City of Austin v Reagan National Advertising of Austin LLC, (2022), was a United States Supreme Court case dealing with the application of zoning restrictions on digital billboards in the city of Austin Texas. In a 6 to 3 ruling, the Court ruled that the Austin regulation against off-premise digital signs was content-neutral and thus should be reviewed as a facial challenge rather than a strict scrutiny following from the reasoning in Reed v Town of Gilbert.

Background.

Austin is one of 350 cities and towns in Texas that enacted bans related to digital billboards along the sides of highways, generally as a long-term effect of the Highway Beautification Act as well as to avoid distractions for drivers along these highways. Austin's city codes includes a Sign Code that distinguishes between signage that is located on-premises, including signs in shop windows and mounted street signs on the property, and those off-premises, like billboards. On-premises signs are generally unregulated and may be updated and improved without any limitations, including improvements to digital signage. Off-premises signage, however, are restricted from such improvements. In addition, the city has banned the installation of new billboards.

Around 2017, two advertising companies that operated static billboards in Austin, Lamar Advantage Outdoor Company and Reagan National Advertising of Austin, sued the city as the city council denied over 80 applications to allow them to convert existing static billboards into digital billboards. The advertising companies contended that the city had allowed some digital signage such as that on the Austin Convention Center, and believed the ban was unconstitutional. They were joined by the Austin Police Association and supporters of local emergency services, believing that such digital billboards could be used to provide information such as Amber Alerts. The case was first filed in a state district court before the city moved it to the United States District Court for the Western District of Texas in 2017. The district court selected to review the matter under intermediate scrutiny based on Metromedia Incorporated v San Diego, rather than the strict scrutiny content-based standard of Reed v Town of Gilbert, as the off-premise versus on-premise standard was content-neutral. Under this distinction, the District Court ruled for the city. Though the city amended the sign code in 2017 after litigation had started, the changes did not impact the case nor render it moot.

The advertisers appealed to the Fifth Circuit. In October 2020, the Fifth Circuit reversed the District's ruling in favor of the advertisers. The Fifth Circuit used the strict scrutiny standard of Reed to evaluate the city codes, as it determined that because to determine whether a sign was on or off-premises, one had to consider the message it was conveying, and that meant that this was a content-based restriction. Given this assessment, the rationale the city had given to maintain the ban against digital signage – to assure the safety of drivers and maintain the beauty of the landscape – were not sufficient reasons to violate the First Amendment rights of the advertisers, and thus ruled the city's sign code unconstitutional