Central Hudson Gas & Electric Corporation, Appellant, v. Public Service Commission of New York
No. 79-565.
Supreme Court of the United States
447 U.S. 557
Argued March 17, 1980.
Decided June 20, 1980.
Mr. Justice POWELL delivered the opinion of the Court.
This case presents the question whether a regulation of the Public
Service Commission of the State of New York violates the First and
Fourteenth Amendments because it completely bans promotional
advertising by an electrical utility.
I
In December 1973, the Commission, appellee here, ordered electric
utilities in New York State to cease all advertising that
"promot[es] the use of electricity." App. to Juris. *559
Statement 31a. The order was based on the Commission's finding that
"the interconnected utility system in New York State does not have
sufficient fuel stocks or sources of supply to continue furnishing
all customer demands for the 1973-1974 winter." Id., at 26a.
Three years later, when the fuel shortage had eased, the Commission
requested comments from the public on its proposal to continue the
ban on promotional advertising. Central Hudson Gas & Electric
Corp., the appellant in this case, opposed the ban on First Amendment
grounds. App. A10. After reviewing the public comments, the
Commission extended the prohibition in a Policy Statement issued on
February 25, 1977.
The Policy Statement divided advertising expenses "into two broad
categories: promotional--advertising intended to stimulate the
purchase of utility services--and institutional and informational, a
broad category inclusive of all advertising not clearly intended to
promote sales." [FN1] App. to Juris. **2348 Statement 35a.
The Commission declared all promotional advertising contrary to the
national policy of conserving energy. It acknowledged that the ban is
not a perfect vehicle for conserving energy. For example, the
Commission's order prohibits promotional advertising to develop
consumption during periods when demand for electricity is low. By
limiting growth in "off- peak" consumption, the ban limits the
"beneficial side effects" of such growth in terms of more efficient
use of existing power-plants. Id., at 37a. And since oil dealers are
not under the Commission's jurisdiction and *560 thus remain free to
advertise, it was recognized that the ban can achieve only "piecemeal
conservationism." Still, the Commission adopted the restriction
because it was deemed likely to "result in some dampening of
unnecessary growth" in energy consumption. Ibid.
FN1. The dissenting opinion attempts to construe the Policy Statement
to authorize advertising that would result "in a net energy savings"
even if the advertising encouraged consumption of additional
electricity. Post, at 2371. The attempted construction fails,
however, since the Policy Statement is phrased only in terms of
advertising that promotes "the purchase of utility services" and
"sales" of electricity. Plainly, the Commission did not intend to
permit advertising that would enhance net energy efficiency by
increasing consumption of electrical services.
The Commission's order explicitly permitted "informational"
advertising designed to encourage "shifts of consumption" from peak
demand times to periods of low electricity demand. Ibid. (emphasis in
original). Informational advertising would not seek to increase
aggregate consumption, but would invite a leveling of demand
throughout any given 24-hour period. The agency offered to review
"specific proposals by the companies for specifically described
[advertising] programs that meet these criteria." Id., at
38a.
When it rejected requests for rehearing on the Policy Statement, the
Commission supplemented its rationale for the advertising ban. The
agency observed that additional electricity probably would be more
expensive to produce than existing output. Because electricity rates
in New York were not then based on marginal cost, [FN2] the
Commission feared that additional power would be priced below the
actual cost of generation. This additional electricity would be
subsidized by all consumers through generally higher rates. Id., at
57a-58a. The state agency also thought that promotional advertising
would give "misleading signals" to the public by appearing to
encourage energy consumption at a time when conservation is needed.
Id., at 59a.
FN2. "Marginal cost" has been defined as the "extra or incremental
cost of producing an extra unit of output." P. Samuelson, Economics
463 (10th ed. 1976) (emphasis in original).
Appellant challenged the order in state court, arguing that the
Commission had restrained commercial speech in violation of the First
and Fourteenth Amendments. [FN3] The Commission's *561 order
was upheld by the trial court and at the intermediate appellate
level. [FN4] The New York Court of Appeals affirmed. It found
little value to advertising in "the noncompetitive market in which
electric corporations operate." Consolidated Edison Co. v. Public
Service Comm'n, 47 N.Y.2d 94, 110, 417 N.Y.S.2d 30, 39, 390 N.E.2d
749, 757 (1979). Since consumers "have no choice regarding the source
of their electric power," the court denied that "promotional
advertising of electricity might contribute to society's interest in
'informed and reliable' economic decisionmaking." Ibid. The court
also observed that by encouraging consumption, promotional
advertising would only exacerbate the current energy situation. Id.,
at 110, 417 N.Y.S.2d, at 39, 390 N.E.2d, at 758. The court concluded
that the governmental interest in **2349 the prohibition outweighed
the limited constitutional value of the commercial speech at issue.
We noted probable jurisdiction, 444 U.S. 962, 100 S.Ct. 446, 62
L.Ed.2d 374 (1979), and now reverse.
FN3. Central Hudson also alleged that the Commission's order reaches
beyond the agency's statutory powers. This argument was rejected by
the New York Court of Appeals, Consolidated Edison Co. v. Public
Service Comm'n, 47 N.Y.2d 94, 102-104, 417 N.Y.S.2d 30, 33-35, 390
N.E.2d 749, 752- 754 (1979), and was not argued to this Court.
FN4. Consolidated Edison Co. v. Public Service Comm'n, 63 A.D.2d 364,
407 N.Y.S.2d 735, (1978); App. to Juris. Statement 22a (N.Y.Sup.Ct.,
Feb. 17, 1978).
The Commission's order restricts only commercial speech, that is,
expression related solely to the economic interests of the speaker
and its audience. Virginia Pharmacy Board v. Virginia Citizens
Consumer Council, 425 U.S. 748, 762, 96 S.Ct. 1817, 1825, 48 L.Ed.2d
346 (1976); Bates v. State Bar of Arizona, 433 U.S. 350, 363-364, 97
S.Ct. 2691, 2698-2699, 53 L.Ed.2d 810 (1977); Friedman v. Rogers, 440
U.S. 1, 11, 99 S.Ct. 887, 895, 59 L.Ed.2d 100 (1979). The First
Amendment, as applied to the States through the Fourteenth Amendment,
protects commercial speech from unwarranted governmental regulation.
Virginia Pharmacy Board, 425 U.S., at 761-762, 96 S.Ct., at 1825.
Commercial expression not only serves the economic interest of the
speaker, but also assists consumers and furthers the societal
interest in the fullest possible *562 dissemination of information.
In applying the First Amendment to this area, we have rejected the
"highly paternalistic" view that government has complete power to
suppress or regulate commercial speech. "[P]eople will
perceive their own best interests if only they are well enough
informed, and . . . the best means to that end is to open the
channels of communication rather than to close them. . . ." Id., at
770, 96 S.Ct., at 1829, see Linmark Associates, Inc. v. Willingboro,
431 U.S. 85, 92, 97 S.Ct. 1614, 1618, 50 L.Ed.2d 155 (1977). Even
when advertising communicates only an incomplete version of the
relevant facts, the First Amendment presumes that some accurate
information is better than no information at all. Bates v. State Bar
of Arizona, supra, at 374, 97 S.Ct., at 2704.
Nevertheless, our decisions have recognized "the 'commonsense'
distinction between speech proposing a commercial transaction, which
occurs in an area traditionally subject to government regulation, and
other varieties of speech." Ohralik v. Ohio State Bar Assn., 436 U.S.
447, 455-456, 98 S.Ct. 1912, 1918, 56 L.Ed.2d 444 (1978); see Bates
v. State Bar of Arizona, supra, 433 U.S., at 381, 97 S.Ct., at 2707;
see also Jackson & Jeffries, Commercial Speech: Economic Due
Process and the First Amendment, 65 Va.L.Rev. 1, 38-39 (1979).
[FN5] **2350 The *563 Constitution therefore accords a lesser
protection to commercial speech than to other constitutionally
guaranteed expression. 436 U.S., at 456, 457, 98 S.Ct., at 1918,
1919. The protection available for particular commercial expression
turns on the nature both of the expression and of the governmental
interests served by its regulation.
FN5. In an opinion concurring in the judgment, Mr. Justice STEVENS
suggests that the Commission's order reaches beyond commercial speech
to suppress expression that is entitled to the full protection of the
First Amendment. See post, at 2359. We find no support for this claim
in the record of this case. The Commission's Policy
Statement excluded "institutional and informational" messages from
the advertising ban, which was restricted to all advertising "clearly
intended to promote sales." App. to Juris. Statement 35a. The
complaint alleged only that the "prohibition of promotional
advertising by Petitioner is not reasonable regulation of
Petitioner's commercial speech. . . ." Id., at 70a. Moreover, the
state-court opinions and the arguments of the parties before this
Court also viewed this litigation as involving only commercial
speech. Nevertheless, the concurring opinion of Mr. Justice STEVENS
views the Commission's order as suppressing more than commercial
speech because it would outlaw, for example, advertising that
promoted electricity consumption by touting the environmental
benefits of such uses. See post, at 2359. Apparently the concurring
opinion would accord full First Amendment protection to all
promotional advertising that includes claims "relating to . . .
questions frequently discussed and debated by our political leaders."
Ibid.
Although this approach responds to the serious issues surrounding our
national energy policy as raised in this case, we think it would blur
further the line the Court has sought to draw in commercial speech
cases. It would grant broad constitutional protection to any
advertising that links a product to a current public debate. But
many, if not most, products may be tied to public
concerns with the environment, energy, economic policy, or individual
health and safety. We rule today in Consolidated Edison Co. v. Public
Service Comm'n of New York, 447 U.S. 530, 100 S.Ct. 2326, 65 L.Ed.2d
319, that utilities enjoy the full panoply of First Amendment
protections for their direct comments on public issues. There is no
reason for providing similar constitutional protection when such
statements are made only in the context of commercial transactions.
In that context, for example, the State retains the power to
"insur[e] that the stream of commercial information
flow[s] cleanly as well as freely." Virginia Pharmacy Board
v. Virginia Citizens Consumer Council, 425 U.S. 748, 772, 96 S.Ct.
1817, 1831, 48 L.Ed.2d 346 (1976). This Court's decisions on
commercial expression have rested on the premise that such speech,
although meriting some protection, is of less constitutional moment
than other forms of speech. As we stated in Ohralik, the failure to
distinguish between commercial and noncommercial speech "could invite
dilution, simply by a leveling process, of the force of the
[First] Amendment's guarantee with respect to the latter kind
of speech." 436 U.S., at 456, 98 S.Ct., at 1918.
The First Amendment's concern for commercial speech is based on the
informational function of advertising. See First National Bank of
Boston v. Bellotti, 435 U.S. 765, 783, 98 S.Ct. 1407, 1419, 55
L.Ed.2d 707 (1978). Consequently, there can be no constitutional
objection to the suppression of commercial messages that do not
accurately inform the public about lawful activity. The government
may ban forms of communication more likely to deceive the public than
to inform it, Friedman v. Rogers, supra, at 13, 15-16, 99 S.Ct., at
896, 897; Ohralik v. Ohio State Bar Assn., supra, at 464-465, 98
S.Ct., at 1923-1925, or *564 commercial speech related to illegal
activity, Pittsburgh Press Co. v. Human Relations Comm'n, 413 U.S.
