Page 55 BUSINESS AND THE CONSTITUTIONA federal statute and.docx

BUSINESS AND THE CONSTITUTION
A federal statute and related regulations prohibited producers of
beer from listing, on a product label, the alcohol content of the
beer in the container on which the label appeared. The
regulation existed because the U.S. government believed that if
alcohol content could be disclosed on labels, certain producers
of beer might begin marketing their brand as having a higher
alcohol content than competing beers. The government was
concerned that “strength wars” among producers could then
develop, that consumers would seek out beers with higher
alcohol content, and that adverse public health consequences
would follow. Because it wished to include alcohol content
information on container labels for its beers, Coors Brewing Co.
filed suit against the United States government and asked the
court to rule that the statute and regulations violated Coors's
constitutional right to freedom of speech.
Consider the following questions as you read Chapter 3:
On which provision in the U.S. Constitution was Coors relying
in its challenge of the statute and regulations?
Does a corporation such as Coors possess the same
constitutional right to freedom of speech possessed by an
individual human being, or does the government have greater
latitude to restrict the content of a corporation's speech?
The alcohol content disclosures that Coors wished to make with
regard to its product would be classified as commercial speech.
Does commercial speech receive the same degree of
constitutional protection that political or other noncommercial
speech receives?
Which party—Coors or the federal government—won the case,
and why?

Do producers and other sellers of alcoholic beverages have, in
connection with the sale of their products, special ethical
obligations that sellers of other products might not have? If so,
what are those obligations and why do they exist?
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1 Describe the role of courts in interpreting constitutions and
in determining whether statutes or other government actions are
constitutional.
2 Explain the key role of the U.S. Constitution's Commerce
Clause in authorizing action by Congress.
3 Describe the incorporation doctrine's role in making most
guarantees of the Bill of Rights operate to protect persons not
only against certain federal government actions but also against
certain state and local government actions.
4 Explain the differences among the means-ends tests used by
courts when the constitutionality of government action is being
determined (strict scrutiny, intermediate scrutiny, and rational
basis).
5 Describe the differences between noncommercial speech and
commercial speech and the respective levels of First
Amendment protection they receive.
Page 56 6 Explain the difference between procedural due
process and substantive due process.
7 Identify the instances when an Equal Protection Clause–
based challenge to government action triggers more rigorous
scrutiny than the rational basis test.
8 Explain the burden-on-commerce doctrine's role in making
certain state government actions unconstitutional.
9 Identify the major circumstances in which federal law will
preempt state law.
10 Explain the power granted to the government by the Takings
Clause, as well as the limits on that power.

CONSTITUTIONS SERVE TWO general functions. First, they
set up the structure of government, allocating power among its
various branches and subdivisions. Second, they prevent
government from taking certain actions—especially actions that
restrict individual or, as suggested by the Coors scenario with
which this chapter opened, corporate rights. This chapter
examines the U.S. Constitution's performance of these functions
and considers how that performance affects government
regulation of business.
An Overview of the U.S. Constitution
The U.S. Constitution exhibits the principle of separation of
powers by giving distinct powers to Congress, the president,
and the federal courts. Article I of the Constitution establishes a
Congress composed of a Senate and a House of Representatives,
gives it sole power to legislate at the federal level, and sets out
rules for the enactment of legislation. Article I, § 8 also defines
when Congress can make law by stating its legislative powers.
Three of those powers—the commerce, tax, and spending
powers—are discussed later in the chapter.
Article II gives the president the executive power—the power to
execute or enforce the laws passed by Congress. Section 2 of
that article lists other presidential powers, including the powers
to command the nation's armed forces and to make treaties.
Article III gives the judicial power of the United States to the
Supreme Court and the other federal courts later established by
Congress. Article III also determines the types of cases the
federal courts may decide.
Besides creating a separation of powers, Articles I, II, and III
set up a system of checks and balances among Congress, the
president, and the courts. For example, Article I gives the
president the power to veto legislation passed by Congress, but
allows Congress to override such a veto by a two-thirds vote of
each House. Article I and Article II provide that the president,
the vice president, and other federal officials may be impeached
and removed from office by a two-thirds vote of the Senate.

Article II states that treaties agreed to by the president must be
approved by a two-thirds vote of the Senate. Article III gives
Congress some control over the Supreme Court's appellate
jurisdiction.
The Constitution recognizes the principle of federalism in the
way it structures power relations between the federal
government and the states. After listing the powers Congress
holds, Article I lists certain powers that Congress cannot
exercise. The Tenth Amendment provides that those powers the
Constitution neither gives to the federal government nor denies
to the states are reserved to the states or the people.
Article VI, however, makes the Constitution, laws, and treaties
of the United States supreme over state law. As will be seen,
this principle of federal supremacy may cause federal statutes to
preempt inconsistent state laws. The Constitution also puts
limits on the states' lawmaking powers. One example is Article
I's command that states shall not pass laws impairing the
obligation of contracts.
Article V sets forth the procedures for amending the
Constitution. The Constitution has been amended 27 times. The
first 10 of these amendments comprise the Bill of Rights.
Although the rights guaranteed in the first 10 amendments once
restricted only federal government action, most of them now
limit state government action as well. As you will learn, this
results from their incorporation within the Due Process Clause
of the Fourteenth Amendment.
Page 57
Describe the role of courts in interpreting constitutions and in
determining whether statutes or other government actions are
constitutional.
The Evolution of the Constitution and the Role of the Supreme
Court
According to the legal realists discussed in Chapter 1, written
“book law” is less important than what public decision makers

actually do. Using this approach, we discover a Constitution
that differs from the written Constitution just described. The
actual powers of today's presidency, for instance, exceed
anything one would expect from reading Article II. As you will
see, moreover, some constitutional provisions have acquired a
meaning different from their meaning when first enacted.
American constitutional law has evolved rather than being
static.
Many of these changes result from the way one public decision
maker—the nine-member U.S. Supreme Court—has interpreted
the Constitution over time. Formal constitutional change can be
accomplished only through the amendment process. Because
this process is difficult to employ, however, amendments to the
Constitution have been relatively infrequent. As a practical
matter, the Supreme Court has become the Constitution's main
“amender” through its many interpretations of constitutional
provisions. Various factors help explain the Supreme Court's
ability and willingness to play this role. Because of their
vagueness, some key constitutional provisions invite diverse
interpretations. “Due process of law” and “equal protection of
the laws” are examples. In addition, the history surrounding the
enactment of constitutional provisions sometimes is sketchy,
confused, or contradictory. Probably more important, however,
is the perceived need to adapt the Constitution to changing
social conditions. As the old saying goes, Supreme Court
decisions tend to “follow the election returns.” (Regardless of
where one finds himself or herself on the political spectrum, the
old saying has taken on a new twist after Bush v. Gore, the
historic 2000 decision referred to later in this chapter.)
Under the power of judicial review, courts can declare the
actions of other government bodies unconstitutional. How
courts exercise this power depends on how they choose to read
the Constitution. Courts thus have political power—a
conclusion especially applicable to the Supreme Court. Indeed,
the Supreme Court's justices are, to a considerable extent,
public policy makers. Their beliefs are important in the

determination of how America is governed. This is why the
justices' nomination and confirmation often involve so much
political controversy.
Yet even though the Constitution frequently is what the courts
say it is, judicial power to shape the Constitution has limits.
Certain limits spring from the Constitution's language, which
sometimes is quite clear. Others result from the judges'
adherence to the stare decisis doctrine discussed in Chapter 1.
Perhaps the most significant limits on judges' power, however,
stem from the tension between modern judicial review and
democracy. Legislators are chosen by the people, whereas
judges—especially appellate level judges—often are appointed,
not elected. Today, judges exercise political power by declaring
the actions of legislatures unconstitutional under standards
largely of the judiciary's own devising. This sometimes leads to
charges that courts are undemocratic, elitist institutions. Such
charges put political constraints on judges because courts
depend on the other branches of government—and ultimately on
public belief in judges' fidelity to the rule of law—to make their
decisions effective. Therefore, judges sometimes, may be
reluctant to declare statutes unconstitutional because they are
wary of power struggles with a more representative body such
as Congress.
LOG ON
For a great deal of information about the U.S. Supreme Court
and access to the Court's opinions in recent cases, see the
Court's website at http://www.supremecourtus.gov.
The Coverage and Structure of This Chapter
This chapter examines certain constitutional provisions that are
important to business; it does not discuss constitutional law in
its entirety. These provisions help define federal and state
power to regulate the economy. The U.S. Constitution limits
government regulatory power in two general ways. First, it

restricts federal legislative authority by listing the powers
Congress can exercise. These are known as the enumerated
powers. Federal legislation cannot be constitutional if it is not
based on a power specifically stated in the Constitution.
Second, the U.S. Constitution limits both state and federal
power by placing certain independent checks in the path of
each. In effect, the independent checks establish that even if
Congress has an enumerated power to legislate on a particular
matter or a state Page 58constitution authorizes a state to take
certain actions, there still are certain protected spheres into
which neither the federal government nor the state government
may reach.
Accordingly, a federal law must meet two general tests in order
to be constitutional: (1) it must be based on an enumerated
power of Congress, and (2) it must not collide with any of the
independent checks. For example, Congress has the power to
regulate commerce among the states. This power might seem to
allow Congress to pass legislation forbidding women from
crossing state lines to buy or sell goods. Yet such a law, though
arguably based on an enumerated power, surely would be
unconstitutional because it conflicts with an independent
check—the equal protection guarantee discussed later in the
chapter. Today, the independent checks are the main limitations
on congressional power. The most important reason for the
decline of the enumerated powers limitation is the perceived
need for active federal regulation of economic and social life.
Recently, however, the enumerated powers limitation has begun
to assume somewhat more importance, as will be seen.
After discussion of the most important state and federal powers
to regulate economic matters, the chapter explores certain
independent checks that apply to the federal government and the
states. The chapter then examines some independent checks that
affect the states alone. It concludes by discussing a provision—
the Takings Clause of the Fifth Amendment—that both
recognizes a governmental power and limits its exercise.
State and Federal Power to Regulate

