Individual rights - Regulation of commercial speech

Learning Outcomes

This article explains how the First Amendment regulates commercial speech for MBE purposes, including:

• Defining commercial speech and distinguishing it from political or other fully protected expression and from regulation of conduct.
• Describing the reduced level of First Amendment protection afforded to commercial speech and why courts apply intermediate rather than strict scrutiny.
• Setting out each step of the four-part Central Hudson test for truthful, non-misleading commercial speech about lawful activity, with emphasis on “substantial government interest,” “direct advancement,” and “narrow tailoring.”
• Highlighting the absence of protection for false, deceptive, or inherently or actually misleading advertising, and for speech proposing illegal transactions.
• Addressing how these principles govern professional advertising, in-person solicitation, prior restraints, licensing schemes, compelled disclosures, and regulation of commercial signage and billboards.
• Emphasizing common MBE pitfalls, such as misclassifying content-based regulations of expressive, non-commercial messages as commercial speech problems or overlooking that some advertising restrictions function as strict-scrutiny content regulations.
• Providing a structured approach to analyzing fact patterns so that commercial speech is accurately identified and the correct constitutional standard—no protection, intermediate scrutiny under Central Hudson, or strict scrutiny—is applied.

MBE Syllabus

For the MBE, you are required to understand how the First Amendment applies to commercial speech, recognizing it receives less protection than political or other forms of speech, with a focus on the following syllabus points:

• Distinguish commercial speech from non-commercial speech and from regulation of conduct.
• Identify the standard of review applicable to commercial speech regulations (intermediate scrutiny).
• Apply the four-part Central Hudson test to regulations of truthful, non-misleading commercial speech regarding lawful activity.
• Recognize that false, misleading, or illegal commercial speech is unprotected by the First Amendment.
• Evaluate restrictions on professional advertising (e.g., attorneys, accountants, doctors) and in‑person solicitation.
• Assess the validity of prior restraints and licensing schemes affecting commercial speech.
• Distinguish regulations that are truly commercial-speech regulations from content-based regulations of non-commercial speech (which trigger strict scrutiny).
• Analyze restrictions on commercial signage and billboards, and compelled disclosures in advertising.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which standard of review do courts typically apply to regulations of truthful, non-misleading commercial speech concerning lawful activity?
   1. Rational basis
   2. Intermediate scrutiny
   3. Strict scrutiny
   4. Minimal scrutiny
2. Under the Central Hudson test, a regulation restricting truthful commercial speech is valid only if, among other requirements, it:
   1. Is necessary to achieve a compelling government interest.
   2. Is viewpoint neutral and rationally related to any legitimate government purpose.
   3. Directly advances a substantial government interest and is narrowly tailored to achieve that interest.
   4. Concerns speech that is inherently harmful to minors.
3. A state law completely banning attorneys from advertising their services via television commercials would likely be found:
   1. Constitutional, because attorney advertising is inherently misleading.
   2. Constitutional, because states have broad power to regulate the legal profession.
   3. Unconstitutional, because the ban is broader than necessary to serve any substantial government interest.
   4. Unconstitutional, because commercial speech receives the same protection as political speech.
4. A city ordinance prohibits businesses from displaying any outdoor signs advertising tobacco products. Assuming the sale of tobacco is legal, which is the strongest argument that this ordinance violates the First Amendment?
   1. Tobacco advertising is political speech subject to strict scrutiny.
   2. The ordinance is not narrowly tailored to serve the city's substantial interest in reducing tobacco use.
   3. The ordinance constitutes an impermissible prior restraint on speech.
   4. The ordinance violates the Equal Protection Clause by singling out tobacco advertisers.
5. A state highway administration bans “graphic displays of violence” on all large electronic billboards along state roads. A movie studio challenges the rule after being barred from showing a violent clip from its new film. Which standard should a court apply?
   1. Arbitrary-or-irrational review because billboards are traditionally regulated
   2. The Central Hudson test for commercial speech
   3. The time, place, and manner test for public forums
   4. Strict scrutiny for content-based regulations

Introduction

The First Amendment's guarantee of freedom of speech extends, to a degree, to commercial speech. Commercial speech is generally defined as speech that proposes a commercial transaction or is related solely to the economic interests of the speaker and its audience. While protected, commercial speech receives a lower level of protection than political, artistic, or other forms of non-commercial expression. This means the government has greater latitude to regulate commercial speech than other types of speech.

The key analysis involves distinguishing between:

• Truthful, non-misleading commercial speech concerning lawful activity; and
• Commercial speech that is false, misleading, or concerns illegal activity.

