First Amendment Aspects of Takings

The following article originally appeared in Signs of the Times magazine.

By Karen E. Claus, JD Phd

This month, the author examines the First Amendment aspects of takings by looking at the cases of Linmark Assoc., Inc. et. al. v. Township of Willingboro et. al., which concerned real-estate signage. and Omni Outdoor Adv Inc. v. The City of Columbia. SC. and Columbia Outdoor Adv., which concerned outdoor advertising.

In the case of Linmark Assoc., Inc., the Township of Willingboro, a town in New Jersey, worried that signs, particularly real-estate signs, could be used to extend and change the racial mix of the town. Through police powers, real-estate signs were banned. With the exception of Metromedia v. San Diego ,[1], this is the only signage case that has reached the U.S. Supreme Court. The essence of the case is the issue of whether it is a legitimate use of police powers to prevent the flow of information offered by real-estate signage.

If the Willingboro law is to be treated differently from those invalidated in Bigelow and Virginia Pharmacy, it can’t be because the speakers — or listeners — have a lesser First Amendment interest in the subject matter of the speech that is regulated. Persons desiring to sell their homes are just as interested in communicating that fact as are sellers of other goods and services. Similarly, would-be purchasers of realty are no less interested in receiving information about available property than are purchasers of other commodities in receiving like information about those commodities. And the societal interest in “the free flow of commercial information:” (Virginia Pharmacy supra, at ’64), is in no way lessened by the fact that the subject of the commercial information here is realty rather than abortions or drugs. [2]

It’s apparent that if realty signs are protected, in order to protect the information necessary for a person to choose a residence or shelter, it would be even more impossible to ban on-premise signs. It would suggest that a ban of particular information on on-premise signs. without having a like ban on all other information, would fail. The court in Linmark used the same logic as Baldwin‘s court to discuss alternate avenues of commercial communications.

First, serious questions exist as to whether the ordinance “leave[s] open ample alternative channels for communication,” (Virginia Pharmacy, supra, at 771). Although, in theory, sellers remain free to employ a number of different alternatives, in practice, realty is not marketed through leaflet, sound trucks, demonstrations or the like. The options to which sellers are realistically relegated — primarily newspaper advertising and listing with real-estate agents — involve more cost and less autonomy than “For Sale” signs.[3]

The financial limitations that limit certain types of businesses to the use of on-premise signage has been recognized by the Small Business Administration. Studies conducted by 3M Research in Lubbock, TX. also drew that conclusion. The real question in this case is not whether banning would be judicially prevented, but how restrictions on use options would hold up under a properly directed legal test. A seller’s marketing strategies can be severely curtailed by limitations, such as the size of a sign.

Content regulation
The first edition of the book Street Graphics, by Mandelker and Ewald, recommended severe limitations upon copy color and graphics.[4] A number of reasons. including “information overload,'” were offered to justify this limitation. The logic seemed to be that public streets should not be a communication area because certain kinds of mental damage might be inflicted upon the public. The Linmark case, however, flatly takes the position that one can look away from the signs.

Rather Willingboro has proscribed particular types of signs based on their content because it fears their “primary” effect — that they will cause those receiving the information to act upon it. That the proscription applies only to one mode of communication, therefore, does not transform this into a “time, place or manner” case. (See. for example, Erznoznik v. City of Jacksonville, supra; Police Department of Chicago v. Mosley, 408 U.S. 92 (1972); Tinker v. Des Moines School Dist., 393 U.S. 503, 510 (1969).)

If the ordinance is to be sustained, it must be on the basis of the township’s interest in regulating the content of the communication, and not on any interest in regulating the form.[5]

The judicial restraint on these sign codes seems to occur when they are overly restrictive or when they restrict content and color. Municipal or governmental censorship is really the issue. The persons desiring to extend this control try to negate the issue through logic that does not stand up either to serious research or to practical observation. When the problem of censorship is brought to the municipality’s attention, the codes do not stand up to public pressure.

More information, not less, is needed. From that statement, one comes to the conclusion that it is not permissible for a municipality to single out one method or form of communication for content restrictions. To what degree this content restriction might apply to all forms of advertising is an open question, particularly when one considers that in certain states, tobacco and liquor advertising, for instance, are banned.

Tobacco and liquor advertising are not permitted on outdoor advertising, per se, in Utah. Certain regulatory bodies in Oregon have prevented advertising of a particular brand of liquor to reduce consumption by young people. In discussing the importance of First Amendment choices, the Linmark court cited the Virginia Pharmacy case, which was decided the previous year:

“There is  . . .  an alternative to this highly paternalistic approach. That alternative is to assume that this information is not in itself harmful, that people will perceive their own best interests if only they are well enough informed, and that the best means to that end is to open the channels of communication rather than to close them . . . . But the choice among these alternative approaches is not ours to make or the Virginia General Assembly’s. It is precisely this kind of choice, between the dangers of suppressing information, and the dangers of its misuse if it is freely available, that the First Amendment makes for us. (425 U.S. 770.)[6]”+

The constitutional defects in this ordinance are far more basic. The Township Council in Linmark, like the Virginia Assembly in Virginia Pharmacy, acted to prevent its residents from obtaining certain information. Information that pertains to sales activities in Willingboro is of vital interest to the Willingboro residents, because it may bear on important decisions, such as where to live and where to raise their families . . . Or as Justice Brandeis noted in an earlier case:

