Commercial Speech (Adverting Freedoms)

 

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Aside from personal communication, no communication is more pervasive in our lives than commercial discourse.  It fills newspapers, magazines, television programs, and billboards.  Logos for products even stand out in motion pictures.  Though no injunction against commercial speech can be found in the First Amendment or even in the debates surrounding its ratification, in this century commercial speech has not been given equal status with other forms of speech.  There has been a tendency among legislators and courts to consider advertising "merely" about commercial transactions, as the Supreme Court said in its Valentine v. Chrestensen (see below) of 1942.  Currently, federal, state, and local governments are attempting to regulate or ban some forms of commercial speech, such as billboard advertising of alcohol and tobacco products. 

            The purpose of this chapter is two fold.  First, it seeks to provide an understanding of the current constitutional protections guaranteed to commercial speech within the matrix of laws and regulations imposed on various kinds of media inclusive of print, broadcast, cable, computer and satellite.  These standards are measured against the original intent of the Founders focusing particularly on those who wrote the First Amendment and the environment in which it was ratified.  Second, the chapter provides guidelines for examining commercial speech by analyzing current case law regarding it. 

            The Historic Context

            The Declaration of Independence holds "these truths to be self-evident, that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these, are life, liberty, and the pursuit of happiness."  The Colonists fought a revolution to secure individual rights and civil liberties, and enshrined them in a written constitution to ensure that no government could ever take them away.  

            Although every word spoken or printed originates in the human thought process, the Founders failed to recognize explicitly the simple fact that, in addition to citizens, all speech is created equal.  This omission has allowed the government to categorize speech according to the message and the medium used to disseminate it, and to extend varying degrees of First Amendment freedom to the different categories.  As we have seen, words appearing as opinion in print are accorded greater protection than those same words when read as part of the evening newscast.  Moreover, advertisements for contraceptives and abortion clinics are protected by the Constitution while commercials for cigarettes and gambling are subject to restrictions imposed by federal, state and local regulators and the courts.

            Those opposed to the regulation of advertising of legal products often point out that the Framers of the Constitution and the Bill of Rights believed commercial expression to be essential to life, liberty, and the pursuit of happiness.  For example, George Mason's Virginia Declaration of Rights claimed that the Revolution was fought to secure "the Enjoyment of Life and Liberty, with the Means of acquiring and possessing Property. . ."  In his call for a bill of rights, Richard Henry Lee claimed that "a free press is the channel of communication to mercantile and public affairs."1  Later, "Cato" wrote that "the Security of Property, and the Freedom of Speech, always go together."2  With such clear indications that freedom of expression was meant to include commercial speech, many are baffled that the Supreme Court has on occasion limited the protection afforded advertising of legal products.

            The newspapers printed in 1791, the year the First Amendment was added to the Constitution, carry advertisements for all sorts of products.  When the Pennsylvania Evening Post printed the first copy of the Declaration of Independence on Saturday, July 6, 1774, it was immediately followed by a full page of advertising.  These advertisements were used by citizens to determine what to buy and where to buy it.  In fact, many prominent newspapers of the day included the word advertiser in their masthead.  The Founders were not simply trying to protect political speech; they were, after all, merchants, farmers, inventors, men and women of commerce who believed that making a living was essential to the pursuit of happiness.3  Commercial advertising pervades the eight daily newspapers that were published in America in 1791 at the time the First Amendment was ratified.  Advertising was certainly recognized by the Framers as an important avenue for pursuing one's livelihood.  Interfering with the livelihood of a colonist was something that our Founders pledged their sacred honor to prevent.  It seems clear that commercial speech was not a separate category of discourse in the minds of the Framers of the Constitution.   

            While our nation began with a strong endorsement of freedom of expression in reaction to suppression in England, it too often settled into the old European habit of suspecting new media and quickly imposing content controls on them.  For example, in 1915 just as the film industry was becoming commercially viable, the Supreme Court ruled that state boards of censorship could use prior restraint to review films for unsavory depictions.4  Interestingly, the Court justified its position based on the proposition that "the exhibition of moving pictures is a business, pure and simple, originated and conducted for profit, like other spectacles, not to be regarded . . . as part of the press of the country or as organs of public opinion."  These phrases embodied the birth of the commercial speech doctrine.  Because of them, the motion picture industry was not freed of these content controls until 1952.

            Even before regulation of the film industry, the Court had upheld regulation of telegraph and telephone communications on the grounds that the companies were monopolies.  Anti-trust rules were viewed as more important than First Amendment policy.  And the tension among anti-trust law, media content controls, and the First Amendment is no where more apparent than in the building of the "information super highway."  Information is provided to us through many different media.  You can link your computer up to the world wide web through the use of phone modem.  You can watch 24 hour news services on cable television.  You can hear weather and traffic reports on your car radio when they are not drowned by talk radio.  You can pick television signals up directly using an antenna, or you can pick them up through retransmission via satellite using a little dish on your roof.  You can read the news in your newspaper or your favorite news magazine.  Or you can watch the evening news in the morning by properly setting you VCR and then replaying a tape.  This welter of media outlets will continue to explode as cable companies merge with movie companies and/or telephone and computer companies.

            Corporate Advocacy of Public Issues

            Corporate speech concerning matters of public importance is protected as political, non-commercial speech, according to the Supreme Court.5  To restrict such speech, the government must prove that it has an overriding interest.  That door to regulation will be examined in full later in this chapter; for now it is crucial to understand that editorial advertisements concerning public issues are protected by the First Amendment regardless of whether the comments promote the economic interest of the corporate speaker.6  The Supreme Court reaffirmed this position on corporate issue discussion.  In Pacific Gas and Electric v. Public Utility Commission of California,7  the question at bar was whether a state regulatory agency could require a privately owned utility to include the speech of third parties, with which it disagreed, in the utility's monthly billing envelopes.  Pacific Gas and Electric ("PG&E") had for the past 62 years distributed a newsletter to its three million customers in its billing envelopes.  The newsletter included political editorials, feature articles, tips on energy conservation, and information on rates and services.  In 1980, a special interest group petitioned the State Public Utility Commission arguing that PG&E should not be allowed to distribute political editorials at the ratepayers' expense.  The California PUC ruled that any "extra" envelope space was ratepayer property, and it required PG&E to allow outside groups to use the extra space to raise funds and disseminate counter editorials.  PG&E believed that its First Amendment rights had been violated and appealed to the U.S. Supreme Court.

            The Supreme Court sided with Pacific Gas and Electric, holding that speech does not lose its protection because of the corporate identity of the speaker.  Forcing PG&E to provide space in its envelopes for the expression of particular views with which it disagreed was "antithetical to the free discussion that the First Amendment seeks to foster."  Moreover, the Court stated that PG&E had "the right to be free from government restrictions that abridge its own rights in order to 'enhance the relative voice' of its opponents."8  Here, those seeking to have their opinion printed in another's paid space were denied such access. 

            Clearly, corporate speech which is not purely commercial is entitled to full First Amendment protection.  Editorial or informational content in an advertisement would also qualify it for protection.  Furthermore, states and the federal government are not allowed to suppress commercial speech in invidious ways.  It is protected by the same precedents that protect other forms of speech from economic punishment.  For example, City of Los Angeles v. Taxpayers for Vincent (1984) states that attempts to suppress speech because of its content -- in this case the mentioning of a tobacco product -- are unconstitutional.  The government may not regulate speech in a way that is prejudicial to some ideas at the expense of others; regulations must be content neutral.  This position was most clearly laid out in Police Department v. Mosley in 1972 when the Supreme Court ruled that a Chicago ordinance forbidding picketing was based on the content of the protest.9  The government may not restrict speech based on its content, nor may it use content to discriminate in favor of one message over another.  Furthermore since the 1973 decision in Committee for Public Education & Religious Liberty v. Nyquist, the Court has held that it does not matter whether the financial burden imposed on the targeted speech is direct or indirect.  Remember that  R.A.V. v. St. Paul (1992) ruled that a law is unconstitutional on its face if it prohibits otherwise permitted speech solely on the basis of the content of that speech.10 

            Furthermore, state and local regulation of certain kinds of advertising over the broadcast media may be pre-empted by federal rules.  For example, in Capital Cities Cable v. Crisp (1984), the Court held

. . . to the extent it has been invoked to control the distant broadcast and nonbroadcast signals imported by cable operators, the Oklahoma advertising ban plainly reaches beyond the regulatory authority reserved to local authorities by the [FCC's] rules, and trespasses into the exclusive domain of the FCC. 

