UNITED STATES AND FEDERAL COMMUNICATIONS COMMISSION v. EDGE BROADCASTING COMPANY T/A POWER 94

Legal Principle at Issue

Whether the government may constitutionally prohibit a broadcaster licensed in a state that bans lotteries from broadcasting lottery advertisements, even when the vast majority of the broadcaster's audience resides in a state that allows lotteries.

Action

Reversed. Petitioning party received a favorable disposition.

Facts/Syllabus

Edge Broadcasting Company owns a radio station in Moyock, North Carolina. Moyock is approximately three miles from the border between North Carolina and Virginia, and 92.2% of the station's audience lives in Virginia. Virginia allows state-run lotteries; North Carolina does not. The Federal Communications Act, 18 U.S.C. _ 1304, prohibits television and radio stations operating in non-lottery states from broadcasting lottery advertisements. Edge challenged the constitutionality of this prohibition, at least as the prohibition was applied to Edge. A federal district court in Virginia ruled in Edge's favor, holding that the prohibition was ineffective in shielding North Carolina residents from lottery advertising. The Fourth Circuit Court of Appeals affirmed.

In Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976), the U.S. Supreme Court for the first time recognized that commercial speech speech that concerns only commercial or economic activity is entitled to some First Amendment protection. The government therefore may regulate commercial speech only if it is false or misleading or if the restriction directly and narrowly advances a substantial state interest. Central Hudson Gas & Elec. v. Public Serv. Comm. of N.Y., 447 U.S. 557 (1978).

Importance of Case

The Court drastically limited the ability of a specially situated speakers to claim First Amendment protection for their commercial speech. While the Court previously had held in Ward v. Rock Against Racism, 491 U.S. 781 (1989), that restrictions on the use of a city park should be reviewed generally and not as they applied to a particular individual or situation, the Court never before had used this analysis in commercial speech cases.

The only issue in this case was whether the prohibition directly advanced the government's interest in supporting the public policy of non-lottery states. The Court agreed with the lower courts and the parties that this governmental interest was substantial and that the prohibition was no broader than necessary to advance this interest. The Court, however, rejected the finding of the lower courts that the prohibition was ineffectual and did not directly advance the governmental interest. The lower courts had based their rulings on the fact that the prohibition was not shielding the vast majority of Edge's audience from lottery advertising. The Court rejected this analysis, holding that the inquiry was not whether the governmental interest is advanced in a single situation but whether the regulation advances the interest overall. The Court held that the prohibition satisfied this more general inquiry and reversed the lower court rulings.