Reagan National Advertising of Austin, Inc. v. City of Cedar Park

Filing 49

AMENDED ORDER re 48 ORDERED that the City's Amended Motion for Summary Judgment # 24 is GRANTED IN PART and DENIED IN PART as described in this opinion; and IT IS FURTHER ORDERED that the City's claim that denial of the New Sign Applications violated the First Amendment is DISMISSED for lack of standing. Signed by Judge Sam Sparks. (td)

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 1 of 17

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

FILED
2019P1Ay23

CLEK
WESjEIU

REAGAN NATIONAL ADVERTISING OF
AUSTIN, INC.,
Plaintiff,

PM 3:03

i;r cotmi
U;

F

'I
.j

CAUSE NO.:
AU-17-CA-00717-SS

-vs-

CITY OF CEDAR PARK,
Defendant.

AMENDED ORDER'
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause,

and specifically Defendant City of Cedar Park (the City)'s Amended Motion for Summary

Judgment [#24], Plaintiff Reagan National Advertising of Austin, Inc. (Reagan)'s Response
[#29], Cedar Park's Reply [#30] in support, Reagan's Sur-Reply [#31] in opposition, and Cedar

Park's Sur-Sur-Reply [#3 5] in

support.2

Having reviewed the documents, the relevant law, and

the file as a whole, the Court now enters the following opinion and orders.

Background
This is a First Amendment case. Reagan is a commercial billboard company in the

business of outdoor advertising. Am. Compi. [#18] at 2. On March 8, 2017, Reagan submitted
five sign permit applications to the City. Am. Mot. Summ. J. [#24-2] (Sign Permit Applications).
Three of these applications requested permission to install digital sign faces on existing outdoor

1

The Court's original order contained a typographical error.

Cedar Park's Motion to Strike Sur-Reply or, in the Alternative, Motion for Leave to File Sur-Sur-Reply
[#32] is DISMISSED AS MOOT because Cedar Park has already filed its sur-sur-reply, which the Court considers
2

herein.

1

TEXAS

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 2 of 17

signs (the Digital Conversion Applications). Id. at 1, 2-16. The other two applications sought

permits for the construction of two new signs (the New Sign Applications). Id. at 1, 17-32.
To receive approval, permit applications must demonstrate proposed signs meet the

requirements of the City's Sign
first

Code.3

These requirements are contained in two articles. The

articleArticle 13.01is entitled "On-Premises Sign Standards and Permits." Am. Mot.

Summ. J. [#24-5] Ex. 5 (Sign Code) at 1. The second

articleArticle 13.03is entitled "Off-

Premises Sign Standards and Permits." Id. at.25.

Both Article 13.01 and Article 13.03 contain provisions which rely upon a distinction
between on-premises and off-premises signs. An "on-premises sign" is defined as a "sign

identifying or advertising the business, person, activity, goods, products, or services located on
the site where the sign is installed, or that directs persons to a location on that site." Sign Code
at 4. By contrast, an "off-premises sign" is defined as a "sign referring to goods, products or

services provided at a location other than that which the sign occupies." Id. at 3-4. All five of

Reagan's permit applications relate to off-premises signs.
On March 14, 2017, the City denied Reagan's permit applications. Am. Mot. Summ. J.
[#24-4] Ex. 4 (Denial Letters). Among other reasons, the New Sign Applications were denied

because they proposed using light-emitting diode (LED) displays in off-premises signs and
because they proposed to erect "pylon signs." Id. at 7-10;

see also

Sign Code

§

13.01 .007(i)(4)

("Electronically controlled changeable messages signs shall not advertise goods or services not
offered on the premises on which the sign is located."); Id.

§

13.03.006(d) ("No light emitting

diode (LED) displays or signs shall be permitted."). The City also denied the Digital Conversion

The City enacted a new sign code the day after Reagan submitted its permit applications. Am. Mot.
Summ. J. [#24] at 5 n.4. However, Texas law requires the permit applications be evaluated under the law as it
existed at the time they were submitted, rather than under the new, revised sign code. TEX. LOC. Gov'T CODE
§ 245.002.

