Chapter 14- Advertising
Time, place, and/or manner restrictions
Laws regulating conduct with only an incidental effect on speech
Content-based laws that regulate unprotected speech
Speech that incites imminent unlawful conduct (e.g., fighting words)
Misleading or deceptive speech (e.g., fraud)
Speech integral to crime (proposing or conspiring to commit crime)
First Amendment does not protect false, misleading, or deceptive speech
First Amendment protects commercial speech about legal activities that is not false, misleading, or deceptive
Free flow of information is “indispensable to the proper allocation of resources in a free enterprise system”
2.Does the government have a “substantial interest” in regulating the speech?
3.Does the government regulation advance the government’s interest in “a direct and material way”?
4. Is the government regulation no more extensive than necessary to serve the government’s interest?
Is the regulation a “reasonable fit” that is “narrowly tailored” to the government’s interest?
The Lanham Act (federal statute) prohibits commercial advertising that contains false or misleading descriptions or representations of fact that misrepresent the nature, qualities, or characteristics of goods, services, or commercial activities
FTC focuses on national advertising, advertising that involves a pattern of deception, and advertising that could affect consumer safety or cause widespread injury
FTC defines false and misleading advertising as any
Representation, omission, or practice that is likely to mislead consumers and
is material (i.e., likely to affect the consumer’s decision)
“Puffery” (exaggerated sales talk that a reasonable person wouldn’t take seriously) is not false advertising
FTC uses both preventive and corrective measures
Trade regulation rules
Cease and desist orders
Permits marketers to send unsolicited commercial email if it adheres to three types of compliance:
Visible and operable “unsubscribe” mechanism present in email
Consumer opt-out requests honored within 10 days
Accurate, non-deceptive “from” and “subject” lines
Legitimate physical address of the publisher and/or advertiser
“Sexually explicit” label if the content is adult
3.Sending Behavior Compliance
Message cannot be sent to a harvested email address and cannot contain false header information
1.emails to existing customers or persons who have inquired about the sender’s products or services;
2. religious and political messages;
3. content complying with marketing mechanisms specified by law;
4. and national security messages
Prohibits sending commercial emails 10 days after opt-out request, and selling or transferring an email address after an opt-out request
Requires unsubscribe mechanism to process opt-out requests for at least 30 days
Requires FTC to promulgate rules to shield consumers from unwanted cell phone spam
Preempts state anti-spam laws that do not deal with fraud, and prevents states from enacting stronger anti-spam protections
Enforcement by FTC, state attorneys general, Internet Service Providers, and other federal agencies for special categories of spammers
Prohibits consumers from suing spammers
Prohibits transmitting ads by facsimile without first obtaining the recipient’s permission
Enforced by Federal Communications Commission (FCC)
Provides a private claim in state court to recover actual damages or $500/violation, whichever is greater, and trebled if the violation was willful or knowing
Allows consumers to register a phone number to prevent telemarketing calls for 5 years
Applies only to residential lines, not business
Exempts calls from:
Callers with an existing relationship to the person called (up to 18 months after last business contact);
companies the person has submitted an application or inquiry to (for up to three months); and
creditors and collection agencies
FTC regulations require products advertised as “made in the USA” to be “all or virtually all” made in the USA
Products with more than negligible foreign content, processing, or labeling must identify percent of US content or acknowledge foreign content
Other federal regulations requiring imported goods to be marked with their country of origin are enforced by the U.S. Customs Service
Prohibits marketers from using exaggerated or misleading claims about the environmental benefits of products, services, or packaging
Requires claims about the environmental benefits of products, services, or packaging to be specific and substantiated
Requires consumer product labels to identify the product, net quantity and contents, and the manufacturer, packager, and distributor
Flammable Fabrics Act
Sets safety standards for flammable fabrics and clothing
Federal Cigarette Labeling and Advertising Act
Requires specific warnings on cigarette packaging and related advertising, and bans advertising on television and radio
Smokeless Tobacco Health Education Act of 1986
Requires specific health warnings on chewing tobacco packaging and related advertising, and bans advertising on television and radio
Wool Products Labeling Act
Requires most wool and textile products to be labeled as to fiber content, country of origin, and identity of manufacturer or other business responsible for marketing or handling the product
the government may regulate advertising for unlawful goods and services
Even truthful, honest advertising for legal goods and services may be regulated if the government:
shows a substantial state interest justifies the regulation
demonstrates that the regulation directly advances the claimed interest
attempts to achieve a reasonable fit between the claimed interest and the regulation
we examine the practice from the perspective of a consumer acting reasonably in the circumstances.
the representation, omission or practice must be a “material” one. the basic question is whether the act or practice is likely to affect the consumer’s conduct or decision with regard to a product or service
Synopsis of Rule of Law. This case established a four-part analysis for commercial speech cases. (1) Whether the expression is protected by the First Amendment of the United States Constitution (Constitution). To be protected, it must concern lawful activity and not be misleading. (2) Whether the asserted governmental interest is substantial. If both part one and part two are satisfied then (3) A court must determine whether the regulation directly advances the governmental interest asserted. (4)Whether it is not more extensive than is necessary to serve that interest.
