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Corporate speech and the First Amendment: History, data and implications

2015 working paper from Harvard University Law School on the expanded corporate use of the First Amendment over time, based on a statistical analysis of 423 cases.

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by Leighton Walter Kille, The Journalist's Resource March 26, 2015

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The 2010 Supreme Court case Citizens United v. Federal Election Commission has been portrayed by supporters and critics alike as a watershed in the history of campaign finance and free speech in the United States. The decision explicitly freed corporations to spend unlimited sums on “electioneering communication” intended to help elect or defeat specific candidates. Justice Anthony Kennedy, writing for the majority, wrote that the ruling would enable political speech that is “central to the First Amendment’s meaning and purpose.” In his dissent, Justice John Paul Stevens argued that the ruling would allow wealthy corporations to “unfairly influence” the electoral process by marginalizing the speech of less-powerful individuals and groups.

Whatever one’s position on Citizens United , there is no question that its impact has been substantial: The Center for Responsive Politics indicated that super PACs created in the wake of the ruling spent more than $600 million during the 2012 election cycle. Research from the National Conference of State Legislators in 2011 indicated that 24 states had laws affected by the ruling — ones that banned political activity by unions, corporations or both. A 2014 report from the Brennan Center for Justice of New York State University, “After Citizen United: The Story of the States,” explores the impact that case has had in state and local elections.

A 2015 working paper from Harvard Law School, “Corporate Speech and the First Amendment: History, Data and Implications,” indicates that Citizens United , while certainly important, is only the latest in a series of cases that have expanded corporate use of the First Amendment. In his research, the author, John C. Coates IV, performed an analysis of nearly 13,000 Supreme Court decisions from 1946 to December 2014. Of these, 423 were selected that involved freedom of speech, press or assembly covered by the First Amendment. Cases were coded according to the nature of the plaintiff — companies, individuals, government entities, or others — and which party won. “Victories were distinguished between those in which a party defeated an attempt to persuade the Court to strike down a law or regulation under the First Amendment and those in which a party succeeded in so persuading a Court to strike down a law or regulation,” Coates writes.

The study’s key findings include:

• While the First Amendment was intended to protect individual freedom of religion, speech and assembly, as well as a free press, corporations have begun to displace individuals as its direct beneficiaries. This “shift from individual to business First Amendment cases is recent but accelerating.”
• Over time the high court has shown an increasing willingness to rule in favor of corporate interests, as a result “reducing law’s predictability, impairing property rights, and increasing the share of the economy devoted to rent-seeking rather than productive activity.”
• Business involvement in First Amendment cases more than doubled during the tenure of Lewis Powell Jr. on the Supreme Court. Before, no more than 25% of such cases involved corporations; toward the end, more than 40% did. (In 1971, prior to being named to the Court, he authored what is now known as the “Powell Memorandum” urging corporations to become more involved in politics and the law.)

• The turning point came with the 1976 case Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council , which prohibited states from limiting the right of pharmacists to provide information on prescription drug prices. After the case, the average number of Supreme Court cases involving corporate interests rose from 1.5 to 2.2 per year (up 47%), while those involving individuals fell from 4.3 to 3.6 (down 12%). The “win” rate for businesses significantly increased as well, from an average of 20% to 55%.
• The First National Bank of Boston v. Bellotti (1978), which challenged a Massachusetts law prohibiting corporate donations on ballot initiatives unless its interests were directly involved, was the first that “affirmed in the strongest terms a corporate ‘right’ to free expression.” This was “founded in the simple logic that corporations were (legally) people, and people have rights under the First Amendment.”
• The 1980 case Central Hudson Gas & Electric Corp. v. Public Service Commission of New York , which struck down a law banning an electric utility from advertising to promote the use of electricity, marked another shift. The ruling “has encouraged an increasing number of commercial-speech cases to be brought over time,” and most “do not involve expressive businesses, but are attacks on laws and regulations that inhibit ‘speech’ by other kinds of businesses in areas of activity incidental or instrumental to their core profit-making activity.”
• The number of cases citing Central Hudson has climbed significantly over time. From 1980 to 1984, only 50 cases cited it; from 2010 to 2014, 79 did.
• The influence of Central Hudson is clear in POM Wonderful LLC v. Coca-Cola Co. , decided in 2014. Health claims for a beverage were required by law to be substantiated by “competent and reliable scientific evidence” — ideally two randomly controlled trial (RCT) studies — or qualifying language had to be included in advertising. The corporation sued and won, and the ruling substantially reduced this requirement: “Regulatory agencies under Central Hudson [thus] face a strong risk that a court will be able to exploit any mismatch between the court’s (often uneducated or even ignorant) view of what is ‘necessary’ to accomplish the agency’s goals to strike down a regulation.”
• The ability for corporations to obtain relief from the courts gives them incentive to “place bets not on new technologies or marketing strategies, but on legal and political ‘innovation’” to protect markets they have and exclude new entrants. This also has the effect of causing regulatory agencies to reduce their efforts, because enforcing existing laws becomes increasingly difficult.

“These findings present a challenge to the view, articulated by the majority and concurrences in Citizens United and Hobby Lobby , that corporations and other business entities should be understood ‘simply’ as aggregations or associations of individuals, and so should not be distinguished from them for purposes of First Amendment analysis,” the author writes in his conclusion, continuing: “The corporate takeover of the First Amendment represents a pure redistribution of power over law with no efficiency gain — ‘rent seeking’ in economic jargon. That power is taken from ordinary individuals with identities and interests as voters, owners and employees, and transferred to corporate bureaucrats pursuing narrowly framed goals with other people’s money. This is as radical a break from Anglo-American business and legal traditions as one could find in U.S. history.”

Related research:  A 2014 study published in Perspectives on Politics , “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” analyzes the relative influence of political actors on policymaking. The researchers sought to better understand the impact of elites, interest groups and voters on the passing of public policies. The authors, Martin Gilens of Princeton and Benjamin Page of Northwestern University, found that compared to economic elites, average voters have a low to nonexistent influence on public policies. “Not only do ordinary citizens not have uniquely substantial power over policy decisions, they have little or no independent influence on policy at all.” In cases where citizens obtained their desired policy outcome, it was in fact due to the influence of elites rather than the citizens themselves.

Keywords: First Amendment, corporations, Court of Appeals, Virginia Pharmacy, Bellotti, Central Hudson, Citizens United, Hobby Lobby, lobbying, rent-seeking

About The Author

Leighton Walter Kille

• ENCYCLOPEDIA
• IN THE CLASSROOM

Corporations (First Amendment Rights)

Corporate speech  refers to the rights of corporations to advertise their products and to speak to matters of public concern.

Commercial speech, as manifested through advertising, and political speech in the form of contributions and expenditures on behalf of candidates and political issues must be considered in assessing whether a corporation has the same rights under the First Amendment as people.

Regulation of commercial speech must survive intermediate scrutiny to pass constitutional muster, but political speech of a corporation must survive strict scrutiny.

Following are Supreme Court cases involving corporate speech and the First Amendment.

• McConnell v. Federal Election Commission (2003)

McConnell v. Federal Election Commission (2003) upheld major provisions of the Bipartisan Campaign Reform Act of 2002, rejecting claims that the act stifled First Amendment rights.

• Nike v. Kasky (2003)

Nike v. Kasky (2003) raised, but did not resolve, contemporary issues regarding First Amendment protection for corporate speech in matters of public concern.

• Burwell v. Hobby Lobby Stores, Inc. (2014)

Burwell v. Hobby Lobby Stores, Inc. (2014) said the government could not require corporations to provide coverage for contraceptives that violated the owners’ religious beliefs.

• Citizens United v. Federal Election Commission (2010)

In a landmark 2010 decision, a divided Supreme Court used the First Amendment to invalidate a campaign regulation that banned corporate and union spending in political elections.

