Auspro Enterprises, LP v. Texas Department of Transportation

ACCEPTED
03-14-00375-CV
12936746
THIRD COURT OF APPEALS
AUSTIN, TEXAS
9/27/2016 6:07:11 PM
JEFFREY D. KYLE
CLERK
No. 03-14-00375-CV
FILED IN
In the Court of Appeals 3rd AUSTIN,
COURT OF APPEALS
TEXAS
for the Third Judicial District
9/27/2016 6:07:11 PM
JEFFREY D. KYLE
Austin, Texas Clerk
AUSPRO ENTERPRISES, LP,
Appellant,
v.
TEXAS DEPARTMENT OF TRANSPORTATION,
Appellee.
On Appeal from the
345th Judicial District Court of Travis County, Texas
APPELLEE’S MOTION FOR REHEARING
KEN PAXTON SCOTT A. KELLER
Attorney General of Texas Solicitor General
JEFFREY C. MATEER MATTHEW H. FREDERICK
First Assistant Attorney General Deputy Solicitor General
State Bar No. 24040931
OFFICE OF THE ATTORNEY GENERAL
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-6407
Fax: (512) 474-2697
matthew.frederick
@texasattorneygeneral.gov
COUNSEL FOR APPELLEE
TABLE OF CONTENTS
Table Of Authorities ................................................................................ iii
I. This Case Does Not Implicate Commercial Speech, and
Neither Does Reed. .................................................................. 3
A. Commercial Speech Does Not Raise the Same
Constitutional Concerns as AusPro’s Political
Speech............................................................................. 3
B. Reed Does Not Subject Regulations of Commercial
Speech to Strict Scrutiny. .............................................. 5
C. AusPro’s Challenge to the Act Does Not Extend to
Regulation of Commercial Speech. .............................. 11
II. Severability Principles Require the Court to Preserve
the Act as It Applies to Commercial Speech. ....................... 13
A. The Texas Legislature Intended to Regulate
Commercial Speech. ..................................................... 14
B. The Act Can Be Executed in a Manner that
Complies with Federal Law and Avoids the
Potential Loss of More than $300 Million in
Federal Highway Funds. ............................................. 16
Prayer ...................................................................................................... 19
Certificate of Service ............................................................................... 21
Certificate of Compliance ........................................................................ 21
ii
TABLE OF AUTHORITIES
Page(s)
Cases
Agostini v. Felton,
521 U.S. 203 (1997) ............................................................................. 19
Ayotte v. Planned Parenthood of N. New England,
546 U.S. 320 (2006) ............................................................................. 17
Bates v. State Bar of Arizona,
433 U.S. 350 (1977) ......................................................................... 4, 13
Boelter v. Hearst Commc’ns, Inc.,
2016 WL 3369541 (S.D.N.Y. June 17, 2016) ...................................... 10
Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n,
447 U.S. 557 (1980) ............................................................... 4, 5, 11, 16
Citizens for Free Speech, LLC v. City of Alameda,
114 F. Supp. 3d 952 (N.D. Cal. 2015) ................................................. 10
Citizens United v. Fed. Elec. Comm’n,
558 U.S. 310 (2010) ............................................................................... 3
City of Cincinnati v. Discovery Network, Inc.,
507 U.S. 410 (1993) ............................................................................... 5
City of Renton v. Playtime Theatres, Inc.,
475 U.S. 41 (1986) ................................................................................. 8
Contest Promotions, LLC v. City & Cnty. of San Francisco,
2015 WL 4571564 (N.D. Cal. July 28, 2015) ................................ 10–11
CTIA—The Wireless Assoc. v. City of Berkeley,
139 F. Supp. 3d 1048 (N.D. Cal. 2015) ........................................... 9–10
Davidson Cnty. v. Elrod,
232 S.W.2d 1 (Tenn. 1950) .................................................................. 17
iii
Geeslin v. State Farm Lloyds,
255 S.W.3d 786 (Tex. App..—Austin 2008, no pet.) ........................... 14
Geft Outdoor LLC v. Consol. City of Indianapolis & Cnty. of
Marion, 2016 WL 2941329 (S.D. Ind. May 20, 2016)......................... 10
Lamar Central Outdoor, LLC v. City of Los Angeles,
245 Cal. App. 4th 610 (2016) .............................................................. 11
Lone Star Security & Video, Inc. v. City of Los Angeles,
827 F.3d 1192 (9th Cir. 2016) ............................................................. 10
Lotze v. Washington,
444 U.S. 921 (1979) ............................................................................... 7
Markham Advertising Co. v. Washington,
393 U.S. 316 (1969) ............................................................................... 7
Marks v. United States,
430 U.S. 188 (1977) ............................................................................... 9
