By Erik Jaffe *
The final month of the recent Supreme Court term brought the latest
installment in a series of cases incrementally advancing First Amendment
protection for commercial speech. In Greater New Orleans Broadcasting
Association, Inc. v. United States, U.S. , 119 S. Ct.
1923 (1999), The Supreme Court struck down a federal prohibition
on broadcast advertising of casino gambling as applied to broadcasters
in states where such gambling is legal. Justice Stevens wrote the
opinion for the Court joined by all but Justice Thomas (who concurred
in the judgment). Chief Justice Rehnquist wrote a concurring opinion
and Justice Thomas wrote an opinion reaching the same result for
a very different reason.
Greater New Orleans involved a challenge to 18 U.S.C. §1304,
which prohibits radio and television broadcasting of "any advertisement
of or information concerning any lottery, gift enterprise, or similar
scheme, offering prizes dependent in whole or in part upon lot or
chance." Regulations by the FCC have interpreted this prohibition
to cover advertising for gambling at privately-owned casinos. The
Court had previously upheld this prohibition as applied to advertisements
for the Virginia lottery broadcast by a radio station located in
North Carolina, which had no authorized lottery. See United States
v. Edge Broadcasting Co., 509 U.S. 418 (1993). The petitioners in
Greater New Orleans, however, sought to broadcast advertisements
only in Louisiana, for casino gambling that is lawful in Louisiana
After losing their challenge in both the Eastern District of Louisiana
and twice in the U.S. Court of Appeals for the Fifth Circuit (the
second time after a Supreme Court vacatur and remand for reconsideration
in light of the new decision in 44 Liquormart, Inc. v. Rhode Island,
517 U.S. 484 (1996)), petitioners were granted full review by the
The Supreme Court reversed the Fifth Circuit and held that petitioners'
advertisements were protected by the First Amendment. The Court
applied the much-maligned Central Hudson test for commercial speech
restrictions, which asks: (1) whether the speech concerns lawful
activity and is not misleading; (2) whether the asserted government
interest is substantial; (3) whether the regulation directly advances
the government interest asserted; and (4) whether the regulation
is not more extensive than necessary to serve that interest. New
Orleans Broadcasting, U.S. at , 119 S. Ct. at 1930
(citing Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n
of N.Y., 447 U.S. 557, 566 (1980)). The advertising restrictions
at issue failed the third and fourth parts of the test, according
to the Court, because the "operation of §1304 and its
attendant regulatory regime is so pierced by exemptions and inconsistencies
that the Government cannot hope to exonerate it." U.S.
at , 119 S. Ct. at 1933.
Accepting as substantial the claimed government interests of (1)
reducing the social costs of casino gambling and (2) assisting states
that restrict or prohibit gambling within their own borders, the
Court examined the whole of the federal regulatory scheme and found
ambivalence and contradictions that undermined any claim that the
speech restriction at issue materially advanced the two government
interests. The exemptions and loop-holes seized upon by the Court
included the exemption for advertising casino gambling run by Native
American tribes, and the allowance of ads promising "Vegas_style
excitement" so long as gambling-specific information is not
mentioned. U.S. at , 119 S. Ct. at 1933. The Court then concluded
that "[f]rom what we can gather, the Government is committed
to prohibiting accurate product information, not commercial enticements
of all kinds, and then only when conveyed over certain forms of
media and for certain types of gambling _ indeed, for only certain
brands of casino gambling _ and despite the fact that messages about
the availability of such gambling are being conveyed over the airwaves
by other speakers." Id., 119 S. Ct. at 1933.
Addressing the government's argument that tribal casino gambling
was more heavily regulated, and therefore less of a threat, the
"If such direct regulation provides a basis for believing
that the social costs of gambling in tribal casinos are sufficiently
mitigated to make their advertising tolerable, one would have thought
that Congress might have at least experimented with comparable regulation
before abridging the speech rights of federally unregulated casinos.