But the Supreme Court has been less clear when it comes to the issue banning purely commercial speech outright.  It is to that category that this chapter now turns.

Commercial Speech: A Definition

            Although defining commercial speech has not been easy, it is generally recognized as advertising that does no more than solicit a commercial transaction.11  Commercial speech is sometimes subject to government restrictions that would be unconstitutional if applied to most non-commercial speech.  Indeed, in 1932 in Packer Corp. v. State of Utah, the Supreme Court ruled that the state of Utah could restrict billboard advertisements for Chesterfield cigarettes.  More important, in 1942, the Supreme Court stripped commercial speech of protection under the First Amendment in Valentine v. Chrestensen.12  Chrestensen involved a New York businessman who was arrested for distributing handbills advertising a submarine exhibition.  New York City's Sanitary Code explicitly provided dichotomous treatment of commercial and non-commercial speech:  it forbade the distribution of commercial and business advertising material but permitted the distribution of handbills devoted to "information or public protest."13  Chrestensen's double-faced handbill consisted of both a commercial solicitation and a protest against the City Dock Department for refusing to provide wharfage facilities for his exhibit.  But the Court held that the purpose in affixing the issue-protest to the handbill was to evade the prohibition of the ordinance and that "[i]f that evasion were successful, every merchant who desires to broadcast advertising leaflets in the streets need only append a civic appeal, or a moral platitude, to achieve immunity from the law's command."14  In conclusion, the Court emphatically declared that the First Amendment simply did not apply "as respects purely commercial advertising."

            Chrestensen gave rise to the commercial speech doctrine, which holds that speech promoting goods and services is less deserving of constitutional protection than speech promoting issues or ideas.  As late as 1973, the Supreme Court was still adhering to this two-tiered approach.  In that year the Court ruled that although newspapers have editorial discretion to select and place advertisements, that discretion did not allow them to publish commercial advertising if their placement violated a local ordinance proscribing employment discrimination.15

            Often various industries contributed to the impression that advertising of legal products did not deserve full First Amendment protection.  For example, starting in 1936 the liquor industry agreed not to promote is products on radio and televion.  This step was support by the National Association of Broadcasters until 1983, when the courts ruled such an agreement violated anti-trust laws.16

            In 1975, however, a breakthrough occurred when the Court departed from this bipolar approach and recognized that commercial speech should be accorded significantly more First Amendment protection.   The motivations for this shift included new research that revealed the role of advertising in early American newspapers.  In Bigelow v. Virginia, for example, the Supreme Court overturned the conviction of a Virginia newspaper editor who was found guilty of running advertisements for a New York abortion referral service at a time when abortions were illegal in Virginia.  One reason the Court decided to extend limited protection to these advertisements was because it believed that Virginians had a right to receive the information.  The Court rejected the contention that an advertisement for abortion services was unprotected because it was commercial:  "Our cases . . . clearly establish that speech is not stripped of First Amendment protection merely because it appears in [commercial] form."17

            By rejecting the "rigid two-tier typology" of Chrestensen, the Court in Bigelow made clear that simply labeling expression as "commercial" did not end the matter.  Instead, it began an inquiry into how much protection such speech is entitled to, or how much regulation could be imposed by government.  That inquiry is essentially a balancing test, which the Court described as "the task of assessing the First Amendment interest at stake and weighing it against the public interest allegedly served by the regulation."18  Bigelow did not answer this inquiry explicitly other than to note that "advertising, like all public expression, may be subject to reasonable regulation that serves a legitimate public interest."  Although Bigelow marked the first movement away from the commercial speech doctrine, the precedential value of the case was questionable because the advertisement at issue did contain non-commercial information of public interest.19

            If there were any doubts as to the viability of Chrestensen, however, they were put to rest the following year in the landmark case of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council.  In Virginia Pharmacy, the Supreme Court reaffirmed Bigelow in the context of a purely commercial advertisement.  Virginia Pharmacy involved a group of consumers who argued that the First Amendment prohibited the State from banning advertisements carrying prescription drug prices.  The State claimed that this regulation of commercial speech was necessary to maintain high professional standards for pharmacists.  Rejecting the State's asserted interest, the Court said that the essential issue was not whether this regulation was well-intentioned, but rather, whether the speech being regulated was protected by the First Amendment.  The Court went on to reject the idea that commercial speech "is wholly outside the protection of the First Amendment."20  It repudiated "the highly paternalistic view that government has complete power to suppress or regulate commercial speech."21 

            Virginia Pharmacy thus rejected the premise of the commercial speech doctrine as enunciated in Chrestensen -- that commercial advertising may be regulated on the same terms as any other aspect of the marketplace.  Even though the advertiser's interest is purely "economic," the Court wrote, "that hardly disqualifies him from protection under the First Amendment."  The Court also recognized in Virginia Pharmacy that consumers had a right to receive commercial information:

As to the particular consumer's interest in the free flow of consumer information, that interest may be as keen, if not keener by far, than his interest in the day's most urgent political debate.22

Moreover, in commenting on Virginia's desire to encourage its citizens to patronize "professional" pharmacists by suppressing price information, the Court demonstrated a sophisticated grasp of how the market for information works:

There is, of course, an alternative to this highly paternalistic approach.  That alternative is to assume that this information is not in itself harmful, that people will perceive their own best interests if only they are well enough informed, and that the best means to that end is to open the channels of communication rather than to close them.23

The state's regulatory goals were meant to raise public esteem for the profession, encourage more small pharmacies, and lessen the demand for potentially dangerous drugs.  While these goals were well-meaning, the state's regulatory approach -- an outright advertising ban -- was detrimental to consumers.

Regulating Commercial Speech: A New Era

            The justices of the Supreme Court have tried to legitimate some controls over commercial speech that also apply to other forms of speech.  For example, fraud and libel are not allowed.  The justices reason that if one side of the coin is limited protection, the other side is limited regulation.  Bigelow declared that commercial speech may be subject to "reasonable" regulation.  Virginia Pharmacy mentioned some of the ways in which commercial speech may be restricted as to time, place, and manner.  Advertising that proposes illegal activities can be banned; untruthful or misleading speech may be restricted.  Moreover, the First Amendment does not prohibit government "from insuring that the stream of commercial information flow cleanly as well as freely."24  So there should be no question that states and the federal government can regulate and restrict advertising in the same manner that they restrict unlawful and deceptive business practices, such as fraud and swindling.  What the Court faced and overruled in Virginia Pharmacy, however, was not regulation of commercial speech, but its complete suppression.  This, the Court ruled, was impermissible under the Constitution whenever the speech was truthful and concerned legal activity.

            Four years later in Central Hudson Gas v. Public Service Commission, the Court articulated a test for evaluating the constitutionality of restrictions on commercial speech.  The first part established criteria for determining whether commercial speech was protected at all.  To be entitled to protection, such speech "must concern lawful activity and not be misleading."25  The next three parts set standards for determining the degree of regulation permissible:  First, "whether the asserted governmental interest is substantial;" second, "whether the regulation directly advances the governmental interest asserted;" and third, "whether it is not more extensive than is necessary to serve that interest."26

            In this case a State Public Service Commission regulation prohibited all public utility advertising that promoted the use of electricity.  The state argued that this ban on commercial advertising supported the national policy favoring conservation of energy resources.  In applying their test, the Supreme Court held that total suppression of public utility advertising was a restriction that was more than was necessary to promote energy conservation.  In other words, commercial speech enjoys protection but a degree of regulation which is proportional to the governmental interest it promotes may be allowed if it is no more than is necessary to accomplish the task. 

