|Central Hudson Gas & Electric Corp. v. Public Service Commission of New York
47 N.Y.2d 94, 390 N.E.2d 749, reversed.
[ Powell ]
[ Brennan ]
[ Blackmun ]
[ Stevens ]
[ Rehnquist ]
Central Hudson Gas & Electric Corp. v. Public Service Commission of New York
APPEAL FROM THE COURT OF APPEALS OF NEW YORK
MR. JUSTICE REHNQUIST, dissenting.
The Court today invalidates an order issued by the New York Public Service Commission designed to promote a policy that has been declared to be of critical national concern. The order was issued by the Commission in 1973 in response to the Mideastern oil embargo crisis. It prohibits electric corporations "from promoting the use of electricity through the use of advertising, subsidy payments . . or employee incentives." State of New York Public Service Commission, Case No. 26532 (Dec. 5, 1973), App. to Juris.Statement 31a (emphasis added). Although the immediate crisis created by the oil embargo has subsided, the ban on promotional advertising remains in effect. The regulation was reexamined by the New York Public Service Commission in 1977. Its constitutionality was subsequently upheld by the New York Court of Appeals, which concluded that the paramount national interest in energy conservation justified its retention. [n1] [p584]
The Court's asserted justification for invalidating the New York law is the public interest discerned by the Court to underlie the First Amendment in the free flow of commercial information. Prior to this Court's recent decision in Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (197), however, commercial speech was afforded no protection under the First Amendment whatsoever. See, e.g., Breard v. Alexandria, 341 U.S. 622 (1951); Valentine v. Chrestensen, 316 U.S. 52 (1942). Given what seems to me full recognition of the holding of Virginia Pharmacy Board that commercial speech is entitled to some degree of First Amendment protection, I think the Court is nonetheless incorrect in invalidating the carefully considered state ban on promotional advertising in light of pressing national and state energy needs.
The Court's analysis, in my view, is wrong in several respects. Initially, I disagree with the Court's conclusion that the speech of a state-created monopoly, which is the subject of a comprehensive regulatory scheme, is entitled to protection under the First Amendment. I also think that the Court errs here in failing to recognize that the state law is most accurately viewed as an economic regulation, and that the speech involved (if it falls within the scope of the First Amendment at all) occupies a significantly more subordinate position in the hierarchy of First Amendment values than the Court gives it today. Finally, the Court, in reaching its decision, improperly substitutes its own judgment for that of the State in deciding how a proper ban on promotional advertising should be drafted. With regard to this latter point, the Court adopts as its final part of a four-part test a "no more [p585] extensive than necessary" analysis that will unduly impair a state legislature's ability to adopt legislation reasonably designed to promote interests that have always been rightly thought to be of great importance to the State.
In concluding that appellant's promotional advertising constitutes protected speech, the Court reasons that speech by electric utilities is valuable to consumers who must decide whether to use the monopoly service or turn to an alternative energy source, and if they decide to use the service, how much of it to purchase. Ante at 567. The Court, in so doing, "assume[s] that the willingness of a business to promote its products reflects a belief that consumers are interested in the advertising." Ante at 568. The Court's analysis ignores the fact that the monopoly here is entirely state-created, and subject to an extensive state regulatory scheme from which it derives benefits, as well as burdens
While this Court has stated that the "capacity [of speech] for informing the public does not depend upon the identity of its source," First National Bank of Boston v. Bellotti, 435 U.S. 765, 777 (1978), the source of the speech nevertheless may be relevant in determining whether a given message is protected under the First Amendment. [n2] When the source of the speech is a state-created monopoly such as this, traditional First Amendment concerns, if they come into play at all, certainly do not justify the broad interventionist role adopted by the Court today. In Consolidated Edison Co. v. [p586] Public Service Comm'n, ante at 549-550, MR. JUSTICE BLACKMUN observed:
A public utility is a state-created monopoly. See, e.g., N.Y.Pub.Serv.Law § 68 (McKinney 1955); Jones, Origins of the Certificate of Public Convenience and Necessity; Developments in the States 1870-1920, 79 Colum.L.Rev. 426, 458-461 (1979); Comment, Utility Rates, Consumers, and the New York State Public Service Commission, 39 Albany L.Rev. 707, 709-714 (1975). Although monopolies generally are against the public policies of the United States and of the State of New York, see, e.g., N.Y.Gen.Bus.Law § 340 (McKinney 1968 and Supp. 1979-1980), . . . utilities are permitted to operate as monopolies because of a determination by the State that the public interest is better served by protecting them from competition. See 2 A. Kahn, The Economics of Regulation 11171 (1971).
