U.S. Supreme Court considers on-/off-site distinction in sign regulations

Edward Sullivan and Carrie Richter
BridgeTower Media Newswires

In an effort to protect natural and scenic beauty along the newly created federal highway system, the Highway Beautification Act of 1965 called for control of outdoor advertising by creating a 660-foot billboard-free zone on federal highways with an on-premises exception for “signs ... advertising activities conducted on the property on which they are located.”

As required by the act, every state enacted legislation and entered into mandatory agreements with the federal government regarding effective control of billboards. In two-thirds of the states, laws implementing the act incorporate this same on/off premises distinction to regulate commercial billboards. Municipalities followed suit, adopting this distinction as a basis to balance private interests in expression with countervailing interests in safety and aesthetics that off-premise signs, particularly billboards, address.

For over 50 years, this approach has held sway. In 1984, the U.S. Supreme Court acknowledged the perceived “aesthetic harm” and “visual clutter” generating traffic-safety concerns resulting from billboards as a justification for their regulation. In an even earlier case, the court opined that “the radio can be turned off, but not so the billboard.”

This year, in the case City of Austin, Texas, v. Reagan National Advertising of Austin, Inc., the U.S. Supreme Court stands poised to consider whether the on-/off-premises sign regulatory distinction violates the First Amendment. In 1983, the city of Austin adopted a sign code that included a general ban of off-premises signs – those that advertise goods or activities not offered on the property on which the sign is located. The rule had the effect of prohibiting billboards. The code did include a provision allowing billboards in place at the time to remain and continue to display off-premises messages in perpetuity. However, any change to increase to the degree of nonconformity with the existing regulations was not allowed, so that the billboard could not be enlarged or receive additional faces.

In 2017, Reagan National Advertising filed permit applications seeking to install digital sign faces on existing, nonconforming billboards. The city denied the applications because they would “change the existing technology used to convey off-premises commercial messages,” allowing the rapid display of messages and thereby increasing the degree of nonconformity. Shortly thereafter, Lamar Advertising filed applications making the same request, and the city denied those as well.

The sign companies sued in state court, alleging that the on/off premises distinction was an unconstitutional content-based regulation of speech under the First Amendment. The city removed the case to federal court, which held that the on-/off-premises distinction was content neutral and thus constitutional.

The Fifth Circuit Court of Appeals reversed, holding that “to determine whether a sign is on-premises or off-premises, one must read the sign” in order to determine whether the advertisement relates to activities occurring on the site or not. Because the sign code applied with equal force to commercial speech and non-commercial speech, the court found that the regulation was subject to “strict scrutiny.” Under “strict scrutiny,” a test that is nearly always fatal to a local regulation, the city must show that off-premises billboards pose greater aesthetic damage than on-premises ones, so the off-premises distinction was struck down.

Arguing that there was divergence among the various circuit courts of appeal on this question, the city successfully secured U.S. Supreme Court review. The city’s argument is that there is a qualitative difference between reading a sign in order to know how to categorize it for regulatory purposes rather than to single out any subjects, topics or viewpoints for regulation.

In Reed v. Town of Gilbert (2015), the previous time the U.S. Supreme Court elected to wade into the thicket of sign regulation, the court invalidated a law that regulated non-commercial signs according to topic. Certain political signs and ideological signs were found to be unconstitutionally preferred over signs promoting nonprofit, charitable or religious events. The court concluded that, if the regulation is content-based, it is subject to strict scrutiny.

In a concurring opinion in Reed, Justice Alito, joined by Justices Kennedy and Sotomayer, set forth a list of examples of sign regulations that were not content-based, including “rules distinguishing between signs with fixed message and electronic signs” and “rules distinguishing between on-premises and off-premises signs.” Relying on long-standing precedent and the concurring opinion in Reed supporting this notion, the city argues that a regulation is not content-based if it simply requires reading the sign to evaluate the requisite “locational nexus” to determine if the sign is permitted.

However, the U.S. Supreme Court is markedly different now than it was in 2015. Justice Thomas, writing for the majority in Reed, explained that, under that municipality’s sign regulations, the “restrictions in the Sign Code that apply to any given sign (depended) entirely on the communicative content of the sign.” It may follow that the “communicative content of the sign” includes whether the sign is on- or off-premises. What mattered to Justice Thomas is that the regulations in Reed “censored or favored” specific ideas, particularly with respect to political, charitable or religious ideas. Unless the billboard is located on a religious property, it may not be allowed elsewhere to direct attendees to this use. Such a limitation may resonate with the strikingly more conservative court.

The city of Austin argues that disallowing sign regulation based on an on-/off-site distinction will “result in less speech, not more” because being left with “only broad and blunt tools” available to regulate signs, a more restrictive approach will be taken to allowing expressive speech.

This outcome should resonate with Oregonians. In 2006, the Oregon Supreme Court struck down, under Article I, Section 8 of the Oregon Constitution, that portion of the Oregon Motorist Information Act requiring a permit for a sign advertising activities not occurring on the property. As a result, local governments in Oregon have been left to regulate signs strictly based on their size, number, materials and location alone. The result has been a hardship for elected officials who would like to allow things like larger murals or banners but resist out of fear that allowing as much would encourage the proliferation of additional billboards or further legal challenges. Time will tell whether what has long been the law in Oregon will prevail in the rest of the country as well.


Edward Sullivan is a retired practitioner of land use and municipal law with more than 50 years of experience. Contact him at esulliva@gmail.com.
Carrie Richter is an attorney specializing in land use and municipal law at Bateman Seidel. Contact her at 503-972-9903 or crichter@batemanseidel.com.