Daniel E. Troy*
The Supreme Courts current approach to commercial speech
exemplifies the perils of balancing tests, particularly when the
right to communicate is at stake. The Courts balancing test
has produced inconsistent results and sowed confusion in the lower
courts. The lack of clarity about the rights of advertisers has
also encouraged bureaucrats and politicians to attack the commercial
speech of politically unpopular interests most dramatically
In assessing restrictions on communications that propose a commercial
transaction, the Court applies a balancing test that weighs the
competing interests of commercial speakers and government regulators.
Central Hudson Gas & Electric Co. v. Public Service Commission
of New York, 447 U.S. 557 (1980). Specifically, under the Central
Hudson test, a court must determine:
- Whether the commercial speech concerns a lawful activity and
is not misleading;
- Whether the government interest asserted to justify the regulation
- Whether the regulation "directly advances" that government
- Whether the regulation is no more extensive than necessary to
serve that interest. (In a later case, this prong of the test
was redefined as requiring only that the "fit" between
the state's goal and the challenged regulation be "reasonable.")
Central Hudson, 447 U.S. at 566.
Applying this test, the Supreme Court has often arrived at decisions
that are extremely protective of commercial speech. Most notably,
in 44 Liquormart, Inc. v. Rhode Island, 116 S.Ct. 1495 (1996), the
Supreme Court unanimously invalidated Rhode Islands restrictions
on advertising the price of alcohol. The Courts primary rationale
for doing so was that the state could have accomplished its asserted
objective of reducing temperance by restricting less speech or,
indeed, without restricting speech at all. But, despite the speech-protective
outcome of the decision, the Court continued to adhere to its Central
Hudson mode of analysis.
Two recent Fourth Circuit decisions demonstrate the perils of such
analysis, notwithstanding the outcome of 44 Liquormart and most
of the Supreme Courts decisions, which are generally protective
of commercial speech. In Penn Advertising, of Baltimore Inc. v.
Mayor and City Council of Baltimore, 63 F.3d 1305 (4th Cir. 1995),
vacated and remanded, 116 S.Ct. 1821 (1996), reaffd, 101 F.3d
325 (4th Cir. 1996), cert. denied, 1997 U.S. Lexis _____ (April
28, 1997) and in Anheuser-Busch v. Mayor and City Council of Baltimore
City, 63 F.3d 1318 (4th Cir. 1995), vacated and remanded, 116 S.Ct.
2575 (1996), reaffd, 101 F.3d 332 (4th Cir. 1996), cert. denied,
1997 U.S. Lexis 2792 (April 28, 1997), the Fourth Circuit upheld
a Baltimore ordinance banning certain advertising of tobacco and
alcohol products. The Fourth Circuit stated that Baltimores
interest in "protecting children who are not yet independently
able to assess the value of the message presented" was sufficiently
related to a ban on billboard advertising of tobacco products (except
in business and industrial areas) to meet the Central Hudson standard.
In contrast, similar ordinances have been stricken in other circuits.
See, e.g., National Advertising Co. v. Town of Babylon, 900 F.2d
551 (2d Cir. 1990) (ordinances prohibiting off-premises signs);
Ackerly Communications of Massachusetts v. City of Somerville, 878
F.2d 513 (1st Cir. 1989) (ordinance prohibiting off-premises sign
The Fourth Circuit decisions are plainly inconsistent with the
Supreme Courts commercial speech analysis following Central
Hudson. Nonetheless, the Court denied certiorari in both cases.
Thus, the subjectivity inherent in the Central Hudson balancing
test has been perpetuated and exacerbated by the Courts own
reluctance to clarify its analysis.
The Wages of Confusion
The lack of clarity that besets commercial speech jurisprudence
encourages politicians to take the chance that the courts will uphold
restrictions on advertising that appear to be politically popular.
Most notably, at the national level, the Food and Drug Administration
(FDA) (discussed below) and Federal Communications Commission (FCC)
have encroached upon commercial speech that should be protected.
Former FCC Chairman Reed Hundt seized on the Fourth Circuits
decisions, stating: "[s]urely [Anheuser-Busch] means that the
First Amendment is in no way violated by a prohibition on advertising
hard liquor on shows and in time slots when kids are likely to be
in the audience in large numbers that applies like it or
not to very late hours."
State and local lawmakers also are attempting to restrict commercial
speech about allegedly "socially harmful" products. After
the Supreme Court denied certiorari in Penn Advertising and Anheuser-Busch,
lawmakers across the country introduced similar ordinances restricting
outdoor advertising of tobacco. At least sixteen states or localities
are or have been considering bills and ordinances restricting advertising
of alcohol and/or tobacco. In many cities, lawmakers cited the Baltimore
ordinance as the impetus for bans on tobacco billboard advertising.
