By David Linehan
In the five years since the United States Supreme Court applied the “strict scrutiny” standard to invalidate an Arizona city’s sign code because it imposed more severe limitations on signs containing certain kinds of messages than it did on others, some federal courts have continued to apply only “intermediate scrutiny” to regulations of commercial signs. A recent decision by the Sixth Circuit, however, calls all such cases into question, asserting that “strict scrutiny” must always be applied whenever a city adopts content-based distinctions in its sign code, regardless of whether the regulated speech is commercial or non-commercial.
In International Outdoor, Inc. v. City of Troy,[1] a billboard company challenged a Michigan city’s sign code that imposed height, size, and setback requirements on signs generally, but made various exceptions for garage sale signs, real estate signs, political signs, seasonal and holiday signs, construction signs, and other “non-commercial” signs. The trial court ruled in the city’s favor, holding that the sign code’s height, square footage, and setback restrictions burdened commercial speech, and thus were subject only to “intermediate scrutiny” under Central Hudson[2] rather than “strict scrutiny” under Reed v. Town of Gilbert.[3]
In the trial court’s view, although these types of restrictions were content-based because they treated non-commercial signs differently from the commercial billboards that the plaintiff was seeking to install, the restrictions were nevertheless permissible under the First Amendment because they met the intermediate scrutiny test—i.e., they were narrowly tailored to serve a substantial governmental interest (traffic safety and visual aesthetics).
On appeal, the Sixth Circuit reversed. Relying on Reed, the Sixth Circuit noted that content-based restrictions are presumptively unconstitutional under the First Amendment and can be upheld only when they satisfy strict scrutiny—meaning that the government must prove that the restrictions are the least restrictive means of furthering a compelling government interest.
The court observed that a restriction on speech is “content-based” if it makes distinctions based on the content or subject matter of a sign. If one must examine the content of the sign to determine whether the restriction applies, then the regulation is content based. Thus, a sign code like Troy’s, which on its face imposed different restrictions based on the type of message conveyed, was subject to strict scrutiny regardless of the government’s motive in adopting it. Indeed, strict scrutiny applies to a sign regulation even if the government offers a benign, content-neutral justification that reflects no animus toward the speaker or the ideas expressed on the sign. This is because the First Amendment does more than simply protect differing points of view. A sign code violates the First Amendment if it singles out certain topics or subject matters for differential treatment, even if it does not discriminate against particular viewpoints within a topic or subject matter.
In ruling against the city, the Sixth Circuit surveyed several recent cases from other circuit courts (including the Second, Third, Ninth, and Tenth Circuits), all of which had recently applied the intermediate scrutiny standard of Central Hudson to content-based restrictions on commercial speech rather than the strict scrutiny standard of Reed. The Sixth Circuit was deeply critical of these decisions, some of which do not mention Reed or its principal holding at all. In the Sixth Circuit’s view, the intermediate scrutiny standard of Central Hudson applies only when the regulation of commercial speech is content-neutral on its face; otherwise, strict scrutiny under Reed is the correct standard.
The Sixth Circuit bolstered its criticism of the Ninth Circuit and other appellate courts by pointing to a summer 2020 decision of the Supreme Court. In Barr v. American Association of Political Consultants (AAPC),[4] the Court held that a government debt-collection exception to a federal prohibition on robocalls constituted a content-based preference toward certain types of speech and that it failed the strict scrutiny test because it was not sufficiently narrowly tailored. The AAPC decision reaffirmed Reed’s holding that “content-based laws are subject to strict scrutiny.”
Applying Reed and Barr to the City of Troy’s sign code, the Sixth Circuit held that Troy’s exemption of specific types of signs (flags, political signs, garage sales, etc.) from the height, size, and setback limits that apply to other signs, constituted a message-based restriction on both commercial and non-commercial speech to which strict scrutiny must be applied. The appeals court vacated the judgment that had been entered in the city’s favor, sending the case back to the trial court to apply the Reed test to determine whether the sign code survives strict scrutiny.
The International Outdoor case opens up a circuit split regarding the standard of review that applies to content-based sign code provisions, particularly when commercial signs are subjected to different permitting standards than non-commercial signs. Until this split is resolved, cities may wish to avoid subject-matter-based sign restrictions so that any challenges to their sign codes will be evaluated under the more forgiving “intermediate scrutiny” standard.
Alternatively, cities could better prepare their sign codes to survive strict scrutiny by ensuing that any content-based restrictions reflect the least restrictive means of advancing a compelling government interest. This would entail an analysis of whether such restrictions are impermissibly underinclusive (i.e., they allow signs that undermine the stated government interest) or overinclusive (i.e., they prohibit more signs than are necessary).
If you have questions or concerns about your sign code, or other First Amendment topics, please feel free to contact David Linehan at David@MadronaLaw.com.
[1] International Outdoor, Inc. v. City of Troy, 974 F.3d 690 (2020).
[2] Central Hudson Gas & Elec. v. Public Serv. Comm’n., 447 U.S. 557 (1980).
[3] Reed v. Town of Gilbert, 576 U.S. 155 (2015).
[4] 140 S. Ct. 2335 (2020).
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