2

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 3 of 17

Applications because, like the New Sign Applications, the Digital Conversion Applications
proposed installing LED displays in off-premises signs. Denial Letters at 1-6; Sign Code
§

13.01.007(i)(4), 13.03.006(d); see also id.

§

13.01.016(a), 13.03.007(a) ("[Nb

change or

alteration shall be made [to existing signs] that would increase the degree of nonconformity [with

the Sign Code].")

After the City denied Reagan's permit applications, Reagan filed this action in state court
arguing that the

Sign

Code's differing treatment of on-premises and off-premises

signs

constitutes content discrimination and that this content-based distinction cannot survive
constitutional scrutiny. Notice Removal [#1-1] Ex.

seeks to invalidate the entire

Sign

1

(Original Pet.) at 4. On this basis, Reagan

Code. Reply [#311 at 3. The City removed the action to this

Court and now moves for summary judgment. Notice Removal [#1]; Am. Mot. Summ. J. [#24].
This pending motion is ripe for review.

Analysis
The Court first considers whether Reagan has standing to challenge the denial of its New
Sign

and Digital Conversion Applications. Because the Court concludes Reagan possesses

standing to challenge the denial of its Digital Conversion Applications, the Court then turns to
consider whether the City is entitled to summary judgment as to the constitutionality of the

Sign

Code provisions relied upon to deny those applications.
I.

Standing
A.

Legal Standard

Article III of the Constitution limits the jurisdiction of federal courts to cases and
controversies. US. Parole Comm 'n

v.

Geraghty, 445 U.S. 388, 395 (1980). In order to meet this

case-or-controversy requirement, plaintiffs must establish they have standing to sue. Raines

3

v.

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 4 of 17

Byrd, 521 U.S. 811, 818 (1997). Plaintiffs have standing to sue

if they have suffered an injury in

fact fairly traceable to the challenged action of the defendant and "likely to be redressed by the

requested relief." Allen

v. Wright,

468 U.S. 737, 750-52 (1984); see also Friends

of the Earth,

Inc. v. Laidlaw Env't Servs. (TOG), Inc., 528 U.S. 167, 185 (2000) ("[A] plaintiff must

demonstrate standing separately for each form of relief sought."). "The party invoking federal

jurisdiction bears the burden of establishing these elements." Lujan

v.

Def 's of Wildlife, 504 U.S.

555, 561 (1992).
B.

Application

Reagan argues the City's denial of the New Sign and Digital Conversion Applications

relied on Sign Code provisions that draw unconstitutional, content-based distinctions between
on-premises and off-premises speech. The Court first considers whether Reagan possesses
standing to challenge the denial of its New Sign Applications. It then considers whether Reagan
possesses standing to challenge the denial of the Digital Conversion Applications.
1.

New Sign Applications

The City suggests Reagan lacks standing to challenge the denial of its New Sign
Applications because Reagan has not shown this denial is redressable. Am. Mot. Summ. J. [#24]
at 5, 17; Reply [#30] at 1-2. In part, the New
to erect "pylon

signs"

prohibited by

Sign

Sign Applications

Code

§

were denied because they sought

13.01.006(e) (the "Pylon Provision"). Reply

[#30] at 1-2. The City argues the Pylon Provision does not depend on the challenged distinction

between on- and off-premises

signs.

Id. If, as the City suggests, the Pylon Provision does not

depend on the challenged distinction, then Reagan's injury is not redressable because the Pylon

Provision will provide a basis for denying the New
Court rules in this case.

4

Sign

Applications regardless of how the

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 5 of 17

Reagan does not argue the New Sign Applications comply with the Pylon Provision. See

Sur-Reply [#31] at 2-3. Instead, Reagan argues the City erred in relying on the Pylon Provision
to deny the New Sign Applications because the Pylon Provision does not apply to off-premises

signs. Id.4 Reagan believes the Pylon Provision does not apply to off-premises signs because it is
located in Article 13.01, which is entitled "On-Premises Sign Standards and Permits." Id.