State Regulatory Power Although state constitutions may do so,
the U.S. Constitution does not list the powers state legislatures
can exercise. The U.S. Constitution does place certain
independent checks in the path of state lawmaking, however. It
also declares that certain powers (e.g., creating currency and
taxing imports) can be exercised only by Congress. In many
other areas, though, Congress and the state legislatures have
concurrent powers. Both can make law within those areas unless
Congress preempts state regulation under the supremacy clause.
A very important state legislative power that operates
concurrently with many congressional powers is the police
power, a broad state power to regulate for the public health,
safety, morals, and welfare.
Federal Regulatory Power Article I, § 8 of the U.S. Constitution
specifies a number of ways in which Congress may legislate
concerning business and commercial matters. For example, it
empowers Congress to coin and borrow money, regulate
commerce with foreign nations, establish uniform laws
regarding bankruptcies, create post offices, and enact copyright
and patent laws. The most important congressional powers
contained in Article I, § 8, however, are the powers to regulate
commerce among the states, to lay and collect taxes, and to
spend for the general welfare. Because they now are read so
broadly, these three powers are the main constitutional bases for
the extensive federal social and economic regulation that exists
today.
Explain the key role of the U.S. Constitution's Commerce
Clause in authorizing action by Congress.
The Commerce Power Article I, § 8 states that “The Congress
shall have Power … To regulate Commerce … among the
several States.” The original reason for giving Congress this
power to regulate interstate commerce was to nationalize
economic matters by blocking the protectionist state restrictions

on interstate trade that were common after the Revolution. As
discussed later in the chapter, the Commerce Clause serves as
an independent check on state regulation that unduly restricts
interstate commerce. Our present concern, however, is the
Commerce Clause's role as a source of congressional regulatory
power.
The literal language of the Commerce Clause simply empowers
Congress to regulate commerce that occurs among the states.
Supreme Court decisions interpreting the Commerce Clause
have held, however, that it sets up three categories of actions in
which Congress may engage: first, regulating the channels of
interstate commerce; second, regulating and protecting the
instrumentalities of interstate commerce, as well as persons or
things in interstate commerce; and third, regulating activities
that substantially affect interstate commerce. Largely because
of judicial decisions regarding congressional action falling
within the third category, the Commerce Clause has become a
federal power with an extensive regulatory reach. How has this
transformation occurred?
The most important step in the transformation was the Supreme
Court's conclusion that the power to regulate interstate
commerce includes the power to regulate intrastate activities
that affect interstate commerce. For example, in a 1914
decision, the Supreme Court upheld the Interstate Commerce
Commission's regulation of railroad rates within Texas (an
intrastate matter outside the language of the Commerce Clause)
because those rates affected rail traffic between Texas and
Louisiana Page 59(an interstate matter within the clause's
language). This “affecting commerce” doctrine eventually was
used to justify federal police power measures with significant
intrastate reach. For instance, the Supreme Court upheld the
application of the 1964 Civil Rights Act's “public
accommodations” section to a family-owned restaurant in
Birmingham, Alabama. It did so because the restaurant's racial
discrimination affected interstate commerce by reducing the
restaurant's business and limiting its purchases of out-of-state

meat, and by restricting the ability of blacks to travel among the
states.
As the above examples indicate, Congress may constitutionally
regulate many predominantly intrastate activities. By the early
1990s, it was not uncommon for observers to view the
Commerce Clause as having become, through judicial
interpretations, a federal police power with almost unlimited
reach. Yet two Supreme Court decisions from the mid-1990s
offered indications that the commerce power is not as broad-
ranging as many had come to believe. Harmonizing those
decisions with the earlier “affecting commerce” decisions was
the Court's task in a 2005 case, Gonzales v. Raich, which
follows shortly.
When it enacted the Patient Protection and Affordable Care Act
in 2010, Congress relied chiefly on the Commerce Clause as the
source of power to enact the health care reform law. Various
constitutional challenges to the law were initiated, with some
federal courts sustaining the statute as a valid exercise of
congressional power under the Commerce Clause but other
federal courts striking down part or all of it on the ground that
Congress had exceeded its commerce power. As this book went
to press in 2011, the constitutional challenges seemed destined
for resolution in the Supreme Court. Gonzales v. Raich and the
two previously referred to decisions from the mid-1990s will be
leading precedents with which the Supreme Court must wrestle
when it decides the fate of the health care reform law.
Gonzales v. Raich
545 U.S. 1 (U.S. Sup. Ct. 2005)

Although state and federal statutes outlaw marijuana possession
and sale, a 1996, California statute made, California the first of
approximately 10 states to authorize limited use of the drug for
medicinal purposes. The Compassionate Use Act created an
exemption from criminal prosecution for patients and primary
caregivers who possess or cultivate marijuana for medicinal
purposes with a physician's approval.
California residents Angel Raich and Diane Monson suffered
from serious medical conditions. After prescribing numerous
conventional medicines, physicians had concluded that
marijuana was the only effective treatment for Raich and
Monson. Both women had been using marijuana as a medication
pursuant to their doctors' recommendations, and both relied
heavily on marijuana so that they could function without
extreme pain. Monson cultivated her own marijuana. Two
caregivers provided Raich with locally grown marijuana at no
charge.
In 2002, county deputy sheriffs and agents from the federal
Drug Enforcement Administration (DEA) came to Monson's
home. Although the deputies concluded that Monson's use of
marijuana was lawful under California law, the federal agents
seized and destroyed all six of her cannabis plants. Raich and
Monson thereafter sued the Attorney General of the United
States and the head of the DEA in an effort to obtain an
injunction barring enforcement of the federal Controlled
Substances Act (CSA), to the extent that it prevented them from
possessing, obtaining, or manufacturing cannabis for their
personal medical use in accordance with California law. The
CSA classifies marijuana as a controlled substance and
criminalizes its possession and sale. In their complaint, Raich
and Monson claimed that enforcing the CSA against them would
violate the U.S. Constitution's Commerce Clause and the Due
Process Clause of the Fifth Amendment. The federal district
court denied the request for a preliminary injunction. The U.S.
Court of Appeals for the Ninth Circuit, however, agreed with
the Commerce Clause argument and directed the lower court to

issue a preliminary injunction prohibiting enforcement of the
CSA against Raich and Monson (often referred to below as
“respondents”). The U.S. Supreme Court granted the federal
government's petition for a writ of certiorari.
Stevens, Justice
Article I, § 8 of the Constitution [empowers Congress] “to make
all Laws which shall be necessary and proper for carrying into
Execution” [the federal] authority to “regulate Commerce with
foreign Nations, and among the several States.” The question
presented in this case is whether the power vested in Congress
by [the Commerce Clause] includes the power to prohibit the
local cultivation and use of marijuana in compliance with
California law. [This] case is made difficult by respondents'
strong arguments that they will suffer irreparable harm because,
despite a congressional finding to the contrary, marijuana does
have valid therapeutic purposes. The [issue] before us, however,
is not Page 60whether it is wise to enforce the statute in these
circumstances; rather, it is whether Congress' power to regulate
interstate markets for medicinal substances encompasses the
portions of those markets that are supplied with drugs produced
and consumed locally.
[Enacted in 1970 as part of a broader legislative package known
as the Comprehensive Drug Abuse Prevention and Control Act],
the CSA repealed most of the earlier [federal] drug laws in
favor of a comprehensive regime to combat the international
and interstate traffic in illicit drugs. The main objectives of the
CSA [center around monitoring] legitimate and illegitimate
traffic in controlled substances. Congress devised a closed
regulatory system making it unlawful to manufacture, distribute,
dispense, or possess any controlled substance except in a
manner authorized by the CSA, [which] categorizes all
controlled substances into five schedules. The drugs are
grouped together based on their accepted medical uses, the
potential for abuse, and their psychological and physical effects
on the body. Each schedule is associated with a distinct set of

controls regarding the manufacture, distribution, and use of the
substances listed therein.
Congress classified marijuana [in] Schedule I [of the CSA].
Schedule I drugs are categorized as such because of their high
potential for abuse, lack of any accepted medical use, and
absence of any accepted safety for use in medically supervised
treatment. These three factors, in varying gradations, are also
used to categorize drugs in the other four schedules. [As
Congress acknowledged in the CSA, many drugs listed on the
other schedules do have accepted medical uses.] By classifying
marijuana as a Schedule I drug, [Congress made] the
manufacture, distribution, or possession of marijuana … a
criminal offense.
Respondents … do not dispute that passage of the CSA … was
well within Congress' commerce power. Rather, respondents'
challenge is actually quite limited; they argue that the CSA's
categorical prohibition of the manufacture and possession of
marijuana as applied to the intrastate manufacture and
possession of marijuana for medical purposes pursuant to
California law exceeds Congress' authority under the Commerce
Clause.
[This Court's Commerce Clause cases] have identified three
general categories of regulation in which Congress is authorized
to engage under its commerce power. First, Congress can
regulate the channels of interstate commerce. Second, Congress
has authority to regulate and protect the instrumentalities of
interstate commerce, and persons or things in interstate
commerce. Third, Congress has the power to regulate activities
that substantially affect interstate commerce. Only the third
category is implicated in the case at hand.
Our case law firmly establishes Congress' power to regulate
purely local activities that are part of an economic “class of
activities” [having] a substantial effect on interstate commerce.
See, e.g., Wickard v. Filburn, 317 U.S. 111 (1942). As we
stated in Wickard, “even if appellee's activity be local and
though it may not be regarded as commerce, it may still,

