Brandishing the First Amendment: Commercial Expression in America

1. Commercial and Corporate Speech

chapter 1 Commercial and Corporate Speech [T]he free ›ow of commercial information is indispensable. —Supreme Court of the United States, Virginia Pharmacy (1976) Prior to the twentieth century neither the courts nor most commentators appeared to believe the First Amendment had much bearing on commercial communications. Although, as legal historian David Rabban1 has noted, there is substantial evidence of interest in the First Amendment prior to 1917, most conventional discussions of First Amendment doctrine and its meaning begin there. So, with respect to the commercial speaker, it is probably fair to say that if the First Amendment itself was not given much consideration prior to the twentieth century, it is axiomatic that little attention was paid to commercial speech speci‹cally. Some have argued that the Framers had advertising in mind when they drafted the First Amendment because of the degree to which advertising supported the development of a free press at the time;2 but there had been little direct evidence in the academic literature to support this reading. Given that the modern corporation and modern modes of communication were unknown to the Framers, they could have hardly had those practices in mind. Thus, there is no venerable tradition supporting freedom of expression for the conduct of commerce3 —at least not as a matter of constitutional law. To the contrary, at least until the latter part of the twentieth century, most observers thought it was self-evident that the government could regulate 17 commercial speech with impunity. While there may have been titanic struggles about the scope of Congress’s power to regulate commerce, those struggles were not framed as issues arising under the First Amendment. Indeed, in 1942 the Supreme Court dismissively declared there was “no such [First Amendment restriction] on government [ability to regulate] as respects purely commercial advertising.”4 The decisions creating First Amendment protection for commercial speech and for corporate political speech were not issued until the latter half of the twentieth century. The Commercial Speech Doctrine Most observers agree that the commercial speech doctrine was created in 1976 by the decision in the Virginia Pharmacy case.5 The issue in Virginia Pharmacy was whether Virginia could forbid pharmacists to advertise drug prices.6 A consumer group protested, arguing that by preventing pharmacies from advertising prices, the state unreasonably burdened their ability to ‹nd the cheapest drugs. In response, the state argued that price advertising would lead to pharmacy price wars and, in turn, to diminished professionalism, which, in the end, would hurt consumers.7 Consumers countered that the state’s rationale was excessively paternalistic, that the government ought not to be in the business of protecting the public from the truth.8 The Supreme Court agreed and held that truthful commercial speech was protected by the First Amendment.9 In so holding, the Court observed, So long as we preserve a predominately free enterprise economy, the allocation of our resources in large measure will be made through numerous private economic decisions. It is a matter of public interest that those decisions , in the aggregate, be intelligent and well informed. To this end, the free ›ow of commercial information is indispensable.10 The Court’s holding, that truthful commercial speech ought to enjoy a measure of First Amendment protection, was a fairly novel interpretation of that amendment. Only a few years earlier, the Court had rejected out of hand the notion that advertising was protected by the First Amendment. It was also novel because it focused on the listeners’ (consumers’) right to hear rather than on the speakers’ (pharmacies’) right to speak, the usual focus in 18 / brandishing the first amendment First Amendment cases. It was so novel that apparently the Court felt that in order to ‹nd the consumer group had standing to raise the speech issue, it ‹rst had to ‹nd that the pharmacies had a First Amendment right to advertise , a right that the consumers were asserting derivatively.11 With little discussion of this point, the Court held that they did have such a right. But the Court’s key holding was that protection was necessary because the consumers had a First Amendment right to hear the price information.12 Had the Court been writing on a blank slate, these gyrations might not have been necessary. Indeed, it might not have been necessary to invoke the First Amendment at all. If you were looking simply at the language of...