City of Austin, Texas v. Reagan National Advertising
Overview
Overview
The Supreme Court held 6-3 that Austin's sign ordinance distinguishing between on-premises and off-premises signs is content-neutral under the First Amendment and subject to intermediate scrutiny, because the distinction turns on location and function rather than on the message conveyed.
The Facts
Facts
Austin's sign code permitted on-premises digital signs but prohibited off-premises signs, including billboards, from being digitized. Reagan National Advertising, a billboard company, challenged the code as content-based under Reed v. Town of Gilbert, arguing that an official must read a sign's content to determine whether it advertises a business on the same premises where the sign stands. The Fifth Circuit agreed and applied strict scrutiny.
The Issue
Issue
Whether a sign ordinance that distinguishes between on-premises and off-premises signs is content-based under the First Amendment because applying the distinction requires reading the sign's message.
The Rules
Rule
A regulation is content-based under Reed if it singles out specific subject matter or viewpoints. An on/off-premises distinction is a location-based rule: the relevant question is where a sign's subject is located relative to the sign, not what the sign says. Requiring officials to read content in order to apply a location rule does not transform a facially neutral regulation into a content-based one.
The Application
Analysis
The Supreme Court applied the Reed test by distinguishing between the subject matter of a regulation and the task of applying it: although officials may need to read a sign's content to determine which business it advertises and thus whether the sign qualifies as on-premises or off-premises, this evidentiary requirement does not make the distinction itself content-based, because the rule turns on location and function, not the message conveyed. The Court rejected the Fifth Circuit's logic that any regulation requiring content-reading becomes per se content-based under Reed, holding instead that a neutral location-based rule remains content-neutral even if applying it incidentally requires examining the sign's message. Austin's ordinance thus survived Reed's threshold because the on/off-premises distinction is categorically different from regulations that target specific subject matter or viewpoints. It is simply a functional rule about where a business advertises relative to its premises.
The Conclusion
Conclusion
Reversed 6-3. Austin's sign code is content-neutral and subject to intermediate scrutiny. The Fifth Circuit's application of strict scrutiny was error. The case was remanded for analysis under the intermediate standard. Thomas, joined by Gorsuch and Barrett, dissented.
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