“If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence. Only an emergency can justify repression.[7]”

On-premise business signs
Although there is some logical extension from political and real-estate signs to on-premise signs, a possible legal conclusion surfaces. Certain protections must be afforded to the on-premise sign classes, and the lack of establishing those legal rights is really a lack of pleading with proper research. The court in Linmark went one considerable step further, and began to segregate laws by two complete differences. It first says that:  “. . .  other varieties  . . .  suggest that a different degree of protection is necessary to [e]nsure that the flow of truthful and legitimate commercial information is unimpaired.[8]”

The court then added, “Laws dealing with false or misleading signs,” and laws requiring such signs to “appear in such a form, or include such additional information  . . .  as [is necessary to prevent [their] being deceptive,” are in another and separate category.[9]

Thus, the federal courts slowly developed a doctrine where the scope and extent to which signs can contribute to the public and to commercial activity weighs heavily against restrictive regulations. Once one has extended this principle to some of its obvious implications, certain protections are apparently available to the sign industry.

Outdoor-advertising companies have been the quickest to act to apply the law equally to all municipalities. The number of outdoor-advertising structures has declined such that companies maximize profit from the structures that are available. They have reached the point where they simply can’t charge any more for the existing structures, or people will seek alternate forms of advertising.

The case of Omni Outdoor Adv., Inc. v. The City of Columbia, SC, and Columbia Outdoor Adv. highlights some of the legal problems involved in taking away the options of a private individual through governmental manipulation of the landscape decision-making rules. No case highlights the opposite side to land-use regulation better than Omni.[10]

In the Omni case, a new billboard company came to town and began to build an outdoor-advertising plant. An old, established outdoor plant worked with the City of Columbia, SC, and, by passing a sign code, managed to limit the possibility of future competition in the town.

As in Loretto v. Teleprompter Manhattan CATV Corp.[11], in the Omni cases, there was a winner and a loser when the City of Columbia applied its sign code. The existing sign company was not only protected from competition but, by limiting the supply of signs, it could command higher prices for its product due to a rising demand with no new supply.

Civil-rights question?
If a constitutional amendment is a civil right, the cause of action is sure to change in future signage litigation. After a successful challenge to a sign law, a municipality often merely reconvenes with city council and, with minor modifications, readopts the sign code that lost in the litigation. Missoula, MT, is such a community.

When city officials sit in a room and agree to pass a code in which one or two major actors will benefit substantially, there is a conspiracy to restrain trade. If this can be proven by the patterns of political donations and the activities that follow, there is usually a settlement. Very seldom is a municipality willing, as in the case of Omni, to allow the question of its activities to go before a jury.

The general bent of American juries seems to be against encouraging and/or allowing the restraint of trade. They seem to feel that consumers are the ultimate losers. The only beneficiaries of restrictions are those that own the established activity, and those politicians that gain some sort of notoriety.

Distinguishing factors
There are many distinguishing facts in the Omni case. Omni Outdoor Adv. spent large amounts of money doing a market survey, paying ground rent and subsequently acquiring the permits from the city. The main issue was the ordinance that was passed prevented competition. Also, the code was not perceived as an illegal act, per se, or as part of the police power. A conspiracy to use the law to restrain trade is based upon the fact that outdoor advertising, by its very nature, involves interstate commerce.

Omni managed to sue and obtain a very large judgment – more than $l million. The actual damages were concluded to be expenses from efforts to enter the market. When Omni recently appealed,[12], the court reinstated the jury award against Columbia Outdoor for actual damages of more than $1 million and remanded the case to the trial court for a jury determination of treble punitive damages ($3 million). The remand is still in trial as of publication date. The City of Columbia was shielded from damages, but the trial court was instructed in remand to grant injunctive relief.

Metromedia v. San Diego [13] is a logical extension of the Baldwin and Linmark cases. In Omni however, the city developed and worked with the billboard or media segment of the industry to develop a sign code. In place of a First or Fifth Amendment issue, the city was charged with restraining trade.

 

Attributions

1. Metromedia, 26 Cal.3d 848, 164 Cal. Rptr. 510, 610 P.2d 407, prob. juris noted 449 U.S. 897.

2. Linmark, 431 ES. at 92.

3. Id. at 93.

4. Street Graphics: A Concept and a System, 1971.

5. Id. at 94.

6. Id. at 97, citing Virgina Pharmacy Bd. v. Consumer Council, 425 US. 748, 770 (1976).

7. Whitney v. California, 274 U.S. 357, 377 (1927) (concurring opinion).

8. Id. at 98.

9. Linmark, 431 U.S. at 98 quoting Virginia Pharmacy Bd. v. Consumer Council, 425 U.S. 748, 771-72 n. 24.

10. Omni Outdoor Adv. v. Columbia Outdoor Adv. and The City of Columbia, No. 3: x5-2872 (D.S.C. Feb. 7, 1986) (Order granting $1,011,000 actual damages).

11. 458 U.S. 419 (1982).

12. 891 F.2d. 1127 (Dec. 15, 1989. Rehearing was denied on Feb. 15, 1990.)

13. 23 Cal.3d 762. 154 Cal. Rptr. 212, 592 P.2d. 728 (1979), reh’g granted.

 

Photo by Scott Webb on Unsplash

Posted in Blog: Rhetorical, Outdoor Advertising, Sign Codes, Signs' Advertising Value.