This exceptional grant of power to private enterprises justifies extensive oversight on the part of the State to protect the ratepayers from exploitation of the monopoly power through excessive rates and other forms of overreaching. . . . New York law gives its Public Service Commission plenary supervisory powers over all property, real and personal, "used or to be used for or in connection with or to facilitate the . . . sale or furnishing of electricity for light, heat or power." N.Y. Pub. Serv. Law §§ 2(12) and 66(1) (McKinney 1955).
Thus, although First National Bank of Boston v. Bellotti, supra, holds that speech of a corporation is entitled to some First Amendment protection, it by no means follows that a utility with monopoly power conferred by a State is also entitled to such protection.
The state-created monopoly status of a utility arises from the unique characteristics of the services that a utility provides. As recognized in Cantor v. Detroit Edison Co., 428 U.S. 579, 595-596 (1976),
public utility regulation typically [p587] assumes that the private firm is a natural monopoly, and that public controls are necessary to protect the consumer from exploitation.
The consequences of this natural monopoly, in my view, justify much more wide-ranging supervision and control of a utility under the First Amendment than this Court held in Bellotti to be permissible with regard to ordinary corporations. Corporate status is generally conferred as a result of a State's determination that the corporate characteristics "enhance its efficiency as an economic entity." First National Bank of Boston v. Bellotti, supra at 825-826 (REHNQUIST, J., dissenting). A utility, by contrast, fulfills a function that serves special public interests as a result of the natural monopoly of the service provided. Indeed, the extensive regulations governing decisionmaking by public utilities suggest that, for purposes of First Amendment analysis, a utility is far closer to a state-controlled enterprise than is an ordinary corporation. [n3] Accordingly, I think a State has broad discretion in determining the statements that a utility may make, in that such statements emanate from the entity created by the State to provide important and unique public services. And a state regulatory body charged with the oversight of these types of services may reasonably decide to impose on the utility a special duty to conform its conduct to [p588] the agency's conception of the public interest. Thus I think it is constitutionally permissible for it to decide that promotional advertising is inconsistent with the public interest in energy conservation. I also think New York's ban on such advertising falls within the scope of permissible state regulation of an economic activity by an entity that could not exist in corporate form, say nothing of enjoy monopoly status, were it not for the laws of New York. [n4]
This Court has previously recognized that, although commercial speech may be entitled to First Amendment protection, that protection is not as extensive as that accorded to the advocacy of ideas. Thus, we stated in Ohralik v. Ohio State Bar Assn., 436 U.S. 447, 455-456 (1978):
Expression concerning purely commercial transactions has come within the ambit of the Amendment's protection [p589] only recently. In rejecting the notion that such speech "is wholly outside the protection of the First Amendment," Virginia Pharmacy, supra at 761, we were careful not to hold "that it is wholly undifferentiable from other forms" of speech. 425 U.S. at 771, n. 24. We have not discarded the "common sense" distinction between speech proposing a commercial transaction, which occurs in an area traditionally subject to government regulation, and other varieties of speech. Ibid. To require a parity of constitutional protection for commercial and noncommercial speech alike could invite dilution, simply by a leveling process, of the force of the Amendment's guarantee with respect to the latter kind of speech. Rather than subject the First Amendment to such a devitalization, we instead have afforded commercial speech a limited measure of protection, commensurate with its subordinate position in the scale of First Amendment values, while allowing modes of regulation that might be impermissible in the realm of noncommercial expression.