According to Reagan, this title conclusively demonstrates the provisions of Article 13.01 apply
only to on-premises signs. Sur-Reply [#31] at 2-3.
In most circumstances, one would expect the title or heading of a statutory or regulatory

provision to reflect the scope and purpose of that provision. But in some instances, a statutory or

regulatory provision possesses a heading at odds with the provision's operative text. Perhaps for
this reason, headings are just one of several considerations taken into account by Texas courts

when interpreting statutory and regulatory provisions. See TEx. Gov. CODE

§

311.023 (listing

considerations that may be weighed by courts when interpreting statutory provisions);5

Dep 't of Revenue

v.

cf

Fla.

Piccadilly Cafeterias, Inc., 554 U.S. 33, 47 (2008) ("[A] heading cannot

substitute for the operative text of the statute[;]

. . .

[n]onetheless, statutory titles and section

headings are tools available for the resolution of a doubt about the meaning of a statute.")
Here, the heading of Article 13.01 suggests the article applies only to on-premises signs.

But the operative text of Article 13.01 does not contain such a limitation. To the contrary, Article
"

Reagan also argues the City is not entitled to summary judgment on this argument because the City
"presented no argument either as to the applicability of [the unchallenged provisions] or to the validity of the
grounds" the City relied upon in seeking summary judgment. Sur-Reply [#33] The Court rejects this argument. The
argument put forward in the City's motion for summary judgment was sufficient to put Reagan on notice that the
City disputed Reagan's standing to challenge the denials of its applications. See Am. Mot. Summ. J. [#24] at 17.
Further, although the Court agrees the City might have better briefed its standing argument, this Court is
nevertheless obligated to dismiss claims over which it lacks subject-matter jurisdiction. FED. R. CIV. P. 12(h)(3) ("If
the court determines at any time that it lacks subject-matter jurisdiction, the Court must dismiss the action."). And
despite its objections, Reagan has not been deprived of an opportunity to respond to the City's arguments. See StirReply [#33] at 2-5.
See also

id.

§

311.003 ("The rules provided in this chapter are not exclusive but are meant to describe and

clarif' common situations in order to guide the preparation and construction of codes.").
5

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 6 of 17

of provisions that appear to be of general applicability and do not

13.01 contains a number

depend on a distinction between on- and off-premises signs. For example,

13.01.004

§

establishes that "[i]t shall be unlawful for any person to erect, construct, enlarge, move or

convert any
§

sign

within the city

...

without first obtaining a sign permit

13.01.004(a) (emphasis added). As another example, Sign Code

§

. . .

." Sign Code

13.01.019, entitled "Repairs

and Maintenance," provides that "all signs in the city must be properly maintained at all times"
and then sets out extensive procedural requirements for reporting and removing signs in violation

of the Sign Code. Id.
§

13.01.019 (emphasis added). And as a third example, Sign Code

§

13.01.007(i) regulates the structural integrity of "[a]ny sign as defined in this article." None of

these provisions contain textual limitations restricting their application to on-premises signs.
Sign Code

§

See

13.01.002 (defining "sign" as "[amy surface, display, design, or device visible from

a public right-of-way on which letters, illustrations, designs, figures, or symbols are painted,

printed, [or] stamped

.

. .

."); cf Sign Code

§

13.01.002 (establishing distinct definitions for

"signs," "on-premises signs," and "off-premises signs")

If Article 13.01 only applied to on-premises signs, then the provisions highlighted

aboveand many other provisions contained within Article

13.01 that appear to be

of general

applicability6would not apply to off-premises signs. This would leave off-premises signs
relatively unregulated, since Article

13.03which does regulate off-premises signagedoes not

establish a comprehensive scheme for regulating off-premises
§

signs.7

See

Sign Code

13.03.001 .011. Yet it is unlikely the City intended to closely regulate on-premises signs while

leaving off-premises signs comparatively unregulated, especially given the disfavored status of

6

See, e.g.,

Sign Code

§

13.01.007 (setting forth "General Provisions").

