Summary of the Oral Arguments

Update: On April 21, 2022, the U.S. Supreme Court ruled in favor of the City of Austin in a 6-3 vote.

On November 10, 2021, the U.S. Supreme Court heard oral arguments in City of Austin v. Reagan National Advertising. The justices expressed concerns about the sweeping implications of the case on the national landscape, raising questions about highway safety, the legacy of the Highway Beautification Act, and the potential costs of overturning longstanding scenic laws. However, justices also questioned some of the city’s assertions, including whether or not its ban on off-premise digital signs is content-neutral, and how First Amendment scrutiny could apply to different messages.

Specific citations of scenic concerns in the oral arguments are outlined here.

An audio recording of the oral arguments and transcription are posted on the Supreme Court website at these respective links.

Why is Austin v. Reagan such an important case?

• This case has tremendous implications. If the U.S. Supreme Court upholds the Fifth Circuit Court of Appeals’ opinion favoring Reagan, billboard bans and sign ordinances in other communities will be unenforceable, limiting the ability of state and local governments to restrict billboard advertising and undoing much of the Highway Beautification Act.
• The “scenic” arguments have attracted a diverse set of allies: Scenic America and its chapters and affiliates have joined an amici curiae brief in support of Austin’s position. This brief argues that billboards are a uniquely annoying type of land use that can be banned to protect property rights. For the first time, major real estate developers and chambers of commerce have also signed on to this brief, speaking directly and authoritatively on this issue. Key players in the outdoor advertising industry, including Outfront Media and the International Sign Association, have also filed amici briefs favoring Austin’s position.

What does Reagan claim is the issue with the City of Austin’s sign ordinance?

Like hundreds of communities across the country, Austin bans digital off-premise billboards along the sides of its roads due to concerns about driver safety and to preserve the scenic qualities of its roadways. The restriction dates to the 1960s when the passage of the Highway Beautification Act prompted signage restrictions along roadways across the country. Today Austin’s sign code allows businesses to install digital signs “on premise” but prohibits billboard companies from installing digital “off-premise” signs, or from converting existing static billboards into digital billboards.

What is the background behind the Austin v. Reagan case?

In 2017, Reagan National Advertising and Lamar Advantage Outdoor Company applied for permits from the City of Austin to convert static off-premises billboards to digital signs in violation of the city’s sign code, which prohibited the digitization of off-premise signs.

Reagan sued the City of Austin, arguing that the sign code’s distinction between the digitization of on-premises and off-premises signs violated the First Amendment in that it was an unconstitutional content-based speech restriction, that the sign code was invalid and unenforceable, and that Reagan and Lamar should be permitted to digitize their signs without permits. The federal district court ruled in favor of Austin and upheld the sign ordinance.

Reagan took the case to the U.S. Court of Appeals for the Fifth Circuit, which reversed the lower court’s decision in October 2020. The Court of Appeals concluded that the sign code—whose stated purpose was to protect the aesthetic qualities of the city and promote public safety—was not content-neutral and was therefore subject to “strict scrutiny.” In the Court’s opinion, the city did not provide sufficient arguments that off-premise signs created more visual blight than on-premise signs, nor that they posed a greater threat to public safety.

What legal precedents have been applied in the review of Austin v. Reagan?

The Supreme Court has previously affirmed the constitutionality of billboard laws on ten occasions, beginning with a 1919 opinion by Justice Oliver Wendell Holmes in St. Louis Poster Advertising Co. v. St. Louis. In 1939, the Court again unanimously upheld a billboard ban with an exception for on-premise business signs in Packer Corp. v. Utah, reasoning: “The radio can be turned off, but not so the billboard or street car placard. These distinctions clearly place this kind of advertisement in a position to be classified so that regulations or prohibitions may be imposed upon all within the class. This is impossible with respect to newspapers and magazines.”

In the 1981 decision of Metromedia v. San Diego, the Court again ruled that billboard bans are constitutional.

The Fifth Circuit Court of Appeals reviewed Austin v. Reagan under Reed v. Town of Gilbert, a 2015 ruling that struck down a sign ordinance that applied different limits to other kinds of signs. For example, the Town of Gilbert’s sign ordinance placed certain restrictions on political advertisements that did not apply to advertisements for churches.

However, Justice Alito noted in a concurrence that “rules distinguishing between on-premises and off-premises signs” are permissible. This concurrence reflected the views of a majority of the Court, but the Fifth Circuit minimized it by suggesting it could have referred to bans on freestanding signs. This would be a use of “off-premise” that no city or court has ever used, including Justice Alito in a seminal and pragmatic 1994 Third Circuit opinion upholding the Delaware Highway Beautification Act as a proper balance between local business owners and other landowners and the traveling public.

What organizations are supporting the City of Austin in this case?

One factor that makes this case incredibly unique is the disparate collection of supporters that have stepped up to side with Austin in this case, as articulated in this Amici Brief signed by more than forty developers, chambers of commerce, and environmental organizations. This scenic-focused brief argues that billboards are a uniquely annoying type of land use that can be banned in order to protect property rights.

This unusual consensus helped persuade the Court in June to grant certiorari or full review of the case at oral argument on November 10. It also helped inspire an unprecedented array of merits briefs by other organizations, most of whom had never appeared in a billboard case, including:

• Brief of Florida and 21 states (Arkansas, California, Connecticut, District of Columbia, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New York, Ohio, Oregon, Pennsylvania, South Dakota, Vermont, and Washington)
• Brief of the United States of America
• Brief of the International Sign Association & Chapters
• Brief of Outfront Media, Inc.—second largest billboard company in the U.S.
• Brief of the Knight First Amendment Institute at Columbia University
• Brief of the National League of Cities, the U.S. Conference of Mayors, The International City/County Management Association, and the International Municipal Lawyers Association
• Brief of the American Planning Association

What does the Amici Brief from the scenic community, chambers of commerce, and developers argue?

