For most of this century commercial speech was regarded as outside the scope of the FIRST AMENDMENT. Indeed, the Supreme Court so held in 1942. But in 1976 the Supreme Court reversed course in the case of VIRGINIA STATE BOARD OF PHARMACY V. VIRGINIA CITIZENS ' CONSUMER COUNCIL. There the Court held that Virginia had violated the First Amendment by prohibiting pharmacists from advertising prices of prescription drugs. The Court was unpersuaded that the state's fear that product advertising would lower the "professional" character of the practice of pharmacy outweighed the First Amendment interest in open competition of information and ideas, even about products of commerce.
In 1980 in CENTRAL HUDSON GAS ELECTRIC CORPORATION V. PUBLIC SERVICE COMMISSION, the Court announced a four-part test for deciding when commercial speech is entitled to First Amendment protection. To determine whether commercial speech is protected, the Court held, it must be found that the speech concerns a lawful activity and is not misleading, that "the regulation directly advances the governmental interest asserted," and that the regulation "is not more extensive than is necessary to serve that interest." Applying that standard to the case before it, the Court invalidated a Public Service Commission regulation that prohibited electrical utilities from engaging in promotional advertising. While the Court acknowledged that the commission's purpose was legitimate (namely, to conserve energy), the commission's case failed in the Court's view because there was no showing that this legitimate purpose could not be achieved by regulation less intrusive on First Amendment interests.
In recent years the Supreme Court has seemed to retreat from the Central Hudson trend of extending broader First Amendment rights when it comes to protection of commercial speech. In a major decision in 1986 in POSADAS DE PUERTO RICO ASSOCIATES V. TOURISM COMPANY, the Court upheld a Puerto Rican government regulation that forbade casino advertising directed at Puerto Rican residents; advertising aimed at tourists, on the other hand, was permitted. Though casino gambling was legal in Puerto Rico, and though the advertising prohibited was neither misleading nor fraudulent, the Court held that the government's interest in avoiding the debilitating effects of gambling on the internal culture of Puerto Rico was "substantial," that the restriction "directly advanced" that goal, and that the...