Reagan Natl Advtsng v. City of Austin ( 2023 )

Case: 19-50354 Document: 00516694971 Page: 1 Date Filed: 03/30/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
March 30, 2023
No. 19-50354 Lyle W. Cayce
Clerk
Reagan National Advertising of Austin, Incorporated,
Plaintiff—Appellant,
Lamar Advantage Outdoor Company, L.P., doing
business as The Lamar Companies,
Intervenor Plaintiff—Appellant,
versus
City of Austin,
Defendant—Appellee.
Appeal from the United States District Court
for the Western District of Texas
USDC No. 1:17-CV-673
ON REMAND FROM
THE SUPREME COURT OF THE UNITED STATES
Before Elrod, Southwick, and Haynes, Circuit Judges.
Leslie H. Southwick, Circuit Judge:
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Two outdoor-advertising companies filed applications with the City
of Austin to digitize existing, traditional billboards and to upgrade signs with
less sophisticated digitization. The City rejected their applications because
the signs would advertise a business, service, or activity that was not located
on the site where the sign was installed. The companies sued, arguing that
the City’s Sign Code’s distinction between on-premises and off-premises
signs violated the First Amendment. The district court upheld the Sign
Code. When the case first came to this court, we reversed, holding that the
on-premises/off-premises distinction was content based and could not
survive strict scrutiny. The U.S. Supreme Court, though, held that the
City’s Sign Code was facially content neutral and, absent an impermissible
purpose, would be subject to intermediate scrutiny. The Court remanded.
We conclude, applying the Supreme Court’s new guidance, that the
Sign Code survives intermediate scrutiny. We AFFIRM.
FACTUAL AND PROCEDURAL BACKGROUND
Austin, Texas, regulates outdoor signs in Chapter 25-10 of its City
Code (the “Sign Code”).1 The Sign Code defined “off-premise sign” as “a
sign advertising a business, person, activity, goods, products, or services not
located on the site where the sign is installed, or that directs persons to any
location not on that site.” AUSTIN, TEX., CITY CODE § 25-10-3(11) (2016).
The Sign Code generally prohibited the construction of new off-premises
signs, § 25–10–102(1), but allowed existing off-premises signs to remain as
“non-conforming signs,” § 25-10-3(10). Non-conforming, off-premises
1
We consider the City’s 2016 Sign Code, which was in effect during the period
relevant to this dispute. In August 2017, the City amended its Sign Code. The
amendments, though, do not affect this appeal. City of Austin v. Reagan Nat’l Advert. of
Austin, LLC, 142 S. Ct. 1464, 1470 n.1 (2022).
2
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signs, though, could not change the “method or technology used to convey
[their] message.” §§ 25-10-152(A)–(B). The Sign Code permitted on-
premises signs to be “electronically controlled changeable-copy sign[s].” §
25–10–102(6).
In sum, off-premises signs could not be upgraded.
The plaintiffs-appellants here are Reagan National Advertising of
Austin and Lamar Advantage Outdoor Company. Both own billboards in
Austin. In 2017, both submitted permit applications to digitize their existing
off-premises signs. The City applied its Sign Code restrictions and denied
the applications. Reagan subsequently sued the City in state court, alleging
that the Sign Code’s prohibition violated the First Amendment. The City
removed the case to federal court; Lamar intervened as a plaintiff. After a
bench trial, the district court entered judgment in favor of the City. Reagan
Nat’l Advert. of Austin, Inc. v. City of Austin, 377 F. Supp. 3d 670, 683 (W.D.
Tex. 2019). The court determined that the relevant Sign Code provisions
were content neutral under Reed v. Town of Gilbert, 576 U.S. 155 (2015). Id.at 678–81. The court applied the “intermediate scrutiny standard for
commercial speech restrictions” and held that the Sign Code was
constitutional. Id. at 682–83.
We reversed, holding that Austin’s on-premises/off-premises
distinction was content based. Reagan Nat’l Advert. of Austin, Inc. v. City of
Austin, 972 F.3d 696, 707 (5th Cir. 2020). We then held that the Sign Code
failed strict scrutiny, as most everything does. Id. at 710.
The Supreme Court reversed. City of Austin v. Reagan Nat’l Advert.
of Austin, LLC, 142 S. Ct. 1464 (2022). We will explain the ruling in detail
later. Here, we summarize by stating that the Court held the Sign Code was
akin to an “ordinary time, place, or manner restriction[].” Id. at 1473. The
Court remanded for further consideration of these issues, with intermediate
3
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scrutiny as the standard unless an improper purpose for the relevant features
of the Sign Code is identified. Id. at 1476.