• Austin v. Michigan Chamber of Commerce (1990)

Austin v. Michigan Chamber of Commerce (1990) upheld against a First Amendment challenge a law prohibiting nonprofit corporations from using general revenues for politics.

• Federal Election Commission v. Massachusetts Citizens for Life (1986)

FEC v. Massachusetts Citizens for Life (1986) found that while a nonprofit corporation violated the Federal Election Campaign Act, its application violated the First Amendment.

• Zubik v. Burwell (2016)

Zubik v. Burwell (2016) dealt with regulations requiring employers to provide contraception coverage to their employees and how these regulations affected religious liberty rights.

• United States v. Lee (1982)

The Supreme Court in 1982 declined to rule that religious liberty guaranteed in the First Amendment allowed an Amish farmer to not pay Social Security taxes on behalf of his workers because of his religious beliefs. In United States v. Lee, the Court ruled it would be problematic to create a religious liberty exception for taxes.

• Prudential Insurance Co. of America v. Cheek (1922)

Prudential Insurance Co. of America v. Cheek (1922) gives a glimpse into First Amendment doctrine prior to the incorporation of the free speech clause to the states.

• National Labor Relations Board v. Virginia Electric and Power (1941)

National Labor Relations Board v. Virginia Electric and Power (1941) examined if illegal activity can be shown on the basis of words otherwise protected by the First Amendment.

2010 Articles

Corporate Political Speech: Who Decides?

Bebchuk, Lucian A. ; Jackson, Robert J.

The Supreme Court spoke clearly this Term on the issue of corporate political speech, concluding in Citizens United v. FEC that the First Amendment protects corporations’ freedom to spend corporate funds on indirect support of political candidates. Constitutional law scholars will long debate the wisdom of that holding, as do the authors of the two other Comments in this issue. In contrast, this Comment accepts as given that corporations may not be limited from spending money on politics should they decide to speak. We focus instead on an important question left unanswered by Citizens United: who should have the power to decide whether a corporation will engage in political speech?

• Corporations--Political activity
• Corporation law
• Corporate speech
• Public policy (Law)

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4.2 Constitutional Protections

The Bill of Rights is the common term given to the first 10 amendments to the U.S. Constitution. These are not the only set of amendments to the Constitution, but they are considered together as impacting rights because they limit the ability of the federal government to infringe upon individual freedoms. In addition, a later amendment, the Fourteenth Amendment, extends the provisions set out in the Bill of Rights to the states, in addition to federal government. The Bill of Rights has a substantial impact upon government regulation of commercial activity, and therefore, it is important to fully understand it.

A summary of the provisions of the Bill of Rights is supplied below:

Application of the Bill of Rights to Commercial Activity

The protections afforded the citizenry in the Bill of Rights are also extended to corporations and commercial activities. In the next sections, some applications of the various amendments in the area of business are discussed.

The First Amendment

The freedom of speech provisions in the First Amendment have application to corporations. The courts distinguish between different types of speech, and each has implications for the power of the federal government and states to regulate in these areas:

• Corporate Political Speech. Political speech is any speech used to support political agendas or candidates. Until the 1970s, several states prevented firms from financially supporting political advertising because they feared the power of corporate assets. However, since the 1978 case First National Bank of Boston v. Bellotti , it has been established that corporate political speech is protected in the same way as citizens’ free speech.
• Unprotected Speech. The 1942 case Chaplinsky v. New Hampshire determined that certain types of speech—that which could “inflict injury or incite an immediate breach of the peace”—is not protected under the First Amendment. Therefore, obscenities, defamation, and slanderous speech are not protected.
• Commercial Speech. This type of speech conveys information pertaining to the sale of goods and services. Ever since the 1980 case Hudson Gas & Electric Corp v. Public Service Commission of New York , a four-part test has been established to determine whether commercial speech should be regulated according to the First Amendment. This test is known as The Central Hudson Test for Commercial Speech.

The free exercise clause of the First Amendment states that government is prohibited from making laws that prohibit the free exercise of religion. Issues pertaining to this clause often arise in organizational settings. For example, historically, there have been a number of cases in which government employees have challenged employers’ attempts to inhibit their exercise of religious practice (e.g., the wearing of religious symbols) in the workplace.

The Fourth Amendment

The Fourth Amendment guarantees that citizens are free from unreasonable searches and seizures, and requires government officials to obtain search warrants to conduct searches. However, government officials can only request a search warrant if they have probable cause to believe that criminal activity is occurring at the location of the search, or that they will locate evidence of criminal activity during the search (except where the official believes items will be removed prior to obtaining a warrant). The Fourth Amendment protects individual organizations and places of business, as well as residences. However, under the terms of the pervasive-regulation exception, administrative agencies can conduct warrantless searches of businesses attached to industries that have a long history of pervasive regulation. For example, public health agencies are allowed to conduct warrantless searches of stone quarries, as authorized by the Federal Mine Safety and Health Act of 1977.

The Fifth Amendment

For commercial enterprises and businesspeople, it is the due process clause of the Fifth Amendment that offers the most extensive protection. The clause states that the government cannot take an individual’s life, liberty, or property without due process of law. Specifically, there are two types of due process:

• Substantive due process means that laws that will deprive an individual of his or her life, liberty, or property must be fair and not arbitrary. Laws passed should not affect fundamental rights, and regulations are required to meet the rational-basis test. In other words, the government must demonstrate that the law bears a rational relationship to a legitimate state interest. Many regulations affecting commercial activity, such as banking regulations, minimum wage laws, and regulations inhibiting unfair trade, have been tested against the rational-basis test.
• Procedural due process means that governments must use fair procedures when depriving an individual of his or her life, liberty, or property. This status quo does not only apply to federal criminal proceedings. For example, if a government employer discharges an employee from his job, or if the government suspends the driver’s license of a worker, the employer must follow procedural due process.

Another clause contained in the Fifth Amendment that is relevant to commercial enterprises is the takings clause. According to this clause, when the government seizes private property for public use, it is required that the government pay the owner just compensation for the property. Just compensation is understood to be equivalent to the market value of the property. This clause has been broadly interpreted. For example, if environmental or safety regulations significantly impact the way in which a property owner can use his or her land for economic gain, the regulation can essentially be deemed as depriving the owner of his or her land, and the owner is entitled to compensation.

It is important to note that the privilege against self-incrimination , established under the Fifth Amendment (usually interpreted as the right to remain silent), only applies to sole proprietorships that are not legally distinct from the individual who owns them. Custodians and agents of corporations do not enjoy this privilege.

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Corporate Political Speech: Who Decides?

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The Erb Principles for Corporate Political Responsibility

Milton Friedman famously claimed that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”  That view is consistent with the vision of perfectly competitive markets that dominated the field of economics half a century ago and justified economists’ trust in “the free market” to deliver results that serve the public interest.  Friedman’s position is powerful if business takes the “rules of the game” as exogenously given and plays no part in shaping them.  In the US today, however, business is a major source of campaign funding and the dominant force in lobbying in the US.  On what basis should business influence those rules? Businesses today face increasingly difficult tradeoffs between the pro-market and pro-society policies needed to support their own long-term goals, and narrower pro-business policies that may pay off more directly in the near term.  Moreover, much of current campaign activity and the content of lobbying influence is hidden from public view.  When business operates behind closed doors to shape the rules of the game, the presumptions that markets are “free” and faithfully serve the public interest no longer hold.  Public opinion and academic research increasingly suggest the influence of political spending and lobbying behind closed doors are major drivers of dangerously high levels of distrust in government. In response to that distrust, companies are facing increasing pressure to step in to solve societal issues, increasing scrutiny of their political activities and more recently, serious questions about the legitimacy of their political engagements.