The latter category receives no First Amendment protection and can be prohibited entirely. The former category receives intermediate scrutiny under the Central Hudson test.

Key Term: Commercial Speech
Speech that does no more than propose a commercial transaction or that relates solely to the economic interests of the speaker and its audience.

Identifying Commercial Speech on the MBE

For exam purposes, treat as commercial speech:

• Traditional advertisements for goods or services (print, online, TV, billboards).
• Professional advertising (lawyers, doctors, accountants, etc.).
• Price advertising or product information directed at potential customers.
• Corporate speech primarily aimed at promoting sales, rather than debating public policy.

Be cautious with mixed speech (e.g., an ad that both promotes a product and expresses a political viewpoint). The Court usually treats such expression as commercial if:

• It is an advertisement,
• It refers to a specific product or service, and
• The speaker has an economic motivation.

When in doubt on the MBE, ask: “Is this mainly about selling something?” If yes, apply the commercial speech framework.

Levels of Scrutiny and Commercial Speech

Content-based regulation of non-commercial speech (e.g., political advocacy) triggers strict scrutiny: the government must show the law is necessary to achieve a compelling interest and is narrowly tailored.

By contrast, most regulation of commercial speech (even if content-based) is reviewed under a form of intermediate scrutiny, captured by the Central Hudson test.

Key Term: Intermediate Scrutiny
A standard of review requiring the government to show that a regulation is substantially related to an important (substantial) government interest. In the commercial speech context, this is implemented through the Central Hudson test.

Commercial speech therefore occupies a middle ground:

• More protected than unprotected categories (obscenity, true threats, etc.).
• Less protected than fully protected speech (political, artistic, religious).

The Central Hudson Test

Regulations affecting truthful, non-misleading commercial speech about lawful activities are evaluated under the four-part test established in Central Hudson Gas & Electric Corp. v. Public Service Commission (1980). This test essentially applies intermediate scrutiny. For a regulation of commercial speech to be upheld, the government must show that:

1. The speech concerns lawful activity and is not misleading.
   If the speech is false, misleading, or proposes illegal activity, it is unprotected, and the regulation is likely valid (subject only to rational basis review). If it is truthful and concerns lawful activity, the analysis proceeds.

2. The asserted governmental interest is substantial.
   The government must identify a significant interest justifying the regulation (e.g., consumer protection, public health, safety, or aesthetics).

3. The regulation directly advances the asserted governmental interest.
   The regulation must actually help achieve the government's substantial interest in a meaningful, non-speculative way. There must be a direct link between the restriction and the goal.

4. The regulation is narrowly tailored (reasonable fit).
   The regulation must not be more extensive than necessary to serve the government's interest. There must be a “reasonable fit” between the ends and the means. This does not require the least restrictive means possible, but the regulation should not suppress far more speech than it needs to.

Key Term: Central Hudson Test
The four-part test used to determine the constitutionality of restrictions on truthful, non-misleading commercial speech about lawful activity, requiring lawful/non-misleading speech, a substantial government interest, direct advancement of that interest, and narrow tailoring (reasonable fit).

Key Term: Substantial Government Interest
An important governmental objective—such as protecting consumers from deception, promoting public health or safety, or preserving aesthetics—sufficient to justify restrictions on commercial speech.

Key Term: Direct Advancement
The requirement that a commercial speech regulation materially and effectively serves the asserted substantial government interest, rather than being remote, speculative, or ineffective.

Applying Each Step

• Step 1 (Lawful and not misleading)
  Always ask first: Is the product legal? Is the advertisement truthful and not misleading? If the answer is no, the speech can be banned outright and Central Hudson does not protect it.

• Step 2 (Substantial interest)
  Common examples that qualify:

  • Protecting consumers from fraud or confusion.
  • Reducing drunken driving or smoking.
  • Preventing harmful professional practices.
  • Promoting traffic safety or community aesthetics.

• Step 3 (Direct advancement)
  The government must show more than a good intention. There must be evidence or a logical connection that the restriction will materially address the harm. A law that barely affects the problem or is riddled with exceptions may fail at this step.

• Step 4 (Narrow tailoring / reasonable fit)
  The regulation cannot be “more extensive than necessary.” Courts look for:

  • Whether less speech-restrictive alternatives reasonably exist (e.g., requiring disclaimers instead of banning ads).
  • Whether the law is a blanket ban on truthful speech.
  • Whether it targets the problem with some precision.

Key Term: False or Misleading Commercial Speech
Commercial expression that is factually inaccurate, deceptive, or likely to confuse consumers. Such speech receives no First Amendment protection and may be prohibited entirely.

