This material is extracted from Analysis and Interpretation: Annotations of Cases Decided by the Supreme Court of the United States, 1992 edition, pages 1113-1118, with 1996 updates added. The entire original document is available on the web at

Governmental Regulation of Commercial Speech

As in the previous section, the governmental regulations here considered may have only the most indirect relation to freedom of expression, or may clearly implicate that freedom even though the purpose of the particular regulation is not to reach the content of the message. First, however, the judicially-formulated doctrine distinguishing commercial expression from other forms is briefly considered.

Commercial Speech.--In recent years, the Court's treatment of ``commercial speech'' has undergone a transformation, from total nonprotection under the First Amendment to qualified protection. The conclusion that expression proposing a commercial transaction is a different order of speech was arrived at almost casually in Valentine v. Chrestensen,1 in which the Court upheld a city ordinance prohibiting distribution on the street of ``commercial and business advertising matter,'' as applied to an exhibitor of a submarine who distributed leaflets describing his submarine on one side and on the other side protesting the city's refusal of certain docking facilities. The doctrine was in any event limited to promotion of commercial activities; the fact that expression was disseminated for profit or through commercial channels did not expose it to any greater regulation than if it were offered for free.2 The doctrine lasted in this form for more than twenty years.

``Commercial speech,'' the Court has held, is protected ``from unwarranted governmental regulation,'' although its nature makes such communication subject to greater limitations than can be imposed on expression not solely related to the economic interests of the speaker and its audience.3 Overturning of this exception in free expression doctrine was accomplished within a brief span of time in which the Justices haltingly but then decisively moved to a new position. Reasserting the doctrine at first in a narrow five-to-four decision, the Court sustained the application of a city's ban on employment discrimination to bar sex-designated employment advertising in a newspaper.4 Granting that speech does not lose its constitutional protection simply because it appears in a commercial context, Justice Powell, for the Court, found the placing of want-ads in newspapers to be ``classic examples of commercial speech,'' devoid of expressions of opinions with respect to issues of social policy; the ad ``did no more than propose a commercial transaction.'' But the Justice also noted that employment discrimination, which was facilitated by the advertisements, was itself illegal.5

Next, the Court overturned a conviction under a state statute making it illegal, by sale or circulation of any publication, to encourage or prompt the obtaining of an abortion, as applied to an editor of a weekly newspaper who published an advertisement announcing the availability of legal and safe abortions in another State and detailing the assistance that would be provided state residents in going to and obtaining abortions in the other State.6 The Court discerned that the advertisements conveyed information of other than a purely commercial nature, that they related to services that were legal in the other jurisdiction, and that the State could not prevent its residents from obtaining abortions in the other State or punish them for doing so.

Then, all these distinctions were swept away as the Court voided a statute declaring it unprofessional conduct for a licensed pharmacist to advertise the prices of prescription drugs.7 Accepting a suit brought by consumers to protect their right to receive information, the Court held that speech that does no more than propose a commercial transaction is nonetheless of such social value as to be entitled to protection. Consumers' interests in receiving factual information about prices may even be of greater value than political debate, but in any event price competition and access to information about it is in the public interest. State interests asserted in support of the ban, protection of professionalism and the quality of prescription goods, were found either badly served or not served by the statute.8

Turning from the interests of consumers to receive information to the asserted right of advertisers to communicate, the Court voided several restrictions. The Court voided a municipal ordinance which barred the display of ``For sale'' and ``Sold'' signs on residential lawns, purportedly so as to limit ``white flight'' resulting from a ``fear psychology'' that developed among white residents following sale of homes to nonwhites. The right of owners to communicate their intention to sell a commodity and the right of potential buyers to receive the message was protected, the Court determined; the community interest could have been achieved by less restrictive means and in any event could not be achieved by restricting the free flow of truthful information.9 Similarly, deciding a question it had reserved in the Virginia Pharmacy case, the Court held that a State could not forbid lawyers from advertising the prices they charged for the performance of routine legal services.10 None of the proffered state justifications for the ban was deemed sufficient to overcome the private and societal interest in the free exchange of this form of speech.11 Nor may a state categorically prohibit attorney advertising through mailings that target persons known to face particular legal problems,12 or prohibit an attorney from holding himself out as a certified civil trial specialist13, or prohibit a certified public accountant from holding herself out as a certified financial planner.28 However, a State has been held to have a much greater countervailing interest in regulating person-to-person solicitation of clients by attorneys; therefore, especially since in-person solicitation is ``a business transaction in which speech is an essential but subordinate component,'' the state interest need only be important rather than compelling.14

The Court later refused, however, to extend this principle to in-person solicitation by certified public accountants, explaining that CPAs, unlike attorneys, are not professionally ``trained in the art of persuasion,'' and that the typical business executive client of a CPA is ``far less susceptible to manipulation'' than was the accident victim in Ohralik.29 To allow enforcement of such a broad prophylactic rule absent identification of a serious problem such as ambulance chasing, the Court explained, would dilute commercial speech protection ``almost to nothing.''30