The FDAs Assault on Tobacco Ads
On August 28, 1996, FDA issued broad regulations to restrict the
advertising and promotion of tobacco, ostensibly to protect children
under 18. 61 Fed. Reg. 44,396, 44,615-18 (Aug. 28, 1996). Specifically,
- prohibit any use of images or colors in most
tobacco advertising (outdoor, print, direct-mail, point of sale),
limiting such advertising to black text on a white background;
- prohibit any outdoor advertising for tobacco
within 1000 feet of a public playground or an elementary or secondary
school, including signs on stores stating that they sell tobacco.
(In places such as Manhattan, this is tantamount to a ban on all
outdoor tobacco ads);
- prohibit any sponsorship of any athletic, social,
or cultural event under the name brand of a tobacco product (e.g.,
Winston Cup, Virginia Slims Tennis tournament);
- prohibit the sale or distribution of non-tobacco
merchandise bearing any tobacco brand name or logo;
- prohibit tobacco advertising in any medium not
approved by FDA, unless 30 days advance notice is provided to
the agency; and
- prohibit tobacco companies from using color or
images to advertise in any mass circulation magazine if more than
15% of the readers, or if 2 million of the readers, were minors.
This would preclude tobacco advertising in Time, Newsweek, People,
Sports Illustrated, Better Homes and Gardens, and Ebony, for example.
If the Central Hudson test were properly applied, a court should
strike down FDAs advertising restrictions as unconstitutional.
Under the third prong of the Central Hudson analysis, the government
is required to prove that an advertising restriction "directly
advances" the governments interests. It would be hard
for FDA to show that tobacco advertising in fact encourages young
people to use tobacco, and would be even harder for the government
to prove that its proposed advertising restrictions "will in
fact" reduce underage tobacco use "to a material degree."
SeeEdenfield v. Fane, 507 U.S. 761, 771 (1993).
In addition, the Supreme Court has made emphatically clear that
limits cannot be "more extensive than necessary" to serve
the governments asserted goals. Again, a court should find
FDAs rules unconstitutional under Central Hudsons fourth
prong. As 44 Liquormart makes clear, restrictions on commercial
speech are not permissible if the government could advance its goal
by means that do not involve restricting speech. Yet the government
has available to it alternatives to reduce underage tobacco use
that would not restrict speech, such as through stricter enforcement,
rules banning the possession of tobacco by those under 18, anti-smoking
educational campaigns, or licensing of tobacco retailers.
Also, the FDA has restricted more speech than is necessary to accomplish
its goals. It would be hard for FDA to demonstrate that only a ban
on images and colors in tobacco advertising (except in publications
which FDA labels adult and in adult-only venues,
as defined by FDAs rule) meets the agencys concerns
about the influence of advertising on young people; that its 1000-foot
ban on outdoor tobacco advertising is necessary; or that its total
ban on brand-name event sponsorship is essential.
Yet, because of the subjective character of the Central Hudson
test, it is not inconceivable that a court even the Supreme
Court could, notwithstanding precedent, apply the Central
Hudson test and declare that these restrictions were narrowly tailored.(1)
The point is not just that courts can be influenced by popular will
pressure to render wrong decisions. The Central Hudson experience
demonstrates that the more barriers case law provides to political
pressure, particularly by articulating clearly stated rules, the
less likely the Court will capitulate to such pressure. Clear rules
also reduce the likelihood that politicians will seek to adopt regulations
that are likely to be held unlawful. The "mushiness" of
the Courts Central Hudson analysis has galvanized the bureaucrats
and politicians, and has burdened First Amendment protected speech.
Thus, as Justice Scalia has noted, although "we will have
... balancing modes of analysis with us forever[,] ... those modes
of analysis should be avoided where possible." Scalia has correctly
observed that "balancing" tests such as the Central Hudson
analysis too easily permit judges to "mistake their own predilections
for the law." When dealing with First Amendment freedoms, "the
use of ... traditional legal categories is preferable to the sort
of ad hoc balancing that the Court" performs under the Central
Hudson analysis. See Simon and Schuster, Inc. v. New York State
Victims Crime Board, 112 S. Ct. 501, 514 (1991) (Kennedy, J., concurring).
The Supreme Court should therefore adopt a rule-based approach to
commercial speech; preferably, one that extends a full measure of
protection to commercial communications.
*Daniel E. Troy is a partner at Wiley, Rein & Fielding in Washington,
D.C. and an associate scholar at the American Enterprise Institute.
He has represented both advertising trade associations and tobacco
companies in connection with commercial speech issues.
- In April of 1997, a district court judge in
North Carolina held that, although the FDA had the power to regulate
the manufacture, sale, and distribution of tobacco products generally,
it lacked the statutory authority to restrict advertising. The
court therefore did not address the First Amendment issues. That
decision is now on appeal.