Adams Outdoor Advertising Limited Partnership v. CITY OF MADISON , WISCONSIN , and MATTHEW TUCKER

In the
United States Court of Appeals
for the Seventh Circuit
____________________
No. 20-1670
A DAMS O UTDOOR A DVERTISING LIMITED PARTNERSHIP ,
Plaintiff-Appellant,
v.
C ITY OF M ADISON , WISCONSIN ,
and M ATTHEW TUCKER ,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 17-cv-576-jdp — James D. Peterson, Chief Judge.
____________________
A RGUED DECEMBER 10, 2020 — DECIDED J ANUARY 4, 2023
____________________
Before S YKES , Chief Judge, and F LAUM and K ANNE,∗ Circuit
Judges.
S YKES , Chief Judge. Adams Outdoor Advertising owns and
operates billboards throughout Wisconsin, including 90 in
∗ Circuit Judge Kanne died on June 16, 2022, and did not participate in
the decision of this case, which is being resolved under 28 U.S.C. § 46(d)
by a quorum of the panel.

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2 No. 20-1670
the City of Madison. Like many cities, Madison long ago
adopted a sign-control ordinance that comprehensively
regulates billboards—or “advertising signs,” as they are
called in the ordinance—to promote traffic safety and aes-
thetics.
The ordinance defines “advertising sign” as any sign ad-
vertising or directing attention to a business, service, or
product offered offsite—in other words, a sign that advertis-
es something unrelated to the premises on which the sign
sits. In 1989 the City amended the ordinance to ban the
construction of new advertising signs. Existing billboards
were allowed to remain but cannot be modified or recon-
structed without a permit and are subject to strict size,
height, setback, and other restrictions. The City amended the
ordinance again in 2009 to prohibit digital displays. And in
2017 the City amended the definition of “advertising sign” to
remove prior references to noncommercial speech. As
amended, the term “advertising sign” is limited to off-
premises signs bearing commercial messages.
Just before this latest amendment, Adams Outdoor filed
this lawsuit raising a broad-spectrum First Amendment
challenge to the City’s sign ordinance. It was not the first
time the company had brought such a suit. In response to
the 1989 amendments, Adams Outdoor sued the City in state
court alleging takings claims seeking compensation under
the state’s inverse-condemnation statute and also challeng-
ing the ordinance on First Amendment and equal-protection
grounds. The case settled by a stipulated judgment in 1993.
That judgment has preclusive effect on most of this new
suit, as the district judge correctly held. But the ban on

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No. 20-1670 3
digital displays came later, so the challenge to that provision
is not precluded, as the judge also properly concluded.
The impetus for this new suit was the Supreme Court’s
decision in Reed v. Town of Gilbert, 576 U.S. 155 (2015), which
involved a challenge to a local sign ordinance—though not
the on-/off-premises distinction at issue here and found in
most billboard ordinances. Based on Reed, Adams Outdoor
argued that any ordinance treating off-premises signs less
favorably than other signs is a content-based restriction on
speech and thus is unconstitutional unless it passes the high
bar of strict scrutiny. The judge disagreed, applied interme-
diate scrutiny, and rejected the First Amendment challenge.
Adams Outdoor appealed, relying primarily on a Fifth
Circuit case that supported its reading of Reed. See Reagan
Nat’l Advert. of Austin, Inc. v. City of Austin, 972 F.3d 696 (5th
Cir. 2020). The Supreme Court granted certiorari in that case,
so we held this appeal to await its decision.
The Court has now reversed the Fifth Circuit, explaining
that nothing in Reed altered its earlier precedents applying
intermediate scrutiny to billboard ordinances and upholding
on-/off-premises sign distinctions as ordinary content-
neutral “time, place, or manner” speech restrictions. City of
Austin v. Reagan Nat’l Advert. of Austin, LLC, 142 S. Ct. 1464,
1472–73, 1476 (2022). That resolves this case. We affirm the
judgment.
I. Background
This case began as a sweeping First Amendment chal-
lenge to the City’s sign ordinance. But the 1993 judgment
precludes much of it, and the Supreme Court’s City of Austin

