After SCOTUS ruling, 7th Circuit vacates permanent injunction, remands Westfield billboard dispute

The 7th Circuit Court of Appeals has vacated a permanent injunction against a Westfield billboard ordinance following a U.S. Supreme Court opinion that “bears heavily” upon the case.

The U.S. District Court for the Southern District of Indiana will now revisit numerous issues on remand in GEFT Outdoor, LLC v. City of Westfield, et al., 20-2915 & 20-3101.

In 2017, the city of Westfield adopted an ordinance governing the design, placement and maintenance of signs within city limits. The ordinance, amended in 2018, requires those wishing to install a sign or billboard to apply for a permit.

Some signs are prohibited while others are allowed with a permit or pursuant to express exceptions within the ordinance. A second category also prohibits certain types of signs, including those on poles and those advertising ideas, products or services not offered on the same premises

Under the city’s permitting scheme, if a proposed sign complies with the requirements of the ordinance, then “a sign permit shall be issued.” Those seeking to install a noncompliant sign can appeal the denial of a permit or request a variance from the local Board of Zoning Appeals.

GEFT Outdoor, a company specializing in the construction and operation of billboards, applied for a permit to build a large digital billboard on private property along U.S. Highway 31 in Westfield. However, because of the proposed sign’s noncompliance with the city’s ordinance, including its off-premises location and use of a pole, the city denied GEFT’s application and subsequent variance request.

In September 2018, the Southern Indiana District Court denied GEFT’s motion for a preliminary injunction against Westfield’s enforcement of the ordinance. Alongside that denial, the district court granted the city’s motion for a restraining order compelling GEFT to cease all actions to install its proposed billboard pending the outcome of the litigation.

The 7th Circuit affirmed the district court’s ruling in April 2019.

However, when the litigation resumed, the district court considered the merits of GEFT’s First Amendment claims. In doing so, it entered summary judgment in the company’s favor and permanently enjoined Westfield from enforcing many aspects of its ordinance.

Relying on the 5th Circuit Court of Appeals’ decision in Reagan National Advertising of Austin, Inc. v. City of Austin, 972 F.3d 696 (5th Cir. 2020), the district court concluded that much of the city’s ordinance governing sign standards regulated speech on the basis of its content and therefore was subject to strict scrutiny.

Regarding the city’s pole sign ban, the district court found it content neutral and applied intermediate scrutiny, but found the restriction lacked sufficient tailoring. Thus, the court declared the entirety of the pole sign ban unconstitutional.

GEFT also argued the variance allowance was problematic because of the discretion it vests in the city’s Board of Zoning Appeals, effectively allowing the board to pick and choose favored and disfavored speakers.

Ultimately, the court invalidated and enjoined the entirety of the permitting scheme.

Following oral arguments, the 7th Circuit deferred its decision until the U.S. Supreme Court ruled in the City of Austin case.

In City of Austin, which was handed down on April 21, the Supreme Court concluded that speech regulation is only content-based if it “‘target[s] speech based on its communicative content’ — that is, if it ‘applies to particular speech because of the topic discussed or the idea or message expressed.’” Thus, the fact that a city must read a sign to evaluate its conformity with a regulation is not alone determinative — rather, the decisive issue is whether the regulation “single[s] out any topic or subject matter for differential treatment.”

Applying that standard to the challenged off-premises regulation, the Supreme Court held that the city of Austin had not prohibited any sign based on its political or ideological message and instead drew regulatory lines only based on whether a given sign was located on “the same premises as the thing being discussed or not.”

Because “the City’s off-premises distinction require[d] an examination of speech only in service of drawing neutral, location-based lines” and was “agnostic as to content,” the justices concluded the regulation was content neutral on its face and didn’t warrant strict scrutiny absent evidence of an impermissible, content-based purpose or justification.

With the decision in City of Austin, the 7th Circuit determined the appropriate course of action in the Westfield case was to vacate the permanent injunction and remand.

City of Austin — which, of course, the district court did not have the benefit of at the time of its decision — makes plain that the City of Westfield’s off-premises ban does not (at least at the facial level) impose a content-based speech restriction requiring application of strict scrutiny,” Judge Michael Scudder wrote. “Indeed, the Supreme Court altogether rejected the Fifth Circuit’s reasoning that a need-to-read requirement — one in which a City official must read a message displayed on a sign to answer whether the communication is on-premises or off-premises — necessarily shows regulation based on the content of speech. This reasoning was at the heart of the district court’s conclusions that Westfield’s off-premises ban, and indeed its entire permitting scheme (including all exceptions), imposed impermissible content-based restrictions on speech.

“This same rationale also seems to explain, as best we can tell, why the district court viewed these aspects of the Westfield ordinance as imposing prior restraints on speech,” Scudder continued. “The only responsible course is to remand to allow the district court to revisit its prior rulings within the intermediate scrutiny framework articulated in City of Austin. In doing so we leave to the district court’s sound discretion whether to permit the parties to supplement the existing summary judgment record to inform, for example, whether challenged provisions of the City of Westfield’s ordinance, although content neutral on their face, operate in practice in ways that show impermissible restrictions on speech based on its content.”

The 7th Circuit also cautioned that the district court appeared to view the entirety of Westfield’s permitting scheme as reflecting an impermissible prior restraint on speech.

“Whatever the rationale, everyone on remand should remember that ‘prior restraints are not per se unconstitutional,’ and can be ‘constitutionally legitimate if they are proper time, place, or manner restrictions.’ HH-Indianapolis, LLC v. Consol. City of Indianapolis and County of Marion, Ind., 889 F.3d 432, 440 (7th Cir. 2018),” Scudder wrote. “In short, we know of no precedent categorically — root and branch — disallowing a municipality from requiring permits for particular activities, including certain forms of speech, to occur within city limits.”

The 7th Circuit also remanded to allow the district court to reconsider its ruling on Westfield’s pole sign ban and other material issues.

“On remand, the district court will have broad discretion to structure the proceedings as it sees fit,” Scudder concluded. “Our only message to all involved is to take care to make a thorough and complete record, one that will allow us in any future appeal to better follow the record evidence, the scope of the issues presented for decision, and the basis for any ruling on those issues.”

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