whatever its nature, be reached by Congress if it exerts a
substantial economic effect on interstate commerce.” In
Wickard, we upheld the application of regulations promulgated
under the Agricultural Adjustment Act of 1938, which were
designed to control the volume of wheat moving in interstate
and foreign commerce in order to avoid surpluses and
consequent abnormally low prices. The regulations established
an allotment of 11.1 acres for Filburn's 1941 wheat crop, but he
sowed 23 acres, intending to use the excess by consuming it on
his own farm. Filburn argued that even though Congress [had
the] power to regulate the production of goods for commerce,
that power did not authorize “federal regulation [of] production
not intended in any part for commerce but wholly for
consumption on the farm.” Justice Jackson's opinion for a
unanimous Court rejected this submission. He wrote:
The effect of the statute before us is to restrict the amount
which may be produced for market and the extent as well to
which one may forestall resort to the market by producing to
meet his own needs. That [Filburn's] own contribution to the
demand for wheat may be trivial by itself is not enough to
remove him from the scope of federal regulation where, as here,
his contribution, taken together with that of many others
similarly situated, is far from trivial.
Wickard thus establishes that Congress can regulate purely
intrastate activity that is not itself “commercial,” in that it is
not produced for sale, if it concludes that failure to regulate that
class of activity would undercut the regulation of the interstate
market in that commodity.
The similarities between this case and Wickard are striking.
Like the farmer in Wickard, respondents are cultivating, for
home consumption, a fungible commodity for which there is an
established, albeit illegal, interstate market. Just as the
Agricultural Adjustment Act was designed “to control the
volume [of wheat] moving in interstate and foreign commerce in

order to avoid surpluses” and consequently control the market
price, a primary purpose of the CSA is to control the supply and
demand of controlled substances in both lawful and unlawful
drug markets. In Wickard, we had no difficulty concluding that
Congress had a rational basis for believing that … leaving
home-consumed wheat outside the regulatory scheme would
have a substantial influence on price and market conditions.
Here too, Congress had a rational basis for concluding that
leaving home-consumed marijuana outside federal control
would similarly affect price and market conditions.
More concretely, one concern prompting inclusion of wheat
grown for home consumption in the 1938 Act was that rising
Page 61market prices could draw such wheat into the interstate
market, resulting in lower market prices. The parallel concern
making it appropriate to include marijuana grown for home
consumption in the CSA is the likelihood that the high demand
in the interstate market will draw such marijuana into that
market. While the diversion of homegrown wheat tended to
frustrate the federal interest in stabilizing prices by regulating
the volume of commercial transactions in the interstate market,
the diversion of homegrown marijuana tends to frustrate the
federal interest in eliminating commercial transactions in the
interstate market in their entirety. In both cases, the regulation
is squarely within Congress' commerce power because
production of the commodity meant for home consumption, be it
wheat or marijuana, has a substantial effect on supply and
demand in the national market for that commodity.
To support their [argument that applying the CSA to them
would violate the Commerce Clause], respondents rely heavily
on two of our more recent Commerce Clause cases, United
States v. Lopez, 514 U.S. 549 (1995), and United States v.
Morrison, 529 U.S. 598 (2000). [However, respondents]
overlook the larger context of modern-era Commerce Clause
jurisprudence preserved by those cases. [T]he statutory
challenges in Lopez and Morrison were markedly different from
the [statutory] challenge in the case at hand. Here, respondents

ask us to excise individual applications of a concededly valid
statutory scheme. In contrast, in both Lopez and Morrison, the
parties asserted that a particular statute or provision fell outside
Congress' commerce power in its entirety. This distinction is
pivotal, for we have often reiterated that “where the class of
activities is regulated and that class is within the reach of
federal power, the courts have no power ‘to excise, as trivial,
individual instances’ of the class.” [Citations of authority
omitted.]
At issue in Lopez was the validity of the Gun-Free School
Zones Act of 1990, which was a brief, single-subject statute
making it a [federal] crime for an individual to possess a gun in
a school zone. Distinguishing our earlier cases holding that
comprehensive regulatory statutes may be validly applied to
local conduct that does not, when viewed in isolation, have a
significant impact on interstate commerce, we held the statute
invalid. We explained:
[The Gun-Free School Zones Act] is a criminal statute that by
its terms has nothing to do with ‘commerce’ or any sort of
economic enterprise, however broadly one might define those
terms. [The statute] is not an essential part of a larger
regulation of economic activity, in which the regulatory scheme
could be undercut unless the intrastate activity were regulated.
It cannot, therefore, be sustained under our cases upholding
regulations of activities that arise out of or are connected with a
commercial transaction, which viewed in the aggregate,
substantially affects interstate commerce.
The statutory scheme that the government is defending in this
litigation is at the opposite end of the regulatory spectrum. [The
CSA is] a lengthy and detailed statute creating a comprehensive
framework for regulating the production, distribution, and
possession of five classes of controlled substances. [The CSA's
classification of marijuana], unlike the discrete prohibition
established by the Gun-Free School Zones Act of 1990, was

merely one of many “essential parts of a larger regulation of
economic activity, in which the regulatory scheme could be
undercut unless the intrastate activity were regulated.” [Citation
omitted.] Our opinion in Lopez casts no doubt on the validity of
such a program.
Nor does this Court's holding in Morrison. The Violence
Against Women Act of 1994 created a federal civil remedy for
the victims of gender-motivated crimes of violence. The remedy
… generally depended on proof of the violation of a state law.
Despite congressional findings that such crimes had an adverse
impact on interstate commerce, we held the statute
unconstitutional because, like the statute in Lopez, it did not
regulate economic activity.
Unlike those at issue in Lopez and Morrison, the activities
regulated by the CSA are quintessentially economic. The CSA is
a statute that regulates the production, distribution, and
consumption of commodities for which there is an established,
and lucrative, interstate market. Prohibiting the intrastate
possession or manufacture of an article of commerce is a
rational (and commonly utilized) means of regulating commerce
in that product. Because the CSA is a statute that directly
regulates economic, commercial activity, our opinion in
Morrison casts no doubt on its constitutionality.
We acknowledge that evidence proffered by respondents in this
case regarding the effective medical uses for marijuana, if
found credible after trial, would cast serious doubt on the
accuracy of the [congressional] findings that require marijuana
to be listed in Schedule I. But the possibility that the drug may
be reclassified in the future has no relevance to the question
whether Congress now has the power to regulate its production
and distribution. One need not have a degree in economics to
understand why a nationwide exemption for the vast quantity of
marijuana … locally cultivated for personal use (which
presumably would include use by friends, neighbors, and family
members) may have a substantial impact on the interstate
market for this extraordinarily popular substance. The

congressional judgment that an exemption for such a significant
segment of the total market would undermine the orderly
enforcement of the entire regulatory scheme is entitled to a
strong presumption of validity.
[T]hat the California exemptions will have a significant impact
on both the supply and demand sides of the market for
marijuana is … readily apparent. [Although] most prescriptions
for legal drugs … limit the dosage and duration of the usage,
under Page 62California law the doctor's permission to
recommend marijuana use is open-ended. The [California
statute's authorization for the doctor] to grant permission
whenever the doctor determines that a patient is afflicted with
“any other illness for which marijuana provides relief” is broad
enough to allow even the most scrupulous doctor to conclude
that some recreational uses would be therapeutic. And our cases
have taught us that there are some unscrupulous physicians who
overprescribe when it is sufficiently profitable to do so.
The exemption for cultivation by patients and caregivers can
only increase the supply of marijuana in the California market.
The likelihood that all such production will promptly terminate
when patients recover or will precisely match the patients'
medical needs during their convalescence seems remote,
whereas the danger that excesses will satisfy some of the
admittedly enormous demand for recreational use seems
obvious. Moreover, that the national and international narcotics
trade has thrived in the face of vigorous criminal enforcement
efforts suggests that no small number of unscrupulous people
will make use of the California exemptions to serve their
commercial ends whenever it is feasible to do so.
[T]he case for the exemption comes down to the claim that a
locally cultivated product that is used domestically rather than
sold on the open market is not subject to federal regulation.
Given the findings in the CSA and the undisputed magnitude of
the commercial market for marijuana, our decisions in Wickard
v. Filburn and the later [cases] endorsing its reasoning foreclose
that claim.