Indeed, Article 13.03 is five pages long, while Article 13.03 is twenty-five pages long.
1-29.

See

Sign Code at

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 7 of 17

off-premises signs within the City's regulatory scheme. More plausibly, in the Court's view, the
City intended Article 13.01 to regulate both on- and off-premises signs and intended Article
13.03 to supplement Article 13.01 with specific regulations addressing only off-premises signs.

The Court thus concludes Article 13.01 applies to both on- and off-premises signs.

Because the Court concludes Article 13.01 applies to both on- and off-premises signs, the
application of the Pylon Provisionwhich is located in Article

13.01does not turn on the

challenged distinction between on- and off-premises signs. See Sign Code

pylon signs shall be permitted.

. .

§

13.01.006(e) ("No

."). As a result, the Pylon Provision will remain unaffected

if

the Court invalidates the Sign Code's distinction between on- and off-premises signs, and

Reagan's New Sign Applications will still be denied for failure to comply with the Pylon
Provision. The Court therefore concludes Reagan has not demonstrated redressability because it
has not shown the denial of the New Sign Applications will be affected by the Court's ruling in
this case. See

Kif Outdoor, LLC v. Clay Cty., 482 F.3d 1299, 1303-04 (11th Cir. 2007) ("Any

injury [plaintiff] actually suffered

.

.

.

is not redressible [sic] because the applications failed to

meet the requirements of other statutes and regulations not challenged."); Get Outdoors II, LLC
v.

City

ofSan Diego, 506 F.3d 886,

895 (9th Cir. 2007) (concluding plaintiff lacked standing to

challenge sign-permitting process because plaintiff's permit applications were "denied on

grounds that are constitutionally valid"). Consequently, Reagan lacks standing to challenge the
denial of its New Sign Applications.
2.

Digital Conversion Applications

The City also suggests Reagan lacks standing to challenge the denial of the Digital

Conversion Applications because Reagan cannot show redressability as to those applications,
either. Reply [#30] at 1-2. Specifically, the City contends the Digital Conversion Applications

7

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 8 of 17

will be denied regardless of how the Court rules in this lawsuit because the applications propose
sign modifications that would violate two Sign Code
§

provisions

13.01.006(g) and

13.03.006(d)that are not dependent on the challenged distinction between on- and off-

premises signage. Id.
The Court concludes Reagan possesses standing to challenge the denial of the Digital

Conversion Applications. Notwithstanding the City's argument to the contrary,
and

§

signs.8

§

13.01.006(g)

13.03.006(d) are dependent on the challenged distinction between on- and off-premises

Section 13.01.006(g) prohibits "electronically controlled changeable copy signs

"except as specifically allowed by section[] 13.01.007." In turn,

§

13.01.007(i) allows such signs

subject to certain restrictions, including that such signs "shall not advertise goods or services not
offered on the premises on which the

controlled changeable signs under

§

sign is

13.01.006(g) and

such signs qualify as on- or off-premises
§

located." Thus, the approval of electronically

signs.

§

13.01.007(i) turns, in part, on whether

Similarly, and somewhat redundantly,

13.03 .006(d)(4)which applies only to off-premises

signs9emphasizes that

"[nb

light

emitting diode (LED) displays or signs shall be permitted."

If the Court holds the distinction between on- and off-premises
then § 13.03.006(g) and

§

signs

is unconstitutional,

13.03.006(d)(4) can no longer be relied upon as a basis for denying the

Digital Conversion Applications. Absent any further argument from the City as to why or how

the Digital Conversion Applications might still be denied for reasons independent of these
provisions, the Court concludes that Reagan has standing to challenge the denial of these

8

The City's denial letters also cite several other provisions as a basis for denying the Digital Conversion
Applications, but the denial letters do not explain how or why those provisions applied and the City has not
elaborated as to how those provisions might serve as a proper basis for denial here. See Denial Letters at 1-6; Reply
[#30] at 1-2.
See supra

Section I.B. 1 (concluding Article 13.03 applies only to off-premises signs).

