''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 Puerto Rico (; abbreviated PR; tnq, Boriken, ''Borinquen''), officially the Commonwealth of Puerto Rico ( es, link=yes, Estado Libre Asociado de Puerto Rico, lit=Free Associated State of Puerto Rico), is a Caribbean island and unincorporated ...

's Games of Chance Act of 1948 is in legal compliance with the United States Constitution, specifically as regards freedom of speech,

equal protection The Equal Protection Clause is part of the first section of the Fourteenth Amendment to the United States Constitution. The clause, which took effect in 1868, provides "''nor shall any State ... deny to any person within its jurisdiction the equal ...

and due process.''Posadas de Puerto Rico Associates v. Tourism Company of Puerto Rico'', . In a 5–4 decision, the Supreme Court held that the Puerto Rico government (law) could restrict advertisement for

casino A casino is a facility for certain types of gambling. Casinos are often built near or combined with hotels, resorts, restaurants, retail shopping, cruise ships, and other tourist attractions. Some casinos are also known for hosting live entertai ...

gambling Gambling (also known as betting or gaming) is the wagering of something of value ("the stakes") on a random event with the intent of winning something else of value, where instances of strategy are discounted. Gambling thus requires three el ...

from being targeted to residents, even if the activity itself was legal and advertisement to

tourist Tourism is travel for pleasure or business; also the theory and practice of touring (disambiguation), touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tour (disambiguation), tours. Th ...

s 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 First or 1st is the ordinal form of the number one (#1). First or 1st may also refer to: *World record, specifically the first instance of a particular achievement Arts and media Music * 1$T, American rapper, singer-songwriter, DJ, and reco ...

, 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 Nicotine marketing is the marketing of nicotine-containing products or use. Traditionally, the tobacco industry markets cigarette smoking, but it is increasingly marketing other products, such as electronic cigarettes and heated tobacco product ...

, 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 In law, commercial speech is speech or writing on behalf of a business with the intent of earning revenue or a profit. It is economic in nature and usually attempts to persuade consumers to purchase the business's product or service. The Supreme ...

,'' Central Hudson Gas & Electric Corp. v. Public Service Commission'', . 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 A precedent is a principle or rule established in a previous legal case that is either binding on or persuasive for a court or other tribunal when deciding subsequent cases with similar issues or facts. Common-law legal systems place great valu ...

in some, if not all, subsequent cases, the case has never been officially overruled.

Prior history

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 Holiday Inn is an American chain of hotels based in Atlanta, Georgia. and a brand of IHG Hotels & Resorts. The chain was founded in 1952 by Kemmons Wilson, who opened the first location in Memphis, Tennessee that year. The chain was a division ...

and

Sands Casino The Sands Hotel and Casino was a historic American hotel and casino on the Las Vegas Strip in Nevada, United States, that operated from 1952 to 1996. Designed by architect Wayne McAllister, with a prominent high sign, the Sands was the sevent ...

, 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.''Posades de Puerto Rico Associates, dba Condado Holiday Inn v. Tourism Company of Puerto Rico et al.'
478 U.S. 328l 106 S. Ct 2968; 92 L. Ed. 2d 266
(1986). 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 The Supreme Court of Puerto Rico ( es, Tribunal Supremo de Puerto Rico) is the highest court of Puerto Rico, having judicial authority to interpret and decide questions of Puerto Rican law. The Court is analogous to one of the state supreme c ...

affirmed the lower court's decision. The company appealed to the U.S. Supreme Court, seeking review of the

federal question In United States law, federal question jurisdiction is a type of subject-matter jurisdiction that gives United States federal court The federal judiciary of the United States is one of the three branches of the federal government of the Unit ...

Case

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 Civil Liberties Union (ACLU) is a nonprofit organization founded in 1920 "to defend and preserve the individual rights and liberties guaranteed to every person in this country by the Constitution and laws of the United States". T ...

, the

American Association of Advertising Agencies The American Association of Advertising Agencies (4A's) is a U.S. trade association for advertising agencies. founded in 1917. It serves over 700+ member agencies across 1,300 offices, which control more than 85% of total U.S. advertising spend. ...

, the American Broadcasting Companies, the

AFL–CIO The American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) is the largest federation of unions in the United States. It is made up of 56 national and international unions, together representing more than 12 million ac ...

, the

American Newspaper Publishers Association The News Media Alliance (formerly known as the Newspaper Association of America until 2016National Broadcasting Company, the Atlantic City Casinos Association and the

Association of National Advertisers The Association of National Advertisers (ANA) represents the marketing community in the United States. Its headquarters is in New York City and it has another office in Washington, D.C. ANA's membership includes over 600 companies with 25,000 b ...

submitted ''

amici curiae An ''amicus curiae'' (; ) is an individual or organization who is not a party to a legal case, but who is permitted to assist a court by offering information, expertise, or insight that has a bearing on the issues in the case. The decision on ...

