Redmond, WA Free Speech

Introduction

Blazing Bagels is a Redmond-based small business owned by entrepreneur Dennis Ballen. As with many small businesses, Ballen needed to get the word out about his bagels, but did not have the money to advertise on radio or television. So, on most weekday mornings until June of 2003, commuters driving past the corner of Northeast 70th Street and Redmond Way Northeast in Redmond, Wash., could see a Blazing Bagels employee wearing a sign that read “Fresh Bagels – Now Open.” Because Blazing Bagels is tucked away off of Redmond Way, Ballen relied heavily on this sign to attract customers. But on June 18, 2003, a Code Compliance Officer from the City of Redmond hand delivered a letter telling Ballen that his advertising for Blazing Bagels “needs to cease and desist immediately.” The letter told Ballen that, in Redmond, portable signs—including those held or worn by individuals, containing certain kinds of commercial information—are prohibited.

The City of Redmond prohibits certain kinds of portable signs, but allows others, such as real estate signs, political signs and celebration signs. The only difference between the signs the City permits and those it does not is the content of the message. The City has justified its restrictions on such signs as necessary to “avoid visual clutter.” ¹ As Richard Cole, a Redmond City Councilman has said, “We believe it is not attractive and it makes the town look trashy.” ²

Entrepreneur Ballen has said that his business has developed a good customer base, most of whom were drawn to Blazing Bagels by his sign. But since the City has banned Blazing Bagels’ advertising, Ballen’s business has dropped significantly and his sign holder has been forced to find another job.

With Washington in a severe and lingering recession, and with unemployment rising, one would think the City of Redmond would applaud an entrepreneur who is trying to bring customers to Redmond and contribute to the region’s economy. Instead, the City of Redmond is stifling free enterprise by telling Ballen that what he is doing—merely exercising his free speech rights and trying to earn an honest living—is illegal.

On July 22, 2003, the Institute for Justice Washington Chapter (IJ-WA) filed a lawsuit on behalf of Ballen seeking to prevent the City from enforcing the restrictions on commercial speech. The suit seeks to have the court declare unconstitutional and unlawful the City ordinance. The suit marks the second lawsuit filed by the new Seattle-based Institute for Justice Washington Chapter and reminds overreaching governments in Washington State that they may no longer interfere with the right of Washingtonians to earn an honest living and exercise rights guaranteed under the state and federal constitutions.

Blazing Bagels’ Signs Are Protected by the Washington and U.S. Constitutions

Small businesses use signs to communicate with their customers and their right to do so is protected by the Washington State and U.S. constitutions. The U.S. Supreme Court is wary of regulations that burden inexpensive forms of communication, finding that they are “essential to the poorly financed causes of little people,” ³ and government regulation of speech through the enactment of laws, such as Redmond’s sign ordinance, must comply with constitutional free speech guarantees. Redmond’s sign ordinance violates the Washington and U.S. constitutions in two ways. It is an invalid regulation of commercial speech and it improperly discriminates against certain forms of speech based solely on the content of the speech.

Commercial Speech

The Washington State Constitution guarantees, “Every person may freely speak, write and publish on all subjects, being responsible for the abuse of that right.” ⁴ The First Amendment to the U.S. Constitution provides in part, “Congress shall make no law . . . abridging the freedom of speech . . . .” ⁵ Despite the strong language of the state constitution and its departure from the text of the First Amendment, the Washington Supreme Court has suggested that commercial speech enjoys no greater protection under the Washington Constitution than the federal Constitution. ⁶ Washington courts have reasoned that our state Constitution permits greater regulation of commercial speech than noncommercial speech because of the state’s interest in “protecting the public from those seeking to obtain its money.” ⁷

Because Washington’s commercial speech jurisprudence tracks federal law, both state and federal free speech cases govern whether a challenged commercial speech regulation violates the state or federal constitutions. Though protected, commercial speech does not enjoy the full protection of the First Amendment and is subject to greater restrictions than other forms of speech, such as political and ideological speech. In general, commercial speech is defined as communication that proposes a commercial transaction or that is related to the economic interests of the speaker and its audience. ⁸ Under the First Amendment, the government may regulate commercial speech that involves a lawful activity and is not misleading only if (1) the government has a substantial interest in regulating the speech, (2) the regulation of the speech directly advances the substantial governmental interest, and (3) the regulation is narrowly tailored to serve the substantial governmental interest. ⁹

Under federal First Amendment case law, the government carries the burden of showing that the challenged regulation advances the government’s interest “in a direct and material way.” ¹⁰ The government may not satisfy its burden by mere speculation or conjecture, but must demonstrate that “the harms [the government] recites are real and that its restriction will in fact alleviate them to a material degree.” ¹¹ In other words, cities must do more than simply include language in the ordinance stating that it was enacted to further a certain interest. Rather, a city must demonstrate that “the ordinance further[s] those interests.” ¹²