DISCUSSION
We address two dispositive issues. First, we determine whether the
plaintiffs have waived their arguments challenging the Sign Code. We find
no waiver and thus also address whether the Sign Code comports with the
First Amendment. It does.
I. Waiver of the plaintiffs’ challenge
The City contends the plaintiffs have waived any argument that the
Sign Code does not survive intermediate scrutiny because that argument was
not made in the alternative when this case was appealed here from district
court. Further, the City asserts that the plaintiffs challenged only the Sign
Code’s on-premises/off-premises distinction and have therefore waived any
arguments directed at the City’s narrower ban on digitizing existing off-
premises signs.
We address Austin’s second contention first. At the district court, the
plaintiffs challenged both the on-premises/off-premises distinction generally
and the specific prohibition on digitizing off-premises signs. The plaintiffs
requested that Chapter 25-10, or any part thereof, be declared
unconstitutional. On appeal, the plaintiffs again argued that Chapter 25-10
was an unconstitutional content-based restriction. Chapter 25-10 includes
the so-called “digitization ban” that the plaintiffs seek to invalidate. While
the City may be correct that the plaintiffs’ arguments on appeal focused on
the on-premises/off-premises distinction, the City’s bar on digitizing
existing off-premises signs is part of that distinction. Thus, when the
plaintiffs challenged Chapter 25-10 on appeal, they were also challenging the
more targeted ban on digitizing off-premises signs. Further, on appeal, the
plaintiffs sought to have all of Chapter 25-10 held to be unconstitutional.
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Accordingly, the plaintiffs have not waived their argument that the City’s ban
on digitizing grandfathered off-premises signs violates the First Amendment.
On the other hand, in their appeal from district court, the plaintiffs
made no effort to convince this court, as an alternative argument, that
intermediate scrutiny was the proper test. In light of Supreme Court
authority as it existed at that time, the plaintiffs asserted that strict scrutiny
was “clearly” the appropriate standard. They also stated that we need not
evaluate the Sign Code under intermediate scrutiny.
Ordinarily, “[a]n appellant abandons all issues not raised and argued
in its initial brief on appeal.” Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir.
1994) (emphasis omitted). There are exceptional circumstances, though. A
remand from the Supreme Court after it altered the existing legal standard in
some manner surely qualifies as one. “[T]he refusal to consider arguments
not raised is a sound prudential practice, rather than a statutory or
constitutional mandate, and there are times when prudence dictates the
contrary.” Davis v. United States, 512 U.S. 452, 464 (1994) (Scalia, J.,
concurring).
Important here, we have held that supplemental briefing may address
new issues raised by an intervening clarification in the law. See DSC
Commc’ns Corp. v. Next Level Commc’ns, 107 F.3d 322, 326 n.2 (5th Cir.
1997). This allowance ensures that we do not “perpetuate incorrect law.”2
Id. In the present case, the Supreme Court reanalyzed the scope of its holding
2
This concern is especially weighty here. The district court applied the Central
Hudson commercial-speech test to the Sign Code. Reagan Nat’l Advert., 377 F. Supp. 3d at
682 (citing Central Hudson Gas & Electric Corp. v. Public Service Comm'n, 447 U.S. 557, 100
S.Ct. 2343, 65 L.Ed.2d 341 (1980)). That was error. See Reagan Nat’l Advert., 142 S. Ct.
at 1471 n.3 (recognizing that Central Hudson does not apply, because the Sign Code applies
to commercial and noncommercial messages alike).
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in Reed, explaining the correct framework to evaluate whether a given law is
content neutral. Reagan Nat’l Advert., 142 S. Ct. at 1474–75. That
clarification directly affects the appropriate level of scrutiny. Regardless of
whether the Supreme Court revised or merely clarified the existing test for
content-based restrictions, the new state of the law allows a party to address
the current reality with appropriate arguments.
We add some suspenders to the belt we just described. A waived issue
can be addressed when “it is a purely legal matter and failure to consider the
issue will result in a miscarriage of justice.” Rollins v. Home Depot USA, 8
F.4th 393, 398 (5th Cir. 2021) (quotation marks and citation omitted). We
have also departed from the general rule when the issue “presents a pure
legal question, and . . . no prejudice will accrue to the defendant[].” Pegues
v. Morehouse Par. Sch. Bd., 706 F.2d 735, 738 (5th Cir. 1983). Here, the level
of scrutiny that applies to the Sign Code is a pure legal question. Further,
Austin has argued throughout the case that the Sign Code should be subject
to intermediate scrutiny; thus, it is not prejudiced by our application of that
standard. Indeed, the district court applied intermediate scrutiny. Reagan
Nat’l Advert., 377 F. Supp. 3d at 682. Consideration of the plaintiffs’
arguments that the Sign Code fails intermediate scrutiny is proper.