Mass. Assoc. of Private Career Schs. v. Healey,
159 F. Supp. 3d 173 (D. Mass. 2016) .................................................. 10
Members of the City Council v. Taxpayers for Vincent,
466 U.S. 789 (1984) ........................................................................... 7–8
Metromedia, Inc. v. City of San Diego,
453 U.S. 490 (1981) ............................................................. 3, 6, 7, 9, 18
Newman Signs, Inc. v. Hjelle,
440 U.S. 901 (1979) ............................................................................... 7
Northland Family Planning Clinic, Inc. v. Cox,
487 F.3d 323 (6th Cir. 2007) ............................................................... 17
Ohralik v. Ohio State Bar Ass’n,
436 U.S. 447 (1978) ............................................................................... 4
Peterson v. Village of Downers Grove,
2016 WL 427566 (N.D. Ill. Feb. 4, 2016) ............................................ 10
iv
Pruett v. Harris Cnty. Bail Bond Bd.,
249 S.W.3d 447 (Tex. 2008) ................................................................ 16
Reed v. Town of Gilbert,
135 S. Ct. 2218 (2015) ................................................................. passim
Rodriguez de Quijas v. Shearson/Am. Express, Inc.,
490 U.S. 477 (1989) ............................................................................. 19
Rose v. Doctors Hospital,
801 S.W.2d 841 (Tex. 1990) ................................................................ 15
Second Amendment Arms v. City of Chicago,
135 F. Supp. 3d 743 (N.D. Ill. 2015) ................................................... 10
Suffolk Outdoor Advertising Co. v. Hulse,
439 U.S. 808 (1978) ............................................................................... 7
Texas Dep’t of Transp. v. Barber,
111 S.W.3d 86 (Tex. 2003) .................................................................... 8
Thomas v. Schroer,
127 F. Supp. 3d 864 (W.D. Tenn. 2015).......................................... 9, 17
United States v. Salerno,
481 U.S. 739 (1987) ............................................................................. 13
Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council,
Inc., 425 U.S. 748 (1976)....................................................................... 4
Valentine v. Chrestensen,
316 U.S. 52 (1942) ................................................................................. 4
Statutes and Rules
23 U.S.C. § 131(b) ...................................................................................... 1
Tex. Gov’t Code § 311.032(c) ................................................................... 15
Tex. Transp. Code
§§ 391.001–430.001 ............................................................................... 2
§ 391.001(10) ....................................................................................... 14
v
§ 391.001(12) ....................................................................................... 14
§ 391.252 ............................................................................................. 16
§ 391.252(a)(1)..................................................................................... 17
Tex. R. App. P. 49.9 ................................................................................. 13
Other Authorities
Brief for the United States as Amicus Curiae Supporting
Petitioners, Reed v. Town of Gilbert, 135 S. Ct. 2218
(2015) (No. 13-502), 2014 WL 4726504 .............................................. 18
U.S. Department of Transportation, Federal Highway
Administration, Notice 4510.788: Apportionment of
Federal-Aid Highway Funds for Fiscal Year (FY) 2015
Pursuant to the Highway and Transportation Funding
Act of 2014, as Amended tbl.1 (Aug. 14, 2015) ................................ 1–2
vi
No. 03-14-00375-CV
In the Court of Appeals
for the Third Judicial District
Austin, Texas
AUSPRO ENTERPRISES, LP,
Appellant,
v.
TEXAS DEPARTMENT OF TRANSPORTATION,
Appellee.
On Appeal from the
345th Judicial District Court of Travis County, Texas
APPELLEE’S MOTION FOR REHEARING
TO THE HONORABLE THIRD COURT OF APPEALS:
The panel’s opinion provides for a sweeping remedy that invalidates
two subchapters of the Texas Transportation Code, thereby prohibiting
state regulations on commercial speech and putting ten percent of the
State’s federal highway funding—more than $300 million—at risk. See
23 U.S.C. § 131(b).1 This case does not call for such a broad remedy
1The Federal Highway Administration apportioned more than $3.3 billion in federal-
aid highway funds to the State of Texas for fiscal year 2015. See U.S. Department of
Transportation, Federal Highway Administration, Notice 4510.788: Apportionment
of Federal-Aid Highway Funds for Fiscal Year (FY) 2015 Pursuant to the Highway
because AusPro’s claims and Reed v. Town of Gilbert, 135 S. Ct. 2218
(2015), do not implicate commercial speech.
