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Chapter 03 - Business and the Constitution
3-11
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
case.) The Supreme Court thus passed up an opportunity to clarify what is--and is
not--commercial speech. Because Kasky was previously a text case and remains a
good vehicle for discussion, notes to help guide the discussion appear below.
Kasky v. Nike, Inc., 45 P.3d 243 (Cal Sup. Ct. 2002): The Supreme Court of
California holds that Nike engaged in commercial speech when it made statements
laws on misleading advertising and unfair competition. As noted earlier, the U.S.
Supreme Court granted certiorari in this case but later dismissed the writ as
improvidently granted (meaning that the Supreme Court did not decide the case).
Points for Discussion: Note that the speech at issue in this case does not fit neatly
into either the commercial category or the noncommercial category. Nike’s statements
potential or actual buyers of the speaker’s goods or services; and third, whether the
relying at least in part on the U.S. Supreme Court’s 1983 Bolger decision. You might
stimulate discussion by dividing the class into two groups, one of which will argue
typically employed that definition, it has occasionally hinted that the commercial
speech classification may be somewhat broader. By not deciding Kasky (see above
comments about the Court's dismissal of a writ of certiorari it had initially granted),
the Supreme Court passed up an opportunity to clarify the definition of commercial
misleads nor pertains to an unlawful activity. Walk the students through the elements
of the test, as outlined at pp. 79-80 and in the Concept Review at p. 82. Under the
Chapter 03 - Business and the Constitution
3-12
© 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
test applied in commercial speech cases, the government is required to show a
substantial underlying interest, which is easier to demonstrate than the compelling
interest that the full strict scrutiny test demands. In addition, according to the test
applied in commercial speech cases, the government need not show that the speech
restriction at issue is absolutely necessary to fulfillment of the government’s purpose
the substantial underlying interest in a way that is no more extensive than necessary.
the test in noncommercial speech cases--a logical goal if commercial speech is
supposed to receive a lesser degree of First Amendment protection than
noncommercial speech receives. The 44 Liquormart case furnishes an example of how
the elements of the test are applied. (See the later discussion of that case.)
noncommercial speech. At other times, the Court has applied the elements more
loosely--making the test easier for the government to pass and thus effectively
widening the gap between the respective protection levels. We now appear to be in a
In 2011, however, the Court decided Sorrell v. IMS Health, Inc., 131 S. Ct. 2653.
There, the Court struck down a Vermont law that imposed restrictions on the sale,
disclosure, and use of prescriber-identifying information gathered by pharmacies. The
law barred pharmacies from selling the information and from using it for marketing
the Vermont law discriminated among speakers and discriminated in regard to content
of affected speech. Accordingly, the Court reasoned, “heightened scrutiny” was
necessary. It concluded that the statute failed the test. Eventually, the Court devoted
fairly abbreviated attention to the four-part test for restrictions on commercial
Chapter 03 - Business and the Constitution
3-13
manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
and its underlying purposes of protecting medical privacy, improving public health,
regulations pertaining to the Food & Drug Administration. It is too early to determine
the full impact of IMS Health, but it is probably fair to say that the decision sends
another signal that formal doctrinal change may be on the horizon and that the
differences between the respective legal treatments in commercial speech and
beverages.
Points for Discussion: Note that the opinion appearing in edited form is actually a
plurality opinion. The justices were unanimous in holding that the Rhode Island law
violated the First Amendment, but they disagreed on the particulars of the reasons
why and on the specific analysis that should be employed. Some of the justices
opinion applied each element of the four-part test. Ask why Rhode Island lost even
though it could point to a substantial government interest in promoting temperance
and thereby advancing public health. (Rhode Island flunked the last two elements of
the test because the supposed connection between a ban on price advertisements and
plurality opinion.)
m. Consider discussing some of the following Supreme Court decisions involving
applications of the above-described test to government restrictions on commercial
speech:
1) Central Hudson Gas & Electric Corp. v. Public Service Commission (1980)--
New York agency regulation barring utility companies from advertising to
test.)
Chapter 03 - Business and the Constitution
3-14
2) Bolger v. Youngs Drug Products Co. (1983)--U.S. postal service regulation
prohibiting far more speech than reasonably necessary to further that interest.