Moreover, a statute prohibiting the practice of optometry under a trade name was sustained because there was ``a significant possibility'' that the public might be misled through deceptive utilization of the same or similar trade names.15 But a state regulatory commission prohibition of utility advertisements ``intended to stimulate the purchase of utility services'' was held unjustified by the asserted interests in energy consumption and avoidance of subsidization of additional energy costs by all consumers.16

While commercial speech is entitled to First Amendment protection, the Court has clearly held that it is not wholly undifferentiable from other forms of expression; it has remarked on the commonsense differences between speech that does no more than propose a commercial transaction and other varieties.17 The Court has developed a four-pronged test to measure the validity of restraints upon commercial expression.

Under the first prong of the test as originally formulated, certain commercial speech is not entitled to protection; the informational function of advertising is the First Amendment concern and if it does not accurately inform the public about lawful activity, it can be suppressed.18

Second, if the speech is protected, the interest of the government in regulating and limiting it must be assessed. The State must assert a substantial interest to be achieved by restrictions on commercial speech.19

Third, the restriction cannot be sustained if it provides only ineffective or remote support for the asserted purpose.20

Instead, the regulation must ``directly advance'' the governmental interest. The Court resolves this issue with reference to aggregate effects, and does not limit its consideration to effects on the challenging litigant.31

Fourth, if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restriction cannot survive.21 The Court has rejected the idea that a ``least restrictive means'' test is required. Instead, what is now required is a ``reasonable fit'' between means and ends, with the means ``narrowly tailored to achieve the desired objective.''22

The ``reasonable fit'' standard has some teeth, the Court made clear in City of Cincinnati v. Discovery Network, Inc.,32 striking down a city's prohibition on distribution of ``commercial handbills'' through freestanding newsracks located on city property. The city's aesthetic interest in reducing visual clutter was furthered by reducing the total number of newsracks, but the distinction between prohibited ``commercial'' publications and permitted ``newspapers'' bore ``no relationship whatsoever'' to this legitimate interest.33 The city could not, the Court ruled, single out commercial speech to bear the full onus when ``all newsracks, regardless of whether they contain commercial or noncommercial publications, are equally at fault.''34 On the other hand, the Court upheld a federal law that prohibited broadcast of lottery advertisements by a broadcaster in a state that prohibits lotteries, while allowing broadcast of such ads by stations in states that sponsor lotteries. There was a ``reasonable fit'' between the restriction and the asserted federal interest in supporting state anti-gambling policies without unduly interfering with policies of neighboring states that promote lotteries.35 The prohibition ``directly served'' the congressional interest, and could be applied to a broadcaster whose principal audience was in an adjoining lottery state, and who sought to run ads for that state's lottery.36

In a 1986 decision the Court asserted that ``the greater power to completely ban casino gambling necessarily includes the lesser power to ban advertising of casino gambling.''37 Subsequently, however, the Court has eschewed reliance on Posadas,38 and it seems doubtful that the Court would again embrace the broad principle that government may ban all advertising of an activity that it permits but has power to prohibit. Indeed, the Court's very holding in 44 Liquormart, Inc. v. Rhode Island,39 striking down the State's ban on advertisements that provide truthful information about liquor prices, is inconsistent with the general proposition. A Court plurality in 44 Liquormart squarely rejected Posadas, calling it ``erroneous,'' declining to give force to its ``highly deferential approach,'' and proclaiming that a state ``does not have the broad discretion to suppress truthful, nonmisleading information for paternalistic purposes that the Posadas majority was willing to tolerate.''40 Four other Justices concluded that Posadas was inconsistent with the ``closer look'' that the Court has since required in applying the principles of Central Hudson.41

The ``different degree of protection'' accorded commercial speech has a number of consequences. Somewhat broader times, places, and manner regulations are to be tolerated.42 The rule against prior restraints may be inapplicable,43 and disseminators of commercial speech are not protected by the overbreadth doctrine.44

Different degrees of protection may also be discerned among different categories of commercial speech. The first prong of the Central Hudson test means that false, deceptive, or misleading advertisements need not be permitted; government may require that a commercial message appear in such a form, or include such additional information, warnings, and disclaimers, as are necessary to prevent deception.45 But even truthful, non-misleading commercial speech may be regulated, and the validity of such regulation is tested by application of the remaining prongs of the Central Hudson test. The test itself does not make further distinctions based on the content of the commercial message or the nature of the governmental interest (that interest need only be ``substantial''). Recent decisions suggest, however, that further distinctions may exist. Measures aimed at preserving ``a fair bargaining process'' between consumer and advertiser46 may be more likely to pass the test47 than regulations designed to implement general health, safety, or moral concerns.48 As the governmental interest becomes further removed from protecting a fair bargaining process, it may become more difficult to establish the absence of less burdensome regulatory alternatives and the presence of a ``reasonable fit'' between the commercial speech restriction and the governmental interest.49

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