Reed v. Gilbert, et al., Sign Ordiances and Its Impact on Real Estate

INTRODUCTION
The Supreme Court of the United States (SCOTUS), on June 18, 2015, reversed and remanded, unanimously (9-0) Reed v. Town of Gilbert, Arizona, ET AL. The ruling now means municipal sign ordinances must remain content-neutral rather than content-based. The ruling was issued after a lawsuit was filed based on the First Amendment Right to Free Speech and the Equal Protection Clause of the Fourteenth Amendment. “As phrased in the Reed majority opinion, a regulation is content-based if the rule ‘applies to a particular [sign] because of the topics discussed or the idea or message expressed.’ The strict scrutiny standard demands that the local government must show that the regulation is (i) designed to serve a compelling governmental interest and (ii) narrowly tailored to achieve that interest. That is a steep hill to climb and, in practice, few, if any, regulations survive strict scrutiny review.”1

Many municipalities’ current sign ordinances exempt real estate signs from fees and regulations; this now could be challenged per the SCOTUS decision as “real estate” is content, a business purpose. Municipalities may no longer single out different types of signs (business, entertainment, advertisement, religious, celebratory occasions, etc.) for special treatment. Quite simply, this means Real Estate signs must now be treated equal to all other signs and may not be excluded, exempted or otherwise treated differently. Many municipalities are and will be updating their sign ordinances to comply with the SCOTUS decision.

BACKGROUND
The town of Gilbert, Arizona (“Town”) has a code that regulates the display of outdoor signs (“Sign Code”).  The Sign Code identifies signs by various categories, and the categories are then regulated in different ways.  The Sign Code also regulates other noncommercial signs such as political signs and ideological signs.

The Good News Community Church (“Church”) operates in the Town and does not have a permanent location. Therefore, the Church uses signs to direct attendees to the different locations where it holds its services. The Town’s sign compliance manager noticed the signs, and fined the Church twice for failing to comply with the Sign Code. The Church tried to negotiate an accommodation for its signs, but the Town refused.

The Church filed a lawsuit challenging the Sign Code as an unconstitutional abridgement of their speech in violation of the United States Constitution. The trial court denied the Church’s motion and the appellate court affirmed; ruling that the Sign Ordinance did not regulate signs based on their content. The Church appealed.

The Supreme Court of the United States reversed the lower courts and ruled that the Sign Ordinance’s regulations for “Temporary Directional Signs” are content-based and so are unconstitutional.  The First Amendment prohibits laws that limit free speech, and laws that regulate based on the speech’s content are presumptively unconstitutional.

The Court determined that the Sign Code regulated speech based on its content, as the sign’s content determined how it was regulated. The Court stated that the First Amendment prohibits any regulation of speech based on the speech’s content and therefore the regulations were subject to strict scrutiny, regardless of whether the Sign Code was neutral or not in its regulation. The temporary direction signs were treated differently than political signs, and both were treated different than ideological signs, showing that the sign’s content determined how it was regulated.

The Sign Code failed to pass the scrutiny tests applied to content-based restrictions on speech.  Because the Town’s content-based regulations could not pass the strict scrutiny test, the Court reversed the lower court’s rulings.

Source: http://www.realtor.org/legal-case-summaries/sign-ordinance-struck-down

CONCLUSION
Due to the SCOTUS ruling, the highest Federal Court of the US (there is no way to appeal a SCOTUS decision), municipalities are now forced to comply with the decision or face potential lawsuits for content-based discrimination violating First Amendment Free Speech.

Columbus REALTORS® staff and leadership continue to work, in partnership, with municipalities around central Ohio to ensure REALTOR® business interests are protected. Understanding the marketing value of signs, we will continue to collaborate with our local municipalities to ensure the success of our members. While we also understand, municipalities are now forced to comply with this ruling, we firmly believe the ability to succeed in business should not be costly and that business should not suffer due to fears of nuisance (anti-neighbor, derogatory, etc.) signs. We maintain any legislation proposed to comply with Reed v. Gilbert, ET AL., should be written with the intent of all parties acting in good-faith and if nuisance signs become an issue, municipalities should then examine ways to amend their sign codes.

1 Lovelady, Adam. "Sign Litigation: A Brief Analysis of Reed v. Town of Gilbert - Coates' Canons." Coates' Canons. N.p., 22 July 2015. Web. 30 Nov. 2016.