Greater New Orleans Broadcasting Assn., Inc. v. United States
527 U.S. 173, 144 L. Ed. 2d 161, 1999 U.S. LEXIS 4010 (1999)
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Rule of Law:
A federal statute prohibiting truthful, non-misleading commercial speech about lawful activities violates the First Amendment if the regulatory scheme is so pierced by exemptions and inconsistencies that it fails to directly and materially advance the asserted governmental interests and is not narrowly tailored.
Facts:
- Federal law, 18 U.S.C. § 1304, historically prohibited the broadcast advertising of lotteries and casino gambling.
- Over many years, Congress enacted numerous statutory exemptions to this ban, permitting broadcast advertisements for state-run lotteries, tribal casinos, and certain charitable and non-profit gambling.
- Private, for-profit casino gambling is legal and regulated in the state of Louisiana and neighboring Mississippi.
- The Greater New Orleans Broadcasting Association, whose members operate FCC-licensed radio and television stations in New Orleans, wished to broadcast advertisements for lawful private casinos.
- The broadcasters refrained from airing these advertisements due to the threat of federal sanctions under § 1304.
- Broadcast signals from the Louisiana stations can be heard in neighboring states such as Texas and Arkansas, where private casino gambling is unlawful.
Procedural Posture:
- The Greater New Orleans Broadcasting Association sued the United States and the FCC in the U.S. District Court for the Eastern District of Louisiana.
- The District Court granted summary judgment in favor of the Government.
- The broadcasters, as appellants, appealed to the U.S. Court of Appeals for the Fifth Circuit, which affirmed the district court's decision.
- The broadcasters petitioned for a writ of certiorari, which the U.S. Supreme Court granted, vacating the judgment and remanding the case for reconsideration in light of its decision in 44 Liquormart, Inc. v. Rhode Island.
- On remand, the Fifth Circuit again affirmed the judgment in favor of the Government.
- The broadcasters again petitioned for a writ of certiorari to the U.S. Supreme Court, which the Court granted.
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Issue:
Does the federal ban on broadcast advertisements for private casino gambling, codified at 18 U.S.C. § 1304, violate the First Amendment as applied to broadcasters in states where such gambling is legal?
Opinions:
Majority - Justice Stevens
Yes, the federal ban violates the First Amendment as applied here. The Court applied the four-part Central Hudson test for commercial speech. While the government asserted substantial interests in reducing the social costs of gambling and assisting states that prohibit it, the regulatory scheme fails the third and fourth prongs of the test. The numerous exemptions and inconsistencies, particularly allowing advertising for tribal and state-sponsored casinos while banning it for private ones, prevent the statute from directly and materially advancing the government's interests. The scheme is irrational because it prohibits advertising for one form of gambling while permitting it for others that create the same social costs. Furthermore, the regulation is not narrowly tailored, as there are non-speech-related regulations that could more directly and effectively alleviate the social costs of gambling.
Concurring - Chief Justice Rehnquist
Yes, the statute violates the First Amendment. Chief Justice Rehnquist agreed that the statutory scheme is unconstitutional because it is 'pierced by exemptions and inconsistencies' and therefore fails the Central Hudson test for commercial speech. He wrote separately to note that if Congress chose to regulate the gambling industry's conduct directly, rather than its speech, such legislative classifications might be constitutionally tolerable under a less demanding standard of review. However, because Congress chose to regulate speech, the more demanding Central Hudson standard applies, and the statute fails that standard.
Concurring - Justice Thomas
Yes, the statute is unconstitutional, but the Central Hudson test should not have been applied. Justice Thomas reiterated his position that when the government's asserted interest is to keep legal users of a product ignorant in order to manipulate their choices, that interest is 'per se illegitimate.' He believes such a paternalistic justification can never support a restriction on truthful commercial speech, and therefore, he concurred only in the judgment to strike down the law.
Analysis:
This case significantly reinforces the application of the Central Hudson test, demonstrating that a government restriction on commercial speech cannot survive if the underlying regulatory scheme is irrational and contradictory. The decision makes it more difficult for the government to justify bans on advertising for legal 'vice' activities, such as gambling or alcohol, when it simultaneously permits or promotes similar activities. By invalidating the ban based on the numerous exemptions, the Court established that a regulation's internal consistency is critical to showing that it 'directly advances' a governmental interest. This holding limits Congress's ability to selectively prohibit truthful advertising based on the identity of the speaker rather than the content of the speech.
