International Outdoor v City of Troy (6th Cir. September 4, 2020)

My last entry had to do with billboards, dealing with an interesting case from the Fifth Circuit Court of Appeals.  in this case is similar. I should mention also that both cases were brought to my attention by Sam Edwards, who has been really scouring the advance sheets for new and interesting cases.

International Outdoor v City of Troy, decided by the Sixth Circuit Court of Appeals, issued just yesterday, September 4, 2020, parallels the case we reviewed in the last entry. In this case, the trial court dismissed the a claim of prior restraint made by the sign company against the city because the claim had been mooted out as a result of some changes made to the sign regulations during the pendency of the litigation. I will not discuss the mootness issues although they are certainly interesting.

More interesting however in the context of this blog is the impact of Reed v Town of Gilbert, 576 US 155 (2015). I won’t get into the factual allegations beyond saying that the sign company alleged in particular that some signs were exempted from having to apply for a permit at all (including flags, temporary signs, real estate signs, garage, estate or yard sale signs, noncommercial and political signs, holiday or seasonal signs and construction signs were all included). In a footnote, the Sixth Circuit indicated that taking the complaint in the light most favorable to the plaintiff, the sign company alleged facts showing that it incurred costs that other applicants were exempt from because its proposed signs were not afforded the same favored treatment under the ordinance. From the standpoint of the Sixth Circuit, this conferred standing.

As I mentioned in the previous entry, because the Reed court concluded that “strict scrutiny applies either when a law is content based on its face or when the purpose and justification for the law are content based, a court must evaluate each question before concludes that the law is content neutral and thus subject to a lower level of scrutiny.” Reed at 166. The Sixth Circuit concluded that intermediate scrutiny generally applicable to commercial speech applies only to a speech regulation that is content neutral on its face. That is, a regulation of commercial speech that is not content neutral is still subject to strict scrutiny under Reed.

Much as the Fifth Circuit did in the Reagan National Advertising case discussed in the last entry, the Sixth Circuit then turned to look at several other circuit court decisions many of which concluded that the intermediate standard applicable to commercial speech still applied. See Central Hudson v Public Service Commission, 447 US 557 (1980). The Sixth Circuit distinguished many of those cases, and also pointed to Barr v American Association of Political Consultants, 140 S Ct 2335 (2020) applied strict scrutiny to a content-based restriction on robo calls to cell phones. In addition, the Sixth Circuit pointed out its own decision in Wagoner v City of Garfield Heights, 577 F. Appx 488 (6th Cir. 2014), cert granted and judgment vacated, 135 S Ct 2888 (2015). The Sixth Circuit had applied a practical test for assessing content neutrality concluding that in the Wagoner case, the city had satisfied the intermediate scrutiny applicable to such regulations. The Supreme Court did not agree, reversed, and remanded for consideration of Reed. This reversal by the Supreme Court had the act of solidifying the Sixth Circuit's conclusion that in the absence of content neutrality, the strict scrutiny test must apply.

In addition, the court also referenced its decision in Thomas v Bright, 937 F. 3d 721 (6th Cir. 2019), also discussed in the prior post, in which the owner of billboards in Tennessee challenged the on-premise restrictions found in the Tennessee Billboard Act. The Sixth Circuit invalidated the act as being contrary to Reed.

While the court acknowledged that both Wagoner and Thomas concerned non-commercial speech, "the regulations in both cases were deemed unconstitutional due to their content-based nature: they required an inspection of the message to determine whether it was political, as in Wagoner, or related to any on-premises activity, as in Thomas, in order to determine the sign’s permissibility under the regulations.”

In this case, the District Court concluded that the speech at issue, erecting advertising billboards, was commercial speech and therefore not subject to strict scrutiny. Furthermore the District Court held that the ordinance provisions satisfied intermediate scrutiny under Central Hudson.

But the Sixth Circuit reversed because it felt that the district court applied the wrong standard. The Sign Ordinance imposed a content-based restriction by exempting certain types of messages from the permitting requirements, such as flags and temporary signs and the other signs I’ve listed above. Thus, the ordinance regulated both commercial and non-commercial speech but treated them differently, requiring the city to consider the content of the message before deciding which treatment should be afforded. For content-based restrictions on speech, strict scrutiny applies, not intermediate scrutiny.

Accordingly, the Sixth Circuit reversed the decision of the District Court dismissing the plaintiff’s claims against the content-based restrictions found in the sign regulations, and remanded for consideration of the Reed analysis.

Okay, then the question here is how often do you see such distinctions between flags, real estate signs construction signs, yard sale signs, holiday signs political signs where such signs are either required to obtain no permit, or have some lesser burden in obtaining permission. Fairly frequently it seems to me. Under this Sixth Circuit case, it seems that such differentiation may be entirely unlawful.

