“Commercial speech” as a constitutional doctrine — initially (and even today) an exception from the First Amendment’s normal rules — was casually suggested by a U.S. Supreme Court opinion in 1942. Then, in 1976, it was altered substantially when the Court recognized that such a talismanic exemption from the Constitution’s mandates was unsustainable. Later, it was transformed by repeated Court cases that resulted in a solid First Amendment rule that commercial speech that is neither false nor misleading is fully protected speech. By 2001, the doctrine approached maturity when the Court recognized that even tobacco advertising was entitled to significant First Amendment protection.
Origins of commercial-speech doctrine
The concept of commercial speech, as a category of speech without First Amendment protections, was invented almost offhandedly. In the 1942 decision Valentine v. Chrestensen, the Supreme Court, without analysis or comment, created the so-called “first commercial speech doctrine,” seemingly exempting such speech from any First Amendment protection.
The Valentine decision came several weeks after Chaplinsky v. New Hampshire, in which the justices had summarily announced that “[t]here are certain well-defined and limited classes of speech, the prevention and punishment of which have never been thought to raise any constitutional problem.” The Court listed those categories as: “the lewd and obscene, the profane, the libelous, and the insulting or ‘fighting’ words,” and Valentine built upon this decision, apparently adding commercial speech to the constitutional dustbin.
The Valentine case grew out of a dispute over littering on the New York waterfront. The plaintiff, F. J. Chrestensen, owned a World War I submarine and sailed it from port to port, exhibiting it to whoever would pay the price of admission. In 1940, he moored the boat on New York’s East River and distributed handbills advertising the tours.
Distribution of those handbills sometimes resulted in litter. New York City therefore enacted a law to ban the use of city streets for “commercial and business advertising purposes.” Chrestensen was advised by New York City Police Commissioner Lewis J. Valentine that he could not distribute his advertisements; but Valentine also assured him that literature “devoted to ‘information or a public protest’” was entirely permissible. Chrestensen returned to his printing press, removing the price information from the advertising, and on the reverse side printed a protest against the city’s refusal. When the police restrained Chrestensen from distributing the amended handbills, he brought suit in federal court, obtaining an injunction against Valentine, but the Supreme Court reversed.
In an opinion written by Justice Owen J. Roberts, with no citation to any authority or any explanation as to the basis for its policy, the Court began by observing that it indeed had held that “the streets are proper places for the exercise of the freedom of communicating information and disseminating opinion.” States could “not unduly burden or proscribe” such non-commercial speech. But, the Court continued:
"We are equally clear that the Constitution imposes no such restraint on government as respects purely commercial advertising. Whether, and to what extent, one may promote or pursue a gainful occupation in the streets, to what extent such activity shall be adjudged a derogation of the public right of user, are matters for legislative judgment."
Finally, the Court turned aside Chrestensen’s attempt to make his commercial fliers seem to be part of a public protest. “If 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.”
This rule of law exempting all commercial speech from the First Amendment’s protections remained, more or less unchallenged, for several years, even as other categories of unprotected speech, such as obscenity Miller v. California (1973)) and libel (New York Times Co. v. Sullivan (1964)), were recognized by the Supreme Court to have some First Amendment protections. At the time, however, the “commercial-speech doctrine” did not even have a name. The term “commercial speech” itself was not used in a judicial opinion until 1971, as Alex Kozinski and Stuart Banner have noted.
Commercial speech receives constitutional protection
Soon after the commercial-speech doctrine got a name, the Supreme Court overturned the Valentine ruling. In 1973 in Pittsburgh Press Co. v. Pittsburgh Commission on Human Relations, the Court acknowledged that citing the Valentine decision was not a sufficient answer to a challenge to a government regulation of advertising of an illegal product — gender-specific employment advertising. Two years later, in Bigelow v. Virginia (1975), the Court narrowed the Valentine holding further, refusing to recognize any “sweeping” per se exception from First Amendment protections for so-called commercial speech. In Bigelow, the Court struck down a Virginia statute that prohibited advertisements of abortions (at the time of the judgment legal in New York but not Virginia), and suggesting that “speech is not stripped of First Amendment protection” merely because it appears in the form of a paid commercial advertisement.
