Posadas de Puerto Rico Associates v. Tourism Company of Puerto Rico

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1986 United States Supreme Court case

Posadas de Puerto Rico Associates v. Tourism Co. of Puerto Rico, 478 U.S. 328 (1986), was a 1986 appeal to the Supreme Court of the United States to determine whether Puerto Rico 's Games of Chance Act of 1948 is in legal compliance with the United States Constitution , specifically as regards freedom of speech , equal protection and due process . In a 5–4 decision, the Supreme Court held that the Puerto Rico government (law) could restrict advertisement for casino gambling from being targeted to residents, even if the activity itself was legal and advertisement to tourists was permitted. The U.S. Supreme Court affirmed the Puerto Rico Supreme Court conclusion, as construed by the Puerto Rico Superior Court, that the Act and regulations do not facially violate the First Amendment , nor did it violate the due process or Equal Protection Clauses of the Fourteenth Amendment .

The controversial case has been subsequently referenced with respect to the legality of bans on tobacco advertising , liquor advertising and other advertisement related to gambling. It is regarded as a landmark case in illustrating the elasticity of the _Central Hudson _ standards for regulating commercial speech , as the Court did not request evidence or argument supporting the need of Puerto Rico to regulate such advertisement, but merely accepted that such regulations seemed reasonable. It also implicitly allowed for more strict regulations on commercial speech related to legal but presumably dangerous "vice" activities. Although there have been calls to overturn Posadas and it has been ignored as precedent in some, if not all, subsequent cases, the case has never been officially overruled.

Prior history

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On 15 May 1948, Puerto Rico adopted Act No. 221, the Games of Chance Act, which allowed regulated casino gambling but disallowed advertisement of gambling establishments within the boundaries of Puerto Rico. In 1978, the Texas-based Posadas de Puerto Rico Associates, which hosted a gambling facility at the Condado Holiday Inn and Sands Casino , was fined twice by the Puerto Rico Tourism Company for such advertising. In 1979, the Tourism Company sent a memo to casino operators further clarifying restrictions on advertising to include "the use of the word 'casino' in matchbooks, lighters, envelopes, inter-office and/or external correspondence, invoices, napkins, brochures, menus, elevators, glasses, plates, lobbies, banners, flyers, paper holders, pencils, telephone books, directories, bulletin boards or in any hotel dependency or object which may be accessible to the public in Puerto Rico." Following this, it fined the company again several times.

In 1981, the company filed suit alleging generally that the Act violated Constitutional guarantees of free speech, equal protection and due process and specifically that the Tourism Company had violated the company's Constitutional rights in interpreting and applying it. The Puerto Rican Superior Court which heard the case agreed that the advertising restrictions applied to the company had been unconstitutional, describing the Tourism Company's acts as "capricious, arbitrary, erroneous and unreasonable." However, it "adopted a narrowing construction of the Act and regulations" which permitted local advertising if aimed at inviting tourists but not residents to partake. Under that new construction, the Puerto Rican Supreme Court determined that the Act was not facially (always) unconstitutional.

On appeal, the Supreme Court of Puerto Rico affirmed the lower court's decision. The company appealed to the U.S. Supreme Court, seeking review of the federal question .

Case

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The case was argued on April 28, 1986, with Maria Milagros Soto representing the appellant and Lino J. Saldana the appellees.

The American Civil Liberties Union , the American Association of Advertising Agencies , the American Broadcasting Companies , the AFL–CIO , the American Newspaper Publishers Association , the National Broadcasting Company , the Atlantic City Casinos Association and the Association of National Advertisers submitted _amici curiae _ in favor of the appellant.

Posadas argued that the First Amendment to the United States Constitution did not permit restrictions on commercial speech except when such speech failed to meet the four-part test established by the 1980 landmark case of _Central Hudson Gas & Electric Corp. v. Public Service Commission _. The Central Hudson standards establish that, when the activity is legal and the advertising not misleading, the government must show substantial interest in the advertisement and substantial benefit from regulating it, as well as demonstrating that such regulations are not excessive to the need. The Tourism Company rebutted that First Amendment does not protect local advertising of casinos and, even if it did, restriction on such advertisement met the Central Hudson standard as reasonable and necessary to secure substantial governmental interest.

Decision

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William Rehnquist wrote the Court's opinion.

The case was decided on July 1, 1986. With a 5–4 majority, the Supreme Court decided on behalf of the appellees, dismissing the facial challenge of the Act and the regulations that supported it, indicating that the Act, in its narrowed construction, was not inherently constitutionally invalid. Among the Justices supporting the majority view were Warren E. Burger , Lewis F. Powell, Jr. , Sandra Day O'Connor , Byron White and William Rehnquist , who wrote the majority opinion. Dissenters included [Thurgood Marshall](https://en.wikipedia.org/wiki/Thurgood_Marshall "

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