In a 2-1 decision with a vigorous dissent, the Ninth U.S. Circuit Court of Appeals has upheld the State of Oregon’s law regulating billboards.

The law prohibits new billboards except for "on-premises signs." An Oregon resident said the law violated his First Amendment rights by favoring businesses. But the court concluded the law passed the content-neutrality standard.

The Oregon Motorist Information Act (OMIA) prohibits all signs and billboards except those that existed in commercial or industrial zones prior to June 12, 1975. The law, however, permits new on-premises signs that attract attention to "activities conducted on the premises." Also permitted are temporary signs of up to 12 square feet. The law further allows the state director of transportation to grant a variance from the temporary sign restriction "for good cause."

Resident James Lombardo challenged the law because it prevented him from displaying a 32-square-foot sign at his house that stated, "For Peace in the Gulf." Lombardo claimed the law violated the First Amendment because it was a content-based regulation and because the variance procedure gave a state official unbridled discretion.

A federal magistrate found that the law was not content-based and recommended that the challenge to the variance procedure be dismissed as "unripe" because Lombardo had not filed an application. District Court Judge Michael Hogan accepted the magistrate’s recommendations and ruled for the state. Lombardo appealed, and a split three-judge panel of the Ninth Circuit upheld the lower court.

On appeal, Lombardo contended that the Oregon law prohibited him from freely expressing his opinion outside his own home, even though the law would allow a business to express commercial speech. He contended this was a First Amendment violation because the content of the sign was the basis for the restriction.

The major precedent in billboard cases is the U.S. Supreme Court’s 1981 ruling in Metromedia, Inc. v. City of San Diego, 453 U.S. 490. In Metromedia, the court held that a law is invalid if it imposes greater restrictions on noncommercial signs than on commercial signs, or if the law regulates noncommercial billboards based on their content.

More recently, the Ninth Circuit ruled in Clear Channel Outdoor Inc. v. City of Los Angeles, 340 F3d 810 (see CP&DR Legal Digest, October 2003) that the on-site/off-site distinction in Los Angeles’s billboard ordinance was constitutional. In the Oregon case, judges on the Ninth Circuit panel split over whether Clear Channel was the proper precedent for deciding Lombardo’s claims. The majority said yes.

"The primary argument raised by Lombardo is that the billboard law negatively affects noncommercial speech because fewer residents will be able to display signs that relate to activity conducted on the premises, where commercial establishments will be able to display their signs advertising their activity with relative ease. This argument fails under our precedent," Judge A. Wallace Tashima wrote for the court.

"The OMIA defines on-premises signs with respect to location alone, not content. The key consideration is whether the sign relates to activity conducted on the premises. Although commercial billboards may prevail under the OMIA’s legislative scheme, neutrality is nonetheless maintained because the regulation allows noncommercial messages on either onsite or offsite signs," Tashima continued.

The court also upheld the variance procedure because it expressly prohibited content-based decisions, and because judicial precedent provides adequate guidelines for the Department of Transportation.

In a lengthy dissent, Judge Betty Fletcher said she would overturn the lower court. "The OMIA allows commercial messages where noncommercial speech is not permitted, draws content-based distinctions among noncommercial billboards and includes an essentially standardless variance procedure," she wrote.

Fletcher pointed to the Oregon law’s exception for on-site "business identification signs" and small off-site signs that "provide information for the safety or convenience of the public." Those standards are based on the sign’s content, she wrote. "Clear Channel does not control the result here," she wrote. "The OMIA includes an explicit preference for ‘business identification signs’ and content-based distinctions among noncommercial messages that were not at issue in Clear Channel."

Fletcher cited the plurality opinion in Metromedia at length. In it, Justice Byron White wrote: "Insofar as the city tolerates billboards at all, it cannot choose to limit their content to commercial messages; the city may not conclude that communication of commercial information concerning goods and services connected with a particular site is of greater value than the communication of noncommercial messages." The Oregon law violated this principal, Fletcher said.

Furthermore, she noted that the variance procedure contained only a list of two examples of situations that may constitute good cause. "Without ‘narrow, objective and definite standards to guide the licensing authority,’ the OMIA’s bare promise of content neutrality can never be tested," Fletcher wrote, citing Forsyth County v. Nationalist Movement, 505 U.S. 122, 131 (1992).

The Case:
Lombardo v. Warner, No. 02-35269, 03 C.D.O.S. 11152, 2003 DJDAR 14104. Filed December 29, 2003.

The Lawyers:
For Lombardo: Alan Herson, (541) 770-1372.
For Warner: Janet Metcalf, attorney general’s office, (503) 378-4402.