The Central Hudson Four Part Test

Sign Law & Policy

Christopher J. Pagan just wanted to sell his car—a 1970 Mercury Cougar—so he put a “For Sale” sign on it and parked it on the street in front of his house in Glendale, Ohio. You can guess what happened next—the Glendale police informed Mr. Pagan he was in violation of Glendale’s traffic ordinance 76.06, which stated in part:

“It shall be unlawful for any person to stand or park any vehicle, motorized or towed, upon any public or private street, road, or highway within the village or upon any unimproved privately owned area within the village for the purpose of:
(A) Displaying it for sale …
(C) Any advertising.”

Mr. Pagan avoided a citation by removing the sign from his car. And then, he filed suit against the Village of Glendale for violating his First Amendment rights. Over the past several years, the case made its way through federal district court, with an appeal to the Sixth Circuit. Its decision in Pagan v. Fruchey can be found at 492 F.3d 766.

The circuit court’s legal reasoning showcases a new look at the bedrock Central Hudson case involving commercial speech, found at 447 U.S. 557. Central Hudson involves a four-part legal test to determine if commercial speech receives constitutional protection. The first and gateway question is: does the commercial speech at issue “concern lawful activities and not be misleading.”?

If the speech is for a lawful activity and is not misleading, the Supreme Court has ruled it is entitled to constitutional protection. Then the second, third and fourth “prongs” of Central Hudson are used to determine whether a municipality’s restriction is valid or not.
Thus, a restriction on commercial speech will be found to be valid and upheld by a court if “the government asserts a substantial interest in support of its regulation,” “demonstrates that the restriction on commercial speech directly and materially advances that interest,” and finally, “draws the regulation narrowly.”

A court reviews such restrictions under a standard called intermediate scrutiny, and the government has the burden of justifying its regulation under the Central Hudson test.

In the Pagan case, the first and second prongs of Central Hudson were not in question, both parties agreed the “For Sale” sign was protected commercial speech, and Mr. Pagan did not argue that Glendale’s interests in traffic safety and aesthetics were invalid.

The case, and the circuit court’s ruling, focused on the third prong, whether Glendale’s ordinance “directly and materially” advanced its regulatory interests. The Sixth Circuit ruled that Glendale had not met its burden here. Quoting the Supreme Court decision in Fla. Bar v. Went For It, Inc. (515 U.S. 618), the court noted that Glendale’s burden to justify its restriction

“… is not satisfied by mere speculation or conjecture; rather, a governmental body seeking to sustain a restriction on commercial speech must demonstrate that the harms it recites are real and that its restriction will in fact alleviate them to a material degree.”

Additionally, the Sixth Circuit relied on a case decided after Central Hudson, Edenfield v. Fane (507 U.S. 761.) There, the Supreme Court, in reviewing the third prong of the Central Hudson test, ruled, as the Sixth Circuit quoted, “the absence of any evidence—statistical, anecdotal, or otherwise—to suggest that the speech at issue posed any threat of concrete harm to those interests caused the regulation to fail.”

The Sixth Circuit looked at the affidavit filed by the Glendale police chief and found it to be “simple conjecture,” and “exactly the type deemed insufficient by the Supreme Court in Edenfield.”

Why is this important? Countless municipalities conjure up restrictive sign regulations on their own inclination of “what might occur,” as the Sixth Circuit admonished the Village of Glendale.

Indeed the court said that the Village of Glendale, in its brief and during oral argument, suggested “that the invocation of aesthetic objectives carries with it some talismanic quality, that, under case precedents, legitimizes all signage regulation and relieves them from making the showing required in Edenfield.”

Yes, the Sixth Circuit said, “… as an abstract matter, aesthetic issues are appropriate considerations in developing speech regulations… [but]:

“… a reviewing court must, as a preliminary matter, be apprised of what the government’s aesthetic motivations are… Assuming that the subjective nature of aesthetics requires that we give regulators a freer hand when examining restrictions on commercial speech, it seems no great burden to require, as a threshold matter, that they offer something more specific than a bald assertion that the regulation reflects aesthetic considerations.”

So the Pagan case may prove instructive in the sign regulation arena. Getting a municipality to prove at least something, even minimally, about why it is restricting signage, can only be an improvement.

And guess what? The on-premise sign industry will be happy to supply its own data into these debates. More than a decade of traffic safety research conducted by Penn State University, for starters. Think about it, “simple conjecture” on one side of the table, and scientifically-conducted research on the other side.

This could be progress.