Then, in 1976, in Virginia Pharmacy Bd. v. Virginia Consumer Council, the Court struck down a Virginia statute that outlawed price advertising by pharmacists. The Court, in an opinion by Justice Harry Blackmun, ruled that such state attempts at regulation of commercial speech were “highly paternalistic” and reasoned that “people will perceive their own best interests if only they are well enough informed and ... the best means to that end is to open the channels of communication, rather than to close them.” Even so, the Court was reluctant to guarantee full protection for advertising and acknowledged that there were “commonsense differences” between advertising and other speech, which may make it “less necessary to tolerate inaccurate statements for fear of silencing the speaker.”
In the following years, the Court considered other commercial-speech issues, and slowly developed a new doctrine that recognized the First Amendment interests inherent in advertising. For example, in 1977 in Carey v. Population Services International, the Court applied the Virginia Pharmacy rule to strike down a New York ban on the advertising of nonprescriptive contraceptives, noting that “the fact that protected speech may be offensive does not justify its suppression.” That same year, in Linmark Associates, Inc. v. Township of Willingboro, the Court ruled that a blanket residential real estate advertising restriction, even if it was designed to prevent “white flight” in city neighborhoods, violated the First Amendment because such a restriction was not limited to false or misleading advertising.
Initial battles over expanding commercial-speech rights
The Supreme Court soon launched itself into the thicket of commercial-speech regulation — at the core of which were long-established restrictions on commercial speech (and on competition) — under the guise of professionalism.
In 1977 in Bates v. State Bar of Arizona, the Court ruled that a “complete suppression” of lawyer advertising could not be sustained under the First Amendment.
The following year, in Ohralik v. Ohio State Bar Association and In re Primus, the Court attempted to distinguish between ambulance-chasing and ACLU agitation, by permitting restrictions on solicitation in one case but denying them in the other. Arguments supporting a “professionalism” exception to the First Amendment died hard, however — the Court was faced with the same basic issues in connection with optometrist advertising in Friedman v. Rogers (1979); lawyer advertising in In re R.M.J. (1982), Zauderer v. Office of Disciplinary Counsel (1985), Shapero v. Kentucky Bar Association (1988), Peel v. Attorney Disciplinary Commission of Illinois (1990), and Florida Bar v. Went for It, Inc. (1995); accountant advertising in Edenfield v. Fane (1993) and Ibanez v. Florida Dept. of Business & Professional Regulation Board (1994); and “compounding druggists" advertising in Thompson v. Western States Medical Center (2002).
Also in 1978, the Supreme Court faced directly the important issue of whether a corporation had a First Amendment right to freedom of speech on political issues of economic interest to the corporation. The case involved a corporation’s efforts to challenge a state tax that affected the profitability of its operations, and in 1978 in First National Bank of Boston v. Bellotti, the Court concluded that such expression — even on behalf of corporations and even if apparently motivated by commercial self-interest — was fully protected by the First Amendment.
Commercial-speech doctrine crystallizes: Central Hudson test
Next, the justices considered another highly regulated group of companies (utilities) and developed a coherent test for commercial speech, which remained. In its 1980 decision in Central Hudson Gas & Electric Corp. v. Public Service Comm’n., the Court developed a balancing test for commercial-speech regulations.
In the Central Hudson case, the Court struck down a New York regulatory ban on promotional advertising by public utilities. The Central Hudson test, which remains the rule today, is a version of the 1968 United States v. O’Brien test for determining the constitutionality of content-neutral state regulations affecting speech or expression (in O’Brien, the Court endorsed penalties for draft-card burnings). Under Central Hudson, a government restriction on advertisements or other commercial speech is permissible only on a showing that (1) the advertising is misleading, (2) the government interest in regulation is substantial, (3) the regulation directly advances that interest, and (4) the regulation is not more extensive than necessary. Justice Lewis Powell justified this different test because of the inherent “hardiness” of commercial speech.