            The last part of the Central Hudson test is probably the key to the Court's thinking on this issue and best summarizes the relevant standard.  Commercial speech enjoys protection but a degree of regulation may be allowed which is in proportion to the governmental interest it promotes -- no more than is necessary to accomplish the task.

            The Court reaffirmed the Central Hudson standard in 1982.  In re RMJ, the Court elaborated on how much regulation may be imposed in an attempt to halt false, unfair or deceptive advertising, which falls under the purview of the Federal Trade Commission by statute.  It established a standard analogous to a sliding scale where the degree of regulation is proportional to the degree of deception.  The remedy may be no more restrictive than necessary.27  The Federal Trade Commission has avoided involvement unless "a grave misrepresentation such asn advertisement depicting people drinking and driving or a claim that wine had medicinal qualities."28  Even this latter clause is suspect given the health benefits now claimed for the consumption of red wine and lite beer.

            Confusion on the Supreme Court

            Given the elevation of commercial speech from 1975 to 1986, the Supreme Court's decision in Posadas v. Tourism Company of Puerto Rico surprised many constitutional scholars.  Posadas involved a challenge to the constitutionality of a Puerto Rico statute that restricted advertising of casino gambling in the local media.  In an effort to deter gambling by residents while encouraging gambling by tourists, Puerto Rico authorized casinos to advertise their "games of chance . . . through newspapers, magazines, radio, television and other publicity media outside Puerto Rico."29  Thus, casinos in Puerto Rico were free to advertise to tourists in official tourist guides and in outside media such as the New York Times or network television, but not to local inhabitants, who were by law permitted to gamble in local casinos.

            After noting that the particular kind of commercial speech at issue in the case concerned a lawful activity and was neither misleading nor fraudulent, the Supreme Court applied the four-part test it had established in Central Hudson Gas.  A bare majority on the Court found that the government of Puerto Rico had a substantial interest in reducing the demand for casino gambling by local residents because gambling tended to disrupt family units, foster prostitution, and increase local and organized crime.  The Court held that the restrictions on advertising directly advanced the government's interest because advertising served "to increase the demand for the product advertised."30  Moreover, the Court asserted that the advertising restrictions were no more extensive than necessary to serve the government's interest in reducing demand for casino gambling.

            The decision in Posadas created confusion because of the way that the majority departed from the Court's earlier precedents.  In Posadas the Court narrowed the extent of the constitutional protection accorded commercial solicitations by allowing a government to prohibit the advertising of any lawful activity as long as that government possessed the greater power to ban the underlying activity promoted in the advertising.31  The Court regarded an advertising ban as a valid "intermediate kind of response" that was not prohibited by anything in the First Amendment.  Accordingly, for the advertising to be fully protected, the underlying activity had to be constitutionally protected.  Contraceptives and abortion clinics were two examples cited by the Court where the government could not prohibit the advertising.32

            Thus, despite the consumer's interest in receiving information relating to lawful products and services, an interest which was recognized in Virginia Pharmacy as being "as keen, if not keener by far, than his interest in the day's most urgent political debate," the Supreme Court treated commercial and non-commercial speech differently for purposes of the First Amendment in the Posadas case. 

            The decision was criticized strongly in the dissenting opinions.  Justice William Brennan believed that the majority had misapplied the Central Hudson Gas test when they endorsed the reasonableness of the government's position that casino gambling was a substantial evil.33  Brennan noted that Puerto Rico had legalized gambling casinos and allowed its citizens to patronize them; therefore, the legislature had already determined that serious harm would not result if residents were allowed to gamble.  Furthermore, Brennan argued that it was "unclear whether banning casino advertising aimed at residents would affect local crime" or the other "serious harmful effects" that the legislature sought to control.34  To Brennan, Puerto Rico's ban on advertising clearly violated the First Amendment; the ban was not a reasonable fit with the goal.

            In his dissent, Justice John Paul Stevens concentrated on the discrimination engendered by the advertising ban.  Stevens found that "Puerto Rico blatantly discriminates in its punishment of speech depending on the publication, audience, and words employed."35  In Stevens' view, that "discrimination among publications, audiences, and words" fostered by this advertising ban clearly violates the First Amendment.36

Cases Since Posadas

            Since 1986, the Supreme Court has tried to establish a consistent position on the rights of commercial speakers.  A review of these cases reveals the modifications made in the criteria that were first laid out in the Central Hudson Gas case.

            1. Board of Trustees of the State of New York v. Fox (1989)

            A resolution of the State University of New York prohibits private commercial enterprises from operating in SUNY facilities.  Campus security used the resolution to bar American Future Systems (AFS) from selling housewares at student parties held in the dormitories.  AFS and a student took the campus to court.  The District Court ruled in favor of the campus, arguing basically that restrictions of time, place, and manner applied.  The university had a right to prevent its dormitories from becoming shopping malls.  Applying the Central Hudson Gas test, the Court of Appeals overturned the decision after applying the Central Hudson Gas test.  It concluded that it was unclear whether the resolution directly advanced the state's asserted interests and whether, if it did, it was the least restrictive means.

            The Supreme Court took up the case and held for the state, reversing the appeals court in a six-to-three decision.  In the process the Supreme Court said:

Although Central Hudson and other decisions have occasionally contained statements suggesting that government restrictions on commercial speech must constitute the least restrictive means of achieving the governmental interests asserted, those decisions have never required that the restriction be absolutely the least severe that will achieve the desired end.  Rather, the decisions require only a reasonable 'fit' between the government's end and the means chosen to accomplish those ends.

This shift from least restrictive to "reasonable" was seen by many as a reinforcement of the Posadas standards.  However, the majority added that the means used must be "narrowly tailored to achieve the desired objective."  Furthermore, in his majority opinion, Justice Antonin Scalia made clear that SUNY dormitories did not constitute a public forum:

The Court of Appeals held, and we agree, that the governmental interests asserted in support of the Resolution are substantial: promoting an educational rather than commercial atmosphere. . . promoting safety and security, preventing commercial exploitation of students, and preserving tranquility.

Nonetheless, Scalia went on to say that the decision should not be construed so as to interrupt the "free flow of commercial information."  The Supreme Court stopped short of deciding whether the resolution was valid and ordered lower courts to reconsider the regulation under the standard of whether it is "reasonable."  In short, because of the setting, this case was not a real test of commercial speakers' rights.   The restriction in SUNY involved a ban on all commercial activity, not purely speech about the sale of products.

2. Austin v. Michigan Chamber of Commerce (1990)

            In this case the Supreme Court again seemed to weaken protection for commercial speech.  In a six-to-three decision, the Court upheld a Michigan law that prohibits the state chamber of commerce from buying a newspaper advertisement on behalf of a political candidate.  Buckley v. Valeo (see chapter on political restrictions) upheld many of the restrictions placed on federal campaigns in the wake of Watergate, particularly corporate contributions to candidates.  The Michigan law bars corporations from spending their own funds on behalf of candidates but does allow them to support or oppose ballot referenda.  Ironically, it exempts media corporations from these restrictions in what must be considered a tip of the hat to the First Amendment.  The problem here is that the case centers on political advertising rather than commercial advertising.

3. Peel v. Attorney Registration and Disciplinary Commission of Illinois (1990)

            In this case, an Illinois commission prohibited lawyers from advertising.  Peel violated the rule by stating on his letterhead that he was a certified civil trial specialist.  In a five-to-four decision the Court held for Peel saying he could not be censured for truthful advertising: "truthful advertising related to lawful activities is entitled to First Amendment protection."