Given these conflicting imperatives and broader threats to free market capitalism and constitutional democracy if current trends continue, businesses, investors and stakeholders are looking for independent non-partisan guidelines. With Congress showing no inclination to wean itself from money, nor to require the transparency the Supreme Court endorsed (but did not require) in its Citizens United decision, private ordering offers a path forward.  Since 2021, the Erb Institute at the University of Michigan has convened a group of business leaders through the Corporate Political Responsibility Taskforce (CPRT) to hammer out a set of guardrails which, if widely adopted, would ensure that corporate political influence is legitimate and serves the public interest.  The Principles were launched publicly in Washington, DC, on March 7, 2023 , and their text is reproduced below.   For the next year, the CPRT is focusing on concrete actions that demonstrate a meaningful commitment to the Principles, with the first three being adopting the CPA-Zicklin Model Code of Conduct for Corporate Political Spending , GRI Standard 415: Public Policy , or a publicly stated policy prohibiting the use of corporate treasury funds for election-related spending .

A formatted PDF of the Erb Principles for Corporate Political Responsibility, including the Statement of Support from the firms that have endorsed the Principles, can be found here .

Firms’ political activities reflect legitimate use of resources and authority, and an authentic basis for engaging. This means firms have certain foundational responsibilities, including:

a. Any political activities using company resources or management authority reflect the company’s views, not those of the individual manager or officer, and they comply with all laws and regulations pertaining to political activities.

b. Companies do not pressure or coerce employees, shareholders or other stakeholders when engaging in political activities.

c. Companies articulate an authentic basis for their engagement on key matters of public policy and societal issues, drawing on the criteria below:

• Contribution: The firm has caused or contributed to the issue or is involved through its products, practices or people; or
• Commitments: The issue affects the firm or its business, has a material impact on key stakeholders, or relates to its purpose or commitments; or
• Consequence: The issue represents a threat to the foundational systems on which the economy, society or life depend — and the company has the capability to help.

If a firm determines that it has an authentic basis for engagement, the remaining principles of accountability, responsibility and transparency outline how to do so responsibly.

Accountability

Firms are accountable for their political activities, actively striving for alignment with their commitments to purpose, values, stated goals and stakeholders. This means firms have certain foundational responsibilities, including:

a. Companies actively strive for alignment between their political activities (including those of trade associations and other third parties influencing on their behalf) and their commitments to purpose, values, stated goals and stakeholders.

b. Companies establish integrated governance processes to oversee their political activities (including those of trade associations and other third parties influencing on their behalf), in order to consult stakeholders who will be significantly impacted, minimize risks to the firm, advance alignment as outlined in item a) above and evaluate responsibility items a) through d).

c. Companies commit to take meaningful and proactive steps to address any misalignment in their political activities as outlined in item a) above, providing mechanisms for hearing stakeholder concerns and prioritizing based on impact to affected stakeholders.

Firms also have discretionary opportunities to demonstrate leadership, such as:

d. Companies model responsiveness and inclusion by identifying and consulting a broad range of stakeholders and considering their interests and concerns when planning political priorities, positions and activities.

Responsibility

Firms’ political activities demonstrate active support for the systems on which the economy, society and life depend. This means firms have certain foundational responsibilities, including:

a. Companies champion healthy market “rules of the game” that foster competition on the basis of quality, price and long-term value, minimizing costs externalized to other stakeholders and aligning private interests with the broader public good.

b. Companies support and protect America’s constitutional democracy; the rule of law; civic freedoms; effective, transparent and accountable civic institutions; and equitable access to civic and political processes for all eligible participants.

c. Companies’ contributions to policy-making and civic discourse are made in good faith, based on evidence and respect for independent, peer-reviewed science.

d. Companies strive to ensure their political activities do not cause or contribute to adverse impacts on environmental sustainability, human rights or the public good.

e. Companies may promote civic engagement if they do so in unbiased ways that respect stakeholder choice.

f. Companies may participate in civic discourse to clarify and advance the public good, consistent with their foundational responsibilities under these principles.

Transparency

Firms communicate openly and honestly about their political activities to promote informed stakeholder decision-making and public trust.  This means firms have certain foundational responsibilities, including:

a. Companies provide transparency in their political activities, publicly reporting on their CPR oversight processes and policies, all direct political spending, spending through trade associations or other third parties influencing on their behalf, and any actions to address misalignments under accountability item c).

b. Companies communicate openly about their political influence approaches, outlining criteria, issues, positions, goals, stakeholder consultation processes and affiliations, to foster trust and enable stakeholders to make informed decisions.

c. Companies provide timely, accurate information and expertise to elected representatives at all levels of government as needed to support fully informed, effective policy-making.

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Corporate Political Speech and Moral Obligation

• Published: 17 September 2014
• Volume 132 , pages 553–563, ( 2015 )

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In the wake of Citizens United v. the Federal Elections Commission , more companies are spending heavily on political speech, but the moral implications of doing so are not clear. Few business ethicists have directly addressed the moral legitimacy of corporate political speech and the conditions under which it may be morally permissible. My goal here is to outline the moral hazards associated with engaging in corporate political speech. I argue that whether one takes a narrow Friedman-style shareholder primacy view of managerial duty, a broader stakeholder view, or an even more wide-ranging political corporate social responsibility view of the moral duties of business, various moral hazards must be taken into account in determining the moral legitimacy of corporate political speech. I discuss a number of moral hazards endemic to corporate political speech and suggest ways in which business practitioners might avoid those moral hazards.

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Corporate Social Responsibility (CSR) Implementation: A Review and a Research Agenda Towards an Integrative Framework

Justifying Limitations on the Freedom of Expression

Carroll’s pyramid of csr: taking another look.

While my focus here is on corporate political speech in the American context, many of the moral hazards will be similar in other contexts. I limit my analysis here to the United States because the American context is already incredibly broad; one article likely simply could not do justice to all of the potential legal and cultural dynamics of corporate political speech globally. Furthermore, the American context is also of special interest because it has recently changed to allow far more corporate political speech in a far more legally unfettered and unregulated fashion. Given that mangers of American business now have extensive leeway in making corporate political speech choices, they likely need more moral guidance in managing such a broad array of new options. For a comparison of the regulation of corporate political speech in the United States as compared to Europe see Hunker ( 2013 ). Ideally, as the scholarly discussion of corporate political speech develops, more will be written on corporate political speech in other national contexts.

While some might argue that the financial collapse ultimately only made the market stronger (and the populace who bore the price of the bailouts weaker), it is clear that this was only one possible outcome. Things could have easily gone the other way plunging the banking industry into chaos. Since my purpose here is to outline the moral hazards associated with political speech, merely noting that there was such a risk is sufficient to advance my argument.

Shareholder primacy theorists might argue that managerial duty does not extend beyond maximizing shareholder value and so the heightened obligations towards truth in political speech do not apply. Whelan, for instance, critiques political CSR for not taking profit as the most basic motive of every managerial decision (Whelan 2012 ). I would argue, along with both stakeholder theorists and political CSR theorists that this highly limited account of the moral duty of management is not morally justified given that shareholders also have moral and civic duties that extend beyond merely making a profit. But even if one takes a shareholder primacy view of moral duty, standard current policies of not even informing board members of political expenditures would not be justified. Even on the most narrow account of corporate moral duty, reforms are needed in current business practice.

I would note that Stark has also argued that corporate political expenditures should be limited to issue advocacy. He also allows money for building relationships with government officials, but I do not believe that this latter spending is likely justified given the inequality such special relationships confer upon wealthier members of the populace (Stark 2010 ).

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Stoll, M.L. Corporate Political Speech and Moral Obligation. J Bus Ethics 132 , 553–563 (2015). https://doi.org/10.1007/s10551-014-2355-9

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Home > Faculty Publications > Faculty Scholarship > 377

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Corporate political speech: who decides.

Lucian A. Bebchuk Robert J. Jackson Jr.