The Court's decision today fails to give due deference to this subordinate position of commercial speech. The Court in so doing returns to the bygone era of Lochner v. New York, 198 U.S. 45 (1905), in which it was common practice for this Court to strike down economic regulations adopted by a State based on the Court's own notions of the most appropriate means for the State to implement its considered policies.
I had thought by now it had become well established that a State has broad discretion in imposing economic regulations. As this Court stated in Nebbia v. New York, 291 U.S. 502, 537 (1934):
[T]here can be no doubt that upon proper occasion and by appropriate measures the state may regulate a business in any of its aspects. . . . [p590]
So far as the requirement of due process is concerned, and in the absence of other constitutional restriction, a state is free to adopt whatever economic policy may reasonably be deemed to promote public welfare, and to enforce that policy by legislation adapted to its purpose. The courts are without authority either to declare such policy, or, when it is declared by the legislature, to override it. If the laws passed are seen to have a reasonable relation to a proper legislative purpose, and are neither arbitrary nor discriminatory, the requirements of due process are satisfied, and judicial determination to that effect renders a court functus officio. . . . [I]t does not lie with the courts to determine that the rule is unwise.
And Mr. Justice Black, writing for the Court, observed more recently in Ferguson v. Skrupa, 372 U.S. 726, 730 (1963):
The doctrine . . . that due process authorizes courts to hold laws unconstitutional when they believe the legislature has acted unwisely -- has long since been discarded. We have returned to the original constitutional proposition that courts do not substitute their social and economic beliefs for the judgment of legislative bodies, who are elected to pass laws.
The State of New York has determined here that economic realities require the grant of monopoly status to public utilities in order to distribute efficiently the services they provide, and, in granting utilities such status, it has made them subject to an extensive regulatory scheme. When the State adopted this scheme and when its Public Service Commission issued its initial ban on promotional advertising in 1973, commercial speech had not been held to fall within the scope of the First Amendment at all. Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976), however, subsequently accorded commercial speech a limited measure of First Amendment protection. [p591]
The Court today holds not only that commercial speech is entitled to First Amendment protection, but also that, when it is protected, a State may not regulate it unless its reason for doing so amounts to a "substantial" governmental interest, its regulation "directly advances" that interest, and its manner of regulation is "not more extensive than necessary" to serve the interest. Ante at 566. The test adopted by the Court thus elevates the protection accorded commercial speech that falls within the scope of the First Amendment to a level that is virtually indistinguishable from that of noncommercial speech. I think the Court, in so doing, has effectively accomplished the "devitalization" of the First Amendment that it counseled against in Ohralik. I think it has also, by labeling economic regulation of business conduct as a restraint on "free speech," gone far to resurrect the discredited doctrine of cases such as Lochner and Tyson Brother v. Banton, 273 U.S. 418 (1927). New York's order here is, in my view, more akin to an economic regulation to which virtually complete deference should be accorded by this Court.
I doubt there would be any question as to the constitutionality of New York's conservation effort if the Public Service Commission had chosen to raise the price of electricity, see, e.g., Sunshine Anthracite Coal Co v. Adkins, 310 U.S. 381 (1940); Old Dearborn Distributing Co. v. Seagram-Distillers Corp., 299 U.S. 183 (1936), to condition its sale on specified terms, see, e.g., Nebbia v. New York, supra at 527-528, or to restrict its production, see, e.g., Wickard v. Filburn, 317 U.S. 111 (1942). In terms of constitutional values, I think that such controls are virtually indistinguishable from the State's ban on promotional advertising.
An ostensible justification for striking down New York's ban on promotional advertising is that this Court has previously
rejected the "highly paternalistic" view that government has complete power to suppress or regulate commercial speech. "[P]eople will perceive their own best interests if [p592] only they are were enough informed and . . . the best means to that end is to open the channels of communication, rather than to close them. . . ."
