2020 Ohio 3377
Ohio Ct. App.2020Background
- In June 2018 Cincinnati enacted CMC Chapter 313 imposing an excise tax on off-premises outdoor advertising: the greater of 7% of a sign’s gross receipts or an annual minimum based on type/location/size. The ordinance also forbade advertising hosts from separately stating or indicating the tax to advertisers (CMC 313‑7).
- Two dominant billboard operators, Lamar and Norton, sued the City claiming the tax and related permit-fee increases violated the First Amendment, Equal Protection, Commerce Clause, and federal civil‑rights statutes; they sought declaratory relief, injunctions, refunds, and fees.
- After a multi‑day injunction hearing the trial court declared the entire Chapter 313 unconstitutional under the First Amendment and entered a permanent injunction; the City appealed.
- The court of appeals held the order was a final, appealable judgment and reviewed the constitutional questions de novo.
- The appellate court reversed the trial court’s holding that the excise tax (the bulk of Chapter 313) violated the First Amendment, but affirmed the trial court’s invalidation of CMC 313‑7 (the prohibition on hosts communicating the tax to advertisers) as an unconstitutional restriction on commercial speech and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the excise tax on billboards violate the First Amendment? | Lamar/Norton: Tax singles out a media-like forum, targets a small group of operators (oligopoly), and burdens speech — triggers strict scrutiny. | City: Tax is content‑neutral, applies to billboard operators generally, serves a legitimate revenue interest, and does not single out speech or a protected class. | Reversed trial court: tax is content‑neutral and does not, on this record, violate the First Amendment; appellate court sustains City on this issue and remands. |
| Is CMC 313‑7 (ban on separately stating/indicating the tax to advertisers) constitutional? | Lamar/Norton: Provision restricts communications about the tax and is either content‑based or otherwise overbroad. | City: Provision is necessary to preserve the excise character of the tax and prevent consumer confusion about tax liability. | Affirmed: 313‑7 regulates commercial speech and fails Central Hudson because it is broader than necessary to advance City’s interest; provision is unconstitutional. |
| Was the trial court’s injunction order appealable (final order)? | Lamar/Norton: Declaration of unconstitutionality and injunction affected substantial governmental rights and rendered other claims moot; Civ.R.54(B) certification present. | City: Argued otherwise but did not preserve all objections; other claims remained. | Held: Order was final and appealable under R.C.2505.02(B)(2); Civ.R.54(B) language and the effect of the judgment support appellate jurisdiction. |
Key Cases Cited
- Metromedia, Inc. v. City of San Diego, 453 U.S. 490 (U.S. 1981) (recognizes billboard display as First Amendment–protected speech and scrutinizes content‑based controls).
- Grosjean v. American Press Co., 297 U.S. 233 (U.S. 1936) (taxes that single out the press can violate the First Amendment).
- Minneapolis Star & Tribune Co. v. Commissioner of Revenue, 460 U.S. 575 (U.S. 1983) (taxes that single out press or a narrowly targeted group trigger heightened scrutiny).
- Arkansas Writers’ Project v. Ragland, 481 U.S. 221 (U.S. 1987) (differential taxation tied to content invalid under strict scrutiny).
- Leathers v. Medlock, 499 U.S. 439 (U.S. 1991) (generally applicable taxes that do not single out the press do not necessarily violate the First Amendment).
- Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (U.S. 1980) (establishes four‑part test for regulation of commercial speech).
- Boos v. Barry, 485 U.S. 312 (U.S. 1988) (content‑based restriction on political speech requires strict scrutiny).
- BellSouth Telecommunications, Inc. v. Farris, 542 F.3d 499 (6th Cir. 2008) (holding a statutory ban on separately stating a tax violated Central Hudson).
- Clear Channel Outdoor, Inc. v. Director, Dept. of Finance of Baltimore City, 244 Md. App. 304 (Md. Ct. Spec. App. 2020) (persuasive decision treating a similar billboard excise as content‑neutral and upholding it).