U.S. Supreme Court Revives A Terrible First Amendment Exception – City of Austin v. Reagan National Advertising, LLC

Hell no.

Those words were the first two that I uttered when I opened the syllabus for the U.S. Supreme Court’s April 21, 2022 decision in City of Austin v. Reagan National Advertising, LLC. The syllabus clearly indicated that the Supreme Court had revived its commercial speech exception to the First Amendment by a 6-2.5 vote. While it is a seemingly insignificant development, it will affect every American consumer, and, in my opinion, it sets a dangerous precedent for sensibilities-based speech regulation.

The facts of the case are relatively mundane. Austin regulates “off-premise” billboards and business signs, which its own code defines 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.” Reagan National Advertising, LLC and Lamar Advantage Outdoor Company, L.P. are advertising companies that operate “off premise” billboards in Austin and sought to digitize some of them, which Austin’s municipal code prohibits. After Austin denied them exceptions to the code, they sued.

Reagan and Lamar reasonably relied on the Supreme Court’s unanimous decision in Reed v. Town of Gilbert, which held that, if a city treated signs differently on the basis of the message that they express, courts must apply strict scrutiny – a form of constitutional analysis that requires the government to show that its regulation furthers a compelling interest and is narrowly tailored to achieve that interest. Strict scrutiny almost always acts as a death knell for government regulations.

Reagan and Lamar argued that, by specifically describing the message of the billboards that it was regulating in its municipal code, Austin was regulating the billboards based on the content of the message conveyed, thus triggering strict scrutiny and certain defeat for Austin.

Justice Sotomayor penned the majority decision, which splits hairs to create unfathomable confusion going forward in First Amendment law. Sotomayor’s majority concluded that Austin’s municipal code did not regulate signs on the basis of their content because it did not specifically target certain classes of speech – e.g., political or religious speech. Thus, Sotomayor characterized Austin’s municipal code as an ordinary time, place, or manner restriction – a technical term of art that refers to government’s power to regulate when and where speech is uttered within reason.

Had Sotomayor stopped there, I could have seen the narrowest foundation of support for her opinion, but she fell victim to the same ill that besets many judges. She opined that the First Amendment allows for broad regulations of solicitation or speech seeking to gain business. She then connected this untethered premise to time, place, and manner restrictions as a justifying factor. Thus, the majority remanded the case for further legal development and fact finding while reversing the Fifth Circuit’s application of strict scrutiny.

What struck me as odd about Sotomayor’s opinion was that she did not mention the commercial speech exception by name, and she did not cite any of the Court’s precedents explicitly recognizing a commercial speech exception. Instead, she simply relied on Black’s Law Dictionary and a conclusory assertion that there is a commercial speech exception to the First Amendment.

The soon-to-be retired Justice Breyer was more frank in his concurrence. He specifically cited Supreme Court precedents that furthered the commercial speech exception even though he did not specifically refer to the exception as an exception.

Justice Alito strangely fell into the middle, concurring in the judgment in part and dissenting in part. The strangest part of his opinion, however, came when he cited Sorrell v. IMS Health Inc. to support the proposition that the Supreme Court analyzes commercial speech and ordinary speech differently. He, however, did not weigh in on the validity of the distinction, but his recognition of the distinction is telling as Reed largely eliminated the commercial speech exception in my view.

Justice Thomas penned a spirited dissent defending his opinion in Reed and the elimination of the commercial speech exception. I’ll leave you to read his dissent for yourselves as I have limited time and space to recite his thorough opinion.

Quite frankly, I don’t know what to make of the Reagan decision. Sotomayor and the majority did not claim that they were overruling Reed. In fact, they claimed that they were applying it faithfully. I, however, do not see any way to read Reagan without coming to the conclusion that it revives a commercial speech exception to the First Amendment – both by the outcome and Sotomayor’s opinion.

There is no question on the facts of the case as recited by the Supreme Court that Austin regulates “off premise” billboards on the content of their messages. Its municipal code establishes a categorical regulatory scheme for advertising. Under traditional First Amendment analysis, such content regulation would trigger strict scrutiny virtually automatically.

Since the 1980s, however, the Supreme Court carved out an exception to permit government regulations of commercial speech based on its content under less stringent standards of constitutional scrutiny. In 2011, it finally began to come to grips with the fact that its commercial speech exception to the First Amendment was not consistent with its other precedents. Thus, in Sorrell, the Supreme Court muddied the waters significantly by rejecting a state argument that a specific commercial regulation of speech merited relaxed constitutional scrutiny.

With Sorrell calling into doubt precedents establishing the commercial speech exception, Reed and NIFLA v. Becerra clarified that any content-based restrictions on speech – regardless of whether the speech was commercial or not – should be subjected to strict scrutiny.

Reagan remuddies the waters. It appears that the Court has now expanded its time, place, and manner jurisprudence to permit an ad hoc consideration of commercial speech’s content. The result is a resurrection of the commercial speech exception.

The free speech clause of the First Amendment grants broad protections to speech. Historically, the Supreme Court has at least paid lip service to the need to be careful in adopting categorical exception to its protections. Thus, it has taken care to clearly define limited categories of speech not protected by the First Amendment – e.g., incitement or defamation.

The rationale underlying its caution has always been that government regulation of speech’s content is dangerous as it will invariably result in the elimination of unpopular speech. It, however, has not employed the same caution when it comes to commercial speech, and its decision in Reagan should concern us all because it sends us back to a constitutional era where governments were free to regulate unpopular commercial speech’s content.

I don’t like pushy salesmen any more than the next person. I drive to work every day, and I see advertisements for businesses that I quite frankly have no use for and even some distaste for. But you know what? I’d rather see them out there working their tails off than have some self-righteous, smug politician tell me that they shouldn’t be allowed to let me know that they exist and offer a product that I might be interested in.

The regulation of commercial speech’s content is, at heart, a sensibilities’ regulation. Maybe you like unspoiled scenery. Maybe you don’t want to see an adult entertainment store light up the sky with a neon barbie whore. Maybe you don’t want to know about your local dive bar. Whatever your reasoning is, you don’t want to see those signs because you don’t like the message that they’re conveying.

Creating a categorical license for governments to regulate commercial speech because of its content will open the door to similar content-based exceptions around the edges of the First Amendment. For example, hate speech will become another First Amendment exception if it hasn’t become one already.

Reagan is not an irrelevant case. It is a significant step on the road to sensibilities-based speech regulation.