LS Attorney Fifth Circuit Court of Appeals Affirms City’s Sign Code Survives Intermediate Scrutiny

Fifth Circuit Court of Appeals Affirms City’s Sign Code Survives Intermediate Scrutiny

This post was authored by Tyler Doan, Esq.

Plaintiffs filed applications with the City of Austin to digitize existing traditional billboards and to upgrade signs with less sophisticated digitization. The Defendant denied their application because the signs would advertise for things not located on the site where the sign was installed. “In sum, off-premises signs could not be upgraded.”

A lawsuit ensued and the Sign Code was upheld in the district court and initially reversed in the Fifth Circuit as unable to survive strict scrutiny. The case was then appealed to the US Supreme Court. The Supreme Court held that the Sign Code was facially neutral in content and would be subject to intermediate scrutiny, then remanding the case. At the Fifth Circuit again, the court now Affirms and holds that the Sign Code survives intermediate scrutiny.

Defendants, on remand, argue that Plaintiffs waived any argument that the Sign Code does not survive intermediate scrutiny because that argument was not made in the alternative when the case was appealed to the Fifth Circuit from the district court. Defendants further contended that Plaintiffs only challenged the Sign Code’s on-premises/off-premises distinction and have waived any arguments directed towards Defendant’s narrower ban on digitizing existing off-premises signs.

In determining that the Plaintiffs did not waive the narrower argument, the Fifth Circuit made the distinction between the Plaintiff’s district court challenge and the challenge on appeal. The Plaintiff did not make any mention of intermediate scrutiny on appeal. The Fifth Circuit stated that although that would normally preclude the argument, an exception circumstance of having a Supreme Court remanded decision to decide, allows for the argument to be made in a supplemental briefing. Furthermore, the Fifth Circuit states: “A waived issue can be addressed when “it is a purely legal matter and failure to consider the issue will result in a miscarriage of justice.” As such, the Fifth Circuit determined that the Plaintiffs had not waived any arguments.

Next the court discussed the First Amendment issue remanded from the Supreme Court. In following the new Supreme Court guidance and in applying intermediate scrutiny, the Fifth Circuit reasoned that neither party contests the existence of significant government interest in traffic safety and aesthetics. Plaintiffs did not contest that a prohibition of off-premises digital content is related to public safety and aesthetics. Further, the Fifth Circuit states “ . . . instead of banning off-premises signs outright, the City has chosen a course of encouraging elimination more gradually, indeed, less economically disruptive for the plaintiffs and others in the same business.” Given that the Supreme Court had already determined that the Sign Code was content neutral and thus subject to intermediate scrutiny, the Fifth Circuit reasoned that through long standing precedent “Municipalities have traditionally been given wide discretion in the domain of sign regulations.” Thus, in accordance with the Supreme Court guidance providing for intermediate scrutiny, the Fifth Circuit determined that the Defendant is entitled to the same deference.

Reagan Outdoor Advertising, Inc v City of Austin, 2023 WL 270582 (5th Circ. CA 3/30/2023)