376, 388, 93 S.Ct. 2553, 2560, 37 L.Ed.2d 669 (1973).
[FN6]
FN6. In most other contexts, the First Amendment prohibits regulation
based on the content of the message. Consolidated Edison Co. v.
Public Service Comm'n of New York, 447 U.S., at 537-540, 100 S.Ct.,
at 2333-2334. Two features of commercial speech permit regulation of
its content. First, commercial speakers have extensive knowledge of
both the market and their products. Thus, they are well situated to
evaluate the accuracy of their messages and the lawfulness of the
underlying activity. Bates v. State Bar of Arizona, 433 U.S. 350,
381, 97 S.Ct. 2691, 2708, 53 L.Ed.2d 810 (1977). In addition,
commercial speech, the offspring of economic self- interest, is a
hardy breed of expression that is not "particularly susceptible to
being crushed by overbroad regulation." Ibid.
If the communication is neither misleading nor related to unlawful
activity, the government's power is more circumscribed. The State
must assert a substantial interest to be achieved by restrictions on
commercial speech. Moreover, the regulatory technique must be in
proportion to that interest. The limitation on expression must be
designed carefully to achieve the State's goal. Compliance with this
requirement may be measured by two criteria. First, the restriction
must directly advance the state interest involved; the regulation may
not be sustained if it provides only ineffective or remote support
for the government's purpose. Second, if the governmental interest
could be served as well by a more limited restriction on commercial
speech, the excessive restrictions cannot survive.
Under the first criterion, the Court has declined to uphold
regulations that only indirectly advance the state interest involved.
In both Bates and Virginia Pharmacy Board, the Court concluded that
an advertising ban could not be imposed to protect the ethical or
performance standards of a profession. The Court noted in Virginia
Pharmacy Board that "[t]he advertising ban does not directly
affect professional standards one way or the other." 425 U.S., at
769, 96 S.Ct., at 1829. In Bates, the Court overturned an advertising
prohibition that was designed to protect the "quality" of a lawyer's
work. "Restraints on advertising . . . are an ineffective way
of deterring shoddy work." 433 U.S., at 378, 97 S.Ct., at 2706.
[FN7]
FN7. In Linmark Associates, Inc. v. Willingboro, 431 U.S. 85, 95-96,
97 S.Ct. 1614, 1619-1620, 52 L.Ed.2d 155 (1977), we observed that
there was no definite connection between the township's goal of
integrated housing and its ban on the use of "For Sale" signs in
front of houses.
The second criterion recognizes that the First Amendment mandates
that speech restrictions be "narrowly drawn." In re Primus, 436 U.S.
412, 438, 98 S.Ct. 1893, 1908, 56 L.Ed.2d 417 (1978). [FN8]
The regulatory technique may extend only as far as the interest it
serves. The State cannot regulate speech that poses no danger to the
asserted state interest, see First National Bank of Boston v.
Bellotti, supra, at 794-795, 98 S.Ct., at 1425-1426, nor can it
completely suppress information when narrower restrictions on
expression would serve its interest as well. For example, in Bates
the Court explicitly did not "foreclose the possibility that some
limited supplementation, by way of warning or disclaimer or the like,
might be required" in promotional materials. 433 U.S., at 384, 97
S.Ct., at 2709. See Virginia Pharmacy Board, supra, at 773, 96 S.Ct.,
at 1831. And in Carey v. Population Services International, 431 U.S.
678, 701-702, 97 S.Ct. 2010, 2025, 52 L.Ed.2d 675 (1977), we held
that the State's "arguments ... do not justify the total suppression
of advertising concerning contraceptives." This holding left open the
possibility that the State could implement more carefully drawn
restrictions. See id., at 712, 97 S.Ct., at 2030 (POWELL, J.,
concurring in part and in judgment); id., at 716-717, 97 S.Ct., at
2032 (STEVENS, J., concurring in part and in judgment).
[FN9]
FN8. This analysis is not an application of the "overbreadth"
doctrine. The latter theory permits the invalidation of regulations
on First Amendment grounds even when the litigant challenging the
regulation has engaged in no constitutionally protected activity. E.
g., Kunz v. New York, 340 U.S. 290, 71 S.Ct. 312, 95 L.Ed. 280
(1951). The overbreadth doctrine derives from the recognition that
unconstitutional restriction of expression may deter protected speech
by parties not before the court and thereby escape judicial review.
Broadrick v. Oklahoma, 413 U.S. 601, 612-613, 93 S.Ct. 2908,
2915-2916, 37 L.Ed.2d 830 (1973); see Note, The First Amendment
Overbreadth Doctrine, 83 Harv.L.Rev. 844, 853-858 (1970). This
restraint is less likely where the expression is linked to
"commercial well-being" and therefore is not easily deterred by
"overbroad regulation." Bates v. State Bar of Arizona, supra, at 381,
97 S.Ct., at 2707.
In this case, the Commission's prohibition acts directly against the
promotional activities of Central Hudson, and to the extent the
limitations are unnecessary to serve the State's interest, they are
invalid.
FN9. We review with special care regulations that entirely suppress
commercial speech in order to pursue a nonspeech-related policy. In
those circumstances, a ban on speech could screen from public view
the underlying governmental policy. See Virginia Pharmacy Board, 425
U.S., at 780, n. 8, 96 S.Ct., at 1835, n. 8 (STEWART, J.,
concurring). Indeed, in recent years this Court has not approved a
blanket ban on commercial speech unless the expression itself was
flawed in some way, either because it was deceptive or related to
unlawful activity.
[17] In commercial speech cases, then, a four-part analysis
has developed. At the outset, we must determine whether the
expression is protected by the First Amendment. For commercial speech
to come within that provision, it at least must concern lawful
activity and not be misleading. Next, we ask whether the asserted
governmental interest is substantial. If both inquiries yield
positive answers, we must determine whether the regulation directly
advances the governmental interest asserted, and whether it is not
more extensive than is necessary to serve that interest.
We now apply this four-step analysis for commercial speech to the
Commission's arguments in support of its ban on promotional
advertising.
The Commission does not claim that the expression at issue either
is inaccurate or relates to unlawful activity. Yet the New York Court
of Appeals questioned whether Central Hudson's advertising is
protected commercial speech. Because appellant holds a monopoly over
the sale of electricity in its service area, the state court
suggested that the Commission's order restricts no commercial speech
of any worth. The court stated that advertising in a "noncompetitive
market" could not improve the decisionmaking of
consumers. 47 N.Y.2d, at 110, 417 N.Y.S.2d, at 39, 390 N.E.2d, at
757. The court saw no constitutional problem with barring commercial
speech that it viewed as conveying little useful information.
This reasoning falls short of establishing that appellant's
advertising is not commercial speech protected by the First
Amendment. Monopoly over the supply of a product provides no
protection from competition with substitutes for that product.
Electric utilities compete with suppliers of fuel oil and natural gas
in several markets, such as those for home heating and industrial
power. This Court noted the existence of interfuel competition 45
years ago, see West Ohio Gas Co. v. Public Utilities Comm'n, 294 U.S.
63, 72, 55 S.Ct. 316, 321, 79 L.Ed. 761 (1935). Each energy source
continues to offer peculiar advantages and disadvantages that may
influence consumer choice. For consumers in those competitive
markets, advertising by utilities is just as valuable as advertising
by unregulated firms. [FN10]
FN10. Several commercial speech decisions have involved enterprises
subject to extensive state regulation. E. g., Friedman v. Rogers, 440
U.S. 1, 4-5, 99 S.Ct. 887, 891, 59 L.Ed.2d 100 (1979) (optometrists);
Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53
L.Ed.2d 810 (1977) (lawyers); Virginia Pharmacy Board v. Virginia
Citizens Consumer Council, supra, at 750-752, 96 S.Ct., at 1819-1820
(pharmacists).
Even in monopoly markets, the suppression of advertising reduces the
information available for consumer decisions and thereby defeats the
purpose of the First Amendment. The New York court's argument appears
to assume that the providers of a monopoly service or product are
willing to pay for wholly ineffective advertising. Most
businesses--even regulated monopolies--are unlikely to underwrite
promotional advertising that is of no interest or use to consumers.
Indeed, a monopoly enterprise legitimately may wish to inform the
public that it has developed new services or terms of doing business.
A consumer may need information to aid his decision whether or not to
use the monopoly service at all, or how much of the service he should
purchase. In the absence of factors that would distort the decision
to advertise, we *568 may assume that the willingness of a business
to promote its products reflects a belief that consumers are
interested in the advertising. [FN11] Since no such
extraordinary conditions have been identified in this case,
appellant's monopoly position does not alter the First Amendment's
protection for its commercial speech.
FN11. There may be a greater incentive for a utility to advertise if
it can use promotional expenses in determining its rate of return,
rather than pass those costs on solely to shareholders. That
practice, however, hardly distorts the economic decision whether to
advertise. Unregulated businesses pass on promotional costs to
consumers, and this Court expressly approved the practice for
utilities in West Ohio Gas Co. v. Public Utilities Comm'n, 294 U.S.
63, 72, 55 S.Ct. 316, 321, 79 L.Ed. 761 (1935).
The Commission offers two state interests as justifications for
the ban on promotional advertising. The first concerns energy
conservation. Any increase in demand for electricity--during peak or
off-peak periods--means greater consumption of energy. The Commission
argues, and the New York court agreed, that the State's interest in
conserving energy is sufficient to support suppression of advertising
designed to increase consumption of electricity. In view of our
country's dependence on energy resources beyond our control, no one
can doubt the importance of energy conservation. Plainly, therefore,
the state interest asserted is substantial.
The Commission also argues that promotional advertising will
aggravate inequities caused by the failure to base the utilities'
rates on marginal cost. The utilities argued to the Commission that
if they could promote the use of electricity in periods of low
demand, they would improve their utilization of generating capacity.
The Commission responded that promotion of off-peak consumption also
would increase consumption during peak periods. If peak demand
were to rise, the absence of marginal cost rates would mean that the
rates charged for the additional power would not reflect the true
costs of expanding production. Instead, the extra costs would
be borne by all consumers through higher overall rates. Without
promotional advertising, the Commission stated, this inequitable turn
of events would be less likely to occur. The choice among rate
structures involves difficult and important questions of economic
supply and distributional fairness. [FN12] The State's
concern that rates be fair and efficient represents a clear and
substantial governmental interest.
FN12. See W. Jones, Regulated Industries 191-287 (2d ed. 1976).
C
Next, we focus on the relationship between the State's interests
and the advertising ban. Under this criterion, the Commission's
laudable concern over the equity and efficiency of appellant's rates
does not provide a constitutionally adequate reason for restricting
protected speech. The link between the advertising prohibition and
appellant's rate structure is, at most, tenuous. The impact of
promotional advertising on the equity of appellant's rates is highly
speculative. Advertising to increase off-peak usage would have to
increase peak usage, while other factors that directly affect the
fairness and efficiency of appellant's rates remained constant. Such
conditional and remote eventualities simply cannot justify silencing
appellant's promotional advertising.