Facts. In December 1973, the Appellee ordered electric utilities in New York State to cease all advertising that promotes the use of electricity. The Appellee based this regulation on a finding that the interconnected utility system in New York State does not have sufficient fuel stocks to continue furnishing all customer demands for the 1973-74 winter. In 1976, the fuel shortage ended, causing the Appellee to request public comment on its proposal to continue the ban on advertising. The Appellant opposes the ban on First Amendment constitutional grounds and filed this suit after the Appellee decided to continue the ban. The 1976 order from the Appellee was that information advertising, used to encourage shifts of consumption of electricity from peak use times to periods of low electricity demand would be allowed because it does not increase aggregate consumption, but would promote the leveling of demand throughout the day. The Appellee also offered to review specific proposals by co
mpanies to determine if their advertisement meets this criterion. The Appellant challenged this order in state court, arguing that the Appellee restrained commercial speech in violation of the First and Fourteenth Amendments of the Constitution. The Appellee’s order was upheld in the trial court, by the appellate level and by the New York Court of Appeals.
Issue. Whether a regulation of the Appellee of the State of New York violates the First and Fourteenth Amendments of the Constitution because it completely bans promotional advertising by an electrical utility?
Held. Yes. The Appellee’s ban is unconstitutional even though the United States Constitution (Constitution) accords a lesser protection to commercial speech than to other constitutionally guaranteed expression. The protection available for particular commercial expression turns on the nature both of the expression and of the governmental interests served by the regulation. There is a four-part analysis for commercial speech cases. (1) Whether the expression is protected by the First Amendment of the Constitution. To determine if it is protected, the speech must concern lawful activity and not be misleading. (2) Whether the asserted governmental interest is substantial. If both parts one and part two are satisfied then (3) A court must determine whether the regulation directly advances the governmental interest asserted. (4)Whether it is not more extensive than is necessary to serve that interest.
Under this four-part analysis the Supreme Court of the United States (Supreme Court) found that the advertising is commercial speech protected by the First Amendment of the Constitution. The Supreme Court found that the state interest in suppressing the use of energy is substantial. The Supreme Court also found a direct link between the state interest in conservation and the Appellee’s order as there is a connection between advertising and demand for electricity. This lead the Supreme Court to consider whether the complete suppression is more extensive than what is necessary. The Supreme Court in this case determined that the Apellee has not shown that it could not protect its interest in energy conservation through a less restrictive means. For example, providing information in its advertisement about the relative efficiency and expense of its offered service. Therefore since there is a less restrictive means available, the restriction by the Appellant is an unconstitutional restri
ction of free speech.
Dissent. The Supreme Court’s decision fails to give due deference to the subordinate position of commercial speech. The dissenting judge feels the court has gone back to the days of Lochner, feeling that it can strike down regulations of a State through its own notions of what is the most appropriate means of regulation.
Doubts whether suppression of information concerning the availability and price of a legally offered product is ever a permissible way for the State to dampen demand for or use of the product. But, agrees with the majority that even though commercial speech is involved, it is protected by the First Amendment of the Constitution. In fact, the Appellee’s ban is a covert attempt by the State to manipulate the choices of its citizens, not by persuasion or direct regulation, but by depriving the public of the information needed to make a free choices.
Another concurring judge argued that this is not a commercial speech case. Therefore, they see no need to decide whether the four-part analysis, adequately protects commercial speech – as properly defined – in the face of a blanket ban of speech of the sort involved in this case.
Discussion. This case is most significant because it clearly provides a four-part test to be used in cases involving commercial speech. The Supreme Court in this case also provides a clear use of this test through its analysis. This case builds on the definition of commercial speech provided in Virginia State Board of Pharmacy. That case defined commercial speech as expression related solely to the economic interests of the speaker and its audience, which is to be used to determine whether or not part one of the test in this case is satisfied. Part two of the test, looks at whether the State’s interest is substantial and is similar to all other First Amendment analysis, except as stated in this case and Virginia State Board of Pharmacy, the state possess an elevated standard of interest in regulating commercial speech, as does part three determining whether the regulation furthers the interest. This leads to part four of the test, where it seems most commercial speech cases will be decided. In part four once again, as is with most First Amendment expression cases, e.g. obscenity cases, the Supreme Court will on a case-by-case basis determine if there was a less restrictive means of regulation. If a less restrictive means is available to achieve the same goal, the answer will always necessarily strike down the regulation as unconstitutional.
The Court held that the law violated the First Amendment and affirmed the judgment of the Court of Appeals.
The first finding of the Court was that the law placed content and speaker based restrictions on speech.[D] Citing Cincinnati v. Discovery Network, Inc., the Court noted that these restrictions warranted heightened judicial scrutiny.[E]
The Court rejected Vermont’s argument that the law was only a commercial regulation and not a regulation of speech on the grounds that the law imposed more than an incidental burden on speech.[F]
The second and final finding of the Court was that Vermont did not meet its burden to justify its content-based law as consistent with the First Amendment. According to Board of Trustees, State Univ. of N. Y. v. Fox, Vermont must demonstrate that the law directly advances a substantial government interest.[G] The Court rejected Vermont’s claims that the law was necessary to protect medical privacy and achieve improved public healthcare.[H]
Justice Breyer, the author of the opinion for the dissent.
Associate Justice Stephen Breyer wrote a dissenting opinion, which Justice Ginsburg and Justice Kagan joined. Breyer argued that the law should be reviewed as an economic regulation, not under a heightened standard applied for First Amendment issues. Breyer found that the legitimate regulatory objectives outweighed the small harm done to First Amendment interests.[I] Breyer also noted that applying a strict First Amendment standard whenever a legislative program burdened speech would give judges the power to choose to undermine or support legislative efforts.[