Key Term: Narrow Tailoring (Reasonable Fit)
In the commercial speech context, the requirement that a regulation not suppress substantially more speech than needed to serve the government’s substantial interest; the law must reasonably fit the problem it addresses, without being a blunt total ban unless narrower tools would not work.

Worked Example 1.1

A state enacts a law prohibiting pharmacies from advertising the prices of prescription drugs. The state asserts its interest is protecting consumers from aggressive marketing that might lead to overconsumption or unwise choices regarding medication, and maintaining professionalism among pharmacists. A pharmacy challenges the law. Is the law constitutional?

Answer:
Likely unconstitutional. Applying Central Hudson:
(1) Price advertising for legal prescription drugs is truthful commercial speech about lawful activity.
(2) The state's interests in consumer protection and professionalism may be substantial.
(3) However, a complete ban on price advertising does not clearly and directly advance the interest in preventing overconsumption (and may hinder informed choices) and significantly impedes the flow of truthful information.
(4) The complete ban is not narrowly tailored; less speech-restrictive means, like prohibiting misleading price claims or requiring disclosures, are available. A total ban on truthful price information is likely unconstitutional. (This mirrors the reasoning in Virginia State Board of Pharmacy.)

Worked Example 1.2

A state prohibits billboard advertising for lawful casino gambling, while allowing extensive on-site advertising at casinos and in newspapers. The stated interest is reducing problem gambling. Is the billboard ban likely valid?

Answer:
Probably invalid. Assume the ads are truthful and gambling is legal.
(1) The speech is protected commercial speech about lawful activity.
(2) Reducing problem gambling is a substantial interest.
(3) The state must show that banning only billboard ads directly and materially reduces harmful gambling. Allowing many other forms of promotion may undermine that claim.
(4) A selective ban on one medium, while allowing others, can be underinclusive or poorly tailored. If the law does not significantly reduce exposure to gambling promotion, it may fail both the “direct advancement” and “reasonable fit” requirements.

Unprotected Commercial Speech

The government has broad power to regulate commercial speech that is false, deceptive, misleading, or related to illegal activity. Such speech receives no First Amendment protection.

• False or Misleading Speech:
  The government may completely ban commercial speech that is false or misleading. The state's interest in preventing consumer deception is inherently substantial, and no protection is afforded to deceptive promotion.

• Inherently vs. potentially misleading:

  • Inherently misleading claims (e.g., unverifiable guarantees of success in legal cases) can be prohibited outright.
  • Potentially misleading claims (e.g., complex fee descriptions) may require disclaimers or more narrowly tailored regulation, rather than a total ban.

• Illegal Activity:
  Speech proposing an illegal transaction (e.g., advertising illegal drugs or prostitution where those activities are criminal) is unprotected and may be prohibited.

Key Term: Prior Restraint
A government action that prevents speech before it occurs (e.g., licensing or pre‑approval of advertising). Prior restraints are presumptively invalid and require clear standards and procedural safeguards.

Worked Example 1.3

A city ordinance prohibits fortune tellers from advertising their services, based on the city council's determination that fortune telling is inherently fraudulent. A fortune teller challenges the ordinance on First Amendment grounds. Is the ordinance likely constitutional?

Answer:
Likely constitutional. The city may regulate or ban commercial speech that is inherently misleading or fraudulent. If fortune telling, as practiced and advertised, is reasonably deemed inherently deceptive (promising outcomes based on claimed supernatural powers), the advertisements relate to potentially fraudulent services. Such speech falls outside First Amendment protection, and the ban will be upheld under rational basis review.

Worked Example 1.4

A state makes marijuana illegal. A company advertises “marijuana delivery—fast, discreet, and cheap.” The state bans the ad. Does the First Amendment protect the ad?

Answer:
No. The ad proposes an illegal transaction. Commercial speech concerning unlawful activity is unprotected by the First Amendment, so the ban is valid without applying the Central Hudson intermediate scrutiny framework.

Specific Applications

Professional Advertising

Advertising by professionals (e.g., lawyers, doctors, accountants) is commercial speech. Truthful advertising about professional services is protected, but states retain significant authority to regulate to prevent deception and protect clients.

Key Term: Professional Advertising
Commercial speech in which licensed professionals (such as lawyers, doctors, or accountants) advertise their services, subject to both First Amendment protection and professional regulation.

• Complete Bans:
  Complete bans on truthful professional advertising are generally unconstitutional as overly broad. For example, a blanket prohibition on lawyers advertising routine services and prices was struck down in Bates v. State Bar of Arizona.