            This decision re-affirmed a series of earlier decisions protecting professionals who wish to advertise their services.  For example, in Bates v. State Bar of Arizona (1977), the Supreme Court overturned a ban on price advertising by lawyers:  "[Commercial] speech serves individual and social interests in assuring informed and reliable decision making. . . ."37  More important, in Zauderer v. Office of Disciplinary Counsel (1985), the Court struck down bans on the content of lawyer's commercials with these words: "[T]here is no longer any room to doubt that what has come to be known as 'commercial speech' is entitled to the protection of the First Amendment. . . . [Legal advertising] tend[s] to acquaint persons with their legal rights who might otherwise be shut off from effective access. . . . [It is] undoubtedly more valuable than many other forms of advertising."38  In Shapero v. Kentucky Bar Association in 1988 the Court expanded the constitutional prohibition against regulation of problem-specific advertising by holding that "targeted" direct-mail solicitation was constitutionally protected.39

            In April of 1993, when the Supreme Court ruled 8-1 in Endenfield v. Fane40 that accountants have a constitutional right to convey "truthful, non-deceptive information" about their services.41  Arguing that "the general rule is that the speaker and the audience, not the government, assess the value of the information presented,"42 the Court struck down the legislation using the third part of the Central Hudson Gas test, that the law must advance the government interest to a significant material degree.43  Important to the Posadas precedent, the Court also said that legal speech could not otherwise be restricted unless the government could demonstrate that such a restriction would directly curtail a proven harm.44  The Court claimed that "[t]he commercial marketplace, like other spheres of our social and cultural life, provides a forum where ideas and information flourish."45  In June of 1994, the Court re-affirmed that decision in Ibanez v. Florida.

            Nonetheless, in June of 1995 the Court once again shifted course in Florida Bar vs. Went For It46 when it ruled that solicitation by lawyers of accident victims within thirty days of the accident was not protected speech.  Justice O'Connor writing for herself and Justices Scalia, Thomas, Rehnquist, and Breyer, argued that the Florida bar was empowered to protect grieving persons from "conduct that is universally regarded as deplorable and beneath common decency. . . . First Amendment protection, of course, is not absolute [when it comes to] pure commercial advertising. . ."  O'Connor's denigration of commercial speech was a major step backward particularly when one considers that much speech that is "deplorable and beneath common decency" is protected by the First Amendment according to the Court, including violence on television and in pulp fiction.  Furthermore, in his dissent Justice Kennedy called the bar's rule "censorship pure and simple. . . .  Under the First Amendment the public, not the state, has the right and the power to decide what ideas and information are deserving of their adherence."  He was joined by Justices Souter, Ginsberg and Stevens.

4. City of Cincinnati v. Discovery Network

            A month earlier, the Court held 6-3 in Cincinnati v. Discovery Network (1993) that cities may not restrict the space available for commercial papers if they allow newspaper stands for regular newspapers.  This is an important time, place, and manner decision.47  The most important principle is that distinction in time, place, and manner cannot be made on the basis of content unless that content is illegal, obscene, fighting words, or a clear and present danger.  Writing for the majority, Justice Stevens wrote:

In our view, the city's argument attaches more importance to the distinction between commercial and non-commercial speech than our cases warrant and seriously underestimates the value of commercial speech. . . .  In sum, the city's newsrack policy is neither content-neutral nor . . . 'narrowly tailored.'  Thus, regardless of whether or not it leaves open ample alternative channels of communication, it cannot be justified as a legitimate time, place, or manner restriction on protected speech.

Concurring Justice Blackmun drew the issue clearly: "[T]here is no reason to treat truthful commercial speech as a class that is less 'valuable' than noncommercial speech . . . the Court should . . . hold that truthful, non-coercive commercial speech concerning lawful activities is entitled to full First Amendment protection."48  The Court thereby rejected the City's claim because it provided "an insufficient justification for the discrimination against respondents' use of newsracks that are no more harmful than the permitted newsracks."49

            A related case, City of Ladue v. Gilleo (1994), examined a statute that was struck down by the Eighth Circuit Court of Appeals for impermissibly discriminating in favor of certain messages and thereby violating First Amendment guarantees.50  The ordinance in question allowed "for sale" and "for lease" signs to be posted on residential property, but it prohibited residents from displaying all other signs except small identification signs on their property.51  For example, political speech was prohibited under the law if the sign exceeds a certain size.  Margaret Gilleo's sign opposing the Gulf War, which she placed in a window, was in violation of the law.  On the other hand, churches, schools, and businesses were allowed to put up signs that inform the public about various activities.  Residents, in short, were prejudiced against by a law that was not content-neutral.  The Supreme Court agreed 9-0 ruling that signs may not be forbidden entirely: "It is common ground that governments may regulate the physical characteristics of signs, within reasonable bounds and absent censorial purpose. . . .  We are confident that more temperate measures could in large part satisfy Ladue's state regulatory needs without harm to the First Amendment rights of its citizens."52

            The First Amendment was given a higher priority than the Fourth in a related case that struck down a city ordinance against door-to-door solicitation in the village of Stratton, Ohio.  The town passed an ordinance that required door-to-door solicitors to obtain a permit.  The Jehovah’s Witnesses filed a law suit to strike down the law.  In an eight to one decision, the Supreme Court ruled in Watchtower Bible & Tract Society v. Village of Stratton (00-1737, 2002) that the law was too broad.  Writing for the majority, Justice Stevens pointed out that the way the ordinance was written it would apply to trick or treaters or a neighbor trying to borrow an egg.  In his lone dissent, Chief Justice Rehnquist reminded the Court of the two Dartmouth College professors killed by two teenagers pretending to be polling, but actually seeking entry to rob credit cards.  Rehnquist sided with the village because the ordinance would provide a degree of safety, security, privacy, and accountability not currently available.

5. U.S. v. Edge (1993)

            Just when the Court seemed to have strung together a series of consistent decisions, it issued a complex ruling that sent lawyers scurrying.  On June 25, 1993, the Court voted 7-2 to uphold a law that prohibits broadcast stations in states without lotteries from broadcasting commercials for lotteries in neighboring states.  WMYK (FM) in Moycock, North Carolina is near the Virginia border; in fact, 90% of its listeners live in Virginia, which has a lottery.  WMYK accepted advertising for it.  But North Carolina has no lottery and ordered the station to stop.  In upholding the North Carolina law, Justice Byron White wrote, "The government has a substantial interest in supporting the policy of non-lottery states as well as not interfering with the policy of states that permit lotteries.  The activity underlying the relevant advertising -- gambling -- implicates no constitutionally protected right; rather, it falls into a category of 'vice' activity that could be, and frequently has been, banned altogether."  As in Posadas, the Court demonstrated a bias against gambling.  Justice Stevens once again strongly objected: "The United States has selected the most intrusive, and dangerous, form of regulation possible -- a ban on truthful information regarding a lawful activity imposed for the purpose of manipulating, through ignorance, the consumer choices of some of its citizens."

            But what about the federal ban on the advertising of gambling?  In Valley Broadcasting Co. v. United States, the Ninth Circuit affirmed a lower court ruling that the federal ban was unconstitutional as applied to legal casino advertising in Nevada.53  The Supreme Court denied certiorari without comment.  This ruling is a major breakthrough for broadcasters because it overturns a provision of the 1934 Communications Act which prohibited the advertising of gambling.

            6. 44 Liquormart v. Rhode Island (1996)

            In 1996 44Liquormart v. Rhode Island directly addressed a state's attempt to ban the advertising of beer, wine, and liquor prices.  Writing for the unanimous Court, Justice Stevens ruled that "[a] complete ban on truthful non-misleading commercial speech" is unconstitutional.  The decision took direct aim at Posadas and Edge by arguing that there is "no vice exception" such as alcohol or gambling to the First Amendment's protections.  Justice Stevens put it this way:

The First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what government perceives to be their own good. . . . [T]he scope of any 'vice' exception to the protection afforded by the First Amendment would be difficult, if not impossible to define.  Almost any product that poses some threat to public health or public morals might reasonably be characterized by a state legislature as relating to 'vice activity.' . . . [A] 'vice' label that is unaccompanied by a corresponding prohibition against the commercial behavior at issue fails to provide principled justification for the regulation of commercial speech about that activity.

The decision struck down a Rhode Island statute and similar regulations in ten other states.  Furthermore, to those who cite the infamous Posadas decision of 1985, Stevens wrote:

[O]n reflection, we are now persuaded that . . . .  Posadas clearly erred in concluding that it was 'up to the legislature' to chose suppression over a less speech-restrictive policy.  The Posadas majority's conclusion can not be reconciled with the unbroken line of prior cases striking down similarly broad regulations on truthful, non-misleading advertising when non-speech-related alternatives were available. . . .  [W]e reject the assumption that words are necessarily less vital to freedom than actions, or that logic somehow proves that the power to prohibit an activity is necessarily 'greater' than the power to suppress speech about it.

