Business Owners Forced to Abandon Lawsuit

J. Justin Wilson
J. Justin Wilson · June 7, 2011

DALLAS—A group of Dallas small business owners have been forced to end their First Amendment lawsuit against the city after being threatened with $300,000 in fines against each business over simple paper and vinyl window signs.

The suit challenged a 2008 Dallas law that prohibits commercial signs—including store hours and “OPEN” signs—in the upper 2/3 of any store window or glass door, and further limits signs to no more than 15% of the glass area. The suit sought only $1 in nominal damages from the city.


Dallas issued its threat after a federal court allowed the city to seek $1,000 per day in fines over the window signs. The court also denied the business owners’ request for an injunction suspending enforcement of the ordinance while the lawsuit was pending. Over 300 days had passed between the city’s filing of its motion and the court’s ruling. Dallas used the delay to argue that it was entitled to $300,000 from each business that left its signs up while the parties awaited the court’s ruling. In the face of such ruinous fines, the business owners agreed to dismiss their lawsuit.

“The First Amendment protects all speech, including commercial speech,” said Matt Miller, executive director of the Institute for Justice Texas Chapter and lead attorney on the case. “Rather than litigating a constitutional lawsuit on the merits, Dallas chose to employ a ‘gotcha’ tactic of claiming that signs displaying vacuum brands and store hours are a $1,000 per day nuisance to the citizens of Dallas. Unfortunately, few small businesses can risk $300,000 in fines, however remote that risk might be. Our clients were forced to abandon their case or face possible bankruptcy.”

“It breaks my heart to drop this suit, but $300,000 in fines would put me out of business” said Dena McDonald, owner of Tiki Trips on McKinney Avenue and one of the plaintiffs in the case. “It’s ridiculous for Dallas to say that the small signs on my door harmed anybody, much less to the tune of $1,000 per day.”

“These business owners sought a declaration of their First Amendment rights in federal court,” added Miller. “It is difficult to believe that Dallas can argue with a straight face that a business should have to pay $300,000 for displaying simple window signs while they awaited a ruling about whether those signs are constitutionally protected. What the city is really doing is punishing people for daring to challenge its authority.”