A few years ago, the City of Austin told two outdoor advertising companies -- Reagan National Advertising of Austin and Lamar Advantage Outdoor Company -- that they could not digitize their existing billboards -- since a local regulation prohibited the digitizing of off-premises signs (but not on-premises signs).  The companies sued, arguing that the ordinance violated the First Amendment.  In a recent decision, the Fifth Circuit agreed, and struck down the regulation. 

The outdoor companies argued that the regulation -- which distinguished between on-premises and off-premises signs -- was a content-based restriction on all speech that cannot survive the strict scrutiny required by the First Amendment. 

Is the ordinance content-based? 

The court first considered whether regulation's distinction between on-premises and off-premises billboards is a content-based restriction.  If the distinction is content-based, then it is "presumptively unconstitutional" and subject to strict scrutiny.  Looking to the Supreme Court's 2015 decision in Reed v. Town of Gilbert -- which some saw as a drastic change in First Amendment jurisprudence -- the court here asked whether the ordinance is targeting speech "based on its communicative content."  In other words, does the ordinance apply to "particular speech because of the topic discussed or the idea or message expressed"? 

In on order to determine whether a sign is an off-premises or on-premises sign under the Austin regulation, one must read the sign in order to determine whether it advertises "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."  The court held that, since "off-premises" signs are defined by their purpose -- in other words, whether or not they advertise something located at the location of the billboard -- the regulation is, in fact, content-based.  

Does the regulation only concern commercial speech? 

The next question the court considered was whether the regulation only restricted "commercial speech," which is subject to less protection under the First Amendment.  

The court held that because "the regulation applies with equal force to both commercial and noncommercial messages," the ordinance's content-based restriction was subject to strict scrutiny (rather than the intermediate scrutiny required under Central Hudson).  The court wrote, "A regulation covering billboards is not exempt from strict scrutiny simply because most billboards display commercial messages." 

Does the regulation survive strict scrutiny?

In order to survive strict scrutiny, the City of Austin was required to prove that "the restriction furthers a compelling interest and is narrowly tailored to achieve that interest."  

The court held that the City's stated justification for the regulation -- to "protect the aesthetic value of the City and to protect public safety" -- does not meet that standard, since the City could not demonstrate why those issues were only posed by off-premises signs, but not on-premises signs.  Citing Reed, the court wrote, "A law cannot be regarded an interest of the highest order, and thus as justifying a restriction upon truthful speech, when it leaves appreciable damage to that supposedly vital interest unprohibited."