In contrast, the State's interest in energy conservation is directly
advanced by the Commission order at issue here. There is an immediate
connection between advertising and demand for electricity. Central
Hudson would not contest the advertising ban unless it believed that
promotion would increase its sales. Thus, we find a direct link
between the state interest in conservation and the Commission's
order.
We come finally to the critical inquiry in this case: whether the
Commission's complete suppression of speech ordinarily protected by
the First Amendment is no more extensive than necessary to
further the State's interest in energy conservation. The Commission's
order reaches all promotional advertising, regardless of the impact
of the touted service on overall energy use. But the energy
conservation rationale, as important as it is, cannot justify
suppressing information about electric devices or services that would
cause no net increase in total energy use. In addition, no showing
has been made that a more limited restriction on the content of
promotional advertising would not serve adequately the State's
interests.
Appellant insists that but for the ban, it would advertise products
and services that use energy efficiently. These include the "heat
pump," which both parties acknowledge to be a major improvement in
electric heating, and the use of electric heat as a "backup" to solar
and other heat sources. Although the Commission has questioned the
efficiency of electric heating before this Court, neither the
Commission's Policy Statement nor its order denying rehearing made
findings on this issue. In the absence of authoritative findings to
the contrary, we must credit as within the realm of possibility the
claim that electric heat can be an efficient alternative in some
circumstances.
The Commission's order prevents appellant from promoting electric
services that would reduce energy use by diverting demand from less
efficient sources, or that would consume roughly the same amount of
energy as do alternative sources. In neither situation would the
utility's advertising endanger conservation or mislead the public. To
the extent that the Commission's order suppresses speech that in no
way impairs the State's interest in energy conservation, the
Commission's order violates the First and Fourteenth Amendments and
must be invalidated. See First National Bank of Boston v.
Bellotti, 435 U.S. 765, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978).
The Commission also has not demonstrated that its interest in
conservation cannot be protected adequately by more limited
regulation of appellant's commercial expression. To further its
policy of conservation, the Commission could attempt to restrict the
format and content of Central Hudson's advertising. It might, for
example, require that the advertisements include information about
the relative efficiency and expense of the offered service, both
under current conditions and for the foreseeable future. Cf. Banzhaf
v. FCC, 132 U.S.App.D.C. 14, 405 F.2d 1082 (1968), cert. denied sub
nom. Tobacco Institute, Inc. v. FCC, 396 U.S. 842, 90 S.Ct. 50, 24
L.Ed.2d 93 (1969). [FN13] In the absence of a showing that
more limited speech regulation would be ineffective, we cannot
approve the complete suppression of Central Hudson's advertising.
[FN14]
FN13. The Commission also might consider a system of previewing
advertising campaigns to insure that they will not defeat
conservation policy. It has instituted such a program for approving
"informational" advertising under the Policy Statement challenged in
this case. See supra, at 2348. We have observed that commercial
speech is such a sturdy brand of expression that traditional prior
restraint doctrine may not apply to it. Virginia Pharmacy Board v.
Virginia Citizens Consumer Council, 425 U.S., at 771-772, n. 24, 96
S.Ct., at 1830, n. 24. And in other areas of speech regulation, such
as obscenity, we have recognized that a prescreening arrangement can
pass constitutional muster if it includes adequate procedural
safeguards. Freedman v. Maryland, 380 U.S. 51, 85 S.Ct. 734, 13
L.Ed.2d 649 (1965).
FN14. In view of our conclusion that the Commission's advertising
policy violates the First and Fourteenth Amendments, we do not reach
appellant's claims that the agency's order also violated the Equal
Protection Clause of the Fourteenth Amendment, and that it is both
overbroad and vague.
Our decision today in no way disparages the national interest in
energy conservation. We accept without reservation the argument that
conservation, as well as the development of alternative energy
sources, is an imperative national goal. Administrative bodies
empowered to regulate electric utilities have the authority--and
indeed the duty--to take appropriate action to further this goal.
When, however, such action involves the suppression of speech,
the First and Fourteenth Amendments require that the restriction be
no more extensive than is necessary to serve the state interest. In
this case, the record before us fails to show that the total ban on
promotional advertising meets this requirement. [FN15]
FN15. The Commission order at issue here was not promulgated in
response to an emergency situation. Although the advertising ban
initially was prompted by critical fuel shortage in 1973, the
Commission makes no claim that an emergency now exists. We do not
consider the powers that the State might have over utility
advertising in emergency circumstances. See State v. Oklahoma Gas
& Electric Co., 536 P.2d 887, 895-896 (Okl.1975).
Accordingly, the judgment of the New York Court of Appeals is
Reversed.
Mr. Justice BRENNAN, concurring in the judgment.
One of the major difficulties in this case is the proper
characterization of the Commission's Policy Statement. I find it
impossible to determine on the present record whether the
Commission's ban on all "promotional" advertising, in contrast to
"institutional and informational" advertising, see ante, at 2347, is
intended to encompass more than "commercial speech." I am inclined to
think that Mr. Justice STEVENS is correct that the Commission's order
prohibits more than mere proposals to engage in certain kinds of
commercial transactions, and therefore I agree with his conclusion
that the ban surely violates the First and Fourteenth Amendments. But
even on the assumption that the Court is correct that the
Commission's order reaches only commercial speech, I agree with Mr.
Justice BLACKMUN that "[n]o differences between
commercial speech and other protected speech justify suppression of
commercial speech in order to influence public conduct through
manipulation of the availability of information." Post, at 2357.
Accordingly, with the qualifications implicit in the preceding
paragraph, I join the opinions of Mr. Justice BLACKMUN and Mr.
Justice STEVENS concurring in the judgment.
Mr. Justice BLACKMUN, with whom Mr. Justice BRENNAN joins, concurring
in the judgment.
I agree with the Court that the Public Service Commission's ban on
promotional advertising of electricity by public utilities is
inconsistent with the First and Fourteenth Amendments. I concur only
in the Court's judgment, however, because I believe the test now
evolved and applied by the Court is not consistent with our prior
cases and does not provide adequate protection for truthful,
nonmisleading, noncoercive commercial speech.
The Court asserts, ante, at 2351, that "a four-part analysis has
developed" from our decisions concerning commercial speech. Under
this four-part test a restraint on commercial "communication
[that] is neither misleading nor related to unlawful
activity" is subject to an intermediate level of scrutiny, and
suppression is permitted whenever it "directly advances" a
"substantial" governmental interest and is "not more extensive than
is necessary to serve that interest." Ante, at 2350 and 2351. I agree
with the Court that this level of intermediate scrutiny is
appropriate for a restraint on commercial speech designed to protect
consumers from misleading or coercive speech, or a regulation related
to the time, place, or manner of commercial speech. I do not agree,
however, that the Court's four-part test is the proper one to be
applied when a State seeks to suppress information about a product in
order to manipulate a private economic decision that the State cannot
or has not regulated or outlawed directly.
Since the Court, without citing empirical data or other authority,
finds a "direct link" between advertising and energy consumption, it
leaves open the possibility that the State may suppress advertising
of electricity in order to lessen demand for electricity. I, of
course, agree with the Court that, in today's world, energy
conservation is a goal of paramount national and local importance. I
disagree with the Court, however, when it says that suppression of
speech may be a permissible means to achieve that goal. Mr. Justice
STEVENS appropriately notes: "The justification for the regulation is
nothing more than the expressed fear that the audience may find the
utility's message persuasive. Without the aid of any coercion,
deception, or misinformation, truthful communication may persuade
some citizens to consume more electricity than they otherwise would."
Post, at 2359.
The Court recognizes that we have never held that commercial speech
may be suppressed in order to further the State's interest in
discouraging purchases of the underlying product that is advertised.
Ante, at 2351, n. 9. Permissible restraints on commercial speech have
been limited to measures designed to protect consumers from
fraudulent, misleading, or coercive sales techniques. [FN1]
Those designed to deprive consumers of information about products or
services that are legally offered for sale consistently have been
invalidated. [FN2]
FN1. See Friedman v. Rogers, 440 U.S. 1, 10, 99 S.Ct. 887, 894, 59
L.Ed.2d 100 (1979) (Court upheld a ban on practice of optometry under
a trade name as a permissible requirement that commercial information
" 'appear in such a form . . . as [is] necessary to prevent
its being deceptive,' " quoting from Virginia Pharmacy Board v.
Virginia COnsumer Council, 425 U.S. 748, 772, n. 24, 96 S.Ct. 1817,
1830, n. 24, 48 L.Ed.2d 346 (1976)); Ohralik v. Ohio State Bar Assn.,
436 U.S. 447, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978).
FN2. See Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691,
53 L.Ed.2d 810 (1977); Carey v. Population Services International,
431 U.S. 678, 700-702, 97 S.Ct. 2010, 2024-2025, 52 L.Ed.2d 675
(1977); Linmark Associates, Inc. v. Willingboro, 431 U.S. 85, 97
S.Ct. 1614, 50 L.Ed.2d 155 (1977); Virginia Pharmacy Board v.
Virginia Consumer Council, 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d
346 (1976); Bigelow v. Virginia, 421 U.S. 809, 95 S.Ct. 2222, 44
L.Ed.2d 600 (1975).
I seriously doubt whether suppression of information concerning the
availability and price of a legally offered product is ever a
permissible way for the State to "dampen" demand for or use of the
product. Even though "commercial" speech is involved, such a
regulatory measure strikes at the heart of the First Amendment. This
is because it is a covert attempt by the State to manipulate
the choices of its citizens, not by persuasion or direct regulation,
but by depriving the public of the information needed to make a free
choice. As the Court recognizes, the State's policy choices are
insulated from the visibility and scrutiny that direct regulation
would entail and the conduct of citizens is molded by the information
that government chooses to give them. Ante, at 2351, n. 9 ("We review
with special care regulations that entirely suppress commercial
speech in order to pursue a nonspeech-related policy. In those
circumstances, a ban on speech could screen from public view the
underlying governmental policy"). See Rotunda, The Commercial Speech
Doctrine in the Supreme Court, 1976 U.Ill.Law Forum 1080,
1080-1083.
If the First Amendment guarantee means anything, it means that,
absent clear and present danger, government has no power to restrict
expression because of the effect its message is likely to have on the
public. See generally Comment, First Amendment Protection for
Commercial Advertising: The New Constitutional Doctrine, 44
U.Chi.L.Rev. 205, 243-251 (1976). Our cases indicate that this
guarantee applies even to commercial speech. In Virginia Pharmacy
Board v. Virginia Consumer Council, 425 U.S. 748, 96 S.Ct. 1817, 48
L.Ed.2d 346 (1976), we held that Virginia could not pursue its goal
of encouraging the public to patronize the "professional pharmacist"
(one who provided individual attention and a stable
pharmacist-customer relationship) by "keeping the public in ignorance
of the entirely lawful terms that competing pharmacists are
offering." Id., at 770, 96 S.Ct., at 1829-30. We noted that our
decision left the State free to pursue its goal of maintaining high
standards among its pharmacists by "requir[ing] whatever
professional standards it wishes of its pharmacists." Ibid.
We went on in Virginia Pharmacy Board to discuss the types of
regulation of commercial speech that, due to the "commonsense
differences" between this form of speech and other forms, are or may
be constitutionally permissible. We indicated that government may
impose reasonable "time, place, and manner" restrictions, and
that it can deal with false, deceptive, and misleading commercial
speech. We noted that the question of advertising of illegal
transactions and the special problems of the electronic broadcast
media were not presented.
