off-premises rule was intended to enhance public safety and preserve local aesthetics. Id. at 709.
Ultimately, Reagan sued Austin in state court, arguing that the Code violated the First Amendment due to “the distinction between the digitalization of on-premises and off-premises signs.” Id. at 699. Austin subsequently removed the suit to federal district court, and Lamar intervened as a plaintiff. Id. Reagan and Lamar asserted that the distinction between off-premises and on-premises signs was a content-based regulation of speech and, therefore, subject to strict scrutiny under Reed v. Town of Gilbert. Reagan National Advertising of Austin, Inc. v. City of Austin, at 675. The district court held that Austin’s differentiation between off-premises and on-premises signs was not subject to strict scrutiny under Reed. Id. at 683. Even though Austin’s regulations applied to noncommercial and commercial speech, the court held that intermediate scrutiny should be applied to the regulation. Id. All told, the district court rejected Reagan’s argument, and determined that the Code was facially neutral because the Code did not prohibit speech regarding particular viewpoints or messages. Id. at 681.
Before trial, Austin amended the Code. Reagan National Advertising of Austin, Inc. at 701. The district court found that, although Austin’s action may have remedied some constitutional problems with the Code, it did not solve Reagan’s problem because applications are controlled by the law in place at the time of filing. Id. Reagan argued if the regulation at the time of filing was unconstitutional, then Austin cannot use off-premises restrictions for applications regarding digital signs. Id. The district court did not rule on this narrower issue. Id.
On appeal, the Fifth Circuit Court of Appeals reversed the district court’s holding. Id. at 699. The Fifth Circuit held that, in Austin’s previous Code, the differentiation between on-premises and off-premises is a content-based regulation and unconstitutional under strict scrutiny. Id.
The United States Supreme Court granted certiorari on June 28, 2021. Brief for Petitioner at 2.
CONTENT-BASED REGULATION OF SPEECH UNDER REED
Petitioner Austin argues that its distinction between on- and off-premises signs is a content-neutral regulation. Brief for Petitioner, City of Austin, Texas (“Austin”) at 11. Austin claims that the Supreme Court’s decision in Reed v. Town of Gilbert does not require that the Supreme Court consider its sign code content based. Id. at 14. In Austin’s view, Reed defines content-based regulations of speech, which are subject to strict scrutiny review, as those that regulate only particular subject matter or viewpoints. Id. at 14, 21. Austin rejects the Court of Appeals’ formulation of Reed as imposing a “read the sign” test, where a sign is deemed content-based when one must read the sign to determine whether the regulation applies. Id. Instead, Austin asserts that Reed merely clarifies the analytical process of identifying a content-based law. Id. at 22. Austin contends that a “read the sign” test would be incompatible with Reed and existing First Amendment precedent. Id. at 25. In prior cases not overruled by Reed, Austin argues that the Supreme Court held that regulations were content-neutral even when their application required that officials read the sign’s contents. Id. at 26. Further, Austin claims that the “read the sign” test would be unworkable in practice because it would require the application of strict scrutiny review to many reasonable sign regulations. Id. at 32–33.
Interpreting Reed to define content-based regulation of speech as regulation of particular subject matters or viewpoints, Austin contends that its on- versus off-premises distinction is not content-based since it regulates all subjects and viewpoints equally. Id. at 21, 38. Austin emphasizes that Justice Alito, in his Reed concurrence, states that rules are not content-based when they distinguish between signs with fixed messages and electronic signs with changing messages, as well as between on-premises and off-premises signs. Id. at 22. Additionally, Austin points to lower-court decisions holding that on- versus off-premises distinctions were not content-based under Reed. Id. at 40. Austin notes that federal, state, and local governments have long imposed distinct restrictions on off-premises signs due to unique concerns posed by billboards. Id. at 14–15. Consequently, Austin finds the code is subject to intermediate scrutiny, rather than strict scrutiny, review. Id. at 11.
