The Futon Factory is a family-owned business that operates a futon store on 196th Street in Lynnwood, Wash. To inform potential customers of the high-quality and attractive furniture at their store, the owners of the Futon Factory—David Bolles, his wife Monica DeRaspe Bolles, and John DeRaspe—hired a sign-holder to stand with a sign on nearby 44th Avenue, which typically has more traffic than 196th Street. The sign holder waved to folks and stood on the street corner on weekends when traffic was highest because of the commercial nature of the area. The sign he held contained commercial information on both its front and back.
After years of economic hardship in the state of Washington, one should reasonably expect that the City of Lynnwood would be delighted to have a successful family-owned business like the Futon Factory operate in Lynnwood. One would also think that Lynnwood would do whatever it could to help such businesses thrive and attract customers. However, if you thought that, you would not know how government bureaucrats operate.
Rather than assist a small business like the Futon Factory, the City of Lynnwood warned the store that its signs did not meet Lynnwood's complex and exception-laden sign code. The owners of the Futon Factory, however, are not the type of people who let warnings from bureaucrats interfere with their ability to exercise their fundamental constitutional rights. So David, Monica and John sent their sign holder out again—this time with a commercial message on the front and the statement "Futon Factory Believes In Free Speech" on the back. And that is when the City issued them a citation.
Under Lynnwood’s scheme, small businesses cannot display portable signs more than eight feet away from their property, but portable residential real estate and political signs are permitted pretty much anywhere in the city. The only difference between the signs Lynnwood permits and the signs it bans are the words on the signs. In Lynnwood, politicians can advertise themselves, but the City prevents small business owners from advertising their products. And apparently, small businesses cannot even tell people about their belief in free speech.
On June 22, 2004, the Institute for Justice Washington Chapter (IJ-WA) filed an appeal of the City's citation on behalf of the Futon Factory in the Snohomish County Superior Court in Washington. The appeal seeks to prevent the City from enforcing the restrictions on commercial speech and asks the court to declare the City's ordinance unconstitutional. The lawsuit's goal is to fulfill the unconditional guarantee of free speech contained in the Washington Constitution.
As John DeRaspe recently said, "We really don't have the time to challenge this, but if we don't, who will? We are very tired of our business getting pushed around by the government in various ways. All of us feel strongly that we are over-taxed, over-governed and overwhelmed by the hoops we must jump through to run our business. It is no wonder to us why many businesses are leaving this state."
Washington's Constitution Protects the Futon Factory's Signs
Small businesses use signs to communicate with their customers and their right to do so is protected by the Washington Constitution. Courts are traditionally wary of regulations that burden inexpensive forms of communication, such as portable signs, finding that they are "essential to the poorly financed causes of little people." Government regulation of speech through the enactment of laws, such as Lynnwood's sign ordinance, must accordingly comply with constitutional free speech guarantees. Lynnwood's sign ordinance violates the Washington Constitution because it improperly discriminates against commercial speech based solely on the content of the speech.
The Washington Constitution Protects All Speech Equally
The Washington Constitution guarantees, "Every person may freely speak, write and publish on all subjects, being responsible for the abuse of that right," whereas the First Amendment to the U.S. Constitution merely provides in part, "Congress shall make no law . . . abridging the freedom of speech . . . ." 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. 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." The goal of this case is to restore the Washington's strong and comprehensive free speech guarantee, including full protection for commercial speech. Under our state constitution, commercial speech should receive the same strong protection from the courts as any other form of speech—political, artistic and expressive speech, to name a few.
The framers of the Washington Constitution drafted a strongly worded guarantee of free expression for a reason. Almost one-third of the delegates to the Washington Constitutional Convention in 1889 were lawyers —had they wished, they were perfectly capable of adopting First Amendment-style protections for the state constitution. Instead, they drafted a provision that expressly makes the right to "freely speak" a personal right—belonging to "every person"—rather than a restriction on the power of the government. To this unique personal right, the framers added a guarantee that it was the citizen doing the speaking who would ultimately decide what was said, not the government. As Justice Robert Utter explained it, "The Washington Constitution . . . leaves no room for Ôunprotected speech' to exist. It protects speech on Ôall subjects'. It is hard to imagine how the language of our constitution could be less unambiguous in its absolute protections of speech."
In that regard, 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 interpreted the California Constitution's free speech clause, upon which Washington based its free speech guarantee, to protect truthful and nonmisleading commercial speech about lawful products and services to the same extent that it protects political and ideological speech. The California Supreme Court found that this protection is "broader and greater" than that provided by the First Amendment. Similarly, under the Oregon Constitution, "commercial speech is afforded the same protection as noncommercial speech."
Nonetheless, the Washington Supreme Court has ignored the plain words of the state provision and the history behind Article I, Section 5. The court has made commercial speech a second-class form of expression, one that does not receive the intended and full protections of the state constitution. IJ-WA believes it is high time to read the provision in full and give it the meaning the framers intended.
The Lynnwood Ordinance Also Violates the First Amendment
Because the Washington Supreme Court has indicated that the less protective federal standard for commercial speech applies to constitutional claims under Article I, Section 5, both state and federal free speech cases govern whether a challenged commercial speech regulation violates the state or federal constitutions. Under the federal standard, 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. Under federal First Amendment case law, 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.
The government carries the burden of showing that the challenged regulation advances the government's interest "in a direct and material way." 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." In other words, city governments 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."
