The Texas Highway Beautification Act permits “political” signs to be displayed no more than 90 days before an election and 10 days after an election. Because this provision regulates speech based on its content, two weeks ago, the Texas Court of Appeals found the entire Highway Beautification Act violates the First Amendment to the U.S. Constitution. The court’s decision in Auspro Enterprises, LP v. Texas Department of Transportation is a major blow to state and local efforts to control billboard advertising.

The case began in 2011 when a head shop owner in Bee Cave, Texas, Auspro Enterprises, displayed a sign advocating the election of Ron Paul for President outside of the time limits prescribed by the Highway Beautification Act. The state Department of Transportation brought an enforcement action against the landowner in county district court to have the sign removed. The district court ruled in favor of the state. While the landowner’s appeal was pending, the U.S. Supreme Court granted certiorari in Reed v. Town of Gilbert. In Reed, the Court found that regulations of speech that contain facial distinctions between subjects and messages were content based and subject to strict scrutiny.

Like most of the state highway advertising laws that came into existence following the Federal Highway Beautification Act of 1965, the Texas law contains a general ban on advertising signs along state highways, with several exceptions. Among the exceptions to the ban were: signs located in commercial or industrial areas, real estate signs, signs advertising natural or historical sites, on-premises advertising signs, safety warning signs, and the political sign exception in question in the case.

The Texas appeals court found that the political sign exception in the Highway Beautification Act was content based and subject to strict scrutiny under Reed. The Texas transportation department defended the exception on the grounds that it actually protected political speech by allowing such speech when it would otherwise be prohibited by the act, however, because the law was nearly identical in structure to the Gilbert sign code at issue in Reed, the court did not agree. The state agreed that the act could not pass strict scrutiny review, and the court thus found the act unconstitutional. The court went on to find that the provisions in question were not severable from the remaining advertising restrictions in the Highway Beautification Act, and invalidated all of the advertising restrictions in the act.

Strictly speaking, the Texas Court of Appeals’ decision is limited to Texas’s highway advertising law, yet the decision is now the second since 2015 invalidating a state highway beautification act (read about the first here). The decision also distinguishes an earlier, pre-Reed Texas Supreme Court case upholding the Highway Beautification Act against a similar challenge. Additionally, the court’s determination that the state’s severability law did not apply in the context of the challenge to the Highway Beautification Act means that the law now requires a legislative fix if it is to remain in effect.

The validity of state highway advertising laws, on which federal transportation funding to the states are conditioned, has been in question since the Court decided Reed. While several state and federal courts have upheld special restrictions on off-premises advertising, state highway advertising laws such as Texas’s, that contain additional distinctions between forms of noncommercial speech over and above those set forth in the federal law, have fared poorly in the post-Reed era. It remains to be seen whether other states will see similar judicial challenges to their highway advertising laws, or whether any challenge will be brought against the Federal Highway Beautification Act. Such challenges could have significant ramifications for federal transportation funding programs, as well as state and local efforts to prevent a proliferation of off-premises billboards along state and federal highways.

Auspro Enterprises, LP v. Texas Dep’t of Transp., ___ S.W.3d ___, 2016 WL 4506161 (Tex. Ct. App. Aug. 26, 2016).