Central Hudson is the leading decision establishing ground rules for the Supreme Court's modern protection of COMMERCIAL SPEECH under the FIRST AMENDMENT. New York's Public Service Commission (PSC), in the interest of conserving energy, forbade electrical utilities to engage in promotional advertising. The Supreme Court held, 8?1, that this prohibition was unconstitutional.
Justice LEWIS F. POWELL, for the Court, used an analytical approach to commercial speech that combined a TWO-LEVEL THEORY with a BALANCING TEST. First, he wrote, it must be determined whether the speech in question is protected by the First Amendment. The answer to that question is affirmative unless the speech is "misleading" or it is "related to illegal activity" (for example, by proposing an unlawful transaction). Second, if the speech falls within the zone of First Amendment protection, the speech can be regulated only if government satisfies all the elements of a three-part interest-balancing formula: the asserted governmental interest must be "substantial"; the regulation must "directly advance" that interest; and the regulation must not be "more extensive than is necessary to serve that interest."
This intermediate STANDARD OF REVIEW seems loosely patterned after the standard used under the EQUAL PROTECTION clause in cases involving SEX DISCRIMINATION. In those cases, the Court typically accepts that the governmental interest is important; when a statute is invalidated, the Court typically regards gender discrimination as an inappropriate means for achieving the governmental interest. The Central Hudson opinion followed this pattern: the promotional advertising was protected speech, and the state's interest in conservation was substantial and directly advanced by the PSC's regulation. However...