Respondent Reagan National Advertising of Austin, LLC (“Reagan”) counters that Austin’s ordinance is a content-based regulation. Brief for Respondent, Reagan National Advertising of Austin, LLC (“Reagan”) at 17. Reagan asserts that Austin wrongly limits Reed’s application when it argues that Reed restricts its definition of “content-based” to regulations singling out specific subjects or viewpoints. Id. at 23. Reagan points out that the Reed Court warned against conflating content neutrality and viewpoint neutrality and articulated that courts may find more subtle instances of content-based regulation. Id. Thus, Reagan contends strict scrutiny review would apply to regulations that do not single out specific subjects or viewpoints. Id. In response to Austin’s emphasis on Justice Alito’s Reed concurrence, Reagan notes that Justice Alito joined the Reed majority in full. Id. at 24–25. Reagan stresses that construing Justice Alito’s comments about on-premises versus off-premises sign distinctions in this way would immunize the regulations from strict scrutiny and contradict the majority opinion. Id. Also, Reagan asserts that prior cases are not inconsistent with its interpretation of the Reed majority. Id. at 28.
Further, Reagan argues that Austin’s sign code is content-based because its on-premises versus off-premises distinction applies based on the communicative content of the signs. Id. at 17. Reagan views the Code as distinguishing based on “function or purpose.” Id. at 19. Off-premises signs’ functions are to advertise businesses and direct people to their premises at a different location, and whether a sign qualifies as off-premises hinges on the communicative content of the sign. Id. Reagan argues that Austin’s distinction will lead to prohibitions on certain messages from certain speakers, like those who lack the ability to host on-premises signs. Id. at 21. Additionally, Reagan warns that Austin’s code may threaten non-commercial speech: banning the digitization of new off-premises signs restricts the number of messages that can appear on each off-premises sign, and, since on-site speech is more likely to be commercial, the code leaves non-commercial entities with fewer outlets. Id. at 22.
APPLICATION OF STRICT SCRUTINY AND INTERMEDIATE SCRUTINY STANDARDS
Austin asserts that the regulation must survive intermediate scrutiny, rather than strict scrutiny, review because its ordinance is not content-based. Brief for Petitioner at 38. A regulation survives intermediate scrutiny review and is valid if it is “narrowly tailored to serve a significant governmental interest” and “leaves open ample alternative channels for communication of information.” Id. at 38. To be narrowly tailored, the regulation cannot be substantially broader than necessary to achieve the government’s interest. Id. at 45. Austin argues its on- versus off-premises distinction is valid under intermediate scrutiny. Id. at 11. Austin maintains that the government has a significant interest in regulating the proliferation of new off-premises signs to improve traffic safety and aesthetic interests, noting that the Supreme Court has found these interests to be significant in the past. Id. at 43–44. Austin further asserts that the ordinance is narrowly tailored because it is not substantially broader than necessary to achieve the government’s goals of improving traffic safety and aesthetics. Id. at 45. Finally, Austin opines that ample alternative channels for communication exist because businesses and advertisers can still use on-premises signs. Id. at 47.
By contrast, Reagan asserts that the ordinance is content-based and therefore subject to strict scrutiny review. Brief for Respondent at 26. A regulation is valid under strict scrutiny review when it is “narrowly tailored” to “further a compelling governmental interest.” Id. at 34–35. Ultimately, though, Reagan contends that Austin’s ordinance would fail under strict scrutiny or intermediate scrutiny review. Id. at 34. While Reagan concedes that Austin’s public safety interest may be compelling, Reagan argues that the ordinance is not narrowly tailored to further Austin’s interest in safety. Id. at 34–35. Reagan finds that Austin has not presented evidence that differential treatment between digitized on-premises and off-premises signs furthers the government’s stated interests, nor has Austin presented evidence that off-premises signs are distracting. Id. at 35–36. Reagan points out that Austin undermines its credibility by regulating only off-premises digital signs and not potentially distracting on-premises digital signs in its sign code. Id. at 36. According to Reagan, Austin also has not shown that its ban on new digitized signs is narrowly tailored to serve its safety and aesthetic interests. Id. at 44. Because the ordinance focuses only on off-premises signs, Reagan maintains that the ordinance is underinclusive and not narrowly tailored. Id. For the same reasons, Reagan argues that the ordinance would also fail under if the Court subjected it to intermediate scrutiny. Id. at 42. Intermediate scrutiny requires that Austin show that its code advances its governmental interest in a “direct and material way” through evidence extending beyond “mere speculation or conjecture,” and Reagan maintains that Austin fails to meet this burden. Id. at 43.
