Consolidated Edison Co. v. Public Serv. Comm'n
447 U.S. 530 (1980)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A state regulation that completely bans a privately-owned utility from inserting bill inserts expressing its opinions on controversial issues of public policy violates the First Amendment. Such a content-based restriction on protected speech is not a permissible time, place, or manner regulation, nor is it a narrowly tailored means of serving a compelling state interest.
Facts:
- Consolidated Edison Company of New York (Consolidated Edison), a regulated public utility, included an insert entitled 'Independence Is Still a Goal, and Nuclear Power Is Needed To Win the Battle' in its January 1976 billing envelopes.
- The insert expressed Consolidated Edison's view that the benefits of nuclear power outweighed its risks and that it was necessary for U.S. energy independence.
- In March 1976, the Natural Resources Defense Council, Inc. (NRDC), requested that Consolidated Edison enclose a rebuttal insert prepared by the NRDC in its next billing.
- Consolidated Edison refused the NRDC's request.
- The NRDC then petitioned the Public Service Commission of the State of New York (the Commission) to require Consolidated Edison to open its billing envelopes to opposing viewpoints.
- The Commission denied the NRDC's request but instead issued an order prohibiting utilities from using bill inserts to discuss 'controversial issues of public policy,' concluding that customers were a captive audience who should not be subjected to the utility's beliefs.
Procedural Posture:
- Consolidated Edison sought review of the Commission’s order in the New York Supreme Court, Special Term (a state trial court), which held the order unconstitutional.
- The Commission, as appellant, appealed to the New York Supreme Court, Appellate Division (an intermediate appellate court), which reversed the trial court.
- Consolidated Edison, as appellant, appealed to the New York Court of Appeals (the state's highest court), which affirmed the Appellate Division's judgment upholding the order.
- The United States Supreme Court noted probable jurisdiction to review the decision of the New York Court of Appeals.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an order by a state public service commission that prohibits a regulated utility from including inserts discussing controversial issues of public policy in its monthly billing envelopes violate the First and Fourteenth Amendments?
Opinions:
Majority - Justice Powell
Yes. The Commission's order violates the First and Fourteenth Amendments because it is a direct, content-based infringement on protected speech that is not justified by a compelling state interest. Corporate speech on public issues is protected, and the Commission's ban is not a valid time, place, or manner regulation because it is based on the subject matter of the inserts. The Commission's asserted justifications—protecting a captive audience, allocating limited resources, and preventing ratepayer subsidies—are not compelling. Customers are not a captive audience as they can simply avert their eyes and discard the insert, the billing envelope is not a scarce public resource like broadcast frequencies, and the Commission's order was not based on cost allocation concerns.
Concurring - Justice Marshall
Yes. This decision correctly strikes down the Commission's order but does not address whether the Commission could permissibly exclude the costs of such bill inserts from the utility's rate base. The Commission did not base its order on the rationale that ratepayers were subsidizing the speech, so the Court is precluded from upholding the order on that ground.
Concurring - Justice Stevens
Yes. The regulation is unconstitutional because it is motivated by a desire to curtail expression on controversial issues, which is viewpoint censorship. While the majority is wrong to suggest that time, place, or manner restrictions can never be based on content, the justification here—that the message might be offensive to some customers because they disagree with it—is an impermissible basis for censorship and plainly violates the First Amendment.
Dissenting - Justice Blackmun
No. The Commission's ban does not violate the First Amendment because it permissibly protects ratepayers from being forced to subsidize the utility's speech. As a state-created monopoly, the entire billing process is a ratepayer-funded activity. Allowing the utility to include its political messages provides a 'free ride' on the fixed costs of the mailing system paid for by consumers, which amounts to a coerced subsidy for the utility's speech. The state has a legitimate and substantial interest in preventing a monopoly from appropriating this ratepayer-funded medium for its own purposes.
Analysis:
This case significantly solidifies the First Amendment rights of corporations to engage in political speech, extending the principles of First National Bank of Boston v. Bellotti. The Court established that a government regulator cannot suppress the speech of a private company on public issues based on its content, even if that company is a heavily regulated monopoly. The ruling mandates that such content-based restrictions must survive strict scrutiny, setting a high bar for justification. It also carefully distinguishes between banning speech outright and regulating the allocation of its costs, leaving open the possibility that regulators could prevent utilities from passing the costs of such speech onto ratepayers.
Unlock the full brief for Consolidated Edison Co. v. Public Serv. Comm'n