Supreme Court wrestles with limits on digital billboard ads, free speech

The Supreme Court on Wednesday wrestled with where to draw the line between a town’s right to restrict garish billboard ads and constitutional free speech protections.

The justices posed difficult questions to both the lawyers supporting and arguing against an Austin, Texas, regulation that permits businesses to use digital billboards on their grounds but bans their use for off-site advertising.

The narrow question before the justices was whether the Austin regulation, or “sign code,” is triggered by the content of the speech in the advertisement, which would place the regulation in a category that draws the most stringent judicial scrutiny.

The case stems from 2017 when would-be advertisers, who sought to upgrade dozens of old billboards with digital displays, were denied permits because the signs were located off-premises from their business.

Michael Dreeben, a former deputy U.S. solicitor general, argued the case for the city of Austin, which lost in the lower appeals court. The Department of Justice (DOJ) has also joined the case before the Supreme Court as an amicus in support of Austin.

Dreeben faced tough questions when he argued Wednesday that the city’s ban of off-premise digital signs is content-neutral and thus should not raise the most serious constitutional alarms.

“The off-premises rule is an empty vessel that applies to all subjects and topics,” Dreeban said. “It turns on the relationship of a sign to its location, not the content of its message.”

Justice Clarence Thomas pushed back on that assertion by asking whether a hypothetical hamburger restaurant would be barred from erecting a digital billboard advertising another restaurant located off-premises.

“[If the sign read] ‘Our hamburgers are great, but if you want great barbecue, go to Franklin’s’ …  that sign would not be acceptable under this ordinance, right?” Thomas asked. “But if I were at Franklin’s, I could say ‘Eat at Franklins’?”

The justice continued: “I don’t understand how that’s not content-based if I could say ‘Eat at Franklin’s’ if I’m at Franklin’s, but I can’t say it if I’m at McDonald’s or some other place.”

Looming over Wednesday’s arguments was Thomas’s majority opinion in a 2015 case that also dealt with a town’s sign code. Although the court voted 9-0 in favor of the challengers in that case, the justices were hardly unanimous in their reasoning, as reflected in three separate concurring opinions.

Lower courts applying that previous decision have also reached vastly different interpretations about how an on- and off-premises distinction should be treated under the First Amendment.

Benjamin Snyder, who argued on behalf of the DOJ, urged the justices to find that Austin’s restriction of off-premises signs amounts to a constitutionally compatible regulation based on where a digital ad is located, not its content.

Justice Brett Kavanaugh asked if there was a way Austin could achieve its aims — to prevent visual blight and potential traffic hazards — through a less restrictive sign code that gave a wider berth to content.

Snyder countered that preserving the location distinction for signs reflects the most sensible way to organize a community — a response which appeared not to satisfy Kavanaugh.

“If you think about walking through a downtown area that didn’t have on-premises signs up,” Snyder explained, “it would be impossible to find the store or the church that you were trying to get to. And so on-premises signs serve that function in a way that off-premises signs just don’t.” 

“A number of states don’t use this distinction,” Kavanaugh replied. “I don’t know if people are just running around lost in all those states, but they presumably find their way to the place.”

Several justices expressed concerns about the unintended consequences of ruling in favor of the advertisers, who argue that by treating on- and off-premise signs differently, Austin had restricted speech on the basis of content. 

Chief Justice John Roberts pointed to the possibility of rendering unconstitutional portions of the Highway Beautification Act, a 1965 statute that relied on the on- and off-premises distinction to let states regulate highway signs.

Kannon Shanmugam, a lawyer for the advertisers, argued that such laws should be subject to strict judicial scrutiny but suggested they might survive the test where Austin’s sign code fails. 

But both Roberts and Justice Elena Kagan expressed concern that such an approach could risk diluting the legal standard, known as strict scrutiny, when applied to content-based restrictions. 

Kagan appeared to indicate that she would prefer a legal principle that could filter out otherwise harmless content-based regulations, citing the example of restrictions that only allow illuminated signs for the purpose of making one’s address more visible.

“There are some laws that sort of scream out not to worry, in terms of any First Amendment values,” Kagan said.

“The thing not to worry about is drawing some kind of sensible line, which takes laws like this one, and puts it on the other side of the content-neutral, content-based divide,” she added later.

In some parts of the country, including Texas, federal courts have adopted the so-called “read the sign” test to determine whether a sign code is based on content. Under the test, a regulation is considered content-based if one must first read the sign to see how the restriction applies.

Other courts, like the federal appeals court in Washington, D.C., have reached a starkly different conclusion. A mere cursory reading of a sign to determine whether a regulation applies does not automatically make the restriction content-based, the D.C.-based federal court has ruled.

The justices likely were inclined to take up the clash between the city of Austin and the advertisers at least in part to resolve the conflict among the lower courts.

In 2019, a federal judge ruled for Austin, finding that the city’s regulation did not run afoul of the Constitution. But that decision was reversed the following year by the U.S. Court of Appeals for the Fifth Circuit, which held that the billboard regulation violated the First Amendment. 

A three-judge panel of the 5th Circuit ruled that the city’s differential treatment of signs based on location amounted to a content-based speech restriction. Such regulations are subject to the strictest of judicial tests, which the Austin regulation failed at the Fifth Circuit, prompting the city’s appeal to the Supreme Court.

A decision in the case, City of Austin v. Reagan National Advertising, is expected by late June.