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The Supreme Court spoke clearly this Term on the issue of corporate political speech, concluding in Citizens United v. FEC' that the First Amendment protects corporations' freedom to spend corporate funds on indirect support of political candidates. 2 Constitutional law scholars will long debate the wisdom of that holding, as do the authors of the two other Comments in this issue.3 In contrast, this Comment accepts as given that corporations may not be limited from spending money on politics should they decide to speak. We focus instead on an important question left unanswered by Citizens United: who should have the power to decide whether a corporation will engage in political speech?

Under existing law, a corporation's decision to engage in political speech is governed by the same rules as ordinary business decisions, which give directors and executives virtually plenary authority. In this Comment, we argue that such rules are inappropriate for corporate political speech decisions. Instead, lawmakers should develop special rules to govern who may make political speech decisions on behalf of corporations. We analyze the types of rules that lawmakers should consider. We also offer a set of proposals, and policymaking considerations, for designing such rules.

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Business Organizations Law | First Amendment | Law | Law and Politics

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Lucian A. Bebchuk & Robert J. Jackson Jr., Corporate Political Speech: Who Decides , 124 Harv. L. Rev. 83 (2010). Available at: https://scholarship.law.columbia.edu/faculty_scholarship/377

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Political Speech and the 1st Amendment - Explained

What is Political Speech under the 1st Amendment?

Written by Jason Gordon

Updated at April 21st, 2024

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What is Political Speech?

Political speech includes any form of speech concerning politics, including the spending or donation of money to political campaigns or undertaking political activism.

Individuals and corporations are entitled to only limited protection of political speech. 

How is Political Speech protected under the 1st Amendment?

Political contributions by individuals or entities may be subject to regulation. Individuals and businesses are limited in the amount of funds that they can contribute to political candidates for federal office and certain groups that donate to political candidates. 

Historically, corporations were also limited in their ability to directly fund or undertake political activism. 

The issue of direct spending in elections came to the forefront in the case, Citizens United v. Federal Election Commission . In this case, the court held that corporations hold rights similar to those of individuals with regard to political speech. 

As such, many of the existing regulations of the amount of funds or activity that a corporation may spend or undertake with regard to political campaigns were held invalid. 

This case did not, however, affect the legal limits on individuals and organizations to make contributions directly to candidates and groups dedicated to making contributions to candidates.

• Note : These provisions apply to federal elections and not state elections. Also, there is currently no limit on the amount of money that an individual or corporation can make to independent-expenditure-only committees, also known as Super-Pacs. These groups spend directly on political activity in support of particular candidates.
• Example : A state passes a law that limits the amount of money that citizens and corporations can give directly to state politicians running for office. While giving money is a type of expression that is protected under the 1st Amendment, this restriction upon individual rights aimed at preserving the integrity of the election system may be constitutional.

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• What are Fighting Words?
• What is Commercial Speech?
• What is Defamation?
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Commercial speech: overview.

• U.S. Constitution Annotated

First Amendment :

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

Starting in the 1970s, the Court’s treatment of “commercial speech” underwent a transformation from total nonprotection under the First Amendment to qualified protection. The conclusion that a communication proposing a commercial transaction is a different order of speech underserving of First Amendment protection was arrived at almost casually in 1942 in Valentine v. Chrestensen . 1 Footnote 316 U.S. 52 (1942) . See also Breard v. City of Alexandria, 341 U.S. 622 (1951) . The doctrine was one of the bases upon which the banning of all commercials for cigarettes from radio and television was upheld. Capital Broadcasting Co. v. Mitchell , 333 F. Supp. 582 (D.D.C. 1971) (three-judge court), aff’d per curiam , 405 U.S. 1000 (1972) . In Chrestensen , the Court upheld a city ordinance prohibiting distribution on the street of “commercial and business advertising matter,” as applied to an exhibitor of a submarine who distributed leaflets describing his submarine on one side and on the other side protesting the city’s refusal of certain docking facilities. The doctrine was in any event limited to promotion of commercial activities; the fact that expression was disseminated for profit or through commercial channels did not expose it to any greater regulation than if it were offered for free. 2 Footnote Books that are sold for profit, Smith v. California, 361 U.S. 147, 150 (1959) ; Ginzburg v. United States, 383 U.S. 463, 474–75 (1966) , advertisements dealing with political and social matters which newspapers carry for a fee, New York Times Co. v. Sullivan, 376 U.S. 254, 265–66 (1964) , motion pictures which are exhibited for an admission fee, United States v. Paramount Pictures, 334 U.S. 131, 166 (1948) ; Joseph Burstyn, Inc. v. Wilson, 343 U.S. 495, 501–02 (1952) , were all during this period held entitled to full First Amendment protection regardless of the commercial element involved. The doctrine lasted in this form for more than twenty years.

The Court later modified this position so that commercial speech is protected “from unwarranted governmental regulation,” although its nature makes it subject to greater limitations than may be imposed on expression not solely related to the economic interests of the speaker and its audience. 3 Footnote Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557, 561 (1980) . The change to its earlier holdings was accomplished within a brief span of time in which the Justices haltingly but then decisively moved to a new position. Applying the doctrine in a narrow five-to-four decision, the Court sustained the application of a city’s ban on employment discrimination to bar sex-designated employment advertising in a newspaper. 4 Footnote Pittsburgh Press Co. v. Comm’n on Human Relations, 413 U.S. 376 (1973) . Suggesting that speech does not lose its constitutional protection simply because it appears in a commercial context, Justice Powell, for the Court, did find the placing of want-ads in newspapers to be “classic examples of commercial speech,” devoid of expressions of opinions with respect to issues of social policy; so the “did no more than propose a commercial transaction.” But the Justice also noted that employment discrimination, which was facilitated by the advertisements, was itself illegal. 5 Footnote 413 U.S. at 385, 389 . The Court continues to hold that government may ban commercial speech related to illegal activity. Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557, 563–64 (1980) .

Next, the Court overturned a conviction under a state statute that made it illegal, by sale or circulation of any publication, to encourage or prompt the procuring of an abortion. The Court held the statute unconstitutional as applied to an editor of a weekly newspaper who published an advertisement announcing the availability of legal and safe abortions in another state and detailing the assistance that would be provided state residents in obtaining abortions in the other state. 6 Footnote Bigelow v. Virginia, 421 U.S. 809 (1975) . The Court discerned that the advertisements conveyed information of other than a purely commercial nature, that they related to services that were legal in the other jurisdiction, and that the state could not prevent its residents from obtaining abortions in the other state or punish them for doing so.

Then, the Court swept all these distinctions away as it voided a statute that declared it unprofessional conduct for a licensed pharmacist to advertise the prices of prescription drugs. 7 Footnote Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976) . Justice Rehnquist dissented. Id. at 781 . In a suit brought by consumers to protect their right to receive information, the Court held that speech that does no more than propose a commercial transaction is nonetheless of such social value as to be entitled to protection. Consumers’ interests in receiving factual information about prices may even be of greater value than political debate, but in any event price competition and access to information about it is in the public interest. State interests asserted in support of the ban—protection of professionalism and the quality of prescription goods—were found either badly served or not served by the statute. 8 Footnote 425 U.S. at 763–64 (consumers’ interests), 764-65 (social interest), 766-70 (justifications for the ban).