We do note, however, the presence of another avenue of relief
[for the respondents: the CSA-authorized procedures that can
lead to] reclassification of Schedule I drugs. But perhaps even
more important than these legal avenues is the democratic
process, in which the voices of voters allied with these
respondents may one day be heard in the halls of Congress.
Under the present state of the law, however, the judgment of the
Court of Appeals [cannot stand].
Court of Appeals decision vacated; case remanded for further
proceedings.
The Taxing Power Article I, § 8 of the Constitution states that
“The Congress shall have Power To lay and collect Taxes,
Duties, Imposts and Excises.” The main purpose of this taxing
power is to provide a means of raising revenue for the federal
government. The taxing power, however, may also serve as a
regulatory device. Because the power to tax is the power to
destroy, Congress may choose, for instance, to regulate a
disfavored activity by imposing a heavy tax on it. Although
some past regulatory taxes were struck down, today the reach of
the taxing power is seen as very broad.
The Spending Power If taxing power regulation uses a federal
club, congressional spending power regulation employs a
federal carrot. Article I, § 8 also gives Congress a broad ability
to spend for the general welfare. By basing the receipt of
federal money on the performance of certain conditions,
Congress can use the spending power to advance specific
regulatory ends. Conditional federal grants to the states, for
instance, are common today.
Over the past several decades, congressional spending power
regulation routinely has been upheld. There are limits, however,
on its use. First, an exercise of the spending power must serve
general public purposes rather than particular interests. Second,
when Congress conditions the receipt of federal money on
certain conditions, it must do so clearly. Third, the condition
must be reasonably related to the purpose underlying the federal

expenditure. This means, for instance, that Congress probably
could not condition a state's receipt of federal highway money
on the state's adoption of a one-house legislature.
The Necessary and Proper Clause After listing the commerce
power, the taxing and spending powers, and various other
powers extended to Congress, Article I, § 8 concludes with a
provision granting Congress the further power to “make all laws
which shall be necessary and proper for carrying into execution
the foregoing powers ….” The Necessary and Proper Clause is
dependent upon Article I, § 8's previously listed powers but
augments them by permitting Congress to enact laws that are
useful or conducive to the exercise of those enumerated powers.
For instance, even though the congressional power under the
Commerce Clause focuses on interstate economic activity,
certain instances of noneconomic activity could be regulated by
Congress under the Necessary and Proper Clause if doing so
would be important to the effective operation of federal
legislation dealing with interstate economic activity.
Page 63Independent Checks on the Federal Government and the
States
Even if a regulation is within Congress's enumerated powers or
a state's police power, it still is unconstitutional if it collides
with one of the Constitution's independent checks. This section
discusses three checks that limit federal and state regulation of
the economy: freedom of speech; due process; and equal
protection. Before discussing these guarantees, however, we
must consider three foundational matters.
Describe the incorporation doctrine's role in making most
guarantees of the Bill of Rights operate to protect persons not
only against certain federal government actions but also against
certain state and local government actions.
Incorporation The Fifth Amendment prevents the federal
government from depriving “any person of life, liberty, or

property, without due process of law.” The Fourteenth
Amendment creates the same prohibition with regard to the
states. The literal language of the First Amendment, however,
restricts only federal government action. Moreover, the
Fourteenth Amendment says that no state shall “deny to any
person … the equal protection of the laws.”
Thus, although the due process guarantees clearly apply to both
the federal government and the states, the First Amendment
seems to apply only to the federal government and the Equal
Protection Clause only to the states. The First Amendment's free
speech guarantee, however, has been included within the
“liberty” protected by Fourteenth Amendment due process as a
result of Supreme Court decisions. The free speech guarantee,
therefore, restricts state governments as well as the federal
government. This is an example of the process of incorporation,
by which almost all Bill of Rights provisions now apply to the
states. The criminal procedure-related provisions in the Fourth,
Fifth, and Sixth Amendments (examined in Chapter 5 of this
text) are further examples of Bill of Rights protections that the
federal government must honor but that state and local
governments must respect as well, because of the incorporation
doctrine. The Fourteenth Amendment's equal protection
guarantee, on the other hand, has been made applicable to
federal government action through incorporation of it within the
Fifth Amendment's Due Process Clause.
Government Action People often talk as if the Constitution
protects them against anyone who might threaten their rights.
However, most of the Constitution's individual rights provisions
block only the actions of government bodies, federal, state, and
local.1 Private behavior that denies individual rights, while
perhaps forbidden by statute, is very seldom a constitutional
matter. This government action or state action requirement
forces courts to distinguish between governmental behavior and
private behavior. Judicial approaches to this problem have
varied over time.
Before World War II, only formal arms of government such as

legislatures, administrative agencies, municipalities, courts,
prosecutors, and state universities were deemed state actors.
After the war, however, the scope of government action
increased considerably, with various sorts of traditionally
private behavior being subjected to individual rights limitations.
The Supreme Court, in Marsh v. Alabama (1946), treated a
privately owned company town's restriction of free expression
as government action under the public function theory because
the town was nearly identical to a regular municipality in most
respects. In Shelley v. Kraemer (1948), the Court held that
when state courts enforced certain white homeowners' private
agreements not to sell their homes to blacks, there was state
action that violated the Equal Protection Clause. Later, in
Burton v. Wilmington Parking Authority (1961), the Court
concluded that racial discrimination by a privately owned
restaurant located in a state-owned and state-operated parking
garage was unconstitutional state action, in part because the
garage and the restaurant were intertwined in a mutually
beneficial “symbiotic” relationship. Among the other factors
leading courts to find state action during the 1960s and 1970s
were extensive government regulation of private activity and
government financial aid to a private actor.
The Court, however, severely restricted the reach of state action
during the 1970s and 1980s. Since then, private behavior
generally has not been held to constitute state action unless a
regular unit of government is directly responsible for the
challenged private behavior because it has coerced or
encouraged such behavior. The public function doctrine,
moreover, has been limited to situations in which a private
entity exercises powers that have traditionally been exclusively
reserved to the state; Page 64private police protection is a
possible example. In addition, government regulation and
government funding have become somewhat less important
factors in state action determinations.
In a 2001 decision, however, a six-justice majority of the
Supreme Court concluded that the Tennessee Secondary School

Athletic Association (TSSAA) was a state actor for purposes of
the Constitution's Fourteenth Amendment when it enforced an
association rule against a member school. The TSSAA, a
privately organized, not-for-profit entity, regulated
interscholastic sports competition among public and private
high schools in Tennessee. Although no school was required to
join the TSSAA, nearly all public schools and many private
schools had done so. All members of the association's governing
bodies were school officials, most of whom were from public
schools. Public school systems provided considerable financial
support for the TSSAA, which worked closely with the state
board of education, a governmental body. For many years, the
TSSAA was designated in a state board of education rule as the
regulator of athletics in the state's public schools. Stressing the
“pervasive entwinement of public institutions and public
officials in [the TSSAA's] composition and workings,” the
Supreme Court held in Brentwood Academy v. Tennessee
Secondary School Athletic Association that the TSSAA was a
government actor. Brentwood Academy's “entwinement”
rationale appears to provide an additional way in which state
action can be found, though the Court emphasized that each
decision on the state action issue is highly fact-specific.
Explain the differences among the means-ends tests used by
courts when the constitutionality of government action is being
determined (strict scrutiny, intermediate scrutiny, and rational
basis).
Means-Ends Tests Throughout this chapter, you will see tests of
constitutionality that may seem strange at first glance. One
example is the test for determining whether laws that
discriminate on the basis of sex violate equal protection. This
test says that to be constitutional, such laws must be
substantially related to the achievement of an important
government purpose. The Equal Protection Clause does not

contain such language. It simply says that “No State shall …
deny to any person … the equal protection of the laws.” What is
going on here?
The sex discrimination test just stated is a means-ends test
developed by the Supreme Court. Such tests are judicially
created because no constitutional right is absolute, and because
judges therefore must weigh individual rights against the social
purposes served by laws that restrict those rights. In other
words, means-ends tests determine how courts strike the balance
between individual rights and the social needs that may justify
their suppression. The “ends” component of a means-ends test
specifies how significant a social purpose must be in order to
justify the restriction of a right. The “means” component states
how effectively the challenged law must promote that purpose
in order to be constitutional. In the sex discrimination test, for
example, the challenged law must serve an “important”
government purpose (the significance of the end) and must be
“substantially” related to the achievement of that purpose (the
effectiveness of the means).
Some constitutional rights are deemed more important than
others. Accordingly, courts use tougher tests of constitutionality
in certain cases and more lenient tests in other situations.
Sometimes these tests are lengthy and complicated. Throughout
the chapter, therefore, we will simplify by referring to three
general kinds of means-ends tests:
The rational basis test. This is a very relaxed test of
constitutionality that challenged laws usually pass with ease. A
typical formulation of the rational basis test might say that
government action need only have a reasonable relation to the
achievement of a legitimate government purpose to be
constitutional.
Intermediate scrutiny. This comes in many forms; the sex
discrimination test discussed above is an example.
Full strict scrutiny. Here, the court might say that the
challenged law must be necessary to the fulfillment of a

compelling government purpose. Government action that is
subjected to this rigorous test of constitutionality is usually
struck down.
Describe the differences between noncommercial speech and
commercial speech and the respective levels of the First
Amendment protection they receive.
Business and the First Amendment
The First Amendment provides that “Congress shall make no
law … abridging the freedom of speech.” Despite its absolute
language (“ no law”), the First Amendment does not prohibit
every law that restricts speech. As Justice Oliver Wendell
Holmes famously remarked, the First Amendment does not
protect someone who falsely shouts “Fire!” in a crowded
theater. Although the First Amendment's free speech guarantee
is not absolute, government action restricting the content of
speech usually receives Page 65very strict judicial scrutiny. One
justification for this high level of protection is the
“marketplace” rationale, under which the free competition of
ideas is seen as the surest means of attaining truth. The
marketplace of ideas operates most effectively, according to this
rationale, when restrictions on speech are kept to a minimum
and all viewpoints can be considered.
During recent decades, the First Amendment has been applied to
a wide variety of government restrictions on the expression of
individuals and organizations, including corporations. This
chapter does not attempt a comprehensive discussion of the
many applications of the freedom of speech guarantee. Instead,
it explores basic First Amendment concepts before turning to an
examination of the free speech rights of corporations.
Political and Other Noncommercial Speech Political speech—
expression that deals in some fashion with government,
government issues or policies, public officials, or political

