Commercial Speech (Update 2)

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Since 1976, the Supreme Court has reviewed first amendment challenges to regulations affecting "commercial speech" under a standard of intermediate scrutiny. To meet that standard, established in central hudson gas and electric corp. v. public service commission (1980), a law dictating or restricting the manner, extent, or content of commercial matter must be a law for which a substantial showing can be furnished of actual (rather than merely speculative) need, and of adequate justification in light of the kind and extent of regulation or restriction it enacts.

Protecting consumers from false or misleading information in commercial representations is a typical interest of sufficiently substantial weight to count heavily in this area, as the opinions of the Court readily admit. Regulations requiring various disclosures such as a product's actual price, ingredients, and full effects (including its effects on the environment, insofar as these, too, may be regarded as important for the consumer to understand) generally tend to be sustained in the courts. The commercial speaker may be constrained to make far more elaborate disclosures in his representations than he might wish to do, or than others not subject to the Central Hudson test (for example, candidates for public office) can be compelled to declare. He may likewise be held far more strictly responsible for the accuracy of his affirmative representations in what he presents in his publicity for his product or services, consistent with Central Hudson. Subject to meeting the other requirements of the Central Hudson test, regulations competently drawn to serve these objectives tend not to be intrusively second-guessed in the courts. It is left quite substantially to the discretion of legislative bodies and to specialized regulatory agencies (such as the Food and Drug Administration and the Federal Trade Commission), moreover, to determine the particular boundary lines—of how much disclosure or in what detail, and of what kind of affirmative claims may or may not be asserted, and on the strength of what measure of empirical support—such as the regulatory agency may require.

In contrast, a restriction severely limiting the time, place, or manner of advertising a particular product or service, not to protect the public from anything identifiably either false or misleading in such commercial material, but rather to protect a competitor's market (whether of the same good or a rival product) is far less likely to be sustained in the courts under the Central Hudson test. It may fail at the first step. For insulating certain producers or products from losing market hegemony or market share to competing goods, of whatever importance it may be asserted to have in the minds of legislators, is generally not regarded by the Court as a suitable justification for biasing the manner and extent to which the public receives equally accurate information respecting those respective products, such as each may be.

To be sure, insofar as the legislature may decide to favor certain producers over others (such as dairy farmers producing butter over producers of equally nutritious, lower-cost nondairy substitutes), it may do so with little First Amendment hindrance, virtually as it may choose to do by other means, for example, by imposing a higher tax on the legislatively disfavored product or by providing some kind of price support for the favored product as it may see fit to do. Still, the Court has suggested, it may not by the same gesture attempt to manipulate consumer response by the different technique of biasing what the public may merely learn about each product by denying an equal freedom of (truthful, accurate) commercial communication. Proceeding in this information-biasing way, in the view of the Court, is generally foreclosed by the First Amendment itself. While some critics have wondered over the point, the distinction for the Court is quite clear. The legislature may "fix the fight" between product rivals to a very considerable extent, even by tying one boxer's legs or arms (as imposing a nearly prohibitive tax upon his product may do), but yet may not do so by putting a gag in one fighter's mouth, stopping his breath.

The First Amendment is quintessentially concerned with gags on speech. When gags are used, the burden of justification on government under Central Hudson tends at once to rise, even as it sharply does as in the more ordinary instance of political or social advocacy speech. A compelling justification must be provided, and insulating preferred producers of preferred products from having to contend with comparative claims, no less accurate or truthful than their own, is unlikely to suffice.

As an additional consideration pursuant to the Central Hudson test, even more conventional regulations (including those discussed earlier respecting what must be disclosed in commercial material in order to make the advertisement permissible), must in each instance have a reasonably close fit to the problem to which they are allegedly addressed. This general requirement of "close fit," in turn, has two matching elements or bookends. On the one side, the law enacted to meet an alleged need must meet it in substantial (not insubstantial) fashion, that is, in a fashion likely to make a real and significant difference rather than very little difference at all. On the other side, the restriction or regulation must not extend further than can be fairly defended in terms of the need it is alleged to be appropriate to meet.

In this latter respect, current commercial speech doctrine has picked up protection from what has been elsewhere described as the First Amendment legislative vice of overbreadth, albeit not yet with all of the consequences that that doctrine has meant in its aplication to laws affecting political, rather than commercial, speech. Specifically, a law on its face prohibiting a greater range of political utterance than the First Amendment will tolerate a legislature to prohibit may risk the fate of being held unconstitutional on its face, solely on that account. It may be impugned even at the behest of one with respect to whom there is no question that his conduct was not merely well within the coverage of the statute, but was conduct itself not protected by the First Amendment. Even so, he is nonetheless able to escape any sanction for his conduct by having the statute declared "void on its face," fatally tainted by its "overbreadth" per se.

Here, however, there is this significant difference. An equivalently "overly broad" restriction on commercial spech may not be as easily impugned—and probably cannot by a party whose conduct it clearly fits, and as to whom there is no First Amendment problem in its application to him. Rather, insofar as the commercial speech restriction may go too far, it may await a person with better standing to be heard on that complaint. So, in this respect, the extent to which commercial speech may claim First Amendment protection remains significantly short of that accorded political or social advocacy speech.

Even so, overall the now-revised Central Hudson test has somewhat more First Amendment "bite" than some of its earlier applications by the Court implied. Moreover, this is especially true as it bears on legislation or regulations that seek to suppress commercial information, rather than to assure its accuracy and completeness, or rather than merely to channel it in various ways. Thus, even as some of the preceding review has already suggested, recent decisions of the Court strongly suggest that where the regulation is one that reflects a desire more to keep the public "underinformed" of certain goods or services than merely to insure it is not deceived or misled, the burden on the state to sustain its commercial speech restrictions may be stepped up to a significant degree. Indeed, suppression of advertisements for products or services a legislature may not wish the public to have brought to their attention ranks hardly better with several members of the current Court than suppression of advertisements for candidates, ballot issues, or for particular books or films a legislature would as readily suppress and keep from public attention, were it free to do so (which it is not). Thus, while legislature authority to channel commercial speech is doubtless greater than its power to direct or channel political speech, yet it is very far from being absolute.

And, in this respect, the Court's suggestion in posadas de puerto rico associates v. tourism company (1986), that a legislature may totally forbid any advertising by any business it would otherwise have the power to forbid to exist or compete at all, is no longer valid. Not only has a majority of the Court now squarely held against that proposition (rather, any restriction must meet the Central Hudson test at a minimum), but Chief Justice william h. rehnquist, who first offered it as an alternative holding in Posadas, has also now laid it aside. (See 44 Liquormart, Inc. v. Rhode Island, 1996; Greater New Orleans Broadcasting Ass'n v. United States, 1999.) Commercial speech has thus achieved a strengthened intermediate level of First Amendment protection more robust than before its assimilation began, a mere quarter of a century ago, in Virginia State Board of Pharmacy v. Virginia Citizens Counsumer Council (1976).

William W. Van Alstyne

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Commercial Speech (Update 2)

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