Thus, 44Liquormart not only revived the Central Hudson test, it sent a strong warning that law making bodies were not free to impose their values on the purchase of such legal products and services as liquor and gambling.  The Rhode Island restriction was unconstitutional because "alternative forms of regulation that would not involve any restriction on speech" were available.54

            However, the issue was not entirely laid to rest because the Supreme Court in May of 1997 -- a year after 44Liquormart -- let stand a lower court decision that allowed the City of Baltimore to ban alcohol and tobacco billboard advertising where it might be exposed to minors.  Furthermore, the Court said that Federal Cigarette Labeling and Advertising Act did not preempt a city ordinance which limited the location of billboards based on their content.55  In these two cases of April 28, 1997, Anheuser-Busch, Inc. v. Mayor and City Council and Penn Advertising of Baltimore, Inc. v. Mayor and City Council, the City argued that advertising increases consumption and the restriction was narrowly tailored to advance a compelling interest, contentions clearly rejected in 44Liquormart.

            The ruling was not only surprising in light of 44Liquormart but because it is contrary to several other precedents.  For example, an ordinance allowing outdoor signs for the Olympics in nonindustrial areas of Atlanta where no other signs were allowed was struck down because it was a content based rule.56  A Minnesota ordinance prohibiting "point of sale" advertising of tobacco products was struck down because the Court believed it WAS preempted by the Federal Cigarette Labeling and Advertising Act.57  In fact, even the policy of the transportation authority of Boston not to allow ads in their subway and trolley cars that contain sexually explicit or patently offensive language to convey substantive messages was deemed not content neutral and therefore, unconstitutional.58  The transportation authority had refused to run condom ads that used words it found to be obscene.  The courts, however, found that the ads had significant redeeming social value and that restricting their use to certain areas was a violation of the First Amendment.  Furthermore, the trolleys and subways of Boston by allowing advertising on many different subjects had in effect become a "public forum" for policy debate.  Therefore, the fact that some sexual language and innuendo would offend passengers was not enough of a justification to ban the ads.59  Taken together these lower court rulings flowing from 44Liquormart certainly would seem to bode well for any one wishing to advertise any legal product on a billboard, particularly where the billboard had existed for a period of time and had carried diverse messages.

            Recently a spate of municipalities have proposed banning of billboards that advertise alcohol or tobacco products.  These ordinances also raise Fifth Amendment concerns.  New York,60 Chicago,61 San Francisco, Los Angeles, Oakland, Baltimore, Milwaukee, Detroit, and Cleveland have all considered and most have passed such proposals.  In 2001 the Supreme Court issued a ruling in case from Massachusetts in which billboard of tobacco products had been banned.  In this instance, the state of Massachusetts prohibited small tobacco advertisements in and around retail outlets, forbade tobacco advertisements in sports stadiums and retail stores if they could be seen outside in an area that was within 1,000 feet of a playground or school.  The ordinance was almost a perfect mirror image of those passed in Los Angeles, San Diego, San Francisco and many other municipalities.

 

The Unique Case of Billboards

            Historically, municipal, county and state governments have been allowed to ban billboards under only two rationales:  First, they must be a public nuisance that is subject to laws restricting items that interfere with public health, safety, peace, comfort or convenience.  Second, they usually carry advertising; therefore, they may be restricted in any ways that commercial speech is restricted.  As an initiation into the regulations governing billboards, this study examines both traditions.

            Land use restrictions which are content neutral and advance the goals of a community have been upheld by the courts.  In 1911, for example, the courts allowed a restriction on billboards because they provided hiding places for criminals.62  The Supreme Court's second major foray into this area came in Village of Euclid v. Ambler Realty Co.63 in 1926.  The Court upheld a zoning ordinance based on its policing power to serve the general welfare of its citizens.  The decision significantly weakened property rights of private citizens while also infringing on commercial liberty.

            At first, the courts refused restrictions on billboards on purely aesthetic grounds, understanding that beauty is in the eye of the beholder and therefore, arbitrary.64  In Berman v. Parker,65 however, the Supreme Court did recognize the public's interest in beautifying certain areas in the name of "spiritual as well as physical" factors.66  Since that time, the Supreme Court has linked aesthetic qualities to economic prosperity, arguing, for example, that tourism is affected by aesthetic attributes and therefore open to zoning laws as long as they are content neutral.  That is to say, all billboards must be banned, not just those carrying certain messages unless those messages are unprotected by the First Amendment for other reasons.

            This issue was reinforced in Metromedia v. City of San Diego,67 wherein a plurality of justices held that the ordinance of the City of San Diego was unconstitutional.  San Diego sought to allow companies to advertise on site as a means of informing consumers and soliciting business, but not off site on billboards.  Justice White writing for the plurality, held that messages of billboards could not be the grounds for prohibition unless the ban could be justified on other First Amendment grounds, for example, that it was obscene:  "Insofar as the city tolerates billboards at all, it cannot choose to limit their content to commercial messages; the city may not conclude that the communication of commercial information concerning goods and services connected with a particular site is of greater value than the communication of noncommercial messages."68   

            The Court has been less clear on the second rationale for billboard bans: that commercial speech can be restricted.  As we have seen elsewhere in this text, the resurrection of commercial speech began with the Bolger case, continued in Virginia Pharmacy, and culminated in the four part test provided in Central Hudson Gas.  First, to be entitled to protection, statements "must concern lawful activity and not be misleading."  The next three parts articulate standards for determining the degree of regulation permissible:  "whether the asserted governmental interest is substantial," "whether the regulation directly advances the governmental interest asserted," and "whether it is not more extensive than is necessary to serve that interest," that is to say, the regulation must be "the least restrictive means" to achieve the end.69  Below, the test will be applied to the question of banning billboard advertising since the Central Hudson test was recently and vigorously re-asserted by the Supreme Court in its unanimous 44Liquormart and New Orleans Broadcast decisions.

            Many legal observers believe the Court refused to intervene in the Penn Advertising cases (see above) because they were waiting for a contrary ruling to bubble up in another circuit.  The opportunity came in Lorillard v. Reilly in 2001.  To demonstrate its framework, this study takes the case of banning the advertising of alcohol products on billboards and examines the arguments that the majority embraced.70

            1) Is the advertising in question misleading or concerned with an illegal product?  This threshold requirement holds that the advertising in question must be legal and not misleading in order to qualify for protection under the next three parts of the test.  For example, since alcohol beverages are legal products and their advertising is not misleading, proposed billboard bans of advertising of alcohol must pass the next three parts of the Central Hudson test.

            2) Is the government interest compelling or substantial?  Of course the government has a substantial interest in reducing alcohol abuse and its related problems.  However, there are programs at all levels aimed at solving the problem; statistics indicate that progress has been made in reducing alcohol abuse despite an increase in spending on alcohol advertising.

            However, in the case of billboard bans, state and local governments have argued that billboards carrying advertising for alcohol beverages should be banned where children are likely to see them.  Those supporting the bans have the burden of proof to demonstrate that billboard advertising leads to an increase in the consumption of alcohol products by minors.  In fact, the Marin Institute Study of 1995, which many advocates of billboard bans cite, demonstrates that in countries where advertising of tobacco products was banned, the percent of young people starting to smoke continued to increase.  The American Council of Education together with U.C.L.A.'s Higher Education Research Institute surveyed 261,217 freshman and found that after the two year decline, less than a sixth of freshmen are smoking and only half are occasionally drinking beer.71  In fact, the survey found that drinking among college freshmen is at its lowest level since 1966!

            These studies indicate that legislation restricting advertising barks up the wrong tree.  Peer pressure and parental behavior are far more influential than advertising.