candidates—is often described as being at the “core” of the
First Amendment. Various Supreme Court decisions have held,
however, that the freedom of speech guarantee applies not only
to political speech but also to noncommercial expression that
does not have a political content or flavor. According to these
decisions, the First Amendment protects speech of a literary or
artistic nature, speech dealing with scientific, economic,
educational, and ethical issues, and expression on many other
matters of public interest or concern. Government attempts to
restrict the content of political or other noncommercial speech
normally receive full strict scrutiny when challenged in court.
Unless the government is able to meet the exceedingly difficult
burden of proving that the speech restriction is necessary to the
fulfillment of a compelling government purpose, a First
Amendment violation will be found. Because government
restrictions on political or other noncommercial speech trigger
the full strict scrutiny test, such speech is referred to as
carrying “full” First Amendment protection.
Do corporations, however, have the same First Amendment
rights that individual human beings possess? The Supreme
Court has consistently provided a “yes” answer to this question.
Therefore, if a corporation engages in political or other
noncommercial expression, it is entitled to full First
Amendment protection, just as an individual would be if he or
she engaged in such speech. In the much-publicized Citizens
United case, which follows shortly, a five-justice majority of
the Supreme Court held that a federal restriction on corporate
funding of “electioneering communications” close to the time of
an election failed the strict scrutiny test and therefore violated
the First Amendment. En route to that holding, the Court
overruled earlier decisions indicating that such restrictions on
corporate funding of election-related issues advertisements
should clear the strict scrutiny hurdle.
Although corporate speakers have First Amendment rights, not
all speech of a corporation is fully protected. Some corporate
speech is classified as commercial speech, a category of

expression examined later in the chapter. As will be seen,
commercial speech receives First Amendment protection but not
the full variety extended to political or noncommercial speech.
The mere fact, however, that a profit motive underlies speech
does not make the speech commercial in nature. Books, movies,
television programs, musical works, works of visual art, and
newspaper, magazine, and journal articles are normally
classified as noncommercial speech—and are thus fully
protected—despite the typical existence of an underlying profit
motive. Their informational, educational, artistic, or
entertainment components are thought to outweigh, for First
Amendment purposes, the profit motive.
Citizens United v. Federal Election Commission
130 S. Ct. 876 (U.S. Sup. Ct. 2010)
Citizens United, a nonprofit corporation with a $12 million
annual budget, receives most of its funds in the form of
donations by individuals. A small portion comes from for-profit
corporations. In January 2008, Citizens United released a film
titled Hillary: The Movie (hereinafter Hillary). It is a 90-minute
documentary about then-Senator Hillary Clinton, a candidate in
the Democratic Party's 2008 presidential primary elections.
Hillary depicts interviews with political commentators and other
persons, most of them quite critical of Senator Clinton.
Hillary was released in theaters and on DVD, but Citizens
United wanted to increase distribution by making it available
through video-on-demand. Although video-on-demand services
often require viewers to pay a small fee to view a selected
program, Citizens United planned to pay for the service and to

make Hillary available to viewers free of charge. To promote
the film, Citizens United produced two 10-second
advertisements and one 30-second ad for airing on broadcast
and cable television. Each ad included a pejorative statement
about Senator Clinton, followed by the name of the movie and
the address of a website for the movie.
Page 66Before the Bipartisan Campaign Reform Act of 2002
(BCRA), federal law prohibited corporations and unions from
using general treasury funds for direct contributions to
candidates or as independent expenditures expressly advocating,
through any form of media, the election or defeat of a candidate
in certain qualified federal elections. 2 U.S.C. § 441b. The
BCRA amended § 441b to prohibit any “electioneering
communication” as well. The statute defined “electioneering
communication” as “any broadcast, cable, or satellite
communication” that “refers to a clearly identified candidate for
Federal office” and is made within 30 days of a primary election
or 60 days of a general election. Federal Election Commission
(FEC) regulations further defined “electioneering
communication” as a communication that is “publicly
distributed,” and went on to provide that “[i]n the case of a
candidate for nomination for President … publicly distributed
means” that the communication “[c]an be received by 50,000 or
more persons in a State where a primary election … is being
held within 30 days.”
When combined, the federal law that prexisted the BCRA and
the amendments added by the BCRA barred corporations and
unions from using their general treasury funds for express
advocacy or electioneering communications. However, they
were permitted to establish a “separate segregated fund” (known
as a political action committee, or PAC) for these purposes. The
moneys to be received by the PAC were limited to donations
from the corporation's stockholders and employees of the
corporation or the union's members.
The BCRA also set forth disclaimer and disclosure
requirements. A televised electioneering communication funded

by anyone other than a candidate must include a clearly spoken
and clearly readable statement that “____ is responsible for the
content of this advertising,” as well as a statement that the
communication “is not authorized by any candidate or
candidate's committee.” The electioneering communication must
also display the name and address (or website address) of the
person or group that funded the advertisement. § 441d(a)(3). In
addition, the BCRA requires any person or entity spending more
than $10,000 on electioneering communications within a
calendar year to file a disclosure statement with the FEC. That
statement must identify the person or entity making the
expenditure, the amount of the expenditure, the election to
which the communication was directed, and the names of certain
contributors.
Citizens United wanted to make Hillary available through
video-on-demand within 30 days of the 2008 primary elections.
It feared, however, that both the film and the ads promoting it
would be covered by § 441b's ban on corporate-funded
independent expenditures and could thus subject the corporation
to civil and criminal penalties. Citizens United therefore sought
declaratory and injunctive relief against the FEC, arguing that §
441b was unconstitutional on its face and as applied to Hillary,
and that the BCRA's disclaimer and disclosure requirements
were unconstitutional as applied to Hillary and to the three ads
for the movie. A federal district court granted the FEC's motion
for summary judgment. The court held that § 441b was
constitutional under previous Supreme Court precedents, as
were the statute's disclaimer and disclosure requirements.
Citizens United sought review by the Supreme Court (rather
than a circuit court of appeals) under a review provision in the
challenged law.
Kennedy, Justice
Federal law prohibits corporations and unions from using their
general treasury funds to make independent expenditures for
speech defined as an “electioneering communication” or for

speech expressly advocating the election or defeat of a
candidate. 2 U.S.C. § 441b. Limits on electioneering
communications were upheld in McConnell v. Federal Election
Comm'n, 540 U.S. 93 (2003). The holding of McConnell rested
to a large extent on an earlier case, Austin v. Michigan Chamber
of Commerce, 494 U.S. 652 (1990). In this case we are asked to
reconsider Austin and, in effect, McConnell. Before considering
whether Austin should be overruled, we first address whether
Citizens United's claim that § 441b cannot be applied to Hillary
may be resolved on other, narrower grounds.
[Apart from its arguments regarding constitutional issues,]
Citizens United contends that § 441b does not cover Hillary …
because the film does not qualify as an “electioneering
communication.” Under the definition of electioneering
communication, the video-on-demand showing of Hillary on
cable television would have been a “cable … communication”
that “refer[red] to a clearly identified candidate for Federal
office” and that was made within 30 days of a primary election.
[Moreover,] Citizens United wanted to use a cable video-on-
demand system that had 34.5 million subscribers nationwide.
Thus, Hillary could have been received by 50,000 persons or
more. Section 441b covers Hillary.
Citizens United next argues that § 441b may not be applied to
Hillary under the approach taken in Federal Election Comm'n v.
Wisconsin Right to Life, Inc., 551 U.S. 449 (2007) (WRTL).
McConnell decided that § 441b's definition of an
“electioneering communication” was constitutional insofar as it
restricted speech that was “the functional equivalent of express
advocacy” for or against a specific candidate. WRTL then found
an unconstitutional application of § 441b where the speech was
not “express advocacy or its functional equivalent.” As
explained by the Chief Justice's controlling opinion in WRTL,
the functional-equivalent test is objective: “a court should find
that [a communication] is the functional equivalent of express
advocacy only if Page 67[it] is susceptible of no reasonable
interpretation other than as an appeal to vote for or against a

specific candidate.”
Under this test, Hillary is equivalent to express advocacy. The
movie, in essence, is a feature-length negative advertisement
that urges viewers to vote against Senator Clinton for President.
The narrative may contain more suggestions and arguments than
facts, but there is little doubt that the thesis of the film is that
she is unfit for the Presidency. [T]here is no reasonable
interpretation of Hillary other than as an appeal to vote against
Senator Clinton. Under the standard stated in McConnell and
further elaborated in WRTL, the film qualifies as the functional
equivalent of express advocacy.
Citizens United further contends that § 441b should be
invalidated as applied to movies shown through video-on-
demand, arguing that this delivery system has a lower risk of
distorting the political process than do television ads. While
some means of communication may be less effective than others
at influencing the public in different contexts, any effort by the
judiciary to decide which means of communications are to be
preferred for the particular type of message and speaker [would
be highly questionable]. And in all events, those differentiations
might soon prove to be irrelevant or outdated by technologies
that are in rapid flux. We must decline to draw, and then
redraw, constitutional lines based on the particular media or
technology used to disseminate political speech from a
particular speaker.
As the foregoing analysis confirms, the Court cannot resolve
this case on a narrower ground without chilling political speech,
speech that is central to the meaning and purpose of the First
Amendment. It is not judicial restraint to accept an unsound,
narrow argument just so the Court can avoid another argument
with broader implications. Here, the lack of a valid basis for an
alternative ruling requires full consideration of the continuing
effect of the speech suppression upheld in Austin.
The law before us is an outright ban [on speech], backed by
criminal sanctions. Section 441b makes it a felony for all
corporations—including nonprofit advocacy corporations—

