PERMISSIBLE BURDEN OR CONSTITUTIONAL VIOLATION?
A FIRST
AMENDMENT ANALYSIS OF CONGRESS'
PROPOSED REMOVAL OF TAX DEDUCTIBILITY
FROM
TOBACCO ADVERTISEMENTS
Louis J. Virelli III[*]
I. INTRODUCTION
The medical problems associated with smoking in
the United States have reached epidemic proportions.[1] Cigarettes are the nation's leading preventable cause of death
and have given rise to the "most important public health issue of our time."[2] Despite the serious health risks inherent in smoking, however,
it is on the rise among the nation's young people.[3] This increase is largely attributed to advertising, which has
been an effective means for the tobacco industry to maintain its customer base
and to recruit new smokers.[4] Because of their power to promote smoking, tobacco ads provide
an opportunity for the government to effectively combat this national health
epidemic.
The Internal Revenue Code allows companies to
deduct all of their advertising costs as business expenses.[5] This provision is particularly beneficial to tobacco
companies, who in 1998 spent $4.6 billion on advertising.[6] In order to mitigate the detrimental effects of tobacco ads,
the Harkin Amendment--which decreased permissible deductions for tobacco ads to
50% of their total cost[7]--was introduced in the Senate in 1993.[8] Because the Harkin Amendment was defeated, however, its
constitutionality was never formally examined.
In 2000,
Congress is again considering a limitation on the tax deductible status of
tobacco advertisements, this time in the form of a complete removal of such
status (hereinafter "Proposal").[9] Despite the recent settlement of forty-six states' claims
against the tobacco industry, lawmakers continue to stress the importance of
adopting federal anti-smoking legislation.[10] Indeed, the states' success in forcing tobacco companies to
assume financial responsibility for tobacco-related health problems has fostered
a political climate more conducive to such legislation. Congress' Proposal is a
timely effort to build on the modest but significant achievement of the recent
tobacco settlement and to curb tobacco use in the United States through federal
regulation.
On November 20, 1998, forty-six states
accepted a settlement agreement with four of the nation's five largest tobacco
companies.[11] The settlement prevents the states from bringing suit to
recover Medicaid money spent treating smoking-related illnesses and grants the
states a total of $206 billion over the next twenty-five years.[12] The settlement eliminates tobacco advertisements on
billboards and mass transit, and limits tobacco companies to one brand-name
sponsorship per year, provided the event "does not involve a sports team, have
paid participants who are underage or cater to a young audience."[13] The settlement also requires tobacco companies to contribute
$1.45 billion over the next five years to national anti-smoking campaigns.[14] The deal does not, however, limit
print, in-store, or combination advertising,[15] and was described as weak by former Surgeon General Dr. C.
Everett Koop.[16] Many opponents of the settlement, including former Food and
Drug Administration commissioner David Kessler, have criticized the agreement
for being too lenient on the tobacco industry.[17] In addition to some of the settlement's substantive
inadequacies, many of its critics are also concerned that its presence will
deter what they consider to be badly needed federal legislative treatment of the
tobacco epidemic.[18] President Clinton noted that "only the national government
can take the full range of steps needed to protect our children from the dangers
of tobacco."[19]
In light of the building consensus
concerning the need for strong federal anti-smoking initiatives, the question of
whether and to what degree the First Amendment permits the federal government to
legislate against tobacco advertising becomes more important. As the number of
young American smokers continues to increase,[20] the call for federal legislation limiting tobacco is likely
to grow stronger. The constitutionality of restrictions on advertising and other
forms of tobacco-related commercial speech are bound to come to the forefront of
First Amendment jurisprudence.[21]
Although critics of the Proposal
maintain that it violates tobacco companies' right to free speech, this Comment
argues that Congress' Proposal to remove tax deductible status from tobacco
advertisements is an effective, constitutional means of combating a dangerous
national epidemic.
Tobacco companies and their supporters
object to Congress' Proposal on the ground that it violates the companies' First
Amendment right to freedom of speech.[22] Specifically, opponents claim that the Proposal is
unconstitutional in two ways. First, they maintain that it violates the First
Amendment's protection of commercial speech that has "evolved over the past
quarter century."[23] Second, they claim that the Proposal fails to provide this
speech with the "protection from government taxation or regulation" that they
insist is integral to free speech principles.[24] Proponents of the Proposal, however, contend that the
restriction will be an effective means of curtailing tobacco advertisements and
will therefore help reduce smoking.[25] They insist that the removal of tax deductibility is
constitutional because it satisfies the Court's test for evaluating regulations
of commercial speech[26] and because it is a constitutionally permissible use of the
government's taxing power to burden such speech.[27]
This Comment evaluates Congress'
Proposal in light of this constitutional debate. Part II traces the development
of commercial speech doctrine, outlining the current state of the doctrine as it
pertains to advertisements, particularly those for tobacco products. Part III
evaluates Congress' Proposal in light of modern commercial speech doctrine and
demonstrates that the Proposal does not violate the controlling test for
commercial speech regulation established in Central Hudson Gas & Electric
Corp. v. Public Service Commission.[28] More specifically, this Part addresses the Proposal's
constitutionality with respect to two different "substantial government
interests" and determines that the government interest in reducing smoking does
not pass the Central Hudson test as clearly as an expressive government
interest in condemning the tobacco industry's irresponsible business practices.
Part IV considers taxation under the First Amendment, concluding that the
current Proposal is not restricted by either free speech principles or Supreme
Court precedent prohibiting the taxation of speech. Congress' Proposal
represents a creative and constitutionally permissible device for diluting the
tobacco industry's most effective means of promoting its products. It should
therefore be upheld as a constitutionally permissible regulation of commercial
speech and an appropriate use of Congress' taxing power.
II. THE DEVELOPMENT OF COMMERCIAL SPEECH DOCTRINE
The nation's Founders considered free speech a
critical and defining characteristic of the new government, as evidenced in the
First Amendment to the Constitution, which states that "Congress shall make no
law . . . abridging the freedom of
speech . . . ."[29] Since the adoption of the First Amendment, philosophers have
echoed the Founders' sentiment that the freedom to express one's views and
engage in open political and social debate is a cornerstone of American
democracy.[30]
A. The History of Commercial Speech in the Supreme
Court
The Supreme Court has established varying
degrees of protection for different categories of speech. Political speech, for
example, has been afforded the strongest First Amendment protection, while other
forms of speech, including commercial speech, have been denied such
protection.[31] After initially denying First Amendment protection to
commercial speech, however, the Court later distinguished forms of speech that
were not wholly commercial in nature,[32] ultimately recognizing that even purely commercial speech
merits some First Amendment protection.[33] In Central Hudson, the Court developed a four-part
test that remains the controlling standard for determining the constitutionality
of commercial speech regulations.[34] The validity of Congress' proposed removal of tax
deductibility from tobacco ads depends on its surviving the Central
Hudson test, an analysis that first requires an understanding of the
development of modern commercial speech doctrine.
