The U.S. Court of Appeals for the Ninth Circuit has issued a pair of First Amendment decisions that have implications for how and when cities can regulate commercial speech. However, in one decision the Court failed to articulate the traditional First Amendment standards or explain how it evaluated the speech regulations under them.
The First Amendment provides that "Congress shall make no law… abridging the freedom of speech, or of the press…." In the free speech context, courts analyzing regulations of speech according to a spectrum of values. For example, the closer to the core of First Amendment protection speech is, the greater protection it is afforded.
To that end, courts have developed the concept of "commercial speech." The core notion of commercial speech is that it "does no more than propose a commercial transaction." While it is afforded a limited measure of First Amendment protection, that protection is less than the protection afforded, for example, to political speech. Courts evaluate content-based restrictions on noncommercial speech under the standard of "strict scrutiny," but analyze similar restrictions on commercial speech under a more lenient level of "intermediate scrutiny."
Under the strict scrutiny test, a regulation is valid only if it is the least restrictive means available to further a compelling government interest. Under the intermediate scrutiny test, a restriction on speech may be upheld if the speech concerns lawful activity that is not misleading; the restriction serves a substantial governmental interest, and the restriction is no more extensive than is necessary to serve that interest. Finally, When commercial speech and fully protected speech are “inextricably intertwined," courts do not apply different levels of scrutiny because to do so would be "artificial and impractical." Courts therefore are required to treat the entire intertwined speech as fully protected expression. On the other hand, speech that has both with commercial and noncommercial components that are not inextricably intertwined is subject to an intermediate level of scrutiny.
In its recent rulings, the Ninth Circuit rulings attempted to clarify the line between commercial and non-commercial speech where cities sought to regulate billboards and telephone directories. But they were inconsistent in their approaches and in one decision did not even articulate how the ordinance should be evaluated under the appropriate level of scrutiny.
The City of Los Angeles' Speech Regulation
In Charles v. City of Los Angeles (Ninth Circuit Case No. 10-57028), the court addressed the city of Los Angeles' regulation of billboards. The city enacted an ordinance requiring a building permit for all temporary signs other than those containing “a political, ideological or other noncommercial message.” Los Angeles Municipal Code (LAMC) § 14.4.16(A).
Wayne Charles (Charles) and Fort Self Storage (Fort) sought to install a temporary sign advertising a television program without obtaining the required city permits. They agreed that Fort would lease exterior wall space to Charles for the display of temporary signs bearing “content related to motion pictures, theatrical productions, television and radio programming, music, books, newspapers, paintings, and other works of art.” For its first sign, Charles proposed an image containing the “E! News” television program logo and photographs of the show's hosts, Giuliana Rancic and Ryan Seacrest.
Charles and Fort asserted that their advertisements were exempt from the ordinance’s permit requirement, asserting the sign contained a noncommercial message. The city disagreed and deemed the sign “strictly commercial in nature” and advised that installation of the proposed sign would violate several provisions of the sign ordinance. Charles and Fort filed suit, claiming the city violated their First Amendment rights in classifying their proposed signs as commercial speech, and seeking a declaration that signs of this nature are exempt from the permit requirement.
The city moved to dismiss the complaint. It argued that the sign constituted commercial speech and the city could regulate it. The district court agreed and entered judgment in favor of the city. The court rejected the argument that the proposed sign enjoyed the same First Amendment protection for noncommercial expression as the advertised news program itself and found the city was entitled to deference in deciding how to categorize such messages. Otherwise, courts would become the "first-line arbiters" of hundreds of thousands of billboards around the nation.
On appeal, the Ninth Circuit agreed and affirmed the district court's ruling. However, the appellate court disagreed with the district court as to the level of deference that should be afforded city officials because of the essential role the judiciary plays in safeguarding First Amendment guarantees. While deference may be due for a city’s legislative decisions addressing the spread of billboard advertising, which require balancing the interests of traffic safety, revenue and aesthetics, no such deference is due as to city officials’ evaluations as to whether particular speech is commercial speech. Although officials have the authority to make such determinations, district courts reviewing such determinations should not merely defer to the city on such constitutional issues.
The concern that Federal courts might become the first-line arbiters of billboards to be erected across the country was deemed insufficient; in order to preserve "the precious liberties established and ordained by the Constitution," the Ninth Circuit explained that courts must engage in a de novo review of the city's determination that particular speech is not entitled to full First Amendment protection
The Ninth Circuit itself reviewed the city's conduct under this standard and determined that the advertisements constituted commercial speech and properly were governed by the sign ordinance. Accordingly, it affirmed the district court's judgment. Notably, the court did not articulate a traditional First Amendment analysis and did not explain how the regulations satisfied the requisite level of scrutiny. This is particularly odd, given that in the City of Seattle case, issued the same day, the court did just that.
The City of Seattle's' Speech Regulation
In Dex v. City of Seattle (Ninth Circuit Case No. 11-35399) the Ninth Circuit considered the Seattle's regulation of the distribution of "yellow page" phone directories. Seattle adopted an ordinance requiring yellow pages directory publishers to obtain permits and pay a fee for each directory distributed within the city. It also establishes an opt-out registry to allow residents to decline to receive them and required publishers to advertise the availability of the opt-out registry on the front cover of the directories. Two yellow page companies challenged the ordinance primarily on the grounds that it violated the First Amendment. The district court disagreed and upheld the regulations, granting summary judgment in favor of the city.
The Ninth Circuit reversed. The court explained that the phone books contained components of both commercial speech and noncommercial speech, thus requiring consideration of “the nature of the speech taken as a whole” in determining which level of First Amendment protection the yellow pages directories should receive. In that context, courts must inquire as to whether the particular speech “does no more than propose a commercial transaction,” taking into account the format, whether there is a reference to a specific product, and the underlying economic motive of the speaker.
In this case, yellow page phone directories historically were not created to serve merely as a vehicle for the delivery of ads. Rather, they started out as directories of telephone numbers. The commercial elements were added later and today still take up only a limited fraction of the space in the phone book. While publishers depend economically on advertisements to pay for the directories, that was not sufficient to distinguish them from other forms of communications that qualify for full First Amendment protection. Further, affording the directories less protection because commercial content is published alongside noncommercial content would require the court to draw a distinction between the directories and other publications that combine commercial and noncommercial speech, such as newspapers and magazines.
The Ninth Circuit held the directories were entitled to full First Amendment protection and did not withstand the strict scrutiny test. The court therefore remanded the case and directed that judgment be entered in favor of the publishers.
The outcome of these cases was hardly surprising. However, in the City of Los Angeles case, while the Ninth Circuit did note its essential role in safeguarding the First Amendment’s guarantees and prohibiting undue deference to public officials in protecting them, it is troubling that the Ninth Circuit upheld the speech restriction without bothering to explain how the ordinance satisfied the appropriate level of scrutiny.
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