While Congress' failure to institute such direct regulation of private
casino gambling does not necessarily compromise the constitutionality
of §1304, it does undermine the asserted justifications for
the restriction before us."
Id. at , 119 S. Ct. at 1934.
This argument is all the more interesting for its widespread potential
application in the commercial speech context, and the Court's long
failure to give such an argument much weight in that context.
As for the interest in helping states that wish to suppress gambling,
the Court suggested that §1304 would serve that interest no
better than it served the comparable federal interest. The Court
also stated that regardless of whether state anti-gambling policies
made more sense than the patchwork federal policy, "§1304
sacrifices an intolerable amount of truthful speech about lawful
conduct when compared to all of the policies at stake and the social
ills that one could reasonably hope such a ban to eliminate."
U.S. at , 119 S. Ct. at 1935.
The Court concluded that the government "cannot overcome the
presumption that the speaker and the audience, not the Government,
should be left to assess the value of accurate and non-misleading
information about lawful conduct. Edenfield, 507 U. S., at 767.
Had the Federal Government adopted a more coherent policy, or accommodated
the rights of speakers in States that have legalized the underlying
conduct, see Edge, 509 U.S., at 428, this might be a different case.
But under current federal law, as applied to petitioners and the
messages that they wish to convey, the broadcast prohibition
violates the First Amendment." U.S. at , 119 S.
Ct. at 1935-36.
Chief Justice Rehnquist joined the opinion of the Court, but wrote
a concurrence highlighting the availability of various non-speech
forms of regulation of the gambling industry. He then added the
ambiguous sentence that "[w]ere Congress to undertake substantive
regulation of the gambling industry, rather than simply the manner
in which it may broadcast advertisements, `exemptions and inconsistencies'
such as those in §1304 might well prove constitutionally tolerable."
U.S. at , 119 S. Ct. at 1936. Whether this statement
simply reaffirms the leniency of the rational basis test as applied
to non-speech regulations, or is suggesting that there would be
greater leeway on speech regulations done in combination with substantive
regulations remains to be seen.
Justice Thomas did not join the opinion of the Court, but reached
the same result for different reasons. Rejecting application of
the Central Hudson test, Justice Thomas reaffirmed his views from
44 Liquormart that where the "`government's asserted interest
is to keep legal users of a product or service ignorant in order
to manipulate their choices in the marketplace,'
"interest" is per se illegitimate and can no more justify
regulation of "commercial speech" than it can justify
regulation of "noncommercial" speech.'" U.S.
at , 119 S. Ct. at 1936 (quoting 44 Liquormart, 517 U. S.
at 518 (Thomas, J., concurring in part and concurring in the judgment)).
Viewing this case alongside 44 Liquormart and Rubin v. Coors Brewing
Co., 514 U.S. 476 (1995) _ striking down various restrictions on
alcohol advertising _ the Court's latest commercial speech decision
is a small step simply confirming and applying the currently stricter
view of the Central Hudson test. While various statements in this
latest case titillate with the possibility of a still more speech-protective
outlook in the future, there are ample statements elsewhere that
portend more ad hoc decisions under the indeterminate Central Hudson
For example, while the Court was more vigorous in its application
of the Central Hudson test than it has been in the past, it expressly
declined to abandon that test despite quaintly recognizing the "intricacies"
_ read incoherence _ of that test, and the widespread calls for
its rejection. U.S. at , 119 S. Ct. at 1930. A cynic
might imagine that the Court is unwilling to abandon the test for
something akin to Justice Thomas's stricter approach because the
current incoherence provides few limits on the Court's future discretion
and ability to distinguish cases that are in principle no different.
Indeed, the Court's closing suggestion that a more coherent federal
policy toward gambling in general might have altered the result
in this case suggests that even the restriction in §1304 might
find new life in the future.
Similarly, while the Court recognized that 44 Liquormart rejected
one of the central premises of the earlier decision in Posadas de
Puerto Rico Associates v. Tourism Company of Puerto Rico, 478 U.S.
