COMMERCIAL SPEECH (Update 1)

For most of this century commercial speech was regarded as outside the scope of the first amendment. Indeed, the Supreme Court so held in 1942. But in 1976 the Supreme Court reversed course in the case of virginia state board of pharmacy v. virginia citizens ' consumer council. There the Court held that Virginia had violated the First Amendment by prohibiting pharmacists from advertising prices of prescription drugs. The Court was unpersuaded that the state's fear that product advertising would lower the "professional" character of the practice of pharmacy outweighed the First Amendment interest in open competition of information and ideas, even about products of commerce.

In 1980 in central hudson gas electric corporation v. public service commission, the Court announced a four-part test for deciding when commercial speech is entitled to First Amendment protection. To determine whether commercial speech is protected, the Court held, it must be found that the speech concerns a lawful activity and is not misleading, that "the regulation directly advances the governmental interest asserted," and that the regulation "is not more extensive than is necessary to serve that interest." Applying that standard to the case before it, the Court invalidated a Public Service Commission regulation that prohibited electrical utilities from engaging in promotional advertising. While the Court acknowledged that the commission's purpose was legitimate (namely, to conserve energy), the commission's case failed in the Court's view because there was no showing that this legitimate purpose could not be achieved by regulation less intrusive on First Amendment interests.

In recent years the Supreme Court has seemed to retreat from the Central Hudson trend of extending broader First Amendment rights when it comes to protection of commercial speech. In a major decision in 1986 in posadas de puerto rico associates v. tourism company, the Court upheld a Puerto Rican government regulation that forbade casino advertising directed at Puerto Rican residents; advertising aimed at tourists, on the other hand, was permitted. Though casino gambling was legal in Puerto Rico, and though the advertising prohibited was neither misleading nor fraudulent, the Court held that the government's interest in avoiding the debilitating effects of gambling on the internal culture of Puerto Rico was "substantial," that the restriction "directly advanced" that goal, and that the legislature could reasonably conclude that residents would "be induced by widespread advertising to engage in such potentially harmful conduct." The Court refused to require Puerto Rico to use means other than an advertising prohibition to achieve its goal of discouraging gambling by residents. The Court reasoned that, because casino gambling could be prohibited entirely, that power "includes the lesser power to ban advertising of casino gambling."

The Posadas case seems a step backward from the direction taken in Virginia Pharmacy and Central Hudson for two reasons. First, it appears to signal that the Court will not demand that governments demonstrate the inadequacy of nonspeech restrictive measures in controlling supposedly harmful effects of commercial speech. While Central Hudson required the state to "demonstrat[e] that its interest in conservation cannot be protected adequately by more limited regulation," Posadas was satisfied by the assumption that the legislature "could" conclude, as it "apparently did," that alternative remedies were insufficient. The Court explicitly articulated this limitation in the Central Hudson formula in board of trustees of state university of new york v. fox (1989).

Second, the Court's reasoning in Posadas that the state's potential power to forbid gambling includes the power to regulate the speech itself even when gambling is not prohibited raises serious questions about the continuing strength of earlier decisions protective of commercial speech. In Virginia Pharmacy, for example, although prescription drugs presumably could have been banned by Virginia, that fact did not stop the Court from holding that a ban on advertising for such drugs was unconstitutional.

The most that can be said at the present time about the commercial speech doctrine is that it is not yet on a consistent track, although some level of First Amendment protection for commercial speech is now firmly established.

Lee C. Bollinger
(1992)