1. Commercial Versus Noncommercial Speech
The justification and scope of commercial
speech doctrine depend on the validity of the distinction between commercial and
noncommercial speech. As an initial matter, the text of the First Amendment does
not distinguish between the two forms of expression, indicating that the Framers
did not consider them separately.[35] Critics of commercial speech doctrine have accordingly
characterized the Court's eventual distinction as "an artificial one,"[36] arguing that First Amendment protection should be granted
equally to commercial and noncommercial speech.[37]
Despite the absence of a textual
distinction between commercial and noncommercial speech, the historical
circumstances surrounding the adoption of the First Amendment indicate that
commercial speech was not the focus of the Framers' concern. In light of
Madison's observation that the First Amendment is "the essential difference
between the British Government and the American Constitutions,"[38] the Amendment seems to reflect the Colonists' adverse
reaction to their lack of political influence over Britain before the
Revolution, suggesting that the amendment's primary purpose was to protect an
individual's freedom to engage in open political discourse.[39] According to Alexander Meiklejohn, "[a]s the self-governing
community seeks, by method of voting, to gain wisdom in action, it can find it
only in the minds of its individual citizens . . . . That is
why freedom of discussion for those minds may not be abridged."[40] Note that both of these commentaries focus solely on the
protection of political speech. In the absence of evidence that the Framers also
considered commercial speech, there is little historical basis for reading the
First Amendment to include commercial speech protection.
In addition to the historical argument, there is also a practical distinction
between commercial and noncommercial, or political, speech.[41] An individual's right to conduct business as he or she
pleases has long been a source of legislative restrictions.[42] Moreover, there are different social costs associated with
the regulation of commercial and noncommercial speech: governmental restrictions
on political speech are potentially more dangerous to the national welfare and
identity than are limitations on commercial speech.[43] These differences support evaluating government regulations
of commercial and noncommercial speech differently.
Finally, Martin Redish has offered a three-part justification that combines
elements of various justificatory theories for the differential protection of
commercial and noncommercial speech.[44] Redish maintains that commercial speech regulation is less
problematic with respect to First Amendment principles because (1) "commercial
speech does not foster First Amendment values in the same manner as do more
traditional categories of expression;" (2) "commercial speech gives rise to
regulatory problems not presented by other types of expression;" and (3)
"commercial speech is less vulnerable to improper or abusive regulatory
pressures than are other forms of expression."[45] Redish's third point captures the Court's reasoning in
Virginia State Board of Pharmacy v. Virginia Citizens' Consumer
Council,[46] where the Court distinguished commercial speech as hardier
than noncommercial speech and therefore better able to withstand government
regulation.[47] These historical, practical, and precedential justifications
for treating commercial and noncommercial speech differently are reflected in
modern commercial speech doctrine.[48]
2. Is Commercial Speech Worthy of First Amendment
Protection?
Since determining that commercial speech is
distinct from noncommercial speech, the Court has struggled to identify an
appropriate constitutional standard for evaluating commercial speech
regulations. Initially, the Court provided no constitutional protection
whatsoever for commercial speech. In Valentine v. Chrestensen,[49] a submarine owner distributed advertising fliers in
violation of a sanitation code ordinance prohibiting public dissemination of
commercial handbills. Although the opposite side of the fliers contained a
noncommercial protest statement against the New York City Dock Department, the
Court denied the advertisements First Amendment protection because it determined
that the only reason for the inclusion of the political speech was to circumvent
the ordinance.[50] In denying First Amendment protection for the handbills, the
Court focused not on the expressive interests of the speaker, as in cases
involving political speech, but on the value of the information to its intended
audience.[51] This focus is consistent throughout the Court's development
of its commercial speech doctrine and distinguishes it from standard First
Amendment analysis.
The importance of commercial speech's
value to its audience was emphasized in New York Times Co. v. Sullivan,[52] a case in which the City Commissioner of Montgomery, Alabama
claimed that he had been libeled by an advertisement in the New York
Times.[53] The Court held that the advertisement, which was primarily
political in content, was noncommercial, despite the fact that it had been
purchased from the Times.[54] The Court protected the ad without specifically overruling
Valentine, focusing on the value of the political content of the
advertisement--which was sufficient to justify protecting the speech under the
First Amendment--rather than on the commercial content of the speech.[55]
The Court first extended First
Amendment protection to purely commercial speech in Bigelow v.
Virginia.[56] In analyzing an ad for abortions, the Court justified some
constitutional protection for commercial speech, determining that "[t]he
relationship of speech to the marketplace of products or of services does not
make it valueless in the marketplace of ideas."[57] Specifically, the Court focused on the value of the
information in the advertisement and determined that it was worthy of First
Amendment protection despite its commercial qualities.[58] Bigelow did not, however, explicitly overrule
Valentine.[59] The Court instead distinguished Valentine and
justified protecting commercial speech on the grounds that the audience had a
right to the specific information in the advertisement.
3. Commercial Speech Is Worthy of First Amendment
Protection
A year after Bigelow, the Court in
Virginia State Board of Pharmacy recognized a common-sense difference
between commercial and noncommercial speech[60] and adapted its holding in Valentine, stating that
"in some circumstances speech of an entirely private and economic character
enjoys the protection of the First Amendment."[61] The Court granted commercial speech some constitutional
protection because it determined that the listener has a First Amendment right
to receive commercial as well as political information;[62] it retained the distinction between commercial and
noncommercial speech, however, determining that commercial speech is more
objective and durable than noncommercial speech and is therefore less likely to
be silenced by regulation.[63]
After Virginia Board, the Court
used the distinction between commercial and noncommercial speech to deny
commercial speech First Amendment protection in a variety of contexts.
Recognizing that commercial speech is incidental to commercial activity,[64] the Court determined that, since commercial activity
is subject to regulation, commercial speech should likewise be subject to
governmental restrictions.[65] The Court did not, however, entirely abandon consideration
of the value of commercial speech to its audience. In Bates v. State Bar of
Arizona,[66] the Court struck down as overbroad a restriction on attorney
advertising, despite findings that the advertising at issue was inherently
misleading,[67] because the value of the information to the consumer was
seen to outweigh the potential social damage from misleading advertising.[68]
Although by 1979 the Court had
established that commercial speech was generally worthy of at least some First
Amendment protection, it was unable to establish clear and consistent standards
for determining when and to what extent protection should be granted. The
uncertainty of these standards led to the development of the four-part test
articulated in Central Hudson Gas & Electric Corp. v. Public Service
Commission[69] to determine the constitutionality of commercial speech
regulations.
4. The Central Hudson Test
In Central Hudson, the Court struck down
a statute prohibiting advertising and other promotional activities designed to
increase electricity consumption.[70] The Court followed precedent establishing that commercial
speech is deserving of something less than the full First Amendment protection
afforded noncommercial speech[71] and developed a four-part test to evaluate the
constitutionality of commercial speech regulations.[72] The test stated that regulation of (1) non-misleading,
legal, commercial speech requires (2) a substantial government interest; if such
an interest exists, the regulation must (3) directly advance that government
interest, and (4) be no more extensive than necessary to serve that interest.[73]
The Central Hudson test has
been interpreted in various ways. In Posadas de Puerto Rico Associates v.
