The Supreme Court heard arguments on Wednesday in a dispute over whether the city of Austin, Texas, violated the First Amendment by regulating the location of digital billboards through a local ordinance.
The rule is meant to preserve the city of Austin‘s skyline and prevent drivers from being distracted by changing advertisements. Austin’s ordinance bans billboard companies from altering existing signs into digital ones, while the city still allows digital billboards on the property of businesses advertising their products but prohibits them elsewhere in the city, including on roadside signs.
Reagan National Advertising of Texas sued the city in 2017 after Austin denied two permit applications seeking to digitize existing roadside signs that had already been constructed for one of its clients. A federal judge initially ruled in 2019 against Reagan, finding Austin’s ordinance is a content-neutral restriction.
Michael Dreeben, a former deputy U.S. solicitor general, argued the case for the city of Austin and asserted the ban of off-premise digital signs is content-neutral. Justice Clarence Thomas presented a difficult hypothetical to the petitioner’s counsel, saying he could not understand how the issue is “not content-based.”
Thomas asked if a sign read, “‘Our hamburgers are great, but if you want great barbecue, go to Franklin’s’ … that sign would not be acceptable under this ordinance, right?” the justice asked. “But if I were at Franklin’s, I could say ‘Eat at Franklin’s’?”
“I don’t understand how that’s not content-based if I could say ‘Eat at Franklin’s’ if I’m at Franklin’s, but I can’t say it if I’m at McDonald’s or some other place,” Thomas added.
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Last year, U.S. Circuit Judge Jennifer Elrod, a George W. Bush appointee on the 5th Circuit, reversed the lower court’s 2019 ruling after finding the city code failed a First Amendment constitutionality test based on a 2015 9-0 Supreme Court decision, Reed v. Town of Gilbert. The ruling determined the restriction on location violated the free speech clause of the First Amendment.
Elrod cited Thomas’ majority ruling in Reed, saying officials’ reading of digitized signs in order to determine whether they should be considered on-premises or off-premises makes the regulation subject to the legal standard of strict scrutiny.
Federal courts in some states, including Texas, exercise a test called “read the sign” to determine whether a sign code is based on content. The test considers something as content-based if one must first read the sign to understand how the restriction applies, according to Dreeben.
Justice Sonia Sotomayor largely understood the respondent counsel Kannon Shanmugam’s arguments against the city ordinance, saying, “I think it’s illogical and contrary to any common sense to think that a regulation that says … only states can put up directional signs on highways, that that’s content-based.”
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The highest court’s decision to take up the case comes as the dispute between the advertising company and the city has failed to meet a clear consensus in lower courts. The court is expected to present a ruling on the matter in mid-2022.