The panel’s opinion correctly recognizes that “because Auspro’s
speech here is unquestionably noncommercial, this case, like Reed, does
not implicate commercial speech considerations.” Opinion at 5 n.10. The
remedy, however, directly implicates commercial-speech considerations
because it invalidates Subchapters B and C of the Texas Highway
Beautification Act (the “Act”), Tex. Transp. Code §§ 391.001–430.001,
and related regulations entirely, even as applied to commercial speech. A
ban on regulation of commercial speech goes beyond the controversy in
this case, the injury alleged by AusPro, and the Supreme Court’s decision
in Reed.
The Texas Department of Transportation seeks panel rehearing on
the panel’s remedy. The Department does not ask the Court to revisit its
holding that the Act violates the First Amendment as it applies to
political speech like AusPro’s. It requests only that the Court modify its
opinion and judgment to enjoin the application of Subchapters B and C
and Transportation Funding Act of 2014, as Amended tbl.1 (Aug. 14, 2015),
https://www.fhwa.dot.gov/legsregs/directives/notices/n4510788/n4510788_t1.cfm
2
to noncommercial speech and allow those provisions of the Act to stand
as they apply to commercial speech. That result is congruent to AusPro’s
claim, faithful to Supreme Court precedent, and consistent with the
reasoning of the Court’s opinion.
I. THIS CASE DOES NOT IMPLICATE COMMERCIAL SPEECH, AND
NEITHER DOES REED.
A. Commercial Speech Does Not Raise the Same
Constitutional Concerns as AusPro’s Political Speech.
Because the Act applies to both commercial and noncommercial
speech, it implicates two distinct First Amendment doctrines.
Noncommercial speech—including political and ideological speech—
receives the highest level of constitutional protection. E.g., Citizens
United v. Fed. Election Comm’n, 558 U.S. 310, 339 (2010) (“The First
Amendment has its fullest and most urgent application to speech uttered
during a campaign for political office.” (quotation marks omitted)); cf.
CR.62 (“This case involves core political speech, which is at the heart of
the First Amendment . . . .”). Commercial speech, on the other hand,
traditionally received no First Amendment protection. See, e.g.,
Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 505 (1981) (“Prior to
1975, purely commercial advertisements of services or goods for sale were
3
considered to be outside the protection of the First Amendment.” (citing
Valentine v. Chrestensen, 316 U.S. 52, 62 (1942))). The Supreme Court
has since held that the First Amendment applies to commercial speech,
but with the caveat that “[t]he Constitution . . . accords a lesser protection
to commercial speech than to other constitutionally guaranteed
expression.” Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447
U.S. 557, 562–63 (1980). This reflects “the ‘commonsense’ distinction
between speech proposing a commercial transaction, which occurs in an
area traditionally subject to government regulation, and other varieties
of speech.” Id. (quoting Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447,
455–56 (1978)).
Content-based regulation of commercial speech does not raise the
same constitutional concerns as similar regulation of noncommercial
speech. Indeed, the very notion of “commercial speech” implies a content-
based determination. See, e.g., Bates v. State Bar of Arizona, 433 U.S.
350, 363 (1977) (“If commercial speech is to be distinguished, it ‘must be
distinguished by its content.’” (quoting Va. State Bd. of Pharmacy v. Va.
Citizens Consumer Council, Inc., 425 U.S. 748, 761 (1976))). Accordingly,
the Supreme Court has noted that particular “features of commercial
4
speech permit regulation of its content,” whereas “[i]n most other
contexts, the First Amendment prohibits regulation based on the content
of the message.” Central Hudson, 447 U.S. at 564 n.6.
B. Reed Does Not Subject Regulations of Commercial
Speech to Strict Scrutiny.
In Reed, the Supreme Court rewrote the rules for claims involving
content-based regulation of noncommercial speech. There, the plaintiffs
challenged certain provisions of a municipal ordinance that set different
standards for different kinds of noncommercial speech. See Reed, 135 S.