Turning from the interests of consumers to receive information to the asserted right of advertisers to communicate, the Court voided several restrictions. The Court voided a municipal ordinance that barred the display of “For sale” and “Sold” signs on residential lawns, purportedly so as to limit “white flight” resulting from a “fear psychology” that developed among white residents following sale of homes to nonwhites. The right of owners to communicate their intention to sell a commodity and the right of potential buyers to receive the message was protected, the Court determined; the community interest could have been achieved by less restrictive means and in any event may not be achieved by restricting the free flow of truthful information. 9 Footnote Linmark Assocs. v. Township of Willingboro, 431 U.S. 85 (1977) . Similarly, deciding a question it had reserved in the Virginia Pharmacy case, the Court held that a state could not forbid lawyers from advertising the prices they charged for the performance of routine legal services. 10 Footnote Bates v. State Bar of Arizona, 433 U.S. 350 (1977) . Chief Justice Burger and Justices Powell, Stewart, and Rehnquist dissented. Id. at 386, 389, 404 . None of the proffered state justifications for the ban was deemed sufficient to overcome the private and societal interest in the free exchange of this form of speech. 11 Footnote 433 U.S. at 368–79 . See also In re R.M.J., 455 U.S. 191 (1982) (invalidating sanctions imposed on attorney for deviating in some respects from rigid prescriptions of advertising style and for engaging in some proscribed advertising practices, because the state could show neither that his advertising was misleading nor that any substantial governmental interest was served by the restraints). Nor may a state categorically prohibit attorney advertising through mailings that target persons known to face particular legal problems, 12 Footnote Shapero v. Kentucky Bar Ass'n, 486 U.S. 466 (1988) . Shapero was distinguished in Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995) , a 5-4 decision upholding a prohibition on targeted direct-mail solicitations to victims and their relatives for a 30-day period following an accident or disaster. “ Shapero dealt with a broad ban on all direct mail solicitations” ( id. at 629 ), the Court explained, and was not supported, as Florida’s more limited ban was, by findings describing the harms to be prevented by the ban. Dissenting Justice Kennedy disagreed that there was a valid distinction, pointing out that in Shapero the Court had said that “the mode of communication [mailings versus potentially more abusive in-person solicitation] makes all the difference,” and that mailings were at issue in both Shapero and Florida Bar . 515 U.S. at 637 (quoting Shapero , 486 U.S. at 475 ). or prohibit an attorney from holding himself out as a certified civil trial specialist, 13 Footnote Peel v. Illinois Attorney Disciplinary Comm’n, 496 U.S. 91 (1990) . or prohibit a certified public accountant from holding herself out as a certified financial planner. 14 Footnote Ibanez v. Florida Bd. of Accountancy, 512 U.S. 136 (1994) (also ruling that Accountancy Board could not reprimand the CPA, who was also a licensed attorney, for truthfully listing her CPA credentials in advertising for her law practice).

More recently, the Court has distinguished between laws that regulate the conduct of sellers versus those that regulate a seller’s speech. In Expressions Hair Design v. Schneiderman , the Court held that a New York State statute that prohibits businesses from displaying a cash price alongside a surcharge for credit card purchases burdens speech. 15 Footnote 581 U.S. ___, No. 15-1391, slip op. (2017) . Relying on Supreme Court precedent suggesting that “price regulation alone regulates conduct, not speech,” the lower court held that the statute was constitutional. 16 Footnote Id. at 5 . The Supreme Court disagreed, stating “[w]hat the law does regulate is how sellers may communicate their prices,” and “[i]n regulating the communication of prices rather than prices themselves, [the statute] regulates speech.” 17 Footnote Id. at 9–10 . The Court, however, remanded the case to the lower court to determine in the first instance whether the law survives First Amendment scrutiny. 18 Footnote Id. at 1 .

However, a state has been held to have a much greater countervailing interest in regulating person-to-person solicitation of clients by attorneys; therefore, especially because in-person solicitation is “a business transaction in which speech is an essential but subordinate component,” the state interest need only be important rather than compelling. 19 Footnote Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447 (1978) . But compare In re Primus , 426 U.S. 412 (1978) . The distinction between in-person and other attorney advertising was continued in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985) ( “print advertising . . . in most cases . . . will lack the coercive force of the personal presence of the trained advocate” ). Similarly, the Court upheld a rule prohibiting high school coaches from recruiting middle school athletes, finding that “the dangers of undue influence and overreaching that exist when a lawyer chases an ambulance are also present when a high school coach contacts an eighth grader.” 20 Footnote Tennessee Secondary School Athletic Ass'n v. Brentwood Academy , 551 U.S. 291 , 298 (2007) . The Court later refused, however, to extend this principle to in-person solicitation by certified public accountants, explaining that CPAs, unlike attorneys, are not professionally “trained in the art of persuasion,” and that the typical business executive client of a CPA is “far less susceptible to manipulation” than was the accident victim in Ohralik . 21 Footnote Edenfield v. Fane, 507 U.S. 761, 775 (1993) . A ban on personal solicitation is “justified only in situations 'inherently conducive to overreaching and other forms of misconduct.'” 22 Footnote Edenfield v. Fane , 507 U.S. at 774 , quoting In re R.M.J. , 455 U.S. at 203 , and quoted in Tennessee Secondary School Athletic Ass'n v. Brentwood Academy , 551 U.S. 291 , 298 (2007) . To allow enforcement of such a broad prophylactic rule absent identification of a serious problem such as ambulance chasing, the Court explained, would dilute commercial speech protection “almost to nothing.” 23 Footnote 507 U.S. at 777 .

Moreover, a statute prohibiting the practice of optometry under a trade name was sustained because there was “a significant possibility” that the public might be misled through deceptive use of the same or similar trade names. 24 Footnote Friedman v. Rogers, 440 U.S. 1 (1979) . But a state regulatory commission prohibition of utility advertisements “intended to stimulate the purchase of utility services” was held unjustified by the asserted interests in energy consumption and avoidance of subsidization of additional energy costs by all consumers. 25 Footnote Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557 (1980) . See also Consolidated Edison Co. v. Public Service Comm’n, 447 U.S. 530 (1980) (voiding a ban on utility’s inclusion in monthly bills of inserts discussing controversial issues of public policy). However, the linking of a product to matters of public debate does not thereby entitle an ad to the increased protection afforded noncommercial speech. Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983) .

Although commercial speech is entitled to First Amendment protection, the Court has clearly held that it is different from other forms of expression; it has remarked on the commonsense differences between speech that does no more than propose a commercial transaction and other varieties. 26 Footnote Commercial speech is viewed by the Court as usually hardier than other speech; because advertising is the sine qua non of commercial profits, it is less likely to be chilled by regulation. Thus, the difference inheres in both the nature of the speech and the nature of the governmental interest. Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 771–72 n.24 (1976) ; Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 455–56 (1978) . It is, of course, important to develop distinctions between commercial speech and other speech for purposes of determining when broader regulation is permissible. The Court’s definitional statements have been general, referring to commercial speech as that “proposing a commercial transaction,” Ohralik v. Ohio State Bar Ass’n , supra , or as “expression related solely to the economic interests of the speaker and its audience.” Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557, 561 (1980) . It has simply viewed as noncommercial the advertising of views on public policy that would inhere to the economic benefit of the speaker. Consolidated Edison Co. v. Public Service Comm’n, 447 U.S. 530 (1980) . So too, the Court has refused to treat as commercial speech charitable solicitation undertaken by professional fundraisers, characterizing the commercial component as “inextricably intertwined with otherwise fully protected speech.” Riley v. National Fed'n of the Blind, 487 U.S. 781, 796 (1988) . By contrast, a mixing of home economics information with a sales pitch at a “Tupperware” party did not remove the transaction from commercial speech. Board of Trustees v. Fox, 492 U.S. 469 (1989) . In Nike, Inc. v. Kasky , 45 P.3d 243 (Cal. 2002) , cert. dismissed , 539 U.S. 654 (2003) , Nike was sued for unfair and deceptive practices for allegedly false statements it made concerning the working conditions under which its products were manufactured. The California Supreme Court ruled that the suit could proceed, and the Supreme Court granted certiorari, but then dismissed it as improvidently granted, with a concurring and two dissenting opinions. The issue left undecided was whether Nike’s statements, though they concerned a matter of public debate and appeared in press releases and letters rather than in advertisements for its products, should be deemed “'commercial speech’ because they might affect consumers’ opinions about the business as a good corporate citizen and thereby affect their purchasing decisions.” Id. at 657 (Stevens, J., concurring). Nike subsequently settled the suit. The Court has developed the four-pronged Central Hudson test to measure the validity of restraints upon commercial expression. 27 Footnote Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557 (1980) . In one case, the Court referred to the test as having three prongs, referring to its second, third, and fourth prongs, as, respectively, its first, second, and third. The Court in that case did, however, apply Central Hudson ’s first prong as well. Florida Bar v. Went For It, Inc., 515 U.S. 618, 624 (1995) .