Twenty-one states and the District of Columbia (collectively, “States”), in support of Austin, assert that state and local governments prioritize safety when promulgating billboard regulations. Brief of Amici Curiae Florida et al., in Support of Petitioner at 6. The States argue that although signs are protected by the First Amendment, they detract from drivers’ focus on the road and create issues that are properly regulated by states’ police powers. Id. The States contend that off-premises restrictions allow state and local governments to decrease the number of signs along highways without discriminating against particular views, activities, or industries. Id. at 8. The National League of Cities and other organizations (collectively, “NLC”), in support of Austin, assert that digital billboards are a significant risk to the safety of drivers. Brief of Amici Curiae of The National League of Cities et al., in Support of Petitioner at 19. The NLC argues that digital billboards are more distracting than unchanging billboards. Id. Next, The NLC contends that shifting digital billboards use rapid lights that cause shifting eye movements and distract drivers’ attention from the road. Id. at 21. Moreover, the NLC highlights a 2012 study that shows drivers tend to look more at digital billboards than other billboards or signs. Id. at 22. The NLC also cites collision studies to assert that there is a correlation between digital billboards and collisions. Id.
By contrast, the Out of Home Advertising Association of America, Inc. and other organizations (collectively, “OAAA”), in support of Reagan, counter that digital billboards do not pose a safety risk to drivers. Brief of Amici Curiae Out of Home Advertising Association of America, Inc. et al., in Support of Respondents at 13. The OAAA claims that studies show no connection between traffic accidents and digital billboards. Id. at 13-14. The OAAA contends that, according to one study, billboards are “safety-neutral” and that drivers on average glance at digital billboards for less than one second. Id. at 13. Moreover, the Alliance Defending Freedom (ADF) and the Islam and Religious Freedom Action Team of the Religious Freedom Institute (RFI) (collectively, “ADF”), also in support of Reagan, argue that billboards can be regulated to promote safety without content-based restrictions. Brief of Amici Curiae Alliance Defending Freedom and the Islam and Religious Freedom Action Team of the Religious Freedom Institute, in Support of Respondents at 20. The ADF contends that billboards can be regulated based on their size to promote safety. Id. The ADF suggests that Austin could also have a regulation for signs a particular distance from a building. Id. The ADF argues that another content-neutral regulation is to regulate outdoor signs with paid advertising. Id.
IMPACT ON FREE SPEECH
The International Sign Association (ISA), in support of Austin, counters that abolishing the off-premises distinction for digital billboards will deter protected speech. Brief of Amici Curiae International Sign Association, in Support of Petitioner at 8. The ISA argues that eliminating on-premises/off-premises distinctions will lead to an unruly amplification of digital billboards, thus causing state and local governments to impose restrictions on both on-premises and off-premises billboards. Id. The ISA explains that governments will have to choose between allowing too many signs or restricting too many signs. Id. The ISA contends that this will burden companies with on-premises billboards because they will have to choose between litigating the regulations or complying. Id.
The Cato Institute, in support of Reagan, contends that Austin’s sign regulation threatens free speech by precluding speakers from being anonymous. Brief of Amici Curiae Cato Institute, in Support of Respondents at 10–11. The Cato Institute argues that some groups might be hesitant to publicly showcase their business location because they fear that it may increase harassment and vandalism at their place of business. Id. The Cato Institute explains that under the current sign regulation in Austin, digital billboards signal that the business or its activities occur at that location. Id. at 11. The Cato Institute urges that the requirement for digital signs to be located on-premises increases the risk of controversial organizations experiencing angry outbursts from passersby, thereby deterring them from engaging in free speech. Id.
- Donald Morgan, Supreme Court Agrees to Hear Landmark Billboard Case, Taft (June 30, 2021).
- Jack Rodgers, Supreme Court Takes Up Battle Over Texas Billboard Rules, Courthouse News Service (June 28, 2021).
- Debra Cassens Weiss, Supreme Court Will Decide Whether Ban on Some Digital Billboards Violates First Amendment, ABA Journal (June 28, 2021).