The U.S. Supreme Court has given its strongest sign yet that the broad view of the First Amendment rights of advertisers revealed in its May 44 Liquormart decision may extend far beyond liquor price advertising issues. Along the way, it may have set the stage to provide broadcasters a major new revenue source: gambling ads.
In a short one-paragraph order last week that cast new doubts on any Federal Communications Commission attempt to bar hard-liquor ads and on the Food & Drug Administration's attempt to restrict tobacco ads, the high court vacated a Court of Appeals decision in New Orleans upholding restrictions on gambling advertising.
NEW ORLEANS CHALLENGE
The Greater New Orleans Broadcasters Association had challenged the section of federal law barring gambling advertising from crossing state boundaries, with criminal penalties for violation, as well as an FCC regulation providing additional sanctions.
In its suit, the association argued both that the combination of laws and rulings, allowing only specific kinds of gambling advertising, made no logical sense. Private casinos can advertise food and entertainment but not gambling, yet states can advertise lotteries and games as can casinos on Native American reservations, the suit said. It also charged that the remaining rules were discriminatory and that they represented an attempt by government to ban truthful speech.
The court didn't quite overturn the gambling ban. Instead, it vacated the 5th U.S. Circuit Court of Appeals decision upholding the ban and then ordered the lower court to reconsider the case in light of 44 Liquormart.
Advertising lawyers and broadcasters, however, say the result is now predestined.
"It seems hard to believe that they can find anything to do but to rule it unconstitutional," said Steve Bookshester, associate general counsel of the National Association of Broadcasters.
Don Cooper, executive director of the New Orleans broadcaster group, said he's hopeful the result is so clear that the FCC won't wait and will immediately decide to stop enforcing gambling advertising restrictions, even as the case proceeds.
Ad groups and lawyers say the action in the gambling case makes clear that the court views its 44 Liquormart decision broadly.
"It seems to be giving a strong signal, to support casinos' rights to have advertising," said Dan Jaffe, exec VP-Association of National Advertisers. "They continue to give off signals on vice products that there are not any categories that show less protection."
John Kamp, senior VP of the American Association of Advertising Agencies, said the decision is significant. "This action by the court is very positive. It indicates how committed the court is to 44 Liquormart and its finding. This is very positive news. These are good signs for commercial speech."
One expert was advising some caution, however.
"What they did is predictable," said Burt Neuborne, a professor of law at New York University who filed the ANA brief in the 44 Liquormart case.
"Some people might read this as a polite suggestion to the lower court, but I think it's more likely that [the justices] are systematically looking at all their free speech cases and sending them down for reconsideration. It's not a clear win. There are many historical examples where lower courts reexamine the facts and send the cases back up again."
Another attorney was more hopeful.
"It's very helpful," said Steve Durschlag of Winston & Strawn, Chicago. "It's a greater recognition of more rights of free speech."
Copyright October 1996 Crain Communications Inc.