Lamar Advantage GP Co. v. City of Cincinnati, 114 N.E.3d 805

Background

Cincinnati enacted Ordinance No. 167 (emergency) creating Chapter 313: an excise ("billboard") tax on outdoor advertising signs (greater of 7% of gross receipts or a minimum annual per-square-foot amount); broad registration, reporting, and inspection requirements were imposed.
Ordinance No. 163 (same day, emergency) amended Chapter 895 to increase construction and renewal permit fees and changed renewals from biennial to annual.
Plaintiffs Lamar and Norton (major billboard owners in Cincinnati) sued, obtained a TRO, and sought preliminary injunctions against enforcement of Chapter 313 and the amendments to Chapter 895.
After litigation began, City passed Ordinance No. 323 which largely restored the pre-163 fee structure and biennial renewals, mooting the challenge to Chapter 895 changes.
The court held a multi-day evidentiary hearing, found (a) the billboard tax targets means of First Amendment expression and likely violates the First Amendment, and (b) several speech-related prohibitions in Chapter 313 (ban on stating/identifying the tax) are facially problematic.
The court enjoined enforcement of all of Chapter 313 (granting a preliminary injunction), declined to require a bond, and denied preliminary relief as to Chapter 895 because Ordinance 323 restored the status quo.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1) Validity of billboard excise tax under First Amendment	Tax unlawfully singles out and burdens a narrow class that owns/controls a medium of First Amendment expression (billboards); discriminatory and will reduce speech.	City contends tax is a revenue measure, applied as an excise on a privilege, and similar taxes have been upheld elsewhere.	Court: Substantial likelihood of success for Plaintiffs; tax is a targeted discriminatory levy on the means of expression (analogous to Grosjean/Minneapolis Star) and likely unconstitutional; preliminarily enjoined.
2) Prohibition on stating or passing-through the tax to advertisers (speech restriction)	Provisions banning disclosure or identification of the tax chill political/policy speech and are overbroad and content-based; not narrowly tailored.	City frames the prohibition as regulation of commercial speech to prevent misleading characterizations that would misstate who bears the tax.	Court: Likely unconstitutional; the no‑statement rules implicate political speech or hybrid speech and fail strict (or even intermediate) scrutiny; preliminary relief warranted as to Chapter 313.
3) Increased permit fees and annual renewal requirement in Chapter 895	Fee increases and annual renewals exceed reasonable administrative costs and amount to a tax/penalty on speech.	City argued fees were legitimate regulatory charges; later passed Ordinance 323 restoring prior fees/renewal cycle.	Court: Challenge to Chapter 895 is moot because ordinance restoring prior fee/renewal scheme was enacted; no preliminary injunction necessary.
4) Severability of unconstitutional provisions from Chapter 313	Plaintiffs seek invalidation of billboard tax provisions.	City argued offending provisions can be severed.	Court: Billboard tax is the linchpin of Chapter 313 and, together with other infirm provisions, cannot be severed; enjoined entire Chapter 313.

Key Cases Cited

Grosjean v. American Press Co., 297 U.S. 233 (1936) (selective tax on newspapers held unconstitutional as a device to burden press freedom)
Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575 (1983) (facially discriminatory tax on publications invalid; differential taxation of media implicates strict review)
Leathers v. Medlock, 499 U.S. 439 (1991) (upholding generally applicable tax scheme that did not single out a narrow class; distinguishable from targeted taxes)
Metromedia, Inc. v. City of San Diego, 453 U.S. 490 (1981) (billboards are a protected medium; regulation of noncommunicative aspects may be permissible)
Central Hudson Gas & Electric Corp. v. Public Service Comm'n, 447 U.S. 557 (1980) (commercial-speech intermediate-scrutiny test governing restrictions on truthful, non-misleading commercial speech)
BellSouth Telecommunications, Inc. v. Farris, 542 F.3d 499 (6th Cir. 2008) (no-stating-the-tax restriction on bills implicates hybrid commercial/political speech and failed Central Hudson analysis)
Elrod v. Burns, 427 U.S. 347 (1976) (loss of First Amendment freedoms constitutes irreparable harm)