            3) Does the banning of billboard advertising directly advance the asserted government interest?  We know that minors do not have the same level of First Amendment protection as adults and that the sale of alcohol to minors is illegal.  Thus, government restrictions aimed exclusively at limiting exposure of minors to alcohol advertising may well constitute a legitimate time, place and manner restriction.  However, the government may not reduce adults to the status of children by regulating expression directed primarily at adults on the grounds that minors may be exposed to it.72  In overturning the Communication Decency Act in 1997, the Supreme Court said that the government's interest in protecting children from harmful materials "does not justify an unnecessary broad suppression of speech directed to adults. . . .  [T]he government may not reduce the adult population to only what is fit for children."73  If the government may not use this rationale to prohibit indecency from the Internet, how much less likely is the rationale to apply to billboards advertising alcohol beverages?  And that is why the majority struck down the ban on tobacco advertising in Massachusetts in 2001.

            Furthermore, advocates of billboard bans have the burden of proving that banning of advertising will lead to a significant reduction in alcohol abuse.  In the case of the Baltimore ban, the city was under the obligation to show that a reduction in billboard advertising near schools and playgrounds would reduce alcohol consumption.  No such evidence was presented.  The fact of the matter is that the hard evidence from Health and Human Services, the Federal Trade Commission, and many others says that this legislation will not materially and directly advance its goals.  For example, the Department of Health and Human services said, "research has yet to document a strong relationship between alcohol advertising and alcohol consumption."74  The Federal Trade Commission found "no reliable basis on which to conclude that alcohol advertising significantly affects alcohol abuse."75  While advertising expenditures for beer indexed to 1971 have increased more than 100%, per capita consumption has remained at basically the same level into the 90s and then began to plummet.76  In 1997, beer companies spent $718 million on television and radio advertising; wine companies spent $67 million.  However in California, for example, the State Board of Equalization reports that consumption of beer, wine and hard liquor dropped significantly in the ten year period from 1988 to 1998.77 Californians were consuming 36% less wine per person, 34% less hard liquor and 21% less beer, while reading billboards and hearing more commercials than ever encouraging them to use various brands.  Many anti-advertising advocates claim that teenagers are a particular target of billboard and television advertising.  However, the most extensive survey of young persons shows that amidst all the billboards and media advertising that went on in 1998 and 1999, smoking and beer drinking steadily declined among college freshman in both years.  Perhaps that is why a Senate investigation and the Assistant Director of the Social Science Institute at Washington University, among others, came to the conclusion78 that advertising leads to shifts in the choices of those already in the market;79 it does not increase the market size nor can it be shown to have an impact on teenagers.  In the majority opinion in 44Liquormart in May of 1996, Justice Stevens embraced this line of argument by referring to this evidence and then applying it to the state of Rhode Island.

            Remember it is objective evidence of a causal relationship that is required before the Supreme Court according to the ruling in 44 Liquormart.  Advertising leads to shifts in the choices of those already in the market;80 it does not increase the market size nor can it be shown to have an impact on teenagers.  Thus, billboard bans of alcohol advertising currently flunk the third part of the Central Hudson Gas test; banning advertising is not the way to reduce alcohol abuse because no correlation exists between advertising and the abuse.

            4) Is this legislation narrowly tailored to achieve a reasonable fit with the asserted government interest?   According to the Court, the legislation banning alcohol advertising on billboards goes after the wrong target and is too "extensive" to meet the Central Hudson test.  It affects advertising that goes to a wide audience in an effort to affect a small segment of that audience.  You cannot pass a law that says all dogs must be killed to make sure that dangerous pit bulls are eliminated from society.  The law must be tailored to meet only its goal, particularly in this case in which a second consumer interest can be argued. 

            Central Hudson as modified by later decisions holds that commercial speech can only be restricted if the product or service is illegal or makes false claims, or if there is a substantial government interest which is advanced "directly and materially" by an ordinance that achieves a reasonable fit with its goal.  In the case of alcohol, it is clear that abuse is better controlled by labeling cans and bottles, by enforcing drunk driving laws, and by instituting educational programs.81  Since these products are legal and in some cases beneficial, it makes no sense to restrict their advertising for the vast bulk of society that uses the product in a responsible way, especially when no correlation has been established between banning advertising and reduced in take of alcohol.82  Thus, a majority of the Court in the Lorillard case argued that targeting billboards on a product-specific basis violates the Constitution and does not serve the public interest.  The Supreme Court overruled Massachusetts on the grounds that their restrictions violated the First Amendment rights of advertisers and the federal cigarette labeling act which mandated warnings on cigarette products and advertisements.  In the majority decision, Justice Sandra Day O’Connor ruled that banning billboards that are within one thousand feet of schools, parks and the like, makes for “nearly a complete ban” on advertising, which is overly broad.  Relying on an earlier ruling regarding the Internet and films, O’Connor claimed that “Protecting children from harmful materials . . . does not justify an unnecessarily broad suppression of speech addressed to adults.”   Furthermore, the federal law “precludes state or localities from imposing any requirement or prohibition based on smoking and health with respect to advertising and promotion of cigarettes.”

            The Fifth Amendment Argument

            The majority reinforced its position from 44Liquormart by reaffirming that there was “no vice exception” to the First Amendment.  And three of the justices in their concurrences, Scalia, Kennedy, and Thomas, argued that advertising restrictions of any kind on legal products are always unconstitutional.  For this reason, foes of alcohol and tobacco advertising have turned to other methods to "chill" this type of commercial speech.83  These methods include direct taxes on a product-specific basis, and the disallowance of advertising tax deductions for certain products.  Advocates of these schemes may have read the words of Daniel Webster in McCulloch v. Maryland (1819) wherein he attacked Maryland's attempt to destroy the national bank:  "An unlimited power to tax involves, necessarily, a power to destroy because there is a limit beyond which no institution and no property can bear taxation."84

            The Fifth Amendment prohibits taking of revenue or other resources in an unjust manner.  The government must compensate those from whom it takes.  Thus, some billboard advocates argue that restrictions on billboard advertising constitute an unjust taking.  Earlier we examined cases in which it was determined that when a city regulates private property within its bounds of policing power, no compensation is necessary.  Thus, the crucial question is what is within the legitimate policing power of a local government.  Those challenging these regulations often cite the use of these bounds as being too elastic. 

            The problem began in 1922 in Pennsylvania Coal Co. v. Mahon85 when the Supreme Court left open what constitutes going "too far" in determining local bounds.  Since that time various theories have been used to justify "taking."  For example, if the benefit to the community outweighs the harm of a loss, then the courts must decide if the owner is entitled to compensation.  For years confusion reigned with many cases being decided on an individual basis highly dependent on the theory of the justices involved.

            In 1978 the Court tried to remedy the situation in Penn Central Transportation Co. v. New York City86 wherein the City had designated Grand Central Station a landmark and prohibited Penn Central from building in the airspace above it.  Justice Brennan ruled for the City using a complex balancing test that included 1) how permanent the regulation is or has been, 2) whether the regulation advances a state's interest, 3) whether the regulation prevents a harm, 4) whether the economic impact of the regulation is negative, and 5) whether the regulation is equitable and just.  In a subsequent case, the courts recognized that "takings" occur when the government requires uses of property different from the expectations of property owners or which substantially diminish their value.87

            The next significant case was Lucas v. South Carolina Coastal Council in 1992,88 which ruled that depriving an owner of all economically beneficial use of his property is an unjust taking.  After Lucas purchased of piece of property, the South Carolina legislature enacted a beachfront control act which effectively destroyed Lucas’ property’s value by prohibiting construction.  Despite the fact that environmental concerns were apparent, the deprivation of economic reward had to be compensated.  The impact of the Lucas case on billboards is still being worked through the courts.  When the standard is followed, if a city were to enact a law abolishing billboards, thus depriving their owners of all economic benefit, that would constitute an unjust taking.  Compensation would then have to be provided to billboard companies. 

