Antitrust Law Daily Wrap Up, ADVERTISING—D.S.C.: Ban on digital and new off-premises signs survives intermediate scrutiny, (Jul 19, 2023)

By Seth Abrams, J.D., M.A.

The court also found that the South Carolina constitution did not provide any additional protection.

The federal district court in Charleston, South Carolina granted defendants Town of Mount Pleasant (the “Town”) and Kent Prause, III’s (“Prause”) motion for summary judgment in its litigation against plaintiff Adams Outdoor Advertising Limited Partnership (“Adams Outdoor.”) Adams Outdoor had brought a cross-motion for summary judgment, which was denied. The court held that: (1) plaintiff’s standing was lacking for most of the second, third, and fourth counts; (2) intermediate scrutiny was appropriate in assessing the constitutionality of the ordinance; and (3) the as-applied challenge failed because the ordinance was applied evenly and was proper under intermediate scrutiny (Adams Outdoor Advertising Ltd. Partnership v. Town of Mount Pleasant, July 12, 2023, Norton, D.).

In October and November of 2019, the Town denied nine permit applications to install new billboards or convert static billboards into digital billboards from Adams Outdoor pursuant to its sign ordinance (“Sign Ordinance”), which prohibits all digital signs and effectively prohibits any new off-premises signs. In October 2020, Adams Outdoor filed this action against the Town and Prause challenging the sign ordinance under the South Carolina and United States Constitutions. The complaint brought five causes of action. The first is “a facial challenge to the constitutionality of the Sign Ordinance as a content-based restriction on speech.” The second is “a facial challenge to the constitutionality of the Sign Ordinance on the grounds that it is vague, ambitious, and overbroad.” The third is “a facial challenge to the constitutionality of the Sign Ordinance as a prior restraint on speech.” The fourth cause of action is “a facial challenge to the constitutionality of the Sign Ordinance as a violation of equal protection and/or substantive due process.” The fifth is a “challenge to the constitutionality of the Sign Ordinance ‘as applied’ to defendants’ actions.”

Initial matters/scope. At the outset, the court found collateral estoppel did not apply because the standing issue was not identical across the cases. It next found that Adams Outdoor lacked standing to bring “most of its second, third, and fourth causes of action.” The Town conceded that Adams Outdoor had standing under the first cause of action and to bring an as-applied challenge to the Sign Ordinance under the fifth cause of action. The court dismissed all of the second count except as regarding the potential overbreadth of prohibiting all digital signs or any new off-premises signs. It dismissed the third count because “a plaintiff does not have standing to challenge an alleged prior restraint where there is ‘no credible threat of prosecution.’ The court dismissed the fourth count as iterative of the First Amendment claims that the court considered. It found that “Adams Outdoor is permitted to challenge the Sign Ordinance provisions regulating off-premises signs and digital signs to assert that those provisions unconstitutionally infringed upon its speech.”

Intermediate scrutiny. The court first had to determine whether intermediate or strict scrutiny applied to the Sign Ordinance. The court determined that “both provisions at issue are facially content-neutral.” As a result, intermediate scrutiny would apply to the ordinance, which required “the Town to show that the provisions in the Sign Ordinance further its stated interests without burdening substantially more speech than necessary.” The Town held the view that it had an interest in “furthering traffic-safety and aesthetic purposes.” The court found that the Sign Ordinance survived intermediate scrutiny as it was narrowly tailored to serve those interests and that it was a “suitable time-place-manner restriction.”

Following the same rationale, the court found that the digital-sign restriction survives Adams Outdoor’s overbreadth challenge, which the court had found standing for under the second count. The “digital-sign restriction is narrowly tailored to promote the Town’s interests in traffic safety and aesthetics” because it bans all digital signs. It is “reasonable for the Town to contend that its goals are only served by a blanket prohibition.” As a result, the court granted summary judgment on the first and second causes of action.

As-applied challenge. The remaining cause of action involves the application of the Sign Ordinance as applied to Adams Outdoor. The Town’s denials were based upon the modification of the signs into digital signs and because they “exceeded the size and height requirements for off-premises signs.” The court characterized them as “virtually ministerial” and exercised without having too much discretion. The primary issue remaining was whether the Town sought to restrict Adams Outdoor’s speech based on its content. The court did not find evidence supporting this contention and granted summary judgment on the fifth cause of action.

South Carolina Constitution. The court found (and the parties agreed) that the claims brought under the South Carolina Constitution should be dealt with in the same manner as those brought under the First Amendment. As a result, summary judgment was also granted for any claims brought concurrently under the South Carolina Constitution.

The Case is No. 2:20-cv-03741-DCN.

Attorneys: Evan Patrick Williams (Bybee & Tibbals, LLC) for Adams Outdoor Advertising Limited Partnership. Andrew F. Lindemann (Lindemann Law Firm PA) for Town of Mount Pleasant.

Companies: Adams Outdoor Advertising Limited Partnership; Town of Mount Pleasant

Cases: Advertising SouthCarolinaNews