First Amendment Follies
Expanding Corporate Speech Rights
by Robert Weissman
Multinational Monitor magazine , May 1998
The First Amendment-it is not just for people anymore.
In recent years, corporations in the United States are increasingly
invoking the First Amendment to the U.S. Constitution to defend
controversial speech. U.S. courts afford corporations most of
the same protections for political speech as are provided to individuals.
The courts are also providing ever-increasing levels of protection
for commercial speech, gradually approaching the peak protection
guaranteed for political debate.
As the U.S. Congress debates tobacco control legislation,
some of the consequences of extending free speech guarantees to
corporations are becoming apparent.
Leading First Amendment scholars-albeit many with historic
ties to the tobacco industry- are persuasively (though not conclusively)
arguing that the Bill of Rights prevents Congress from banning
various types of advertising, including those that are thought
to contribute to rising teen smoking rates.
In a nutshell, Northwestern University Law School Professor
Martin Redish told a congressional committee, "There can
be no constitutionally acceptable justification for the suppression
or widespread disruption of the truthful advertising of a lawful
ESTABLISHING THE RIGHT
In 1886, the U.S. Supreme Court declared that it did "not
wish to hear argument" on whether corporations were "persons"
protected by the Fourteenth Amendment's due process guarantees
originally intended to safeguard the rights of emancipated slaves.
It simply asserted that corporations should be treated the same
as people, at least for Fourteenth Amendment purposes.
But it was not until the 1970s that the Supreme Court began
extending First Amendment speech rights to corporations.
In 1976, the Supreme Court first held that the First Amendment
protected commercial speech by corporations. The Court ruled in
Virginia State Board of Pharmacy that a Virginia regulation banning
advertising of pharmaceutical prices was unconstitutional. The
Virginia Citizens Consumer Council argued that consumers had a
right to pricing information, and the Supreme Court agreed.
In 1978, the Court held that corporations had political speech
rights as well. In First National Bank, the court upheld the right
of Massachusetts corporations to make campaign contributions to
defeat a political referendum that would have enacted a progressive
Massive campaign spending by corporations is now the norm
in any statewide referendum or initiative potentially impinging
on corporate power, whether it concerns insurance regulation,
workers compensation, campaign finance reform or toxics.
The Supreme Court extended this line of cases in 1986, in
Pacific Gas and Electric, when it ruled that corporations have
"negative" speech rights not to be associated with the
speech of others or to be forced to speak.
In the Pacific Gas and Electric case, a California consumer
group had successfully lobbied for a regulation that utilities
in the state be required to include inserts in their billing envelopes
asking utility users to join a non-profit, democratically run
utility consumer advocacy group. (There would have been no cost
to the utility; the consumer group would have paid printing costs
and, because the insert would use extra space in the billing envelope,
there would have been no additional postage costs.) The Supreme
Court ruled that this arrangement might unconstitutionally compel
the utility to respond or tailor its statements in response to
the consumer group's information.
"For corporations as well as for individuals, the choice
to speak includes within it the choice of what not to say,"
the Court held.
Other courts have since extended corporations' political and
negative speech rights. In 1996, a U.S. appellate court struck
down a Vermont law that would have required milk that was produced
by cows treated with BGH (bovine growth hormone also known as
bovine somatotropin (BST)) to be labeled with a blue dot [see
"Corporate Rights, and Wrongs," Multinational Monitor,
October 1996]. Grocery stores would have been required to carry
signs noting that the blue dot signified that the milk came from
BGH-treated cows and stating that the Food _ and Drug _ Administration
has concluded there is no health difference between BGH-treated
and non-BGH-treated milk. The appellate court ruled that this
program would infringe on corporations' "negative" speech
rights, and held it to be unconstitutional.
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Meanwhile, the commercial speech line of cases has also evolved
significantly from the 1970s.
In 1980, in a case known as Central Hudson Gas and Electric,
the Supreme Court established a four-part test for determining
whether limitations on commercial speech are constitutional.
First, Justice Lewis Powell wrote in his majority opinion,
to receive constitutional protection, commercial speech must concern
lawful activity and not be misleading.
If the communication passes the first test, a court must then
determine if the government interest advanced by the regulation
If a substantial government interest is at stake, a court
must ask whether the commercial speech regulation directly advances
the government interest.
Finally, the court must determine whether the regulation of
speech is no more extensive than necessary to serve the government
The fourth prong of this test is the harshest. It sounds like
a "least restrictive alternative" test, meaning commercial
speech regulations will only be upheld if there is no alternative
available that might accomplish the same ends but would burden
However, the Supreme Court has explicitly stated that this
is not its approach for commercial speech cases. In 1995, in Florida
Bar v. Went-For-It, Inc., the Court stated, "The 'least restrictive
means' test has no role in the commercial speech context."