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 9 of 17

applications because their denial would be redressed by an order invalidating the application of

the challenged provisions to off-premises signs
In sum, the Court concludes Reagan has standing to challenge the denial of the Digital

Conversion Applications but not the New Sign Applications. Because Reagan has standing to
challenge the denial of the Digital Conversion Applications, the Court proceeds to consider

Reagan's claim that the denial of those applications violated the First Amendment.

II.

First Amendment Claims
A.

Legal Standard

Summary judgment shall be rendered when the pleadings, the discovery and disclosure
materials on file, and any affidavits show that there is no genuine dispute as to any material fact
and that the moving party is entitled to judgment as a matter of law.

FED.

R.

Civ. P.

56(a);

Harvey, 504 F.3d 505, 508

Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Washburn

v.

(5th Cir. 2007). A dispute regarding a material fact is "genuine"

if the evidence

is such that a

reasonable jury could return a verdict in favor of the nonmoving party. Anderson

v.

Liberty

Lobby, Inc., 477 U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the

court is required to view all inferences drawn from the factual record in the light most favorable
to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986);

Washburn, 504 F.3d at 508. Further, a court "may not make credibility determinations or weigh

the evidence" in ruling on a motion for summary judgment. Reeves

v.

Sanderson Plumbing

Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477 U.S. at 254-55.
Once the moving party has made an initial showing that there is no evidence to support
the nonmoving party's case, the party opposing the motion must come forward with competent

summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at

9

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 10 of 17

586. Mere conclusory allegations are not competent summary judgment evidence, and thus are

insufficient to defeat a motion for summary judgment. Turner v. Baylor Richardson Med. Ctr.,
476 F.3d 337, 343 (5th Cir. 2007). Unsubstantiated assertions, improbable inferences, and

unsupported speculation are not competent summary judgment evidence. Id. The party opposing
summary judgment is required to identify specific evidence in the record and to articulate the
precise maimer in which that evidence supports his claim. Adams

v.

Travelers Indem. Co. of

Conn., 465 F.3d 156, 164 (5th Cir. 2006). Rule 56 does not impose a duty on the court to "sift

through the record in search of evidence" to support the nonmovant's opposition to the motion
for summary judgment. Id.

"Only disputes over facts that might affect the outcome of the suit under the governing
laws will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248.

Disputed fact issues that are "irrelevant and unnecessary" will not be considered by a court in

ruling on a summary judgment motion. Id. If the nonmoving party fails to make a showing
sufficient to establish the existence of an element essential to its case and on which it will bear

the burden of proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.
B.

Application

The City argues it is entitled to summary judgment because the distinction drawn by the
Sign Code between on-premises and off-premises speech is constitutional as a matter of law.

Am. Mot. Summ. J. [#24] at 2. Reagan, meanwhile, contends this distinction is an

unconstitutional content-based regulation of speech under the First Amendment. Resp. [#29]
at 20.

10

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 11 of 17

Standard of Scrutiny

1.

As a predicate matter, the Court must determine what standards of scrutiny to apply in
assessing the constitutionality of the Sign Code. The City argues regulation of commercial

billboard speech is subject to intermediate scrutiny under the Supreme Court's decision in
Metromedia, Inc.

v.

City of San Diego, 453 U.S. 490 (1981). Am. Mot. Summ. J. [#24] at 6-7.

Reagan disagrees. According to Reagan, the Supreme Court's decision in Reed

v.