Tourism Co. of Puerto Rico,[74] the Court considered a First Amendment challenge to a
regulation banning gambling advertisements aimed at Puerto Rican residents.[75] After establishing that the advertisements were neither
illegal nor misleading,[76] the Court deferred to Congress' judgment, applying a
reasonableness test and finding that the statute satisfied the fourth prong of
the Central Hudson test.[77] The Court reasoned that because Congress has the power to
ban gambling altogether, it must also be able to take the less drastic measure
of banning gambling advertisements.[78]
The Central Hudson test was
reinterpreted in 44 Liquormart, Inc. v. Rhode Island,[79] which involved a First Amendment challenge to a Rhode Island
statute banning alcohol price advertisements.[80] Writing for a plurality,[81] Justice Stevens explained that neither the common sense
distinction between commercial and noncommercial speech nor the increased
durability of commercial information could justify the deferential standard of
review applied in Posadas.[82] According to Stevens, a complete ban on alcohol
advertising could be justified only by "strong evidence" that the ban would
substantially advance the government's interest in promoting temperance.[83] Stevens thus called for a "more stringent constitutional
review . . . appropriate for the complete suppression of
truthful, nonmisleading commercial speech."[84] The plurality rejected the greater-includes-the-lesser logic
from Posadas[85] and determined that the regulation was not a "reasonable
fit" with the government's interest under Central Hudson's fourth
prong.[86] The plurality's opinion in 44 Liquormart, however,
was only one of many opinions in the case and created considerable confusion
about the future application of Central Hudson.[87]
The Court alleviated some of the
confusion created by 44 Liquormart in Greater New Orleans Broadcasting
Ass'n v. United States,[88] which reconciled a split in the lower courts[89] concerning the constitutionality of 18 U.S.C. § 1304, a
statute that "prohibit[ed] radio and television
broadcasting . . . of `any advertisement of . . .
any lottery, gift enterprise, or similar scheme, offering prizes dependent in
whole or in part upon lot or chance . . . .'"[90] In a per curiam decision, the Court applied the Central
Hudson test and found the statute too broad and riddled with exceptions to
pass First Amendment scrutiny. Section 1304, according to the Court, did not
directly or materially advance the government's interest in curtailing
gambling,[91] nor was it a reasonable fit with that goal.[92] Adopting a stricter, less deferential standard of review
than that employed in Posadas, the Court in Greater New Orleans
Broadcasting invalidated § 1304 as a violation of the First Amendment and
helped clarify the scope of the Central Hudson test after 44
Liquormart.[93]
Greater New Orleans
Broadcasting did not diminish the importance of Central Hudson in
evaluating commercial speech regulations. While it implied a stricter standard
for reviewing commercial speech restrictions than Central Hudson,
Greater New Orleans Broadcasting spoke specifically to a broad statute
laden with exceptions and internal contradictions.[94] Statutes that are narrower or free from such contradictions
remain subject to the Central Hudson test as interpreted before
Greater New Orleans Broadcasting, particularly the third and fourth
prongs of the test-the most closely and frequently analyzed by the Court in
determining the constitutionality of commercial speech
regulations.
B. Application of Central Hudson's Third and Fourth
Prongs
1. Central Hudson's "Materially Advance"
Standard
The third prong of the Central Hudson
test originally required that, in order to pass First Amendment review, a
regulation must "directly advance" a substantial government interest.[95] In the first cases to apply Central Hudson, however,
the original language was interpreted to articulate a reasonableness test for
determining the validity of commercial speech regulations.[96] In Metromedia, Inc. v. San Diego,[97] for example, the Court deferred to local lawmakers'
determination that a ban on billboard advertising would enhance traffic safety,
upholding the statute on the basis that "[t]here is nothing [in the statute] to
suggest that these [lawmakers'] judgments are unreasonable."[98] This deferential standard was echoed in Posadas[99] and welcomed by scholarly commentators.[100]
The Court has recently begun to
retract the Posadas standard, however, in favor of demanding a closer
relationship between a challenged regulation and an asserted government
interest. In Edenfield v. Fane,[101] a statute forbidding in-person solicitation by accountants
was struck down because the government did not prove on the record that the
prohibition "materially advance[d]" the government's interest in protecting
accountants' professional integrity.[102] The Court found that purely prophylactic rules, that is,
rules that fail the "materially advance" standard, are only appropriate where
commercial speech is likely to mislead.[103]
Despite the Court's apparent desire,
evidenced in Edenfield and 44 Liquormart,[104] to scrutinize commercial speech regulations more
carefully, it distinguished advertising restrictions from other commercial
speech regulations in United States v. Edge Broadcasting Co.,[105] observing that "the Government may be said to advance its
purpose [of reducing gambling] by substantially reducing lottery advertising,
even where it [the advertising] is not wholly eradicated."[106] Notwithstanding Edenfield's finding that purely
prophylactic rules do not satisfy Central Hudson's third prong, Edge
Broadcasting found that restricting gambling ads directly affects demand,
thereby materially advancing the government's interest in reducing gambling.
Edge Broadcasting thus represented an exception to the strict
review promoted in Edenfield and 44 Liquormart for the evaluation
of advertisements for socially disfavored activities.
After establishing that advertising regulations are sometimes due more deference
under Central Hudson, the Court tightened its scrutiny of statutes whose
enforcement was deemed suspect under Edenfield's material advancement
standard. In Rubin v. Coors Brewing Co.,[107] the Court determined that a ban on the inclusion of
alcohol content on beer labels did not materially advance the government
interest in frustrating strength wars among breweries because the statute was
replete with exceptions and internal contradictions.[108] In Rubin, and again in Greater New Orleans
Broadcasting,[109] the Court implied that not only must a regulation be aimed
at a substantial government interest in order to be considered constitutional,
it must also have some probability of achieving that interest.[110] Such statements represent a significant departure from the
"reasonableness" standard of Metromedia and
Posadas.
The combined effect of Edge
Broadcasting, Edenfield, and Rubin suggests that, while a
regulation designed to restrict advertising for a socially disfavored activity
will receive a more lenient standard of review, a regulation rife with
exceptions and internal contradictions will be invalidated under Central
Hudson's "materially advance" standard.