The Institute for Justice Washington Chapter contends that the City of Redmond’s “Prohibited Signs” ordinance cannot survive application of these standards. Ballen’s advertising for Blazing Bagels qualifies as protected speech because it is not misleading and promotes a legal activity—the sale of bagels. Importantly, the Redmond ordinance does not directly and materially advance its asserted interest—the protection of “aesthetics”—because it permits some types of commercial speech (such as signs advertising real estate for sale) while it prohibits other types of commercial speech (such as signs advertising bagels for sale). The U.S. Supreme Court has held that a ban that permits certain types of commercial speech but prohibits other types is irrational and incapable of directly and materially advancing an asserted governmental interest. ¹³ This principal applies with equal force to the Redmond “Prohibited Signs” ordinance. The various exceptions to the otherwise complete prohibition on portable signs are so numerous as to call into question both the validity of the City’s asserted interest and the extent to which the “Prohibited Signs” ordinance materially advances that interest.

Regardless of the federal tests for regulation of commercial speech, however, the broad language of the Washington Constitution’s free speech clause demands that commercial speech be provided greater protection than the limited protection offered by the federal Constitution. Importantly, courts in other states with free speech clauses that are nearly identical to Washington’s have extended the full protection of those provisions to commercial speech. The California Supreme Court recently affirmed that the California Constitution’s free speech clause ¹⁴ protects truthful and nonmisleading commercial speech about lawful products and services to the same extent that it protects political and ideological speech, and that this protection is “broader and greater” than that provided by the First Amendment. ¹⁵ Under the Oregon Constitution, ¹⁶ “commercial speech is afforded the same protection as noncommercial speech.” ¹⁷ It is high time Washington also takes the language of its constitution seriously.

The Institute for Justice Washington Chapter believes that “all subjects” means “all subjects”—not “all subjects except bagels.” Thus, one goal of this litigation is to firmly establish that the Washington Constitution’s free speech clause makes no such distinction between commercial and noncommercial speech.

Time, Place, and Manner Restrictions

Under the First Amendment, the government may impose reasonable restrictions on the time, place and manner of protected speech provided the restrictions are (1) content neutral, (2) narrowly tailored to serve a significant governmental interest and (3) leave open ample alternative channels of communication. ¹⁸ Washington free speech jurisprudence applies the same principles, except that the State must show that a restriction furthers a compelling—rather than merely significant—governmental interest. ¹⁹

Redmond’s sign ordinance fails this test. The “Prohibited Signs” ordinance is clearly content-based as it differentiates not only between commercial speech and noncommercial speech, but also differentiates between permissible commercial speech (such as real estate signs) and impermissible commercial speech (such as bagel signs). Because the ban distinguishes between permitted and prohibited signs based on their content, the ordinance is presumptively unconstitutional. ²⁰ As Justice Thurgood Marshall wrote, our free speech rights mean that, above all else, “government has no power to restrict expression because of its message, its ideas, its subject matter, or its content.”

Also, the City’s sign ordinance does not serve a compelling governmental interest. Although the City has justified its sign ban as necessary to preserve the aesthetics of Redmond, courts have ruled that preserving the aesthetics of a city does not constitute a sufficiently compelling government interest to warrant restricting free speech. ²¹

The Free Flow of Information

Free speech and the free flow of information are supreme values under our constitutional system of government. The First Amendment guarantees not only that Americans may speak their minds free from governmental censorship, but that they may freely send and receive information vital to their daily lives as well. It is indisputable that information that impacts our financial and commercial decisions is as essential to our lives as the political or ideological opinions we express. Unfortunately, laws that unconstitutionally restrict the flow of such information are flourishing, not only here in Washington, but across the nation. The Institute for Justice has been busy litigating across the nation to protect the right of small businesses to communicate with their customers. For example:

Salib v. City of Mesa – Egyptian immigrants Edward and Nouha Salib operate a Winchell’s doughnut franchise in Mesa, Ariz. Every month, Winchell’s corporate office sends the Salibs new window signs advertising that month’s specials—two doughnuts and a cup of coffee for $2.49, three doughnuts and a cup of coffee for $2.99, and so on. Such signs are obviously critical to the shop’s success, as they allow the Salibs to cheaply and effectively communicate with potential customers. However, the City of Mesa ordered the Salibs to remove all such signs because they violated a City regulation forbidding any window sign from covering more than 30 percent of the window. A City official justified the restriction by telling the Salibs that their signs were “tacky.” Upon removing the signs, the Salibs’ suffered a significant loss of business. The Institute for Justice Arizona Chapter filed suit challenging Mesa’s sign ordinance in January 2003 and the suit is currently pending in the Arizona courts.