Ct. at 2224; cf. CR.67 (arguing that the Act’s election-sign exemption is
content-based because it reflects “a governmental preference for speech
concerning traditional ‘elections’ over other political speech unrelated to
an election”). Under then-current doctrine, intermediate scrutiny applied
because the challenged provisions did not betray an effort to target
particular viewpoints or messages. See, e.g., City of Cincinnati v.
Discovery Network, Inc., 507 U.S. 410, 428 (1993) (discussing cases
approving time-place-and-manner restrictions “provided that they are
adequately justified without reference to the content of the regulated
speech” (quotation marks omitted)). But the Supreme Court changed
course, holding that the town’s content-based rules were subject to strict
5
scrutiny regardless of the underlying motive. Reed, 135 S. Ct. at 2228 (“A
law that is content based on its face is subject to strict scrutiny regardless
of the government's benign motive, content-neutral justification, or lack
of animus toward the ideas contained in the regulated speech.” (quotation
marks omitted)). The Department recognizes that in the wake of Reed,
the Act is subject to strict scrutiny insofar as it creates content-based
regulations on noncommercial speech, including the political speech at
issue here.
But Reed did not overrule Central Hudson or Metromedia, and it
did not change the rules that apply to regulations on commercial speech.
The majority opinion in Reed implicitly limited the scope of its holding
when it declined to mention, much less overrule, previous cases
upholding content-based regulations of commercial speech. In
Metromedia, for example, seven Justices concluded that the city’s
interest in preventing visual clutter justified a prohibition on billboards.
453 U.S. at 507–08, 510 (plurality opinion of White, J., joined by Stewart,
Marshall, and Powell, JJ.); id. at 552 (Stevens, J., dissenting in part); id.
at 559–61 (Burger, C.J., dissenting); id. at 570 (Rehnquist, J.,
dissenting). Metromedia declined to overrule the Supreme Court’s earlier
6
decision in Suffolk Outdoor Advertising Co. v. Hulse, 439 U.S. 808 (1978),
summarily dismissing an appeal from a judgment sustaining “a
municipal ordinance that distinguished between offsite and onsite
billboard advertising, prohibiting the former and permitting the latter,”
Metromedia, 453 U.S. at 498. The ordinance in question defined
“billboard” to mean “[a] sign which directs attention to a business,
commodity, service, entertainment, or attraction sold, offered or existing
elsewhere than upon the same lot where such sign is displayed.” Id. at
499 (quotation marks omitted). By summarily disposing of the case, the
Supreme Court made a decision on the merits “rejecting the submission
. . . that prohibiting offsite commercial advertising violates the First
Amendment.” Id. at 498–99. Metromedia declined to overrule other
summary decisions upholding facial and as-applied challenges to similar
state laws. See id. at 499 (citing Lotze v. Washington, 444 U.S. 921 (1979);
Newman Signs, Inc. v. Hjelle, 440 U.S. 901 (1979); Markham Adver. Co.
v. Washington, 393 U.S. 316 (1969)). And in Members of the City Council
v. Taxpayers for Vincent, the Court reaffirmed Metromedia, holding that
“the visual assault . . . presented by an accumulation of signs posted on
7
public property” constituted “a significant substantive evil within the
City’s power to prohibit,” 466 U.S. 789, 806–07 (1984).
Confirming the limits on the majority’s holding, Justice Alito wrote
separately to provide examples of laws that would not be subject to strict
scrutiny under the Court’s decision. See Reed, 135 S. Ct. at 2233 (Alito,
J., concurring, joined by Kennedy and Sotomayor, JJ.). The concurrence’s
non-exhaustive list included two examples with special relevance to this
case: “Rules distinguishing between the placement of signs on
commercial and residential property”; and “Rules distinguishing between
on-premises and off-premises signs.” Id.; cf. Texas Dep’t of Transp. v.
Barber, 111 S.W.3d 86, 99–102 (Tex. 2003) (upholding the Act’s
distinction between on-premise and off-premise signs because it
regulates signs based on location and does not discriminate against any
viewpoint or subject matter); id. at 101 (“The state has simply recognized
that the right to advertise an activity conducted on-site is inherent in the
ownership or lease of the property.”).2 Because Justice Alito’s concurrence
2Reed abrogates the Texas Supreme Court’s alternative holding in Barber—that “the
Act is also content neutral because it is ‘justified without reference to the content of
the regulated speech.’” Barber, 111 S.W.3d at 100 & n.83 (quoting City of Renton v.