2. Central Hudson's Fourth
Prong
The fourth prong of Central Hudson was
dramatically altered by the Court's decision in Board of Trustees of the
State University of New York v. Fox.[111] The Court in Fox interpreted Central
Hudson's "not more extensive than is necessary" language to require "a fit
[between the regulation and the interest it purports to serve] that is not
necessarily perfect, but reasonable; that represents not necessarily the single
best disposition but one whose scope is `in proportion to the interest
served.'"[112]
Fox's deferential standard of
review was challenged in City of Cincinnati v. Discovery Network,[113] where the Court struck down a city ban on newsracks
displaying particular publications. The ban was adopted on the premise of
improving the aesthetics and safety of city sidewalks, but was struck down as an
unreasonable means of achieving the City's stated goals. In a very narrow
holding, the Court determined that "the fact that the regulation `provided only
the most limited incremental support for the interest asserted,' that it
achieved only a `marginal degree of protection' for that interest--supported
[the Court's] holding that the prohibition was invalid."[114] The Court invalidated the regulation because it bore
virtually no relation to the asserted government interest, raising doubts about
whether mere reasonableness would be sufficient to satisfy Central
Hudson's fourth prong.[115]
The reasonable fit standard of
Fox was reaffirmed, however, in Florida Bar v. Went For It, Inc.[116] The Court in Florida Bar upheld a statute banning
attorneys from participating in direct mail solicitation of accident victims.
Despite the harsh implications for commercial speech inherent in a regulatory
ban, the Court nonetheless found that the statute was a reasonable fit with the
state's interest in protecting accident victims from unnecessary stress and
invasions of privacy, noting that it had "made clear that the `least restrictive
means' test has no role in the commercial speech context."[117] Although seemingly just a reaffirmation of established
doctrine, Florida Bar proved significant to the future of regulatory
limitations on commercial speech. While the Court in 44 Liquormart seemed
inclined to alter the reasonable fit test to mirror something like a more
stringent "least restrictive means" test,[118] Florida Bar's clear support for a reasonable fit
standard for regulatory bans on speech forces the Court to maintain at least the
principle of deference to the legislature.
Lower court
decisions since 44 Liquormart have emphasized the importance of the
distinction between legislative bans and mere restrictions on
commercial speech under the fourth prong of Central Hudson. Lower courts
have adopted an even more deferential standard than the one applied in
Fox for determining whether a reasonable fit exists between a regulation
and a substantial government interest, upholding various statutes imposing
restrictions on alcohol and tobacco advertisements.[119] The restrictions were found to be a reasonable fit under
Central Hudson because they limited advertisements geographically,
primarily to areas where children were unlikely to see them, and, unlike the ban
on commercial speech in 44 Liquormart, did not interfere with the
exchange of important information.[120] The circuit courts distinguished 44 Liquormart and
refrained from applying strict First Amendment scrutiny to the challenged
regulations because they were restrictions rather than bans on commercial
speech.[121]
Central Hudson's fourth prong
has not changed significantly since Fox, but has yet to be applied to a
restriction such as that suggested in Congress' anti-tax deduction
Proposal.
III. THE ANTI-TAX DEDUCTION PROPOSAL UNDER CENTRAL
HUDSON
Congress' Proposal to withdraw tax-deductible
status from tobacco advertisements comports with constitutional standards for
permitting commercial speech restrictions. To the extent that tobacco ads are
misleading, they may be ineligible for First Amendment protection.[122] Alternatively, even if tobacco ads are not misleading,
Congress' Proposal still satisfies the Central Hudson test for evaluating
the constitutionality of regulations aimed at nonmisleading commercial speech.[123]
The Court has consistently treated
advertising as purely commercial speech[124] and has recognized as substantial the government's
interest in protecting the health, safety, and welfare of its citizens.[125] Congress' proposed advertising restriction "materially
advances" this interest by frustrating the activity being advertised[126] and represents a "reasonable fit" with the government's
interest in combating smoking.[127] Moreover, because the Proposal is a restriction rather
than a ban on commercial speech, it is a rational means of achieving the
government's desired ends.[128] Finally, even if Congress' Proposal fails to satisfy the
Central Hudson test with respect to the government's interest in
discouraging smoking, however, it can nonetheless survive First Amendment
scrutiny by asserting a different government interest--an expressive interest in
publicly condemning tobacco companies' irresponsible marketing practices. With
this substantial government interest as its goal, the Proposal is likely to meet
even the strictest standards of review under Central Hudson and therefore
be upheld under the First Amendment.
A. Tobacco Advertisements Are Misleading
The Court has clearly stated that misleading
advertising is not protected in the same way as non-misleading commercial
speech.[129] Deceitful information frustrates the First Amendment's
purpose of encouraging open discourse, and may even do affirmative damage to
consumers who rely on such information to make economic decisions.[130] Tobacco advertisements, such as those regulated by the
Congress' Proposal, are frequently misleading forms of communication and
therefore have little claim to First Amendment protection under Central
Hudson. For example, tobacco ads portray smoking as a glamorous and athletic
pursuit, without adequately representing the extreme danger inherent in tobacco
consumption. In a recent issue of a national magazine, an advertisement for a
popular brand of cigarettes depicted three rodeo cowboys posing for what
appeared to be a post-contest victory picture.[131] The ad unfolded to reveal another cowboy riding a bucking
bronco above the caption "just warming up."[132] The mandatory Surgeon General's Warning in the bottom
corner of the ad simply stated that "Cigarette Smoke Contains Carbon
Monoxide."[133] As a result of this advertisement, a consumer who is not
aware of the medical effects of carbon monoxide on the body remains uninformed
as to the true consequences of using cigarettes, and is left with the impression
that smoking is associated with a daring and exciting lifestyle. Similarly, an
ad for a different brand of cigarettes promotes "Mighty Tasty Lifestyles."[134] The Surgeon General's Warning in the corner of this ad
indicated that "Quitting Smoking Now Greatly Reduces Serious Risks to Your
Health."[135] This warning is also insufficient to convey the actual
risks of smoking to the consumer, downplaying smoking's dangers and allowing it
to be falsely associated with a glamorous lifestyle.
These
examples represent the dominant trend in tobacco advertisements: a denial of the
unquestionably dangerous and addictive nature of tobacco in hopes of appealing
to adults and young children to begin smoking in pursuit of a more exciting and
glamorous life. [136] The warnings required by law are woefully deficient
representations of the dangers of smoking: they neglect to inform an often
misguided smoking public about the probable negative consequences of their
actions.[137] Tobacco advertisements, because of their failure to
communicate accurate information to their audience, are not worthy of First
Amendment protection under the Central Hudson test.[138] They are of low informational value because they are
typically misleading.[139]
Despite evidence that tobacco ads
are misleading, denying First Amendment protection to such ads could serve as a
dangerous precedent justifying the denial of First Amendment protection for
other forms of socially disfavored speech. In the case of tobacco advertising,
however, the government's strong interests in regulating tobacco ads provide
additional support for the constitutionality of such regulations.[140]
B. Tobacco Advertisements Are Commercial SpeechUnder
Central Hudson
Advertisements are a classic example of
commercial speech, and the tobacco ads regulated by Congress' Proposal are no
exception. In Central Hudson, which involved the prohibition of
advertisements for public utilities, the Court defined commercial speech as
"expression related solely to the economic interests of the speaker and its
audience."[141] In Bolger v. Youngs Drug Products Corp.,[142] which involved a ban on unsolicited contraceptive ads, the
Court defined commercial speech as communication that "does `no more than
propose a commercial transaction.'"[143] Other ways to distinguish commercial speech have also been
developed, defining speech as noncommercial when the speaker "comes as close as
reasonably and inexpensively possible under the circumstances to presenting it
as noncommercial."[144] Despite these various definitions of commercial speech,
advertisements have remained the paradigmatic example of commercial discourse
under the First Amendment.[145] In particular, tobacco and alcohol ads have been
uncontroversially treated as commercial speech in many recent Supreme Court and
circuit court cases.[146] As a result, the tobacco advertisements targeted by
Congress' Proposal are properly defined as commercial speech.