Under the first prong of the test, certain commercial speech is not entitled to protection; the informational function of advertising is the First Amendment concern and if an advertisement does not accurately inform the public about lawful activity, it can be suppressed. 28 Footnote Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557, 563, 564 (1980) . Within this category fall the cases involving the possibility of deception through such devices as use of trade names, Friedman v. Rogers, 440 U.S. 1 (1979) , and solicitation of business by lawyers, Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447 (1978) , as well as the proposal of an unlawful transaction, Pittsburgh Press Co. v. Commission on Human Relations, 413 U.S. 376 (1973) .

Second, if the speech is protected, the interest of the government in regulating and limiting it must be assessed. The state must assert a substantial interest to be achieved by restrictions on commercial speech. 29 Footnote Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557, 564, 568–69 (1980) . The Court deemed the state’s interests to be clear and substantial. The pattern here is similar to much due process and equal protection litigation as well as expression and religion cases in which the Court accepts the proffered interests as legitimate and worthy. See also San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U.S. 522 (1987) (governmental interest in protecting USOC’s exclusive use of word “Olympic” is substantial); Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) (government’s interest in curbing strength wars among brewers is substantial, but interest in facilitating state regulation of alcohol is not substantial). Contrast United States v. Edge Broadcasting Co., 509 U.S. 418 (1993) , finding a substantial federal interest in facilitating state restrictions on lotteries. “Unlike the situation in Edge Broadcasting ,” the Coors Court explained, “the policies of some states do not prevent neighboring states from pursuing their own alcohol-related policies within their respective borders.” 514 U.S. at 486 . However, in Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983) , the Court deemed insubstantial a governmental interest in protecting postal patrons from offensive but not obscene materials. For deferential treatment of the governmental interest, see Posadas de Puerto Rico Associates v. Tourism Co. of Puerto Rico, 478 U.S. 328 (1986) (Puerto Rico’s “substantial” interest in discouraging casino gambling by residents justifies ban on ads aimed at residents even though residents may legally engage in casino gambling, and even though ads aimed at tourists are permitted).

Third, the restriction cannot be sustained if it provides only ineffective or remote support for the asserted purpose. 30 Footnote 447 U.S. at 569 . The ban here was found to directly advance one of the proffered interests. Contrast this holding with Bates v. State Bar of Arizona, 433 U.S. 350 (1977) ; Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976) ; Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983) ; Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) (prohibition on display of alcohol content on beer labels does not directly and materially advance government’s interest in curbing strength wars among brewers, given the inconsistencies and “overall irrationality” of the regulatory scheme); and Edenfield v. Fane, 507 U.S. 761 (1993) (Florida’s ban on in-person solicitation by certified public accountants does not directly advance its legitimate interests in protecting consumers from fraud, protecting consumer privacy, and maintaining professional independence from clients), where the restraints were deemed indirect or ineffectual. Instead, the regulation must “directly advance” the governmental interest. The Court resolves this issue with reference to aggregate effects, and does not limit its consideration to effects on the challenging litigant. 31 Footnote United States v. Edge Broadcasting Co., 509 U.S. 418, 427 (1993) ( “this question cannot be answered by limiting the inquiry to whether the governmental interest is directly advanced as applied to a single person or entity” ).

Fourth, if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restriction cannot survive. 32 Footnote Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557, 565, 569–71 (1980) . This test is, of course, the “least restrictive means” standard. Shelton v. Tucker, 364 U.S. 479, 488 (1960) . In Central Hudson , the Court found the ban more extensive than was necessary to effectuate the governmental purpose. See also Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983) , where the Court held that the governmental interest in not interfering with parental efforts at controlling children’s access to birth control information could not justify a ban on commercial mailings about birth control products; “[t]he level of discourse reaching a mailbox simply cannot be limited to that which would be suitable for a sandbox.” Id. at 74 . See also Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) (there are less intrusive alternatives— e.g. , direct limitations on alcohol content of beer—to prohibition on display of alcohol content on beer label). Note, however, that, in San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U.S. 522, 539 (1987) , the Court applied the test in a manner deferential to Congress: “the restrictions [at issue] are not broader than Congress reasonably could have determined to be necessary to further these interests.” The Court has rejected the idea that a “least restrictive means” test is required. Instead, what is now required is a reasonable “fit” between means and ends, with the means “narrowly tailored to achieve the desired objective.” 33 Footnote Board of Trustees v. Fox, 492 U.S. 469, 480 (1989) . In a 1993 opinion the Court elaborated on the difference between reasonable fit and least restrictive alternative. “A regulation need not be ‘absolutely the least severe that will achieve the desired end,’ but if there are numerous and obvious less-burdensome alternatives to the restriction . . . , that is certainly a relevant consideration in determining whether the ‘fit’ between ends and means is reasonable.” City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 417 n.13 (1993) . But see Thompson v. Western States Medical Center, 535 U.S. 357, 368 (2002) , in which the Court quoted the fourth prong of the Central Hudson test without mentioning its reformulation by Fox , and added, again without reference to Fox , “In previous cases addressing this final prong of the Central Hudson test, we have made clear that if the government could achieve its interests in a manner that does not restrict speech, or that restricts less speech, the government must do so.” Id. at 371 . The Court, however, does “not equate this test with the less rigorous obstacles of rational basis review; . . . the existence of ‘numerous and obvious less-burdensome alternatives to the restriction on commercial speech . . . is certainly a relevant consideration in determining whether the 'between ends and means is reasonable.’” 34 Footnote Florida Bar v. Went For It, Inc., 515 U.S. 618, 632 (1995) .

The “reasonable fit” standard has some teeth, the Court made clear in City of Cincinnati v. Discovery Network, Inc. , 35 Footnote 507 U.S. 410 (1993) . See also Edenfield v. Fane, 507 U.S. 761 (1993) , decided the same Term, relying on the “directly advance” third prong of Central Hudson to strike down a ban on in-person solicitation by certified public accountants. striking down a city’s prohibition on distribution of “commercial handbills” through freestanding newsracks located on city property. The city’s aesthetic interest in reducing visual clutter was furthered by reducing the total number of newsracks, but the distinction between prohibited “commercial” publications and permitted “newspapers” bore “no relationship whatsoever ” to this legitimate interest. 36 Footnote 507 U.S. at 424 . The city could not, the Court ruled, single out commercial speech to bear the full onus when “all newsracks, regardless of whether they contain commercial or noncommercial publications, are equally at fault.” 37 Footnote 507 U.S. at 426 . The Court also noted the “minute” effect of removing 62 “commercial” newsracks while 1,500 to 2,000 other newsracks remained in place. Id. at 418 . By contrast, the Court upheld a federal law that prohibited broadcast of lottery advertisements by a broadcaster in a state that prohibits lotteries, while allowing broadcast of such ads by stations in states that sponsor lotteries. There was a “reasonable fit” between the restriction and the asserted federal interest in supporting state anti-gambling policies without unduly interfering with policies of neighboring states that promote lotteries. 38 Footnote United States v. Edge Broadcasting Co., 509 U.S. 418 (1993) . The prohibition “directly served” the congressional interest, and could be applied to a broadcaster whose principal audience was in an adjoining lottery state, and who sought to run ads for that state’s lottery. 39 Footnote 507 U.S. at 428 .