Commercial vices, wobbling cases: Court weaves, bobs
The “Age of Anxiety” followed for several years, as the Court worked out the implications of the commercial-speech doctrine, as detailed by Robert Sack and Cameron DeVore. The result was a cacophony of conflicting decisions.
In part, the problem was prompted by resistance, by some members of the Court, to the full implications of the commercial-speech doctrine, resulting in narrow rulings that weaved back and forth. For example, advertising regulation is often justified because such advertisements are allegedly blight, visual pollution. Thus, in 1981 in Metromedia, Inc. v. City of San Diego, which struck down a partial ban on outdoor advertising allegedly justified by traffic safety concerns, the Court’s scattered opinions produced what then Justice William Rehnquist called a “virtual Tower of Babel.” The regulations allowed certain commercial advertising, but banned all noncommercial displays.
In a later outdoor-advertising case, City Council v. Taxpayers for Vincent (1984), the Court upheld a broad ban of commercial and noncommercial advertising on city-owned property, including utility poles, supported by aesthetic grounds, concluding that the proffered justification was not a mere pretext and instead directly advanced a substantial governmental interest. In 1993 in City of Cincinnati v. Discovery Network, the Court struck down a ban on commercial news racks, citing lack of a “reasonable fit” between the ends and means of the city ordinance.
Another factor aggravating judicial anxiety was the fact that many of the commercial-speech cases forced the Court to wade into the constitutionality of governmental restrictions on so-called “vice” advertising — efforts to outlaw or restrict advertisements related to gambling, liquor, condoms, and other products associated with so-called “vices” that had been traditionally subject to extensive government regulation under the states’ police powers. The Court, still uncomfortable with the extensive (and very strongly pro-market) implications of its recent extension of First Amendment protection to commercial speech, shifted back and forth inconsistently. (At one point, the Court was faced with a state ban on advertisements relating to a more modern and insidious vice, the Tupperware party, which it upheld in Board of Trustees, State Univ. of New York v. Fox (1989).)
The Court soon recognized that vice-advertising restrictions were little different from the professionalism cases, and that many restrictions on advertising, which the states had sought to justify on moral grounds, were in fact prompted by anticompetitive forces that had insinuated themselves into the machinery of government regulation — in Bolger v. Youngs Drug Products Corp. (1983) striking down federal postal regulations outlawing mailed condom advertisements; in Posadas de Puerto Rico Associates v. Tourism Co. of Puerto Rico (1986) allowing Puerto Rico (which allowed casino gambling) to ban casino advertisements directed at Puerto Ricans; in Frank v. Minnesota Newspaper Association, Inc. (1989), the Court vacated as moot an apparent federal ban on news and editorials about lotteries; in United States v. Edge Broadcasting Co. (1993), the Court rejected an attack on a federal statute that prohibited broadcasters licensed in non-lottery states to accept advertising about legal lotteries in other states; in Rubin v. Coors Brewing Co. (1995), it struck down a federal prohibition on identifying alcohol content on beer bottles; in 44 Liquormart v. Rhode Island (1996) it ruled that a state ban on advertising the price of alcoholic beverages was a violation of the First Amendment; and in Greater New Orleans Broadcasting Association v. United States (1999), the Court unanimously reversed a lower court decision upholding a federal law banning broadcast advertising of casino gambling.
Final consolidation: Even big tobacco’s commercial speech protected
With Greater New Orleans Broadcasting, the Court’s commercial-speech jurisprudence has solidified, into a steadfast First Amendment principle — with the Central Hudson test requiring government to justify, with real evidence, any limitations on commercial speech or advertising. But there remained one final hurdle — tobacco, a legal product established by decades of scientific evidence to be both unhealthy and addictive.
But, in 2001 in Lorillard Tobacco Co. v. Reilly/Altadis U.S.A. Inc. v. Reilly, the Court ruled that comprehensive Massachusetts restrictions on tobacco advertising were unconstitutional under the Central Hudson test. While the state insisted that its regulations would deter underage smoking, the Court emphasized that this “theory” was no substitute for evidence showing that the regulations directly and materially advanced the state’s goal.