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4 No. 20-1670
decision resolves what remains, so our discussion of the
background need not be long.
A. Madison’s Sign Ordinance
Chapter 31 of the Madison General Ordinances exten-
sively regulates dozens of types of signs. This case concerns
billboards, referred to as “advertising signs” in the ordi-
nance. Madison has regulated billboards since at least the
1970s. In 1989 it moved toward more comprehensive regula-
tion, amending the sign ordinance to completely ban the
construction of new billboards. Existing billboards were
allowed to remain (with a few exceptions) but are classified
as nonconforming uses; they cannot be modified, restored,
or rebuilt without a permit and must comply with strict size,
height, setback, and other restrictions. M ADISON , WIS .,
GENERAL O RDINANCES §§ 31.041, 31.05(2)(b), 31.11 (2013). In
short, since 1989 Madison has regulated billboards far more
restrictively than other types of signs.
As relevant here, in 2009 the City amended the sign ordi-
nance again, this time banning all digital-image signs. Id.
§ 31.045(3)(i). A digital-image sign is defined as: “A sign, any
portion of which displays static or stationary illuminated
digital images, produced by technology such as LED (light
emitting diode) or LCD (liquid crystal display) display
screens, plasma, high-definition, interactive touch-screen, or
other such technology.” Id. § 31.03(2). Under a preexisting
provision, on-premises “electronic changeable copy signs”—
signs that feature electronically changing messages (like time
and temperature displays)—are permitted in a few locations
but are subject to strict limits. Id. § 31.046(1).

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No. 20-1670 5
The City’s purposes are spelled out in the text of the or-
dinance. As a general matter, the sign regulations promote
the City’s interest in “public safety and aesthetic values.” Id.
§ 31.02(1). More specifically, the purpose of the ordinance is
to “protect the public and promote safety, including but not
limited to traffic and pedestrian safety,” id. § 31.02(1)(d); to
“protect scenic views and the visual environment,” id.
§ 31.02(1)(e); and to “promote overall aesthetics, avoid
clutter[,] and avoid inappropriate scale,” id.
B. Adams Outdoor and Its Earlier Litigation
Adams Outdoor, a large national outdoor advertising
company, owns and operates billboard structures across
Wisconsin, including 90 in Madison featuring almost
200 advertising surfaces. It has long battled the City over its
sign ordinance, with a litigation history that dates to 1977
when its predecessor, Hansen Advertising Company, was
ordered to remove billboards from certain parts of down-
town. Hansen Advertising sued, and in 1983 the parties
entered into a stipulated judgment in which the City agreed
to amend the ordinance to permit Hansen to relocate the
affected billboards. Adams Outdoor later acquired Hansen
Advertising and its rights under the stipulated judgment.
A few years later, however, Madison strengthened its
billboard restrictions. As we’ve explained, in 1989 the City
completely banned the construction of new advertising signs
and imposed strict limits on existing ones. In 1990 Adams
Outdoor sued the City in Dane County Circuit Court seeking
compensation under takings law and the state inverse-
condemnation statute, and also alleging claims under the
First Amendment and the Equal Protection Clause of the
Fourteenth Amendment.