In 1999, the Court struck down a provision of the same statute as applied to advertisements for private casino gambling that are broadcast by radio and television stations located in a state where such gambling is legal. 40 Footnote Greater New Orleans Broadcasting Ass’n, Inc. v. United States, 527 U.S. 173 (1999) . The Court emphasized the interrelatedness of the four parts of the Central Hudson test: “Each [part] raises a relevant question that may not be dispositive to the First Amendment inquiry, but the answer to which may inform a judgment concerning the other three.” 41 Footnote 527 U.S. at 184 . For example, although the government has a substantial interest in reducing the social costs of gambling, the fact that the Congress has simultaneously encouraged gambling, because of its economic benefits, makes it more difficult for the government to demonstrate that its restriction on commercial speech materially advances its asserted interest and constitutes a reasonable “fit.” 42 Footnote 527 U.S. at 186–87 . In this case, “[t]he operation of [ 18 U.S.C. ] § 1304 and its attendant regulatory regime is so pierced by exemptions and inconsistencies that the Government cannot hope to exonerate it.” 43 Footnote 527 U.S. at 190 . Moreoever, “the regulation distinguishes among the indistinct, permitting a variety of speech that poses the same risks the Government purports to fear, while banning messages unlikely to cause any harm at all.” 44 Footnote 527 U.S. at 195 .

In Posadas de Puerto Rico Assocs. v. Tourism Co. of Puerto Rico , the Court asserted that “the greater power to completely ban casino gambling necessarily includes the lesser power to ban advertising of casino gambling.” 45 Footnote 478 U.S. 328, 345–46 (1986) . For discussion of the case, see P. Kurland , Posadas de Puerto Rico v. Tourism Company: “’Twas Strange, ‘Twas Passing Strange; ‘Twas Pitiful, ‘Twas Wondrous Pitiful,” 1986 Sup. Ct. Rev. 1 . Subsequently, however, the Court eschewed reliance on Posadas , 46 Footnote In Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) (invalidating a federal ban on revealing alcohol content on malt beverage labels), the Court rejected reliance on Posadas , pointing out that the statement in Posadas had been made only after a determination that the advertising could be upheld under Central Hudson . The Court found it unnecessary to consider the greater-includes-lesser argument in United States v. Edge Broadcasting Co., 509 U.S. 418, 427 (1993) , upholding through application of Central Hudson principles a ban on broadcast of lottery ads. and it seems doubtful that the Court would again embrace the broad principle that government may ban all advertising of an activity that it permits but has power to prohibit. Indeed, the Court’s very holding in 44 Liquormart, Inc. v. Rhode Island , 47 Footnote 517 U.S. 484 (1996) . striking down the state’s ban on advertisements that provide truthful information about liquor prices, is inconsistent with the general proposition. A Court plurality in 44 Liquormart squarely rejected Posadas , calling it “erroneous,” declining to give force to its “highly deferential approach,” and proclaiming that a state “does not have the broad discretion to suppress truthful, nonmisleading information for paternalistic purposes that the Posadas majority was willing to tolerate.” 48 Footnote 517 U.S. at 510 (opinion of Stevens, joined by Justices Kennedy, Thomas, and Ginsburg). Stevens' opinion also dismissed the Posadas “greater-includes-the-lesser argument” as “inconsistent with both logic and well-settled doctrine,” pointing out that the First Amendment “presumes that attempts to regulate speech are more dangerous than attempts to regulate conduct.” Id. at 511–512 . Four other Justices concluded that Posadas was inconsistent with the “closer look” that the Court has since required in applying the principles of Central Hudson . 49 Footnote 517 U.S. at 531–32 (concurring opinion of O’Connor, joined by Chief Justice Rehnquist and by Justices Souter and Breyer).

The “different degree of protection” accorded commercial speech has a number of consequences as regards other First Amendment doctrine. For instance, somewhat broader times, places, and manner regulations are to be tolerated, 50 Footnote Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 771 (1976) ; Bates v. State Bar of Arizona, 433 U.S. 350, 384 (1977) . But, in Linmark Associates v. Township of Willingboro, 431 U.S. 85, 93–94 (1977) , the Court refused to accept a times, places, and manner defense of an ordinance prohibiting “For Sale” signs on residential lawns. First, ample alternative channels of communication were not available, and second, the ban was seen rather as a content limitation. and the rule against prior restraints may be inapplicable. 51 Footnote Central Hudson Gas & Elec. Co. v. PSC, 447 U.S. 557, 571 n.13 (1980) , citing Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 772 n.24 (1976) . See “The Doctrine of Prior Restraint,” supra . Further, disseminators of commercial speech are not protected by the overbreadth doctrine. 52 Footnote Bates v. State Bar of Arizona, 433 U.S. 350, 379–81 (1977) ; Central Hudson Gas & Electric Co. v. PSC, 447 U.S. 557, 565 n.8 (1980) . On the other hand, there are circumstances in which the nature of the restriction placed on commercial speech may alter the First Amendment analysis, and even result in the application of a heightened level of scrutiny.

For instance, in Sorrell v. IMS Health, Inc. , 53 Footnote 564 U.S. 552 (2011) . the Court struck down state restrictions on pharmacies and “data-miners” selling or leasing information on the prescribing behavior of doctors for marketing purposes and related restrictions limiting the use of that information by pharmaceutical companies. 54 Footnote “Detailers,” marketing specialists employed by pharmaceutical manufacturers, used the reports to refine their marketing tactics and increase sales to doctors. These prohibitions, however, were subject to a number of exceptions, including provisions allowing such prescriber-identifying information to be used for health care research. Because the restrictions only applied to the use of this information for marketing and because they principally applied to pharmaceutical manufacturers of non-generic drugs, the Court found that these restrictions were content-based and speaker-based limits and thus subject to heightened scrutiny. 55 Footnote Although the state put forward a variety of proposed governmental interests to justify the regulations, the Court found these interests (expectation of physician privacy, discouraging harassment of physicians, and protecting the integrity of the doctor-physician relationship) were ill-served by the content-based restrictions. Sorrell , 564 U.S. at 572–77 . The Court also rejected the argument that the regulations were an appropriate way to reduce health care costs, noting that “[t]he State seeks to achieve its policy objectives through the indirect means of restraining certain speech by certain speakers—that is, by diminishing detailers’ ability to influence prescription decisions. Those who seek to censor or burden free expression often assert that disfavored speech has adverse effects. But the 'fear that people would make bad decisions if given truthful information' cannot justify content-based burdens on speech.” Id. at 577 .