Town of

Gilbert, 135 5. Ct. 2218 (2015) effectively abrogated Metromedia by requiring strict scrutiny be
applied to all content-based regulations of speech, regardless of whether the speech in question is

commercial or not. Resp. [#29] at 6-15. Reagan alternatively contends that even if intermediate

scrutiny applies to commercial speech, strict scrutiny should be applied here because the Sign

Code's content-based distinctions also apply to noncommercial speech. Id. at 15-16.
In Metromedia, the Supreme Court considered the constitutionality of a San Diego
ordinance that permitted on-premises commercial advertising but forbid off-premises
commercial advertising. Metromedia, 453 U.S. at 495-96. The Supreme Court "unambiguously

held" San Diego could constitutionally discriminate between on-premises and off-premises
commercial speech. RTM Media, LLC v. City of Houston, 584 F.3d 220, 223-224 (5th Cir. 2009)
(citing Metromedia, 453 U.S. at 507-5 12). And in upholding the ordinance as applied to

commercial speech, the Supreme Court applied a form of intermediate
Hudson commercial speech

protection.

. .

teston the ground that commercial

scrutinythe Central

speech is entitled to "lesser

than other constitutionally guaranteed expression." Metromedia, 453 U.S. at 507

(quoting Cent. Hudson Gas & Elec. Corp.

562-63 (1980)); see also Sorrell

v.

v.

Pub. Serv. Comm 'n of New York, 447 U.S. 557,

IMS Health, Inc., 564 U.S. 552, 583 (2011) (Breyer, J.,

dissenting) (characterizing Central Hudson's commercial speech test as an "intermediate'

11

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 12 of 17

standard"). Thus, under Metromedia, Reagan's commercial speech would be subjected to

intermediate scrutiny.
Reagan contends, however, that the Supreme Court's more recent decision in Reed

overrules both Metromedia and Central Hudson and requires strict scrutiny be applied to
content-based regulations of even commercial speech. Resp. [#29] at 6-15. In Reed, the Supreme
Court considered the constitutionality of a local ordinance that applied differing requirements to

certain noncommercial signs depending upon whether the sign in question qualified as an

"Ideological," "Political," or "Temporary Directional" sign under the ordinance. Reed, 135 S. Ct.
at 2224-25. The Court held these sign classifications were content-based regulations of speech..

Id. at 2228. The Court also held that because the regulations were content based, they were

subject to strict scrutiny "regardless of the government's benign motive, content-neutral

justification, or 'lack of animus toward the ideas contained' in the regulated speech. Id. (quoting
Cincinnati

v.

Discovery Network, Inc., 507 U.S. 410, 429 (1993)). According to Reagan, Reed

requires all content-based regulations of speech to survive strict scrutinyregardless of whether
the speech at issue is commercial or not. Resp. [#29] at 6-15.

Reed does not require the application of strict scrutiny to content-based regulations of
commercial speech. For starters, Reed concerned noncommercial speech, rather than commercial
speech, and perhaps for that reason, the majority opinion in Reed makes no mention of the

Central Hudson commercial speech standard. See Reed, 135 S. Ct. at 2224. What's more, there's
little reason to believe the Court in Reed intended to alter sub silentio the application of the

Central Hudson standard to commercial speech. To the contrary, a majority of the justices
involved in Reed have indicated that Reed did not affect the application of Central Hudson to
content-based regulations of commercial speech. See Reed, 135 S. Ct. at 2234-3 5 (Breyer, J.,

12

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 13 of 17

concurring) (assuming content-based regulations of commercial speech are not subject to strict
scrutiny after Reed); Matal v. Tam., 137 S. Ct. 1744, 1767 (2017) (Kennedy J., concurring in part
and concurring in the judgment) ("Unlike content based discrimination, discrimination based on

viewpoint, including a regulation that targets speech for its offensiveness, remains a serious
concern in the commercial context."). The Sign Code's regulation of commercial speech must
therefore be evaluated under intermediate scrutiny.'0
The Sign Code also regulates noncommercial speech, however. As Reagan correctly

observes, content-based regulations of noncommercial speech are subject to strict scrutiny. See
Reed, 135 S. Ct. at 2231. Further, the restrictions the

Sign

Code imposes on off-premises speech

qualif' as content-based restrictions under Reed because the restrictions depend upon the content
of the

sign.

