Austin Asks “What’s Your Sign?” Before Violating the First Amendment

When does a local ordinance relating to commercial signage become an unconstitutional regulation of speech? That is the question before the U.S. Court of Appeals for the Fifth Circuit in Reagan National Advertising of Austin v. City of Austin—a case that, if Austin, Texas has its way, could bring a troubling course correction to existing commercial‐​speech doctrine.

Austin distinguishes “on‐​premise” from “off‐​premise” signs, prohibiting the construction of new “off‐​premise” signs—signs that advertise products or businesses located elsewhere—while at the same time allowing for new “on‐​premise” signs. The city argues that the distinction preserves the city’s aesthetic character and ensures public safety. When advertising company Reagan National (not related to the airport) applied to construct dozens of off‐​premise signs, the city denied the permit.

Reagan National sued under the First Amendment. The district court applied so‐​called intermediate scrutiny and upheld the regulation. Now, on appeal to the Fifth Circuit, Reagan National asks the court to overturn the district court and Cato filed an amicus brief in support.

At a hearing last week, the judges probed both sides’ arguments in ways that offer some clues into their thinking, suggesting they are inclined to reverse the lower court. The judges pressed Reagan National on practical workarounds to otherwise unconstitutional restrictions, including advertising off‐​premises “for a short time,” as one judge understands the ordinance, but more or less left it at that. The judges were much less forgiving in their questions to Austin. Out of the gate, they wondered aloud how regulating the words on a sign—in contrast to its color or size—can be considered anything other than content‐​based.

The court was less than receptive to Austin’s assertion that a mixed on‐​premise/​off‐​premise message—“Sally makes quilts here and sells them [there]”—would be “considered” an on‐​premise sign (and therefore permissible). In a notable exchange, one judge asked how the ordinance would treat a sign, in front of a home, that read: “Barbara and Tom love Whataburger.” The panel was were unconvinced by Austin’s counsel’s insistence that that was a non‐​commercial sign. The nature and number of borderline examples, with so much haggling over the words on a sign, speak to the ordinance’s illogic—and suggest that the target of the law is the message conveyed rather than its method of delivery.

The hearing reinforced our argument that what’s at issue here is a content‐​based restriction, the kind that the Supreme Court has said are “presumptively unconstitutional” and subject to strict judicial scrutiny. Surely, both “buy here” and “buy there” signs, identical in every way save for the physical address to which it directs potential customers, would equally affect the attention of drivers or a city’s existing beauty.

Judge Jennifer Elrod referenced Cato’s brief (31:20) to counter Austin’s claim that the ordinance does not distinguish non‐​commercial signs based on the ideas or messages they convey. She asked how Austin can square this claim with the several examples we provided to show that the city’s sign ordinance would do just that.

Moreover, even if the court doesn’t apply strict scrutiny, the city’s rationale fails the more forgiving “rational basis” standard because the city’s permit denial treated certain messages more favorably than others, while also regulating the discussion of a topic in general. Both outcomes run afoul of existing Supreme Court precedent if the government cannot show that the harms it recites—here aesthetics and public safety—are real rather than speculative. In other words, a giant rotating Colonel Sanders head will have the same effect on local safety and beauty whether it is situated directly above a KFC or not.

While a city or state can protect drivers from obnoxious signage, it must do so within constitutional bounds. If its regulation makes a distinction based on where pizza is sold, it is content‐​based. Moreover, while commercial speech is already given less constitutional protection than noncommercial speech—something that finds no constitutional justification—states and municipalities shouldn’t be given license to violate the First Amendment simply because the speaker appears to be selling something.