New Hampshire Municipal Association
New Hampshire Municipal Association

Court Update

Banning Electronic Changeable Copy Signs Under Zoning Is Valid Restriction on Commercial Free Speech

Carlson’s Chrysler v. City of Concord
No. 2006-362, 11/8/2007

Regulation of signs by zoning ordinance involves a unique set of issues under the First Amendment of the United States Constitution. Signs are a form of expression, but they are also structures that call for regulation. “Commercial speech,” defined as “expression related solely to the economic interests of the speaker and its audience,” receives less protection than other expression. The United States Supreme Court case of Central Hudson Gas & Elec. v. Public Serv. Comm’n, 447 U.S. 557 (1980), adopted a four-part test to determine the validity of government restrictions on commercial speech: (1) whether the advertising is unlawful or misleading, in which case it would not be protected speech; (2) whether the ordinance seeks to implement a substantial government interest; (3) whether the ordinance directly advances that interest; and (4) whether the ordinance reaches no further than necessary to accomplish its stated goals.

In this important case the New Hampshire Supreme Court addressed the constitutionality of a zoning ordinance that prohibits electronic changeable copy signs, an issue of growing concern in cities and towns with sizeable commercial districts. The plaintiff auto dealer applied for a permit for an electronic changeable copy sign to display messages advertising its vehicle inventory. The Concord sign ordinance prohibited “signs which make or create an illusion of movement … and signs which appear animated or projected, or which are intermittently illuminated or of a traveling, tracing, or sequential light type, or signs which contain or are illuminated by animated or flashing light …[.]” The express purposes of the sign regulations included promoting aesthetics and traffic safety. The application was denied by the city code administrator, the denial was upheld by the zoning board of adjustment and the plaintiff appealed to the Superior Court.

Applying the Central Hudson test, the trial court found that the plaintiff’s advertising was entitled to First Amendment protection and that the city’s concerns for public safety and aesthetics were substantial government interests. However, the trial court ruled that the ordinance was unconstitutional because the city had failed to satisfy the third and fourth prongs of the test. The court ruled that generalized concerns about accidents caused by distracted motorists and negative impacts of unsightly signage were unsupported by evidence. The trial court also found that the city could achieve its objectives by regulating the number, proximity and placement of electronic display signs instead of banning them completely.

The city appealed to the New Hampshire Supreme Court, which disagreed with the trial court’s analysis. The Court cited Taylor v. Town of Plaistow, 152 N.H. 142, 145 (2005): “[Z]oning is a legislative function, and judging the wisdom of the legislation is not the function of this court.” The Court then applied the deferential standard of review: “The City ‘need not provide detailed proof that the regulation advances its purported interests of safety and aesthetics’ [citation omitted], and we hold that the trial court erred in substituting its judgment for that of the City’s that prohibiting animated, flashing signs containing commercial advertising will ‘enhance the appearance and aesthetic environment of the City’ and ‘improve traffic safety.’” Likewise, the Supreme Court ruled that the city’s ordinance was not broader than necessary. “The most effective way to eliminate the problems raised by electronic signs containing commercial advertising is to prohibit them.”

A related issue was a provision of the ordinance that permitted electronic signs whose message was limited to indications of time, date and temperature. This provision was very vulnerable to the claim that it discriminated on the basis of the content of the speech. The city amended the ordinance to prohibit all electronic message centers including time, date and temperature signs. The amended ordinance has been upheld as content-neutral by the United States District Court in Naser Jewelers, Inc. v. City of Concord, 2007 WL 1847307 (D.N.H. June 25, 2007), but the decision has been appealed to the First Circuit Court of Appeals.

Please be advised that the foregoing case summary is based upon a Supreme Court slip opinion. Slip opinions are subject to change following motions for rehearing and/or motions for reconsideration. The Court may also modify the opinion without motion. The final version of the Court’s opinion is that which appears in the New Hampshire Reports.

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