See Id. at 2227 (majority opinion) ("Government regulation of speech is content

based if a law applies to particular speech because of the topic discussed or the idea or message
expressed."); see also Id. at 2237 (Kagan, J., concurring in the judgment) ("Given the Court's
analysis, many sign ordinances [regulating signs based on their subject matter] are now in

jeopardy,

. . .

far-reaching

[and] in trying to limit today's decision, Justice Auto's concurrence highlights its

Finally, Reagan possesses standing to challenge the Sign Code's

regulation of noncommercial speech because Reagan's billboards occasionally feature such

See also Lone Star Sec. & Video, Inc. v. City of Los Angeles, 827 F.3d 1192, 1198 n.3 (9th Cir. 2016)
("[A]lthough laws that restrict only commercial speech are content based, such restrictions need only withstand
intermediate scrutiny." (internal citation omitted)).
10

To illustrate, suppose a sign is erected in front of a store. If the content of that sign refers to goods sold
on the premises, it is not subject to the restrictions. But if the content of the sign refers to goods sold off the
premises, then that sign would be subject to the restrictions. The only difference between these two scenarios is the
content of the sign.
13

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 14 of 17

speech. See Mot. New Trial [#39-2] Ex. A-i at

12

1

The Sign Code's content-based regulation of

noncommercial speech must therefore be evaluated under strict scrutiny.
2.

Constitutionality

The Court first assesses whether the Sign Code constitutionally regulates commercial
speech. It then considers whether the Sign Code constitutionally regulates noncommercial
speech.

Commercial Speech

a.

The First Amendment protects commercial speech only insofar as that speech concerns
lawful activity and is not misleading. Metromedia, 453 U.S. at 507 (citing Central Hudson, 447
U.S. at 563-66). To pass muster under Central Hudson, government regulation of commercial

speech falling within the ambit of the First Amendment must directly advance a substantial
government interest while reaching no further than necessary to accomplish its goals. Id. Reagan
argues

(i) the City does not possess a substantial government interest; and (2) to the extent a

substantial government interest exists, it is not directly advanced by the City's Sign Code. Resp.
[#29] at 16.

Reagan first argues the City does not possess a substantial government interest. Id. The
Court disagrees. The Sign Code purports to further the City's interests in traffic safety and

aesthetics by reducing "confusion and hazards that result from excessive and prolific use of sign

displays" and by limiting "visual clutter" that might lead to a "decline in the community's
appearance." Sign Code

§§

13.01.001, 13.03.005. Under Metromedia, these stated interests in

traffic safety and aesthetics qualify as substantial government interests. Metromedia, 490 U.S. at
12

A previous version of this order erroneously concluded that Reagan lacked standing to challenge the Sign
Code's regulation of noncommercial speech. Order of Sept. 24, 2018 [#37] at 5-9. Reagan subsequently moved for a
new trial on the ground the Court had raised the issue of standing sua sponte and deprived Reagan a chance to
respond. Mot. New Trial [#39]. The Court granted Reagan's motion after Reagan submitted evidence establishing
standing to challenge the Sign Code's regulation of noncommercial speech. Order of Nov. 15, 2018 [#42].

14

Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 15 of 17

5 07-08

("Nor can there be substantial doubt that.

. .

traffic safety and the appearance of the city

are substantial governmental goals.").

Reagan next argues that the City's interests in traffic safety and aesthetics are not directly

advanced by the City's SIgn Code. Resp. [#29] at 16. Specifically, Reagan contends the Sign
Code as a whole fails to advance any substantial government interest because the City allows a
single tenant on one of its properties to use an LED display for off-premises advertising. Resp.
[#29] at 3, 16-2 1 (noting the HEB

sign to display off-premises

Centera sports

advertising).13

arena and live-event venueuses an LED

Yet this single exception "is not so pervasive as to

seriously undermine the stated purpose[s]" of the City's Sign Code. See Paradigm Media Grp.

v.