C. Congress' Proposal Under Central Hudson's Means/Ends Analysis
A commercial speech regulation must address
a "substantial government interest" in order to pass First Amendment scrutiny.[147] It is widely accepted that the government has "a
compelling interest in trying to reduce smoking,"[148] as tobacco use can be directly connected to a wide variety
of both medical and non-medical life risks,[149] and that advertising contributes to the negative impact of
tobacco by playing a significant role in the recruitment of new smokers, many of
whom are children or young adults.[150] The limitations of current non-legislative attempts to
curb smoking further support Congress' "substantial interest" in adopting
legislation to combat this epidemic.[151]
In order to survive constitutional
scrutiny, however, Congress' Proposal must do more than invoke a worthy cause.
The First Amendment requires that a commercial speech regulation both materially
advance and be a reasonable fit with whatever substantial government interest it
is meant to address.[152] Congress' Proposal satisfies these criteria with respect
to two distinct government interests: (1) discouraging people from smoking to
promote public health; and (2) expressing governmental disdain for tobacco
companies' unethical business practices.
1. The Government's Interest in Promoting Public
Health
There are a number of substantial
smoking-related interests that the government may promote by removing tax
deductibility from tobacco advertisements. The most obvious of these is
"protecting the health, safety, and welfare of [American] citizens" by
discouraging tobacco advertising and thereby curbing smoking nationally.[153] These interests were found to satisfy the Central
Hudson test in Posadas,[154] and were again recognized as valid in 44
Liquormart[155] and Greater New Orleans Broadcasting.[156] The constitutionality of Congress' Proposal, therefore,
can be evaluated by applying the third and fourth prongs of Central
Hudson to the government's interest in promoting the health and welfare of
its citizens.
a. The Proposal Materially Advances the Government's Interest in Promoting Public Health
Central Hudson's third prong
requires that a commercial speech regulation "materially advance" an asserted
government interest. Congress' Proposal removes the tax deductible status from
tobacco ads in order to reduce tobacco advertising, and, in turn, tobacco
consumption. Edge Broadcasting recognized that a connection between
advertising and consumption is sufficient to satisfy the third prong of
Central Hudson, concluding that the government was able to "materially
advance" its interest in reducing gambling by reducing lottery advertising.
Similarly, burdening tobacco ads by eliminating their tax-deductibility will
"materially advance" the government's interest in reducing smoking.[157] Moreover, because Congress' Proposal does not contain any
of the internal contradictions that proved fatal to the regulation in
Rubin, enforcement of the Proposal will be uniform and consistent with
regard to all tobacco advertisements. In short, the Proposal satisfies the
material advancement standard because of its effectiveness in discouraging
smoking.
b. Reasonable Fit
In order for a regulation to pass the fourth
prong of Central Hudson, it must also be a "reasonable fit" with the
asserted government interest. The Court recently reaffirmed this deferential
standard of review in Greater New Orleans Broadcasting, but has yet to
articulate the appropriate application of Central Hudson's fourth prong
with respect to regulations that are mere restrictions, rather than complete
bans, on commercial speech.[158]
Florida Bar provided some insight into how
commercial speech restrictions would fare under Central Hudson. The Court
employed a lenient standard for evaluating the constitutionality of bans on
commercial speech and thus implied that a similar or even more deferential
standard should be applied to mere restrictions which do not jeopardize a
speaker's rights as significantly as outright bans. As a result, such
restrictions are more likely to satisfy the Central Hudson test.[159]
Some lower courts have emphasized
the importance of this restriction/ban distinction in their treatment of
commercial speech regulations. While they generally apply a very strict standard
of review, making it nearly impossible for a ban on commercial speech to satisfy
either the third or fourth prong of Central Hudson, lower courts have
tended to defer to legislatures in determining the constitutionality of
commercial speech restrictions.[160] The relaxed standard of review applied to speech
restrictions by many federal courts suggests that Congress' tax-deduction
Proposal will not be subject to the more rigorous standard applied to
advertising bans such as those in Florida Bar and 44 Liquormart.[161]
To an important degree, the
viability of Congress' Proposal--justified in terms of the goal of reducing
smoking--depends upon the resolution of this ban/restriction issue. The question
of whether a commercial speech regulation is a reasonable fit with such an
interest is generally a factual one, and the degree of deference afforded to the
legislature can often be determinative of the regulation's constitutionality.[162] In this climate of uncertainty, it is appropriate to
evaluate Congress' Proposal with respect to the government's second interest in
removing the tax-deductible status of tobacco advertising: publicly condemning
tobacco companies' irresponsible business practices.
2. The Government's Expressive Interest
The government has a substantial interest in
condemning tobacco companies' irresponsible and deceitful business practices.[163] Cigarette manufacturers contribute to the serious health
risks and social costs of smoking by irresponsibly producing misleading and
uninformative advertising campaigns designed to attract new smokers and
encourage current smokers to continue.[164] Congress' Proposal, by imposing a substantial financial
burden on tobacco advertising, expresses the government's disapproval of tobacco
marketing methods and provides a strong incentive for cigarette manufacturers to
amend their business practices.
A government interest in
condemning tobacco advertisements by removing their tax deductibility satisfies
the "substantial interest" prong of Central Hudson by effectively
addressing a serious social problem in a way that benefits the nation as a
whole.[165] This expressive government interest is not in the
suppression of commercial speech per se, but in the apportionment of government
funds in a way that symbolizes government concern with the dangers of smoking
and with the national welfare.
Congress' anti-tax
deduction Proposal embodies Congress' condemnation of tobacco companies'
irresponsible business practices.[166] The government's condemnation represents a substantial
expressive interest under Central Hudson because it targets "the
marketing practices or commercial speech or conduct that . . .
government is reasonably justified in considering risky or socially
irresponsible, in the sense of marketing that may involve frequent, extremely
serious--if undemonstrable--harms with no proportionate social benefit."[167] The social harms which result from smoking clearly
represent "frequent, extremely serious . . . harms with no
proportionate social benefit."[168] Smoking is the nation's leading preventable cause of
death;[169] it is responsible for causing a wide variety of
potentially fatal illnesses[170] and is the leading cause of civilian fire deaths in the
United States.[171] Cigarette manufacturers are implicated in smoking's social
harms because of their deceptive advertising and under-inclusive warnings to
consumers.[172] Congress is justified in considering tobacco companies'
misrepresentations socially irresponsible and, therefore, an appropriate target
of expressive legislation;[173] the product is extremely harmful and the potential
benefits of consumer education about tobacco substantial. In short, the social
dangers of smoking are sufficient to justify a substantial government interest
in declining to fund the irresponsible acts of the tobacco industry in promoting
their harmful product.