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6 No. 20-1670
The suit was settled by a stipulated judgment in 1993.
The City gave Adams Outdoor permission to relocate some
billboards. In exchange Adams Outdoor agreed that the
“causes of action and any and all claims or causes of action
which have been brought or which could have been
brought, founded upon the facts which are the subject of
this action, … may be dismissed upon the merits, with
prejudice,” once the City Council formally approved the
agreement. The Council indeed approved the agreement,
and the case was dismissed with prejudice.
C. This Lawsuit
The prelude to the present lawsuit began in 2016 when
Adams Outdoor applied for a permit to construct a new
advertising sign as a replacement for an existing sign that
had been obstructed by recent construction. In 2017 Adams
Outdoor filed an additional 26 permit applications seeking
to modify or replace existing advertising signs. It was a futile
effort. The applications proposed height increases, conver-
sion to digital displays, and other modifications that are
expressly prohibited by the ordinance. Predictably, the City
denied all but one of the permit applications.
Adams Outdoor responded with this federal suit waging
a broad-based First Amendment attack on the sign ordi-
nance. The company took aim at multiple provisions in the
ordinance, including many that do not apply to its billboards
or business. Meanwhile, in December 2017 the City amended
the ordinance again. Most of the changes are immaterial for
our purposes, but one is relevant to the regulatory back-
ground. Previously the definition of “advertising sign”
included off-premises signs with noncommercial messages.
The 2017 amendments modified the definition to delete

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No. 20-1670 7
references to noncommercial messages. The new definition
of “advertising sign” is as follows:
A sign containing a commercial message di-
recting attention to a business, commodity,
service, or entertainment, not related to the
premises at which the sign is located, or direct-
ing attention to a business, commodity, service
or entertainment conducted, sold[,] or offered
elsewhere than on the premises where the sign
is located.
§ 31.03(2). With this amendment, the definition of “advertis-
ing sign” is limited to off-premises signs bearing commercial
messages.
The case proceeded to cross-motions for summary judg-
ment. Adams Outdoor argued that the Supreme Court’s
decision in Reed dramatically changed First Amendment law
as it relates to sign regulations. Relying on Reed, Adams
Outdoor contended that treating off-premises signs less
favorably than other signs amounts to impermissible
content-based line drawing, triggering strict scrutiny. The
company also challenged the ordinance on vagueness and
prior-restraint grounds, and raised an additional claim that
the ordinance vests too much discretion in zoning adminis-
trators.
The City asserted a threshold defense based on preclu-
sion, arguing that the 1993 state-court judgment blocked all
claims except one: the challenge to the 2009 amendment
banning digital-image signs. On the merits, the City argued
that Reed did not change the legal standard for billboard
regulations and urged the court to uphold the ordinance

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8 No. 20-1670
under the intermediate standard of scrutiny specified in the
Supreme Court’s decisions in Central Hudson Gas & Electric
Corp. v. Public Service Commission of New York, 447 U.S. 557,
561 (1980), and Metromedia, Inc. v. City of San Diego, 453 U.S.
490 (1981).
The judge sided with the City across the board. He first
concluded that the 1993 judgment barred all claims except
the challenge to the ban on digital-image signs. Turning to
the substantive arguments, the judge disagreed with Adams
Outdoor that Reed had altered the long-standing test for
billboard regulations. He instead applied Central Hudson,
which adopted an intermediate standard of scrutiny for
regulations on commercial speech, and Metromedia, which
applied intermediate scrutiny and upheld the on-/off-
premises distinction found in most billboard ordinances.
After carefully applying the intermediate standard of re-
view, the judge upheld the ban on digital displays. Although
he did not need to go further, he also addressed and rejected
the cluster of other First Amendment arguments Adams
Outdoor had raised. Final judgment for the City followed,
and Adams Outdoor appealed.
II. Discussion
We review de novo the judge’s ruling on cross-motions
for summary judgment, construing the record and drawing
reasonable inferences “in favor of the party against whom
the motion at issue was made”—here, Adams Outdoor.
Tripp v. Scholz, 872 F.3d 857, 862 (7th Cir. 2017). Wisconsin
preclusion law applies to the threshold question of claim
preclusion. Robbins v. MED-1 Sols., LLC, 13 F.4th 652, 656 (7th
Cir. 2021) (explaining that under the Full Faith and Credit
Act, 28 U.S.C. § 1738, we “apply the preclusion law of the

