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A Sign of Relief: Appellate Court Allows Sign Codes to Distinguish Off/Onsite and Non/Commercial

In an opinion which will elicit sighs of relief from municipal governments around the state, the Second Appellate District has upheld municipalities’ ability to differentiate between offsite and onsite commercial advertising under the California liberty of speech clause.

In Lamar Central Outdoor, LLC. v. City of Los Angeles,  (Mar. 10, 2016), __ Cal.App.2d __, a billboard agency challenged whether the City of Los Angeles could regulate signs differently based on their commercial nature and their location.  The City’s regulations banned new offsite signs (with exceptions including an exception for noncommercial signage) and also banned offsite signs with digital displays.  Lamar claimed that the City’s denial of its 45 applications to convert existing offsite signs to more lucrative digital signs violated the California constitution.  In a surprise ruling by the lower court, the trial court agreed with Lamar and found that the onsite/offsite and commercial/noncommercial distinctions were impermissible content-based distinctions under the California liberty of speech clause.  The lower court’s decision was contrary to Ninth Circuit rulings under a First Amendment analysis and a California constitutional analysis, the latter analysis being persuasive but not binding authority.

Left to stand, the lower court decision in the Lamar case had the potential to radically reduce municipalities’ ability to regulate billboards.  In a well-founded opinion, the appellate court did not agree with the lower court’s reasoning and reversed.  Specifically, the Second Appellate District explained that municipalities can distinguish between onsite and offsite signs and between commercial and noncommercial speech without making a content-based distinction and triggering the strict scrutiny standard of review.  The court found that the distinctions were content-neutral and met the more forgiving intermediate standard of review applicable to content-neutral regulations.  The court also rejected Lamar’s argument that the City’s regulations were unconstitutional because the various exceptions to the offsite ban undermined its interests in enacting the ban.  These exceptions included the exemption for noncommercial speech as well as exceptions for relocation agreements, specific plans, supplemental use districts, development agreements and bus shelters and certain other public property.  The court explained that the City’s regulation was not underinclusive simply because it had exceptions and that there was no basis to conclude that the exceptions worked at cross-purposes to the offsite ban.

The Lamar decision joins a recently published Fourth District opinion, City of Corona v. AMG Outdoor Advertising, Inc. (2016) 244 Cal. App.4th 291, in which the Fourth District upheld municipalities’ authority to ban all offsite commercial advertising.  While the California Supreme Court may yet weigh in, this prospect is less likely given that both the Second and Fourth Appellate Districts have now both found that the onsite/offsite and commercial/noncommercial distinctions pass muster under California’s liberty of speech clause.   The Ninth Circuit has not yet looked at the issue in the wake of Reed v. Town of Gilbert (in which the United States Supreme Court articulated a very rigid test for determining content-neutrality), but given the Lamar decision and other court decisions upholding the distinctions, municipalities should be able to confidently continue to use the distinctions.

Because of the state-wide importance of the Lamar case, the League of California Cities, the California State Association of Counties and the American Planning Association California Chapter submitted an amicus brief. Deborah Fox and Meg Rosequist authored the brief and greatly appreciated the opportunity to contribute to the efforts to preserve the ability of cities and counties throughout the state to continue to use the onsite/offsite and commercial/noncommercial distinctions as a regulatory tool in their sign codes.