City’s On-site and Off-site Business Signs Distinction Upheld - Ninth Circuit Says Code is Proper Regulation of Commercial Speech

by Best Best & Krieger LLP
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A City of San Francisco Planning Code section that distinguishes between “general advertising signs” and “business signs” was upheld last week by a federal appeals court. The U.S. Ninth Circuit Court of Appeals ruling reaffirms prior decisions that cities’ disparate treatment of on-site and off-site business advertising is within the bounds of proper commercial speech regulation, and outlines the relevant test for commercial speech regulation in general.
 
The code section at issue in Contest Promotions v. City and County of San Francisco defines general advertising signs as signs that “direct attention to a business, commodity, industry or other activity which is sold, offered or conducted elsewhere than on the premises upon which the sign is located.” “Business signs” are defined as signs referring to the “primary business, commodity, service, industry or other activity which is sold, offered, or conducted on the premises upon which such sign is located.” The code bans new general advertising signs, but permits business signs, subject to certain restrictions. San Francisco cites safety and aesthetics concerns for justifying the ban.
 
Contest Promotions alleged, among other arguments, that the code section that defines business signs violates the First Amendment. The district court granted the city’s motion to dismiss the case, and it was appealed to the Ninth Circuit.
 
Contest Promotions argued that by requiring business signs to direct attention to the primary business conducted on the premises, the code section is a “content-based” regulation of speech subject to heighted scrutiny. The court rejected this argument, applying the four-part test developed in Central Hudson Gas & Electric Corp. v. Public Service Commission, which has become the standard for assessing restrictions on commercial speech.
 
The court held that the City’s code section satisfied the Central Hudson test, explaining that first, there was no question that the proposed signs concern lawful activity and are not misleading, and second, that San Francisco’s interests in safety and aesthetics are substantial. Third, the court noted that it has “repeatedly held that regulations distinguishing between on-site and off-site advertising signs directly advance governmental interest in safety and aesthetics.” Lastly, the court found that the code section is not more extensive than necessary to serve San Francisco’s interest, because the code section’s detailed definition of a “business sign” is appropriate to ensure that such signs actually relate to activities on the premises.
 
The court also rejected Contest Promotions’ other arguments and upheld the district court’s decision to dismiss the case.

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