Concluding with a restatement of the type of restraint that is not
permitted, we said: "What is at issue is whether a State may
completely suppress the dissemination of concededly truthful
information about entirely lawful activity, fearful of that
information's effect upon its disseminators and its recipients. . . .
[W]e conclude that the answer to this [question] is
in the negative." Id., at 773, 96 S.Ct., at 1831.
Virginia Pharmacy Board did not analyze the State's interests to
determine whether they were "substantial." Obviously, preventing
professional dereliction and low quality health care are
"substantial," legitimate, and important state goals. Nor did the
opinion analyze the ban on speech to determine whether it "directly
advance[d]," ante, at 2351, 2353, these goals. We also did
not inquire whether a "more limited regulation of . . . commercial
expression," ante, at 2353, would adequately serve the State's
interests. Rather, we held that the State "may not [pursue its
goals] by keeping the public in ignorance." 425 U.S., at
770, 96 S.Ct., at 1829. (Emphasis supplied.)
Until today, this principle has governed. In Linmark Associates, Inc.
v. Willingboro, 431 U.S. 85, 97 S.Ct. 1614, 50 L.Ed.2d 155 (1977), we
considered whether a town could ban "For Sale" signs on residential
property to further its goal of promoting stable, racially integrated
housing. We did note that the record did not establish that the
ordinance was necessary to enable the State to achieve its goal. The
holding of Linmark, however, was much broader. [FN3] We
stated:
FN3. In my view, the Court today misconstrues the holdings of both
Virginia Pharmacy Board and Linmark Associates by implying that those
decisions were based on the fact that the restraints were not closely
enough related to the governmental interests asserted. See ante, at
2350, and n. 7. Although the Court noted the lack of substantial
relationship between the restraint and the governmental interest in
each of those cases, the holding of each clearly rested on a much
broader principle.
"The constitutional defect in this ordinance, however, is far
more basic. The Township Council here, like the Virginia Assembly in
Virginia Pharmacy Bd., acted to prevent its residents from obtaining
certain information . . . which pertains to sales activity in
Willingboro . . . . The Council has sought to restrict the free flow
of these data because it fears that otherwise homeowners will make
decisions inimical to what the Council views as the homeowners'
self-interest and the corporate interest of the township: they will
choose to leave town. The Council's concern, then, was not with any
commercial aspect of "For Sale" signs--with offerors communicating
offers to offerees--but with the substance of the information
communicated to Willingboro citizens." Id., at 96, 97 S.Ct., at
1620.
The Court in Linmark resolved beyond all doubt that a strict standard
of review applies to suppression of commercial information, where the
purpose of the restraint is to influence behavior by depriving
citizens of information. The Court followed the strong statement
above with an explicit adoption of the standard advocated by Mr.
Justice Brandeis in his concurring opinion in Whitney v. California,
274 U.S. 357, 377, 47 S.Ct. 641, 649, 71 L.Ed. 1095 (1927): "If there
be time to expose through discussion the falsehood and fallacies, to
avert the evil by the processes of education, the remedy to be
applied is more speech, not enforced silence. Only an emergency can
justify repression." 431 U.S., at 97, 97 S.Ct., at 1620.
Carey v. Population Services International, 431 U.S. 678, 700-702, 97
S.Ct. 2010, 2024-2025, 52 L.Ed.2d 675 (1977), also applied to
content-based restraints on commercial speech the same standard of
review we have applied to other varieties of speech. There the Court
held that a ban on advertising of contraceptives could not be
justified by the State's interest in avoiding " 'legitimation'
of illicit sexual behavior" because the advertisements could not be
characterized as " 'directed to inciting or producing imminent
lawless action and . . . likely to incite or produce such action,' "
id., at 701, 97 S.Ct., at 2024, quoting Brandenburg v. Ohio, 395 U.S.
444, 447, 89 S.Ct. 1827, 1829, 23 L.Ed.2d 430 (1969).
Our prior references to the " 'commonsense differences' " between
commercial speech and other speech " 'suggest that a different degree
of protection is necessary to insure that the flow of truthful and
legitimate commercial information is unimpaired.' " Linmark
Associates, 431 U.S., at 98, 97 S.Ct., at 1621, quoting Virginia
Pharmacy Board, 425 U.S., at 771-772, n. 24, 96 S.Ct., at 1830, n.
24. We have not suggested that the "commonsense differences" between
commercial speech and other speech justify relaxed scrutiny of
restraints that suppress truthful, nondeceptive, noncoercive
commercial speech. The differences articulated by the Court, see
ante, at 2350, n. 6, justify a more permissive approach to regulation
of the manner of commercial speech for the purpose of protecting
consumers from deception or coercion, and these differences explain
why doctrines designed to prevent "chilling" of protected
speech are inapplicable to commercial speech. No differences between
commercial speech and other protected speech justify suppression of
commercial speech in order to influence public conduct through
manipulation of the availability of information. The Court stated in
Carey v. Population Services International :
"Appellants suggest no distinction between commercial and
noncommercial speech that would render these discredited arguments
meritorious when offered to justify prohibitions on commercial
speech. On the contrary, such arguments are clearly directed not at
any commercial aspect of the prohibited advertising but at the ideas
conveyed and form of expression--the core of First Amendment values."
431 U.S., at 701, n. 28, 97 S.Ct., at 2025, n. 28 (emphasis
added).
It appears that the Court would permit the State to ban all direct
advertising of air conditioning, assuming that a more limited
restriction on such advertising would not effectively deter the
public from cooling its homes. In my view, our cases do not support
this type of suppression. If a governmental unit believes that use or
overuse of air conditioning is a serious problem, it must attack that
problem directly, by prohibiting air conditioning or regulating
thermostat levels. Just as the Commonwealth of Virginia may promote
professionalism of pharmacists directly, so too New York may not
promote energy conservation "by keeping the public in ignorance."
Virginia Pharmacy Board, 425 U.S., at 770, 96 S.Ct., at 1829.
Mr. Justice STEVENS, with whom Mr. Justice BRENNAN joins, concurring
in the judgment.
Because "commercial speech" is afforded less constitutional
protection than other forms of speech, [FN1] it is important
that the commercial speech concept not be defined too broadly lest
speech deserving of greater constitutional protection be
inadvertently suppressed. The issue in this case is whether New
York's prohibition on the promotion of the use of electricity through
advertising is a ban on nothing but commercial speech.
FN1. See Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 456, 98 S.Ct.
1912, 1918, 56 L.Ed.2d 444, quoted ante, at 2350, n. 5. Cf. Smith v.
United States, 431 U.S. 291, 318, 97 S.Ct. 1756, 1772, 52 L.Ed.2d 324
(STEVENS, J., dissenting).
In my judgment one of the two definitions the Court uses in
addressing that issue is too broad and the other may be somewhat too
narrow. The Court first describes commercial speech as "expression
related solely to the economic interests of the speaker and its
audience." Ante, at 2349. Although it is not entirely clear whether
this definition uses the subject matter of the speech or the
motivation of the speaker as the limiting factor, it seems clear to
me that it encompasses speech that is entitled to the maximum
protection afforded by the First Amendment. Neither a labor leader's
exhortation to strike, nor an economist's dissertation on the
money supply, should receive any lesser protection because the
subject matter concerns only the economic interests of the audience.
Nor should the economic motivation of a speaker qualify his
constitutional protection; even Shakespeare may have been motivated
by the prospect of pecuniary reward. Thus, the Court's first
definition of commercial speech is unquestionably too broad.
[FN2]
FN2. See Farber, Commercial Speech and First Amendment Theory, 74
Nw.U.L.Rev. 372, 382-383 (1979):
"Economic motivation could not be made a disqualifying factor
[from maximum protection] without enormous damage to the
first amendment. Little purpose would be served by a first amendment
which failed to protect newspapers, paid public speakers, political
candidates with partially economic motives and professional authors."
(Footnotes omitted.)
The Court's second definition refers to " 'speech proposing a
commercial transaction.' " Ante, at 2349. A salesman's solicitation,
a broker's offer, and a manufacturer's publication of a price list or
the terms of his standard warranty would unquestionably fit within
this concept. [FN3] Presumably, the definition is
intended to encompass advertising that advises possible buyers of the
availability of specific products at specific prices and describes
the advantages of purchasing such items. Perhaps it also extends to
other communications that do little more than make the name of a
product or a service more familiar to the general public. Whatever
the precise contours of the concept, and perhaps it is too early to
enunciate an exact formulation, I am persuaded that it should not
include the entire range of communication that is embraced within the
term "promotional advertising."
FN3. See id., at 386-387.
This case involves a governmental regulation that completely bans
promotional advertising by an electric utility. This ban encompasses
a great deal more than mere proposals to engage in certain kinds of
commercial transactions. It prohibits all advocacy of the immediate
or future use of electricity. It curtails expression by an
informed and interested group of persons of their point of view on
questions relating to the production and consumption of electrical
energy--questions frequently discussed and debated by our political
leaders. for example, an electric company's advocacy of the use of
electric heat for environmental reasons, as opposed to wood-burning
stoves, would seem to fall squarely within New York's promotional
advertising ban and also within the bounds of maximum First Amendment
protection. The breadth of the ban thus exceeds the boundaries of the
commercial speech concept, however that concept may be defined.
[FN4]
FN4. The utility's characterization of the Commission's ban in its
complaint as involving commercial speech clearly does not bind this
Court's consideration of the First Amendment issues in this new and
evolving area of constitutional law.
Nor does the Commission's intention not to suppress "institutional
and informational" speech insure that only "commercial speech" will
be suppressed. The blurry line between the two categories of speech
has the practical effect of requiring that the utilities either
refrain from speech that is close to the line, or seek advice from
the Public Service Commission. But the Commission does not possess
the necessary expertise in dealing with these sensitive free speech
questions; and, in any event, ordinarily speech entitled to maximum
First Amendment protection may not be subjected to a prior clearance
procedure with a government agency.
The justification for the regulation is nothing more than the
expressed fear that the audience may find the utility's message
persuasive. Without the aid of any coercion, deception, or
misinformation, truthful communication may persuade some citizens to
consume more electricity than they otherwise would. I assume that
such a consequence would be undesirable and that government may
therefore prohibit and punish the unnecessary or excessive use of
electricity. But if the perceived harm associated with greater
electrical usage is not sufficiently serious to justify direct
regulation, surely it does not constitute the kind of clear and
present danger that can justify the suppression of speech.
Although they were written in a different context, the words used by
Mr. Justice Brandeis in his concurring opinion in Whitney v.
California, 274 U.S. 357, 376-377, 47 S.Ct. 641, 648-649, 71 L.Ed.
1095, explain my reaction to the prohibition against advocacy
involved in this case:
"But even advocacy of violation, however reprehensible morally, is
not a justification for denying free speech where the advocacy falls
short of incitement and there is nothing to indicate that the
advocacy would be immediately acted on. The wide difference between
advocacy and incitement, between preparation and attempt, between
assembling and conspiracy, must be borne in mind. In order to support
a finding of clear and present danger it must be shown either that
immediate serious violence was to be expected or was advocated, or
that the past conduct furnished reason to believe that such advocacy
was then contemplated.
