Daily Development for
Wednesday, July 16, 1997

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

ZONING AND LAND USE; CONSTITUTIONAL LAW; FREE SPEECH; YARD SIGNS: City may not prohibit yard signs advertising home businesses when it merely regulates, but does not prohibit, other types of commercial advertising.

Schultz v. City of Rochester Hills, (Mich. App. 1997)

Homeowner sold beauty products from her home in an area zoned for single family use. She attached a large sign to a tree on her front yard to advertise her merchandise and to solicit distributors. The city zoning ordinance permitted in-home businesses subject to certain requirements, including, specifically, that there be no signs.

The city cited the homeowner, and the trial court dismissed the prosecution on the gounds that the ordinance was an impermissible content-based restriction on protected commercial speech. The court relied upon the "four prong test" established by the U.S. Supreme Court in this area in Central Hudson Gas & Electric Corp v New York Public Service Comm'n, 447 US 557, 566; 100 S Ct 2343; 65 L Ed 2d 341, 351 (1980)

The court began by pointing out that the speech in question did not advertise an illegal activity, contain or further a fraud, or otherwise fall outside of those types of commercial speech normally protected. It further acknowledged that the city's interests were "substantial" in regulating this speech. It identified these interests as "maintain[ing] the nature and character of residential neighborhoods in the City by permitting only minimal, incidental, non-disruptive commercial activity within residential zones, and maintaining aesthetics, property values and traffic safety by keeping residential neighborhoods free of visual clutter."

But the court then pointed out that the City had the burden to demonstrate that its banning the speech in question directly advanced the public interests it asserted. It concluded that the city had not met this burden. The City mustered no evidence that yard signs indeed increased unwelcome commercial activity. Since the City had not barred in-home businesses per se, there will be some, and those businesses will still be able to advertise in various ways. If anything, the court maintained, barring yard signs is likely to force such businesses to advertising in ways that will necessarily reach broader audiences and thus increase commercial activity in the neighborhoods.

Perhaps even more telling, the court pointed out that the City did permit a large variety of signs to be erected in residential neighborhoods. These included: premises signs at entrances of subdivisions, residential developments, and mobile home parks; real estate development signs naming the property, developer, contractor and subcontractors, engineers, architects, brokers, and financial institutions of real estate developments; real estate signs; model home signs; signs containing street numbers, name of premises, name of owner, and name of occupant; signs warning of danger, prohibition, or regulation of the use of property; flags of any state or nation; signs bearing any message posted inside windows; labels identifying the brand name of property to be sold; signs indicating the date of erection of buildings; political signs; garage sale signs; signs of public authorities in pursuance of their public duties; and outdoor church and institutional bulletin boards. This demonstrated, the court held, that the City placed little value on protecting aesthetics through the prohibition of signs. Consequently, it did not trust this suggested justification for the ordinance.

The court went on to point out that even if the City could show a justifiable basis for this ordinance in aesthetic concerns, the court concluded that it still would strike down the ordinance as there was an insufficient "fit" between the regulation and the proposed purpose. It pointed out that the U.S. Supreme Court has required a relatively close relationship between the proposed public purpose of a restriction on free speech and the nature of that restriction.

It cited and quoted State University of New York Bd of Trustees v Fox, 492 US 469, 480; 109 S Ct 3028; 106 L Ed 2d 388 (1989):

The court noted that the City feels comfortable in achieving its various regulatory goals by doing no more than regulating the time, place and manner of numerous signs other than home business signs. It concluded that the City had no reasonable claim that it could not achieve its goals by regulating home business signs in the same manner, instead of completely prohibiting them.

It is interesting to note that the Michigan Municipal League filed an amicus brief supporting City's interests in restricting home business activities, but the court dismissed these arguments by saying that the correct response to these concerns would be to regulate the businesses, not the signs advertising them.

Comment: The case is useful primarily as a primer for local government agencies who are tempted to retreat from established general neighborhood policies in order to satisfy the demands of particular interest groups. Particularly when fundamental interests such as speech are concerned, the rule may be "all or nothing."

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