Playtime Theatres, Inc., 475 U.S. 41, 48 (1986)).
8
represents the views of three members of the six-Justice majority, it is
essential to the meaning of Reed. Cf. Marks v. United States, 430 U.S.
188, 193 (1977) (“When a fragmented Court decides a case and no single
rationale explaining the result enjoys the assent of the five justices, the
holding of the Court may be viewed as that position taken by those
Members who concurred in the judgments on the narrowest grounds.”)
(quotation marks omitted).
Consistent with the Supreme Court’s commercial-speech cases and
Justice Alito’s concurrence, lower courts have recognized that Reed does
not undermine the commercial-speech doctrine.3 The Northern District
of California, for instance, cautioned that “[t]he Supreme Court has
clearly made a distinction between commercial speech and
noncommercial speech, see, e.g., Central Hudson . . ., and nothing in its
recent opinions, including Reed, even comes close to suggesting that that
3 The Western District of Tennessee’s interpretation of Reed at the preliminary-
injunction stage, see Thomas v. Schroer, 127 F. Supp. 3d 864 (W.D. Tenn. 2015),
carries no persuasive weight to the contrary for at least two reasons. First, it did not
consider a regulation on commercial speech. See id. at 869 (referring to “billboards
and signs displaying noncommercial content”). Second, it ignored Supreme Court
decisions upholding distinctions between on- and off-premise signs. Cf., e.g.,
Metromedia, 453 U.S. at 498–99. Had the district court devoted more attention to the
issue, it could not have dismissed Justice Alito’s cautionary instructions as
“unsupported conclusions.” Thomas, 127 F. Supp. 3d at 873.
9
well-established distinction is no longer valid.” CTIA—The Wireless Ass’n
v. City of Berkeley, 139 F. Supp. 3d 1048, 1061 (N.D. Cal. 2015); see also
Lone Star Sec. & Video, Inc. v. City of Los Angeles, 827 F.3d 1192, 1198
n.3 (9th Cir. 2016) (“[A]lthough laws that restrict only commercial speech
are content based, see Reed[], 135 S. Ct. at 2232, such restrictions need
only withstand intermediate scrutiny.”); Mass. Ass’n of Private Career
Sch. v. Healey, 159 F. Supp. 3d 173, 194 (D. Mass. 2016) (rejecting
argument that Reed overturned commercial-speech doctrine and holding
that “at most, the appropriate level of First Amendment scrutiny . . . is
intermediate scrutiny under Central Hudson”).4 Similarly, the California
4 See also, e.g., Boelter v. Hearst Commc’ns, Inc., Nos. 15 Civ. 3934, 15 Civ. 9279,
39342016 WL 3369541, at *9 n.10 (S.D.N.Y. June 17, 2016) (noting that the Supreme
Court “has not explicity overturned the decades of jurisprudence holding that
commercial speech, and speech like it—which, inherently, requires a content-based
distinction—warrants less First Amendment protection. . . . The Court will not take
that leap here.”); Geft Outdoor LLC v. Consol. City of Indianapolis & Cnty. of Marion,
No. 1:15-cv-01568, 2016 WL 2941329, at *10 (S.D. Ind. May 20, 2016) (“Few courts
have had occasion to address it post-Reed, but the majority of courts that have
considered the question have held that the holding in Reed is limited to
noncommercial sign regulations and does not alter or otherwise affect precedent
relating to municipal regulations of commercial signs.”); Peterson v. Vill. of Downers
Grove, No. 14 C 09851, 2016 WL 427566, at *4 (N.D. Ill. Feb. 4, 2016) (“Absent an
express overruling by the Supreme Court of Central Hudson, which clearly applies to
commercial speech like [plaintiff]’s signs, Central Hudson must be deemed to apply
here.”); Second Amendment Arms v. City of Chicago, 135 F. Supp. 3d 743, 755 (N.D.
Ill. 2015) (applying intermediate scrutiny to dismiss a First Amendment challenge to
city ordinance banning the display of “firearms or ammunition in [any] window”);
Citizens for Free Speech, LLC v. City of Alameda, 114 F. Supp. 3d 952, 968–69 (N.D.
Cal. 2015) (applying intermediate scrutiny after determining that the challenged ban
on billboards applied only to commercial speech); Contest Promotions, LLC v. City &
10
Court of Appeals has held that commercial-speech doctrine remains in
force after Reed. See Lamar Central Outdoor, LLC v. City of Los Angeles,
245 Cal. App. 4th 610, 625 (2016) (“Reed did not cite Metromedia[] either,
so Reed certainly did not overrule or disapprove that precedent.”).
