• Valentine = police commissioner of N.Y.C. who tried to restrain Chrestensen from handing out handbills advertising his submarine
• Courts found the underlying act to of Valentine to be prior restraint and unlawful
• Chrestensen won at all levels of court
• added commercial speech to categorical exemptions

Government-ordered disclosures that a person or organization must make to compensate for prior deceptive advertising.

• occasionally enforced/used by the FTC

exaggerated, figurative advertising claims that consumers would not assume to be grounded in factual documentation

i.e. the best in the world

using superlatives; best, greatest, etc.

rules adopted by the FTC that specify certain kinds of advertising or packaging practices as automatically deceptive and illegal

speech intended to generate financial or commercial transactions

• much of it is advertising
• "caveat emptor" - let the buyer beware
• federal and state regulation
• states regulate CONTENT in the interest of protecting that state's consumers
• "right to receive information"

• Time/Place/Manner Restrictions
• Trade libel
• Commercial appropriation of likeness
• Copyright & Trademark infringement
• Unfair competition

• was unprotected at first by the 1st Amendment because it was considered to be "self-serving" and contributed nothing to society
• ^this view is backed up by Valentine v. Chrestensen

Virginia Board of Pharmacy 

v

Virginia Citizens Consumer Council

• court held that "pure commercial speech" - that which aims solely to propose a commercial transaction- is generally protected by the First Amendment
• VA statute made it illegal to advertise prices for prescription drugs and the statute was challenged because it violated First Amendment rights to receive information

Bates

v

State Bar of Arizona

court claimed that an AZ statute prohibiting lawyers to advertise their services in a mass medium violated First Amendment rights

• cited VA Pharmacy Board

The Central Hudson Test

4 part analysis:

1. Is the commercial speech misleading or related to unlawful activity? If so, it's UNPROTECTED, if not:
2. Does the govt. have substantial interest in restricting the commercial speech?
3. Does the restriction directly advance this interest?
4. Is the restriction no more extensive/broad than necessary to fulfill the govt. interest?

• if the answer to 2-4 is yes, the restriction on TRUTHFUL commercial speech will be upheld
• in Central Hudson, court ruled that the commercial speech at hand was protected because it was overextensive

Bolger 

v

Youngs Drug Products, Corp

• Supreme court asked to judge the validity of a ban against the mailing of unsolicited contraceptive ads
• the ads did MORE than propose a commercial transaction, they provided information to the public
• however, the court ruled that the pamphlets were unprotected commercial speech

The Nike Saga

Kasky v. Nike, inc.

• allegations of Nike's oversea factories paying employees less than min. wage, violating limits of overtime and exposing employees to unsafe working conditions
• Nike refuted the allegations with a PR campaign that provoked Kasky to file a lawsuit for misleading advertising with false messages
• courts ruled against Nike, deeming the ads unprotected commercial speech

• the restriction is supported by substantial governmental interest such as public health, safety or economic welfare
• the govts. interest is directly advanced by the restriction
• the restriction is no more extensive than necessary
• ex: cigarette ads banned in broadcast media by the FCC

• headed by 5 commissioners appointed by the president
• derived from Sec. 5 of the Federal Trade Commission Act
• charges FTC with the responsibility to regulate "unfair or deceptive acts or practices in or affected commerce"
• Ralph Nader report charged that the FTC has poor management, lacked sufficient resources and enforcement authority and wasted it's time on trivial matters

•  

• under the Nixon administration in the 60s, the FTC began to revitalize itself
• 70s = FTC is proactive and aggressive
• 80s= backed off a little, scrutinized for it
• issues subpoenas

Federal Trade Commission Improvement Act 

1975

• more power to issue industry-wide rules against certain ad practices
• gave FTC the power to sue in U.S. District Court for various forms of damages on behalf of consumers

• the seriousness of the problem
• geographic scope of the ad
• current status of the agency's resources

1. Cease-and-desist orders/consent orders
2. Corrective advertising
3. Court injunctions
4. Civil and Criminal penalties

subtle, existence may be debatable.

determining how consumers will interpret an ad based on experience and intuition

• commercial speech has less protection from regulation
• govt. has more power/latitude to restrict commercial speech

• created by: Congress, Legislative Branch
• belongs to: Executive Branch
• Judicial Branch decides regulations
• interstate commerce and commerce that affects interstate commerce
• regulates false, misleading and deceptive speech

• federal govt. trademark protection law, interstate commerce
• provides businesses with a legal tool against false advertising by others in the marketplace
• consumers cannot file a lawsuit under this statute because it was made to protect commercial interests

• a false representation of fact made by an advertiser about a product/service
• a representation that deceives, or has a tendency to deceive, a substantial segment of the intended audience
• a material representation, likely to influence purchasing decisions
• a false representation that results or is likely to result in injury to the plaintiff

• EPT claimed pregnancy test took 10 minutes while Tambrands' took 20 minutes
• false advertising
• court issued an injunction prohibiting EPT from their false advertising

the judicial principle asserting the supremacy of federal over state legislation on the same subject