For billboard owners, threat of legal challenge presents opportunity


City of Austin might weigh new rules on digital billboards.

Recent court rulings will likely affect the city’s efforts to revise its billboard rules as part of CodeNext.

Eight sections deep in the city’s vast 1,100-plus-page draft rewrite of its land use rules sits a footnote that portends a possible legal challenge to come.

But, as an example of just how far-reaching CodeNext is, the warning deals not with sort of buildings Austin might allow, but the types of signs that could be placed on or near them.

Recent court rulings, including one from the U.S. Supreme Court, will likely affect the city’s efforts to revise its billboard and sign rules as part of CodeNext, the city’s staff warns in the footnote. For major billboard owners, the legal uncertainty presents an opportunity to push something they’ve always wanted: digital signs.

“If they do nothing at all, and risk having the city’s sign code stricken because of a court challenge, then it’s the Wild West,” said Russ Horton, the attorney who represents a coalition of billboard owners, local businesses and public safety unions known as Sign On Austin. “What we want to do is avoid a Las Vegas or Times Square-type situation. The city needs to pull its head out of the sand and do something about it.”

In 2015, the Supreme Court struck down a small Arizona town’s sign regulations, finding they inappropriately regulated their content. The next year, the Texas 3rd Court of Appeals struck down much of the state’s highway beautification act, finding it inappropriately regulated political speech.

Horton’s group argues it’s only a matter of time until a legal challenge appears taking the argument one step further: That differing regulations between “on-premises” and “off-premises” signs are unconstitutional as well.

For instance, while businesses are free to put up digital billboards on their building or land, owners of “off-premises” billboards advertising businesses located elsewhere cannot.

The solution pushed by Horton’s group: A series of changes to the city’s sign regulations that would unify the rules for on-premise and off-premise signs, which would allow sign owners to replace vinyl, static billboards with digital ones.

That’s a non-starter for highway beautification group Scenic Texas.

“Communities don’t want these signs in their community, period,” said Margaret Lloyd, vice president of Scenic Texas’ board of directors. “That’s what I get concerned about, when I see an industry coming in and trying to leverage a process to their advantage so that the issue can’t be honestly discussed, separate from creating this atmosphere of fear.”

Horton’s group met with opponents and Mayor Steve Adler late last year in an attempt to resolve their differences, he said. A promised meeting for early this year has yet to take place, he added

“The mayor is facilitating a conversation with some of the stakeholders because a resolution is needed on this issue,” said Adler spokesman Jason Stanford.

City spokeswoman Alina Carnahan described the sign regulations in the currently released CodeNext draft as a placeholder. The city, she said, will roll out its new proposal, which is undergoing legal review, this spring.

The crux of Horton’s argument centers around the 3rd Court of Appeals ruling last August, which struck down key sections of the 1972 Texas Highway Beautification Act.

That case stemmed from a legal challenge brought by the owner of a Planet K shop, who argued the state rules limiting when political signs could be posted along a freeway in Bee Cave improperly limited his First Amendment rights.

The appellate court ruled that the state’s limits on outdoor advertising cannot be enforced because the law improperly regulated billboards and signs based on what they say. That ruling, which has been appealed to the Texas Supreme Court, didn’t directly apply to city or county rules governing billboards.

The Texas appellate court’s ruling relied on the 2015 U.S. Supreme Court ruling in Reed v. Town of Gilbert, which found the Arizona town’s sign ordinance placed improper restrictions on signs being used by a church to inform the public about the time and location of its services.

However, Scenic Texas argues that a challenge against Austin’s rules wouldn’t naturally line up with the existing case law.

And in a concurring opinion to that 2015 Supreme Court ruling, three justices agreed that “(r)ules distinguishing between on-premises and off-premises signs” were acceptable.

“They said, basically, a ban on digital, off-premise, commercial speech is very different from a regulation of on-premise’s noncommercial speech and it’s perfectly OK” under a previous ruling, Lloyd said. “As long as city codes don’t try to regulate noncommercial speech on private property, then they can regulate the rest.”

However, Horton pointed out that a separate concurring opinion from that Supreme Court decision warned the ruling could be more expansive than intended. Additionally, he pointed to the 3rd Court’s decision to strike down most of the Texas Department of Transportation’s authority to regulate billboards, even though the case stemmed from a political sign.

“Local sign codes, in cities and towns, essentially have been modeled after the Highway Beautification Act for the last 30 years,” Horton said. “That’s the problem.”

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