"Those who won our independence by revolution were not cowards. They
did not fear political change. They did not exalt order at the cost
of liberty. To courageous, self-reliant men, with confidence in
the power of free and fearless reasoning applied through the
processes of popular government, no danger flowing from speech can be
deemed clear and present, unless the incidence of the evil
apprehended is so imminent that it may befall before there is
opportunity for full discussion. If there be time to expose through
discussion the falsehood and fallacies, to avert the evil by the
processes of education, the remedy to be applied is more speech, not
enforced silence. Only an emergency can justify repression. Such must
be the rule if authority is to be reconciled with freedom. Such, in
my opinion, is the command of the Constitution." (Footnote omitted.)
[FN5]
FN5. Mr. Justice Brandeis quoted Lord Justice Scrutton's comment in
King v. Secretary of State for Home Affairs ex parte O'Brien,
[1923] 2 K.B. 361, 382:
" 'You really believe in freedom of speech, if you are willing to
allow it to men whose opinions seem to you wrong and even dangerous.
. . .' " 274 U.S., at 377, n. 4, 47 S.Ct., at 648, n. 4.
See also Young v. American Mini Theatres, Inc., 427 U.S. 50, 63, 96
S.Ct. 2440, 2448, 49 L.Ed.2d 310 (opinion of STEVENS, J.).
In sum, I concur in the result because I do not consider this to be a
"commercial speech" case. Accordingly, I see no need to decide
whether the Court's four-part analysis, ante, at 2351, adequately
protects commercial speech--as properly defined--in the face of a
blanket ban of the sort involved in this case.
Mr. Justice REHNQUIST, dissenting.
The Court today invalidates an order issued by the New York Public
Service Commission designed to promote a policy that has been
declared to be of critical national concern. The order was issued by
the Commission in 1973 in response to the Mideastern oil embargo
crisis. It prohibits electric corporations "from promoting the use of
electricity through the use of advertising, subsidy payments . . .,
or employee incentives." State of New York Public Service Commission,
Case No. 26532 (Dec. 5, 1973), App. to Juris. Statement 31a (emphasis
added). Although the immediate crisis created by the oil embargo has
subsided, the ban on promotional advertising remains in effect. The
regulation was re-examined by the New York Public Service Commission
in 1977. Its constitutionality was subsequently upheld by the New
York Court of Appeals, which concluded that the paramount national
interest in energy conservation justified its retention.
[FN1]
FN1. The New York Court of Appeals stated:
"In light of current exigencies, one of the policies of any public
service legislation must be the conservation of our vital and
irreplaceable resources. The Legislature has but recently imposed
upon the commission a duty 'to encourage all persons and corporations
. . . to formulate and carry out long-range programs . . .
[for] the preservation of environmental values and the
conservation of natural resources' (Public Service Law, ß 5,
subd. 2). Implicit in this amendment is a legislative recognition of
the serious situation which confronts our State and Nation. More
important, conservation of resources has become an avowed legislative
policy embodied in the commission's enabling act (see also, Matter of
New York State Council of Retail Merchants v. Public Serv. Comm. of
State of N. Y., 45 N.Y.2d 661, 673-674 [412 N.Y.S.2d 358, 384
N.E.2d 1282])." Consolidated Edison Co. v. Public Service Comm'n,
47 N.Y.2d 94, 102-103, 417 N.Y.S.2d 30, 34, 390 N.E.2d 749, 753
(1979).
The Court's asserted justification for invalidating the New York law
is the public interest discerned by the Court to underlie the First
Amendment in the free flow of commercial information. Prior to this
Court's recent decision in Virginia Pharmacy Board v. Virginia
Citizens Consumer Council, 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d
346 (1976), however, commercial speech was afforded no protection
under the First Amendment whatsoever. See E. g., Breard v.
Alexandria, 341 U.S. 622, 71 S.Ct. 920, 95 L.Ed. 1233 (1951);
Valentine v. Chrestensen, 316 U.S. 52, 62 S.Ct. 920, 86 L.Ed. 1262
(1942). Given what seems to me full recognition of the holding of
Virginia Pharmacy Board that commercial speech is entitled to some
degree of First Amendment protection, I think the Court is
nonetheless incorrect in invalidating the carefully considered state
ban on promotional advertising in light of pressing national
and state energy needs.
The Court's analysis in my view is wrong in several respects.
Initially, I disagree with the Court's conclusion that the speech of
a state-created monopoly, which is the subject of a comprehensive
regulatory scheme, is entitled to protection under the First
Amendment. I also think that the Court errs here in failing to
recognize that the state law is most accurately viewed as an economic
regulation and that the speech involved (if it falls within the scope
of the First Amendment at all) occupies a significantly more
subordinate position in the hierarchy of First Amendment values than
the Court gives it today. Finally, the Court in reaching its decision
improperly substitutes its own judgment for that of the State in
deciding how a proper ban on promotional advertising should be
drafted. With regard to this latter point, the Court adopts as its
final part of a four-part test a "no more extensive than
necessary" analysis that will unduly impair a state legislature's
ability to adopt legislation reasonably designed to promote interests
that have always been rightly thought to be of great importance to
the State.
In concluding that appellant's promotional advertising constitutes
protected speech, the Court reasons that speech by electric utilities
is valuable to consumers who must decide whether to use the monopoly
service or turn to an alternative energy source, and if they decide
to use the service how much of it to purchase. Ante, at 2352. The
Court in so doing "assume[s] that the willingness of a
business to promote its products reflects a belief that consumers are
interested in the advertising." Ante, at 2352. The Court's analysis
ignores the fact that the monopoly here is entirely state-created and
subject to an extensive state regulatory scheme from which it derives
benefits as well as burdens.
While this Court has stated that the "capacity [of speech]
for informing the public does not depend upon the identity of its
source," First National Bank of Boston v. Bellotti, 435 U.S. 765,
777, 98 S.Ct. 1407, 1416, 55 L.Ed.2d 707 (1978), the source of the
speech nevertheless may be relevant in determining whether a given
message is protected under the First Amendment. [FN2] When
the source of the speech is a state-created monopoly such as this,
traditional First Amendment concerns, if they come into play at all,
certainly do not justify the broad interventionist role adopted by
the Court today. In Consolidated Edison Co. v. Public Service
Comm'n, 447 U.S. 530, 549-550, 100 S.Ct. 2326, 2339-2340, 65 L.Ed.2d
319, Mr. Justice BLACKMUN observed:
FN2. In Brown v. Glines, 444 U.S. 348, 100 S.Ct. 594, 62 L.Ed.2d 540
(1980), for example, we recently upheld Air Force regulations that
imposed restrictions on the free speech and petition rights of Air
Force personnel. See also, e. g., Parker v. Levy, 417 U.S. 733, 94
S.Ct. 2547, 41 L.Ed.2d 439 (1974) (commissioned officer may be
prohibited from publicly urging enlisted personnel to disobey orders
that might send them into combat); Snepp v. United States, 444 U.S.
507, 100 S.Ct. 763, 62 L.Ed.2d 704 (1980) (employees of intelligence
agency may be required to submit publications relating to agency
activity for prepublication review by the agency).
"A public utility is a state-created monopoly. See, e. g., N. Y. Pub.
Serv. Law ß 68 (McKinney 1955); Jones, Origins of the
Certificate of Public Convenience and Necessity; Developments in the
States 1870-1920, 79 Colum. L.Rev. 426, 458-461 (1979); Comment,
Utility Rates, Consumers, and the New York State Public Service
Commission, 39 Albany L.Rev. 707, 709-714 (1975). Although monopolies
generally are against the public policies of the United States and of
the State of New York, see, e. g., N. Y. Gen. Bus. Law ß 340
(McKinney 1968 and Supp.1979-1980), . . . utilities are permitted to
operate as monopolies because of a determination by the State that
the public interest is better served by protecting them from
competition. See 2 A. Kahn, The Economics of Regulation 113-171
(1971).
"This exceptional grant of power to private enterprises justifies
extensive oversight on the part of the State to protect the
ratepayers from exploitation of the monopoly power through excessive
rates and other forms of overreaching. . . . New York law gives its
Public Service Commission plenary supervisory powers over all
property, real and personal, 'used or to be used for or in connection
with or to facilitate the . . . sale or furnishing of electricity for
light, heat or power.' N.Y.Pub.Serv.Law ßß 2(12) and
66(1) (McKinney 1955)."
Thus, although First National Bank of Boston v. Bellotti, supra,
holds that speech of a corporation is entitled to some First
Amendment protection, it by no means follows that a utility with
monopoly power conferred by a State is also entitled to such
protection.
The state-created monopoly status of a utility arises from the unique
characteristics of the services that a utility provides. As
recognized in Cantor v. Detroit Edison Co., 428 U.S. 579, 595-596, 96
S.Ct. 3110, 3120, 49 L.Ed.2d 1141 (1976), "public utility regulation
typically assumes that the private firm is a natural monopoly
and that public controls are necessary to protect the consumer from
exploitation." The consequences of this natural monopoly in my view
justify much more wide-ranging supervision and control of a utility
under the First Amendment than this Court held in Bellotti to be
permissible with regard to ordinary corporations. Corporate status is
generally conferred as a result of a State's determination that the
corporate characteristics "enhance its efficiency as an economic
entity." First National Bank of Boston v. Bellotti, supra, at
825-826, 98 S.Ct., at 1441 (REHNQUIST, J., dissenting). A utility, by
contrast fulfills a function that serves special public interests as
a result of the natural monopoly of the service provided. Indeed, the
extensive regulations governing decisionmaking by public utilities
suggest that for purposes of First Amendment analysis, a utility is
far closer to a state-controlled enterprise than is an ordinary
corporation. [FN3] Accordingly, I think a State has broad
discretion in determining the statements that a utility may make in
that such statements emanate from the entity created by the State to
provide important and unique public services. And a state regulatory
body charged with the oversight of these types of services may
reasonably decide to impose on the utility a special duty to conform
its conduct to the agency's conception of the public interest.
Thus I think it is constitutionally permissible for it to decide that
promotional advertising is inconsistent with the public interest in
energy conservation. I also think New York's ban on such advertising
falls within the scope of permissible state regulation of an economic
activity by an entity that could not exist in corporate form, say
nothing of enjoy monopoly status, were it not for the laws of New
York. [FN4]
FN3. In this regard the New York Court of Appeals stated:
"Public utilities, from the earliest days in this State, have been
regulated and franchised to serve the commonweal. Our policy is 'to
withdraw the unrestricted right of competition between corporations
occupying . . . the public streets . . . and supplying the public
with their products or utilities which are well nigh necessities'
(People ex rel. New York Edison Co. v. Willcox, 207 N.Y. 86, 99,
[100 N.E. 705], Matter of New York Elec.
Lines Co., 201 N.Y. 321, [94 N.E. 1056]). The realities of
the situation all but dictate that a utility be granted monopoly
status (see People ex rel. New York Elec. Lines Co. v. Squire, 107
N.Y. 593, 603-605, [14 N.E. 820]). To protect against abuse
of this superior economic position extensive governmental regulation
has been deemed a necessary coordinate (see People ex rel. New York
Edison Co. v. Willcox, supra, [207 N.Y.] at pp. 93-94
[100 N.E. 705]." 47 N.Y.2d, at 109-110, 417 N.Y.S.2d, at
38-39, 390 N.E.2d, at 757.
