Greater New Orleans Broadcasting Association, Inc. v. United States

Brief Fact Summary.

The Petitioner, the Greater New Orleans Broadcasting Association, Inc. (Petitioner), is challenging a United States statute and Federal Communication Commission (FCC) regulation that prohibits the advertisement of for-profit casino’s in broadcasts that might be heard in states where such activity is prohibited. The Petitioner’s challenge that these regulations restrict their First Amendment constitutional rights concerning commercial speech.

Synopsis of Rule of Law.

18 U.S.C. Section: 1304, prohibiting advertisements of for-profit casino’s in broadcast signals that reach states which prohibit such activity, regulates an intolerable amount of truthful speech about lawful conduct, meaning more than is absolutely necessary to achieve the goals of a substantial interest, violating the broadcasters First Amendment Rights of commercial speech under Central Hudson.

Facts.

The Petitioner is an association of Louisiana broadcasters and its members who operate FCC licensed radio and television stations in the New Orleans area. The Petitioners claim, that if not for the threat of sanctions, they would broadcast promotional advertisements for gaming available at private, for-profit casinos. Such for profit casinos are lawful and regulated in Louisiana and Mississippi, but not in Texas and Arkansas. The FCC claims its prohibition of casino advertisement pursuant to 18 U.S.C Section: 1304 prohibits radio and television stations from broadcasting “any advertisement of or information concerning any lottery, gift enterprise or similar scheme, offering prizes dependent in whole or in part upon lot or chance, or any list of the prizes drawn or awarded by means of such lottery, gift enterprise, or scheme, whether said list contains any part or all of such prizes.” The FCC further states that under appropriate conditions, some broadcast signals from Louisiana stati
ons may be heard in Texas and Arkansas, where private casinos are illegal. The Petitioners then brought this action against the Respondents, the United States and FCC (Respondents) to have 18 U.S.C. Section: 1304 declared unconstitutional as the First Amendment of the Constitution applies and for an injunction preventing enforcement of the statute and the FCC rule against them. The District Court ruled against the Petitioners and the Fifth Circuit affirmed. The Petitioners then appealed to the Supreme Court of the United States (Supreme Court) on the same grounds as their appeal to the Fifth Circuit.

Issue.

Whether, under the Central Hudson standard for commercial speech, 18 U.S.C Section: 1304 and the FCC regulation prohibiting casino advertisements for signals that may cross into states where such gambling is illegal, violates the First Amendment of the Constitution?

Held.

Yes, the broadcast prohibition in 18 U.S.C. Section: 1304 violates the First Amendment of the Constitution. The Supreme Court in this case determined the Central Hudson standard applies because the Supreme Court feels it is unnecessary to make novel or unnecessarily broad pronouncements on constitutional issues when a case can be resolved on a narrower ground. Because Central Hudson provides an adequate basis for decision, the four-part test from that decision applies. This test states: (1) Whether the expression is protected by the First Amendment of the Constitution. To be protected it must concern lawful activity and not be misleading. (2) Whether the asserted governmental interest is substantial. If both parts one and part two are satisfied then (3) A court must determine whether the regulation directly advances the governmental interest asserted. (4) Whether it is not more extensive than is necessary to serve that interest. Under Central Hudson, there is no doubt that casino adve
rtisements constitute free speech. In this case part two is satisfied by the fact that substantial governmental interests are put forth by the government. The government states these interests are (1) reducing the social costs associated with gambling or casino gambling and (2) assisting States that restrict gambling or prohibit casino gambling within their borders. But, the government fails when it comes to the third and fourth parts of the test. Under these parts, the government has not shown that the policies in Section:1304 sacrifice no more than a tolerable amount of truthful speech about lawful conduct. The government’s arguments that these regulations are no more than what is absolutely necessary were also unpersuasive. If the federal government adopted a more coherent policy, or accommodated the rights of speakers in States that have legalized the underlying conduct, then the regulation might hold up under First Amendment constitutional scrutiny.
Concurrence.
When Congress regulates commercial speech, the Central Hudson test imposes a demanding standard of review and this standard had not been met here.
One concurring judge still believes the Central Hudson test should not apply because it can no more justify regulation of commercial speech than it can justify regulation of noncommercial speech.

Discussion.

This case does not create any new law, as much as it provides another example of the application of the Central Hudson standard for a regulation that regulates commercial speech. This case, therefore, is more important for its arguments than it is its holding. It is important to read through these additional arguments, along with Central Hudson and Liquormart 44 to gain a full grasp of what arguments are not satisfactory to the Supreme Court, and which arguments, if made, the Supreme Court would be willing to accept. While Liquormart 44 seemed to show the Supreme Court creating a new standard, higher than the standard in Central Hudson, this case shows that the Supreme Court will, unless necessary, apply the least stringent policy, for commercial speech the Central Hudson standard. The Supreme Court seems to have taken a step back from its spectrum analysis of commercial speech in Liquormart 44, but the Supreme Court might, if faced with another blanket prohibition like t
he one in that case, revert back to that lesser burden for challenging the regulation. In analyzing this area of the law it would be prudent to determine under which standard the commercial speech applies, Liquormart 44 or Central Hudson and then in any case go through the Central Hudson four-part test in case the argument for the Liquormart 44 standard fails. One concrete rule has been established through this series of cases, and that is the government regulation will necessarily fail if it regulates more truthful speech about legal conduct than is ABSOLUTELY NECESSARY. If the Supreme Court finds this to be the case, these cases show that the regulation in question will fail First Amendment constitutional scrutiny every t