Court Upholds the Onsite/Offsite Distinction

Several years ago, Reagan National Advertising and Lamar Outdoor sued the City of Austin in Federal Court in Texas because the city refused to allow digital billboard conversions but did permit digital on-premise signage. In 2019, the local District Court upheld the sign code. In 2020, the 5th Circuit Court of Appeals reversed, holding that the on-premises/off-premises distinction was unconstitutionally content-based, because it discriminated against one method of speech over another (i.e., on-premise digital messages v. off-premise digital messages), and therefore could not survive “strict scrutiny” judicial analysis (the standard of review for content-based speech restrictions).

In 2022, however, the US Supreme Court held the Austin sign code was essentially a reasonable “time, place and manner” land use regulation and sent the case back to the 5^th Circuit for reconsideration.

Ultimately, in 2023, the 5^th Circuit, applying Supreme Court guidance, came to the (proper) conclusion that the sign code was valid – because it did not control, regulate, nor legislate the topic or message, but instead controlled only the location of digital billboards.

Why is this case important to California?

It effectively takes the wind out of the sails of numerous court cases in Federal courts around the country that seek to eliminate the onsite/offsite distinction, i.e., it protects the “regulatory tradition” that there is in fact a meaningful difference between an offsite billboard and onsite business identification sign.  Such distinctions are part of an “unbroken tradition” that traces to the 1800s.

A commercial billboard is typically a standalone tenant leasing land to do its business; it is not simply protected speech mounted on a stick.  It is a physical manifestation of the business of advertising.  Whereas, an on-premise business sign – of the type CSA seeks to protect – is about identification (not only for customers, but for the preservation of the industry). While on-premise signs also serve an advertising function, their primary permanent job is to let the public know where a business is located.

In California, this has been deemed a property right as a matter of law:

A business sign is a part of the business itself, just as the structure housing the business is part of it, and the authority to conduct a business carries with it the right to maintain a business sign on the premises, subject to reasonable regulation by the government.
– Carlin v. City of Palm Springs (1971) 14 Cal. App. 3d 706.

The US Supreme Court’s pronouncement, as applied in Texas and thus effectively throughout the nation, finally cements the on/off distinction as a lawful governmental land use regulation (provided it is narrowly tailored and not based on the content of the message). Notably, in California, this issue was resolved favorably in State Court in a 2016 case where CSA/ISA submitted an amicus brief in support of the distinction. Lamar Central Outdoor, LLC v. City of Los Angeles (2016), 245 Cal. App. 4th 610.