A potential problem arises,
however, with the recognition of expressive interests under Central
Hudson. Simply intending to condemn a particular form of speech could
justify regulations beyond the scope of what the Court has established as
appropriate limits on commercial speech. For example, in the interest of
condemning excessive television watching by children, Congress may want to ban
television advertisements directed at minors. While the passage of this
regulation would clearly express the government's desire that kids watch less
television, it offends the intuition that speech should not be silenced by
government intervention; merely claiming such an expressive interest should not
be sufficient to justify such a harsh regulation.
Finding
an expressive governmental interest in regulating commercial speech, however,
does not necessarily create a slippery slope toward government censorship of
such speech. Although it may seem easier for a regulation motivated by an
expressive governmental interest to overcome the Central Hudson
requirement that the government have a substantial interest in limiting speech,
such a regulation must still satisfy the two remaining Central Hudson
prongs in order to pass constitutional muster. A regulation that is overly
restrictive or unreasonably tailored to achieve an expressive interest will fail
to pass First Amendment scrutiny under Central Hudson regardless of the
expressive interest the government claims as its
justification.
The Court's evaluation of the statute in
44 Liquormart--banning all alcohol price ads appearing outside of liquor
stores--perfectly illustrates the vitality of Central Hudson regardless
of the character of the governmental interest at issue. The Court struck down
the ban on alcohol ads because it was not a reasonable fit with the government's
interest in decreasing alcohol consumption. This result would be the same even
if the government had relied on an expressive interest in condemning drinking to
justify the regulation. The complete ban on commercial speech in 44
Liquormart is not a reasonable means of expressing disdain for a particular
activity or social practice because it unduly burdens speech under the First
Amendment. Therefore, while partial restrictions on commercial speech, such as
Congress' anti-tax deduction Proposal, may be a constitutional means of
achieving an expressive government interest, more intrusive statutes, such as
the advertising ban at issue in 44 Liquormart, will be invalidated
because they cannot satisfy Central Hudson's reasonable fit
requirement.
Consideration of the government's expressive
interest in removing tax deductibility from tobacco ads does not dramatically
alter the Court's commercial speech doctrine or pave the way for complete
governmental control over commercial speech. Recognizing the expressive interest
inherent in Congress' Proposal simply shifts more
emphasis to the third and fourth prongs of Central Hudson in evaluating
the Proposal's constitutionality.
a. The Proposal Materially Advances the Government's Interest in
Condemning the Tobacco Industry
The inherent differences in evaluating
expressive government interests under the Central Hudson test render much
of the Court's interpretation of the material advancement prong of that test
inapplicable to Congress' Proposal. For example, the Court in Edenfield v.
Fane[174] overturned a statute because the government could not
prove "on the record" that banning commercial speech in that case would
materially advance the asserted government interest.[175] This standard is not applicable to the Proposal's
expressive government interest, however, because there is no way to prove on
the record whether Congress' Proposal successfully expresses the
government's message, or whether a sufficient number of people understand it.
Proof that an expressive interest is actually furthered is too elusive to
provide a means of deciding a regulation's
constitutionality.
Similarly, the Court's finding in
Rubin v. Coors Brewing Co.,[176] that a commercial speech regulation containing numerous
exceptions cannot materially advance its purported interest,[177] is not applicable to the present analysis. Congress'
Proposal conveys a consistent sentiment: tobacco companies behave irresponsibly
by recruiting new smokers and promoting their products with deceptive
advertising. The Proposal does not include any exceptions to its goal of
expressing its anti-tobacco position, nor is it likely that an expressive
government interest would ever include such exceptions. The unique character of
an expressive interest, therefore, requires a different method for evaluating
commercial speech regulations motivated by government disdain for "the socially
irresponsible behavior of the seller, in this case the tobacco companies."[178]
A more appropriate standard for
determining material advancement in cases involving expressive government
interests is the "alternate channels" analysis used in evaluating time, place,
and manner restrictions under the First Amendment.[179] Valid time, place, and manner restrictions must satisfy
two criteria: (1) they must leave open "alternative channels" for the
communication of the regulated speech; and (2) those alternative channels cannot
be "prohibitively more expensive, not markedly more inconvenient, and not
significantly less effective as a means of broadcasting the message."[180]
These criteria can be combined to
establish a third prong of the Central Hudson test appropriate for
regulations motivated by an expressive government interest. The alternative
channel test is not overly restrictive because it applies almost exclusively to
regulations that eradicate a particular message altogether, namely, complete
bans on commercial speech. The Supreme Court in 44 Liquormart implied
that striking down total bans on commercial speech is not constitutionally
problematic or overreaching because such bans impair a speaker's constitutional
right to free speech severely enough to require close First Amendment
scrutiny.[181] At the same time, the alternate channel test is not so lax
as to allow the government to silence speakers otherwise deserving of First
Amendment protection under the pretext of expressing the government's own
message. Preventing such an abuse of power protects against government
censorship.[182] The alternative channel test provides an effective means
of evaluating expressive government interests under Central Hudson's
third prong by recognizing both the policy-making role of government and the
potential for it to be abused.
Congress' Proposal
materially advances a substantial government interest under the alternate
channel test. Removing tax deductibility from tobacco ads does not close
any channels of communication. While it does make advertising more costly,
consistent consumer demand for cigarettes[183] and the enormous industry-wide budget for tobacco
advertising[184] indicate that the loss of tax deductions for advertising
expenses will not make tobacco ads "prohibitively expensive," "markedly more
inconvenient," or a "significantly less effective" means of communication.[185] Moreover, the alternate channels test preserves the power
of listeners to influence the message and methods of speakers--tobacco companies
in this case--without gaining the power to silence those speakers in a way that
is irreconcilable with the First Amendment. The government will thus be able to
use its regulatory power to call attention to the tobacco companies'
irresponsible business practices, but will be prevented under the alternative
channels standard from committing clear First Amendment violations, such as
eradicating altogether the rights of tobacco companies to dispense commercial
messages.
b. The Proposal Represents a Reasonable Fit With the Government's Expressive Interest in Condemning Tobacco Industry Practices
Central Hudson's fourth prong
requires that a commercial speech regulation represent a "reasonable fit" with
the asserted government interest.[186] Congress' Proposal is a reasonable means of achieving the
government's interest in expressing its dissatisfaction with tobacco companies'
irresponsible business practices.
The Proposal is "in
proportion to the interest served," as it is neither an excessively restrictive
means of conveying the government's sentiments regarding tobacco ads, nor so
limited as to be entirely ineffectual in achieving this purpose. The Proposal
will not eradicate tobacco companies' ability to convey their commercial
message, nor will it make it appreciably more inconvenient for them to do so.
