Place or Advertising? The Supreme Court’s Decision

Read Time: 5 minutes

On November 10, 2021, the US Supreme Court heard oral arguments on
City of Austin v. Reagan Advertising to consider whether government regulation of billboards violates the First Amendment rights of advertising companies. In a 6-3 decision issued on April 21, the Court rejected Reagan Advertising’s argument and upheld the City of Austin’s right to regulate “off premise” signage.. In a follow-up to her opinion piece from November 2021, SEGD past Board President Paula Rees (Principal, Foreseer) provides analysis of the Court’s judgment.

Last November, SEGD reported on a First Amendment case being heard by the US Supreme Court that would have upended thousands of sign codes. The landmark case, City of Austin v. Reagan National Advertising, was decided last week on April 21, 2022. 

In a 6-3 ruling, the court determined that the City of Austin, Texas, has the right to designate signs as on-premises versus off-premises. The challenge began in 2017 when Reagan National and Lamar Advertising applied for permits in Austin. They wanted to convert 83 older billboards into digital. When the permits were denied, they identified the distinction of on- or off-premises as an unconstitutional restriction of free speech. 

Designers working in the public realm, especially in a commercial context, are familiar with on- or off-premises. It is the common language in sign codes—the codes that dictate what we can design for our clients in each jurisdiction or community. 

On-premises signs locate goods, services, or activities available on the same property as the sign. The sign identifies businesses and helps differentiate places, whether a coffee shop, home of worship or dentist’s office. 

Off-premises signs advertise goods, services, or activities not available on the property, commonly known as billboard advertising. Austin’s ordinance allowed digital billboards on an advertiser’s premises but not elsewhere. Billboards most frequently advertise alcohol, beverages, cannabis, cars, telecom, financial and insurance institutions, or entertainment venues (casinos, theme parks, etc.).  

In the US, the on- versus off-premises distinction has been embedded in sign codes since the Highway Beautification Act (HBA) was established in 1965. Under the HBA, states receiving federal highway funding have been directed to regulate signs near federal highways.

Justice Sotomayor authored the decision; she was joined by Roberts, Breyer, Kagan, and Kavanaugh. Justice Alito filed an opinion concurring on the major issue, but dissented in part. Justices Thomas, Gorsuch, and Coney Barrett dissented. Sotomayor wrote “The dissent would hold that tens of thousands of jurisdictions have presumptively violated the First Amendment, some for more than half a century, and that they have done so by use of an on-/off-premises distinction this court has repeatedly reviewed and never previously questioned.” In determining whether the issue was content-neutral, she noted “The message on the sign matters only to the extent that it informs the sign’s relative location. The on-/off-premises distinction is therefore similar to ordinary time, place, or manner restrictions.”

This case had repercussions beyond Austin, and it would have questioned whether sign ordinances and billboard bans in other places would be enforceable. More than 700 cities and most states have billboard restrictions. Four states (Maine, Alaska, Hawaii, and Vermont) have an outright ban on billboards. It would have limited the ability of state and local governments to restrict billboard advertising, and sign code reviews would have become necessary, plus impacted the scenic protections of the Highway Beautification Act.

Austin was supported by an unusual mix of organizations, including developers, mayors, chambers of commerce, 21 states, environmental organizations, the National League of Cities, International City/County Management Association, Scenic America, American Planning Association, and the International Sign Association. Even a few billboard companies like Outfront Media, the second largest in the US, felt their competitors were reaching too far.

Scenic America’s President Mark Falzone said the ruling “affirms a city’s right to have a say on what its streetscape looks like.” And a city spokesperson told the Austin Monitor “The city of Austin is gratified by the Supreme Court’s recognition that the city’s regulation of off-premise signage is a content-neutral measure designed to serve safety and esthetic interests, consistent with thousands of similar regulations nationwide.”

The good news about the Supreme Court ruling is that cities can still delineate what the look and feel of their community will be. Suppose a city wants to be like Las Vegas or Times Square. In that case they should understand that defining a “special district” allows taxation and shared revenues with the city if carefully negotiated. Or, if they choose to allow natural beauty to dominate, they can have discreet signage like many coastal towns, such as Santa Barbara, California.

Regardless of this legal outcome, many planning departments and sign codes are still behind the curve as our tools change. Technology, new materials, lighting, and the ability to scale more affordably in digital are evolving rapidly. Each city should be asking how to regulate this change. For what purpose should digital be used in the public realm—for art, entertainment, information, or off-premise advertising? Who gets what and why? How big or dense, bright and fast can it rotate in the commons? Should “special districts” for sports or entertainment be lit up all night or off-season? Because technology changes rapidly, should there be sunset clauses? For instance, Seattle’s sign code hasn’t been comprehensively updated for 50 years. The chapter that regulates today’s digital signs was written in the early 90s, referring to when the light pixels were the size of golf balls.

As EGD designers, we enhance the experience, place, or communications, and because we don’t sell the hardware, we are at an advantage in being trusted by jurisdictions. I would encourage SEGD designers to become actively involved in your hometown and take the lead in helping the stakeholders and the city planners of your community anticipate and express the future before the next challenge appears. This ruling gave us a pause to consider and responsibly address our options.

Paula Rees is the principal of Foreseer and a past SEGD board president. Rees began tracking billboard litigation over 20 years ago and has served as a consultant and expert witness on the topic. She has studied billboards’ history, which started with two partners in Portland, OR, and Seattle, WA. Her research into Seattle’s archives reaches back 100 years—and explains the endless off-premises challenges to the city.