Ante at 562. Whatever the merits of this view, I think the Court has carried its logic too far here.
The view apparently derives from the Court's frequent reference to the "marketplace of ideas," which was deemed analogous to the commercial market in which a laissez faire policy would lead to optimum economic decisionmaking under the guidance of the "invisible hand." See, e.g., Adam Smith, Wealth of Nations (1776). This notion was expressed by Mr. Justice Holmes in his dissenting opinion in Abrams v. United States, 250 U.S. 616, 630 (1919), wherein he stated that "the best test of truth is the power of the thought to get itself accepted in the competition of the market. . . ." See also e.g., Consolidated Edison v. Public Service Comm'n, ante at 534; J. Mill, On Liberty (1858); J. Milton, Areopagitica, A Speech for the Liberty of Unlicensed Printing (1644).
While it is true that an important objective of the First Amendment is to foster the free flow of information, identification of speech that falls within its protection is not aided by the metaphorical reference to a "marketplace of ideas." There is no reason for believing that the marketplace of ideas is free from market imperfections any more than there is to believe that the invisible hand will always lead to optimum economic decisions in the commercial market. See, e.g., Baker, Scope of the First Amendment, Freedom of Speech, 25 UCLA L.Rev. 964, 967-981 (1978). Indeed. many types of speech have been held to fall outside the scope of the First Amendment, thereby subject to governmental regulation, despite this Court's references to a marketplace of ideas. See, e.g., Chaplinsky v. New Hampshire, 315 U.S. 568 (1942) (fighting words); Beauharnais v. Illinois, 343 U.S. 250 (1952) (group libel); Roth v. United States, 354 U.S. 476 (1957) (obscenity). It also has been held that the government has [p593] a greater interest in regulating some types of protected speech than others. See, e.g., FCC v. Pacifica Foundation, 438 U.S. 726 (1978) (indecent speech); Virginia Pharmacy Board v. Virginia Citizens Consumer Council, supra, (commercial speech). And as this Court stated in Gertz v. Robert Welch, Inc., 418 U.S. 323, 344, n. 9 (1974):
Of course, an opportunity for rebuttal seldom suffices to undo [the] harm of a defamatory falsehood. Indeed, the law of defamation is rooted in our experience that the truth rarely catches up with a lie.
The Court similarly has recognized that false and misleading commercial speech is not entitled to any First Amendment protection. See, e.g., ante at 566.
The above examples illustrate that, in a number of instances, government may constitutionally decide that societal interests justify the imposition of restrictions on the free flow of information. When the question is whether a given commercial message is protected, I do not think this Court's determination that the information will "assist" consumers justifies judicial invalidation of a reasonably drafted state restriction on such speech when the restriction is designed to promote a concededly substantial state interest. I consequently disagree with the Court's conclusion that the societal interest in the dissemination of commercial information is sufficient to justify a restriction on the State's authority to regulate promotional advertising by utilities; indeed, in the case of a regulated monopoly, it is difficult for me to distinguish "society" from the state legislature and the Public Service Commission. Nor do I think there is any basis for concluding that individual citizens of the State will recognize the need for and act to promote energy conservation to the extent the government deems appropriate, if only the channels of communication are left open. [n5] Thus, even if I were [p594] to agree that commercial speech is entitled to some First Amendment protection, I would hold here that the State's decision to ban promotional advertising, in light of the substantial state interest at stake, is a constitutionally permissible exercise of its power to adopt regulations designed to promote the interests of its citizens.
The plethora of opinions filed in this case highlights the doctrinal difficulties that emerge from this Court's decisions granting First Amendment protection to commercial speech. My Brother STEVENS, quoting Mr. Justice Brandeis in Whitney v. California, 274 U.S. 357, 376-377 (1927), includes Mr. Justice Brandeis' statement that
[t]hose who won our independence by revolution were not cowards. They did not fear political change. They did not exalt order at the cost of liberty.