'' in favor of the appellant. Posadas argued that the

First Amendment to the United States Constitution The First Amendment (Amendment I) to the United States Constitution prevents the government from making laws that regulate an establishment of religion, or that prohibit the free exercise of religion, or abridge the freedom of speech, the ...

did not permit restrictions on

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

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 Warren Earl Burger (September 17, 1907 – June 25, 1995) was an American attorney and jurist who served as the 15th chief justice of the United States from 1969 to 1986. Born in Saint Paul, Minnesota, Burger graduated from the St. Paul Colleg ...

, Lewis F. Powell, Jr., Sandra Day O'Connor,

Byron White Byron "Whizzer" Raymond White (June 8, 1917 April 15, 2002) was an American professional football player and jurist who served as an associate justice of the U.S. Supreme Court from 1962 until his retirement in 1993. Born and raised in Colo ...

and

William Rehnquist William Hubbs Rehnquist ( ; October 1, 1924 – September 3, 2005) was an American attorney and jurist who served on the U.S. Supreme Court for 33 years, first as an associate justice from 1972 to 1986 and then as the 16th chief justice from ...

, who wrote the majority opinion. Dissenters included

Thurgood Marshall Thurgood Marshall (July 2, 1908 – January 24, 1993) was an American civil rights lawyer and jurist who served as an associate justice of the Supreme Court of the United States from 1967 until 1991. He was the Supreme Court's first African-A ...

and Harry Blackmun, as well as William J. Brennan, Jr. and John Paul Stevens, who authored dissenting opinions. In voicing the majority view, Rehnquist stated that the government of Puerto Rico had a legitimate concern in limiting gambling among its residents to promote public well-being under the same logic used by many of the 50 United States in making gambling illegal. The substantial interest of the government thus affirmed, he indicated that advertising aimed at local residents would undoubtedly increase demand and that the limitations were not excessive because restriction was limited to casino gambling as opposed to all games of chance. In his dissent, Brennan indicated that the determination to make casino gambling legal in Puerto Rico was indication that Puerto Rico does not believe "serious harmful effects" result from gambling, that the appellees had not demonstrated that restricting such advertisement would reduce any civic "serious harmful effects" of gambling, or that restriction of free speech was the best or only method of reducing such harmful effects. Justice Stevens, dissenting, concluded that, "The general proposition advanced by the majority today—that a State may prohibit the advertising of permitted conduct if it may prohibit the conduct altogether—bears little resemblance to the grotesquely flawed regulation of speech advanced by Puerto Rico in this case. ... The First Amendment surely does not permit Puerto Rico's frank discrimination among publications, audiences, and words."

Implications

The case is regarded as a landmark in illustrating the elasticity of the ''Central Hudson'' standards for regulating commercial speech. In 2003's ''Freedom of Commercial Expression'', Roger Shiner points out that what was remarkable about the ''Posadas'' decision was the way in which the Court applied ''Central Hudson'', not requesting any evidence that the restrictions were necessary to protect state interest in public wellbeing, but simply accepting that the assertion that it ''might'' be necessary and useful was reasonable.

Court of Appeals A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of ...

justice

Richard Posner Richard Allen Posner (; born January 11, 1939) is an American jurist and legal scholar who served as a federal appellate judge on the U.S. Court of Appeals for the Seventh Circuit from 1981 to 2017. A senior lecturer at the University of Chic ...

suggested in 2004's ''Frontiers of Legal Theory'' that to an

economist An economist is a professional and practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this field there are ...

, this view is ''not'' reasonable, even granting for the sake of argument that the state does have interest in imposing more rigorous restrictions on commercial speech. Posner notes that reducing advertising costs to casinos might lead to their reducing gambling costs, which may in turn increase gambling and any undesirable social effects. ''Posadas'' has been precedent in a number of subsequent cases on commercial speech due to its implicit recognition of a "

vice A vice is a practice, behaviour, or habit generally considered immoral, sinful, criminal, rude, taboo, depraved, degrading, deviant or perverted in the associated society. In more minor usage, vice can refer to a fault, a negative character t ...

" allowance for restrictions under which federal and state governments can regulate nonmisleading advertisement for substances and services that are legal, but might be subject to regulation for civic good. It was the first in a series of permissive decisions regarding regulation of commercial speech, applying a more lax standard than the intermediate scrutiny recommended in ''Central Hudson''. Specifically, the case has been brought up in considering other cases related to

tobacco Tobacco is the common name of several plants in the genus '' Nicotiana'' of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the ...

, alcohol and gambling. At the same time that the Court applied this more relaxed scrutiny to some commercial speech cases, it applied more rigorous scrutiny to others.

