Chp 12: Commercial Speech

Rubin V. Coors Brewing Co.

(1995) No disclosure of alcohol content on labels or ads for beer - didn't want brands to compete for high alcohol content - Coors objected this regulation - ruled in favor of beer companies

44 Liquor Mart V. Rhode Island

(1996) Rhode Island banned price advertising except at place of sale - 44 Liquor Mart sued - UNANIMOUS Supreme Court decision - held the ban invalid

Commercial Speech as something distinctive

A distinct and separate type of speech

Consent Order

A formal agreement by a defendant to cease activity that the government alleges to be illegal, such as deceptive advertising as alleged by the FTC.

Class Action

A lawsuit instituted by one party or a small group, not only in their own interest, but also on behalf of many other parties with the same grievance.

Endorsement

A message of product or service approval that is represented to come from a party other than the sponsoring advertiser.

Material Representation

A statement upon which an average consumer or investor might reasonably rely when making a purchasing decision.

Temperance

A substantial government interest

Second Circuit Court of Appeals

Court for Valentine's appeal - 2nd court affirmed (agreed with) the U.S. District Court

Valentine V. Chrestensen

(1942) Civil case - Valentine (defendant and police commissioner NYC), Chrestensen (plaintiff, in submarine business) - Chrestensen had a submarine on display and charged 25 cents per person to view it - promoted it by passing out handbills (goal: to persuade present bystanders) - handbills listed the admission price

Bigelow V. Virginia

(1975) V.A. newspaper editor ran an ad for the availability of legal abortions in New York - merely proposes a commercial transaction - Supreme Court held Roe V. Wade and remands back to V.A. who rules in favor Bigelow - COMMERCIAL AND POLITICAL SPEECH - CRIMINAL CASE B/C criminal offense in V.A. to have/perform abortion

Sanitary Code

NYC ordinance that made Chrestensen's handbills illegal and was told to stop by the police - NYC said that the bills were solely devoted to "information or protest" (political and education) and if they weren't they were outlawed - keep the city clean

Self-Censorship

Need to be able to not get in trouble - speaker needs to know where the line between protected and unprotected speech is

Deceptive Advertising

Advertising deemed illegal under state or federal statutes because of its capacity to mislead reasonable consumers.

Kasky V. Nike

Allegations against Nike that they were using sweatshops in Indonesia - Citizen filed lawsuit against Nike claiming they used false representations - California ruled in favor of citizen - COMMERCIAL SPEECH - Supreme Court said it would hear case but them remanded it

Cease-and-Desist Order

An order from an administrative agency prohibiting a person or business from continuing specified conduct.

Valentine V. Chrestensen Outcome

Chrestensen sued Valentine and asked for an injunction (to stop the police from prohibiting him from passing out his handbills) Diversity jurisdiction - Federal Court: U.S. District Court in New York - Along with injunction also asked for $3,000 - Chrestensen WON in the district court and received his injunction (he could now pass out his handbills) - Valentine appealed the decision and the case went to the Second Circuit Court of Appeals

Valentine & Commercial Speech

Commercial speech exempt from constitutional protection

Duff Case

Case where N.C. radio station for V.A. lottery even though N.C. didn't have lottery at the time

Chaplinksy & Commercial Speech

Categorically exempt: speech not protected by the First Amendment because of category

Revised Handbill

Chrestensen revised the handbill to protest no wharfage at a city pier (docking of boats at a city dock) Police said he could still not distribute his revised handbill

Territorial Limitation

On NYC sanitary code ordinance - limited to city limits of New York City

Industry Guides

Detailed descriptions of what the FTC considers to be illegal advertising practices, published by the FTC to put advertisers on notice.

Central Hudson Gas & Electric Co. V. Public Service Comm'n of New York

Did this make the FTC's job easier or harder?

Puffery

Exaggerated, figurative advertising claims that consumers would not assume to be grounded in factual documentation.

Federal Trade Commission

FTC - regulates commercial trade - Consent Order - agree to stop - Cease-and-Desist Order

Unprotected Speech (Chaplinsky)

Fighting Words, Lewd and Obscene, Defamation (low value of speech)

Unprotected Speech (Valentine)

Fighting Words, Lewd and Obscene, Defamation and Commercial Speech

Corrective Advertising

Government-ordered disclosures that a person or organization must make to compensate for prior deceptive advertising. An enforcement tool occasionally used by the FTC.

Celebrity Endorsement

Have to have used the product but not necessarily exclusively

Morales V. Trans World Airlines, Inc.

NAAG advertising guidelines that stated any fuel tax or other airfare surcharge must be included in advertised fare prices - trying to stop speech (prior restraint - presumed unconstitutional) but was ok in this case

Trade Regulation Rules

Rules adopted by the FTC that specify certain kinds of advertising or packaging practices as automatically deceptive and illegal.

Fourth Circuit Court of Appeals

S.C. Court of Appeals

Pittsburg Press V. P.H. Comm. on Human Relation

Still no absolute ban on commercial speech - method

Preemption

Stop in advance - Federal government can have power over states because federal government has power over interstate commerce

Commercial Speech is protected by?

Strict Scrutiny - 3rd & 8 - Content Based - Central Hudson Test - government can compel speech

Valentine V. Chrestensen Decision

Supreme Court reversed the decision - Chrestensen did not get to keep $3,000 or injunction (b/c reversed) - Supreme Court said that placing a political statement on a commercial handbill does not go around the ordinance - "we need to engage in nice appraisal" - they don't care that he revised the handbill, they do NOT look at subtle distinctions between political and commercial speech

V.A. Board of Pharmacy V. Virginia Consumers Union

Supreme Court says price of drugs is commercial speech but also public health - Solely of benefit for pharmacists who wanted to charge higher prices

Central Hudson Test

Test used to find the constitutionality of restricted commercial speech (Intermediate Scrutiny) - Commercial speech with governmental interest - restrictions more likely to be constitutional

Prior Substantiation Doctrine

The FTC requirement that advertisers possess reasonable substantiation for all verifiable product claims before the claims are made.