II. First Amendment
As we begin our examination of the merits, we elaborate on what the
Supreme Court held before remanding the case. The Court held, “the City’s
off-premises distinction requires an examination of speech only in service of
drawing neutral, location-based lines.” Reagan Nat’l Advert., 142 S. Ct. at
1471. The distinction “do[es] not single out any topic or subject matter for
differential treatment . . . . Rather, the City’s provisions distinguish based on
location: A given sign is treated differently based solely on whether it is
located on the same premises as the thing being discussed or not.” Id. at
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1472–73. The Court rejected the “view that any examination of speech or
expression inherently triggers heightened First Amendment concern.” Id. at
1474 (emphasis omitted).
The Court also clarified the scope of its holding in Reed v. Town of
Gilbert. Id. The Court cautioned against “stretch[ing] Reed’s ‘function or
purpose’ language too far.” Id. Reed does not, the Court explained, stand
for the proposition that “any classification that considers function or purpose
is always content based.” Id. (emphasis in original). Only “regulations that
discriminate based on ‘the topic discussed or the idea or message expressed’
[] are content based.” Id. (quoting Reed, 576 U.S. at 171). Because the City’s
Sign Code did not discriminate on those bases, the Court concluded that it is
not facially content based. Id. at 1474–75.
Even if not content-based, to survive a First Amendment challenge,
the ordinance must not have an improper purpose:
If there is evidence that an impermissible purpose or
justification underpins a facially content-neutral restriction, for
instance, that restriction may be content based. Moreover, to
survive intermediate scrutiny, a restriction on speech or
expression must be narrowly tailored to serve a significant
governmental interest.
Id. at 1475–76 (quotation marks and citations omitted).
The plaintiffs do not assert that an “impermissible purpose or
justification underpins” the City’s facially content-neutral restriction. See
id. at 1475. Thus, we apply intermediate scrutiny, meaning that the Sign
Code’s “restriction on speech or expression must be ‘narrowly tailored to
serve a significant governmental interest’” Id. at 1475–76 (quoting Ward v.
Rock Against Racism, 491 U.S. 781, 791 (1989)). The government’s interests
need not be accomplished through the “least restrictive or least intrusive
means.” Ward, 491 U.S. at 798. “Rather, the requirement of narrow
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tailoring is satisfied so long as the . . . regulation promotes a substantial
government interest that would be achieved less effectively absent the
regulation.” Id. at 799 (quotation marks and citation omitted).
Neither party contests the existence of significant government
interests. The City asserts that the regulation of off-premises signs advances
its interests in “traffic safety and esthetics.”3 The plaintiffs concede that the
Supreme Court has recognized those interests as substantial governmental
goals. See Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 507–08 (1981).
Thus, the only issue we must address is whether the Sign Code’s ban on
digitizing existing off-premises signs is “narrowly tailored to serve a
significant government interest.” See Reagan Nat’l Advert., 142 S. Ct. at
1475–76.
Before addressing that issue, we note that the Supreme Court has
“repeatedly reviewed and never previously questioned” on-premises/off-
premises distinctions. Id. at 1475. Such distinctions are part of an “unbroken
tradition” that traces to the 1800s. Id. “Each medium of expression . . . must
be assessed for First Amendment purposes by standards suited to it, for each
may present its own problems.” Metromedia, 453 U.S. at 501 n.8 (quoting
Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546, 557 (1975)). In the
context of sign regulations, the Court has generally accorded municipalities
significant leeway. See, e.g., Suffolk Outdoor Advert. Co. v. Hulse, 439 U.S.
808 (1978); Metromedia, 453 U.S. 490.
The City identifies two interests as supporting the Sign Code: traffic
safety and aesthetics. In Metromedia, the Court upheld San Diego’s ban on
3
Quotes in this opinion will contain two different spellings of the same word:
aesthetics and esthetics. We will not force consistency. We do strive for consistency when
we are not quoting and chose “aesthetics.”
8
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off-premises commercial billboards. It found that “billboards are traffic
hazards” and “can be perceived as an ‘esthetic harm’”; a ban on off-
premises commercial billboards would advance San Diego’s interests in
promoting traffic safety and aesthetics. Metromedia, 453 U.S. at 509–10. The
Court rejected arguments that the ban was underinclusive in permitting
onsite advertising: San Diego could reasonably determine that “offsite
advertising, with [its] periodically changing content, presents a more acute
problem than does onsite advertising.” Id. at 511. Further, a commercial
enterprise “has a stronger interest in identifying its place of business and
advertising the products or services available there than it has in using or
leasing its available space for the purpose of advertising commercial
enterprises located elsewhere.” Id. at 512.