Two years earlier, the Supreme Court held that "the requirement
of narrow tailoring is met if the regulation promotes a substantial
government interest that would be achieved less effectively absent
the regulation, provided that it did not burden substantially
more speech than necessary to further the government's legitimate
Nonetheless, in 1996, the Court seemed to veer in the direction
of the least-restrictive-alternative test. In 44 Liquormart, the
Supreme Court struck down a Rhode Island ban on liquor price advertising.
The ostensible purpose of the advertising , was to limit price
competition that would induce higher alcohol consumption. The
Court held that the ban was unconstitutional, concluding that
there was not a reasonable fit between the ad prohibition and
the goal of cutting alcohol consumption.
"It is perfectly obvious that alternative forms of regulation
that would not involve any restriction on speech would be more
likely to achieve the State's goal of promoting temperance,"
wrote Justice John Paul Stevens.
"Higher prices can be maintained either by direct regulation
or by increased taxation. Per capita purchases could be limited
as is the case with prescription drugs. Even educational campaigns
focused on the problems of excessive, or even moderate, drinking
might prove to be more effective."
At least seven of the nine justices in 44 Liquormart agreed
with this analysis.
This invocation of a wide array of alternative measures- without
any evidence that Rhode Island legislators had ever considered
them or any acknowledgement that the alternatives might be politically
or financially infeasible-illustrates the intensity of the least-restrictive
alternative analysis. If this analysis emerges as the norm in
commercial speech regulation cases, it will be very difficult
for government agencies to limit commercial speech outside of
the deceptive advertising area.
Some commentators argue that 44 Liquormart did not represent
a shift in the commercial speech doctrine. Rhode Island's ad ban
was struck down, they argue, because the state presented virtually
no evidence to support its claim that the ad ban would deter drinking.
Where the government can show a reasonalbe fit between a commercial
speech regulation and achievement of a legitimate policy goal,
they believe, the courts will uphold the regulation.
It is against the backdrop of the Supreme Court's commercial
speech jurisprudence that the constitutionality of various tobacco
marketing regulations is being debated.
Most of the various tobacco bills being considered in the
U.S. Congress include strong advertising and marketing restrictions.
Among the proposed regulations: prohibiting tobacco billboard
advertisements, restricting tobacco print ads to black-and-white
text-only format in publications with high youth readership and
banning the use of human images and cartoons in tobacco promotions.
Proponents justify all of these measures as designed to limit
certain kinds of advertisements that appeal to children. Opponents
argue the measures fail to pass the Central Hudson test, and can
only be constitutionally adopted with an industry waiver of the
tobacco companies' rights.
Here is how the argument breaks down:
* Does the speech contain lawful activity? David Vladeck,
director of Public Citizen's Litigation Group, argued to the Senate
Commerce Committee in March that the answer to this question is
"no," at least for the somewhat narrower regulations
promulgated by the Food and Drug Administration in 1995. The First
Amendment does not protect commercial speech that proposes an
illegal transaction, and selling tobacco to kids is illegal. "Because
a reviewing court would understand that these [commercial advertising]
restraints are aimed at forbidding an illegal transaction, they
would be upheld," Vladeck testified.
Opponents of the regulations counter that the desire to protect
children cannot justify regulation of commercial speech that does
not narrowly target children.
"As the Supreme Court said just last June, the interest
in protecting children from harmful materials 'does not justify
an unnecessarily broad suppression of speech directed to adults,"'
First Amendment attorney and sometime tobacco industry representative
Floyd Abrams told the Senate Judiciary Committee.
* Is a substantial interest advanced by the regulation? Even
opponents grant that reducing youth smoking is a substantial government
* Does the regulation directly advance the government's interest?
Proponents of the regulation do well on this score as well. The
FDA, in its rule-making leading up to promulgation of the 1995
rule, compiled an extensive record showing the connection between
advertising and youth ~ smoking. The famous study | showing six
year-olds were as able to recognize Joe Camel as Mickey Mouse,
and a raft of others, support the notion that limiting advertising
will help diminish youth smoking.
