Posadas De Puerto Rico Associates v. Tourism Co. of Puerto Rico
1986 U.S. LEXIS 129, 478 U.S. 328, 92 L. Ed. 2d 266 (1986)
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Rule of Law:
A government may ban the advertising of a product or service, such as casino gambling, that it has the power to ban entirely. This power to completely prohibit the activity necessarily includes the lesser power to restrict the promotion of that activity to the public.
Facts:
- In 1948, Puerto Rico legalized certain forms of casino gambling through the Games of Chance Act, primarily to promote tourism.
- Section 8 of the Act prohibited licensed gambling rooms from advertising or otherwise offering their facilities to the public of Puerto Rico.
- Posadas de Puerto Rico Associates (Posadas) operated the Condado Holiday Inn Hotel and Sands Casino under a franchise.
- Between 1978 and 1981, the Tourism Company of Puerto Rico, the regulatory agency, repeatedly fined Posadas for violating the advertising ban.
- The Tourism Company's interpretation of the ban included prohibiting the use of the word 'casino' on items such as matchbooks, napkins, menus, and other objects accessible to the public in Puerto Rico.
- Posadas paid the fines under protest, facing threats that its gambling franchise would not be renewed if it failed to pay.
Procedural Posture:
- Posadas de Puerto Rico Associates filed a declaratory judgment action against the Tourism Company of Puerto Rico in the Superior Court of Puerto Rico (a trial-level court).
- The Superior Court held that the advertising restrictions had been unconstitutionally applied to Posadas, but that the statute was facially constitutional after the court issued a narrowing construction.
- Under the narrowing construction, the ban only applied to advertising specifically aimed at residents of Puerto Rico.
- Posadas (appellant) appealed the Superior Court's decision on the facial constitutionality of the statute to the Supreme Court of Puerto Rico (the highest court in the commonwealth).
- The Supreme Court of Puerto Rico dismissed the appeal, ruling that it did not present a 'substantial constitutional question'.
- Posadas then appealed this dismissal to the Supreme Court of the United States.
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Issue:
Does a Puerto Rico statute that restricts advertising of legal casino gambling to the public within the commonwealth violate the First Amendment's protection of commercial speech?
Opinions:
Majority - Justice Rehnquist
No, the Puerto Rico statute, as construed by its courts, does not violate the First Amendment's protection of commercial speech. The Court applied the four-part test from Central Hudson. It found that 1) the speech concerned a lawful activity and was not misleading; 2) Puerto Rico's interest in reducing the demand for casino gambling among its residents to protect their health, safety, and welfare was substantial; 3) the advertising restrictions directly advanced this interest by limiting the stimulation of demand; and 4) the restrictions were no more extensive than necessary, especially given the narrowing construction by the lower court that limited the ban to advertising targeting residents. Crucially, the Court reasoned that the government's greater power to completely ban the underlying conduct (casino gambling) necessarily includes the lesser power to ban advertising for that conduct. Since Puerto Rico could have prohibited its residents from gambling in casinos altogether, it was permissible for it to take the less intrusive step of allowing the activity but restricting its promotion.
Dissenting - Justice Brennan
Yes, the Puerto Rico statute violates the First Amendment. The government should not be permitted to suppress truthful commercial speech about a lawful activity simply because it fears that people will act on the information. When the government seeks to manipulate private behavior by depriving citizens of truthful information, its actions should be subject to strict judicial scrutiny, not the more relaxed commercial speech standard. Even under the Central Hudson test, the government's interest is not substantial because Puerto Rico has legalized casino gambling for residents and permits advertising for other forms of gambling like lotteries and horse racing. Furthermore, there are less restrictive alternatives to a complete ban on speech, such as promulgating counterspeech to discourage gambling or more direct regulation of the casinos.
Dissenting - Justice Stevens
Yes, the Puerto Rico statute violates the First Amendment. The regulation is unconstitutional not because of the 'greater includes the lesser power' theory, but because it is a bizarre and discriminatory system of censorship. The law blatantly discriminates based on the publisher (favoring outside media like the New York Times over local papers), the audience (disfavoring Puerto Rican residents compared to tourists), and the specific words used (singling out the word 'casino' for special sanction). Furthermore, the regulatory scheme, as construed by the Puerto Rican court, establishes an unconstitutional system of prior restraint and is hopelessly vague, providing no predictable standards for what speech is permissible.
Analysis:
This decision established the controversial 'greater includes the lesser' doctrine in commercial speech jurisprudence, creating a category of 'vice' activities (like gambling, alcohol, and tobacco) where the government has broader power to regulate advertising. The Court's analysis significantly deferred to legislative judgment on whether a restriction on speech was necessary, arguably weakening the protections for commercial speech established in cases like Central Hudson. While the specific holding has been substantially narrowed by subsequent cases like 44 Liquormart, Inc. v. Rhode Island, the case remains a key example of the Supreme Court's historical struggle to define the boundaries of First Amendment protection for the promotion of legal but disfavored products.
