Austin Court of Appeals holds parts of Texas Highway Beautification Act unconstitutional


Auspro enterprises, LP v. Texas Department of Transportation,03-14-00375-CV (Tex. App— Austin , August 26,2016)

In this case the Austin Court of Appeals held unconstitutional part of the Texas Highway Beautification Act (“Act”) in light of the U.S. Supreme Court’s decision last term in Reed v Town of Gilbert.  It is a twenty-nine-page opinion.

Auspro Enterprises, LP, placed a sign supporting Ron Paul’s 2012 presidential campaign on its property on State Highway 71 West in Bee Cave, Texas.  Texas Department of Transportation (“TxDOT”) sent a letter to Auspro explaining that its sign was “illegal” because all outdoor signs must be permitted and, although there is a specific exemption under Department rules for political signs, the exemption only allows political signs to be displayed 90 days before and 10 days after an election. After Auspro failed to remove the sign, the Department brought an enforcement action for injunctive relief and civil penalties. In response, Auspro asserted that the Act and TxDOT’s implementing rules violate, both facially and as applied, Auspro’s right to free speech under the U.S. and Texas constitutions.  The trial court found for TxDOT and Auspro appealed.

The Austin Court of Appeals performed an analysis of the Reed case and determined it “refined its framework for analyzing ‘content based’ regulations of speech” and holding, “[a] law that is content based on its face is subject to strict scrutiny regardless of the government’s benign motive, content-neutral justification, or lack of animus.” This framework marks a significant departure from the content-  neutrality analysis used by the Texas Supreme Court.

The government regulation of speech addressed in Reed was a sign ordinance that banned the display of outdoor signs in any part of the Town of Gilbert, Arizona without a permit. The ordinance included exemptions from the permit requirement for 23 different categories of signs including political speech signs and ideological signs. The Supreme Court, explained that a law can be content based in either of two ways: (1) by distinguishing speech by the topic discussed; and (2) where the government’s purpose or justification for enacting the law depends on the underlying “idea or message expressed.”  “Both are distinctions drawn based on the message a speaker conveys, and, therefore, are  subject to strict scrutiny.”

Born from a mid-1960s initiative to clean up the nation’s roads, the federal Highway Beautification Act of 1965 requires states to regulate “outdoor advertising” “in areas adjacent to the Interstate System” or risk losing ten percent of their federal highway funding. The Texas Legislature passed the Texas Highway Beautification Act in 1972 to comply with the federal act’s mandate.  Analyzing the Act’s exemptions, the court held the Act was content based. Several of the exemptions are the same as those analyzed in Reed. The Act is therefore subject to a strict scrutiny analysis. To survive such an analysis TxDOT has to demonstrate that the Act’s differentiation between types of signs furthers a compelling governmental interest and it is narrowly tailored to that end. The Department acknowledges that it cannot do this and the court agreed. Additionally, TxDOT’s adopted rules regarding the exemptions likewise cannot withstand the holding in Reed. Finally, the court analyzed the problematic portions of the Act and invoke the Texas severability statute found in the Code Construction Act.  Essentially the court found Subchapters B and C unconstitutional and carved out the remaining sections of the Act as being untouched by the opinion.

If you would like to read this opinion click here. The Panel includes Chief Justice Rose, Justice Pemberton, and Justice Field. Chief Justice Rose delivered the opinion of the court. Attorney for Auspro is listed as Ms. Meredith B. Parenti.  The attorneys listed for TxDOT are Mr. Matthew H. Frederick and Mr. Douglas D. Geyser.

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