The Amici Brief filed by developers, chambers of commerce, and scenic organizations makes a unique argument that bans on billboards protect property rights—something that the lower court did not take into consideration. Striking down off-premise restrictions would be costly and onerous for landowners and developers. Almost every city in the country would have to rewrite sign codes. Even key players in the outdoor advertising industry agree that off-premise restrictions should remain in place.

The Amici Brief filed by an unprecedented bipartisan coalition of developers, chambers of commerce, and scenic organizations makes a unique argument that bans on billboards protect property rights, with significant implications for communities across the country.

Key points in this brief include:

Billboard laws do not unreasonably infringe freedom of speech, nor do they implicate the First Amendment at all.

• Billboards are not ideas. They are permanent structures that dominate the views of entire communities. They are a form of visual blight that damages property values and raises public safety concerns.
• The First Amendment does not require that a citizen be held captive on his own property, forced to hear or view intrusive messages.
• The Supreme Court has affirmed the constitutionality of billboard restrictions on ten occasions.

If billboard bans are struck down, communities, landowners, and developers would face significant costs.

• More than 1,500 cities and states have billboard restrictions. Four states (Maine, Alaska, Hawaii, and Vermont) have outright bans on billboards. Almost every city would have start from scratch to rewrite its sign codes.
• Property values in the vicinity of billboards would immediately drop. There is simply no market for homes or businesses facing digital billboards.
• There would be greater public safety concerns, with more digital billboards contributing to distracted driving and traffic accidents.

No one has asked for such an upheaval. Even the billboard industry opposes it.

• An unprecedented coalition of chambers of commerce, developers, sign industry groups, and states leaning right and left, have filed briefs in support of keeping local billboard laws in place.
• Off-premise restrictions work.

Detailed overview of the Amici Brief

Summary of the Argument (as presented in the brief)

“The lower court gave zero weight to property rights. While land-use restrictions can be burdensome and violate due process, striking down off-premise restrictions would impose enormous costs on landowners and developers. Off-premise restrictions work.”

Argument

The lower court erred by treating billboards simply as a form of speech, whereas, billboards are property that create “a unique set of problems for land-use planning and development.” Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 502 (1981). The City of Austin’s sign ordinance addresses the distinction between off-premise and on-premise signs. As with other development regulations, the City regulates signs through permits, and in the present case, the Respondent sign companies both certified in advance that all of their signs were off-premise, and provided their locations, ownership, and structural drawings of blank signs in their permit applications. Thus, sign content was not a part of the permitting process.

The Third Circuit got it right when it decided the billboard case of Rappa v. New Castle County, 18 F.3d 1043, 1066 (3d Cir. 1994), where the court upheld the Delaware Highway Beautification Act. Rappa’s approach has been used successfully to resolve several difficult sign cases for the last twenty-five years. The approach in Rappa is consistent with the First Amendment. The First Amendment does not require that a citizen be held captive on his own property and forced to hear or view intrusive messages. See Members of City Council v. Taxpayers for Vincent, 466 U.S. 789, 805 (1984) (notwithstanding the First Amendment, cities may ban “unwanted exposure to certain methods of expression which may legitimately be deemed a public nuisance”).

As early as the 1920s, the Supreme Court has tacitly acknowledged that off-premise signs were subject to reasonable limits like other land uses; indeed, the Court affirmed a zoning ordinance that restricted billboards and allowed on-premise “accessory” signs based on location. Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 380 (1926). The zoning ordinance was based on location: “a right thing in the wrong place,–like a pig in the parlor instead of the barnyard.” Id. at 388. Thereafter, the Court has recognized the inherent property interest in on-premise signage. Linmark Associates, Inc. v. Willingboro, 431 U.S. 85 (1977); Metromedia, 453 U.S. 490; City of Ladue v. Gilleo, 512 U.S. 43 (1994). Further, on ten occasions listed in the brief, the Court has affirmed the constitutionality of off-premise restrictions.

Should the Court affirm the Fifth Circuit decision, enormous costs would be imposed on property owners and developers. More than 1,500 cities and states have enacted billboard restrictions with the same on-premise language, consistent with model sign laws and the Highway Beautification Act of 1965, 23 U.S. Code sec. 131(b)(3). The impact on national land values would be astronomical if the lower court decision were to be affirmed (citing Jonathan Snyder, “Beyond Aesthetics: How Billboards Affect Economic Prosperity,” (University of Pennsylvania, 2011). Almost every city in the country would have to rewrite sign codes.

Even the billboard industry is opposed to striking down the on-premise/off-premise distinction. See Outdoor Advertising Association of America (OAAA) Brief in Schroer v. Thomas, 937 F.3d 721 (6^th Cir. 2019) (Case No. 1638), cert denied, 141 S.Ct. 194 (July 9, 2020) (arguing, in part, “If allowed to stand, the district court’s decision [striking on/off-premise exceptions] would have breathtaking doctrinal and practical implications. […] The district court’s sweeping interpretation of Reed would also have striking practical consequences by calling into question the continued validity of an enormous swath of regulations across the country. That includes the [Highway Beautification Act], which makes on-premises/off-premises distinctions”). The OAAA has continually supported the core provisions of the Highway Beautification Act since 1965.

Conclusion

“Off-premise restrictions are based on billboards’ impact on neighboring property. They are embedded in thousands of sign codes. Affirming would cause severe disruption and costs for property owners and developers.”