either to expressly advocate the election or defeat of candidates
or to broadcast electioneering communications within 30 days
of a primary election and 60 days of a general election. Thus,
the following acts would all be felonies under § 441b: The
Sierra Club runs an ad, within the crucial phase of 60 days
before the general election, that exhorts the public to
disapprove of a Congressman who favors logging in national
forests; the National Rifle Association publishes a book urging
the public to vote for the challenger because the incumbent U.
S. Senator supports a handgun ban; and the American Civil
Liberties Union creates a website telling the public to vote for a
Presidential candidate in light of that candidate's defense of free
speech. These prohibitions are classic examples of censorship.
Section 441b is a ban on corporate speech notwithstanding the
fact that a PAC created by a corporation can still speak. A PAC
is a separate association from the corporation. So the PAC
exemption from § 441b's expenditure ban does not allow
corporations to speak. Even if a PAC could somehow allow a
corporation to speak—and it does not—the option to form PACs
does not alleviate the First Amendment problems with § 441b.
PACs are burdensome alternatives; they are expensive to
administer and subject to extensive regulations. [Also,] PACs
must file detailed monthly reports with the FEC, which are due
at different times depending on the type of election that is about
to occur. PACs have to comply with these regulations just to
speak. This might explain why fewer than 2,000 of the millions
of corporations in this country have PACs. PACs, furthermore,
must exist before they can speak. Given the onerous
restrictions, a corporation may not be able to establish a PAC in
time to make its views known regarding candidates and issues in
a current campaign.
Speech is an essential mechanism of democracy, for it is the
means to hold officials accountable to the people. The right of
citizens to inquire, to hear, to speak, and to use information to
reach consensus is a precondition to enlightened self-
government and a necessary means to protect it. [P]olitical

speech must prevail against laws that would suppress it,
whether by design or inadvertence. Laws that burden political
speech are “subject to strict scrutiny,” which requires the
Government to prove that the restriction “furthers a compelling
interest and is narrowly tailored to achieve that interest.” [This]
quoted language from WRTL provides a sufficient framework
for protecting the relevant First Amendment interests in this
case.
Premised on mistrust of governmental power, the First
Amendment stands against attempts to disfavor certain subjects
or viewpoints. Prohibited, too, are restrictions distinguishing
among different speakers, allowing speech by some but not
others. As instruments to censor, these categories are
interrelated: Speech restrictions based on the identity of the
speaker are all too often simply a means to control content.
The Court has recognized [in various cases] that First
Amendment protection extends to corporations. [E.g.,] First
National Bank of Boston v. Bellotti, 435 U.S. 765 (1978). This
protection has been extended by explicit holdings to the context
of political speech. Under the rationale of these precedents,
political speech does not lose First Amendment protection
simply because its source is a corporation.
At least since the latter part of the 19th century, the laws of
some states and of the United States imposed a ban on corporate
direct contributions to candidates. Yet not until 1947 did
Congress first prohibit independent expenditures by
corporations and labor unions. For almost three decades
thereafter, the Court did not reach the question whether
restrictions on corporate and union expenditures are
constitutional.
In Buckley v. Valeo, 424 U.S. 1 (1976), the Court addressed
various challenges to the Federal Election Campaign Act of
Page 681971 (FECA), as amended in 1974. [FECA limited
direct contributions to candidates, established] an independent
expenditure ban … that applied to individuals as well as
corporations and labor unions, [and included a separate ban on

corporate and union independent expenditures.] [Buckley
considered only the direct contributions provision and the
broader independent expenditure ban that applied to individuals
as well as corporations and unions. The separate ban on
independent expenditures by corporations and unions was not at
issue in Buckley.]
Before addressing the constitutionality of [the broader]
independent expenditure ban, Buckley first upheld … FECA's
limits on direct contributions to candidates. The Buckley Court
recognized a “sufficiently important” governmental interest in
“the prevention of corruption and the appearance of corruption.”
This followed from the Court's concern that large contributions
could be given “to secure a political quid pro quo. ” The
Buckley Court explained that the potential for quid pro quo
corruption distinguished direct contributions to candidates from
independent expenditures. The Court emphasized that “the
independent expenditure ceiling … fails to serve any substantial
governmental interest in stemming the reality or appearance of
corruption in the electoral process,” because “[t]he absence of
prearrangement and coordination … alleviates the danger that
expenditures will be given as a quid pro quo for improper
commitments from the candidate.” Buckley invalidated [FECA's
broader] restriction on independent expenditures, with only one
Justice dissenting.
Buckley did not consider [FECA's] separate ban [that
specifically applied to] corporate and union independent
expenditures. Had [that specific ban] been challenged in the
wake of Buckley, however, it could not have been squared with
the reasoning and analysis of that precedent. [Nevertheless],
Congress recodified [the] corporate and union expenditure ban
at 2 U.S.C. § 441b four months after Buckley was decided.
Section 441b is the independent expenditure restriction
challenged here.
Less than two years after Buckley, Bellotti reaffirmed the First
Amendment principle that the government cannot restrict
political speech based on the speaker's corporate identity.

Bellotti could not have been clearer when it struck down a state-
law prohibition on corporate independent expenditures related
to referenda issues. Bellotti did not address the constitutionality
of the state's ban on corporate independent expenditures to
support candidates. In our view, however, that restriction would
have been unconstitutional under Bellotti's central principle:
that the First Amendment does not allow political speech
restrictions based on a speaker's corporate identity.
Thus the law stood until Austin, [which] “uph[eld] a direct
restriction on the independent expenditure of funds for political
speech for the first time in [this Court's] history.” (Kennedy, J.,
dissenting in Austin.) [In Austin], the Michigan Chamber of
Commerce sought to use general treasury funds to run a
newspaper ad supporting a specific candidate. Michigan law,
however, prohibited corporate independent expenditures that
supported or opposed any candidate for state office. A violation
of the law was punishable as a felony. The Court sustained the
speech prohibition. To bypass Buckley and Bellotti, the Austin
Court identified a new governmental interest in limiting
political speech: an anti-distortion interest. Austin found a
compelling governmental interest in preventing “the corrosive
and distorting effects of immense aggregations of wealth that
are accumulated with the help of the corporate form and that
have little or no correlation to the public's support for the
corporation's political ideas.”
The Court is thus confronted with conflicting lines of precedent:
a pre-Austin line that forbids restrictions on political speech
based on the speaker's corporate identity and a post-Austin line
that permits them. No case before Austin had held that Congress
could prohibit independent expenditures for political speech
based on the speaker's corporate identity. In its defense of the
corporate-speech restrictions in § 441b, the government notes
the anti-distortion rationale on which Austin and its progeny
rest in part, yet … the government does little to defend it. And
with good reason, for the rationale cannot support § 441b.
If the First Amendment has any force, it prohibits Congress

from fining or jailing citizens, or associations of citizens, for
simply engaging in political speech. If the anti-distortion
rationale were to be accepted, however, it would permit
government to ban political speech simply because the speaker
is an association that has taken on the corporate form. The
government contends that Austin permits it to ban corporate
expenditures for almost all forms of communication stemming
from a corporation. If Austin were correct, the government
could prohibit a corporation from expressing political views in
media beyond those presented here, such as by printing books.
The government responds “that the FEC has never applied this
statute to a book,” and if it did, “there would be quite [a] good
as-applied [constitutional] challenge.” This troubling assertion
of brooding governmental power cannot be reconciled with the
confidence and stability in civic discourse that the First
Amendment must secure.
[As noted in Bellotti,] [p]olitical speech is “indispensable to
decisionmaking in a democracy, and this is no less true because
the speech comes from a corporation rather than an individual.”
This protection for speech is inconsistent with Austin's anti-
distortion rationale. Austin sought to defend the anti-distortion
rationale as a means to prevent corporations from obtaining “‘an
unfair advantage in the political marketplace’” by using
“‘resources amassed in the economic marketplace.’” But
Buckley rejected the premise that the government has an
interest “in equalizing the relative ability of individuals and
groups to influence the outcome of elections.” Buckley was
specific in stating that “the skyrocketing cost of political
campaigns” could not Page 69sustain the governmental
prohibition. The First Amendment's protections do not depend
on the speaker's “financial ability to engage in public
discussion.”
Austin interferes with the open marketplace of ideas protected
by the First Amendment. Most of [the corporations affected by
§ 441b] are small corporations without large amounts of wealth.
This fact belies the government's argument that the statute is

justified on the ground that it prevents the “distorting effects of
immense aggregations of wealth” [quoting Austin.]
The censorship we now confront is vast in its reach. The
government has “muffle[d] the voices that best represent the
most significant segments of the economy” (opinion of Scalia,
J., in McConnell). And “the electorate [has been] deprived of
information, knowledge and opinion vital to its function.”
[Citation omitted.] By suppressing the speech of manifold
corporations, both for-profit and nonprofit, the government
prevents their voices and viewpoints from reaching the public
and advising voters on which persons or entities are hostile to
their interests. Factions will necessarily form in our republic,
but the remedy of “destroying the liberty” of some factions is
“worse than the disease.” The Federalist No. 10, p. 130 (J.
Madison). Factions should be checked by permitting them all to
speak, and by entrusting the people to judge what is true and
what is false.
The purpose and effect of this law is to prevent corporations,
including small and nonprofit corporations, from presenting
both facts and opinions to the public. This makes Austin's anti-
distortion rationale all the more an aberration. When
Government seeks to use its full power, including the criminal
law, to command where a person may get his or her information
or what distrusted source he or she may not hear, it uses
censorship to control thought. This is unlawful. The First
Amendment confirms the freedom to think for ourselves.
What we have said also shows the invalidity of [another
argument] made by the government. For the most part
relinquishing the anti-distortion rationale, the government falls
back on the argument that corporate political speech can be
banned in order to prevent corruption or its appearance. The
Buckley Court … sustained limits on direct contributions in
order to ensure against the reality or appearance of corruption.
That case did not extend this rationale to independent
expenditures, and the Court does not do so here.
[The Court stated in Buckley that] “[t]he absence of