Under the Supreme Court’s discrete commercial-speech doctrine,
regulation of commercial speech receives intermediate scrutiny even
though it is inherently content-based. See, e.g., Central Hudson, 447 U.S.
at 564 n.6. Reed did not mention the Court’s commercial-speech doctrine,
let alone overrule it. Commercial speech simply was not before the Court.
C. AusPro’s Challenge to the Act Does Not Extend to
Regulation of Commercial Speech.
AusPro has not challenged the Act as it applies to commercial
speech, nor could it. AusPro has no reason to challenge the Act’s
regulation of commercial advertisements because it does not complain
that its own commercial speech has been restricted. Without an injury to
Cnty. of San Francisco, No. 15-cv-00093, 2015 WL 4571564, at *4 (N.D. Cal. July 28,
2015) (“Because Reed does not abrogate prior case law holding that laws which
distinguish between on-site and off-site commercial speech survive intermediate
scrutiny, the Court holds that its prior analysis continues to control the fate of
plaintiff’s First Amendment claim.”).
11
its own interest in commercial speech, AusPro could not establish
standing to challenge the Act as applied to commercial speech.
AusPro has consistently disclaimed any challenge to the Act’s
regulation of commercial speech. It explained to the district court:
The speech that we’re talking about in this particular case,
Your Honor, is this sign. It’s maybe not the most beautiful
sign, but it is a sign that I think we all can agree is core
political speech. It does not relate to the sale of any product.
It does not relate to anything that is being marketed on the
premise. It is a core political statement.
2.RR.18. Although AusPro changed its approach significantly on appeal,
it has not expanded its claim to attack commercial-speech regulations. In
its opening brief, for instance, AusPro noted the “distinction between
commercial and noncommercial speech” but stated, “Whether this
distinction remains valid is not at issue in this case involving
noncommercial political speech.” Appellant’s Opening Brief 21 & n.6.
Even if AusPro could argue that it attempted to challenge the Act
as it applies to commercial speech, the Court has no basis to resolve that
claim. First, the parties have not briefed Reed’s effect on commercial-
speech doctrine or the application of intermediate scrutiny to the Act.
Second, AusPro cannot rely on alleged injuries to third parties’
commercial-speech rights, even in the guise of a facial challenge. Because
12
Reed does not address commercial-speech doctrine, it provides no basis
to hold that every application of the Act against commercial speech is
invalid. See, e.g., United States v. Salerno, 481 U.S. 739, 745 (1987)
(explaining that in a facial challenge, “the challenger must establish that
no set of circumstances exists under which the Act would be valid”).
AusPro cannot invoke overbreadth because that doctrine does not apply
to commercial speech. See Bates, 433 U.S. at 381 (“[W]e decline to apply
[the overbreadth doctrine] to professional advertising, a context where it
is not necessary to further its intended objective.”). As a result, even if
Reed implied that the Act is unconstitutional in every application to
noncommercial speech (which it does not5), it provides no support for a
facial challenge to the Act as applied to commercial speech.
II. SEVERABILITY PRINCIPLES REQUIRE THE COURT TO PRESERVE
THE ACT AS IT APPLIES TO COMMERCIAL SPEECH.
Given the limits of Reed and of AusPro’s claim, the Court was right
to conclude that this case does not implicate commercial speech. That
leaves two questions: Did the Legislature intend to regulate commercial
5By declining to revisit points the Court has already addressed, the Department does
not waive or forfeit any arguments, including but not limited to arguments about
Reed’s effect on the Act as applied to noncommercial speech. See Tex. R. App. P. 49.9.
13
speech; and is it possible to apply the Act to commercial speech without
also regulating noncommercial speech? See, e.g., Geeslin v. State Farm
Lloyds, 255 S.W.3d 786, 797 (Tex. App.—Austin 2008, no pet.) (“The goal
of severability is to retain the valid portions and applications of a statute
whenever possible”). The answer to both questions is yes. Severability
allows the Court to protect AusPro’s First Amendment rights while
respecting the Legislature’s intent to the greatest extent possible.
A. The Texas Legislature Intended to Regulate
Commercial Speech.
