Courts in the Ninth Circuit Decline to Extend Reed v. Town of Gilbert to Commercial Speech

After the U.S. Supreme Court released its decision in Reed v. Town of Gilbert four months ago striking down that Arizona town’s sign code as being unconstitutionally content-based, some commentators, including one from The New York Times, were quick to raise the alarm that the decision would have consequences far beyond local sign codes. Although the decision has undoubtedly created uncertainty, it has not yet led to any such consequences so far in the Ninth Circuit, the federal circuit that includes Washington State.   

As local governments sort through the true implications of Reed, I think that it’s worthwhile to take stock of how courts in the Ninth Circuit have so far handled attempts to extend the logic of Reed beyond the regulation of noncommercial signs. As of today, the most significant push by nongovernmental actors in the Ninth Circuit has been to attempt to extend Reed’s holding to commercial speech.

Why is this Important?

Now, you may be wondering why it matters whether or not Reed controls the regulation of both types of speech – commercial and noncommercial. The distinction is important to local governments because, traditionally, local governments have more authority to regulate commercial speech then they have to regulate noncommercial speech. See, e.g., Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980). If Reed controls the regulation of both types of speech, then local governments are going to have to face the same demanding burden before they can regulate any type of speech, which could have many implications for current government regulation of commercial speech, such as consumer protection disclosures and restrictions on drug and alcohol advertisements. 

Now let’s talk about what courts in the Ninth Circuit have done so far. If you need a quick refresher on the Reed case itself before we get started, I recommend reviewing our U.S. Supreme Court Issues Significant Sign Code Decision blog post.

Ninth Circuit Cases

As of today, the four federal district courts in the Ninth Circuit that have confronted attempts to expand Reed’s logic to commercial speech have refused to do so; they have so far limited Reed to noncommercial speech. 

At issue in CTIA-The Wireless Association v. City of Berkeley, California, 2015 WL 5568072 (N.D. Cal. 2015), was a city ordinance that required cell phone retailers to provide a certain notice about radiofrequency energy emitted by cell phones to any customer who buys a cell phone within the city. The plaintiff argued that, under the logic of Reed, the ordinance violated the First Amendment. The court found that the speech at issue was commercial speech and that nothing in the U.S. Supreme Court’s recent opinions, including Reed, “even comes close to suggesting that that well-established distinction [between commercial and noncommercial speech] is no longer valid.” Having found that the regulation concerned commercial speech, the court evaluated the constitutionality of the ordinance in a manner more favorable to the city, and held that the ordinance did not violate the First Amendment.

In Contest Promotions, LLC v. City and County of San Francisco, 2015 WL 4571564 (N.D. Cal. 2015), a business corporation similarly tried to get the court to extend Reed to commercial speech. At issue in this case was a San Francisco ordinance that banned businesses from using “off-site” general advertising signs (e.g. billboards), but permitted “on-site” business signs (i.e. signs advertising the business to which they’re affixed). The plaintiff argued that, under Reed, this distinction violated the First Amendment. The court held that “Reed does not concern commercial speech” and therefore Reed does not change existing legal precedent, which requires a court evaluating the constitutionality of a regulation on commercial speech to do so in a manner more favorable to the municipality than would be due if the regulation concerned noncommercial speech. In applying this less demanding standard of review, the court found no First Amendment violation.  

The two other Ninth Circuit courts that have had the opportunity to consider the issue have reached the same conclusion: Reed does not apply to commercial speech. See California Outdoor Equity Partners v. City of Corona, 2015 WL 4163346 (C.D. Cal. 2015) (“Reed does not concern commercial speech”); Citizens for Free Speech, LLC v. County of Alameda, 2015 WL 4365439 (N.D. Cal. 2015) (holding that Reed does not apply to commercial speech).

Stay Tuned

It’s important to note that these four cases do not control any local government action in Washington State, and it’s unclear whether Washington courts will apply Reed to commercial speech because, to our knowledge, none have yet been asked to do so. However, I do think that these cases demonstrate that there is a growing trend in the Ninth Circuit toward maintaining the pre-Reed First Amendment distinctions between commercial and noncommercial speech. 

Going forward, at least one of these cases (Contest Promotions, LLC) has officially been appealed to the Ninth Circuit Court of Appeals, a court whose decisions do apply to local government action in Washington State, so we may, in the coming months, receive clearer guidance on the extent to which Reed applies to commercial speech here in Washington.

Photo Courtesy of Randy Heinitz