Different degrees of protection may also be discerned among different categories of commercial speech. The first prong of the Central Hudson test means that false, deceptive, or misleading advertisements need not be permitted; government may require that a commercial message appear in such a form, or include such additional information, warnings, and disclaimers, as are necessary to prevent deception. 56 Footnote Bates v. State Bar of Arizona, 433 U.S. 350, 383–84 (1977) ; Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 456 (1978) . Requirements that advertisers disclose more information than they otherwise choose to are upheld “as long as [they] are reasonably related to the State’s interest in preventing deception of consumers,” the Court explaining that “[t]he right of a commercial speaker not to divulge accurate information regarding his services is not . . . a fundamental right” requiring strict scrutiny of the disclosure requirement. Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 & n.14 (1985) (upholding requirement that attorney’s contingent fees ad mention that unsuccessful plaintiffs might still be liable for court costs). But even truthful, non-misleading commercial speech may be regulated, and the validity of such regulation is tested by application of the remaining prongs of the Central Hudson test. The test itself does not make further distinctions based on the content of the commercial message or the nature of the governmental interest (that interest need only be “substantial” ). Recent decisions suggest, however, that further distinctions may exist. Measures aimed at preserving “a fair bargaining process” between consumer and advertiser 57 Footnote 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 501 (1996) . may be more likely to pass the test 58 Footnote See, e.g. , Ohralik v. Ohio State Bar Ass’n, 436 U.S. 447, 465 (1978) (upholding ban on in-person solicitation by attorneys due in part to the “potential for overreaching” when a trained advocate “solicits an unsophisticated, injured, or distressed lay person” ). than are regulations designed to implement general health, safety, or moral concerns. 59 Footnote Compare United States v. Edge Broadcasting Co., 509 U.S. 418 (1993) (upholding federal law supporting state interest in protecting citizens from lottery information) and Florida Bar v. Went For It, Inc., 515 U.S. 618, 631 (1995) (upholding a 30-day ban on targeted, direct-mail solicitation of accident victims by attorneys, not because of any presumed susceptibility to overreaching, but because the ban “forestall[s] the outrage and irritation with the . . . legal profession that the [banned] solicitation . . . has engendered” ) with Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) (striking down federal statute prohibiting display of alcohol content on beer labels) and 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996) (striking down state law prohibiting display of retail prices in ads for alcoholic beverages). As the governmental interest becomes further removed from protecting a fair bargaining process, it may become more difficult to establish the absence of less burdensome regulatory alternatives and the presence of a “reasonable fit” between the commercial speech restriction and the governmental interest. 60 Footnote “[S]everal Members of the Court have expressed doubts about the Central Hudson analysis and whether it should apply in particular cases.” Thompson v. Western States Medical Center, 535 U.S. 357, 367 (2002) . Justice Stevens has criticized the Central Hudson test because it seemingly allows regulation of any speech propounded in a commercial context regardless of the content of that speech. “[A]ny description of commercial speech that is intended to identify the category of speech entitled to less First Amendment protection should relate to the reasons for permitting broader regulation: namely, commercial speech’s potential to mislead.” Rubin v. Coors Brewing Co., 514 U.S. 476, 494 (1995) (concurring opinion). The Justice repeated these views in 1996: “when a State entirely prohibits the dissemination of truthful, nonmisleading commercial messages for reasons unrelated to the preservation of a fair bargaining process, there is far less reason to depart from the rigorous review that the First Amendment generally demands.” 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 501 (1996) (a portion of the opinion joined by Justices Kennedy and Ginsburg). Justice Thomas, similarly, wrote that, in cases “in which the government’s asserted interest is to keep legal users of a product or service ignorant in order to manipulate their choices in the marketplace, the Central Hudson test should not be applied because such an interest’ is per se illegitimate. . . .” Greater New Orleans Broadcasting Ass’n, Inc. v. United States, 527 U.S. 173, 197 (1999) (Thomas, J., concurring) (internal quotation marks omitted). Other decisions in which the Court majority acknowledged that some Justices would grant commercial speech greater protection than it has under the Central Hudson test include United States v. United Foods, Inc., 533 U.S. 405, 409–410 (2001) (mandated assessments, used for advertising, on handlers of fresh mushrooms struck down as compelled speech, rather than under Central Hudson ), and Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 554 (2001) (various state restrictions on tobacco advertising struck down under Central Hudson as overly burdensome).

The following state regulations pages link to this page.

Corporate America is mobilizing to support democracy in 2024 and beyond. Here’s how

This year is consequential for democracy and businesses that depend on a stable government, the rule of law, and social cohesion to run smoothly. And yet, many of our fellow CEOs say they would prefer to sit out the U.S. elections this November.

This approach ignores an important reality: Avoiding this election is going to be impossible—and doing so jeopardizes progress on every issue.

An assumption is permeating the business community that supporting elections, and our democracy more broadly, is risky. However, U.S. businesses can mobilize to support their employees and ensure they don’t have to choose between earning a paycheck and voting. Employers can support voter education, election integrity, and other essential and non-partisan pillars of our democratic system. And when they do so, it is wildly popular with their employees. This year, these low-risk, high-impact initiatives could not be more important.

Based on Patagonia’s history of civic engagement, along with new research from NationSwell, here is what we recommend:

First and foremost, refuse the notion that democracy is a third-rail issue

Voting, other forms of civic engagement, and advocacy around the integrity of our electoral system should not be partisan pursuits.

Employers can stand firm and confident in rejecting any premise to the contrary, given that 80% of all Americans believe businesses play a role in encouraging a free and fair election, according to a  recent survey  from Weber Shandwick.

Yet, ill-intentioned actors seek to discourage businesses and others from voicing support or taking action when democracy, or the fundamental rights it affords, are at risk. But actively promoting civic participation can do more than mitigate those risks—it’s a net positive for business. The research shows that civically engaged employees are more productive, more creative, and more satisfied in their work.

Prepare for threats to democracy and pressure to speak out from employees and customers

Given the plausibility of situations like a contested election outcome and civil unrest, businesses should develop response frameworks and contingencies.

Employees and customers increasingly expect companies to speak out and take action during a crisis. And no leader wants to be caught off guard when the moment demands they respond with urgency, clarity, and conviction.

Find an onramp that aligns with your organization’s values

The range of opportunities to support a healthy democracy is vast, and no two businesses need to take the same approach. NationSwell’s research identified three overarching goals companies can (and often do) pursue: encouraging and enabling civic participation, promoting information accessibility, transparency, and quality, and supporting issues that protect rights and strengthen democracy.

Companies can leverage numerous capabilities: workplace policies and benefits, employee engagement and people infrastructure, core products and services, political contributions and advocacy, and corporate voice.

Provide accurate information

The 2024 election cycle is the first national election in the era of generative artificial intelligence, which experts warn can be exploited to undermine democracy.

To combat manipulated media, bring in a credible third party to train your employees on media literacy and how to identify deep fakes.

To encourage voter participation, provide employees with important details about registering and casting their ballot in their state, information about candidates up and down the ticket, and information about ballot measures.

Seek safety and strength in collaboration

In 2018, Patagonia helped launch Time to Vote , a business-led movement to ensure employees don’t have to choose between a paycheck and casting their ballot. Across 2022 and 2023, Don’t Ban Equality added nearly 1,000 new businesses to its efforts to protect and promote access to reproductive healthcare. And just a few weeks ago, Levi Strauss & Co., Lyft , and SHOWTIME/MTV Entertainment Studios announced the Community College Commitment , intended to close the voting gap between students at community colleges and those at four-year universities.

While the risk of inaction on democracy is likely greater than the risk of action, these examples can attest to the relative safety afforded by coalitions to their participating companies. And they show that when working in concert, two or more organizations can combine capabilities, mobilize peers, and scale impact.

Finally, invest in long-term change

While the urgency around the 2024 election is hard to ignore and critical to address, we cannot solve the challenges associated with U.S. democracy in one election cycle. Businesses can help restore the health of our democratic institutions and processes by advocating for policies that protect and restore voting rights, increase the public funding of elections, and regulate the use of manipulated media in elections.

Companies can help Americans develop their civic competence by offering employees access to civic education programming, fostering productive and civil dialogue in the workplace, and promoting civic volunteerism.

The election will be here before we know it—and now is the time for corporate leaders to prepare. Years from now, shareholders, stakeholders, employees, and our children will ask what we did in 2024 to stand up for our democracy

Greg Behrman is CEO of NationSwell. Ryan Gellert is CEO of Patagonia.

More must-read commentary published by  Fortune :

• Fannie Mae CEO: Beyoncé is right.  Climate change has already hit the housing market—and homeowners aren’t prepared
• Trade and investment data in the last two years dispel the deglobalization and decoupling myths as U.S.-China competition ignites ‘reglobalization’
• Ex-Lululemon CEO: Gen Zers want sustainably made and compostable products. Firms taking heed today will be market leaders tomorrow
• Congress could soon spell  the end of employment arbitration —but it’s not all good news for American workers

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of  Fortune .

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