You asked for information on a Missouri law banning billboards advertising sexually oriented businesses near highways. This report updates OLR Report 2006-R-0468.

SUMMARY

A Missouri law prohibits billboards and exterior advertising signs for adult cabaret or sexually-oriented businesses within one mile of a state highway. If such a business is located within one mile of a highway, it can display (1) one sign up to 40 square feet in size that provides basic identification information and (2) one sign stating that the premises are off limits to minors. It also allows signs in place when the law took effect that do not conform to its requirements to remain but they “should be made to conform” by August 28, 2007 (within three years of the law's passage).

A “sexually oriented business” is a business with a substantial portion of its goods that are sexually oriented materials. A business with more than 10% of its display space dedicated for sexually oriented materials is presumed to be one. An “adult cabaret” is a nightclub, bar, restaurant, or similar establishment where people appear nude or semi-nude in performing their duties.

Business owners who violate the law commit a class C misdemeanor (punishable by up to 15 days in prison, a fine of up to $ 300, or both) and each week in violation is a separate offense.

The law states that it is designed to protect public policy interests including mitigating the adverse secondary effects of sexually oriented businesses; improving traffic safety; limiting harm to minors; and reducing prostitution, crime, juvenile delinquency, deteriorating property values, and lethargy in neighborhood improvement efforts (Mo. Rev. Stat. § 226. 531).

Business owners challenged the law arguing that it violated their First Amendment right to free speech. The federal district court upheld the law as a valid regulation on commercial speech. But the federal Eighth Circuit Court of Appeals reversed the decision and ruled that the law was unconstitutional because its regulation of commercial speech was not narrowly tailored to achieve the state's purpose (Passions Video, Inc. v. Nixon, No. 05-3847, 2006 WL 2389380 (8^th Cir. , August 21, 2006)).

To provide additional information about laws regulating billboards, we attach an OLR Report on this topic (2004-R-0836) and another report discussing Connecticut's laws governing signs on highways (2006-R-0369).

FEDERAL APPEALS COURT RULING

The Eighth Circuit Court of Appeals ruled that the Missouri statute violated the First Amendment. The court began by stating that the First Amendment prohibits laws abridging the freedom of speech and sexually explicit material is constitutionally protected as long as it is not obscene.

The court then looked at the scope of the advertising restriction. It stated that the statute prohibits not only advertising sexually oriented products or aspects of the affected businesses but prohibits any business classified as an adult cabaret or sexually oriented business from erecting a sign without regard to the sign's content. The court stated: “Although we adopt, where possible, an interpretation that renders a statute constitutional, the plain language of section 226. 531 precludes a constitutional interpretation. ”

The court then considered whether the statute was constitutional as interpreted. Because the statute regulates outdoor advertising, the court applied the U. S. Supreme Court's four-step analysis for regulating commercial speech.

1. Does the First Amendment protect the speech in question? Does it involve unlawful activity or is it misleading?

2. Is the government interest substantial?

3. Does the law directly advance the government's claimed interest?

4. Does the law restrict no more speech than necessary to serve the asserted interest?

The court found the first part of the test satisfied because the speech is commercial speech, is not misleading, and concerns lawful activity.

Regarding the second part of the test, the court considered whether the government's interest was substantial by looking at the law's stated purpose, which includes addressing the adverse secondary effects of sexually-oriented businesses, improving traffic safety, limiting harm to minors, limiting criminal activity, and improving neighborhoods. The court stated that minimizing secondary effects of sexually oriented businesses serves a substantial government interest and the state's asserted interest satisfies the second part of the test.

Regarding the third part of the test, the court stated that the regulation must advance the government's interest directly and materially. The state's goal was to reduce adverse secondary effects by limiting the presence of these businesses. Under this theory, restricting the amount of advertising reduces customers and profits and ultimately forces the businesses to close. The court stated that there “may be some evidence that the statute directly and materially advances the state's asserted interest” but the statute fails under the fourth part of the test because it is not narrowly tailored to meet its asserted goals.

Under the fourth part of the test, the court stated that the suppression of protected speech must be no more extensive than necessary to further the state's interest in reducing the secondary effects of adult businesses. The state does not have to use the least restrictive means but the statute must be reasonable and narrowly tailored to achieve the desired objective.

The court stated that the statute threatens criminal prosecution for signs that merely include the name and address of one of the affected businesses within one mile of a highway. The court stated that the statute “sacrifices an intolerable amount of truthful speech about lawful conduct” (quoting language from a U. S. Supreme Court case) and its prohibition is directed at speech beyond what would lead to the secondary effects and is not narrowly tailored to meet the stated goal.

The court found that the state did not show that a more limited regulation would not adequately serve the state's interest.

The court also looked at the statute's rules for on-premises signs for businesses located within one mile of a highway. Because the statute prohibits all expression other than the business' basic identifying information, the court found that it was not narrowly drawn and this portion of the statute also fails the fourth part of the test. The court stated that a sign advertising gas prices or soda would be subject to criminal prosecution under the statute.

The court found the entire statute unconstitutional.

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