prearrangement and coordination of an expenditure with the
candidate or his agent not only undermines the value of the
expenditure to the candidate, but also alleviates the danger that
expenditures will be given as a quid pro quo for improper
commitments from the candidate.” Limits on independent
expenditures, such as § 441b, have a chilling effect extending
well beyond the government's interest in preventing quid pro
quo corruption. The anti-corruption interest is not sufficient to
displace the speech here in question. Indeed, 26 states do not
restrict independent expenditures by for-profit corporations.
The government does not claim that these expenditures have
corrupted the political process in those states.
Our precedent is to be respected unless the most convincing of
reasons demonstrates that adherence to it puts us on a course
that is sure error. “Beyond workability, the relevant factors in
deciding whether to adhere to the principle of stare decisis
include the antiquity of the precedent, the reliance interests at
stake, and of course whether the decision was well reasoned.”
[Citation omitted.] We have also examined whether “experience
has pointed up the precedent's shortcomings.” [Citation
omitted.]
These considerations counsel in favor of rejecting Austin, which
itself contravened this Court's earlier precedents in Buckley and
Bellotti. For the reasons above, it must be concluded that Austin
was not well reasoned. Austin is [also] undermined by
experience since its announcement. Political speech is so
ingrained in our culture that speakers find ways to circumvent
campaign finance laws. Our nation's speech dynamic is
changing, and informative voices should not have to circumvent
onerous restrictions to exercise their First Amendment rights.
Speakers have become adept at presenting citizens with sound
bites, talking points, and scripted messages that dominate the
24-hour news cycle. Corporations, like individuals, do not have
monolithic views. On certain topics corporations may possess
valuable expertise, leaving them the best equipped to point out
errors or fallacies in speech of all sorts, including the speech of

candidates and elected officials.
Rapid changes in technology—and the creative dynamic
inherent in the concept of free expression—counsel against
upholding a law that restricts political speech in certain media
or by certain speakers. Today, 30-second television ads may be
the most effective way to convey a political message. Soon,
however, it may be that Internet sources, such as blogs and
social networking websites, will provide citizens with
significant information about political candidates and issues.
Yet, § 441b would seem to ban a blog post expressly advocating
the election or defeat of a candidate if that blog were created
with corporate funds. The First Amendment does not permit
Congress to make these categorical distinctions based on the
corporate identity of the speaker and the content of the political
speech.
Due consideration leads to this conclusion: Austin should be
and now is overruled. We return to the principle established in
Buckley and Bellotti that the government may not suppress
political speech on the basis of the speaker's corporate identity.
No sufficient governmental interest justifies limits on the
political speech of nonprofit or for-profit corporations.
Austin is overruled, so it provides no basis for allowing the
government to limit corporate independent expenditures. As the
government appears to concede [in its brief], overruling Austin
Page 70“effectively invalidate[s] not only [the BCRA's
amendments to § 441(b)] but also § 441b's prohibition on the
use of corporate treasury funds for express advocacy.” Section
441b's restrictions on corporate independent expenditures are
therefore invalid and cannot be applied to Hillary. Given our
conclusion, we are further required to overrule the part of
McConnell that upheld [the BCRA's] extension of § 441b's
restrictions on corporate independent expenditures. The
McConnell Court relied on the anti-distortion interest
recognized in Austin to uphold a greater restriction on speech
than the restriction upheld in Austin, and we have found this
interest unconvincing and insufficient. This part of McConnell

is now overruled.
Citizens United next challenges the BCRA's disclaimer and
disclosure provisions as applied to Hillary and the three
advertisements for the movie. [The disclaimer and disclosure
requirements established by the BCRA are described in the
statement of facts.] Disclaimer and disclosure requirements may
burden the ability to speak, but they “impose no ceiling on
campaign-related activities” (quoting Buckley), and “do not
prevent anyone from speaking” (quoting McConnell). In
Buckley, the Court explained that disclosure could be justified
based on a governmental interest in providing the electorate
with information about the sources of election-related spending.
The McConnell Court [relied on] this interest in [upholding the
BCRA's disclosure requirements] on the ground that they would
help citizens “‘make informed choices in the political
marketplace.’”
[D]isclosure permits citizens and shareholders to react to the
speech of corporate entities in a proper way. This transparency
enables the electorate to make informed decisions and give
proper weight to different speakers and messages. [W]e uphold
the application of [the BCRA's disclaimer and disclosure
requirements] to the ads [for Hillary]. We [also] find no
constitutional impediment to the application of [the] disclaimer
and disclosure requirements to [Hillary], a movie [to be]
broadcast via video-on-demand. [T] here has been no showing
that, as applied in this case, these requirements would impose a
chill on speech or expression.
District court's judgment reversed as to constitutionality of
restrictions on corporate independent expenditures but affirmed
as to constitutionality of disclaimer and disclosure
requirements.
Stevens, Justice (joined by Ginsburg, Breyer, and Sotomayor,
Justices), concurring in part and dissenting in part
Although I concur in the Court's decision to sustain the BCRA's
disclaimer and disclosure provisions, I emphatically dissent
from its principal holding.

Citizens United is a wealthy nonprofit corporation that runs a
political action committee (PAC) with millions of dollars in
assets. Under the BCRA, it could have used those assets to
televise and promote Hillary wherever and whenever it wanted
to. It also could have spent unrestricted sums to broadcast
Hillary at any time other than the 30 days before the last
primary election. Neither Citizens United's nor any other
corporation's speech has been “banned.” All that the parties
dispute is whether Citizens United had a right to use the funds
in its general treasury to pay for broadcasts during the 30-day
period. The notion that the First Amendment dictates an
affirmative answer to that question is, in my judgment,
profoundly misguided. Even more misguided is the notion that
the Court must rewrite the law relating to campaign
expenditures by for-profit corporations and unions to decide
this case.
The basic premise underlying the Court's ruling is … the
proposition that the First Amendment bars regulatory
distinctions based on a speaker's identity, including its
“identity” as a corporation. While that glittering generality has
rhetorical appeal, … [t]he conceit that corporations must be
treated identically to natural persons in the political sphere is
not only inaccurate but also inadequate to justify the Court's
disposition of this case. In the context of election to public
office, the distinction between corporate and human speakers is
significant. The financial resources, legal structure, and
instrumental orientation of corporations raise legitimate
concerns about their role in the electoral process. Our
lawmakers have a compelling constitutional basis, if not also a
democratic duty, to take measures designed to guard against the
potentially deleterious effects of corporate spending in local
and national races.
The majority's approach to corporate electioneering [bypasses
narrower grounds of decision and] marks a dramatic break from
our past. Congress has placed special limitations on campaign
spending by corporations ever since the passage of the Tillman

Act in 1907. We have unanimously concluded that this “reflects
a permissible assessment of the dangers posed by those entities
to the electoral process,” and have accepted the “legislative
judgment that the special characteristics of the corporate
structure require particularly careful regulation.” [Citations
omitted.] The Court today rejects a century of history when it
treats the distinction between corporate and individual
campaign spending as an invidious novelty born of Austin.
Relying largely on individual dissenting opinions, the majority
blazes through our precedents, overruling or disavowing a
[large] body of case law. The only thing preventing the majority
from affirming the district court, or adopting a narrower ground
that would retain Austin, is its disdain for Austin. The laws
upheld in Austin and McConnell leave open many additional
avenues for corporations' political speech.
Roaming far afield from the case at hand, the majority worries
that the government will use [the statute at issue] to ban books,
pamphlets, and blogs. Yet by its plain terms, [the statute] does
not apply to printed material. And … we highly doubt Page
71that [§ 441b] could be interpreted to apply to a website or
book that happens to be transmitted at some stage over airwaves
or cable lines, or that the FEC would ever try to do so.
So let us be clear: Neither Austin nor McConnell held or
implied that corporations may be silenced; the FEC is not a
“censor”; and in the years since these cases were decided,
corporations have continued to play a major role in the national
dialogue. Laws such as [§ 441b] target a class of
communications that is especially likely to corrupt the political
process [and] that is at least one degree removed from the views
of individual citizens. Such laws burden political speech, and
that is always a serious matter, demanding careful scrutiny. But
the majority's incessant talk of a “ban” aims at a straw man.
In [our] democratic society, the longstanding consensus on the
need to limit corporate campaign spending [reflects] the
common sense of the American people, who have … fought
against the distinctive corrupting potential of corporate

electioneering since the days of Theodore Roosevelt. It is a
strange time to repudiate that common sense. While American
democracy is imperfect, few outside the majority of this Court
would have thought its flaws included a dearth of corporate
money in politics.
Commercial Speech The exact boundaries of the commercial
speech category are not certain, though the Supreme Court has
usually defined commercial speech as speech that proposes a
commercial transaction. As a result, most cases on the subject
involve advertisements for the sale of products or services or
for the promotion of a business. In 1942, the Supreme Court
held that commercial speech fell outside the First Amendment's
protective umbrella. The Court reversed its position, however,
during the 1970s. It reasoned that informed consumer choice
would be furthered by the removal of barriers to the flow of
commercial information in which consumers would find an
interest. Since the mid-1970s, commercial speech has received
an intermediate level of First Amendment protection if it deals
with a lawful activity and is nonmisleading. Commercial speech
receives no protection, however, if it misleads or seeks to
promote an illegal activity. As a result, there is no First
Amendment obstacle to federal or state regulation of deceptive
commercial advertising. (Political or other noncommercial
speech, on the other hand, generally receives—with very few
exceptions—full First Amendment protection even if it misleads
or deals with unlawful matters.)
CYBERLAW IN ACTION
Some types of speech are classified as wholly outside the
protection of the First Amendment. For instance, expression
that constitutes obscenity under a test developed by the
Supreme Court carries no First Amendment protection—
meaning that the government is free to regulate it on the basis
of its content (including criminalizing the possession or