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No. 20-1670 9
state that rendered the judgment”) (quotation marks omit-
ted)).
A. Claim Preclusion
Under Wisconsin claim-preclusion law, “a final judgment
on the merits in one action bars parties from relitigating any
claim that arises out of the same relevant facts, transactions,
or occurrences.” Kruckenberg v. Harvey, 694 N.W.2d 879, 884
(Wis. 2005). Claim preclusion bars all subsequent actions
between the same parties as to all matters that were litigated
or that might have been litigated in the former proceeding.
Teske v. Wilson Mut. Ins. Co., 928 N.W.2d 555, 561 (Wis. 2019).
The defense of claim preclusion has three elements: (1) an
identity of the parties or their privies in the prior and pre-
sent lawsuits; (2) a final judgment on the merits in the prior
action; and (3) an identity of the causes of action in the two
suits. Id.
The parties agree that the first two elements are satisfied
here. The dispute centers on the third element: an identity of
the causes of action in the prior and present litigation. On
this element Wisconsin follows the “transactional approach”
from the Restatement (Second) of Judgments, which imple-
ments the principle that “parties who are given the capacity
to present their entire controversies shall in fact do so.” Id. at
562 (quotation marks omitted). Under the transactional
approach, “all claims arising out of one transaction or factual
situation are treated as being part of a single cause of action
and they are required to be litigated together.” Id. (quotation
marks omitted).
Adams Outdoor argues that there is no identity of the
causes of action because its earlier lawsuit focused mostly on

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10 No. 20-1670
winning compensation for or relocation of Hansen Advertis-
ing’s billboards whereas the present suit is a more sweeping
First Amendment challenge to the sign ordinance in general.
This argument is a nonstarter for two reasons. First, it
doesn’t matter whether Adams Outdoor actually litigated a
First Amendment or other constitutional challenge in the
prior litigation. What matters is whether a constitutional
challenge “might have been litigated.” Id. at 561 (quotation
marks omitted). Second, Adams Outdoor actually did plead
First Amendment and equal-protection claims in the prior
litigation in addition to its takings-law inverse-condemnation
causes of action.
Adams Outdoor also emphasizes that the City has
amended the ordinance since the 1993 judgment. But that
has only limited significance here. Most of the amendments
are immaterial to Adams Outdoor. Only one new restriction
is relevant: the 2009 ban on digital-image signs. In all other
respects, the prior and present lawsuits satisfy all three
elements for claim preclusion. As such, the 1993 judgment
has preclusive effect on all claims in this case except for the
challenge to the ban on digital displays.
Adams Outdoor resists this conclusion by invoking a
Wisconsin exception to claim preclusion for declaratory
judgments: “[A] declaratory judgment is only binding as to
matters which were actually decided therein and is not
binding as to matters which might have been litigated.”
Barbian v. Lindner Bros. Trucking Co., 316 N.W.2d 371, 375
(Wis. 1982) (quotation marks omitted). Adams Outdoor
contends that the 1993 judgment does not preclude this suit
because its 1990 lawsuit sought a declaratory judgment that

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No. 20-1670 11
the City had taken its property and that the sign ordinance
was unconstitutional.
But the declaratory-judgment exception “operates only if
the plaintiff seeks solely declaratory relief in the first pro-
ceeding.” Stericycle, Inc. v. City of Delavan, 120 F.3d 657, 659
(7th Cir. 1997) (applying Wisconsin preclusion law). “[A]
plaintiff who seeks an injunction cannot later seek other
coercive relief on the same claim.” Id. at 660 (emphasis
omitted). In its 1990 complaint in state court, Adams Out-
door sought declaratory relief and an order requiring the
commencement of inverse-condemnation proceedings for
payment of compensation for the taking of its property. The
latter was a request for injunctive relief. The declaratory-
judgment rule is inapplicable.
Finally, Adams Outdoor argues that applying preclusion
doctrine here is manifestly unfair because First Amendment
law has dramatically changed since 1990. More particularly,
Adams Outdoor contends that the law now treats commer-
cial speech more favorably, see, e.g., Sorrell v. IMS Health Inc.,
564 U.S. 552 (2011), and that under Reed, 576 U.S. at 159,
restrictions on off-premises signs are now subject to strict
scrutiny.
This argument is meritless. For starters, the premise is
wrong. Billboard law has not changed much since the 1990
litigation. More particularly, as the Supreme Court has now
confirmed, nothing in Reed requires the application of strict
scrutiny to sign codes that treat off-premises signs—i.e.,
billboards—less favorably than other types of signs. City of
Austin, 142 S. Ct. at 1472–73. Rather, as we will explain at
greater length in a moment, regulations that treat off-
premises signs differently are content-neutral “time, place,