The plain text of the Act leaves no room to doubt that the
Legislature intended to regulate commercial speech. Subchapters B and
C apply to “outdoor advertising,” which the Legislature defined to mean
virtually any outdoor sign or display “designed, intended, or used to
advertise or inform.” Tex. Transp. Code § 391.001(10). That definition is
obviously broad enough to include commercial advertisements offering
goods or services. Cf. id. § 391.001(12) (defining “Specific information logo
sign” as a subset of signs containing brand names of “commercial
establishments” offering particular services).
Under Texas law, severability doctrine does not require courts to
strike down a statutory provision when a particular application violates
14
the Constitution. On the contrary, the Code Construction Act provides
expressly that unconstitutional applications of a statute must be severed
so that the statute remains in force as applied in all other circumstances.
Tex. Gov’t Code § 311.032(c) (“[I]f any provision of the statute or its
application to any person or circumstance is held invalid, the invalidity
does not affect other provisions or applications of the statute that can be
given effect without the invalid provision or application . . . .”) (emphasis
added); cf. Rose v. Doctors Hospital, 801 S.W.2d 841, 845–46 (Tex. 1990)
(severing an application of the Medical Liability and Insurance
Improvement Act’s cap on “health care liability claims” to “common law
claims,” which was previously held to violate the Texas Constitution, and
applying the statutory cap to the plaintiffs’ wrongful death claim, which
was created “by statute, not by the common law”). Here, insofar as the
Act’s content-based regulations violate the First Amendment as applied
to noncommercial speech, those applications must be severed, and the
Act must continue to apply to commercial speech.
15
B. The Act Can Be Executed in a Manner that Complies
with Federal Law and Avoids the Potential Loss of
More than $300 Million in Federal Highway Funds.
The Court’s opinion shows that Subchapters B and C can be
executed, as the Legislature intended, with respect to commercial speech.
The Court declined to strike down Subchapter I, which prohibits off-
premise signs adjacent to and visible from specific highways. See Tex.
Transp. Code § 391.252. The Court explained that “the provisions in
Subchapter I are not affected by our decision here because they authorize
the State to regulate commercial speech along certain specified
highways, specifically off-premise signs displaying messages regarding
‘goods, services, or merchandise.’” Opinion 24–25; id. at 25 n.108 (citing
Central Hudson, 447 U.S. at 563; Pruett v. Harris Cnty. Bail Bond Bd.,
249 S.W.3d 447, 456 (Tex. 2008)). The severability doctrine required the
Court to preserve Subchapter I because it could be “executed as the
Legislature intended in the absence of the Act’s outdoor-advertising
regulations.” Id. at 25. The same logic applies to Subchapters B and C as
applied to commercial advertisements.6
6To the extent Thomas v. Schroer might be thought to bear on the question, it merely
shows that Tennessee law deviates from the general preference for severability.
There, the district court recognized that courts generally seek to “avoid ‘nullify[ing]
more of a legislature’s work than is necessary,’ because doing so ‘frustrates the intent
16
If Texas’s severability doctrine requires the Court to preserve
Subchapter I because it regulates commercial speech, it necessarily
requires the Court to preserve Subchapters B and C as they apply to
commercial speech, including off-premise commercial signs. But by
invalidating Subchapters B and C in all their applications, the Court’s
opinion forbids the State to regulate commercial speech on Highway 71
but permits the State to regulate the same kind of speech on Highway
290. Compare Opinion 2 (noting that AusPro’s sign was located on
Highway 71) with Tex. Transp. Code § 391.252(a)(1) (prohibiting off-
premise signs on specific roads, including Highway 290). That cannot be
right. State regulation of commercial speech either conflicts with Reed or
it doesn’t. (It doesn’t.) A regulation of commercial speech under
Subchapter B is no less constitutional than a regulation of commercial
speech under Subchapter I. If the Court’s constitutional holding can
of the elected representatives of the people.’ . . . For this reason where partial, rather
than facial, invalidation is possible, it is the ‘required course.’” Northland Family
Planning Clinic, Inc. v. Cox, 487 F.3d 323, 333 (6th Cir. 2007) (quoting Ayotte v.
Planned Parenthood of N. New England, 546 U.S. 320, 329 (2006)), quoted in Thomas,
127 F. Supp. at 875–76. But that general rule gave way in Thomas to the contrary
presumption under Tennessee state law, which declared that “severance of
unconstitutional portions of a statute is generally disfavored.” Id. at 876 (citing
Davidson Cnty. v. Elrod, 232 S.W.2d 1, 2–3 (Tenn. 1950)).
