Central Hudson Gas & Electric Corporation v. Public Service Commission of New York

PETITIONER: Central Hudson Gas & Electric Corporation
RESPONDENT: Public Service Commission of New York
LOCATION: Public Service Commission

DOCKET NO.: 79-565
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: New York Court of Appeals

CITATION: 447 US 557 (1980)
ARGUED: Mar 17, 1980
DECIDED: Jun 20, 1980

ADVOCATES:
Peter H. Schiff - on behalf of the Appellee
Telford Taylor - on behalf of the Appellant

Facts of the case

The Public Service Commission of New York (PSC), in the interest of conserving energy, enacted a regulation that prohibited electric utilities from promoting electricity use. The PSC's regulation distinguished promotional advertising from informational advertising, which was permitted. Central Hudson Gas and Electric challenged the regulation in a New York State Supreme Court, which upheld the regulation. The Appellate Division of the New York State Supreme Court affirmed the decision, as did the New York Court of Appeals.

Question

Did the PSC's ban on advertising violate the freedom of speech protected by the First and Fourteenth Amendments?

Media for Central Hudson Gas & Electric Corporation v. Public Service Commission of New York

Audio Transcription for Oral Argument - March 17, 1980 in Central Hudson Gas & Electric Corporation v. Public Service Commission of New York

Warren E. Burger:

We will hear argument next in Central Hudson Gas & Electric v. Public Service Commission of New York.

Mr. Taylor, I think you may proceed whenever you are ready now.

Telford Taylor:

Mr. Chief Justice, and may it please the Court.

This case also involves an order of the Public Service Commission, it is in our brief on page 3, and is mercifully short "All electric corporations are hereby prohibited from promoting the use of electricity through the use of advertising.

I think the Court will readily see that the constitutional questions raised here are distinct from those in the case that has just been heard.

The bill insert ban closes a particular channel to speech on public issues this is a complete ban on speech described as promotional advertising.

That, of course, falls within the general category of speech.

That in the decisions of this Court has been called commercial speech, but I think it will appear in the course of the discussion that the line here between commercial speech and other speech is not as clear as it has been in some of the other cases in this Court.

Now, I think I should say a word about the genesis of this order because it is different from the chronology of the bill insert case.

The ban there in the same language as on page 3 was enunciated by the commission in a summary emergency fashion in December of 1973 at the time of the Arab oil boycott following the Arab-Israeli war, at a time when there was a genuine and acknowledge belief of a shortage of oil which might not enable the utilities to continue service, and it was put in on that basis at that time, together with an order for voltage reduction.

Months passed, the shortage eased and the voltage restriction was restored, but the promotional ban was retained in effect.

In 1976, the commission inaugurated a proceeding to review whether the promotional ban should be continued.

Central Hudson and other companies urged that it should be lifted.

We urged that unsuccessfully, and after losing before the commission and rehearing denied, this litigation was commenced in the New York state courts and, of course, therefore is here on appeal on federal constitutional grounds.

I might also just mention to the Court that a brief has been filed here in amicus on behalf of the Long Island Lighting Company.

That was a litigation started in the federal courts, in the Eastern District of New York, in which Judge Pratt ruled that this promotional ban was indeed unconstitutional under the First Amendment but upheld the bill insert ban.

That case is pending and has been argued in the Second Circuit but has not been decided.

Now, before I come to the two matters that I think are very basic here, I would like to mention three things which either are or should be uncontroverted and which I think may clear up a couple of things and avoid the necessity for colloquy.

In the first place, in this case there is no question about who pays for promotional advertising.

There is federal legislation declaring federal standards which require that promotional advertising be paid for by the shareholders and not the rate payers.

The commission's own view is to the same effect and therefore we do not have here any question about the source of funds for promotional advertising.

The owners of the company bear it.

Warren E. Burger:

Would this bar, Mr. Taylor, ads in the form of essays, as is sometimes done, promoting the more efficient use of electrical energy?

Telford Taylor:

Yes.

The ban is phrased in terms not of consumption of oil or energy resource but the amount of electricity and therefore if we urge by the use of an appliance or in any other way something which will increase the use of electricity, even though it might be a net saving of energy, it comes within the ban.

I will be coming in more detail to that point in a few moments.

Potter Stewart:

But it wouldn't ban advertising in promoting the non-use of electricity --

Telford Taylor:

No.

Potter Stewart:

-- if the advertising said turn out your lights when there is nobody in the room.

Telford Taylor:

You're quite right.