The City’s Sign Code is supported by the same logic. The City is
entitled to use its legislative judgment to conclude that off-premises
advertising undermines its interests in safety and aesthetics more than on-
premises advertising does.
The plaintiffs argue that Metromedia is of limited relevance because
they are not challenging the City’s ban on new off-premises signs but only
the ban on digitizing existing off-premises signs. They assert: “the City has
not shown that its interests in safety and aesthetics apply differently when
considering the digitization of the limited number of off-premises signs that
the City has grandfathered under its sign code, as compared to the
digitization of the unlimited number of on-premises signs that the City
allows.” The problem with that argument is that intermediate scrutiny does
not require perfect tailoring. See Ward, 491 U.S. at 798–99. Nor does
Metromedia:
Appellants question whether the distinction between onsite
and offsite advertising on the same property is justifiable in
terms of either esthetics or traffic safety. The ordinance
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permits the occupant of property to use billboards located on
that property to advertise goods and services offered at that
location; identical billboards, equally distracting and
unattractive, that advertise goods or services available
elsewhere are prohibited even if permitting the latter would not
multiply the number of billboards. Despite the apparent
incongruity, this argument has been rejected, at least
implicitly, in all of the cases sustaining the distinction between
offsite and onsite commercial advertising. We agree with those
cases . . .
Metromedia, 453 U.S. at 511.
The Court continued: “In the first place, whether onsite advertising
is permitted or not, the prohibition of offsite advertising is directly related to
the stated objectives of traffic safety and esthetics. This is not altered by the
fact that the ordinance is underinclusive because it permits onsite
advertising.” Id.The plaintiffs do not contest that the prohibition on off-premises
digital signs is related to public safety and aesthetics. Those interests
continue to be served even if the Sign Code is underinclusive by permitting
on-premises digital signs. Further, the City “may believe that offsite
advertising, with i[t]s periodically changing content, presents a more acute
problem than does onsite advertising.” Id. This logic applies equally to
digital signs: the City may believe that off-premises digital signs generally
have more content turnover than on-premises digital signs and therefore pose
a larger threat to public safety.4
4
We mention that the City and amici marshaled pertinent evidence when this case
was at the Supreme Court. See, e.g., Reply Brief for Petitioner at 20, City of Austin v. Reagan
Nat’l Advert. of Austin, 142 S. Ct. 1464 (2022) (No. 20-1029) (“[S]tudies do support that
on-premises digital signs are less distracting than their off-premises counterparts.”
(emphasis omitted) (citing Jerry Wachtel, Compendium of Recent Research Studies on
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Metromedia also gave substantial weight to the legislative judgment
that on-premises speech is more valuable than off-premises speech:
San Diego has obviously chosen to value one kind of
commercial speech — onsite advertising — more than another
kind of commercial speech — offsite advertising. The
ordinance reflects a decision by the city that the former
interest, but not the latter, is stronger than the city’s interests
in traffic safety and esthetics.
Id. at 512.
The Court also found justification for San Diego’s distinctions in that
city’s belief that a business would be more interested in advertising its place
of business onsite than it would be in advertising its activities on a billboard
located elsewhere. Id. Indeed, not to allow a business to notify and attract
customers by signage at the business’s physical location would be a
significant barrier to operations. There is quite clearly a heightened need for
on-location signs. Likewise, Austin could reasonably conclude that
commercial and noncommercial enterprises have a stronger interest in
identifying their places of operation and therefore are entitled to greater
leeway than those engaged in off-premises advertising.
The plaintiffs argue that such leeway is unlimited because “the sign
code is entirely devoid of any limits on on-premises digital signs.” That is
factually incorrect. Austin’s Sign Code restricts on-premises sign owners to
one sign per building or curb cut and prohibits glare visible from the roadway.
Austin City Code § 25-10-101(B)(1), (C)(1), (G)(1); § 25-10-192(B)(1). Off-
Distraction from Commercial Electronic Variable Message Signs (CEVMS) 10 (2020))); see also
Reagan Nat’l Advert., 142 S. Ct. at 1479 (Breyer, J., concurring) (summarizing studies
showing that “on-premises [digital] signs are less likely to cause accidents” and are
typically smaller in size than off-premises digital signs).
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premises signs are regulated more strictly. Under Metromedia, the distinction
is permissible.
