During the 1970s energy crisis, the New York Public Service Commission initially banned all electric utility advertising that promoted electricity use. After the crisis subsided, the Commission continued the ban on promotional advertising, while allowing ads that conveyed information about energy conservation, safety, or other nonpromotional matters. Central Hudson Gas & Electric challenged the restriction as a violation of the First and Fourteenth Amendments. The case reached the Supreme Court after the New York Court of Appeals upheld the Commission's order.
Does the First Amendment permit a state utility commission to ban promotional advertising by an electric utility in order to conserve energy?
Commercial speech that concerns lawful activity and is not misleading is protected by the First Amendment, but it may be regulated if: (1) the government asserts a substantial interest; (2) the regulation directly advances that interest; and (3) the regulation is not more extensive than necessary to serve that interest. If the speech is misleading or relates to unlawful activity, it receives no First Amendment protection.
No. Although energy conservation is a substantial state interest, New York's complete ban on promotional advertising by electric utilities violated the First Amendment because it was more extensive than necessary under the governing commercial speech analysis.
The Court first held that Central Hudson's proposed advertising concerned lawful activity and was not misleading, so it fell within the First Amendment's protection for commercial speech. It accepted that conservation of energy and fair utility rates were substantial governmental interests and assumed the advertising ban would directly advance those interests. But the Commission failed the final step because a total prohibition on promotional advertising suppressed too much protected speech when narrower measures were available. The state could pursue conservation goals by means short of a broad speech ban, so the restriction was unconstitutional.
Justice Blackmun, joined by Justice Brennan in part, agreed the ban was unconstitutional but criticized the majority's treatment of commercial speech as too limited and argued such speech should receive greater First Amendment protection.
This case established the modern four-part test for evaluating restrictions on commercial speech, commonly called the Central Hudson test. It remains a foundational precedent in First Amendment doctrine governing advertising and other commercial expression. Related cases include Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976), which recognized First Amendment protection for truthful commercial speech; Ohralik v. Ohio State Bar Assn., 436 U.S. 447 (1978), which upheld some regulation of commercial solicitation; Board of Trustees of State University of New York v. Fox, 492 U.S. 469 (1989), which clarified the "not more extensive than necessary" prong; and 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996), which applied and strengthened protection against broad bans on truthful price advertising.
Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976) |
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Ohralik v. Ohio State Bar Assn., 436 U.S. 447 (1978) |
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Trustees of State University of New York v. Fox, 492 U.S. 469 (1989) |
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Inc. v. Rhode Island, 517 U.S. 484 (1996) |
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