It’s October 2016, and Milwaukee County, Wisconsin residents are massing on sidewalks, around town landmarks, and in public parks, eyes glued to their smartphones as they chase virtual Pokèmon Go characters.
Meanwhile, in the halls of county government, elected officials mull over the implications of this craze.
Some delight at the game’s ability to bring people together and inspire normally sedentary younger residents to get outside. Others, however, wring their hands over complaints of traffic disruptions and unruly teenagers and scheme over how to quell game-creature hunting, or at least how to make money off of it for the county.
One supervisor, deciding that something needs to be done, devises an ordinance. Rather than target the bad behavior of individuals playing the games, the measure imposes a permitting process and fees on augmented-reality-app developers. After several months of debate, the Board of Supervisors passes Resolution 16-637 by a 13-4 vote on February 2, 2017.
Resolution 16-637 is a monument to reactionary, ill-informed policymaking. It applies not just to Pokèmon Go, but to all “location-based augmented reality games.” Before such games can be sold for use in Milwaukee County, developers must fill out a 10-page permit application that treats smartphone apps like a parade or a softball tournament.
Developers must provide the event date, time, and estimated attendance, information that cannot possibly be known before an app’s release. They also must include a site map and detailed plans for security, garbage collection, and medical services. Finally, developers must have liability insurance for the game’s use, and pay several fees.
The ordinance cautions that permit submission does not guarantee approval, and that the County “in its sole discretion” can revoke or suspend a permit for any reason. App developers who sell an augmented-reality (AR) game in Milwaukee County without a permit are subject to civil fines and incarceration.
A small startup company, Candy Lab AR, brought a bold legal challenge to Resolution 16-637 on April 21. The plaintiff, which created an AR poker game called “Texas Rope ‘Em” and wanted to beta test the game in Milwaukee County, alleged that the ordinance imposed a prior restraint on their publication of the game in violation of the First Amendment. Candy Lab requested that the US District Court for the Eastern District of Wisconsin enjoin the ordinance.
The suit, Candy Lab, Inc. v. Milwaukee, raised some truly unique legal issues, such as whether AR video games constitute “speech” and, if so, whether an injunction against an ordinance that essentially bans the sale of those games for use in public parks is appropriate.
On July 20, Judge J.P. Stadtmuller broke new First Amendment ground by imposing a preliminary injunction on the county ordinance. He concluded that the western-themed search for cards provided Texas Rope ‘Em with “sufficient expressive content” to be considered speech, citing to the US Supreme Court’s 2011 Brown v. Entertainment Merchants Association decision while also taking to heart Brown‘s admonition not to “make aesthetic judgments” or “act as art critics.” Judge Stadtmuller next declined the plaintiff’s request that he analyze the ordinance as a prior restraint. He instead assessed it as a time, place, and manner restriction.
In order to withstand First Amendment scrutiny, a time, place, and manner restriction must be content-neutral, narrowly tailored to serve a significant government interest, and must leave open ample alternative communication channels.
Judge Stadtmuller held that because the county ordinance targeted the method of communication, and not the message itself, the permitting mandate was content-neutral. He further found, however, that the ordinance failed the third prong of the time-place-and-manner test by placing boundless permitting discretion in the county government’s hands.
The ordinance did not require that county officials approve a permit request unless they could cite specific public safety concerns; rather, the default rule was rejection. Permit approval was explicitly subject to suspension or revocation without justification.
The approval criteria were also profoundly vague, the court explained. The ordinance expressed concern over the “protection of rare flora and fauna” and “the intensity of game activities,” but failed to provide any definitions or factors for applicants to judge which flora are “rare” or what game activities are too “intense.”
Judge Stadtmuller also found the ordinance’s consideration of “public safety” as being too “nebulous” to protect First Amendment rights. Though such unbridled discretion was enough to doom the ordinance, Judge Stadtmuller added that the ordinance was not narrowly tailored to the government’s stated policy goal.
Milwaukee County’s ordinance is yet another example of speech officiously being treated as a proxy for conduct to which government regulators object. In recent years, regulators have used advertising restrictions or government-crafted warning mandates to chill consumption of tobacco, alcohol, or sugar-sweetened beverages instead of directly targeting consumers’ purchase of those disfavored products.
Similarly, in Candy Lab, rather than regulate “the objectionable downstream conduct” of game players, the county supervisors seemingly decided to restrict app-developers’ speech.
Kudos to Candy Lab for asserting its constitutional rights—and to Judge Stadtmuller for braving uncharted legal territory to uphold those rights.
We are concerned, however, with the relatively low level of First Amendment protection ultimately provided in Candy Lab. The court should have evaluated the ordinance as a prior restraint on speech.
Judge Stadtmuller justified his use of the more lenient time, place, and manner analysis by citing to a US Court of Appeals for the Seventh Circuit decision, MacDonald v. City of Chicago. While that decision did evaluate a permitting scheme as a time, place, and manner restriction, the permit in question was for a traditional “event”—a parade.
AR game playing cannot be crammed into the concept (or “round hole” as Judge Stadtmuller put it) of an event. The county’s use of permitting was so obviously “incongruent” and posed such a “real and substantial threat” to Candy Lab’s speech that Judge Stadtmuller could have distinguished MacDonald and utilized the US Supreme Court’s prior-restraint precedents, under which most restrictions are per se unconstitutional.
Even under the test Judge Stadtmuller applied, the decision could have provided greater protection to app-developers’ speech had it concluded that Milwaukee County’s ordinance was content based. In order to determine whether the ordinance applies, county regulators must decide whether the app in question is a “game,” and whether it is “location-based” and of the “augmented reality” type.
That assessment requires an examination of an app’s content, and if all those criteria are met, regulators will treat such apps far differently than other mobile software or even other mobile games.
If a group of people plan to compete in a “Words with Friends” tournament while physically sitting together in a public park, for instance, that gathering would not trigger the permit requirement. In addition, as Candy Lab argued, the ordinance targets the physical act of playing an AR game, which is part of the expressive content.
The smartphone-application industry is characterized by very low barriers to entry and a very high level of competition. Products rise or fall based on a variety of market factors, only some of which can be predicted. The regulatory landscape that app developers and publishers face should not be one of those unpredictable factors.
Companies like Candy Lab will never be able to create the “next Pokèmon Go” if, for instance, they must obtain permits that are impossible to obtain thanks to the very nature of their product. And they shouldn’t fear that success will attract the kind of negative governmental attention AR-game makers received in Milwaukee County.
Also published by Forbes.com on WLF’s contributor page.