Advertising Statute Declared an Unconstitutional Regulation of Speech
 
October 2, 2006
 
Cynthia L. Hain- Jacksonville

A federal appeals court struck down a Missouri criminal statute that prohibited advertising within one mile of any state highway by “sexually oriented businesses” and “adult cabarets.” Despite the commercial nature of the speech at issue in the case, the U.S. Court of Appeals for the Eighth Circuit held the lower court had failed to apply adequate First Amendment safeguards.

A Missouri video store, gas station and convenience store, and nightclub each challenged the constitutionality of the statute. The video store, gas station, and convenience store all were regulated under the statute as “sexually oriented businesses” – defined under the statute as businesses that devoted more than 10 percent of their interior display space to non-obscene, sexually-oriented materials – and the nightclub as an “adult cabaret” – defined as establishments where people appear nude or semi-nude in the performance of their duties.

The businesses filed suit in the U.S. District Court for the Western District of Missouri, seeking to enjoin the enforcement of the advertising statute and to have the statute declared an unconstitutional restraint on speech. On summary judgment, the district court held that the statute did not unconstitutionally infringe on the speech rights of the businesses. The district court reached its decision by interpreting the statute as being directed at advertising for sexually explicit materials only, and by analyzing the statute under a hybrid test that combined two First Amendment standards set forth in Supreme Court precedent: namely, the standard for commercial speech and the standard for restrictions on the time, place and manner of speech. The businesses all appealed to the Eighth Circuit.

In reversing the district court, the appellate court declined to adopt the same narrow interpretation of the statute’s language as the district court. Instead, the appellate court found that the regulation, by its plain terms and as interpreted by the state, prohibited adult cabarets and sexually-oriented businesses from erecting any billboard or other exterior signs within the one-mile zone, without regard to content. The appellate court also rejected the district court’s analytical approach, applying instead the commercial speech standard.

The appellate court concluded the statute violated First Amendment principles under the commercial speech standard because it curtailed substantially more speech than necessary to accomplish the government’s stated interest in reducing the adverse secondary effects of sexually-oriented businesses by limiting the presence of such businesses. Under the statute, a business could be criminally prosecuted for simply advertising its name or address on billboards within one mile of any state highway. In this regard, it went too far, and the state failed to carry its burden of showing that a more limited regulation of speech would not have adequately served its interests.

The appellate court also was troubled by an exception provided by the statute. The law permitted businesses located within one mile of a state highway to display two on-premises, exterior signs: an identification sign that is no more than 40 square feet and a sign that the premises is off limits to minors. The exception, however, restricted the content of the identification sign to the name of the business, the street address, telephone number and operating hours. This content-based restriction rendered the exception unconstitutional, according to the appellate court. The court was particularly concerned that businesses displaying a sign advertising the price of gasoline or a nationally-known soda would be subject to criminal prosecutions.

Although commercial speech is analyzed under a lesser standard of scrutiny than non-commercial speech, this decision reinforces First Amendment principles that the regulation of commercial speech is not without constitutional limits.

For more information, e-mail Cynthia L. Hain at cynthia.hain@hklaw.com or call toll free, 1-888-688-8500.