• Misleading Advertising:
  States can prohibit inherently or actually misleading professional advertising, such as:

  • Unverifiable claims of being “the best” or “guaranteed winner.”
  • Use of trade names or specialties that confuse consumers about licensure or qualifications.
  • Claims about fees that create a false impression.

• Regulating format vs. content:
  States may impose reasonable, content-neutral limits on the manner of professional advertising (e.g., requiring identification of the responsible attorney, or limiting the use of dramatizations), so long as the rules serve a substantial interest and satisfy Central Hudson.

In-Person Solicitation

Key Term: In-Person Solicitation
Direct, face-to-face outreach by a professional (such as a lawyer) to a targeted individual to obtain business, particularly for pecuniary gain.

States may regulate or prohibit in-person solicitation by lawyers for pecuniary gain because of the risk of overreaching, coercion, and invasion of privacy.

• A ban on lawyers going to accident victims’ hospital bedsides to solicit business is generally valid.
• States have more leeway to restrict in-person, real-time solicitation than to restrict general advertising.

By contrast:

• Targeted direct-mail solicitations are commercial speech and are usually protected if truthfully describing lawful services. The state can impose reasonable restrictions—such as waiting periods before contacting accident victims—if they satisfy Central Hudson (substantial interest, direct advancement, reasonable fit).

Worked Example 1.5

A state bar rule prohibits lawyers from sending direct-mail advertisements to persons known to have been involved in a recent automobile accident for 30 days after the accident. The state cites the privacy and emotional vulnerability of recent accident victims. A lawyer challenges the rule. Is it likely constitutional?

Answer:
Likely constitutional. The mailings are commercial speech about lawful services, so apply Central Hudson.
(1) The speech is truthful and about lawful activity.
(2) Protecting privacy and preventing overreaching of recent accident victims is a substantial interest.
(3) A 30‑day cooling-off period directly advances that interest by delaying targeted solicitation during the most vulnerable period.
(4) The restriction is limited in time and method (only certain mailings for 30 days) and leaves open other advertising channels (general ads, later mailings). It is not more extensive than necessary.

Prior Restraints and Licensing

Prior restraints (government actions preventing speech before it occurs) are heavily disfavored. While theoretically possible for commercial speech (e.g., requiring pre-approval of advertising copy to ensure compliance with consumer-protection rules), they face a heavy presumption of unconstitutionality and must include procedural safeguards, such as:

• Clear, objective standards for approving or rejecting ads.
• Prompt decisions.
• Judicial review.

Licensing schemes that give officials unfettered discretion to approve or deny advertisements, or that lack clear criteria, are especially vulnerable.

Commercial Signage and Billboards

Many regulations of commercial speech arise in the context of signs and billboards.

• Content-neutral regulations (e.g., limits on size, location, illumination of all signs) are typically evaluated as time, place, and manner restrictions in public or nonpublic forums. They generally survive if they serve a significant interest (such as traffic safety or aesthetics), are narrowly tailored, and leave open alternative channels of communication.

• Content-based regulations targeting subject matter may be treated as commercial speech regulations or, in some cases, as content-based regulations of fully protected speech requiring strict scrutiny.

On the MBE, be careful not to misclassify:

• A rule banning “all tobacco product ads on outdoor signs” is a content-based regulation of commercial speech; apply Central Hudson.
• A rule banning “graphic displays of violence” on billboards is not aimed at commercial promotion as such; it is a content-based regulation of expressive content, triggering strict scrutiny.

Worked Example 1.6

A city ordinance bans all outdoor signs advertising lawful tobacco products to reduce youth smoking. Tobacco remains lawful for adults. A store challenges the ordinance. How should a court analyze it?

Answer:
The signs are truthful commercial speech about lawful activity, so the Central Hudson test applies.
(1) The speech is protected commercial speech (truthful ads for a lawful product).
(2) Reducing youth smoking is a substantial government interest.
(3) A total ban on all outdoor tobacco ads may directly advance that interest by reducing exposure, but the city must show the connection is not speculative.
(4) A blanket ban may be more extensive than necessary if less restrictive tools (limiting ads near schools, restricting certain formats) could reasonably protect minors without eliminating all outdoor ads to adults. The ordinance is vulnerable at the tailoring stage and may be struck down as not narrowly tailored.

Worked Example 1.7

A state highway administration, citing driver distraction and safety, bans “graphic displays of violence” on all electronic billboards along state roads. A movie studio is barred from showing a violent scene from its new film and sues under the First Amendment. What standard applies?

