The following article originally appeared on the Small Business Administration website in February 2001, but it was subsequently removed.
First Amendment protections guarantee some of our most basic freedoms, including freedom of speech and assembly, freedom of the press, and freedom of religious expression.
The U.S. Supreme Court has ruled that the Fourteenth Amendment to the Constitution makes the First Amendment’s federal constitutional guarantees enforceable against actions of state and local government. Thus, a local government’s sign code must comply with the First Amendment’s guarantee of freedom of expression because signs, including a business sign that does nothing more than identify a business or advertise a product, are a constitutionally protected form of expression.
The most critical legal issue raised by a sign code is whether it regulates signs based on their content. While it is not unconstitutional, per se, for a sign code to regulate signs based on their content, courts evaluate “content-based” regulations under a demanding test known as “strict scrutiny.” Under the strict-scrutiny test, a content-based sign regulation will be upheld only if it is justified by a compelling governmental interest, and is “narrowly-tailored” to achieve that interest.
The problem with content-based regulations
All sign codes contain “content-neutral” provisions that define signs by their structure or location, e.g., wall sign, pole sign, roof sign, and then impose regulations on the signs that meet those definitions. Some sign codes, however, also contain regulatory provisions that define signs by their use, e.g. “identification sign,” “information sign.” Because the only way to determine whether a particular sign falls within the definition is to analyze the content of the message on the sign, these “use definitions” are “content-based” regulations. In other words, the content of a business sign then determines whether it is allowable for display.
The problem with “use definitions” in a sign code is that such codes often contain regulations that limit the content of the message on a business sign. For example, in a recent federal case that struck down a code with these kinds of provisions, the court noted that a “directional sign” in front of a business could contain words such as “Enter Here” or “Entrance,” but couldn’t display the McDonald’s “Golden Arches” logo or the words “Honda Service.” The court also cited the fact that the local government had interpreted another “content-based” provision of the code to prohibit a Dodge dealership from displaying on its sign a corporate logo that designated it met the manufacturer’s “Five-Star” quality standard for repair service. (See the case North Olmsted Chamber of Commerce, et al v. City of North Olmsted, 86 F.Supp.2d 755 (N.D. Ohio 2000), in the Legal Resources section and http://fasi.org/1999/12/11/1693/.)
Although sign codes may lawfully regulate the size, height, location, and other “physical” characteristics of business signs, regulations that define business signs by reference to their content — the message they display — are legally suspect and may be unlawful intrusions on the business owner’s constitutional rights.
As stated above, the U.S. Supreme Court has ruled that the Fourteenth Amendment to the Constitution makes the federal constitutional guarantees contained therein enforceable against actions of state and local government. In regards to on-premise signage regulation, the protection provided by the Fourteenth Amendment commonly enters the picture at the sign-permit application counter.
In order to pass constitutional muster, the permitting, licensing, conditional use or variance request procedure must, at minimum, be structured to assure easy understanding of objectively based requirements. In addition, reasonable application fees, speedy decision on the application by the permitting authority, and recourse to automatic and swift appeal of any denial must be provided. A failure to provide any one of these minimum procedural requirements can give rise to a claim that the process violates the due-process clause of the Fourteenth Amendment.
Because a sign is essential to communicating a business’s presence, and effectively competing in the marketplace, in some circumstances, a failure to provide minimum due process can raise a “prior restraint” issue. A prior restraint occurs when the right to communicate is subject to the prior discretionary approval of a government official that may be exercised to censor speech.
To the degree that government regulatory decisions affecting signs are not based solely on objective, quantitative criteria, the prior-restraint issue is always potentially present in the sign-permitting process. This potential makes it incumbent upon the official to act pursuant to clearly defined standards that:
- strictly limit the official’s discretion, and
- guarantee resolution of application issues within a short period of time.
- Failure to provide these standards may render the code unenforceable.