Current Constitutional trends: ‘creeping’ commercial speech
By 2002, 60 years after F.J. Chrestensen lost his battle with the New York police, constitutional protection for commercial speech, guided by the Central Hudson rule, is firmly established. But the paternalism decried by Justice Blackmun in 1976 takes many forms. New restrictions on freedom of speech, presenting new dangers for the commercial-speech doctrine, now threaten.
Today, the main danger to First Amendment rights in this context comes not so much from direct government regulations but from private litigants seeking to ignore First Amendment rules by arguing that their opponents’ statements are mere “commercial speech.” With the commercial-speech doctrine still ensconced in First Amendment law as a narrow exception to freedom of speech, several lawsuits have sought to expand the doctrine in order to impose free- speech liability on defendants for commentary on newsworthy matters and discussion of matters of public concern.
Several lower court decisions have endorsed this strategy, by expanding the commercial-speech doctrine beyond its traditional definitions and, in effect, moving the constitutional goalposts. For example, in World Wrestling Entertainment Federation, Inc. v. Bozell (2001), the U.S. District Court for the Southern District of New York refused to dismiss a Lanham Act lawsuit brought by a sports entertainment company against some “self-proclaimed ‘media monitors’” who had criticized the wrestling program claiming it had caused the deaths of several children because of other children's “copycatting” what they saw on television. The court held that the statements were commercial speech "[b]ecause defendants’ statements were part of a campaign to raise money and notoriety” for their organization.”
A similar result was reached by the 5th U.S. Circuit Court of Appeals in Procter & Gamble Co. v. Amway Corp. (2001), where the court ruled that, if an economic motivation can be found for the defendant’s speech, then various statements accusing P&G of Satanism could be deemed to be “commercial speech” and strict liability would be imposed under the Lanham Act for their transmission, without regard to the usual First Amendment requirements of actual malice or negligence that the Supreme Court has imposed as a constitutional floor for defamation liability.
Finally, in May 2002, the California Supreme Court decided Kasky v. Nike, Inc., and sought to broaden the commercial-speech exception in order to penalize Nike for its assertive defense, in newspapers, television and other publications, of the value of “globalization” and for its rebuttal of specific charges made by anti-globalization activists against its overseas suppliers’ labor practices. The plaintiff, Marc Kasky, claimed that First Amendment protections did not apply because Nike’s publications were merely “commercial speech,” and the California court agreed (4-3) with Kasky. The court ruled that, because Nike’s statements in its press releases and letters to influential media entities were designed, at least in part, to protect the company’s profitability, the publications were “commercial speech.”
These decisions dramatically expand the scope of communication that qualifies as “commercial speech” by rejecting the generally accepted definition of commercial speech — that is, “speech that does no more than propose a commercial transaction,” as stated in Pittsburgh Press Co. v. Pittsburgh Commission on Human Relations (1973) (emphasis added). Therefore, on Oct. 14, 2002, Nike filed a petition for certiorari with the U.S. Supreme Court. The Court heard arguments in the case in April 2003, but announced on June 26 that it should not have taken the case, Nike v. Kasky, clearing the way for Kasky to proceed with his lawsuit.
The “commercial-speech” cases demonstrate, if nothing else, the truth in James Madison’s observation, in The Federalist No. 10, that the American republic would be built, and would survive, by embracing a clash of “interest” and “faction.” Extending constitutional protection to commercial speech simply recognizes that the “interested self — that ‘most powerful impulse of the human breast’” is the “adhesive force in this dynamic busy society.” Battles over commercial speech have thus involved whether one “interest” (in gaining the levers of governmental power) can effectively silence or punish a competing “interest” simply by arguing that the expression at issue is “interested” because it has a commercial nexus.
In recent years, the Supreme Court has repeatedly prevented such interest groups from blocking their opponents’ free speech merely by appealing to “commercial speech” as a talisman. Its failure to rule in Nike v. Kasky appears to reflect more of a technical, procedural concern than any substantive change of sentiment on commercial speech.