Home » Articles » Case » Commercial Speech » Central Hudson Gas and Electric Corp. v. Public Service Commission (1980)

Written by Richard Parker, published on January 1, 2009 , last updated on February 18, 2024

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The energy crisis of 1973 prompted New York to order electric utilities in the state to stop advertising as a way to reduce energy consumption. The challenge to the order by Central Hudson Gas and Electric Corp. led to a Supreme Court case clarifying First Amendment protections of commercial speech and outlining a test for when government can regulate it. (In this Dec. 1 1973 photo, cars line up at a Washington D.C. service station to fill up with gasoline in anticipation of the closing of the stations later that night, to help ease the fuel shortage. Photo by AP Photo/Harvey Georges, reprinted with permission from The Associated Press.)

The Supreme Court decision in Central Hudson Gas and Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980), established a four-part test for determining when commercial speech can be regulated without violating the Constitution.


Although the test has been subsequently modified slightly and is often criticized, it remains the standard applied in virtually all commercial speech cases.


The history of First Amendment protection for commercial speech


In 1942 the Supreme Court had flatly denied First Amendment protections to commercial speech in Valentine v. Chrestensen.


In 1976, in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., it noted the value of commercial communications to a free enterprise system, but nevertheless still considered commercial expression to be low-value speech.


With Central Hudson Gas and Electric Corp. v. Public Service Commission, Justice Lewis F. Powell Jr. commanded the support of five of eight justices in the majority in overturning lower court decisions and announcing a new four-part test for determining when commercial speech is protected by the Constitution.


New York orders electric utilities to stop advertising


In an effort to conserve energy and discourage consumption during the 1973 energy crisis, the Public Service Commission of New York had ordered all electric utilities in the state to cease advertising. Central Hudson Gas and Electric Corp. challenged the order in court as a restraint on free speech.


Court used four-part test to declare the regulation to declare the regulation overbroad


Lower courts ruled that the government’s interest in discouraging consumption outweighed the value of the speech. The Supreme Court reversed, declaring the regulation too broad.


  1. Part one flatly denies constitutional protection to “communication more likely to deceive the public than to inform it” and to “commercial speech relating to illegal activity.”  This constitutes a threshold for identifying types of commercial speech that merit First Amendment protection. The burden of proof resides with the communicator to demonstrate that speech does not fall into one of these categories. Any commercial speech that satisfies the threshold requirement is presumed to be protected, and the burden of proof shifts to the state to justify regulation by satisfying parts two through four.
  2. Part two provides that “the State must assert a substantial interest to be achieved by restrictions on commercial speech.”
  3. Part three specifies that “the [State’s] restriction must directly advance the state interest involved.”
  4. Part four ensures that “if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restrictions cannot survive.”

To settle a decade-long controversy regarding the evidentiary requirements in commercial speech cases, the Court held in Rubin v. Coors Brewing Co. (1995) that the regulating agency “must demonstrate that the harms [from speech] . . . are real and that its restriction will in fact alleviate them to a material degree.”


Court later modified the Central Hudson test


The Court made a major modification in the Central Hudson test by altering the level of proof required of the government to meet part four of the test. The original requirement entailed that the government prove that the means of regulation be the “least restrictive means” available, but from more recent cases evolved the demand that the government “demonstrate narrow tailoring of the challenged regulation to the asserted interest — ‘a fit that is not necessarily perfect, but reasonable; that represents not necessarily the single best disposition but one whose scope is in proportion to the interest served’ ” (Greater New Orleans Broadcasting Association v. United States [1999], citing Board of Trustees of State University of New York v. Fox [1989]).


Critics contend that the reasonableness standard is inherently subjective because what is reasonable varies from case to case. Nevertheless, since reasonableness was first proposed in In re R.M.J. (1982), the Supreme Court has more often used the standard to overturn than to uphold governmental restrictions on commercial speech.


This article was originally published in 2009. Richard A. “Tony” Parker is an Emeritus Professor of Speech Communication at Northern Arizona University. He is the editor of Speech on Trial: Communication Perspectives On Landmark Supreme Court Decisions which received the Franklyn S. Haiman Award for Distinguished Scholarship in Freedom of Expression from the National Communication Association in 1994.


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