Using this standard in a case recently litigated by the Institute for Justice Washington Chapter, a federal district court in June 2004 struck down the City of Redmond's sign ordinance—a sign ordinance remarkably similar to Lynnwood's—as "irrational" and "unconstitutional." In that suit, small business owner Dennis Ballen and his store Blazing Bagels successfully challenged Redmond's sign ban with the free help of IJ-WA. The Honorable Marsha J. Pechman, of the U.S. District Court for the Western District of Washington, ruled that the City of Redmond's ban "creates content-based exceptions for certain commercial speech that has no material relationship to the safety and aesthetic goals." The judge explained, "The different treatment under the ordinance is entirely based on a sign's content. There is no rational reason for such a distinction; there is no relationship between the content-based distinction and the safety and aesthetic goals. Rather than a reasonable fit, here there is an irrational fit." As a consequence of this finding, the judge held that the "ordinance at issue is unconstitutional."
The Institute for Justice Washington Chapter believes that the City of Lynnwood's sign ordinance is similarly flawed. The Futon Factory's advertising qualifies as protected speech because it is not misleading and promotes a legal activity—the sale of futons. Importantly, the Lynnwood ordinance, like 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 futons for sale). Judge Pechman, following controlling U.S. Supreme Court precedent, 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. This principle applies with equal force to Lynnwood's ordinance. The various exceptions to the 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 ordinance materially advances that interest.
Even under the less exacting federal standard, the Lynnwood ban fails. That Lynnwood has applied its ban to speech mixing commercial and political content exacerbates the unconstitutionality of the City's actions and demonstrates the confusion inherent in attempting to draw distinctions between commercial and political speech.
The Free Flow of Information
Free speech and the free flow of information are supreme values under our constitutional system of government. The Washington Constitution guarantees not only that Washingtonians 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 nationwide. The Institute for Justice has been busy litigating across the nation to protect the right of small businesses to communicate (or in some cases, not to communicate) with their customers. For example:
Cochran v. Veneman—Milk producers who are forced to pay for those ubiquitous "got milk?" ads are asking the federal government, "got free speech?"
Traditional dairy farmers Joseph and Brenda Cochran from Westfield, Pa., are being forced by federal law to help pay for the "Got Milk?" advertisements. Represented by the Institute for Justice, they are in court seeking to stop this form of government-compelled speech. The case pits the First Amendment against the government's regulation of agriculture and speech. It promises to have far-reaching consequences for free speech.
Although just about everyone has seen the "Got Milk?" ads on television and in print, most people do not know that under the federal Dairy Promotion Program dairy farmers are forced to pay for them. The Cochrans, for example, must pay approximately $4,000 a year from their thin operating budget for advertisements that obscure the distinctions between the Cochrans' traditionally farmed milk and the milk of large-scale producers. This case will have major implications for the many similar programs promoting a wide variety of agricultural products such as "beef, it's what's for dinner" and "pork, the other white meat" ad campaigns, to name just two. Each of these is certainly a clever ad campaign, but the Cochrans' lawsuit raises the question, "Should the government force individual producers to pay for them whether or not they want to advertise their products and whether or not they agree with the advertising the programs fund?" On February 24, 2004, the 3rd U.S. Circuit Court of Appeals struck down program as unconstitutional.
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-astronomical 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.
Salib v. City of Mesa—In August 2002, a Mesa "code enforcement officer" forced Edward Salib to remove every one of his corporate-issued signs advertising the monthly specials, such as frozen mocha cappuccinos and a three-for-one doughnut special, from his Winchell's Donut House's windows. A City ordinance prevents businesses in the downtown redevelopment area from covering more than 30 percent of any windowsill or pane area—an arbitrary percentage the City created by averaging similar ordinances in surrounding cities.
The City at first argued the ordinance was needed for public safety: police needed to see inside businesses. But when the Institute for Justice Arizona Chapter (IJ-AZ), which represents Salib for free, pointed out that the City does not require businesses to have windows, and that windows may be covered with blinds and shades or tinted to entirely block views, Mesa quickly shifted gears to say that the restriction is to protect aesthetics.
The IJ-AZ seeks to reinvigorate the Arizona Constitution's protection of the free flow of commercial information that is essential to our free enterprise system. This litigation seeks to firmly establish the broadest possible protection for speech of all kinds for all Arizonans. The case is currently on appeal.
These are but three 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 by Lynnwood and Redmond, Wash.; Mesa, Ariz.; the State of California and even the federal government not only violate free speech rights, but also inflict harm on businesses, consumers and our economy by unnecessarily restricting the free flow of information.
The U.S. Supreme Court has demonstrated its recognition of these truths by making clear that more information—not less—is better for consumers. 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." More recently, the Court reiterated that if the guarantee of free speech means "anything, it means that regulating speech must be a last—not first—resort."
In that regard and in light of the ever-growing list 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 both the full protection of the First Amendment and the independent protections of state free speech guarantees.
In filing the Futon Factory appeal, the Institute for Justice Washington Chapter 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.
The Futon Factory wants nothing more than to communicate truthful information to potential customers regarding the products for sale at its store. 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.
The litigation team on this case is Institute for Justice Washington Chapter Executive Director William R. Maurer and Staff Attorney Jeanette M. Petersen. Maurer was the lead attorney in Ballen v. City of Redmond, which struck down Redmond's sign ban. 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.
Prior to joining IJ-WA in January 2003, 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.
For more information, or to arrange an interview with the Institute for Justice and its clients, please contact:
John E. Kramer
Vice President for Communications
Institute for Justice
901 North Glebe Road
Arlington, VA 22203
W: (703) 682-9320, ext. 205
William R. Maurer
Executive Director Washington Chapter
811 First Avenue, Suite 625
Seattle, WA 98104
W: (206) 341-9300