FN4. The Commission's restrictions on promotional advertising are
grounded in its concern that electric utilities fulfill their
obligation under the New York Public Service Law to provide
"adequate" service at "just and reasonable" rates. N.Y.Pub.Serv.Law
ß 65(1) (McKinney 1955). The Commission, under state law, is
required to set reasonable rates. N.Y.Pub.Serv.Law ßß
66(2) and 72 (McKinney 1955); ß 66(12) (McKinney Supp.1979).
The Commission has also been authorized by the legislature to
prescribe "such reasonable improvements [in electric utilities'
practices] as will best promote the public interest . . .."
ß 66(2). And in the performance of its duties the Commission is
required to "encourage all persons and corporations subject to
its jurisdiction to formulate and carry out
long-range programs, individually or cooperatively, for the
performance of their public service responsibilities with economy,
efficiency, and care for the public safety, the preservation of
environmental values, and the conservation of natural resources."
N.Y.Pub.Serv.Law ß 5(2) (McKinney Supp.1979). Here I think it
was quite reasonable for the State Public Service Commission to
conclude that the ban on promotional advertising was necessary to
prevent utilities from using their broad state-conferred monopoly
power to promote their own economic well-being at the expense of the
state interest in energy conservation--an interest that could
reasonably be found to be inconsistent with the promotion of greater
profits for utilities.
This Court has previously recognized that although commercial
speech may be entitled to First Amendment protection, that protection
is not as extensive as that accorded to the advocacy of ideas. Thus,
we stated in Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 455-456,
98 S.Ct. 1912, 1918, 56 L.Ed.2d 444 (1978):
"Expression concerning purely commercial transactions has come within
the ambit of the Amendment's protection only recently. In
rejecting the notion that such speech 'is wholly outside the
protection of the First Amendment,' Virginia Pharmacy, supra,
[425 U.S.], at 761, [96 S.Ct., at 1825], we were
careful not to hold 'that it is wholly undifferentiable from other
forms' of speech. 425 U.S., at 771, n. 24, [96 S.Ct., at 1831, n.
24]. We have not discarded the 'common-sense' distinction between
speech proposing a commercial transaction, which occurs in an area
traditionally subject to government regulation, and other varieties
of speech. Ibid. To require a parity of constitutional protection for
commercial and noncommercial speech alike could invite dilution,
simply by a leveling process, of the force of the Amendment's
guarantee with respect to the latter kind of speech. Rather than
subject the First Amendment to such a devitalization, we instead have
afforded commercial speech a limited measure of protection,
commensurate with its subordinate position in the scale of First
Amendment values, while allowing modes of regulation that might be
impermissible in the realm of noncommercial expression." (Footnote
omitted.)
The Court's decision today fails to give due deference to this
subordinate position of commercial speech. The Court in so doing
returns to the bygone era of Lochner v. New York, 198 U.S. 45, 25
S.Ct. 539, 49 L.Ed. 937 (1905), in which it was common practice for
this Court to strike down economic regulations adopted by a State
based on the Court's own notions of the most appropriate means for
the State to implement its considered policies.
I had thought by now it had become well established that a State has
broad discretion in imposing economic regulations. As this Court
stated in Nebbia v. New York, 291 U.S. 502, 537, 54 S.Ct. 505, 516,
78 L.Ed. 940 (1934):
"[T]here can be no doubt that upon proper occasion and by
appropriate measures the state may regulate a business in any of its
aspects. . . .
"So far as the requirement of due process is concerned, and in the
absence of other constitutional restriction, a state is free to adopt
whatever economic policy may reasonably be deemed to promote public
welfare, and to enforce that policy by legislation adapted to its
purpose. The courts are without authority either to declare such
policy, or, when it is declared by the legislature, to override it.
If the laws passed are seen to have a reasonable relation to a proper
legislative purpose, and are neither arbitrary nor discriminatory,
the requirements of due process are satisfied, and judicial
determination to that effect renders a court functus officio. .
. . [I]t does not lie with the courts to determine that the
rule is unwise."
And Mr. Justice Black, writing for the Court, observed more recently
in Ferguson v. Skrupa, 372 U.S. 726, 730, 83 S.Ct. 1028, 1031, 10
L.Ed.2d 93 (1963):
"The doctrine . . . that due process authorizes courts to hold laws
unconstitutional when they believe the legislature has acted
unwisely--has long since been discarded. We have returned to the
original constitutional proposition that courts do not substitute
their social and economic beliefs for the judgment of legislative
bodies, who are elected to pass laws."
The State of New York has determined here that economic realities
require the grant of monopoly status to public utilities in order to
distribute efficiently the services they provide, and in granting
utilities such status it has made them subject to an extensive
regulatory scheme. When the State adopted this scheme and when its
Public Service Commission issued its initial ban on promotional
advertising in 1973, commercial speech had not been held to fall
within the scope of the First Amendment at all. Virginia Pharmacy
Board v. Virginia Citizens Consumer Council, 425 U.S. 748, 96 S.Ct.
1817, 48 L.Ed.2d 346 (1976), however, subsequently accorded
commercial speech a limited measure of First Amendment
protection.
The Court today holds not only that commercial speech is entitled to
First Amendment protection, but also that when it is protected a
State may not regulate it unless its reason for doing so amounts to a
"substantial" governmental interest, its regulation "directly
advances" that interest, and its manner of regulation is "not more
extensive than necessary" to serve the interest. Ante, at 2351. The
test adopted by the Court thus elevates the protection accorded
commercial speech that falls within the scope of the First Amendment
to a level that is virtually indistinguishable from that of
noncommercial speech. I think the Court in so doing has effectively
accomplished the "devitalization" of the First Amendment that it
counseled against in Ohralik. I think it has also, by labeling
economic regulation of business conduct as a restraint on "free
speech," gone far to resurrect the discredited doctrine of cases such
as Lochner and Tyson & Brother v. Banton, 273 U.S. 418, 47 S.Ct.
426, 71 L.Ed. 718 (1927). New York's order here is in my view more
akin to an economic regulation to which virtually complete deference
should be accorded by this Court.
I doubt there would be any question as to the constitutionality of
New York's conservation effort if the Public Service Commission had
chosen to raise the price of electricity, see, e. g., Sunshine
Anthracite Coal Co. v. Adkins, 310 U.S. 381, 60 S.Ct. 907, 84 L.Ed.
1263 (1940); Old Dearborn Distributing Co. v. Seagram-Distillers
Corp., 299 U.S. 183, 57 S.Ct. 139, 81 L.Ed. 109 (1936), to condition
its sale on specified terms, see, e. g., Nebbia v. New York, supra,
at 527-528, 54 S.Ct., at 511-512, or to restrict its production, see,
e. g., Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122
(1942). In terms of constitutional values, I think that such controls
are virtually indistinguishable from the State's ban on promotional
advertising.
An ostensible justification for striking down New York's ban on
promotional advertising is that this Court has previously "rejected
the 'highly paternalistic' view that government has complete power to
suppress or regulate commercial speech. '[P]eople will
perceive their own best interests if only they are well enough
informed and . . . the best means to that end is to open the channels
of communication, rather than to close them. . . .' " Ante, at 2349.
Whatever the merits of this view, I think the Court has carried its
logic too far here.
The view apparently derives from the Court's frequent reference to
the "marketplace of ideas," which was deemed analogous to the
commercial market in which a laissez-faire policy would lead to
optimum economic decisionmaking under the guidance of the "invisible
hand." See, e. g., Adam Smith, Wealth of Nations (1776). This
notion was expressed by Mr. Justice Holmes in his dissenting opinion
in Abrams v. United States, 250 U.S. 616, 630, 40 S.Ct. 17, 22, 63
L.Ed. 1173 (1919), wherein he stated that "the best test of truth is
the power of the thought to get itself accepted in the competition of
the market . . . ." See also, e. g., Consolidated Edison v. Public
Service Comm'n, 447 U.S., at 534, 100 S.Ct., at 2331; J. Mill, On
Liberty (1858); J. Milton, Areopagitica, A Speech for the Liberty of
Unlicensed Printing (1644).
While it is true that an important objective of the First Amendment
is to foster the free flow of information, identification of speech
that falls within its protection is not aided by the metaphorical
reference to a "marketplace of ideas." There is no reason for
believing that the marketplace of ideas is free from market
imperfections any more than there is to believe that the invisible
hand will always lead to optimum economic decisions in the commercial
market. See, e. g., Baker, Scope of the First Amendment, Freedom of
Speech, 25 UCLA L.Rev. 964, 967-981 (1978). Indeed, many types of
speech have been held to fall outside the scope of the First
Amendment, thereby subject to governmental regulation, despite this
Court's references to a marketplace of ideas. See, e. g., Chaplinsky
v. New Hampshire, 315 U.S. 568, 62 S.Ct. 766, 86 L.Ed. 1031 (1942)
(fighting words); Beauharnais v. Illinois, 343 U.S. 250, 72 S.Ct.
725, 96 L.Ed. 919 (1952) (group libel); Roth v. United States, 354
U.S. 476, 77 S.Ct. 1304, 1 L.Ed.2d 1498 (1957) (obscenity). It also
has been held that the government has a greater interest in
regulating some types of protected speech than others. See, e. g.,
FCC v. Pacifica Foundation, 438 U.S. 726, 98 S.Ct. 3026, 57 L.Ed.2d
1073 (1978) (indecent speech); Virginia Pharmacy Board v. Virginia
Citizens Consumer Council, supra (commercial speech). And as this
Court stated in Gertz v. Robert Welch, Inc., 418 U.S. 323, 344, n. 9,
94 S.Ct. 2997, 3009, n. 9, 41 L.Ed.2d 789 (1974): "Of course, an
opportunity for rebuttal seldom suffices to undo [the] harm
of a defamatory falsehood. Indeed the law of defamation is rooted in
our experience that the truth rarely catches up with a lie." The
Court similarly has recognized that false and misleading commercial
speech is not entitled to any First Amendment protection. See, e. g.,
ante, at 2351.
The above examples illustrate that in a number of instances
government may constitutionally decide that societal interests
justify the imposition of restrictions on the free flow of
information. When the question is whether a given commercial message
is protected, I do not think this Court's determination that the
information will "assist" consumers justifies judicial invalidation
of a reasonably drafted state restriction on such speech when the
restriction is designed to promote a concededly substantial state
interest. I consequently disagree with the Court's conclusion that
the societal interest in the dissemination of commercial information
is sufficient to justify a restriction on the State's authority to
regulate promotional advertising by utilities; indeed, in the case of
a regulated monopoly, it is difficult for me to distinguish "society"
from the state legislature and the Public Service Commission. Nor do
I think there is any basis for concluding that individual citizens of
the State will recognize the need for and act to promote energy
conservation to the extent the government deems appropriate, if only
the channels of communication are left open. [FN5] Thus, even
if I were to agree that commercial speech is entitled to
some First Amendment protection, I would hold here that the State's
decision to ban promotional advertising, in light of the substantial
state interest at stake, is a constitutionally permissible exercise
of its power to adopt regulations designed to promote the interests
of its citizens.