The Tennessee Freedom of Speech Act, Tenn. Code Ann. §2-7-143

The Tennessee Freedom of Speech Act, Tenn. Code Ann. § 2-7-143, was passed by the Tennessee General Assembly during its last session. The act provides as follows:

This state, a local government, or any other political subdivision of this state:

(A) Shall not regulate the shape or quantity of political or campaign posters or signs placed on private property that is located more than one hundred feet (100') from a polling place if the signs or posters are placed on the property by the owner of the property or any lawful resident of a residence on the property;

(B) May prohibit, notwithstanding subdivision (b)(1)(A), any political or campaign poster or sign covered by this section from exceeding:

(i) For commercial property, thirty-two square feet (32 sq. ft.) in size; and

(ii) For residential property, sixteen square feet (16 sq. ft.) in size; and

(C) Notwithstanding subdivision (b)(1)(A), may adopt reasonable restrictions limiting the number of political campaign signs or posters that may be placed on property; provided, that such restrictions authorize an owner or resident to place at least one (1) poster or sign on the property per candidate, issue, or subject . . .

There is however, a significant constitutional issue: how to determine whether a particular sign is a "political or campaign poster or sign" without reading the sign? And if you have to read the sign in order to determine whether it is "political," isn't the regulation content-based in violation of Reed v Town of Gilbert, 135 S.Ct. 2218 (2015)? In fact, in Reed, the issue was whether or not different regulations for political, religious, and other signs amounted to content-based regulation leading to strict scrutiny under the First Amendment, which in turn led the US Supreme Court to conclude that the regulations were unconstitutional.

Is this just not the same thing, only instead of being enacted at the local level, enacted by the state legislature? In light of the majority opinion in Reed, how can this piece of legislation possibly be considered constitutional?

In my opinion, it frankly cannot. We have in fact, a case out of the Western District here in Tennessee, invalidating the state Billboard act on similar grounds. Thomas v Schroer, 2017 WL 1208672. 

I guess perhaps possibly one way of avoiding difficulties might be for all local governments to enact a zoning regulation which allows temporary non-commercial signs on all properties not to exceed the sizes set forth in the statute. In that way, so long as the sign is temporary, the local government would not need to decide what kind of assign it actually is.

Perhaps another way to approach the same problem would have been to allow any temporary sign, 60 days before an election, to be placed on commercial and residential properties with the signs to be removed within a week after the election.

Another potential problem, or signs on industrial properties permitted without any regulation whatsoever under the terms of the statute? While signage on commercial and residential properties are limited to 32 square feet and 16 square feet respectively, there is no mention of an ability by the local government to regulate signs on industrial property.

I haven't heard of any litigation concerning this provision, but surely it's just a matter of time.

Tennessee Billboard Act declared unconstitutional

In an extremely interesting billboard case recently decided by the US District Court for the Western District of Tennessee, the Tennessee Billboard Regulation and Control Act of 1972, Tenn. Code Ann. §54-21-101 et seq., was held unconstitutional. Actually, the Billboard Act certainly seemed to be a fit candidate for constitutional scrutiny, particularly after the recent US Supreme Court decision in Reed v Town of Gilbert, 135 S Ct 2218 (2015). I had occasion several years ago to get involved in a billboard case and was frankly stunned to learn that the Sixth Circuit had upheld the on/off premises distinction in the context of noncommercial speech. So for example, if the Billboard owner wanted to announce his or her support for American veterans, for example, unless the property on which the billboard was established operated some veterans relief organization, it was not an on premise sign and prohibited. Thus, noncommercial speech faced a significantly greater burden than commercial speech. Thomas v Schroer, 2017 WL 1208672.

While this state of affairs was difficult to understand before the Reed decision in 2015, once that decision was handed down, it became clear that any regulation which required categorization of a sign by reading the sign was subject to strict scrutiny under the First Amendment, and as a result, was likely to be determined to be unconstitutional. Nevertheless, the state regulations concerning billboards here in Tennessee were never changed.

In this case, Thomas displayed an image of the American flag, and at different times content referencing the holiday season along with the American flag. Because he never obtained a permit for the sign, the state sought to have the sign removed: it did not in fact comply with the state regulations anyway. The court applied strict scrutiny because the regulations had an impact on the plaintiffs noncommercial speech. In effect, if the sign is deemed to be on premise, then it need not comply with the locational requirements otherwise established. But since its difficult to establish noncommercial speech as on premise, the rule actually discriminates against noncommercial speech, which should be given more favorable treatment, not less.

Having concluded that the Billboard Act was subject to survive strict scrutiny, the court then looked at the reasons advanced by the state as compelling in order to justify the regulations. These reasons included safety, recreational value of public travel, tourism, economic development, scenic beauty and the investment in public highways. Perhaps understandably, the District Court found none of these as being a compelling state interest. Furthermore, the Billboard Act was not narrowly tailored to advance the state’s compelling interest, even if it had any.

The court also concluded that the act was both overinclusive and underinclusive. It is overinclusive because the Billboard Act is content based inasmuch as the application of the exemptions hinges on the content of the sign. While the state wants to limit highly distracting signs which might have an impact on traffic safety, the net effect of the state act leaves an off premise sign of enormous size regulated in the same manner as a small on premise sign.

The court also concluded that the act was underinclusive in that there is no rationale as to why signs displaying non-premise related content would mar the aesthetics in such a way as to merit arbitrary restrictions such as permits and tags. In essence, the act would permit large ostentatious on premise signs closely placed together while restricting small, muted off premise signs. As the court indicated, “aesthetics are not measured by how relevant the signs content is to the on premise activity.”

This is an extremely interesting case which almost certainly will go on up to the Sixth Circuit. It will be interesting to see what happens on appeal.