Associates’ Corner: Commercial Speech and the First Amendment
By Kluger Kaplan December 20, 2012
By Jorge R. Delgado
Among the classes of protected speech under the First Amendment, commercial speech does not rank in the highest echelons. But businesses should not be quick to dismiss a potential constitutional challenge to governmental regulation that improperly infringes on their right to advertise, exchange information, or engage (or abstain from engaging) in any number of activities.
While commercial speech is not afforded the same protections as traditional speech, its restriction must still have a sound basis. Regulation of commercial messages in order to protect consumers from “misleading, deceptive, or aggressive sales practices, or [that] requires the disclosure of beneficial consumer information” is entirely proper. 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 501 (1996). However, where there is an attempt by the government to curtail truthful, non-misleading commercial messages “for reasons unrelated to the preservation of a fair bargaining process, there is far less reason to depart from the rigorous review that the First Amendment generally demands.” Id.
In Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980), the Court set forth a test to determine whether commercial speech can be regulated. First, the speech must concern lawful activity and not be misleading in order to warrant First Amendment protection. Then the court must determine whether the governmental interest in the speech it seeks to regulate is substantial. If both prongs are satisfied, the court must then determine (a) whether the regulation directly advances the governmental interest asserted and (b) whether the regulation is more extensive than necessary to serve that interest.
Recent case law highlights the types of protections that can be afforded to businesses. In Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011), the U.S. Supreme Court overturned a Vermont law that banned pharmacies from selling information about doctors’ prescribing histories to pharmaceutical companies. The Court reasoned that the Vermont law placed content and speaker-based restrictions on speech, and therefore these restrictions warranted higher judicial scrutiny. The Court rejected Vermont’s argument that the law was not a regulation of speech but rather a commercial regulation that only had an incidental burden on speech.
In the more recent case of R.J. Reynolds Tobacco Co. v. Food & Drug Admin., 696 F.3d 1205 (D.C. Cir. 2012), the D.C. Circuit invalidated FDA rules adopting regulations under the Family Smoking Prevention and Tobacco Control Act that would require graphic images to be placed on cigarette packages. The court held that the FDA failed to set forth sufficient evidence that the graphic warnings actually reduced smoking rates to material degree.
Of course, such a favorable result is not always guaranteed. In Disc. Tobacco City & Lottery, Inc. v. United States, 674 F.3d 509 (6th Cir. 2012), the Sixth Circuit upheld the validity of the same graphic warnings only the month before. The plaintiffs in that case, some of which overlap with the plaintiffs in R.J. Reynolds, have petitioned the U.S. Supreme Court for certiorari review. It is not entirely clear whether the High Court will take up the question, but whatever the Court’s action, it is clear that this area is ripe for further litigation in the near future.