The Posadas Case: The Way Ahead for Vice Advertising?
- posted by Jim Leitzel @ 11:40 PM

Vice Squad has long been concerned (see, for instance, the August 26, 2004 post on Rubin v. Coors (1995)) that interpretations of the First Amendment that preclude stringent regulation of commercial advertising for legal goods will mean less freedom, not more, as the government will choose to keep vice goods (such as marijuana or heroin, for instance) illegal rather than adopt a legalization scheme that must tolerate unfettered advertising. There is one Supreme Court decision, however, that I think points a way forward for legalized vice. The decision was rendered in Posadas de Puerto Rico Associates v. Tourism Company, 478 U.S. 328 (1986). The Posadas case concerns limitations on casino advertising in Puerto Rico.

When the legislature of Puerto Rico legalized casino gambling in the late 1940s, it simultaneously prohibited advertising by the casinos directed towards residents of Puerto Rico. Advertising aimed at foreign tourists, however, was permitted. By a 5-4 majority, the US Supreme Court, employing the Central Hudson test, upheld the legitimacy of the advertising restrictions. (The advertising restrictions that were upheld were not the full set adopted by the Puerto Rican legislature, but a narrower version that had been constructed by Puerto Rican courts.) The majority opinion also argued that “the greater power to completely ban casino gambling necessarily includes the lesser power to ban advertising of casino gambling.” This commonsense notion has attracted a good deal of critical commentary (including some from later opinions by Supreme Court justices), and indeed, appears to fly in the face of the Central Hudson approach to regulating commercial speech.

In many circumstances, the existence of a “greater” power need not imply the existence of a “lesser” power. For instance, capital punishment for convicted murderers is constitutional in the United States, while the (arguably) lesser power of extreme torture is not constitutional. (That is, torture would be inconsistent with the Eighth Amendment’s protection against cruel and unusual punishments.) But in terms of vice regulation, the power (if it exists) to ban one of the traditional vices probably should include the lesser power of legalizing the vice while controlling the advertising of the vice, as the Posadas case suggests for casino gambling. A legal-sales-but- controlled-advertising regime essentially consists of an offer from the government to license sellers, conditional on their willingness to refrain from specified types of advertising. The threat not to license the vices in the absence of ad controls is quite credible, in that the traditional vices legally can be banned today, and often have been banned in the past. (And of course, many vice- related activities currently are prohibited in the US.) Such conditional offers, therefore, have a strong claim for promoting both individual liberty and speech, relative to the alternative that would arise if such licenses were not available. A conditional license to sell ketchup only in the absence of advertising cannot similarly be argued to be speech-and-liberty enhancing – a threatened ban on ketchup is neither credible nor traditional. Therefore, a Posadas-like acceptance of the constitutionality of conditional vice licenses need not imply that the government can more generally confer benefits only if speech rights are waived. (On this point in particular, though also for this post more generally, I am indebted to Mitchell N. Berman, “Commercial Speech and the Unconstitutional Conditions Doctrine: A Second Look at ‘The Greater Includes the Lesser.’” Vanderbilt Law Review 55(3): 693-796, April 2002; the working paper version can be found here.) The traditional vices have proven their exceptionalism from most other types of consumer goods and services over centuries, and it is appropriate that the legal regime recognize that exceptional history.

Labels: casino, marketing, Supreme Court