            Conclusion

            This chapter demonstrates that commercial speech is protected by the First Amendment, but there are times when the Supreme Court believes that an "overriding government interest" supported by a "narrowly tailored law" may take precedence.  A misinterpretation of these phrases can have dire consequences particularly if the Court, as it did in Posadas and Edge Broadcasting, or the Congress, as it does with beer and wine advertising, relegate a perfectly legal product to a lower rung on the societal value scale.  The Bill of Rights was not added to the Constitution to protect the majority; it was added to protect minorities, the accused, and the outcast.  Some expression is more free than others because different levels of First Amendment protection have been accorded to different categories of speech.  Yet all speech should be afforded equal treatment unless the government can demonstrate that the speech itself is harmful.89  Whether it is printed or broadcast, whether it concerns how much a product costs or presents a particular editorial view, it is speech pure and simple under the First Amendment.  To say that some speech is more valuable than other speech assumes that the government can impose a hierarchy on human thought.  We all place different values on things, and speech is no exception; however, unless a clear and present danger can be demonstrated, all speech, regardless of its societal value at the time, should be allowed to compete in an open arena where reason and truth are free to combat fallacy and falsehood. 

 

Study Questions

1.  In what year was the “commercial speech doctrine” established?   How did the Supreme Court define “commercial speech” in 1942?

2. What kinds of speech can corporations and advertisers mingle with “commercial speech” to assure that it is protected by the First Amendment?

3. What 1976 case increased the First Amendment protection afforded to commercial speech?

4. What is the four part test established in the Central Hudson Gas ruling?  How was this test modified in SUNY v. Fox?

5. Was the Posadas ruling an aberration?

6. Only one major commercial speech ruling has gone against attorney’s seeking to advertise their services.  What was the rule and what was the rationale of the Supreme Court?

7. If you were to make a case for banning the advertising of alcohol beverages within 1000 feet of a public school, what would you use for evidence of a compelling government interest?

Simulations

1. Ms. Eliza Trinity, a student at Slippery Rock University,  has been approach by Mr. Tupac Tokay, a salesman for the Broadleaf Birth Control company.  His company manufactures birth control pills and devices and Mr. Tokay sells them on campus to students who live in college dormitories.  Tokay tells Trinity that if she will host a dorm party in her room for Broadleaf products, he will give her a $50 certificate to Victoria’s Secret on-line shopping center.  She agrees and the party is held at 2 in the afternoon in her dorm room.  A half hour into Tokay's speel, the campus security person arrives and shuts down the party under a rule of Slippery Rock U. that no commercial activity may be carried on in the dormitories.  Tokay refuses to give Ms. Trinity her gift certificate.  She then sues the University arguing that her and Tokay's First Amendment rights have been violated.  She says, "My dorm is my home and I should be free to do and say what I want there.  They wouldn't have pulled the plug on Home Shopping Network if I had been watching it in the student lounge.  Furthermore, students are allowed to have televisions and computers in their dorm rooms and they shop through them.”  The university seeks to uphold the SUNY v. Fox decision as precedent; Trinity and Tokay seek to have it overturned relying in part on 44Liquormart and other cases.  Side A = the University; side B = Ms. Trinity and Mr. Tokay.

2. In 2002 Congress passes and the president signs a bill requiring that five mandated warnings must be rotated "in an alternating sequence" in all television advertising of any alcoholic beverage.  The label/announcements include warnings about consuming alcohol while pregnant, driving while under the influence of alcohol, and operating machinery while under the influence of alcohol.  Some of the warnings run over 30 words and include an 800 number for information.  In television advertising, the legislation says that the warning must be "read . . . in an audible and deliberate manner and in a length of time that allows for a clear understanding. . . ."  Television stations, networks, beer, wine and advertising companies are outraged.  They argue that the legislation would eliminate most 15 and 30 second advertising.  That would do tremendous damage to the already shrinking budgets of free television networks and stations since such advertising provides of $612 million a year for television and radio.  It could mean the end to free coverage of the Olympic Games and many other sporting events.  They appeal to the Supreme Court for relief under the First Amendment.  Side A = beer companies and advertisers; Side B= federal government.  Supreme Court:  Do you find for Congress or for the advertisers and networks?

 

 

 

ENDNOTES

 


1. Letter XVI, January 20, 1788 in Letters from the Federal Farmer to the Republican (Tuscaloosa, AL: University of Alabama Press, 1978), p.151.

2. "Essay No. 15, Of Freedom of Speech, February 4, 1720," in John Trenchard & Thomas Gordon, Cato's Letters (1733), pp. 95-103.  See also Frank Presbrey, The History and Development of Advertising (Garden City, NY: Doubleday, 1929), p. 154.

3. See David Anderson, "The Origins of the Press Clause," U.C.L.A. Law Review, 30 (1983), pp. 455, 533-37 (1983); see also L. Levy, Emergence of a Free Press (New York: Oxford University Press, 1985), pp. vii-xix. In the preface, Levy acknowledges that his earlier work, Legacy of Suppression:  Freedom of Speech and Press in Early American History (Cambridge: Harvard University Press, 1960), "gave the misleading impression that freedom of the press meant to the Framers merely the absence of prior restraints."

4. See Mutual Film Corp. v. Industrial Comm'n of Ohio, 236 U.S. 230 (1915); Mutual Film Corp. of Missouri v. Hodges, 236 U.S. 248 (1915).

5. Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 562 n.5 (1980).  This landmark case will be examined in full later in this study and applied to a current piece of legislation.

 

6. See, for example, Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 67 (1983); Bigelow v. Virginia, 421 U.S. 809, 818 (1975); Ginzburg v. United States, 338 U.S. 463, 474 (1966); Thornhill v. Alabama, 310 U.S. 88 (1940).

7. 106 S. Ct. 903 (1986).

8. Pacific Gas at 911 and 912.

9. 408 U.S. 92 (1972).  In this decision, the Court quoted from its 1964 ruling, New York Times Co. v. Sullivan: “Any restriction on expressive activity because of its content would completely undercut the ‘profound national commitment to the principle that debate on public issues should be uninhibited, robust, and wide-open.’” (408 U.S. 92,  96).

10. 112 S. Ct. 2538.

11. Thomas H. Jackson & John C. Jeffries, Jr., "Commercial Speech: Economic Due Process and the First Amendment," Virginia Law Review, 65 (1979), pp. 1-42.

12. 316 U.S. 52 (1942). 

13. Chrestensen at 53.

14. Chrestensen at 55.

15. Pittsburgh Press Co. v. Pittsburgh Commission on Human Relations, 413 U.S. 376, 391 (1973).

16. In November of 1996, the liquor industry ended the agreement, as Seagrams and others began placing advertisements on radio and television.  There was an immediate reaction from Congress, the FDA, the FTC, and the FCC.  The FCC deadlocked on the issue, but the FTC subpoenaed Seagrams and Schlitz Brewing.

17. 421 U.S. 809, 818-822 (1975).

18. Bigelow at 826.

19. Bigelow at 822.  The advertisement published in Bigelow's newspaper did more than propose a commercial transaction.  It contained factual material of clear public interest.  The advertisements included the words "Abortions are now legal in New York.  There are no residency requirements."

20. 425 U.S. 748, 761 (1976).

21. Virginia Pharmacy at 762.

22. Virginia Pharmacy at 763.

23. Virginia Pharmacy at 770.

24. Virginia Pharmacy at 771.

25. 447 U.S. 557, 571 (1980).

26. Central Hudson at 571.

27. In re RMJ, 455 U.S. 191, 203 (1982).

28. See "Comment," UCLA Law Review 1139, 1154 (1987).

29. 54 U.S.L.W. 4956, 4958 (U.S. July 1, 1986).

30. Posadas at 4960.

31. Posadas at 4961.

32. Posadas at 4961-62.

33. Posadas at 4963.

34. Posadas at 4963.

35. Posadas at 4965.

36. Posadas at 4966.

37. 433 U.S. at 364.  In Ohralik v. Ohio State Bar Association, 436 U.S. 447 (1978), the Court did uphold a law forbidding face to face solicitation of clients.  And in Friedman v. Rogers, 440 U.S. 1 (1979) the Court upheld a prohibition on the use of trade names in the practice of optometry.

38. 471 U.S. 626 at 637, 646.

39. 486 U.S. 466, 108 S. Ct., 100 L. Ed. 2d 475.

