LAND USE U P D AT E Off-Premises Billboards and On-Premises Signs One of your clients has a problem. The city rejected his application to put up a billboard because the sign ordinance prohibits off-premises signs like billboards but permits on-premises signs. He believes this distinction is unconstitutional. What would you advise? The Off-Premises vs. On-Premises Problem Thousands of sign ordinances have prohibited off-premises and allowed onpremises signs since the early days of sign regulation. How this difference in treatment originated is unclear, but it may have been due to differences between these sign types in the early years of sign regulation. Off-premises billboards originally were free-standing wooden structures, while on-premises signs were attached to walls. These differences have disappeared. Today, for example, tall pole signs often serve as on-premises signs, raising the same aesthetic problems as offpremises billboards that are placed on tall poles. The 1965 federal Highway Beautification Act (HBA), 23 U.S.C. § 131, also allows different treatment. It requires states to prohibit billboards within 660 feet of federal interstate or primary highways but exempts on-premises signs. States may exempt “signs, displays, and devices advertising the sale or lease of property upon which they are located” and “signs, displays, and devices . . . advertising activities conducted on the property on which they are located.” About two-thirds of the states have similar exemptions. The HBA preempts local sign ordinances, except in states where they can be different from the federal law. Different rules for off-premises and Land Use Update Editor: Daniel R. Mandelker, Stamper Professor of Law Emeritus, Washington University School of Law, St. Louis, Missouri.
on-premises signs are questionable because they undercut the aesthetic purposes of sign regulation. A sign ordinance can prohibit billboards but must allow on-premises signs that may also be aesthetically offensive unless they are regulated, which the off- vs. on-premises distinction does not require. The different treatment of off-premises and on-premises signs has survived, but its place in modern sign ordinances is doubtful. The Constitutional Issue Distinguishing off-premises and on-premises signs presents an equal protection problem unless there is a satisfactory explanation for the distinction. There may not be one, because on-premises and offpremises signs can both present aesthetic problems. Court decisions were favorable despite this problem. All but one state court held the off-premises vs. on-premises distinction constitutional. One court held that the business purpose of on-premises signs justified different treatment because it distinguished them from off-premises signs. Another court held that a city could reasonably classify on-premises and offpremises signs differently to minimize sight pollution. This holding sounds like the relaxed equal protection that courts apply to social and economic laws. State and federal courts that considered on-premises sign exemptions in the federal Highway Beautification Act were also favorable. They accepted the different treatment of off-premises and on-premises signs in highway beautification statutes, accepted exemptions allowed under state laws, and accepted state laws allowing commercial and noncommercial on-premises signs. They held that the avoidance of economic hardship and the unique nature of business signs were reasons for allowing on-premises signs. They rejected free speech objections, an issue that became more troublesome later.
Review Under the Free Speech Clause The legal problems faced by the different treatment of off-premises and on-premises signs deepened after the Supreme Court decided that the free speech clause protects commercial speech. Sign ordinances regulate commercial speech. In Central Hudson Gas & Electric Corporation v. Public Service Commission, 447 U.S. 557 (1980), the Court adopted a four-factor test for the regulation of commercial speech. If the speech concerns lawful activity and is not misleading, then the asserted governmental interest must be substantial, the regulation must directly advance the governmental interest asserted, and it must not be more extensive than necessary to serve that interest. Courts hold that the Central Hudson factors provide an intermediate standard of judicial review, which is more demanding than the rational basis standard of judicial review that courts apply to economic laws, like sign ordinances. Nevertheless, in Metromedia, Inc. v. San Diego, 453 U.S. 490 (1981), a plurality of the US Supreme Court easily upheld a ban on billboards and rejected problems presented by the Central Hudson factors. This decision, now treated as a majority opinion, is the leading Supreme Court case on the intermediate judicial review of billboard regulation under the free speech clause. The Metromedia Court also upheld the different treatment of off-premises and onpremises signs that were included in the San Diego ordinance. It accepted traffic safety as a legitimate governmental interest for prohibiting billboards, but the sign company claimed that “the city denigrates its interest in traffic safety and defeats its own case by permitting onsite advertising and other specified signs.” An occupant of property, the company argued, can use billboards to advertise goods and services offered at his location, while identical billboards, “equally distracting and unattractive,” are prohibited if they advertise goods or services available elsewhere. The Court rejected these arguments, after noting that all courts had explicitly or implicitly rejected them. It held that prohibiting
Published in Probate & Property, Volume 37, No 6 © 2023 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
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November/December 2023
