Sign of the Times — Second Circuit Upholds Rule on Commercial Ads Near Homes

March 27, 2002

A dozen years ago, the U.S. Court of Appeals for the Second Circuit issued a decision in National Advertising Co. v. Town of Babylon./1 In an opinion by then-Chief Judge James L. Oakes, the appellate court found that sign ordinances that had been enacted by five local governments on Long Island were unconstitutional. It relied in large measure on the four-part test for determining the validity of governmental regulations on commercial speech set forth by the U.S. Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission./2

Several weeks ago, in Long Island Board of Realtors, Inc. v. Incorporated Village of Massapequa Park,/3 the Second Circuit issued another decision (by now-Senior Judge Oakes) regarding the constitutionality of a sign ordinance enacted by a Long Island government. This time, however, the appellate court upheld the regulation against a First Amendment attack. As in the Town of Babylon ruling, the analysis in the Board of Realtors opinion relied on the Central Hudson test, which the U.S. Supreme Court affirmed last June continues to provide the basis for considering the constitutionality of regulation of commercial speech./4 The Board of Realtors opinion, coupled with the Town of Babylon case, thus provides a current roadmap for local governments to follow when considering how to regulate commercial signs within the confines of the First Amendment.

The Law

Board of Realtors involved a sign law enacted by the Village of Massapequa Park regulating (but not prohibiting) the use of commercial signs on residential property within the village. The first section of the local law specifies that its purpose is to regulate existing and proposed signs to:

(1) preserve the aesthetic value of the property in the village;

(2) enhance and protect the village’s physical appearance and environment;

(3) preserve the village’s scenic and natural beauty;

(4) provide for a more enjoyable and pleasing community;

(5) reduce sign and advertising distractions and obstructions that may contribute to traffic, congestion or accidents;

(6) reduce hazards that may be caused by signs overhanging or projecting over public rights-of-way; and

(7) reduce hazards to bicyclists and pedestrians that may be caused from signs being placed on or around sidewalks or streets.

The law then provides, among other things, that except for an identification or professional sign, only one sign may be placed on a residential property. In addition, the village requires that this sign may be no further than three feet from a dwelling or the building line, may be no larger than 15 inches in length and 15 inches in height, and, if attached to a pole, may not extend beyond the top of the pole, which may not be higher than four feet above the ground. It also mandates that the sign be removed from the property within 24 hours of the transfer of the title to the property or the transfer of possession of the property, whichever comes first, and it prohibits off-site commercial advertisements on residential property.

Concerned about the impact on “For Sale” signs, the Long Island Board of Realtors, a not-for-profit corporation representing real estate licensees, challenged the ordinance in the Eastern District of New York. The district court found that the village’s sign ordinance did not violate the First Amendment as it contained permissible restrictions on the number, size and location of signs on residential property, the duration for which signs may remain on residential property and the presence of off-site commercial advertising. The board appealed to the Second Circuit.

Appellate Ruling

In the decision, Judge Oakes described the four-part framework for considering regulation of commercial speech set forth in Central Hudson: “At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.”/5 It should be noted that the fourth element does not require that the regulation be the “least restrictive” available, only that the government demonstrate a “reasonable fit” between the legislature’s ends and the means chosen to accomplish those ends./6

With real estate signs in mind, the Second Circuit observed that the parties had agreed that these signs are lawful and seek to convey truthful speech. The parties further had agreed that, based on the purposes outlined in the opening section of the ordinance, the regulation seeks to protect aesthetics and safety, which are substantial governmental interests. Therefore, the court noted, only the last two steps of the Central Hudson analysis were at issue. Of course, under well-established law, the village had the burden of satisfying these steps./7

The Second Circuit had little trouble finding that the village ordinance met the third Central Hudson factor. It stated that the regulations relating to the number, size and location of signs on residential property and the duration for which signs may remain on residential property, as well as the prohibition of off-site commercial advertisements on residential property, “directly advance” the village’s interest in aesthetics and safety./8 This finding is critical to those governments considering ordinances of the type involved in the Board of Realtors case.

In addition, the Second Circuit found, the regulations were not more extensive than necessary to serve the village’s interest in aesthetics and safety and therefore complied with the fourth element of Central Hudson. As the appellate court noted, municipalities have “considerable leeway . . . in determining the appropriate means to further a legitimate governmental interest, even when enactments incidentally limit commercial speech.” The Court of Appeals recognized where a legislature’s ends are aesthetics and safety, permissible means include the regulation of the size, placement and number of signs as well as the prohibition of off-site commercial advertising.

Therefore, it held that the ordinance furthered the village’s interest in aesthetics and safety while permitting the board to display signs to inform people of the availability of a house for sale. Accordingly, the Second Circuit concluded that there was a “reasonable fit” between the village’s ends and the means it had chosen to accomplish those ends, and the ordinance did not violate the First Amendment.

Conclusion

There are numerous distinctions between the ordinances rejected in Town of Babylon and the one upheld in Board of Realtors. For one thing, two of the statutes in Town of Babylon were held to be unconstitutional because they contained no statement of any substantial governmental interests they sought to promote and the municipalities had not introduced extrinsic evidence of those interests. By contrast, the regulation at bar in Board of Realtors quite clearly set forth — in its opening section — the governmental interests the village was seeking to advance.

Another problem with some of the statutes in Town of Babylon was that they discriminated against speech based on content. However, as found by the district court, the Village of Massapequa Park’s statute at issue in Board of Realtors was content-neutral. Indeed, before the district court had issued its decision, the village had deleted a provision of the law that permitted real estate signs to contain only the words “For Sale” or “For Rent,” the words “By Owner” or “By Broker” and a telephone number.

As the Board of Realtors decision suggests, and as is often the case with zoning laws, local governments that carefully consider their goals, clearly express their purposes, and narrowly draft their statutes are most likely to see their ordinances upheld. This decision has set a clear course for government to follow when it attempts to regulate in the area controlled by the First Amendment.

NOTES: 1. 900 F.2d 551 (1990). 2. 447 U.S. 557, 563-66 (1980). 3. 277 F.3d 622 (2d Cir. 2002). 4. Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001). 5. Central Hudson, supra, 447 U.S. at 566. 6. See, e.g., Bd. of Trustees v. Fox, 492 U.S. 469, 476-81 (1989). 7. See, e.g., City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 416 (1993). 8. See, e.g., Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 508-12 (1981); Gold Coast Publ’ns, Inc. v. Corrigan, 42 F.3d 1336, 1346-48 (11th Cir. 1994); South-Suburban Hous. Ctr. v. Greater South Suburban Bd. of Realtors, 935 F.2d 868, 896-97 (7th Cir. 1991).

John M. Armentano, a partner with the Long Island law firm of Farrell Fritz, P.C., represents local governments and developers in zoning, land use, and environmental matters, including litigation. He may be reached at jarmentano@farrellfritz.com.

This article is reprinted with permission from the March 27, 2002 edition of the New York Law Journal.

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