Ante at 582. MR. JUSTICE BLACKMUN, in his separate opinion, joins only in the Court's judgment because he believes that the Court's opinion "does not provide adequate protection for truthful. nonmisleading noncoercive commercial speech." Ante at 573. Both MR. JUSTICE STEVENS, ante at 582, and MR. JUSTICE BLACKMUN, ante at 577, would apply the following formulation by Mr. Justice Brandeis of the clear-and-present-danger test to the regulation of speech at issue in this case:
If there be time to expose through discussion the falsehood [p595] and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence. Only an emergency can justify repression.
Whitney v. California, supra at 377 (concurring opinion) . Although the Court today does not go so far as to adopt this position, its reasons for invalidating New York's ban on promotional advertising make it quite difficult for a legislature to draft a statute regulating promotional advertising that will satisfy the First Amendment requirements established by the Court in this context. See Part III, infra.
Two ideas are here at war with one another, and their resolution, although it be on a judicial battlefield, will be a very difficult one. The sort of "advocacy" of which Mr. Justice Brandeis spoke was not the advocacy on the part of a utility to use more of its product. Nor do I think those who won our independence, while declining to "exalt order at the cost of liberty," would have viewed a merchant's unfettered freedom to advertise in hawking his wares as a "liberty" not subject to extensive regulation in light of the government's substantial interest in attaining "order" in the economic sphere.
While I agree that, when the government attempts to regulate speech of those expressing views on public issues, the speech is protected by the First Amendment unless it presents "a clear and present danger" of a substantive evil that the government has a right to prohibit, see, e.g., Schenck v. United States, 249 U.S. 47, 52 (1919), I think it is important to recognize that this test is appropriate in the political context in light of the central importance of such speech to our system of self-government. As observed in 249 U.S. 47, 52 (1919), I think it is important to recognize that this test is appropriate in the political context in light of the central importance of such speech to our system of self-government. As observed in Buckley v. Valeo, 424 U.S. 1, 14 (1976):
Discussion of public issues and debate on the qualifications of candidates are integral to the operation of the system of government established by our Constitution. The First Amendment affords the broadest protection to [p596] such political expression in order "to assure [the] unfettered interchange of ideas for the bringing about of political and social changes desired by the people."
And in Garrison v. Louisiana, 379 U.S. 64, 74-75 (1964), this Court stated that "speech concerning public affairs is more than self-expression; it is the essence of self-government."
The First Amendment, however, does not always require a clear and present danger to be present before the government may regulate speech. Although First Amendment protection is not limited to the "exposition of ideas" on public issues, see, e.g., Winters v. New York, 333 U.S. 507, 510 (1948) -- both because the line between the informing and the entertaining is elusive and because art, literature, and the like may contribute to important First Amendment interests of the individual in freedom of speech -- it is well established that the government may regulate obscenity even though its does not present a clear and present danger. Compare, e.g., Paris Adult Theatre I v. Slaton, 413 U.S. 49, 57-58 (1973), with Brandenburg v. Ohio, 395 U.S. 444, 447 (1969). Indecent speech, at least when broadcast over the airwaves, also may be regulated absent a clear and present danger of the type described by Mr. Justice Brandeis and required by this Court in Brandenburg. FCC v. Pacifica Foundation, 438 U.S. 726 (1978). And in a slightly different context, this Court declined to apply the clear-and-present-danger test to a conspiracy among members of the press in violation of the Sherman Act because to do so would "degrade" that doctrine. Associated Press v. United States, 326 U.S. 1, 7 (1945). Nor does the Court today apply the clear-and-present-danger test in invalidating New York's ban on promotional advertising. As noted above, in these and other contexts, the Court has clearly rejected the notion that there must be a free "marketplace of ideas."