328 (1986), the Court mentions that case only in discussing the
first of the two Fifth Circuit decisions below. U.S. at ,
119 S. Ct. at 1929. And the Court failed to expressly overrule Posadas
_ indeed, never mentions it again _ despite that Posadas upheld
restrictions on gambling advertisements seemingly indistinguishable
from those struck down in New Orleans Broadcasting. See Posadas,
478 U.S. at 340-41 (upholding a ban on "advertising of casino
gambling aimed at the residents of Puerto Rico, [which] concerns
a lawful activity and is not misleading or fraudulent"). Indeed,
when criticizing the notion that speech regarding "vices"
may be regulated as much as the vices themselves, the Court does
not even refer to the source of that notion _ Posadas itself. See
U.S. at , 119 S. Ct. at 1934-35 ("the power to
prohibit or to regulate particular conduct does not necessarily
include the power to prohibit or regulate speech about that conduct.
44 Liquormart, 517 U. S., at 509511 (opinion of STEVENS, J.); see
id., at 531532 (O'CONNOR, J., concurring in judgment); Rubin, 514
U. S., at 483, n. 2. It is well settled that the First Amendment
mandates closer scrutiny of government restrictions on speech than
of its regulation of commerce alone. Fox, 492 U. S., at 408.").
On two other points, the Court raises interesting and potentially
promising arguments. When the Court discussed the first part of
the Central Hudson test, it made the approving observation that
the advertising at issue "would convey information _ whether
taken favorably or unfavorably by the audience _ about an activity
that is the subject of intense public debate in many communities."
U.S. at , 119 S. Ct. at 1930. The Court also noted
the messages would "benefit listeners by informing their consumption
choices and fostering price competition." Id., 119 S. Ct. at
1930. And when discussing whether the speech restriction materially
advanced the government's interests, the Court argued that "[w]hile
it is no doubt fair to assume that more advertising would have some
impact on overall demand for gambling, it is also reasonable to
assume that much of that advertising would merely channel gamblers
to one casino rather than another." Id. at , 119 S. Ct.
at 1932-33. Arguments such as these have long been made in connection
with cigarette advertising, and it will be interesting to see if
the Court's seeming approval of these arguments will ever be tested
in the context of tobacco products.
On another point of central importance to First Amendment reasoning,
however, the Court offered only a thin response that arguably does
as much harm as good. In reply to a government argument that broadcasts
originating in a pro-casino state might spill over into an anti-casino
state whose citizens would "hear it and make rash or costly
decisions," the Court said equivocally that "[t]o be sure,
in order to achieve a broader objective such regulations may incidentally,
even deliberately, restrict a certain amount of speech not thought
to contribute significantly to the dangers with which the Government
But Congress' choice here was neither a rough
approximation of efficacy, nor a reasonable accommodation of competing
State and private interests." U.S. at , 119 S.
Ct. at 1935. By seemingly accepting the underlying "objective"
of preventing citizens from hearing information that might lead
them to make decisions the government believes to be unwise, the
Court appears to sanction an argument that would normally fly in
the face of the First Amendment. This basic First Amendment point
was made in Justice Thomas's opinion, but Justice Stevens failed
to join issue on the matter.
Overall, for those favoring greater protection of commercial speech,
the New Orleans Broadcasting decision produced a positive result
that at least incrementally advanced the ball of constitutional
protections. But despite some promising sentences here and there,
the Court's failure to reject Posadas outright and by name, coupled
with the Chief Justice's concurrence and the malleability of the
Central Hudson test, provides ample caution against premature celebration
of any expected First Amendment renaissance for commercial speech.
It is simply too soon for anything more than guarded optimism and
continued wariness regarding the ad hoc nature of the Central Hudson
* Erik Jaffe is a sole practitioner concentrating in appellate litigation.
He serves as Chairman of the Advertising Law & Regulation Subcommittee
of the Free Speech & Election Law Practice Group.