Legalese: Two Big Ones From SCOTUS on Commercial Speech

This article ran in the September 2015 issue of AVN magazine. Click here to see the digital edition. Last month’s Legalese column talked about the Supreme Court’s license plate decision. But there’s way more. A couple of this term’s other opinions are of great interest to this industry, the first of very intense interest. The important one involved, of all things, a hotel in Los Angeles and the city’s requirement that the hotel keep its guest-registration records available to the city. What can that have a thing to do with the adult video industry? A bunch! This column of late reviewed the wonderful result that all-star lawyer Michael Murray achieved in his challenge to the labeling and record-keeping law, 18 U.S.C. §2257 and its regulations. In short, the United States Court of Appeals for the Third Circuit held that the inspection provisions of 2257 violated the Fourth Amendment’s prohibition against unreasonable searches and seizures. The court held that the administrative-search exception to the warrant requirement could not be applied to adult video production because it was not involved in an industry traditionally considered heavily regulated. Free Speech Coalition, Inc. v. Attorney General of the United States, 677 F.3d 519 (3rd Cir. 2015). Los Angeles, like a whole bunch of cities, requires that hotels and motels keep a guest register so that the police can find out who was staying there. Under Los Angeles’ ordinance, like most such ordinances, the police have the right to inspect the guest register, a regulation mostly designed to allow the cops to keep tabs on possible prostitution and other deviations from the law. A motel in the City of Angels challenged that law. It went all the way to the Supreme Court—and the motel won. The High Court dumped on Los Angeles, holding that hotels and motels are not traditionally heavily regulated industries, like firearms, liquor and junk yards. City of Los Angeles, Calif. v. Patel, ___S.Ct. ___, 2015 WL 2473445 (March 3, 2015). You see the connection? Like adult video production, hotels and motels have not been considered traditional heavily regulated industries. Accordingly, the 2257 case now appears bullet-proof. Notwithstanding the fact that a federal court of appeals decision upending a federal statute is generally the quickest path to Supreme Court review, the Los Angeles motel case would appear to make Mike Murray’s victory in the Third a done deal. Mike and his esteemed colleague who also was involved, Lorraine Baumgardner, did a great job. That victory now is unlikely to merit Supreme Court review, notwithstanding the fact that decisions throwing out federal statutes usually make it there. And, although the DOJ has filed for rehearing, the odds of that being granted seem equally long. The other Supreme Court case worthy of mention involves signs. Courts always had assumed that advertising—commercial speech—was not protected by the First Amendment. Then, in the ’70s, the Supreme Court afforded commercial speech limited protection. The test for evaluating commercial speech was articulated in a case popularly known as “Central Hudson.” Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). There, the court set forth the analysis for whether commercial speech (speech proposing a commercial transaction, although not a bright-line concept) is protected by the First Amendment: • Is the asserted governmental interest substantial? • Does the regulation directly advance the governmental interest asserted? • Is the regulation more extensive than is necessary to serve that interest? If you happen to go to San Diego, you need to know where the fast-food places and gas stations are located, because the Supreme Court allowed San Diego to pretty much outlaw billboards. Metromedia, Inc. v. City of San Diego, 453 U.S. 490 (1981). Metromedia appears to now have been overruled. Indeed, the new decision casts a serious doubt over whether there is anything left of Metromedia or the cornerstone case involving the protection of commercial speech, Central Hudson Gas. The 1980 Central Hudson case articulated the test for determining whether a regulation of commercial speech was valid, a test akin to the one applied to time, place and manner restrictions on non-commercial speech, like zoning, hours of operation and so on. The landscape changed in further favor of protection in 1996 when the Supreme Court, in a much-splintered opinion, held that the state’s right to regulate alcohol under the Twenty-First Amendment did not impact the First Amendment’s free-speech protection. 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996). As divergent as were the opinions in that case, it was clear that the court was headed in the direction of additional protection of commercial speech. This year’s case involved signs. Here’s what happened: Gilbert, Arizona, like most places, included in its municipal code some sign regulations. The aspect of Gilbert’s regulatory regime important to this case was that the size and other limitations imposed upon a sign was dependent upon what kind of a sign it was. For example, signs giving directions to someplace were subject to different rules than signs promoting political candidates. Clyde Reed was the pastor of the apparently fledgling Good News Community Church. Having no building of its own, the church would meet in different locations that Pastor Reed managed to secure, such as elementary school auditoriums. Apparently living from hand to mouth and, accordingly, not always knowing too far in advance the location of the next Sunday morning’s service, every Saturday the pastor and some of his parishioners would scatter some 15 or 20 little signs about town, announcing the location for the next day’s service. The problem was that the church’s weekly signs, designated “temporary directional signs” by the Municipal Code, often were in place longer than the Code’s 12-hour limitation. So, the pastor and the church challenged the constitutionality of the sign ordinance in federal court—a good move, because defending citations in municipal court can have criminal-conviction consequences with no opportunity for recovery of attorney’s fees. The lower courts saw no problem with this, agreeing with the town’s position that the regulations were content neutral because they said nothing about the messages in the signs. The Supreme Court reversed. Three of the justices found that the Ninth Circuit should be reversed because the ordinance does not “pass strict scrutiny, or intermediate scrutiny, or even the laugh test.” The prevailing six justices agreed that the ordinance was invalid, but how they arrived at that conclusion represents a sea change in the application of the First Amendment to commercial speech. The six-justice majority held that strict scrutiny should apply to this type of sign ordinance. Strict scrutiny means a speech regulation is invalid unless the (1) government can prove (2) that it is narrowly tailored (3) to further a compelling governmental interest. That, friends, is a tall order! And the court has never applied that to ordinances regulating signs, most of which are commercial speech. That is a marked departure from application of intermediate scrutiny, where the government is required only to establish that the regulation is supported by a valid and substantial governmental interest, rather than a compelling one; that the regulation is unrelated to suppression of free expression; and that reasonable or ample alternative avenues of communication are available. Big differences! The consensus so far is that this case abolishes the distinction between the First Amendment’s application to commercial speech and other speech. If that be the case, commercial advertising is on an equal footing with political speech. That makes sense, given that the town’s distinction between signs applied with equal force to commercial and political ones. The Court jettisoned the ordinance because it distinguished among those various types of signs. Historically, commercial speech has enjoyed less protection than non-commercial speech. In recent years, a great many attorneys have believed that approach to be wrong-headed and that the Supreme Court eventually would abolish the distinction. That prediction seems to have materialized. In four decades, commercial speech has gone from unprotected to fully protected. Wow! Clyde DeWitt is a Las Vegas and Los Angeles attorney, whose practice has been focused on adult entertainment since 1980. He can be reached at ClydeDeWitt@earthlink.net. More information can be found at ClydeDeWitt.com. This column is not a substitute for personal legal advice. Rather, it is to alert readers to legal issues warranting advice from your personal attorney.