City of Irving, 65 F. App'x 509, 2003 WL 1922999, at *3 (5th Cir. 2003) (per curiam)

(upholding advertising ordinance with narrow exception for "sports facilities" on the ground the
ordinance was not so riddled with exceptions as to undermine the ordinance's stated purpose).

Absent any further argument from Reagan, the Court concludes the

Sign

Code directly and

materially advances the City's stated interests in traffic and aesthetics by restricting the number
and types of

signs

appearing within the City. See Metromedia, 490 U.S. at 509 ("We likewise

hesitate to disagree with the accumulated, common-sense judgments of local lawmakers

. . .

that

billboards are real and substantial hazards to traffic safety."); id. at 510 (upholding ordinance

restricting proliferation of billboards on the ground such restrictions advance substantial
government interest in aesthetics)

Reagan provides no cogent explanation as to why it believes "[t]he exception made for this sign renders"
the entire Sign Code unconstitutional. See Resp. [#29] at 19-20. Indeed, the Sign Code contains many provisions
which have little to do with the distinction between on-premises and off-premises advertising. See, e.g., Sign Code
§ 13.01.006(a) (prohibiting use of "flashing lights" and "revolving beacon lights"); id. § 13.01.008 (regulating
signage in residential subdivisions); id. § 13.01 .017(a)(1) (prohibiting signs which obstruct fire escapes).
13

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Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 16 of 17

In sum, the Court concludes the Sign Code's regulation of commercial speech directly

advances the City's substantial government interests in traffic safety and aesthetics and survives
constitutional scrutiny under Central Hudson.

b.

Noncommercial Speech

Laws that impose content-based restrictions on noncommercial speech must survive strict
scrutiny, "which requires the [g]overnment to prove that the restriction furthers a compelling

interest and is narrowly tailored to achieve that interest." Reed, 135 5. Ct. at 2231 (internal
quotation marks and citation omitted).
The Court concludes the City is not entitled to summary judgment as to the

constitutionality of the Sign Code's regulation of on- and off-premises noncommercial speech.
As the Court previously noted, the Sign Code contains several restrictions which apply to off-

premises speech but not on-premises speech. See supra Section I.B.2. What's more, these
restrictions are content-based restrictions, and because they are content-based, they must survive
strict scrutiny. See supra Section I.B.2. Thus, the burden is on the City to demonstrate the

restrictions further a compelling interest and are narrowly tailored to achieve that interest. The
City has not met this burden

hereindeed, the City has not even attempted to argue the

restrictions further a compelling interest or are narrowly tailored. Cf Am. Mot. Summ. J. [#24]
at 10. The Court therefore denies summary judgment on Reagan's claim that the Sign Code

imposes unconstitutional, content-based restrictions on noncommercial, off-premises speech.

Conclusion
The Court dismisses Reagan's claim that denial of the New Sign Applications violated
the First Amendment on the ground that Reagan lacks standing to assert that claim. By contrast,
the Court concludes Reagan does have statiding to challenge the denial of the Digital Conversion

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Case 1:17-cv-00717-SS Document 49 Filed 05/23/19 Page 17 of 17

Applications. Because the Court concludes the denial of the Digital Sign Permits must be
evaluated under strict scrutiny and because the City has not carried its burden under that
standard, the Court denies summary judgment as to Reagan's claim that denial of the Digital

Conversion Permits violates the First Amendment.
Accordingly,
IT IS ORDERED that the City's Amended Motion for Summary Judgment [#24J
is GRANTED IN PART and DENIED IN PART as described in this opinion; and

IT IS FURTHER ORDERED that the City's claim that denial of the New Sign

Applications violated the First Amendment is DISMISSED for lack of standing.

SIGNED this thea 3 day of May 2019.
SAM SPARKS
SENIOR UNITED STATES DISTRICT JUDGE

17