Singling out tobacco ads for the removal of tax deductibility is a clear and
reasonable method of expressing the government's lack of support for the
industry's deceptive advertising practices. Finally, unlike the regulation
invalidated in Discovery Network, Congress' Proposal is sufficiently
uniform in its application to pass scrutiny under Central Hudson's fourth
prong. The Proposal should therefore be upheld as a valid restriction on
commercial speech under the First Amendment.
IV. FIRST AMENDMENT DOCTRINE REGARDING CONTENT-BASED SPEECH
RESTRICTIONS ON GOVERNMENT FUNDING
Congress' Proposal is a valid government
funding decision, rather than an unconstitutional content-based restriction on
speech, under the First Amendment.[187] Although a "statute is presumptively inconsistent with the
First Amendment if it imposes a financial burden on speakers because of the
content of their speech,"[188] Supreme Court decisions regarding First Amendment taxation
have concentrated solely on the constitutionality of taxes on noncommercial
speech; the Court has never evaluated taxes levied on commercial speech.
Moreover, the Court's treatment of First Amendment challenges to selective
congressional funding establish that Congress may selectively allocate
government funds without violating the constitutional rights of the funds'
recipients.[189] The Proposal is not an impermissible content-based
restriction on speech, but is instead an exercise of Congress' authority to
preferentially fund particular programs. Accordingly, Congress' Proposal
represents a valid economic policy decision within the bounds of the First
Amendment more closely analogous to the regulations at issue in the Court's
selective funding cases than to those invalidated on the basis of content
discrimination.
A. The Anti-Tax Deduction Proposal Is Not an Unconstitutional Content-Based Restriction of Speech
Although the Court has yet to decide a case
involving the constitutionality of commercial speech taxation, the same
considerations that led the Court to extend less constitutional protection to
commercial speech justify a more relaxed standard of review for taxes levied
against such speech. While generally applicable taxes on noncommercial speech
have routinely been upheld under the First Amendment, content-based taxes on
noncommercial speech have been consistently invalidated. The Court's decisions
involving content-based taxes on speech, however, have only addressed government
regulation of noncommercial speech; it thus remains uncertain whether a purely
commercial speech regulation such as Congress' Proposal will face equally strict
constitutional scrutiny.
The federal government is vested
with the power to levy taxes on different forms of speech,[190] including noncommercial speech, provided such taxes are
content-neutral[191] and not "aimed at the suppression of dangerous ideas."[192] In Cammarano v. United States,[193] the Court upheld a uniform denial of tax deductions to
lobbying organizations on the premise that the financial burden was not imposed
due to the specific content of the speech being regulated.
However, in Grosjean v. American Press Co.,[194] the Court struck down a Los Angeles sales tax aimed
specifically at large newspapers primarily because the tax was discriminatory,[195] but also because it involved "a deliberate and calculated
device in the guise of a tax to limit the circulation of information to which
the public is entitled in virtue of the constitutional guaranties."[196] The tax was invalidated, therefore, not only because it
was content-based, but also because it was born of an invidious legislative
motive.
Nearly fifty years later, in Minneapolis Star
& Tribune Co. v. Minnesota Commissioner of Revenue,[197] a tax on ink and paper was invalidated because it only
affected a small number of large newspapers. Instead of simply striking down the
statute as a facially content-based speech regulation in violation of the First
Amendment, the Court relied on Grosjean to emphasize the importance of an
invidious legislative motive in assessing constitutionality.[198] The Court extended its holding in Minneapolis Star
in Regan v. Taxation with Representation of Washington[199] when it "reject[ed] the `notion that First Amendment
rights are somehow not fully realized unless they are subsidized by the
State.'"[200] This statement seemed to give legislatures much more
leeway to levy taxes against certain forms of speech, provided there was no
"explicit demonstration that a classification is a hostile and oppressive
discrimination against particular persons and classes."[201]
In Arkansas Writers' Project,
Inc. v. Ragland,[202] however, the Court retreated from the legislative
intent-based analysis of Grosjean and Minneapolis Star, focusing
instead solely on whether the challenged tax exemption discriminated on the
basis of the regulated speech's content.[203] In invalidating the tax, the Court required the state to
provide a "compelling justification" in order to retain a differentiated tax.[204] Justice Scalia, in dissent, argued in favor of a rational
basis test for review of differential tax exemptions, noting that a "wide
variety of [content-based] tax preferences and subsidies" already exist, and
"that denial of participation in a tax exemption . . . does not
necessarily infringe a fundamental right . . . such a denial does
not, as a general rule, have any significant coercive effect."[205]
Justice Scalia's reasoning in his
Arkansas Writers' dissent took hold in Leathers v. Medlock,[206] in which the Court indicated that tax exemptions would be
presumed constitutional absent some explicit demonstration of the statute's
hostile and oppressive discrimination against particular thoughts or ideas.[207] The Court found that differentiated tax exemptions should
be invalidated only if they can be characterized as a "penalty for the few."[208] Congress' Proposal, while seemingly content-based, is
significantly different from the taxes invalidated in Minnesota Star,
Regan, and Arkansas Writers' in that it only taxes commercial
speech. Because commercial speech has historically been granted less
constitutional protection than noncommercial speech, it is unclear to what
extent the taxation cases involving noncommercial speech apply to Congress'
Proposal. Moreover, none of the Court's previous commercial speech cases address
the potentially discriminatory nature of commercial speech regulations. These
facts, together with the Court's selective funding decisions, make it unlikely
that Congress' Proposal will qualify as an impermissible, content-based speech
restriction.
B. The Proposal Is a Valid Selective Government Funding
Decision
Congress' anti-tax deduction Proposal is a
permissible selective funding decision under the First Amendment. In Rust v.
Sullivan,[209] the Court recognized Congress' power to make content-based
funding decisions regarding government programs. Rust addressed whether
the exclusion of programs involving abortion from Title X funding[210] amounted to an unconstitutional attempt by the government
to silence a particular viewpoint, or a constitutionally permissible means of
discouraging abortion.[211] The Court held that:
The Government can, without
violating the Constitution, selectively fund a program to encourage certain
activities it believes to be in the public interest, without at the same time
funding an alternative program which seeks to deal with the problem in another
way. In so doing, the Government has not discriminated on the basis of
viewpoint; it has merely chosen to fund one activity to the exclusion of the
other.[212]
The expressive interest embodied in
Congress' anti-tax deduction Proposal resembles the government's use of
financial incentives to discourage abortion upheld in Rust: just as Title
X's selective funding was a constitutionally permissible expression of the
government's lack of support for abortion, the Proposal's removal of tax
deductibility is a constitutionally permissible expression of congressional
disdain for the tobacco industry's objectionable business
practices.
