4 Steps of the Central Hudson Test
1. Does the speech concern lawful activity and is not misleading?
2. is the gov't interest substantial?
3. Does the regulation directly advance that interest?
4. Is the regulation more extensive than necessary?
Posadas de Puerto Rico v. Tourism Company (SIGNIFICANCE)
Illustrated how the CHT is suppose to put up hurdles to allow for the freedom of speech but Rehnquist knocks those hurdles down. The greater less power is also introduced
What case rewrote the CHT?
Sunny v. Fox - SUNY restricts advertising on campus. Girl holds tupperware party in dorm and invites company representative. Police find out and come to girls room...comany representative gets arrested. The student sues for infringement of her first amendment rights. Judge Scalia (conservative) said that the CHT made it so we "d/n restrict more than necessary". This was a change from "more extensive than necessary"
Who is John Banzhaf and what did he do?
John Banzhaf started the ball rolling on tobacco advertising. He noticed numerous advertisements on CBS (a broadcasting station) that promoted cigarette smoking. Banzhaf was also aware of the FCC's Fairness Doctrine that stated, "if you are going to broadcast a controversial topic, you must also broadcast the other side of the issue." Banzhaf wrote CBS demanding that the dangers of smoking have time to be advertised. CBS said no and he went to the FCC. The FCC found that Banzhaf was correct and decided to run one anti-smoking commercial for every three cigarette ads. The result was a decline in cigarette sales.This also resulted in Big Tobacco lobbying congress to ban all cigarette advertising. Television tobacco ads went off the air at the end of 1970, as did the free anti-smoking ads. Much of the cigarette advertising money shifted to print media.
Master Settlement Agreement (MSA)
Agreement finally reached in the late 1990s by the states. The states threatened that they were each, individually going to sue the tobacco companies because their product was costing a ton of money in healthcare. The settlement stated that the states promised not to sue tobacco companies they stopped advertising on billboards, in magazines that had more than 50% of their readers as kids and paid $250 billion to the states over the course of 25 years.
What was the Uniform Sales Act (USA) and what did it do?
The USA was a model that was designed to guide each state in drafting its state securities law. It was also an attempt to get states to adopt a law that was the same in dealing with sale. It was important b/c it was the first law to make mere affirmation of fact into a warranty. However, it was not adopted by all states (1930ish)
What is the Uniform Commercial Code (UCC)
The UCC is a uniformed code that has, in some form been adopted by all of the states. It created express and implied warranties
A warranty that is explicitly stated as a warranty. Must be stated either orally or in writting
A warranty that is implied by the mere act of selling. - pureness of food
- merchantability - the law that goods are reasonably fit for the general purpose for which they are sold
- samples - when one sells a product, they promise it will perform like other similar products
fitness for a particular purpose
warranties tend to only cover tangible goods
Who wrote it - Rehnquist
First appeared in - Posadas de Puerto Rico v. Tourism Company
Does SC accept it today? - NO (flawed logic)
What is it? - The greater-includes-the-lesser argument states that if a state has the power to do X and x is a greater power than y, the state also has the power to control y.
Example - Since Puerto Rico has the right to allow gambling (x) it also has the lesser right (y) to ban the advertising for gambling. Argument is also used in US vs. Edge Broadcasting (applied it to vices) and state of RI tried to claim it in the 44 Liquarmart case
Coincidences that led America to b/cm a superpower
1. Industrial Revolution (1700s-1800s)
- America was ratified in 1776
2. Transportation - Railroads were created in 1804. This was only 30 years after ratification.
3. Civil War (1860s) - the war promoted production
4. immigration policy - brought in cheap labor from around the world
5. federal tax policy - encouraged vertical integration of companies and even gave a tax incentive to do so
44 Liquor-mart v. Rhode Island
Citation - 517 U.S. 484 (1996)
SIG - Final word in protection for commercial speech. Last big case
RI banned adv the PRICE of alcohol. 44 LQ ran an ad in '91 with the word "wow" next to bottles of alcohol. State said that this implied a low price and sued.
The decision written by STEVENS stated that adv serves as vital information for the marketplace. When the state of RI tried to claim that since the 21 Amendment gives them the right to ban alcohol, they also have the **lesser power to ban alcohol advertising. BUT Stevens found that this was not the case. Also noted that there is NO vice exception under the 1st Amendment. This case made deceptive advertising the only thing that could be regulated.
Protected consumers before the FTC was created. There were three types of misrepresentation, fraudulent, gross negligence (reckless disregard for the truth and Ekins v. Tresham) and negligence (when the representation is made carelessly while having no reasonable reason for believing it to be true).
Law of Misrepresentation
The buyer must reasonably RELY on representation to his/her detriment.
rely on what the seller says - you c/n knowingly know that the seller is lying just to sue him
must be a detriment - the misrepresentation must work against you
covers both intangible and tangible goods
A warranty is an enforceable promise. It can be expressed or implied. If the seller broke his promise, the buyer was protected. First warranty is 1383 - guaranteed quality of a horse
Bezar stone = stone that you rub on yourself to cure any alignments. Chandelor sold Lopus a bezar stone and lopus took it home and it didn't cure him so he sue Chandelor. The court said that Chandelor did not promise it was a bezar stone. This created the 3 magic words, promise, warranty and guarantee. These words must be used in order to create a warranty. This rule lasted until 1603 when intent came into play.
Aka pass off. An example are the people on the street who sell designer handbags. These really hurts the brand being sold.
1. Investigation - if the FTC receives enough comments then they launch an investigation
2. recommendation - the staff investigates and then gives recommendation to commissioners
3. Complaint - says that you are charged/in trouble
4. Administrative Law Judge Hearing (ALJ) - BIAS the judge is an FTC board member
5. ALJ Decision
6. Appeal (by either party) - can be appealed by the advertiser or FTC
7. Final Opinion (made by commissioners)
8. Appeal to US Appeals Court - ONLY the advertiser
How Courts view the first Amendment
Governmental entities shall make NO law - unless they have a good reason - in anyway hindering the freedom of verbal or symbolic expression
Protecting the sellers right to speak, favoring the seller. Cavet Emptor is in favor of the seller. Hurts the consumer a lot but also hurting the competition
Favoring the buyer. This is most likely how the future will remain. There is too much regulation in consumerism and it stops free speech. Hurts the seller and the consumer because of the lack of information