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Legal Principle at Issue

Whether a state-issued ban on promotional advertising by public utility companies in order to conserve energy resources violates the First Amendment.

Action

The Supreme Court struck down the ban, reversing the state court decisions.

Facts/Syllabus

In an effort to curb energy use, New York placed a ban on advertisements by public utility companies that promote the use of electricity. After the restriction was placed in effect, Central Hudson Gas and Electric challenged the regulation in court. The regulation was upheld before it was sent to the Supreme Court.

Importance of Case

This case established the Central Hudson test, which is still the operative test for determining whether a government restriction on commercial speech is permissible under the First Amendment. As a threshold matter, the speech must relate to lawful activity and not be misleading. Then, the court will look to whether (1) the government’s interest is substantial, (2) the regulation directly and materially advances that interest, and (3) the regulation is narrowly tailored.