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City billboard battle lands at U.S. Supreme Court today

Wednesday, November 10, 2021 by Jo Clifton

The long fight between Reagan National Advertising and the city of Austin is nearing the final field of battle –  the U.S. Supreme Court. Lawyers for each side are scheduled to make their arguments this morning over the city’s ban on off-premise digital billboards. While the city allows individual businesses, such as bars and restaurants, to have digital signs, it prohibits digital billboards for anything else.

In 2017, Reagan and Lamar Advantage Outdoor Advertising applied for a total of 84 city permits to convert their regular billboards to digital. The city denied their requests, noting it would be a violation of city code. Both companies sued the city, arguing that the distinction between on-premises and off-premises signs was a violation of the First Amendment.

Although the city won the first round in federal district court, Reagan and Lamar prevailed on appeal before the 5th U.S. Circuit Court of Appeals.

The 5th Circuit wrote in its ruling, “There are two substantive issues we must address to determine what standard of scrutiny applies to Austin’s sign code. First, whether the sign code’s distinction between on-premises and off-premises signs is content based, and second, whether the sign code is a regulation of commercial speech,” which would make it subject to a lower level of scrutiny. But the court did not reach the second question because it ruled that the city’s regulations are indeed “content-based regulation,” not subject to the commercial speech exception.

The distinction is likely to feature prominently at the Supreme Court today.

The city argued in its brief, “The city of Austin has enacted a general sign code to address the problems of aesthetic blight and traffic hazards posed by the proliferation of signs. For 38 years, the sign code has included a general ban on off premises signs – signs that advertise activities off site. The off-premises rule prohibits billboards, which advertise off-premises activities. The code nevertheless allows nonconforming signs that were lawful when installed to remain. But under the code, the degree of nonconformity of such signs cannot increase.” The billboard companies are operating billboards in Austin “that are grandfathered and thus permitted to continue to display off-premises messages. They sought to convert their billboards to digital signage – thus significantly increasing their aesthetic harm and capacity to distract drivers. Austin rejected the digitization requests as barred by its sign code because digitization would increase the degree of the billboards’ nonconformity.”

Although city officials must look at signs to determine whether they are on- or off-premises, the city argues that merely making that determination does not violate the First Amendment and the court should reject the billboard companies’ argument.

Lawyers for the two sign companies will argue, as they did at the Court of Appeals, that the city’s distinction between on-premises and off-premises signs amounts to a violation of the First Amendment. Arguments will revolve around a Supreme Court case called Reed v. Town of Gilbert.

Michael Dreeben of the Washington, D.C., law firm O’Melveny & Myers and Austin attorney Renea Hicks will be representing the city. Their arguments will be livestreamed beginning at 9 a.m. Reagan and Lamar are represented by B. Russell Horton of George Brothers Kincaid & Horton in Austin and Kannon K. Shanmugam of Paul, Weiss in Washington, D.C.

Beyond the city’s sign regulations, this case could have far-reaching consequences. According to an amicus brief filed by 41 different organizations, including Scenic Texas, Scenic America, various chambers of commerce, business groups and environmental organizations, and the Texas Sign Association, California Sign Association and International Sign Association, a win for Reagan will upend sign regulations throughout the country.

In summary, the groups said the distinction between on- and off-premise signs, which the city relies on to disallow digitizing billboards, “has been used for more than a century, most importantly in the federal Highway Beautification Act of 1965. Millions of businesses and communities have developed in reliance on this basic principle of land use law. This court has upheld the distinction at least 10 times. Two circuits have now held the distinction violates the First Amendment …. Three went the other way. Sign owners and communities across the country now face profound uncertainty and protracted, expensive disruption due to the split.”

It will be up to the Supreme Court now to decide which side has interpreted the law correctly. A ruling is expected sometime in 2022.

Lining up with the billboard companies is another impressive list of friends of the court. Those filing briefs on behalf of the billboard companies’ position include Americans for Prosperity Foundation, Pacific Legal Foundation, Washington Legal Foundation, Alliance Defending Freedom, Cato Institute, Institute for Justice, Out of Home Advertising Association of America, and Institute for Free Speech.

Those interested in hearing the case can listen in live on the Supreme Court website.

Photo made available through a Creative Commons license.

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