Supreme Court Offers Additional Guidance on Sign Restrictions
Nearly seven years after its landmark ruling in Reed v Town of Gilbert, the U.S. Supreme Court has clarified a question that has split circuits across the country: can a municipality still differentiate between on- and off-premises signs? The court, in City of Austin v Reagan National Advertising of Austin, LLC, has held that such distinction is facially content neutral under the First Amendment and therefore a valid regulation. This overturns past Sixth Circuit (which covers Michigan) precedent.
On-premises signs are signs that relate to the use or purpose of the real property where the sign is physically located. It is common for sign ordinances to permit on-premises signs related to the business located on the property but restrict or even prohibit non-commercial off-premises signs. As previously detailed in our March 2022 post, the Sixth Circuit found this distinction to run afoul with the Constitution’s freedom of speech. Calling it “neither a close call nor a difficult question,” the Sixth Circuit found that Reed requires any ordinance which requires an official to read a sign before determining whether the ordinance applies to be a content-based restriction and therefore the distinction is unconstitutional.
The Sixth Circuit found the on-/off-premises distinction to be unconstitutional despite Justice Alito, in his concurrence to Reed, predicting that such distinction would survive scrutiny. In City of Austin, the Supreme Court did just that. It was asked to determine if the City’s ordinance distinguishing between on- and off-premises signs was content-based and subject to strict scrutiny. The Supreme Court held that while the reader must read the sign to determine who is speaking and what he or she is saying, that is not an automatic content-based violation. Instead, the distinction is facially content neutral and must only survive intermediate scrutiny, which requires the restriction to be narrowly tailored to serve a significant government interest.
With the Sixth Circuit’s decision in Thomas being overruled, ordinances in Michigan are free to distinguish between on- and off-premises signs so long as the ordinance serves a significant government interest.
This ruling also supports another one of Justice Alito’s predictions – that sign ordinances can also limit the amount of time in which a sign related to a one-time event can remain posted. Although time restrictions (along with place and manner) were long thought to be a classic example of content-neutral restrictions, Reed cast doubt on that. Naturally, a person must read the sign to determine whether it related to a temporary event and then apply a restriction based on the communicative content of the sign. But with the ruling in City of Austin, the Supreme Court reiterated that “restrictions on speech may require some evaluation of the speech” but nonetheless remain content neutral. Examples included ordinary time, place, or manner restrictions. This gives municipalities who want to regulate how long temporary signs may remain up firmer legal ground to enact such restrictions.
If you have any questions related to sign ordinances or would like a review of your sign ordinance, please contact your Foster Swift Attorney or one of the authors of this article.
 See Thomas v Bright, 937 F3d 721 (6th Cir, 2019)
Laura's practice focuses on bankruptcy, municipal law, collections, and trial-level and appeals litigation. In the bankruptcy arena, she represents primarily Chapter 7 trustees. Laura has handled a wide range of trial and appellate matters for individual and business clients and has appeared before the U.S. Sixth Circuit Court of Appeals, the Michigan Court of Appeals, and the United States Bankruptcy Court for the Western District of Michigan, as well as Michigan circuit and district courts across the state.View All Posts by Author ›
Cody is a member of the firm’s Business and Tax Practice Group and works in the Grand Rapids and Lansing offices. He works with clients on entity planning and formation, drafts commercial transaction documents, and provides counsel to clients on securities and tax issues. Cody is also a part of the firm’s Election and Campaign Finance Law Group. He provides advice to candidates, their committees, and public bodies on Michigan campaign finance and election law issues.View All Posts by Author ›