The City has also justified its digitization prohibition by arguing that
it will cause off-premises billboards to be removed in time. At oral argument,
the City asserted that “the whole idea behind [the prohibition] is that
eventually [off-premises signs] peter out and go away.” In that same vein, at
the Supreme Court the City expressed that “part of the reason for having a
grandfather clause [] that limits the modifications you can make to a sign is
an interest in gradually phasing out those off-premises signs.” Transcript of
Oral Argument at 52, City of Austin v. Reagan Nat’l Advert. of Austin, 142 S.
Ct. 1464 (2022) (No. 20-1029). The City’s argument at the Supreme Court
may well flow from the sense that digital signs produce more income than
traditional signs; limiting digitization, then, may eventually lead to the
removal of traditional off-premises signs altogether.
This understanding means that, instead of banning off-premises signs
outright, the City has chosen a course of encouraging elimination more
gradually, indeed, less economically disruptively for the plaintiffs and others
in the same business.5
This raises the question of whether a total, immediate ban on off-
premises signs would be constitutional. There is some support for a total ban
5
Allowing nonconforming uses to continue at least for a time is a moderate and
often upheld path to accomplish zoning goals. 2 PATRICIA E. SALKIN, AM. LAW ZONING
§ 12:1 (5th ed. 2022). Moreover, the rule that nonconforming uses may not increase their
degree of nonconformity is a pillar of zoning laws. One treatise states that “continu[ing] a
nonconforming use does not include a right to expand or enlarge it.” Id. at § 12:19. Another
summarizes that “[w]ith the objective of eventually terminating nonconformities zoning
codes generally prohibit enlargement or extension or changes in the nature of
nonconforming uses.” 4 RATHKOPF’S THE LAW OF ZONING & PLANNING § 73:2 (4th ed.
2022).
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in Metromedia’s logic. There, San Diego banned off-premises commercial
signs and all noncommercial signs, subject to some content-based exceptions.
Metromedia, 453 U.S. at 494–96, 512–13.
As explained earlier, the Court upheld the ban on off-premises
commercial signs. Id. at 512. The Court also, however, struck down the ban
on all noncommercial advertising. Id. at 512–17. It did so for two reasons,
neither of which cast doubt on a total off-premises ban foreshadowed by
Austin’s regulations. 6
First, the Court found that San Diego’s regulations inverted the usual
judgment that noncommercial speech is accorded more protection than
commercial speech. Id. at 513. Austin has not offended that judgment. The
City’s Sign Code treats commercial and noncommercial messages alike.
That parity is all Metromedia seems to require.
Second, the Court explained that “[a]lthough the city may distinguish
between the relative value of different categories of commercial speech, the
city does not have the same range of choice in the area of noncommercial
speech to evaluate the strength of, or distinguish between, various
communicative interests.” Id. at 514. By “communicative interests,” the
Court was referencing the fact that San Diego’s regulations discriminated on
the basis of content, allowing some noncommercial messages but not others.
Id. at 494, 514–16. The Court was concerned about government control of
“the appropriate subjects for public discourse.” Id. at 515.
6
These two reasons, which supported the Court’s judgment with respect to San
Diego’s noncommercial sign regulations, garnered only a plurality. Metromedia, 453 U.S.
at 541 (Stevens, J., joining Parts I through IV of the plurality opinion and dissenting in part).
Nevertheless, we consider their persuasiveness here.
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That concern is absent here. As the Supreme Court determined,
Austin’s Sign Code does not allow content discrimination. Reagan Nat’l
Advert., 142 S. Ct. at 1472–73. Whereas the Metromedia Court rejected that
San Diego’s ordinance was a “time, place, and manner” restriction,
Metromedia, 453 U.S. at 515, here the Court has held that Austin’s Sign Code
is exactly that. Reagan Nat’l Advert., 142 S. Ct. at 1473.
As a result, Metromedia’s logic fits poorly here. Indeed, the upshot of
the Court’s logic was this: “Because some noncommercial messages may be
conveyed on billboards throughout the commercial and industrial zones, San
Diego must similarly allow billboards conveying other noncommercial
messages throughout those zones.” Metromedia, 453 U.S. at 515. Austin,
again, does not offend this requirement: unlike San Diego’s ordinance,
Austin’s Sign Code is content neutral and therefore does not allow certain
noncommercial messages but not others. In this way, Austin’s Code does
not hand the “government the choice of permissible subjects for public
debate.” See id. (quotation marks and citation omitted).
