City of Austin, Texas v. Reagan Natl. Advertising of Austin, LLC – Loosening the First Amendment’s grip on governmental sign regulations

Sign law is a historically convoluted and ever-evolving legal topic. The court system is continuously issuing decisions expanding and restricting the scope of the government’s authority to regulate signage in an attempt to strike the right balance between First Amendment rights and important government interests furthered by sign regulations. U.S. Supreme Court and Sixth Circuit decisions handed down over the past decade have tipped the scales in favor of private free speech rights in recent years. The Supreme Court’s decision this year in Reagan Natl. Advertising, however, made strides towards restoring the free speech/sign regulation balance by walking back the Court’s restrictive holding in Reed v. Town of Gilbert and reinforcing the government’s authority to regulate billboards and other on/off-premises signs generally. 

Taking a short trip down sign-law memory lane to 2015, the Supreme Court greatly narrowed governmental authority to regulate signs when it decided Reed v. Town of Gilbert.[1]  In that case, the Court considered the constitutionality of a local sign code which prohibited the placement of any outdoor sign in the town without a government permit. The code provided a number of exemptions to the permitting requirements for certain types of signs, such as ideological, political and temporary directional signs. Because certain signs were subject to different regulations based on the message they conveyed, the Court held the town’s sign regulations were content based (rather than content neutral) regulation of speech and, therefore, subject to constitutional strict scrutiny. 

The Reed holding was a significant turning point in sign law. Some lower courts had previously deemed sign regulations content neutral as long as the government’s intent behind the regulations wasn’t to favor a certain viewpoint or type of message over another. The Reed Court conclusively held the government’s intent behind a regulatory scheme was irrelevant if regulations were content based on their face by setting different restrictions on signs based on their content. The distinction between content based and content neutral regulations on speech is an important one. Content neutral regulations need only comport with constitutional intermediate scrutiny (must be narrowly tailored to further a substantial governmental interest), whereas content based regulations are presumptively unconstitutional and must survive strict scrutiny (be narrowly tailored to further a compelling governmental interest) – a very high and difficult bar to meet. 

The Sixth Circuit Court of Appeals relied, and expanded upon, Reed in handing down its polarizing 2019 decision in Thomas v. Bright.[2]  The Bright opinion held different state permitting requirements for on-premises versus off-premises advertising signs constituted content based regulation of speech subject to strict scrutiny. The sign regulations defined an on-premises sign as one which advertised goods or services located on the same property on which the sign was located. In contrast, an off-premises sign advertised goods or services located on a different property. The Court reasoned, if the government must read the content of a sign to determine whether the sign advertises products or services available on or off-site, the government is effectively regulating the sign based on the message it conveys (a content based regulation of speech under Reed). 

The Supreme Court’s April 21, 2022, decision in City of Austin, Texas v. Reagan Natl. Advertising of Austin, LLC[3] abrogated the Bright Court’s holding and narrowed the unwieldy scope of the Reed decision. Similar to the sign regulations at issue in Bright, the Court was asked to decide the constitutionality of a city sign code that restricted construction of off-premises billboards, but did not set similar restrictions for on-premises billboards. The Fifth Circuit in the underlying case relied on Reed in holding the fact that the government had to read the message conveyed by a billboard to decide which set of regulations to apply meant the regulations were content-based and, therefore, subject to strict scrutiny. The Supreme Court reversed the Fifth Circuit’s decision and expressly rejected its interpretation of Reed: 

This rule, which holds that a regulation cannot be content neutral if it requires reading the sign at issue, is too extreme an interpretation of this Court’s precedent. Unlike the regulations at issue in Reed, the City’s off-premises distinction requires an examination of speech only in service of drawing neutral, location-based lines. It is agnostic as to content.  Thus, absent a content-based purpose or justification, the City’s distinction is content neutral and does not warrant the application of strict scrutiny.[4] 

The Court ultimately held the sign regulations to be content neutral and remanded the case back to the Fifth Circuit to analyze their constitutionality under intermediate scrutiny. 

The Reagan opinion will likely halt the quickly spiraling precedent in Ohio’s jurisdiction stemming from the Reed decision. The case refocuses the content-based-regulation analysis on whether a sign code provides greater restrictions for certain messages or viewpoints over others (or is crafted with the intent to favor some speech over others); rather than whether a sign must be read to identify applicable sign regulations. Trying to craft sign regulations that fully comply with the current state of sign case law at all times will likely always be a moving target, but, for now, the Reagan opinion rebalances the free speech/sign regulation scale a bit and brings sign law precedent in our jurisdiction back within more manageable parameters for local governments to apply.