3) Posadas de Puerto Rico Associates v. Tourism Co. (1986)--Puerto Rico law
4) Board of Trustees v. Fox (1989)--In case in which Court remands with
sound educational environment and in protecting students against being
deceived or manipulated by aggressive salespersons.
5) City of Cincinnati v. Discovery Network (1993)--Court strikes down
newspapers to remain on sidewalks. Court holds that ordinance did not
6) Rubin v. Coors Brewing Co. (1995)--See chapter’s opening
raised in vignette/problem.
7) 44 Liquormart, Inc. v. Rhode Island (1996)--See above discussion.
8) Greater New Orleans Broadcasting Association v. United States (1999)--
operated casinos could freely be advertised under federal law, ban on
Advertising ban also restricted significantly more speech than necessary.
9) Lorillard v. Reilly (2001)--Massachusetts restrictions on advertising of
smokeless tobacco products struck down as restricting more speech than
reaching First Amendment issue).
Chapter 03 - Business and the Constitution
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manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
10) Thompson v. Western States Medical Center (2002)--Supreme Court strikes
down federal law exempting compounded drugs from FDA’s approval
process only if providers thereof did not advertise the compounding. Court
compounded drugs for patients who need them.
11) Sorrell v. IMS Health, Inc. (2011)--See earlier discussion.
3. Due Process
a. Describe procedural due process in general terms, stressing that: 1) cases involving
life aside, the claimant normally must have a liberty interest or property interest in the
first place; 2) the claimant must have been deprived of that interest; 3) where such a
suspended without pay was not entitled to notice and a hearing before the suspension,
but probably was entitled to a post-suspension hearing.
b. The range of liberty interests protected by the Fifth and Fourteenth Amendments is
very broad; sometimes, it even includes one's interest in his or her reputation. Even
additional example of procedural due process issues, see Problem #1.
c. The keys to most forms of substantive due process are: 1) including some preferred
d. The old "economic" form of substantive due process gave enhanced protection to
freedom of contract and other economic liberties such as the right to pursue any lawful
trade or profession. This sometimes led the courts to overturn social legislation that
a line of business.
Chapter 03 - Business and the Constitution
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e. Of course, substantive due process lives on in noneconomic areas of life. Note the
fundamental rights mentioned at pp. 84-86. Stress the strictness of the scrutiny given
regulation will usually be upheld.
4. Equal Protection
a. Make sure that students understand why the rational basis test rarely imposes much of
a check on economic regulation. The Racing Association case is an example. Further
example: Problem #8.
doesn’t apply here. (No fundamental rights are at stake, and no suspect classes are in
danger of being adversely affected.) Ask what the rational basis test requires. (That
the government action—here, the different tax treatment—is rationally related to a
legitimate government purpose.) Track Justice Breyer’s discussion of what a
unconstitutional. Laws almost invariably make classifications.
c. When a classification involving government action discriminates with regard to the
exercise of a fundamental right, the rational basis test no longer applies. Instead, the
classification is subjected to much more rigorous scrutiny. Why is the list of equal
basis of the Supreme Court’s decision in Bush v. Gore, which ended the disputes
arising from the 2000 presidential election. At pp. 85-86, the text summarizes the
majority’s reasoning and the dissenters’ criticisms thereof in this controversial
decision. More recently, the Supreme Court decided another case in which the
they impose more onerous identification requirements than the measure at issue in
Chapter 03 - Business and the Constitution
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manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Crawford.
e. When a classification involving government action discriminates with regard to a
suspect class, scrutiny considerably more rigorous than rational basis review is
applied. The Supreme Court has identified the following suspect classes: race and
national origin; alienage; sex; and illegitimacy.
universities, the U.S. Supreme Court decided two 2003 cases that shed light on
whether state universities may consider race in admission decisions without violating
the Equal Protection Clause. The companion cases, Gratz v. Bollinger and Grutter v.
Bollinger, are discussed in the text at pp. 86-87. Go over the basics of Gratz and
that a state university’s goal of achieving a diverse student body is a compelling
government purpose. (That holding in Grutter was significant because a majority of
the Court had not previously so held.) Even so, Michigan lost the case because the
full strict scrutiny test--applicable because the case involved supposed discrimination
guaranteeing admission to any minority applicant who met certain other minimum
criteria, whereas white applicants with similar qualifications had no chance of
admission. The system of automatically assigning a certain number of points to