distribution of obscene material). For more details concerning
the obscenity doctrine, see the discussion in Chapter 5.
Child pornography is another type of speech that carries no
First Amendment protection, in light of the obviously important
public interest in protecting minors against physical and
psychological harm. Thus, there is no First Amendment barrier
to a criminal prosecution against one who possesses or purveys
material that constitutes child pornography. Many such
prosecutions are based on photos or other material stored on
computers or shared online.
Both obscenity and child pornography depend in part upon
graphic depictions of sexual content, though less in that regard
is required for child pornography than for obscenity. What
about speech that contains gratuitous and highly offensive
depictions of violence? May the government prohibit such
depictions and impose adverse consequences on those who
purvey such material? Those were among the key questions in
United States v. Stevens, 130 S. Ct. 1577 (U.S. Sup. Ct. 2010).
A statute enacted by Congress criminalized the creation, sale, or
possession of certain depictions of animal cruelty. For purposes
of the statute, a depiction of “animal cruelty” was defined as
one “in which a living animal is intentionally maimed,
mutilated, tortured, wounded, or killed,” if the depicted conduct
violated federal or state law at the place where the creation,
sale, or possession took place. The legislative history of the
statute indicated that it was prompted by a congressional
objective of eliminating dissemination of so-called crush videos
(videos showing live animals being crushed to death by persons
stomping on them).
Robert Stevens operated a website on which he sold videos of
pit bulls engaging in dogfighting and otherwise attacking
animals. After he was convicted of violating the above
described statute by selling the videos, he appealed on the
ground that the statute violated the First Amendment. The case
made its way to the Supreme Court, which ruled in his favor and
rejected the government's argument that speech containing

gratuitous Page 72depictions of violence against animals should
be added to the list of unprotected types of speech.
In Stevens, the Court seemed disinclined to issue a decision that
might prompt others to ask courts to categorize more and more
types of speech as falling outside the First Amendment
umbrella. In particular, the Court expressed considerable
concern about the statute's potential overbreadth, given the
varying and inconsistent state laws on animal cruelty and the
potential for the statute to apply even to hunting videos if they
depicted an animal being killed outside a state's hunting season
or to videos showing certain humane killings of diseased
animals. (The Court declined to express a view on whether a
more narrowly drawn statute—one that by its terms was
restricted to the sale of crush videos or other depictions of
extreme animal cruelty—might pass First Amendment muster.)
The Court's decision in Stevens serves as a reminder that the
First Amendment protects a great deal of speech that may be
highly offensive to many persons. It bears remembering, too,
that any ability on the part of the Robert Stevenses of the world
to avoid legal liability for the sale of dogfighting videos would
not privilege such persons to participate in the underlying acts
of animal cruelty. The Court's decision in Stevens dealt only
with the videos—i.e, speech—and cast no doubt on the validity
of laws penalizing those who engage in conduct amounting to
animal cruelty.
As this book went to press, the Supreme Court decided Brown
v. Entertainment Merchants Association, 2011 U.S. LEXIS 4802
(2011). There, the Court struck down a California law that
restricted the sale of violent video games to minors. In
declining to hold that expressive depictions of violence should
be classified as unprotected by the First Amendment even when
the government seeks to safeguard minors, the Court relied in
part on its earlier decision in Stevens.
Because nonmisleading commercial speech about a lawful
activity receives intermediate protection, the government has

greater ability to regulate such speech without violating the
First Amendment than when the government seeks to regulate
fully protected political or other noncommercial speech.
Roughly three decades ago, the Supreme Court developed a
still-controlling test that amounts to intermediate scrutiny.
Under this test, a government restriction on protected
commercial speech does not violate the First Amendment if the
government proves each of these elements: that a substantial
government interest underlies the restriction; that the restriction
directly advances the underlying interest; and that the
restriction is no more extensive than necessary to further the
interest (i.e., that the restriction is narrowly tailored). It usually
is not difficult for the government to prove that a substantial
interest supports the commercial speech restriction. Almost any
asserted interest connected with the promotion of public health,
safety, or welfare will suffice. The government is likely to
encounter more difficulty, however, in proving that the
restriction at issue directly advances the underlying interest
without being more extensive than necessary—the elements that
address the “fit” between the restriction and the underlying
interest. If the government fails to prove any element of the
test, the restriction violates the First Amendment.
CONCEPT REVIEW
The First Amendment
Type of Speech
Level of First Amendment Protection
Consequences When Government Regulates Content of Speech
Noncommercial

Full
Government action is constitutional only if action is necessary
to fulfillment of compelling government purpose. Otherwise,
government action violates First Amendment.
Commercial(nonmisleading and about lawful activity)
Intermediate
Government action is constitutional if government has
substantial underlying interest, action directly advances that
interest, and action is no more extensive than necessary to
fulfillment of that interest (i.e., action is narrowly tailored).
Commercial (misleading or about unlawful activity)
None
Government action is constitutional.
Page 73Although the same test has been used in evaluating
commercial speech restrictions for nearly three decades, the
Supreme Court has varied the intensity with which it has
applied the test. From the mid-1980s until 1995, the Court
sometimes applied the test loosely and in a manner favorable to
the government. The Court has applied the test—especially the
“fit” elements—more strictly since 1995, however. For instance,
in Coors v. Rubin (1995), the Court struck down federal
restrictions that kept beer producers from listing the alcohol
content of their beer on product labels. (The Coors case was the
subject of the introductory problem with which this chapter
began.) In 44 Liquormart v. Rhode Island (1996), which follows
shortly, the Court held that Rhode Island's prohibition on price
disclosures in alcoholic beverage advertisements violated the
First Amendment. A 1999 decision, Greater New Orleans

Broadcasting Association v. United States, established that a
federal law barring broadcast advertisements for a variety of
gambling activities could not constitutionally be applied to
radio and television stations located in the same state as the
gambling casino whose lawful activities were being advertised.
In each of the cases just noted, the Court emphasized that the
government's restrictions on commercial speech suffered from
“fit” problems—usually because the restrictions prohibited more
speech than would have been necessary if the government had
adopted available alternative measures that would have
furthered the underlying public health, safety, or welfare
interest just as well, if not better.
Two key conclusions may be drawn from the Court's
commercial speech decisions since 1995: (1) the government
has found it more difficult to justify restrictions on commercial
speech; and (2) the gap between the intermediate protection for
commercial speech and the full protection for political and other
noncommercial speech has effectively become smaller than it
was 20 to 25 years ago. Although the Court has hinted that it
might consider formal changes in commercial speech doctrine
(so as to enhance First Amendment protection for commercial
speech), it had not made formal doctrinal changes as of the time
this book went to press in 2011.
The following case, 44 Liquormart v. Rhode Island, addresses
the four-part test utilized in determining the constitutionality of
commercial speech restrictions, and illustrates the rigor with
which the Supreme Court has applied the third and fourth parts
of the test during the past 15-plus years.
44 Liquormart, Inc. v. Rhode Island
517 U.S. 484 (U.S. Sup. Ct. 1996)

Two Rhode Island statutes prohibited advertising the retail price
of alcoholic beverages. The first applied to vendors licensed in
Rhode Island as well as to out-of-state manufacturers,
wholesalers, and shippers. It prohibited them from “advertising
in any manner whatsoever” the price of any alcoholic beverage
offered for sale in the state. The only exception to the
restriction was for price tags or signs displayed with the
merchandise within licensed premises, if the tags or signs were
not visible from the street. The second statute barred the Rhode
Island news media from publishing or broadcasting
advertisements that made reference to the price of any alcoholic
beverages.
44 Liquormart, Inc., a licensed retailer of alcoholic beverages,
operated a store in Rhode Island. Because it wished to advertise
prices it would charge for alcoholic beverages, 44 Liquormart
filed a declaratory judgment action against the state. 44
Liquormart asked the court to rule that the statutes referred to
above violated the First Amendment. The district court
concluded that the statutes failed the applicable test for
restrictions on commercial speech and therefore struck them
down. The U.S. Court of Appeals for the First Circuit reversed,
determining that the statutes were constitutionally permissible
restrictions on commercial speech. The U.S. Supreme Court
granted 44 Liquormart's petition for a writ of certiorari.
Stevens, Justice
Advertising has been a part of our culture throughout our
history. Even in colonial days, the public relied on “commercial
speech” for vital information about the market. In accord with
the role that commercial messages have long played, the law has
developed to ensure that advertising provides consumers with
accurate information about the availability of goods and
services. In the early years, the common law, and later, statutes,
served the consumers' interest in the receipt of accurate

information in the commercial market by prohibiting fraudulent
and misleading advertising.
It was not until the 1970s, however, that this Court held that the
First Amendment protected the dissemination of truthful and
nonmisleading commercial messages about lawful products and
services. [The Court did so in Virginia Board of Pharmacy v.
Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976).
In that case] we held that [Virginia's] blanket ban on advertising
the price of prescription drugs violated the First Amendment.
Page 74Virginia Board of Pharmacy reflected the conclusion
that the same interest that supports regulation of potentially
misleading advertising, namely, the public's interest in
receiving accurate commercial information, also supports an
interpretation of the First Amendment that provides [an
intermediate level of] protection for the dissemination of
accurate and nonmisleading commercial messages. We
explained:
Advertising, however tasteless and excessive it sometimes may
seem, is nonetheless dissemination of information as to who is
producing and selling what product, for what reason, and at
what price. So long as we preserve a predominantly 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 flow of commercial information is indispensable.
On the basis of these principles, our early cases uniformly
struck down several broadly based bans on truthful,
nonmisleading commercial speech. At the same time, our early
cases recognized that the [government] may regulate some types
of commercial advertising more freely than other forms of
protected speech. Virginia Board of Pharmacy attributed the
[government's] authority to impose these regulations in part to
certain “commonsense differences” that exist between

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