Commercial speech has been uniquely categorized in American law. In fact, this process of splitting speech into various categories has been a hallmark of American Constitutional jurisprudence. Pulling from both British common law and more modern doctrines, the Supreme Court has established a rather complex hierarchy of under-protected categories of speech. As a result, commercial speech has been subject to a much greater amount of regulation than its more-protected forms. This essay examines the doctrine’s foundation and also its future in light of more recent cases.

Our first inquiry is what is meant by the term “Commercial Speech”? The doctrine, as we are familiar with today, originated with Central Hudson v. Public service Commission of New York. The issue in this case was whether the state could constitutionally prohibit Central Hudson (an electric-company) from advertising the use of electricity in an attempt to curb energy usage. Much of the debate in revolved around the economic interests of the state of New York in maintaining the supply of electricity for its citizens. In order to protect supply (and by extension, the interests of the public at large), the city had created a restriction on Hudson’s ability to advertise energy use. The state’s economic interests were considered substantial enough to warrant the suppression of Central Hudson’s First Amendment protections.

The Court broadly defined Commercial Speech as anything that either “proposes a commercial transaction or [was] related solely to the economic interest of the speaker and the speaker’s audience”¬ù. The Court then developed a 4 part test for determining whether commercial speech receives first amendment protection. First, the speech must concern lawful activity and not be misleading. Next, the asserted governmental interest must be substantial. If these tests are met, the court then applies intermediate scrutiny–applied asking whether the governmental interest is directly advanced, and whether it is more extensive than necessary.
The Central Hudson test is, in the broad scope of things, a very modern development in first Amendment Jurisprudence. Early cases such as Chrestensen2 and Pittsburgh Press3 held that purely commercial speech does not get any First Amendment protection. It was not until Bigelow v. Virginia4 that the Supreme Court recognized first Amendment protections for Commercial Speech. In this case, Bigelow, a Virginia Newspaper Editor, was charged with violating a statute that prohibited advertisements aimed at encouraging women to get low-cost abortions. In a complete round-a-bout, the court found that Commercial Speech does not wholly lose its first amendment protection merely because it is Commercial Speech.5
A state cannot foreclose the exercise of constitutional rights by mere labels. Regardless of the particular label asserted by the state–whether it calls speech “commercial” or “commercial advertising” or “solicitation”–a court may not escape the task of assessing the First Amendment interest at stake and weighing it against the public interest allegedly served by the regulation?¢‚Ǩ¬¶ The relationship of speech to the marketplace of products or of services does not make it valueless in the marketplace of ideas.
This is fantastic. In an instant, Commercial Speech was transformed from something worth no more than the product it displayed to an indispensable and invaluable element of Democracy. Unbelievable! What was once considered only “solicitation” is now a public service allowing the marketplace of ideas to function more efficiently.?Ç Finally, What I find particularly interesting about Bigelow is that the larger issues of privacy and abortion, which were certainly on the minds of the Justices at the time (Roe v. Wade was decided just 2 years earlier) might have indirectly affected the development of the Commercial Speech doctrine.6
As one reads the many opinions about this doctrine, I think it is fair to say there is a certain unease with its scope. How does it apply to a business’ political statements? Is it only applicable to point-of-sale speech or does it cover a wider array of speech that simply benefits a company’s economic interests? As corporations have evolved from small town-shops to multinational corporations, it has become harder to support the idea that they speak only with an intent to sell a good or service. Statements on issues such as labor, trade, and health care have nothing necessarily to do with a ?¢‚Ǩ?ìcommercial transaction?¢‚Ǩ¬ù, but rather deal with managerial decisions and public policy issues. As one reads Nike v. McClaskey, it becomes clear that the doctrinal limits of the doctrine are very much in question.
The issue in Nike was whether Nike’s false statements about its labor practices, issues of “public debate”, deserved greater first amendment protection because of their quazi-public nature. Nike was sued under a California Unfair Competition law because of false statements made by Nike in a number of public outlets (including newspaper editorials, press releases, etc.) regarding its labor practices.¬† Nike’s position was that issues of labor practice and working conditions at its factories were issues of public concern and therefore Nike’s speech warranted higher First Amendment protection.?Ç Although the Supreme Court ultimately did no more than dismiss the writ of certiorari, Justice Breyer’s dissent wrestles with the limits of the doctrine.?Ç In addressing the dual nature of Nike’s speech, he found the non-commercial characteristics to be “inextricably intertwined”¬ù with the commercial elements. He noted that the non-commercial elements in question were designed for a “diverse audience” concerning “a matter that is of significant public interest and active controversy.”
What seems to be happening with the Court is a dawning realization that the Commercial Speech Doctrine is too inflexible.?Ç It paints with broad strokes and encompases certain types of political speech that would otherwise be protected. After all, isn’t the large majority of purely political speech centered around economic issues? Why exclude corporations from engaging the American public on matters of public concern??Ç I certainly cannot think of any pressing reason to keep Nike’s opinions from the public sphere, and I think Breyer would agree with me. Whatever the value the doctrine has in regulating commercial transactions, it fails to carry logical, historical, or constitutional weight when applied to political speech by commercial organizations. Businesses are, after all, organized groups of individuals who have similar interests in mind. To prohibit them from speaking on public issues is certainly contrary not only to the purpose of the Amendment’s drafters, but also to contemporary concepts of free society.

Tags: featured, First Ammendment, law school

This entry was posted on Sunday, April 22nd, 2007 at 9:50 am and is filed under Constitution, Law. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.