Outdoor Advertising, the First Amendment, and Free Speech: The Supreme Court Refines the Case of Reed v. Gilbert by its Decision in Austin v. Reagan – Update from McGregor Legere & Stevens, PC

Written by Gregor I. McGregor, Esq.

The City of Austin, Texas regulates signs that advertise things not located on the same premises as the sign, and signs directing readers to offsite locations, all known as “off-premises signs.” The City’s sign code prohibited construction of new off-premises signs, but gave existing signs vested rights and treated on-premises signs liberally.

An outdoor advertising company filed suit alleging the prohibition against digitizing off-premises signs, but not on-premises signs, violated the First Amendment’s Free Speech Clause. The federal courts reviewed the City’s ordinance to see if it was content neutral under the seminal sign case of Reed v. Town of Gilbert, 576 U. S. 155 (2015). 

The District Court ruled for the City, but the Court of Appeals found the on-/off-premises distinction to be facially content based because, as the Court said, a government official had to read a sign’s message to determine whether the sign was off-premises. On this logic, applying the strict scrutiny test to sign rules that are not content neutral, the City lost in the Court of Appeals.

The U.S Supreme Court reversed, holding the City’s on-/off-premises distinction is facially content neutral, so it does not violate the Free Speech Clause. 

The Court applied and explained Reed in a way that ameliorates (some say undercuts) the strictness of that sweeping and controversial decision. Reed had caused much consternation as apparently applying to all regulation of speech, not just signs for advertising, political, informational, directional and other purposes, and virtually banning whatever remotely controls speech or expression. 

You could say that the Austin decision brings some order to the chaos left in the wake of the Reed decision concerning regulation of signs, and even speech, nationwide. 

The case is City of Austin, Texas v. Reagan National Advertising of Austin, LLC, 596 US ___ (April 21, 2022). Justice Sotomayer authored the decision. Not surprisingly, Justice Thomas, who authored the Reed decision, filed a dissent. Austin does not so much rebuke Reed, though, as a refine what it meant, discuss how to apply it, and dampen the doubts thrown at every form of sign regulations. 

In Austin, the Supreme Court disapproved the misconceived “reading the sign” logic: “The Court of Appeals’ interpretation of Reed—to mean that a regulation cannot be content neutral if its application requires reading the sign at issue—is too extreme an interpretation of this Court’s precedent.” 

Specifically, Reed had ruled that a regulation of speech is content based if it targets speech based on its communicative content, meaning that it “applies to particular speech because of the topic discussed or the idea or message expressed.” 576 U. S., at 163. So far, so good.  

Reed moreover had lumped into content-based sign rule regulating speech directly for its particular subject matter, as well as more subtly by its function or purpose. 576 U. S., at 163. Commentators and lower courts since Reed had seen this as making content-based any regulation of speech and expression by subject matter, function or purpose. 

Indeed, the Court of Appeals here had taken the “subject-function-purpose” wording of Reed as signaling that if one has to read the sign (or hear the expression) to know what is its subject, function or purpose, it triggers strict scrutiny and makes the sign vulnerable to attack under the First Amendment Free Speech Clause.

The Supreme Court in Austin sweeps away that concern, stating with clarity that the “subject-function-purpose” test “does not mean that any classification that considers function or purpose is always content based.”

More particularly, in Reed, a comprehensive and detailed sign code of Gilbert, Arizona applied distinct size, placement, and time restrictions to 23 different categories of signs, giving more favorable treatment to some categories (such as ideological signs or political signs) and less favorable treatment to others (such as temporary directional signs relating to religious events, educational events, or other similar events). 

In Austin, in contrast, the Supreme Court found “the City’s sign ordinances here do not single out any topic or subject matter for differential treatment. A sign’s message matters only to the extent that it informs the sign’s relative location. Thus, the City’s on-/off-premises distinction is more like ordinary time, place, or manner restrictions, which do not require the application of strict scrutiny.”

The Court pointed out that precedents and doctrines in this field have consistently recognized that restrictions on speech may require some evaluation of the speech and nonetheless remain content neutral. Examples are valid regulation of solicitation, where speech must be read or heard to determine whether it entails solicitation, and regulation of off-premise signs, where they must be read to know if they are on-premises or off-premises. 

Thus, even while citing (and not overturning) Reed, the Supreme Court in Austin told us: “Underlying these cases and others is a rejection of the view that any examination of speech or expression inherently triggers heightened First Amendment concern. Rather, content-based regulations are those that discriminate based on ‘the topic discussed or the idea or message expressed.’ Reed, 576 U. S., at 171. Pp. 8–10.” 

As is common, when the Supreme Court announces a fresh view of a doctrine, or different take on a leading case, there is a remand to the lower courts to apply the new view to the facts of the case. Here the Court remanded the case to the lower courts for what it termed the rest of the inquiry whether the sign ordinance violates the First Amendment. 

Much is specifically left to do on remand. The Supreme Court indicated that its determination that the City’s on-/off-premises distinction is facially content neutral does not end the First Amendment inquiry. Evidence that an impermissible purpose or justification underpins a facially content-neutral restriction may mean that the restriction is nevertheless content based. Moreover, to survive intermediate scrutiny, a restriction on speech or expression must be “narrowly tailored to serve a significant governmental interest.” 

The lessons of Reed as moderated by Austin seem to be these: 

–ordinary time, place and manner restrictions on signs, and on Free Speech more broadly, do not trigger strict scrutiny, just intermediate scrutiny; 

–more sign rules will be found to be facially content-neutral; typical on-/off- premises signs distinctions likely will be upheld; 

–the classic prohibitions of off-premise advertising signs will remain valid, as will the typical limits on digitized, moving and changing signs; 

–federal, state, county and municipal rules about most informational and directional signs, permanent or temporary (like event signs) remain safe; 

–an underlying impermissible purpose or justification, however, will change the nature of the restriction, level of scrutiny, and likely result in court;

–therefore, beware inappropriate motives and unstated reasons for targeting specific advertisers, products, messages, property owners, land uses, political positions, or religious faiths; and

–regardless, be sure that any restrictions that are imposed on signs, or  on any speech or expression, are narrowly directing to accomplish a significant government interest.