Last week, the Ninth Circuit Court of Appeals upheld San Francisco’s prohibition on new off-site commercial billboards, rejecting a First Amendment claim to the contrary made by a billboard company.  The case reaffirms the distinction between commercial and noncommercial speech regulation under the First Amendment, and limits the scope of Reed v. Town of Gilbert.

Since 2002, San Francisco has prohibited the erection of new off-site billboards—which advertise products or services not available on the property where the billboards are located—while allowing new on-site business signs.  The prohibition amounts to an effective ban on new billboards in San Francisco, although billboards that predated the ban are allowed to remain in place.  The plaintiff, Contest Promotions, LLC, is a billboard company that challenged San Francisco’s regulation under the First Amendment.  The district court for the Northern District of California granted a motion to dismiss filed by the City and County of San Francisco.

On appeal, the Ninth Circuit first found that Central Hudsonthe 1980 case that established the four-part test for the validity of commercial speech regulations—applied to the case.  Contest Promotions argued that Reed and a prior case, Sorrell v. IMS Health, had overturned Central Hudson, and that full content neutrality was therefore required of commercial speech regulations.  The implication of the plaintiff’s argument was that commercial and noncommercial speech should be treated the same for purposes of First Amendment review, meaning that content-based commercial speech regulations should be subject to strict scrutiny.  The Ninth Circuit rejected the plaintiff’s argument, and analyzed San Francisco’s law under Central Hudson intermediate scrutiny.

Applying Central Hudson, the court found that the regulation passed constitutional muster.  Contest Promotions argued that, because the ban applied to only a subset of the signs in San Francisco—off-site commercial billboards—it was unconstitutionally underinclusive, i.e. the ban prohibited some speech while allowing myriad other speech, and thus did not effectively further the government’s interest in traffic safety and aesthetics.  The court was unconvinced, and noted that prior Supreme Court cases, including Metromedia v. City of San Diego and City of Cincinnati v. Discovery Network, implied that underinclusive billboard bans could satisfy intermediate scrutiny.  The court also implied that it would continue a relaxed approach toward reviewing regulations of commercial speech, stating that “a law need not deal perfectly and fully with an identified problem to survive intermediate scrutiny.”

The Ninth Circuit’s decision in Contest Promotions is important because it clarifies that the Central Hudson test still applies to commercial speech regulations, and reaffirms the requirement that governments need only establish a reasonable fit between their regulatory interests and regulations of commercial speech.  More narrowly, the Ninth Circuit’s decision means that local regulations of commercial billboards will be upheld if based on aesthetic and traffic safety concerns.

Contest Promotions, LLC v. City and Cnty. of San Francisco, ___ F.3d ___, 2017 WL 4773041 (9th Cir. Oct. 23, 2017).

Photo of Brian J. Connolly Brian J. Connolly

Brian Connolly represents public- and private-sector clients in matters relating to zoning, planning, development entitlements and other complex regulatory issues.  Brian’s practice encompasses a broad range of land use matters including zoning compliance, rezonings and other regulatory amendments, planned-unit developments, development agreements, private covenants and restrictions, land use and zoning litigation, initiatives and referenda associated with land use approvals, and real estate transactions.  Brian additionally specializes in the First Amendment and land use issues associated with outdoor sign and advertising regulation, and fair housing matters in local planning and zoning.