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12 No. 20-1670
or manner” speech restrictions and are subject only to
intermediate scrutiny, as they have been since the 1980s. Id.
Moreover, although the doctrine of issue preclusion in-
cludes a “fairness” element, claim preclusion does not. The
Wisconsin Supreme Court has not adopted a general fairness
factor as part of its claim-preclusion doctrine. Kruckenberg,
694 N.W.2d at 890. Nor has the state supreme court recog-
nized an exception to claim preclusion when the law has
changed. And nothing suggests that it would do so if given
the opportunity.1 As the United States Supreme Court long
ago observed, the preclusive effect of a final judgment on the
merits is not altered “by the fact that the judgment may have
been wrong or rested on a legal principle subsequently
overruled in another case.” Federated Dep’t Stores, Inc. v.
Moitie, 452 U.S. 394, 398 (1981). We think it unlikely that the
Wisconsin Supreme Court would break with the United
States Supreme Court by creating an exception to claim
preclusion when the law has changed.
To the contrary, “[e]xceptions to the doctrine of claim
preclusion are rare.” Kruckenberg, 649 N.W.2d at 888; see also
Patzer v. Bd. of Regents of Univ. of Wis. Sys., 763 F.2d 851, 856
(7th Cir. 1985) (applying Wisconsin law). Recognizing an
exception to claim preclusion when the law has changed
would open the floodgates to relitigation of already decided
cases, seriously undermining the main objectives of the
doctrine: “to promote judicial economy and to conserve the
1 In a nonprecedential decision, the Wisconsin Court of Appeals rejected
an exception to claim preclusion where an intervening change in the law
would likely create a different result. Samuels Recycling Co. v. Cont'l Cas.
Co., 2006 WL 559435, at *1 (Wis. Ct. App. 2006).

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No. 20-1670 13
resources the parties would expend in repeated and needless
litigation.” Hanlon v. Town of Milton, 612 N.W.2d 44, 48–49
(Wis. 2000) (quotation marks omitted). We see no reason to
recognize such an exception here.
B. First Amendment Challenge
What’s left on the merits is the challenge to the ban on
digital displays. Our analysis can be brief. Adams Outdoor
built its case on a faulty legal foundation. The animating
theory of this suit is that under Reed, sign codes that distin-
guish between on-premises signs and off-premises signs
draw content-based regulatory lines and therefore must
satisfy strict scrutiny. Adams Outdoor found support for
this position in the Fifth Circuit’s decision in Reagan National
Advertising v. City of Austin, 972 F.3d at 706. As the Supreme
Court has now held, however, the Fifth Circuit’s reading of
Reed was incorrect. City of Austin, 142 S. Ct. at 1471–73.
City of Austin, like this case, concerned a municipal sign
ordinance that distinguished between on-premises and off-
premises signs, regulating the latter more heavily to protect
public safety and preserve aesthetic value. Id. at 1469–70.
Like Madison’s ordinance, the City of Austin’s sign code
banned the construction of new off-premises signs but
grandfathered preexisting ones subject to strict restrictions,
including a prohibition of digitized messages. Id. Relying on
Reed, the Fifth Circuit held that the on-/off-premises distinc-
tion amounted to a content-based regulatory classification
because it required municipal officials to read each sign to
determine how to classify it. Reagan Nat’l Advert., 972 F.3d at
706–07. The Fifth Circuit accordingly applied strict scrutiny
and invalidated Austin’s ordinance. Id. at 709–10.