FN5. Although the Constitution attaches great importance to freedom
of speech under the First Amendment so that individuals will be
better informed and their thoughts and ideas will be uninhibited, it
does not follow that "people will perceive their own best interests,"
or that if they do they will act to promote them. With respect to
governmental policies that do not offer immediate tangible benefits
and the success of which depends on incremental contributions by all
members of society, such as would seem to be the case with energy
conservation, a strong argument can be made that while a policy may
be in the longrun interest of all members of society, some rational
individuals will perceive it to their own shortrun advantage to not
act in accordance with that policy. When the regulation of commercial
speech is at issue, I think this is a
consideration that the government may properly take into account. As
was observed in Townsend v. Yeomans, 301 U.S. 441, 451, 57 S.Ct. 842,
847, 81 L.Ed. 1210 (1937), "the Legislature, acting within its
sphere, is presumed to know the needs of the people of the state."
This observation in my view is applicable to the determination of the
State Public Service Commission here.
The plethora of opinions filed in this case highlights the doctrinal
difficulties that emerge from this Court's decisions granting First
Amendment protection to commercial speech. My Brother STEVENS,
quoting Mr. Justice Brandeis in Whitney v. California, 274 U.S. 357,
376-377, 47 S.Ct. 641, 648- 649, 71 L.Ed. 1095 (1927), includes Mr.
Justice Brandeis' statement that "[t]hose who won our
independence by revolution were not cowards. They did not fear
political change. They did not exalt order at the cost of liberty."
Ante, at 2359. Mr. Justice BLACKMUN, in his separate opinion, joins
only in the Court's judgment because he believes that the Court's
opinion "does not provide adequate protection for truthful,
nonmisleading, noncoercive commercial speech." Ante, at 2355. Both
Mr. Justice STEVENS, ante, at 2359, and Mr. Justice BLACKMUN, ante,
at 2357, would apply the following formulation by Mr. Justice
Brandeis of the clear-and-present-danger test to the regulation of
speech at issue in this case:
"If there be time to expose through discussion the falsehood
and fallacies, to avert the evil by the processes of education, the
remedy to be applied is more speech, not enforced silence. Only an
emergency can justify repression." Whitney v. California, supra, at
377, 47 S.Ct., at 649 (concurring opinion).
Although the Court today does not go so far as to adopt this
position, its reasons for invalidating New York's ban on promotional
advertising make it quite difficult for a legislature to draft a
statute regulating promotional advertising that will satisfy the
First Amendment requirements established by the Court in this
context. See Part III, infra.
Two ideas are here at war with one another, and their resolution,
although it be on a judicial battlefield, will be a very difficult
one. The sort of "advocacy" of which Mr. Justice Brandeis spoke was
not the advocacy on the part of a utility to use more of its product.
Nor do I think those who won our independence, while declining to
"exalt order at the cost of liberty," would have viewed a merchant's
unfettered freedom to advertise in hawking his wares as a "liberty"
not subject to extensive regulation in light of the government's
substantial interest in attaining "order" in the economic sphere.
While I agree that when the government attempts to regulate speech of
those expressing views on public issues, the speech is protected by
the First Amendment unless it presents "a clear and present danger"
of a substantive evil that the government has a right to prohibit,
see, e. g., Schenck v. United States, 249 U.S. 47, 52, 39 S.Ct. 247,
249, 63 L.Ed. 470 (1919), I think it is important to recognize that
this test is appropriate in the political context in light of the
central importance of such speech to our system of self- government.
As observed in Buckley v. Valeo, 424 U.S. 1, 14, 96 S.Ct. 612, 632,
46 L.Ed.2d 659 (1976):
"Discussion of public issues and debate on the qualifications of
candidates are integral to the operation of the system of government
established by our Constitution. The First Amendment affords the
broadest protection to such political expression in order 'to
assure [the] unfettered interchange of ideas for the bringing
about of political and social changes desired by the people.' "
And in Garrison v. Louisiana, 379 U.S. 64, 74-75, 85 S.Ct. 209, 216,
13 L.Ed.2d 125 (1964), this Court stated that "speech concerning
public affairs is more than self-expression; it is the essence of
self-government."
The First Amendment, however, does not always require a clear and
present danger to be present before the government may regulate
speech. Although First Amendment protection is not limited to the
"exposition of ideas" on public issues, see, e. g., Winters v. New
York, 333 U.S. 507, 510, 68 S.Ct. 665, 667, 92 L.Ed. 840 (1948)--both
because the line between the informing and the entertaining is
elusive and because art, literature, and the like may contribute to
important First Amendment interests of the individual in freedom of
speech--it is well established that the government may regulate
obscenity even though it does not present a clear and present danger.
Compare, e. g., Paris Adult Theatre I v. Slaton, 413 U.S. 49, 57-58,
93 S.Ct. 2628, 2635, 37 L.Ed.2d 446 (1973), with Brandenburg v. Ohio,
395 U.S. 444, 447, 89 S.Ct. 1827, 1829, 23 L.Ed.2d 430 (1969).
Indecent speech, at least when broadcast over the airwaves, also may
be regulated absent a clear and present danger of the type described
by Mr. Justice Brandeis and required by this Court in Brandenburg.
FCC v. Pacifica Foundation, 438 U.S. 726, 98 S.Ct. 3026, 57 L.Ed.2d
1073 (1978). And in a slightly different context this Court declined
to apply the clear-and-present-danger test to a conspiracy among
members of the press in violation of the Sherman Act because to do so
would "degrade" that doctrine. Associated Press v. United States, 326
U.S. 1, 7, 65 S.Ct. 1416, 1418, 89 L.Ed. 2013 (1945). Nor does the
Court today apply the clear-and- present-danger test in invalidating
New York's ban on promotional advertising. As noted above, in these
and other contexts the Court has clearly rejected the notion that
there must be a free "marketplace of ideas."
If the complaint of those who feel the Court's opinion does not go
far enough is that the "only test of truth is its ability to
get itself accepted in the marketplace of ideas"--the test advocated
by Thomas Jefferson in his first inaugural address, and by Mr.
Justice Holmes in Abrams v. United States, 250 U.S. 616, 630, 40
S.Ct. 17, 22, 63 L.Ed. 1173 (1919) (dissenting opinion)--there is no
reason whatsoever to limit the protection accorded commercial speech
to "truthful, nonmisleading, noncoercive" speech. See ante, at 2355
(BLACKMUN, J., concurring in judgment). If the "commercial speech" is
in fact misleading, the "marketplace of ideas" will in time reveal
that fact. It may not reveal it sufficiently soon to avoid harm to
numerous people, but if the reasoning of Brandeis and Holmes is
applied in this context, that was one of the risks we took in
protecting free speech in a democratic society.
Unfortunately, although the "marketplace of ideas" has a historically
and sensibly defined context in the world of political speech, it has
virtually none in the realm of business transactions. Even so staunch
a defender of the First Amendment as Mr. Justice Black, in his
dissent in Breard v. Alexandria, 341 U.S., at 650, n., 71 S.Ct., at
936, n., stated:
"Of course I believe that the present ordinance could
constitutionally be applied to a 'merchant' who goes from door to
door 'selling pots.' " And yet, with the change in solicitation and
advertising techniques, the line between what Central Hudson did here
and the peddler selling pots in Alexandria a generation ago is
difficult, if not impossible to fix. Doubtless that was why Mr.
Justice Black joined the unanimous opinion of the Court in Valentine
v. Chrestensen, 316 U.S., at 54, 62 S.Ct., at 921, in which the Court
stated:
"This court has unequivocally held that the streets are proper places
for the exercise of the freedom of communicating information and
disseminating opinion and that, though the states and municipalities
may appropriately regulate the privilege in the public interest, they
may not unduly burden or proscribe its employment in these
public thoroughfares. We are equally clear that the
Constitution imposes no such restraint on government as respects
purely commercial advertising. Whether, and to what extent, one may
promote or pursue a gainful occupation in the streets, to what extent
such activity shall be adjudged a derogation of the public right of
user, are matters for legislative judgment." (Emphasis added.)
I remain of the view that the Court unlocked a Pandora's Box when it
"elevated" commercial speech to the level of traditional political
speech by according it First Amendment protection in Virginia
Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748,
96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). The line between "commercial
speech," and the kind of speech that those who drafted the First
Amendment had in mind, may not be a technically or intellectually
easy one to draw, but it surely produced far fewer problems than has
the development of judicial doctrine in this area since Virginia
Board. For in the world of political advocacy and its marketplace of
ideas, there is no such thing as a "fraudulent" idea: there may be
useless proposals, totally unworkable schemes, as well as very sound
proposals that will receive the imprimatur of the "marketplace of
ideas" through our majoritarian system of election and representative
government. The free flow of information is important in this context
not because it will lead to the discovery of any objective "truth,"
but because it is essential to our system of self- government.
The notion that more speech is the remedy to expose falsehood and
fallacies is wholly out of place in the commercial bazaar, where if
applied logically the remedy of one who was defrauded would be merely
a statement, available upon request, reciting the Latin maxim "caveat
emptor." But since "fraudulent speech" in this area is to be
remediable under Virginia Pharmacy Board, supra, the remedy of one
defrauded is a lawsuit or an agency proceeding based on common-law
notions of fraud that are separated by a world of difference
from the realm of politics and government. What time, legal
decisions, and common sense have so widely severed, I declined to
join in Virginia Pharmacy Board, and regret now to see the Court
reaping the seeds that it there sowed. For in a democracy, the
economic is subordinate to the political, a lesson that our ancestors
learned long ago, and that our descendants will undoubtedly have to
relearn many years hence.
III
The Court concedes that the state interest in energy conservation is
plainly substantial, ante, at 2352, as is the State's concern that
its rates be fair and efficient. Ante, at 2353. It also concedes that
there is a direct link between the Commission's ban on promotional
advertising and the State's interest in conservation. Ibid. The Court
nonetheless strikes down the ban on promotional advertising because
the Commission has failed to demonstrate, under the final part of the
Court's four-part test, that its regulation is no more extensive than
necessary to serve the State's interest. Ante, at 2353- 2354. In
reaching this conclusion, the Court conjures up potential
advertisements that a utility might make that conceivably would
result in net energy savings. The Court does not indicate that the
New York Public Service Commission has in fact construed its ban on
"promotional" advertising to preclude the dissemination of
information that clearly would result in a net energy savings, nor
does it even suggest that the Commission has been confronted with and
rejected such an advertising proposal. [FN6] The final
part of the Court's test thus leaves room for so many
hypothetical "better" ways that any ingenious lawyer will surely
seize on one of them to secure the invalidation of what the state
agency actually did. As Mr. Justice BLACKMUN observed inIllinois
Elections Bd. v. Socialist Workers Party, 440 U.S. 173, 188-189, 99
S.Ct. 983, 993, 59 L.Ed.2d 230 (1979) (concurring opinion):
FN6. Indeed appellee in its brief states:
"[N]either Central Hudson nor any other party made an attempt
before the Commission to demonstrate or argue for a specific
advertising strategy that would avoid the difficulties that the
Commission found inherent in electric utility promotional
advertising. The Commission, therefore continued to enforce its ban
on promotion which it had instituted in 1973." Brief for Appellee
15.