17
accommodate Subchapter I, it must also accommodate the application of
Subchapters B and C to commercial advertisements. Cf. Metromedia, 453
U.S. at 521 n.26 (“Since our judgment is based essentially on the
inclusion of noncommercial speech within the prohibitions of the
ordinance, the California courts may sustain the ordinance by limiting its
reach to commercial speech, assuming the ordinance is susceptible to this
treatment.”) (emphasis added).
Preserving Subchapters B and C as applied to commercial speech
not only cures an internal conflict in the panel’s opinion, it avoids an
unnecessary risk to more than $300 million in federal highway funds. As
the panel noted, Subchapter I is not mandated by federal law, but
Subchapters B and C are. Opinion 25. The United States does not believe
that the federal Highway Beautification Act contains the same
constitutional flaws as the municipal code in Reed. See Brief for the
United States as Amicus Curiae Supporting Petitioners, Reed v. Town of
Gilbert, 135 S. Ct. 2218 (2015) (No. 13-502), 2014 WL 4726504, at *28–
34. If a specific provision or application of the Act is not clearly forbidden
by Reed—and regulation of commercial speech is not—the Department’s
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failure to enforce the Act puts the State’s highway funding in jeopardy.
That risk is unnecessary and avoidable here.
Withholding judgment on Subchapters B and Cs’ application to
commercial speech also respects the Supreme Court’s control over its own
precedents. The Court has consistently cautioned lower courts that “[i]f
a precedent of this Court has direct application in a case, yet appears to
rest on reasons rejected in some other line of decisions, the Court of
Appeals should follow the case which directly controls, leaving to this
Court the prerogative of overruling its own decisions.” Agostini v. Felton,
521 U.S. 203, 237 (1997) (citing Rodriguez de Quijas v. Shearson/Am.
Express, Inc., 490 U.S. 477, 484 (1989)). Insofar as Subchapters B and C
apply to commercial speech, the Supreme Court’s commercial-speech
cases directly control. This Court should follow those cases and let the
Supreme Court decide whether or not to overrule them.
PRAYER
The Court should grant the petition for rehearing, vacate its
opinion, withdraw its judgment, and issue a revised opinion and
judgment holding that Subchapters B and C of the Texas Highway
Beautification Act do not violate the First Amendment as applied to
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commercial speech. That would preserve AusPro’s interest, under Reed,
in displaying noncommercial signs on its property. It would honor the
Texas Legislature’s intent—apparent on the face of the Act—to regulate
commercial advertisements as required by the federal Highway
Beautification Act and avoid the risk of losing more than $300 million in
federal highway funds. It would follow the logic of the panel’s opinion,
which correctly upheld regulation of commercial advertisements under
Subchapter I. And it would avoid unwarranted interference with the
Supreme Court’s commercial-speech doctrine, which was neither
considered nor curtailed in Reed.
Respectfully submitted.
KEN PAXTON SCOTT A. KELLER
Attorney General of Texas Solicitor General
JEFFREY C. MATEER /s/ Matthew H. Frederick
First Assistant Attorney General MATTHEW H. FREDERICK
Deputy Solicitor General
State Bar No. 24040931
OFFICE OF THE ATTORNEY GENERAL
P.O. Box 12548 (MC 059)
Austin, Texas 78711-2548
Tel.: (512) 936-6407
Fax: (512) 474-2697
matthew.frederick
@texasattorneygeneral.gov
COUNSEL FOR APPELLEE
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CERTIFICATE OF SERVICE
On September 27, 2016, this motion was served via File &
ServeXpress and e-mail on:
Meredith B. Parenti
PARENTI LAW PLLC
P.O. Box 19152
Houston, Texas 77224
[Tel] (281) 224-5848
[Fax] (281) 605-5677
meredith@parentilaw.com
/s/ Matthew H. Frederick
MATTHEW H. FREDERICK
Counsel for Appellee
CERTIFICATE OF COMPLIANCE
In compliance with Texas Rule of Appellate Procedure 9.4(i)(2), this
brief contains 4,131 words as counted by the Microsoft Word 2010 word
count utility, excluding the portions of the brief exempted by Rule
9.4(i)(1).
/s/ Matthew H. Frederick
MATTHEW H. FREDERICK
Counsel for Appellee
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