ForSaleByOwner.com v. California Department of Real Estate—Young entrepreneurs Damon Giglio and Colby Sambrotto run a website named ForSaleByOwner.com. ForSaleByOwner.com empowers homeowners all over the nation to advertise and sell their homes while avoiding often-breathtaking brokers commissions. Avoiding these commissions helps make the dream of home ownership a reality to more Americans. However, the State of California decided that companies such as ForSaleByOwner.com, which advertise or list homes or properties for a flat fee, must become licensed real estate brokers in order to do business in the state. Obtaining a brokers license requires up to two years of college-level courses and apprenticeship before one may even take the brokers examination. California’s regulation is thus almost a complete barrier to doing business in the state for a small company like ForSaleByOwner.com, which operates on tight margins in a very competitive industry. The State insists on this requirement even though traditional newspapers, which perform the exact same services through classified ads, are not subject to the same requirement. ForSaleByOwner.com is not a real estate broker—it does not represent property owners or buyers or give advice about particular transactions, it does not set or negotiate real estate deals, and it does not show homes or find properties for buyers. It simply provides an advertising platform to homeowners for a flat fee, empowering individuals to sell and purchase homes on their own. On May 14, 2003, the Institute for Justice filed suit in the U.S. District Court for the Eastern District of California challenging the licensing requirements imposed by California’s Department of Real Estate.

These are but two examples of regulations that unconstitutionally burden commercial speech. At a time when information is more important to the American economy than ever before, laws such as those adopted in Redmond, Wash., Mesa, Ariz., and the State of California not only violate free speech rights, they inflict harm on businesses, consumers and our economy by unnecessarily restricting the free flow of information.

The Supreme Court has demonstrated its recognition of these truths by making clear that more information is better for consumers than less. As the Court stated nearly 30 years ago, “It is a matter of public interest that [economic] decisions, in the aggregate, be intelligent and well-informed. To this end, the free flow of commercial information is indispensable.” ²² More recently, the Court reiterated, “If the First Amendment means anything, it means that regulating speech must be a last—not first—resort.” ²³

Unfortunately, the U.S. Supreme Court recently declined an opportunity to further embed these principles in American jurisprudence. Its failure last month to act upon a California Supreme Court decision that may expose the Nike corporation to an outrageous false advertising suit for daring to defend its labor practices may prevent all businesses from speaking on matters of public concern without fear of legal liability. ²⁴ Given its “commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open,” ²⁵ surely the First Amendment does not allow such a result. Nevertheless, in light of the potential expansion of laws that restrict commercial speech, it is imperative that the courts ensure that commercial speech—no less than political or ideological speech—is afforded the full protection of the First Amendment.

In bringing the Blazing Bagels lawsuit, the Institute for Justice seeks to foster prosperity—both across the state and the nation—by challenging governmental regulations that unwisely and impermissibly seek to limit the free flow of information on which that prosperity so fundamentally depends.

Conclusion

Blazing Bagels wants nothing more than to communicate truthful information to potential customers regarding the fact that the shop is open and bagels are for sale. The Institute for Justice Washington Chapter seeks to reinvigorate the Washington State Constitution’s protection of the free flow of information that is essential to our free enterprise system. This case presents an opportunity to clearly establish the most robust protection for commercial speech under the Washington Constitution, while reinvigorating First Amendment commercial speech jurisprudence as well.

Litigation Team

The litigation team on this case will be Institute for Justice Washington Chapter Executive Director William R. Maurer and Staff Attorney Jeanette M. Petersen. Prior to joining IJ-WA, Maurer was an attorney with Perkins Coie LLP, where he practiced complex administrative litigation and appellate advocacy. He is a former law clerk to Washington State Supreme Court Justice Richard B. Sanders and Rhode Island Supreme Court Justice Victoria Lederberg. In 2000, he received the National Law Journal’s Pro Bono award as part of the Innocence Project Northwest. He is a graduate of the University of Wisconsin-Madison School of Law, where he was an editor of the Wisconsin Law Review.

Petersen joined IJ-WA in January 2003. Prior to joining IJ-WA, Petersen practiced law at the Kirkland, Wash., office of Wilson Sonsini Goodrich & Rosati, P.C. Petersen clerked for Judge Ronald Gould of the U.S. Court of Appeals for the Ninth Circuit, Justice Richard B. Sanders of the Washington State Supreme Court, and Judge David Armstrong of the Washington State Court of Appeals. She graduated with honors from the University of Washington School of Law and is a member of the Order of the Coif.

The Institute for Justice is a nonprofit public interest law firm that represents individuals, free of charge, when their essential liberties have been violated by government. From its offices in Seattle, the Institute’s Washington Chapter litigates under the Washington Constitution to reinvigorate economic rights, preserve property rights, promote educational choice, and defend the right of Washingtonians to freely speak, write and publish on all subjects. The national organization trains law students, lawyers, and others in the tactics of public interest litigation with the goal of limiting governmental power and advancing individual freedom. The Institute was formed in 1991 by Chip Mellor and Clint Bolick.

For more information, or to arrange an interview with the Institute for Justice and its clients, please contact:

John Kramer
Vice President for Communications
Institute for Justice
901 N. Glebe Road, Suite 900
Arlington, VA 22203
W: (703) 682-9320, ext. 205
E-mail: [email protected]

Lisa Knepper
Director of Communications
Institute for Justice
901 N. Glebe Road, Suite 900
Arlington, VA 22203
W: (703) 682-9320, ext. 202
E-mail: [email protected]