Subsequent history

In 1987, the implications of the decision were raised when the

American Bar Association The American Bar Association (ABA) is a voluntary bar association of lawyers and law students, which is not specific to any jurisdiction in the United States. Founded in 1878, the ABA's most important stated activities are the setting of aca ...

was considering a proposal to support extending the ban on tobacco advertising to all media, even though the act of smoking was legal. In the courtroom, the case was cited as precedent in two 1990s Supreme Court cases testing alcohol-related laws: '' Rubin v. Coors Brewing Co.'' (1995) and ''

44 Liquormart, Inc. v. Rhode Island ''44 Liquormart, Inc. v. Rhode Island'', 517 U.S. 484 (1996), was a Supreme Court of the United States, United States Supreme Court case in which the Court held that a complete ban on the advertising of alcohol prices was unconstitutional under t ...

'' (1996). According to attorney Bruce Ennis, ''Rubin'' "put the nail in the coffin of the ''Posadas'' decision" when the Court unanimously decided that it was unconstitutional to prohibit the display of alcoholic content on beer labels. However, ''Posadas'' was not overturned then nor when it was raised during ''44 Liquormarts successful challenge to a law banning publication of liquor prices in

Rhode Island Rhode Island (, like ''road'') is a state in the New England region of the Northeastern United States. It is the smallest U.S. state by area and the seventh-least populous, with slightly fewer than 1.1 million residents as of 2020, but it ...

, even though Justices Stevens,

Ruth Bader Ginsburg Joan Ruth Bader Ginsburg ( ; ; March 15, 1933September 18, 2020) was an American lawyer and jurist who served as an associate justice of the Supreme Court of the United States from 1993 until her death in 2020. She was nominated by Presiden ...

Anthony Kennedy Anthony McLeod Kennedy (born July 23, 1936) is an American lawyer and jurist who served as an associate justice of the Supreme Court of the United States from 1988 until his retirement in 2018. He was nominated to the court in 1987 by Presid ...

, and

Clarence Thomas Clarence Thomas (born June 23, 1948) is an American jurist who serves as an associate justice of the Supreme Court of the United States. He was nominated by President George H. W. Bush to succeed Thurgood Marshall and has served since 1 ...

all called for it to be overruled. Even though she did not call for overruling, Justice O'Connor—whose opinion was signed by Rehnquist, Stephen Breyer and

David Souter David Hackett Souter ( ; born September 17, 1939) is an American lawyer and jurist who served as an associate justice of the U.S. Supreme Court from 1990 until his retirement in 2009. Appointed by President George H. W. Bush to fill the seat ...

—stated that the Court had properly ignored ''Posadas'' in determining subsequent cases. Although ''Freedom of Commercial Speech'' posits this decision as a "rebounding" from the ''Posadas'' decision, it noted that ''44 Liquormart'' nevertheless reaffirmed the Court's opinion that commercial speech was less deserving of constitutional protection than non-commercial speech. In 1999, it became precedent in another Supreme Court case involving gambling advertisement, '' Greater New Orleans Broadcasting Assn., Inc. v. United States'', which challenged the

Federal Communications Commission The Federal Communications Commission (FCC) is an independent agency of the United States federal government that regulates communications by radio, television, wire, satellite, and cable across the United States. The FCC maintains jurisdicti ...

's right to restrict advertisement on games of chance with the justification that such restrictions would reduce gambling, given that advertisements for such games of chance as state lotteries and

Native American gambling enterprises Native American gaming comprises casinos, bingo halls, and other gambling operations on Indian reservations or other tribal lands in the United States. Because these areas have tribal sovereignty, states have limited ability to forbid gambling t ...

were allowed in all states and all gambling advertisement had been permitted by the

United States Court of Appeals for the Ninth Circuit The United States Court of Appeals for the Ninth Circuit (in case citations, 9th Cir.) is the U.S. federal court of appeals that has appellate jurisdiction over the U.S. district courts in the following federal judicial districts: * District ...

in nine. At issue was whether the state of

Louisiana Louisiana , group=pronunciation (French: ''La Louisiane'') is a state in the Deep South and South Central regions of the United States. It is the 20th-smallest by area and the 25th most populous of the 50 U.S. states. Louisiana is borde ...

could restrict the advertisement to its residents of legal private casinos. In its hearing of that case, the

United States Court of Appeals for the Fifth Circuit The United States Court of Appeals for the Fifth Circuit (in case citations, 5th Cir.) is a federal court with appellate jurisdiction over the district courts in the following federal judicial districts: * Eastern District of Louisiana * M ...

affirmed that the prohibition was constitutional based on ''Posadas'', but the Supreme Court held rather that private casinos must be permitted to advertise to residents since gambling was legal in that state. However, as of 2007, ''Posadas'' had still not been officially overturned.

References

External links

* {{US1stAmendment, speech, state=expanded United States Supreme Court cases United States Supreme Court cases of the Burger Court United States commercial speech case law 1986 in United States case law Legal history of Puerto Rico United States gambling case law Advertising and marketing controversies