The City also argues, though it provides no evidence we can find, that
off-premises signs are larger than those on-premises, and thus the former
cause more visual clutter. More generally, Austin provided little empirical
evidence supporting its restrictions. Nonetheless, intermediate scrutiny has
“never required” a municipality to “demonstrate, not merely by appeal to
common sense, but also with empirical data, that its ordinance will
successfully” achieve the desired end. City of Los Angeles v. Alameda Books,
Inc., 535 U.S. 425, 439 (2002). “[M]unicipalities must be given a reasonable
opportunity to experiment with solutions to address the secondary effects of
protected speech.” Id. (quotation marks and citations omitted). As a result,
“[t]he quantum of empirical evidence needed to satisfy heightened judicial
scrutiny of legislative judgments will vary up or down with the novelty and
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plausibility of the justification raised.” Nixon v. Shrink Missouri Gov’t PAC,
528 U.S. 377, 391 (2000).
In the context of sign codes, which are part of a “regulatory tradition”
dating back well over a century, the Court has not required a great quantum
of empirical support. See Reagan Nat’l Advert., 142 S. Ct. at 1469. The Court
upheld San Diego’s off-premises commercial sign ban based on intermediate
scrutiny, relying on the “accumulated, common-sense judgments of local
lawmakers and of the many reviewing courts that billboards are real and
substantial hazards to traffic safety.” Metromedia, 453 U.S. at 509. We
conclude there is enough evidence and common sense here supporting
Austin’s Sign Code distinction.
The Seventh Circuit recently reached a similar conclusion. See Adams
Outdoor Advert. Ltd. P’ship v. City of Madison, Wisconsin, 56 F.4th 1111 (7th
Cir. 2023). There, the court considered the City of Madison’s sign code,
which prohibits the digitization of off-premises commercial signs but allows
on-premises digital signs. Id. at 1114–15. The court held that the distinction
survives intermediate scrutiny. Id. at 1120. Further, the court responded to
the plaintiff’s argument “that the City must provide empirical evidence
linking digital billboards to aesthetic or safety-related harms. Not so . . .
. [T]he connection between billboards and traffic safety is too obvious to
require empirical proof.” Id.
It is true that Austin’s Sign Code is broader than Madison’s. Leaving
aside grandfathered signs, Austin’s Code bars off-premises commercial and
noncommercial signs. Reagan Nat’l Advert., 142 S. Ct. at 1471 n.3. As we
explained earlier, however, Austin’s Sign Code treats commercial and
noncommercial messages alike and is content neutral — thus passing muster
under Metromedia. The difference between Austin’s and Madison’s sign
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codes, then, is not legally relevant. We are persuaded by Adams’s reasoning
with respect to “obvious,” common-sense judgments.
Finally, we discuss the plaintiffs’ reliance on City of Cincinnati v.
Discovery Network, Inc., 507 U.S. 410 (1993). Cincinnati had banned the
distribution of commercial handbills through newsracks on public property,
citing an interest in safety and aesthetics. Id. at 419. Cincinnati did not,
though, ban newspaper distribution through newsracks. Id. The Court held
that the distinction between commercial handbills and newspapers failed
intermediate scrutiny because the newsracks containing commercial
handbills “are no greater an eyesore than the newsracks permitted to remain
on Cincinnati’s sidewalks.” Id. at 425. Newspapers and commercial
handbills were “equally at fault” for the harms Cincinnati sought to prevent,
and therefore the city “ha[d] not established the ‘fit’ between its goals and
its chosen means.” Id. at 426, 428. The plaintiffs see an analogy, because
Austin’s “prohibition on digitizing off-premises but not on-premises signs
draws distinctions between two forms of speech that are ‘equally at fault’ for
the harms the City seeks to remedy.”
The effort to compare all billboards to all newsracks fails. The
Supreme Court could discern no meaningful difference between newspapers
and commercial handbills. Both were sold on identical newsracks and were
equally responsible for harms inflicted to public safety and aesthetics.
Discovery Network, 507 U.S. at 425–26. In the context of sign regulations, by
contrast, the Court has discerned a meaningful difference between on-
premises and off-premises signs. See Metromedia, 453 U.S. at 511. Indeed,
the Discovery Network court explicitly disclaimed any similarity in its issues
to those in Metromedia, which involved a distinction that was well-supported
by differences between on-premises and off-premises signs. Discovery
Network, 507 U.S. at 425 n.20. Moreover, context is always critical. While
the Discovery Network analysis may not tolerate underinclusivity with respect
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to newsrack regulations, Metromedia — which deals directly with the subject
matter, sign regulations, at issue here — does not demand airtight tailoring.
Thus, Discovery Network does not alter our conclusion.