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14 No. 20-1670
The Supreme Court reversed, rejecting the Fifth Circuit’s
interpretation of Reed, particularly its “need to read” rule for
determining when a speech regulation is content based and
thus subject to strict scrutiny. City of Austin, 142 S. Ct. at
1471. As the Court explained, the Fifth Circuit’s rule—“that
a regulation cannot be content neutral if it requires reading
the sign at issue”—was “too extreme an interpretation of this
Court’s precedent.” Id. The Court reiterated the long-
standing principle in its caselaw that a speech regulation is
considered content based only “if it ‘target[s] speech based
on its communicative content’—that is, if it ‘applies to
particular speech because of the topic discussed or the idea
or message expressed.’” Id. (quoting Reed, 576 U.S. at 163).
Applying this principle, the Court held that treating off-
premises signs less favorably than other signs draws a
regulatory line based on location, not communicative content.
Id. Because Austin’s “off-premises distinction requires an
examination of speech only in service of drawing neutral,
location-based lines,” strict scrutiny did not apply. Id. Ra-
ther, the Court held that regulations governing off-premises
signs are ordinary, content-neutral “time, place, or manner”
speech restrictions subject only to intermediate scrutiny. Id.
at 1473. Finally, the Court confirmed that nothing in Reed
disturbed its earlier precedents—notably Metromedia,
453 U.S. 490—approving the on-/off-premises distinction
and upholding a municipal ban on off-premises signs under
an intermediate standard of scrutiny. 142 S. Ct. at 1473–75.
Returning now to our case, the district judge’s constitu-
tional analysis correctly anticipated City of Austin, and his
application of intermediate scrutiny was spot on. As City of
Austin explains, content-neutral “time, place, or manner”

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No. 20-1670 15
restrictions—like the on-/off-premises sign regulations
typical in most municipal sign codes—need only be “nar-
rowly tailored to serve a significant governmental interest.”
Id. at 1475–76 (quoting Ward v. Rock Against Racism, 491 U.S.
781, 791 (1989)). This standard aligns with the Central Hudson
intermediate-scrutiny test for regulations on commercial
speech, which the Court applied in Metromedia and the judge
used here. (Recall that after the 2017 amendments, the
definition of “advertising sign” in Madison’s ordinance is
limited to off-premises signs bearing commercial messages.)
Adams Outdoor has not meaningfully argued that the
City’s digital-sign ban flunks intermediate scrutiny. Prohibit-
ing digital signs serves Madison’s stated interests in promot-
ing traffic safety and preserving visual aesthetics. It’s well
established that these are significant governmental interests.
Metromedia, 453 U.S. at 507–08 (holding that “traffic safety
and the appearance of the city … are substantial governmen-
tal goals”).
Adams Outdoor questions the degree of fit between
Madison’s means and its ends. It contends that the City must
provide empirical evidence linking digital billboards to
aesthetic or safety-related harms. Not so. “[B]illboards by
their very nature … can be perceived as an esthetic harm,”
id. at 510 (quotation marks omitted), and the City “need not
try to prove that [its] aesthetic judgments are right,”
Leibundguth Storage & Van Serv., Inc. v. Village of Downers
Grove, 939 F.3d 859, 862 (7th Cir. 2019). Likewise, the connec-
tion between billboards and traffic safety is too obvious to
require empirical proof. “It does not take a double-blind
empirical study, or a linear regression analysis, to know that
the presence of overhead signs and banners is bound to

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16 No. 20-1670
cause some drivers to slow down in order to read the sign
before passing it.” Luce v. Town of Campbell, 872 F.3d 512, 517
(7th Cir. 2017).
In sum, the legal foundation of this suit—that the on-/off-
premises distinction in Madison’s sign code is a content-
based classification triggering strict scrutiny—is unsound.
As City of Austin has now made clear, the on-/off-premises
line is content neutral, so intermediate scrutiny applies. And
we see no flaw in the judge’s analysis and decision uphold-
ing the City’s ban on digital-image signs under that more
lenient standard of review.
A FFIRMED

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