7th Circuit reverses lower court’s finding in First Amendment case, affirms severability determination

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Monroe County’s variance procedure operated as a prior restraint of speech, but it didn’t amount to a First Amendment violation, the 7th Circuit Court of Appeals has ruled in reversing a district court’s finding and vacating a permanent injunction.

The 7th Circuit also affirmed the United States District Court for the Southern District of Indiana’s severability determination and remanded for further proceedings.

GEFT Outdoor, a billboard company, leased property along Interstate 65 in Monroe County to erect a billboard. GEFT didn’t apply for a permit, though, because it recognized the county’s ordinance wouldn’t allow what the company had in mind: a digital billboard that would display off-premises commercial speech. The billboard would have also been too tall, too large and not set back far enough from the interstate.

GEFT instead jumped to the next stage of the process and sought a variance in January 2019 from the Board of Zoning Appeals. The board denied the request two months later.

GEFT sued the county and the board, alleging the sign standards, permit procedure and variance procedure facially violated the First Amendment. The company emphasized that regulations that treated commercial speech differently than noncommercial speech were impermissibly content-based.

The county has since removed all content-based provisions from its zoning code.

GEFT contended the county and the board had too much discretion over whether to grant permits and variances, which the company saw as an unconstitutional prior restraint on speech.

GEFT also requested a permanent injunction against all the county’s sign regulations, not just those it specifically challenged as unconstitutional, arguing that the permit and variance procedures could not be severed from the rest of the ordinance.

The United States District Court for the Southern District of Indiana, Indianapolis Division, entered partial summary judgment for GEFT, determining several provisions of Monroe County’s sign ordinance — such as its treatment of commercial speech — impermissibly restricted speech on the basis of its content. The district court also agreed with GEFT that the permit and variance procedures operated as unconstitutional prior restraints on speech by affording too much discretion to the county and the Board of Zoning Appeals.

The district court issued a permanent injunction blocking the enforcement of certain content-based restrictions, eliminating the permitting requirement altogether and preventing the board from granting any variances with respect to signs.

The district court relied on a severability clause in the Monroe County code to find the enjoined provisions severable from the rest of the code, therefore declining GEFT’s invitation to enjoin the county’s entire sign ordinance. The court recognized that other constitutional restrictions — such as the ban on digital signs — would still have prevented GEFT from installing its billboard. So, the company was denied its request for money damages.

The parties cross-appealed, with Monroe County appealing the district court’s permanent injunction against the variance procedure and GEFT appealing the district court’s severability determination. The county did not appeal the permanent injunction of the permit procedures.

The 7th Circuit reversed the district court’s finding that the variance provision is unconstitutional and vacated the permanent injunction on those grounds. But it also affirmed the district court’s severability determination and remanded for further proceedings consistent with its opinion.

The 7th Circuit noted that by repealing several content-based regulations, including its ban on off-premises commercial speech, the county mooted GEFT’s request for an injunction against those provisions of the sign ordinance. The county also mooted GEFT’s severability argument based on those provisions, as the company’s desired outcome — an injunction against the entire sign ordinance — cannot provide effectual relief from provisions that no longer exist.

The opinion says Monroe County “cannot dodge a claim for money damages by repealing an unconstitutional regulation,” but the damages claim “is not properly before us on this interlocutory appeal from an injunction.”

The 7th Circuit first addressed Monroe County’s challenge to the variance injunction.

The county’s variance provision “gives the Board of Zoning Appeals meaningful discretion” to consider concepts such as the general welfare of the community, substantial adversity and unnecessary hardship, the opinion reads.

GEFT argued the board’s discretion was so broad as to be constitutionally problematic, tantamount to a prior restraint on speech, but the county argued the variance procedure cannot be a prior restraint because a variance is after-the-fact relief from a zoning restriction.

“We call a spade a spade: the County’s variance procedure operates as a prior restraint,” the opinion says.

The court then addressed whether the county’s variance procedure is unconstitutional prior restraint.

“Prior restraints that distinguish speech based on its content directly raise the specter of censorship,” the opinion reads, noting that the review of content-neutral prior restraints is more flexible than a review of content-based restraints.

The 7th Circuit found the risk of censorship with the county’s variance scheme was low. The opinion cited four reasons: the county removed all content-based sign regulations in 2021; the county permits “ample alternatives for speech,” including displays of messages on signs; the board’s discretion “is not central to the overarching zoning scheme”; and the Indiana Legislature requires local governments to include a variance provision in their zoning codes.

“The possibility of a state zoning board abusing its limited discretion in ways that might offend the First Amendment is not reason enough for a federal court to step into states’ and municipalities’ traditional sphere of land-use regulation and facially invalidate zoning laws left and right,” the opinion reads.

The 7th Circuit said it is “convinced that Monroe County’s variance provision does not give so much discretion to the Board of Zoning Appeals that it violates the First Amendment.”

GEFT argued the 7th Circuit can’t reach that outcome without putting the court at odds with the with the 6th Circuit Court of Appeals’ recent decision in International Outdoor, Inc. v. City of Troy, 974 F.3d 690 (6th Cir. 2020). While similar to the case at hand, the 7th Circuit noted differences, including that the sign ordinance in International Outdoor included several content-based distinctions.

The 7th Circuit then addressed the district court’s injunction of the permitting scheme and variance scheme. Because Monroe County appealed only the latter, the district court’s injunction stands as to the permitting scheme.

GEFT argued the permitting scheme is not severable from the rest of the county’s sign ordinance, which would mean the district court should have enjoined the entire ordinance.

The 7th Circuit disagreed.

“We conclude that Monroe County’s substantive sign standards do not need a permitting scheme to function,” the opinion reads.

Judge Michael Scudder wrote the opinion.

The case is GEFT Outdoor, LLC v. Monroe County, Indiana and Monroe County Board of Zoning Appeals, 21-3328 & 22-1004.

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