Since Rust, the Court has decided two
cases that cast doubt on its commitment to the selective funding principle. In
Simon & Schuster v. Members of the New York State Crime Victims
Board,[213] the Court invalidated a statute requiring a convicted
criminal to forfeit the proceeds from any reenactment of his crime or the
associated story. The Court found that the law unconstitutionally "singles out
income derived from expressive activity for a burden the state places on no
other income, and it is directed only at works with a specified content."[214] This statute is distinguishable from Congress' Proposal
regarding the tax deductibility of tobacco ads. The speech at issue in Simon
& Schuster was noncommercial; the Court never addressed the consequences
of a law placing a similar financial burden on commercial speech. Given the
historical distinction between commercial and noncommercial speech, the Court is
likely to evaluate Congress' Proposal under a less demanding constitutional
standard than that employed in Simon &
Schuster.
Similarly, in Rosenberger v. Rector &
Visitors of the University of Virginia,[215] the Court invalidated a decision by the University to deny
funding to a student group intending to publish a Christian periodical. The
University's decision was inconsistent with the First Amendment, according to
the Court, because it singled out the publication based on its content, denying
it a grant it was otherwise qualified to receive.[216] Distinguishing between the funding of governmental and
private speech, the Court held that selective funding is permissible for
speakers with a "governmental message," but not for speakers, such as the
Christian group, engaged in private speech.[217]
Congress' Proposal satisfies the
standard set forth in Rosenberger. First, the speech which the University
refused to fund was noncommercial. The recognized constitutional difference
between commercial and noncommercial speech distinguishes Congress' regulation
of tobacco advertising from a public university's restriction of private
speakers. Second, Congress' Proposal is aimed at speech that is comparable to a
governmental message. Unlike the religious speech at issue in
Rosenberger, tobacco advertisements implicate a government interest by
posing a threat to the national welfare.
When subsidized
speech, even by a private actor, is directly contrary to a government message,
such speech must be amenable to government regulation as something greater than
(exclusively) private speech. Thus, despite Rosenberger's apparent
limitation on the selective funding doctrine, Congress' Proposal is still valid
because it satisfies Rosenberger's "governmental message"
requirement.
The Court recently reaffirmed its selective
funding doctrine in National Endowment for the Arts v. Finley,[218] upholding a requirement that federal arts funding be
available only to those artists adhering to tenets of "decency and respect for
the diverse beliefs and values of the American public."[219] The Court determined that the statute did not require
unconstitutional content-based discrimination in funding decisions because it
did not eliminate specific means of expression, but simply increased the
subjectivity of the selection process. The Court implied, however, that the
statute would not have survived First Amendment scrutiny if it had been designed
to "drive `certain ideas or viewpoints from the marketplace.'"[220] Congress' Proposal is more akin to the subjective
selection process upheld in Finley than to an intentional act of
censorship. The government's interest in expressing its distaste for the tobacco
industry does not require or entail decimating tobacco companies' promotional
efforts. Instead, Congress merely declines to encourage tobacco ads in the
interest of public welfare. The removal of tax deductible status from tobacco
ads is thus not an act of censorship, but a subjective policy decision within
the bounds of Congress' funding authority.
A further
consideration in assessing the constitutionality of Congress' Proposal is the
Court's unique treatment of federal funding for advertising. Federal funding of
advertisements has been virtually immune from First Amendment scrutiny. In
Glickman v. Wileman Brothers & Elliott, Inc.,[221] the Court evaluated a federal advertising program as a
matter of economic policy to be decided by "producers and administrators"[222] of the program, rather than as a First Amendment issue to
be decided by the courts. The Court stated that:
The First Amendment has
never been construed to require heightened scrutiny of any financial burden that
has the incidental effect of constraining the size of a firm's advertising
budget. The fact that a regulation may indirectly lead to a reduction in a
handler's individual advertising budget does not itself amount to a restriction
on speech.[223]
This reasoning, like that in
Rust, suggests that Congress' Proposal implicates Congress' economic
policy-making authority rather than the First Amendment. If the Proposal is
analyzed as an economic policy decision, and not as a content-based speech
regulation, it will thus not be subject to the rigorous First Amendment scrutiny
that dooms most content-based regulations of speech.
Congress' Proposal is comparable to these government funding cases for three
reasons. First, the Court has gone to great lengths to establish the difference
between commercial and noncommercial speech, even developing an independent test
for the constitutionality of commercial speech restrictions.[224] As a result, it is inappropriate to analogize a Proposal
dealing with purely commercial speech to First Amendment taxation cases, all of
which deal solely with regulations of noncommercial speech.[225] Second, the Court has regularly heard cases involving
advertising restrictions without ever addressing the problem of content-based
discrimination.[226] Finally, the Court has already addressed the propriety of
a regulation designed to alter the advertising budgets of particular taxpayers
and has upheld that regulation against a First Amendment challenge.[227] Since Congress' Proposal does not represent the type of
impermissible content-based speech restrictions that have been struck down in
the past, it should be permitted under the First Amendment.[228]
V. CONCLUSION
Congress' Proposal to remove the tax-deductible
status of tobacco advertisements is constitutional because it satisfies both the
Central Hudson test and First Amendment standards regarding differential
taxation of speech. Because tobacco ads are typically misleading, they may be
regulated without violating the First Amendment. Indeed, even if tobacco ads are
not found to be misleading, Congress' Proposal nonetheless satisfies the
Central Hudson test for evaluating commercial speech regulations. Whether
the government claims it has a substantial interest in the welfare of its
citizens or, alternatively, in publicly condemning the irresponsible behavior of
the tobacco industry, Congress' Proposal is permissible because it both
materially advances an important government interest and represents a reasonable
fit with that interest.
The Proposal is also a permissible
government funding decision under the First Amendment. The Court has only struck
down content-based taxes on noncommercial speech. In commercial speech
cases--specifically those involving limits on advertising--the Court has never
raised the question of whether a tax on commercial speech is impermissibly
content-based, but instead has consistently relied on the Central Hudson
test to determine a statute's constitutionality. Moreover, the Court has
consistently found that the government may, in accord with the rational basis
standard, tax speech and other activities at its discretion. Accordingly,
Congress' Proposal to remove the tax deductible status of tobacco advertisements
represents a permissible regulation of commercial speech and an appropriate
exercise of congressional taxing power under the First Amendment.
[*]
J.D. Candidate 2000, University of Pennsylvania; M.S.E. 1997, University of Pennsylvania; B.S.E. 1996, Duke University. This Comment is dedicated to my parents, Lou and Barbara Virelli, and to my brother, Chris Virelli, for their unending love and support. Special thanks to Professors Seth Kreimer and Frank Goodman for their insightful comments, Mary Sigler and all the editors of the Journal of Constitutional Law for their hard work and dedication, and to Andrew Morton for his assistance in bringing this issue to my attention. "[E]verything [led] up to this day, and it's just like any other day that's ever been." GRATEFUL DEAD, Black Peter, on WORKINGMAN'S DEAD (Warner Bros. Records Inc. 1970).