Municipalities have traditionally been given wide discretion in the
domain of sign regulations. Austin is entitled to that latitude. AFFIRMED.
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Jennifer Walker Elrod, Circuit Judge, concurring in part7 and
dissenting in part:
The City of Austin’s Sign Code prohibits digitization of certain grand-
fathered off-premises signs yet allows unlimited digitization of on-premises
signs. I dissent from the majority opinion’s conclusion that this selective pro-
hibition survives intermediate scrutiny. Under that standard, the City bears
the burden to show that the ban is narrowly tailored to further an important
governmental interest. See City of Cincinnati v. Discovery Network, 507 U.S.
410, 416 (1993). And in considering the ban, the majority opinion gives sub-
stantial deference to the City’s “legislative judgment.” Ante at 11. But such
deference is inappropriate when applying intermediate scrutiny. See Metro-
media, Inc. v. City of San Diego, 453 U.S. 490, 514 (1981). As such, in my
view, the majority opinion’s approach is really just rational-basis review mas-
querading as intermediate scrutiny. I would hold that the City’s ban violates
the First Amendment because, under a proper application of intermediate
scrutiny, the City fails to carry its burden to establish that the provisions were
narrowly tailored to further its stated interests.
Here, the City contends that the ban is necessary to further important
safety and aesthetic interests. In this regard, the issues presented here closely
resemble those presented in City of Cincinnati v. Discovery Network. There,
the City of Cincinnati banned the distribution of commercial handbills
through freestanding newsracks located on public property, but allowed the
distribution of newspapers on public sidewalks. Id. at 419. The Supreme
7
I agree with the majority opinion that consideration of the intermediate scrutiny
argument is proper. The Supreme Court remanded to this panel, explicitly stating that the
Court’s ruling did not “end the First Amendment inquiry,” that “[t]he parties dispute
whether the City can satisfy [intermediate scrutiny],” and that “the Court leaves [that
inquiry] for remand.” City of Austin v. Reagan Nat’l Advert. of Austin, LLC, 142 S. Ct.
1464, 1471 (2022).
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Court held that the distinction between commercial handbills and newspa-
pers failed intermediate scrutiny because handbills “are no greater an eyesore
than the newsracks permitted to remain on Cincinnati’s sidewalks.” Id. at
425. And because “the distinction Cincinnati has drawn had absolutely no
bearing on the interests it has asserted,” the Court held that the City failed
to “established the ‘fit’ between its goals and its chosen means.” Id. at 428.
Likewise, the provisions at issue here have no bearing on the interests
the City of Austin asserts. The City offers no studies, surveys, or statistics
to suggest that digitizing the limited number of grandfathered off-premises
signs would be either more dangerous or less attractive than digitizing on-
premises signs. Neither does common sense support the distinction because
off-premises digital signs employ the exact same technology as their on-
premises counterparts. If anything, just like the newsracks in Discovery Net-
work, on-premises signs are “arguably the bigger culprit because of their su-
perior number.” Id. at 426. When put under the appropriate quantum of
scrutiny, the City’s justifications do not hold up.
But the majority opinion does not truly test the City’s justifications.
It admits that “little empirical evidence” supports the “restrictions” at issue
here. Ante at 15. Even so, it declines to probe the issue further, citing Metro-
media, Inc. v. City of San Diego for the proposition that the court ought to
afford “substantial weight” to the City’s “legislative judgment that on-
premises speech is more valuable than off-premises speech.” Id. at 11–12.
A more precise reading of Metromedia suggests something different.
There, the Court considered the constitutionality of the City of San Diego’s
ordinance prohibiting outdoor advertising display signs. 453 U.S. at 493.
True, the Court expressed caution in testing the City’s judgment. Id. at 509(“We likewise hesitate to disagree with the accumulated, common-sense
judgements of local lawmakers.”). But the Court expressly limited that
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caution to purely commercial speech restrictions. In a later section discussing
non-commercial speech restrictions, the Court explained that the latter are to
be given significantly less deference. Id. at 514 (“Although the city may dis-
tinguish between the relative value of different categories of commercial
speech, the city does not have the same range of choice in the area of non-
commercial speech to evaluate the strength of, or distinguish between, vari-
ous communicative interests.”).
