Legal Corner: Municipal sign regulation more than a decade after Reed v. Town of Gilbert

Over a decade ago, in 2015, the U.S. Supreme Court issued a landmark decision in Reed v. Town of Gilbert, 576 U.S. 155, leading to sign code overhauls by local governments across the country. While the decision addressed a narrow issue, the potential ramifications were far-reaching as the opinion suggested that many types of sign regulations would be presumptively unconstitutional under the Court’s new standard. It was these potential ramifications that resulted in widespread changes as local government sought to avoid being the subject of any subsequent litigation. Since Reed, there have been relatively few notable cases on sign regulations. It seems that many local governments have taken similar conservative approaches; however, there are certainly gray areas that remain. This article dives into a brief overview of the state of sign regulation in Colorado.

Reed v. Town of Gilbert

In Reed, the U.S Supreme Court struck down an ordinance applying distinct size, placement, and time restrictions on ideological, political, and temporary directional signs.  Reed established that any regulation of speech based on the content of the speech (e.g., subject matter) is presumptively unconstitutional under the First Amendment and subject to strict scrutiny.  This standard requires the challenged regulation to be narrowly tailored to serve a compelling governmental interest.  Strict scrutiny presents such a high bar that most regulations will be deemed unconstitutional.  Reed essentially relegated the regulation of noncommercial signage to content-neutral time, place, and manner restrictions.

City of Austin v. Reagan National Advertising

In the years since Reed, the U.S. Supreme Court has only weighed in on sign regulations one other time in City of Austin v. Reagan National Advertising, 596 U.S. 61, in 2022. In City of Austin, the city faced a constitutional challenge due to its stricter regulations for off-premises signs than on-premises signs. Whether a sign is on- or off-premises has to do with whether it has a connection to the site where it is located.  For example, an on-premises sign promotes or identifies a business, activity, or service with a connection to the site where the sign is located; an off-premises sign, in contrast, promotes a business, activity, or service located off-site, or directs people to off-site locations.  Although this distinction commonly impacts commercial speech, it extends to noncommercial speech as well. 

While many had interpreted Reed to mean that a regulation is not content neutral if the sign’s content must be read, the U.S. Supreme Court expressly rejected that interpretation in this case. Despite having to read a sign’s content to determine if it is an on- or off-premises sign, the court found that sign regulations that distinguish between such signs are content neutral, location-based regulations and, therefore, are not presumptively unconstitutional, putting some limitations on the reach of Reed. Rather than being subject to strict scrutiny, these types of regulations are subject to intermediate scrutiny, which requires the regulations to be narrowly tailored to serve a significant government interest. On remand, in 2023, the Fifth Circuit Court of Appeals held that the city’s sign code survived intermediate scrutiny.

StreetMedia Group, LLC v. Stockinger

In 2023, the Tenth Circuit Court of Appeals considered the constitutionality of Colorado regulations that required a Colorado Department of Transportation permit only if a billboard owner received compensation for putting up an advertisement. The state had moved away from an on-/off-premises billboard distinction to this payment-based regulation following the Reed case. In StreetMediaGroup, LLC v. Stockinger, 79 F.4th 1243, relying on the rationale in the City of Austin case, the Court held that the state’s regulations were not content based—the regulation depended on whether there was compensation, not the content of the message. The opinion found that intermediate scrutiny was satisfied because Colorado has a legitimate interest in “highway safety and reducing visual clutter” by controlling proliferation of paid billboard advertising.

Content neutral sign regulation

Sign regulations serve a variety of purposes including vehicle and pedestrian safety, identification, aesthetics, and more. While governments are clearly restricted in regulating the content of signage, there are many content neutral ways that signs can be regulated. There are the commonly understood categories of content neutral regulations: time, place, and manner regulations. And, as established through the prominent cases discussed above, on- versus off-premises regulation and compensation-based regulations are content neutral and not presumptively unconstitutional (however, regulations based on compensation may lack some clarity or be difficult to enforce, as suggested by the Tenth Circuit in the Stockinger case).

More specific content-neutral regulations can include design or manner-based requirements such as type, shape, and size of the sign; size and font of wording; and sign materials, colors, digitization, lighting, brightness, quantity, and quality. Place-based regulations could include permissible locations, setbacks, and requirements to avoid obstructions for health or safety reasons.