40. See also Ibanez v. Florida Department of Business & Professional Regulation, 114 S. Ct. 2084 (1994).  This case also reported the high value of commercial speech to the consumer.

41. Justice Blackmun in concurring argued that the Court should go further and give commercial speech the same protection as speech about public affairs.

42. 113 S. Ct. at 1798.

43. However, the Supreme Court recently granted certiorari in Florida State Bar v. McHenry, a case involving a lawyer's solicitation of business from an injury victim within thirty days of the accident, which is prohibited by the Florida Bar.  Since the 11th Circuit Court of Appeals struck down this provision of the Bar on May 10, 1994, it is odd that the Supreme Court would take the case up given its rather consistent record on lawyers' commercial speech.

44. 113 S. Ct. at 1800.

45. 113 S. Ct. 1792, 1798.

46. 94-226.

47. See also Lakewood v. Plain Dealer Publishing (1988).

48. 113 S. Ct.1518, 1520.

49. 113 S. Ct. at 1511.

50. The ordinance attempt to overcome the barrier established by the Supreme Court in Linmark Associates, Inc. v. Township of Willingboro, 431 U.S. 85 (1977), which prohibited limitations on for-sale signs because such a rule was content-based.  See also Burson v. Freeman, 112 S. Ct. 1846, 1855 (1992).

51. This case revisited portions of Linmark Associates v. Willingboro, 431 U.S. 85 (1977) which struck down a New Jersey ordinance forbidding the posting of for sale signs.

52. The decision is very consistent with Linmark which allowed the posting of "for sale" signs.

53. February 25, 1997.

54. 116 S.Ct. at 1510.

55. certiorari granted, vacated, 116 S.Ct. 2575.

56. See Outdoor Systems Inc. v. City of Atlanta, 885 F. Supp. 1572.

57. Chigio v. City of Preston, Minn. 909 F. Supp. 675.

58. See AIDS Action Committee of Massachusetts, Inc. V. Massachusetts Bay Transp. Authority, 42 F. 3d 1.

59. See also Brockway v. Shepherd, 942 F. Supp. 1012.

60. In New York, the disputants have gone to court.  See Greater New York Metropolitan Food Council, Inc. and Advertising Freedom Coalition v. Giuliani, No. 98 CIV 251 (DAB) (S.D.N.Y. filed Jan. 14, 1998).

61. See Federation of Advertising Industry Representatives, Inc. v. City of Chicago, No. 97C 7619 (N.D. Ill. Filed October 30, 1997).

62. St. Louis Gunning Advertising Co. v. City of St. Louis, 137 W.W. 929, 938 (Mo. 1911).

63. 272 U.S. 365, 390-95 (1926).

64. R. Douglas Bond, Note. "Making Sense of Billboard Law: Justifying Prohibitions and Exemptions,"  88 Michigan Law Review.  2482, 2485 (1990)

65. 348 U.S. 26 (1954).

66. P. 33 (1954).  This decision was reinforced in People v. Stover, 191 N.E. 2d 272 (N.Y.), appeal dismissed, 375 U.S. 42 (1963).  The Berman case took place in Washington, D.C. where the Supreme Court resides.  The Court may have ruled differently if it did not affect the members own backyards.

67. 453 U.S. 490 (1981).

68. 453 U.S. 490.

69. 477 U. S. 562, 570-72, 577 (1980).

70. This is the approach used by the lower courts since the 44Liqourmart decision.  See, for example, A.B.C. Home Furnishings, Inc. v. Town of East Hampton, 947 F. Supp. 635, and Kenro, Inc. v. Fax Daily, Inc., 962 F. Supp. 1162.

71. Los Angeles Times, January 24, 2000, P. A3.

72. See, for example, Sable Communications of California, Inc. v. FCC, 492 U.S. 115, 131 (1989); New York v. Ferber, 458 U.S. 747 (1982).

73. Reno v. ACLU, 117 U.S. at 2346 (1997).

74. See Seventh Report to Congress on Alcohol and Health, 1990.  Even Surgeon General Koop said in his 1989 Report, "There is no scientifically rigorous study available to the public that provides a definitive answer to the basic question of whether advertising and promotion increase levels of tobacco consumption."

75. FTC News Release, April 16, 1985.

76. See Federal Trade Commission, April 16, 1985. For updated figures, 1971 to 1987, see The Beer Institute,  1989 Report.

77. As reported in the Los Angeles Times, (Aug. 10, 1999): A3.  State Board of Equalization, Alcohol Research Information Service, based on data from the Centers for Disease Control and Prevention.

78. "Our subcommittee record contains no facts which would justify legislation to ban/censor advertising of beer and wine products or require counter advertising."  U.S. Senator Paula Hawkins, Reporting the findings of the Senate Subcommittee on Alcoholism and Drug Abuse hearings, May 20, 1985.  See also Donald E. Strickland, "The Advertising Regulation Issue: Some Empirical Evidence Concerning Advertising Exposure and Teenage Consumption Patterns" Paper presented to conference on Control Issues in Alcohol Abuse Prevent, September, 1981 (Professor Strickland, Ph.D., Assistant Director, Social Science Institute, Washington University.)  Reginald G. Smart, "Does Alcohol Advertising Affect Overall Consumption? A Review of Empirical Studies," Journal of Studies of alcohol, (1988); Alan C. Ogborne and Reginald G. Smart, "Will Restrictions on Alcohol Advertising Reduce Alcohol Consumption?" British Journal of Addiction, 75 (1980), 293-296.  Linda Sobell, et al., "Effect of Television Programming and Advertising on Alcohol Consumption in Normal Drinkers," Journal of Studies on Alcohol, (1986). 

79. Another study to make this point, "Advertising and the U.S. Market Demand for Beer", was released on May 24, 1990 by Professors Byunglak Lee and Victor J. Tremblay of the Department of Economics at Oregon State University.  They conclude, "Although many respectable groups have argued that advertising promotes beer consumption, the empirical results of this study do not support this hypothesis.  If social welfare is best served by reducing alcoholic beverage consumption, policies other than a restriction on advertising should be sought." (p. 9)

80. Lee and Tremblay conclude, "Although many respectable groups have argued that advertising promotes beer consumption, the empirical results of this study do not support this hypothesis.  If social welfare is best served by reducing alcoholic beverage consumption, policies other than a restriction on advertising should be sought." (p. 9)

81. It should be noted that since the Cigarette Labeling and Advertising Act of 1965, the courts have consistently ruled that by complying with federal labeling requirements, cigarette manufacturers are immune from regulation by the states.  This immunity was water downed in case of damage suits in Cipollonne v. Liggett Group, Inc. but only in the case of fraud or breach of warranty.  See Lorillard v. Reilly, 2001.

82. In April of 1995, the Supreme Court ruled that federal government could not bar Coors Brewing from printing the alcohol content of its products on the label.  In this case, the Court took a step toward the Founders' position that companies have a right to advertise as they see fit, as long as such advertising is truthful and not misleading.

83. See, for example, A. E. Gerencser, "Removal of Billboards: Some Alternatives for Local Governments," Stetson Law Review, 21 (1992): 899-930.

84. The Supreme Court has regularly returned to this issue.  In one important First Amendment cases, Grosjean v. American Press Co., 297 U.S. 233 (1936), the Court ruled unanimously against a Louisiana licensing tax levied on the gross advertising receipts of large newspaper companies.  The decision was reinforced in Arkansas Writers’ Project, Inc. v. Ragland, 481 U.S. 221 (1987) where in the Court struck down an Arkansas law that imposed a sales tax on periodicals but not on newspapers.  In this case, the tax was seen as prejudicial.

85. 260 U.S. 393.

86. 438 U.S. 104.

87. See Pruneyard Shopping Center v. Robins, 447 U.S. 74, 83 (1980).

88. 112 S. Ct. 2886.

89. Speech creating a clear and present danger would fall into this category of speech, which by its very nature, is harmful to society.  Justice Holmes provided the best illustration of this in Schenck v. United States, 249 U.S. 51 (1919), when he wrote:  "The most stringent protection of free speech would not protect a man in falsely shouting fire in a theater, and causing a panic."