Instead of acquiescing to unsubstantiated rationales, the Court coun-
seled against “deferring to merely rational legislative judgments” and em-
phasized that it is the court’s responsibility “to weigh the circumstances and
to appraise the substantiality of the reasons advance[d] in support of the reg-
ulation.” Id. at 519. And unlike the majority opinion here, neither did the
Court attempt to come up with its own possible reasons for why the regula-
tions “may” be justified. Ante at 11–12. Rather, the Court determined that
the ordinance was “unconstitutional on its face” because the City failed to
“explain how or why” its purported distinction related to non-commercial
billboards would promote safe driving. Metromedia, 453 U.S. at 521. In short,
the substantial deference applied by the majority opinion has no place in the
intermediate-scrutiny analysis of non-commercial speech restrictions.
The majority opinion asserts that Metromedia’s commercial vs. non-
commercial distinction “is not legally relevant” because the Sign Code is
content neutral, ante at 16, but that invents a logical rule that does not exist
in Metromedia. The Court in Metromedia clearly explained what motivated
its deference, and what did not. It noted: “The Constitution . . . accords a
lesser protection to commercial speech than to other constitutionally guaran-
teed expression.” 453 U.S. at 507 (quoting Central Hudson Gas & Electric
Corp. v. Public Service Comm’n, 447 U.S. 557 (1980)). Accordingly, the Con-
stitution affords noncommercial speech “a greater degree of protection than
commercial speech.” Id. at 513. And because the first provision at issue there
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only restricted commercial speech, the Court determined that a heightened
deference to the legislature was proper. See id. at 509.
Second, the Court was clear that any absence of regulation on the
communicative aspect of speech did not motivate its heightened deference to
the city. The Court instructed that courts should conduct a “careful inquiry
into the competing concerns,” even if the ordinance at issue only impinges
on the noncommunicative aspects of speech. Id. at 517. It observed that
“[b]ecause regulation of the non-communicative aspects of a medium often
impinges to some degree on the communicative aspects,” “[a] court may not
escape the task of assessing the First Amendment interest at stake and weigh-
ing it against the public interest allegedly served by the regulation.” Id. at
502. Thus, contrary to the majority opinion’s assertions, Metromedia does
not stand for the proposition that courts can defer to “common-sense” judg-
ments of local lawmakers merely because the ordinance “treats commercial
and noncommercial messages alike and is content neutral.” Ante at 16; see
Nat’l Advert. Co. v. City of Orange, 861 F.2d 246, 248 (9th Cir. 1988)
(“Merely treating noncommercial and commercial speech equally is not con-
stitutionally sufficient. The first amendment affords greater protection to
noncommercial than to commercial expression.”) (citing Metromedia, 453
U.S. at 506–07).
Finally, the City and the majority opinion point us to the Seventh Cir-
cuit’s recent decision in Adams Outdoor Advertising LP v. City of Madison,
Wisconsin, asserting that it lends support to the digitization ban. No. 20-
1670, 2023 WL 33962, at *3 (7th Cir. Jan. 4, 2023). It does not. Unlike the
ordinance in the present case, which apply to both commercial and non-com-
mercial messages, the ordinance in Adams only applies to commercial mes-
sages. Id. This difference is crucial because, in the context of purely com-
mercial speech restriction, we ought to give some deference to reasonable
legislative judgment, and “the city may distinguish between the relative value
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of different categories of commercial speech.” Metromedia, 453 U.S. at 514.
In contrast, in the area of non-commercial speech, we ought not “defer[] to
merely rational legislative judgments.” Id. at 519.
Here, the parties do not dispute that the provisions at issue apply to
non-commercial speech. Cf. Adams, 2023 WL 33962, at *3 (“[T]he defini-
tion of ‘advertising sign’ in Madison’s ordinance is limited to off-premises
signs bearing commercial messages.”). And this panel has likewise observed
that “the regulation applies to any noncommercial message ‘off-premises.’”
Reagan Nat’l Advert. of Austin, Inc. v. City of Austin, 972 F.3d 696, 708 (5th
Cir. 2020), rev’d on other grounds, City of Austin v. Reagan Nat’l Advert. of
Austin, LLC, 142 S. Ct. 1464 (2022). Thus, consistent with the Supreme
Court’s reasoning in Metromedia, I would not defer to legislative judgments,
rely on the City’s scant empirical evidence, or construct possible reasons for
why the distinction “may” be justified. Ante at 11–12. After all, the applica-
ble standard here is intermediate scrutiny, not rational basis.
Consequently, because the City has not carried its “burden to estab-
lish a ‘reasonable fit’ between its legitimate interests in safety and esthetics
and its choice of a limited and selective prohibition,” I would hold that the
selective prohibition of off-premises signs digitization fails intermediate scru-
tiny. Discovery Network, 507 U.S. at 416. With great respect, I dissent from
the majority opinion’s conclusion that the Sign Code survives intermediate
scrutiny and is consistent with the First Amendment.
22