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High court rules Texas billboard law doesn’t violate First Amendment

The decision reverses a Fifth Circuit ruling that found Austin’s sign regulations were a content-based violation of the First Amendment.

WASHINGTON (CN) — In a 6-3 opinion released Thursday, the Supreme Court ruled in favor of an Austin, Texas, law regulating billboards based on their location, reversing a Fifth Circuit decision that found the rules violated the First Amendment.

The majority found that an Austin city law that regulates signs for on-premises goods and services differently from signs advertising something at a different location is content-neutral on its face and does not infringe on free speech rights.

Justice Sonia Sotomayor wrote the majority opinion and Justice Stephen Breyer filed a concurring opinion. Justice Samuel Alito filed an opinion concurring in part and dissenting in part, while Justices Clarence Thomas, Neil Gorsuch and Amy Coney Barrett dissented.

Austin's city code regulates billboards differently based on whether they advertise something found onsite or at a different location, so when Reagan National Advertising put in applications to digitize two of its preexisting signs, the city declined the company's request.

The ordinance bans digital billboards that are not on the premises of a business and prevents companies from converting off-premise analog billboards into digital ones.

Reagan sued Austin in 2017 and while a federal judge sided with the city, the Fifth Circuit reversed and ruled for the company. 

The First Amendment case centered on whether the city was regulating the signs by their content or by their location. The Supreme Court’s 2015 precedent in Reed v. Town of Gilbert — which says cities can impose content-based restrictions on signs — was cited by attorneys for both sides during oral arguments.

Michael R. Dreeben, a partner at O’Melveny & Meyers who represents Austin, asked the justices to reverse the Fifth Circuit, arguing a law is only content-based if it treats signs differently based on their content. On the other side, Kannon K. Shanmugam, an attorney at Paul Weiss, argued for Reagan that Austin was regulating speech by its purpose.

Writing for the majority, Sotomayor said that while the city's regulation do require the content of a sign to be taken into account, the content is only relevant in determining whether the advertisement is for an on-site or off-site product or service.

"The off-premises distinction requires an examination of speech only in service of drawing neutral, location-based lines. It is agnostic as to content. Thus, absent a content-based purpose or justification, the City's distinction is content neutral and does not warrant the application of strict scrutiny," Sotomayor wrote.

Unlike the regulation at issue in Reed, the majority found the Austin law "did not single out any topic or subject matter for differential treatment," and evaluated speech only insofar as to determine the location of the subject being advertised.

Sotomayor said the regulation had more similarities with "time, manner, place" restrictions on First Amendment speech – which the court ruled legal in1940 through its decision in Cantwell v. Connecticut – than content-based regulations.

The court has previously allowed for on-off-premises regulations to stand in other contexts, including a 1978 opinion in Suffolk Outdoor Advertising Co. v. Hulse, in which the justices upheld in part an ordinance that banned off-premise advertising while allowing on-premise advertising.

In a dissent written by Thomas and joined by Gorsuch and Barrett, the three justices argued the Austin law was a content-based restriction on First Amendment speech.

"That an Austin official applying the sign code must know where the sign is does not negate the fact that he must also know what the sign says," Thomas wrote. (Emphasis in original.)

The city's attorney applauded the majority's decision.

“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 as well as the federal Highway Beautification Act," Dreeben said in an email.

Shanmugam, attorney for the billboard company, declined to comment on the ruling.

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