The Court makes no attempt to address this statement, or to explain
why, when no state body has addressed the issue, the Court should
nonetheless resolve it by invalidating the state regulation.
"A judge would be unimaginative indeed if he could not come up with
something a little less 'drastic' or a little less 'restrictive' in
almost any situation, and thereby enable himself to vote to strike
legislation down."
Here the Court concludes that the State's interest in energy
conservation cannot justify a blanket ban on promotional advertising.
In its statement of the facts, the Court observes that the
Commission's ban on promotional advertising is not "a perfect vehicle
for conserving energy." It states:
"[T]he Commission's order prohibits promotional advertising
to develop consumption during periods when demand for electricity is
low. By limiting growth in 'off-peak' consumption, the ban limits the
'beneficial side effects' of such growth in terms of more efficient
use of existing powerplants. [App. to Juris. Statement] 37a."
Ante, at 2348.
The Court's analysis in this regard is in my view fundamentally
misguided because it fails to recognize that the beneficial side
effects of "more efficient use" may be inconsistent with the goal of
energy conservation. Indeed, the Commission explicitly found that the
promotion of off-peak consumption would impair conservation efforts.
[FN7] The Commission stated:
FN7. In making this finding, the Commission distinguished "between
promotional advertising designed to shift existing consumption from
peak to off-peak hours and advertising designed to promote additional
consumption during off-peak hours." App. to Juris.
Statement 58a, n. 2. It proscribed only the latter. Ibid.
"Increased off-peak generation, . . . while conferring some
beneficial side effects, also consumes valuable energy resources and,
if it is the result of increased sales, necessarily creates
incremental air pollution and thermal discharges to waterways. More
important, any increase in off-peak generation from most of the major
companies producing electricity in this State would not, at this
time, be produced from coal or nuclear resources, but would require
the use of oil-fired generating facilities. The increased requirement
for fuel oil to serve the incremental off-peak load created by
promotional advertising would aggravate the nations' already
unacceptably high level of dependence on foreign sources of supply
and would, in addition, frustrate rather than encourage conservation
efforts." App. to Juris. Statement 37a. [FN8]
FN8. And in denying appellant's petition for rehearing, the
Commission again stated:
"While promotion of off-peak usage, particularly electric space
heating, is touted by some as desirable because it might increase
off-peak usage and thereby improve a summer-peaking
company's load factor, we are convinced that off-peak promotion,
especially in the context of imperfectly structured electric rates,
is inconsistent with the public interest, even if it could be
divorced in the public mind from promoting electric usage generally.
As we pointed out in our Policy Statement, increases in generation,
even off-peak generation, at this time, requires the burning of
scarce oil resources. This increased requirement for fuel oil
aggravates the nation's already high level of dependence on foreign
sources of supply." Id., at 58a (footnotes omitted).
The Court also observes, as the Commission acknowledged, that the ban
on promotional advertising can achieve only "piecemeal
conservationism" because oil dealers are not under the Commission's
jurisdiction, and they remain free to advertise. Until I have
mastered electrical engineering and marketing, I am not prepared to
contradict by virtue of my judicial office those who assume that the
ban will be successful in making a substantial contribution to
conservation efforts. And I doubt that any of this
Court's First Amendment decisions justify striking down the
Commission's order because more steps toward conservation could have
been made. This is especially true when, as here, the Commission
lacks authority over oil dealers.
The Court concludes that the Commission's ban on promotional
advertising must be struck down because it is more extensive than
necessary: it may result in the suppression of advertising by
utilities that promotes the use of electrical devices or services
that cause no net increase in total energy use. The Court's reasoning
in this regard, however, is highly speculative. The Court provides
two examples that it claims support its conclusion. It first states
that both parties acknowledge that the "heat pump" will be "a major
improvement in electric heating," and that but for the ban the
utilities would advertise this type of "energy efficien[t]"
product. [FN9] The New York Public Service Commission,
however, considered the merits of the heat pump and concluded that it
would most likely result in an overall increase in electric energy
consumption. The Commission stated:
FN9. As previously discussed, however, it does not follow that
because a product is "energy efficient" it is also consistent with
the goal of energy conservation. Thus, with regard to the heat pump,
counsel for appellees stated at oral argument that "Central Hudson
says there are some [heat pumps] without air conditioning,
but . . . they have never advised us of that." Tr. of Oral Arg.
32-33. The electric heat pump, he continued, "normally
carr[ies] with it air conditioning in the summer, and the
commission found that this would result in air
conditioning that would not otherwise happen." Id., at 33. This is
but one example of the veritable Sargasso Sea of difficult nonlegal
issues that we wade into by adopting a rule that requires judges to
evaluate highly complex and often controversial questions arising in
disciplines quite foreign to ours.
"[I]nstallation of a heat pump means also installation of
central air- conditioning. To this extent, promotion of off-peak
electric space heating involves promotion of on-peak summer
air-conditioning as well as on-peak usage of electricity for
water heating. And the price of electricity to most consumers in the
State does not now fully reflect the much higher marginal costs of
on-peak consumption in summer peaking markets. In these
circumstances, there would be a subsidization of consumption on-peak,
and consequently, higher rates for all consumers." App. to Juris.
Statement 58a.
Subsidization of peak consumption not only may encourage the use of
scarce energy resources during peak periods, but also may lead to
larger reserve generating capacity requirements for the State.
The Court next asserts that electric heating as a backup to solar and
other heat may be an efficient alternative energy source. Ante, at
2353. The Court fails to establish, however, that an advertising
proposal of this sort was properly presented to the Commission.
Indeed, the Court's concession that the Commission did not make
findings on this issue suggests that the Commission did not even
consider it. Nor does the Court rely on any support for its assertion
other than the assertion of appellant. Rather, it speculates that
"[i]n the absence of authoritative findings to the contrary,
we must credit as within the realm of possibility the claim that
electric heat can be an efficient alternative in some circumstances."
Ibid. [FN10]
FN10. Even assuming the Court's speculation is correct, it has shown
too little. For the regulation to truly be "no more extensive than
necessary," it must be established that a more efficient energy
source will serve only as a means for saving energy, rather than as
an inducement to consume more energy because the cost has decreased
or because other energy using products will be used in conjunction
with the more efficient one.
Ordinarily it is the role of the State Public Service Commission to
make factual determinations concerning whether a device or service
will result in a net energy savings and, if so, whether and to what
extent state law permits dissemination of information about the
device or service. Otherwise, as here, this Court will have no
factual basis for its assertions. And the State will never have an
opportunity to consider the issue and thus to construe its law
in a manner consistent with the Federal Constitution. As stated in
Barrows v. Jackson, 346 U.S. 249, 256-257, 73 S.Ct. 1031, 1035, 97
L.Ed. 1586 (1953):
It would indeed be undesirable for this Court to consider every
conceivable situation which might possibly arise in the application
of complex and comprehensive legislation. Nor are we so ready to
frustrate the expressed will of Congress or that of the state
legislatures. Cf. Southern Pacific Co. v. Gallagher, 306 U.S. 167,
172 [, 59 S.Ct. 389, 391, 83 L.Ed. 586]."
I think the Court would do well to heed the admonition in Barrows
here. The terms of the order of the New York Public Service
Commission in my view indicate that advertising designed to promote
net savings in energy use does not fall within the scope of the ban.
The order prohibits electric corporations "from promoting the use of
electricity through the use of advertising subsidy payments . . ., or
employee incentives." App. to Juris. Statement 31a (emphasis added).
It is not clear to me that advertising that is likely to result in
net savings of energy is advertising that "promot[es] the use
of electricity," nor does the Court point to any language in the
Commission order that suggests it has adopted this construction.
Rather, it would seem more accurate to characterize such advertising
as designed to "discourage" the use of electricity. [FN11]
Indeed, I think it is quite likely that the Commission would
view advertising that would clearly result in a net savings in energy
as consistent with the objectives of its order and therefore
permissible. [FN12] The Commission, for example, has
authorized the dissemination of information that would result in
shifts in electrical energy demand, thereby reducing the demand for
electricity during peak periods. Id., at 37a. [FN13] It has
also indicated a willingness to consider at least some other types of
"specific proposals" submitted by utilities. Id., at 37a-38a. And it
clearly permits informational as opposed to promotional dissemination
of information. Id., at 43a-46a. Even if the Commission were
ultimately to reject the view that its ban on promotional advertising
does not include advertising that results in net energy savings, I
think the Commission should at least be given an opportunity to
consider it.
FN11. This characterization is supported by the reasoning of the New
York Court of Appeals, which stated:
"[P]romotional advertising . . . seeks . . . to encourage the
increased consumption of electricity, whether during peak hours or
off-peak hours. Thus, not only does such communication lack any
beneficial informative content, but it may be affirmatively
detrimental to the society. . . . Conserving
diminishing resources is a matter of vital State concern and
increased use of electrical energy is inimical to our interests.
Promotional advertising, if permitted, would only serve to exacerbate
the crisis." 47 N.Y.2d, at 110, 417 N.Y.S.2d, at 39, 390 N.E.2d, at
757- 758.
FN12. At oral argument counsel for appellant conceded that the ban
would not apply to utility advertising promoting the nonuse of
electricity. Tr. of Oral Arg. 6. Indeed, counsel stated: "If the use
reduces the amount of electricity used, it is not within the ban. The
promotional ban is defined as anything which might be expected to
increase the use of electricity." Ibid. And counsel for appellee
stated that "the only thing that is involved here is the promotion by
advertising of electric usage." Id., at 30. "And if a showing can be
made that promotion in fact is going to conserve energy," counsel for
appellee continued, "which . . . has never been made to us, the
commission's order says we are ready to relax our ban, we're not
interested in banning for the sake of banning it. We think that is
basically a bad idea, if we can avoid it. In gas, we have been
relaxing it as more gas has become available." Id., at 40.
FN13. By contrast, as previously discussed, the Public Service
Commission does not permit the promotion of off-peak consumption
alone. Supra, at 2369, and n. 8.
It is in my view inappropriate for the Court to invalidate the
State's ban on commercial advertising here, based on its speculation
that in some cases the advertising may result in a net savings in
electrical energy use, and in the cases in which it is clear a net
energy savings would result from utility advertising, the Public
Service Commission would apply its ban so as to proscribe such
advertising. Even assuming that the Court's speculation is
correct, I do not think it follows that facial invalidation of the
ban is the appropriate course. As stated in Parker v. Levy, 417 U.S.
733, 760, 94 S.Ct. 2547, 2563, 41 L.Ed.2d 439 (1974), "even if there
are marginal applications in which a statute would infringe on First
Amendment values, facial invalidation is inappropriate if the
'remainder of the statute . . . covers a whole range of easily
identifiable and constitutionally proscribable . . . conduct. . . .'
CSC v. Letter Carriers, 413 U.S. 548, 580-581, 93 S.Ct. 2880, 2898,
37 L.Ed.2d 796 (1973)." This is clearly the case here.
For the foregoing reasons, I would affirm the judgment of the New
York Court of Appeals.