* Are the regulations no more extensive than necessary? Proponents
like Richard Daynard, a professor of law at Northeastern University,
emphasize that the regulations are narrowly tailored. "Tobacco
advertising legislation will not be a total | ban and the tobacco
industry will still have many alternative channels to communicate
with its adult customers," Daynard told the Senate Judiciary
Committee in February. "Adults will still receive information
on price, quality, comparative product features and any other
information to help them make an informed decision on tobacco
Daynard and others also emphasize the reasonableness of the
proposed tobacco marketing rules by highlighting the failed three
decade-long attempt by health authorities to curb youth smoking.
Opponents of the regulation respond with their strongest arguments.
Citing 44 Liquormart, they argue the government must pursue less
restrictive alternatives to speech regulations before imposing
"If Congress determines that the education and access
provisions of the tobacco settlement are insufficient, then it
should consider additional measures, such as a minimum age for
possession and use of tobacco products," Abrams testified
"But whatever means are selected," he said, "the
Constitution requires Congress to employ education (more speech)
and access restrictions before it enacts a wholesale prohibition
on free speech."
Opponents also contend that the regulations are far too broad.
"The prohibition on colors and images in virtually all tobacco
advertising eliminates those elements of communication that most
effectively and efficiently draw attention to an advertisement,
impart information and distinguish one brand from another,"
David Versfelt, general counsel to the American Association of
Advertising Agencies, told the Senate Judiciary Committee in February.
There is no way to establish with certainty how a court would
rule on these various disputes. It is clear, however, that the
arguments for marketing regulations become weaker the more removed
they become from the purpose of protecting children. Thus while
a federal court has upheld a Baltimore ordinance banning tobacco
billboards in residential areas, an ad ban in adult magazines
would face a stronger constitutional challenge.
As the Supreme Court stiffens its application of the Central
Hudson test, the differential treatment of political and commercial
speech is beginning to narrow. The Court appears increasingly
willing to grant safeguards to commercial speech that are similar
to the strong protections for political speech.
In an opinion joined by two other justices, Justice Stevens
wrote in 44 Liquormart that the governmental interest in protecting
consumers from misleading, deceptive or aggressive sales practices,
or requiring the disclosure of beneficial consumer information,
justified greater deference to government regulation of commercial
speech. (Indeed, recall that in the Central Hudson test, deceptive
commercial speech is not afforded any First Amendment protection.)
"When a State entirely prohibits the dissemination of truthful,
non-misleading commercial messages for reasons unrelated to the
preservation of a fair bargaining process," Stevens wrote,
"there is far less reason to depart from the rigorous review
that the First Amendment generally demands."
"The First Amendment directs us to be especially skeptical
of regulations that seek to keep people in the dark for what the
government perceives to be their own good," Stevens argued.
"That teaching applies equally to state attempts to deprive
consumers of accurate information about their chosen products."
Justice Thomas openly argued in his opinion in 44 Liquormart
for the abandonment of the Central Hudson test, and the application
of the same standards to political and commercial speech.
"I do not see a philosophical or historical basis for
asserting that 'commercial' speech is of 'lower value' than 'non-commercial'
speech," Thomas asserted.
Justice O'Connor, in an opinion joined by three other justices,
refused to consider the merits of abandoning the Central Hudson
test, saying that such a reconsideration of Central Hudson should
be postponed until another day. But she suggested a willingness
to review the issue with an open mind.
This trend in commercial speech jurisprudence accounts for
the necessity of tobacco advertising restriction proponents justifying
ad bans as preventing children from smoking. Even proponents tend
to concede that it would be I extremely difficult under current
doctrine for the government to constitutionally regulate cigarette
advertising as a public health policy to deter adult use of a
deadly product, as long as that deadly product -tobacco-is legal
for sale and consumption.
"No substantial interest could be asserted by the government
in support of depriving adults of access to advertisements for
tobacco which may lawfully be sold to them," Floyd Abrams
told the Senate Judiciary Committee.
If the trend continues unchecked, it is possible that it will
evolve in ways that will limit the ability of the government to
require warning labels on products or to ban deceptive advertising.
If it is "paternalistic" and unconstitutional to
deny consumers truthful information, the argument would run, perhaps
it is also "paternalistic" to censor deceptive information.
Just as the government does not distinguish between legitimate
and illegitimate arguments in the political realm, ;he contention
would be, perhaps it should make no such distinctions in regulating
It is by no means certain that First Amendment jurisprudence
will evolve in this fashion. But is eminently possible, and corporate
free-speech rights are already interfering in notable ways with
democratic processes and outcomes. Whether the trend to expanding
corporate speech rights will grow incrementally and with little
or no attention from the public or policymakers, or whether it
will spark a backlash- resulting perhaps from campaign funding
scandals or a court decision striking down tobacco advertising
restrictions- remains to be seen.