Answer:
Strict scrutiny. The rule targets a particular type of content—depictions of violence—without regard to whether the billboard is commercial or non-commercial. It is therefore a content-based regulation of expression, not a commercial speech regulation. The state must show the rule is necessary to achieve a compelling interest and is narrowly tailored. On the MBE, this scenario should not be analyzed under Central Hudson.

Compelled Disclosures in Advertising

Sometimes the government compels commercial speakers to include certain information, such as warnings or disclaimers.

Examples:

• Requiring lawyers who advertise contingent-fee services to disclose that clients may be responsible for costs.
• Requiring health warnings on cigarette packaging.
• Mandating calorie counts on restaurant menus.

Courts are more tolerant of factual, non-controversial disclosures that are reasonably related to preventing consumer deception or informing consumers.

A compelled disclosure requirement for commercial speech is generally valid if:

• It is limited to factual, non-ideological information;
• It is reasonably related to a substantial interest (often preventing deception); and
• It is not unduly burdensome.

However, compelled ideological messages or controversial viewpoints are treated as content-based regulations of non-commercial speech and trigger strict scrutiny.

Worked Example 1.8

A state requires all automobile advertisements to include a disclosure in 12-point font: “Driving at high speeds increases the risk of fatal accidents.” A car dealer challenges the rule. Is it likely valid?

Answer:
Likely valid. The rule compels factual, non-controversial information related to the safety risks of the advertised product. The state has a substantial interest in traffic safety, and requiring a short warning reasonably related to that interest is not unduly burdensome. The requirement fits comfortably within the more lenient standard for compelled factual disclosures in commercial speech.

Exam Warning

Do not confuse the intermediate scrutiny applied to truthful commercial speech with the strict scrutiny applied to most content-based regulations of non-commercial speech. Also remember:

• The government has much broader power to regulate or ban commercial speech that is false, misleading, or concerns illegal activity.
• Not every speech regulation involving an advertisement is a “commercial speech” case; some, like bans on graphic violence, are pure content regulations of expressive material.
• On professional advertising questions, recognize the distinction between:
  • General advertising (protected, subject to Central Hudson).
  • In-person solicitation for pecuniary gain (highly regulable).
• Licensing schemes or prior restraints on commercial advertising must include clear standards and safeguards to avoid unconstitutional discretion.

Summary

Commercial speech receives First Amendment protection, but less than non-commercial speech. Truthful, non-misleading commercial speech about lawful activity is subject to intermediate scrutiny under the Central Hudson test, requiring:

• That the speech concern lawful activity and not be misleading;
• A substantial government interest;
• Direct advancement of that interest; and
• Narrow tailoring, in the sense of a reasonable fit between means and ends.

False, misleading, or illegal commercial speech receives no First Amendment protection and can be banned. Regulations on professional advertising are permissible if designed to prevent deception and protect clients, but complete bans on truthful advertising are generally invalid. States may regulate in-person solicitation more aggressively due to the risk of overreaching. Prior restraints and licensing schemes on commercial speech remain suspect and require clear, objective standards.

On the MBE, once you identify commercial speech, move systematically through the Central Hudson framework and be alert to whether the speech is truthful and about lawful activity, whether the asserted interest is substantial, and whether the regulation both materially advances that interest and is not more extensive than necessary.

Key Point Checklist

This article has covered the following key knowledge points:

• Commercial speech proposes a transaction or relates to the economic interests of speaker and audience.
• It receives less First Amendment protection than political or artistic speech.
• False, misleading, or illegal commercial speech is unprotected and may be prohibited outright.
• Truthful commercial speech about lawful activity receives intermediate scrutiny via the Central Hudson test.
• Central Hudson requires: (1) Lawful/Not Misleading Speech; (2) Substantial Government Interest; (3) Direct Advancement; (4) Narrow Tailoring (reasonable fit).
• Complete bans on truthful commercial speech are often unconstitutional because they are more extensive than necessary.
• States can regulate professional advertising to prevent deception but cannot impose blanket bans on truthful ads.
• In-person solicitation by professionals can be regulated more stringently than general advertising.
• Prior restraints and licensing schemes for commercial speech are disfavored and must include clear standards and safeguards.
• Content-based regulations that target expressive content (e.g., graphic violence) are not commercial speech regulations and trigger strict scrutiny.
• Compelled factual, non-controversial disclosures in commercial ads are generally permissible if reasonably related to preventing deception and not unduly burdensome.

Key Terms and Concepts

• Commercial Speech
• Central Hudson Test
• Intermediate Scrutiny
• False or Misleading Commercial Speech
• Substantial Government Interest
• Direct Advancement
• Narrow Tailoring (Reasonable Fit)
• Prior Restraint
• Professional Advertising
• In-Person Solicitation