If the complaint of those who feel the Court's opinion does not go far enough is that the "only test of truth is its ability [p597] to get itself accepted in the marketplace of ideas" -- the test advocated by Thomas Jefferson in his first inaugural address, and by Mr. Justice Holmes in Abrams v. United States, 250 U.S. 616, 630 (1919) (dissenting opinion) -- there is no reason whatsoever to limit the protection accorded commercial speech to "truthful, nonmisleading, noncoercive" speech. See ante at 573 (BLACKMUN, J., concurring in judgment). If the "commercial speech" is in fact misleading, the "marketplace of ideas" will, in time, reveal that fact. It may not reveal it sufficiently soon to avoid harm to numerous people, but if the reasoning of Brandeis and Holmes is applied in this context, that was one of the risks we took in protecting free speech in a democratic society.
Unfortunately, although the "marketplace of ideas" has a historically and sensibly defined context in the world of political speech, it has virtually none in the realm of business transactions. Even so staunch a defender of the First Amendment as Mr. Justice Black, in his dissent in Breard v. Alexandria, 341 U.S. at 650, n., stated:
Of course I believe that the present ordinance could constitutionally be applied to a "merchant" who goes from door to door "selling pots."
And yet, with the change in solicitation and advertising techniques, the line between what Central Hudson did here and the peddler selling pots in Alexandria a generation ago is difficult, if not impossible, to fix. Doubtless that was why Mr. Justice Black joined the unanimous opinion of the Court in Valentine v. Chrestensen, 316 U.S. at 54, in which the Court stated:
This court has unequivocally held that the streets are proper places for the exercise of the freedom of communicating information and disseminating opinion, and that, though the states and municipalities may appropriately regulate the privilege in the public interest, they may not unduly burden or proscribe its employment in these public [p598] thoroughfares. We are equally clear that the Constitution imposes no such restraint on government as respects purely commercial advertising. Whether, and to what extent, one may promote or pursue a gainful occupation in the streets, to what extent such activity shall be adjudged a derogation of the public right of user, are matters for legislative judgment.
I remain of the view that the Court unlocked a Pandora's Box when it "elevated" commercial speech to the level of traditional political speech by according it First Amendment protection in Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976). The line between "commercial speech," and the kind of speech that those who drafted the First Amendment had in mind may not be a technically or intellectually easy one to draw, but it surely produced far fewer problems than has the development of judicial doctrine in this area since Virginia Pharmacy Board. For in the world of political advocacy and its marketplace of ideas, there is no such thing as a "fraudulent" idea: there may be useless proposals, totally unworkable schemes, as well as very sound proposals that will receive the imprimatur of the "marketplace of ideas" through our majoritarian system of election and representative government. The free flow of information is important in this context not because it. will lead to the discovery of any objective "truth," but because it is essential to our system of self-government.
The notion that more speech is the remedy to expose falsehood and fallacies is wholly out of place in the commercial bazaar, where. if applied logically. the remedy of one who was defrauded would be merely a statement, available upon request, reciting the Latin maxim "caveat emptor." But since "fraudulent speech" in this area is to be remediable under Virginia Pharmacy Board, supra, the remedy of one defrauded is a lawsuit or an agency proceeding based on common law notions of fraud that are separated by a world of difference [p599] from the realm of politics and government. What time, legal decisions, and common sense have so widely severed, I declined to join in Virginia Pharmacy Board, and regret now to see the Court reaping the seeds that it there sowed. For in a democracy, the economic is subordinate to the political, a lesson that our ancestors learned long ago, and that our descendants will undoubtedly have to relearn many years hence.
The Court concedes that the state interest in energy conservation is plainly substantial, ante at 568, as is the State's concern that its rates be fair and efficient. Ante at 569. It also concedes that there is a direct link between the Commission's ban on promotional advertising and the State's interest in conservation. Ibid. The Court nonetheless strikes down the ban on promotional advertising because the Commission has failed to demonstrate, under the final part of the Court's four-part test, that its regulation is no more extensive than necessary to serve the State's interest. Ante at 569-571. In reaching this conclusion, the Court conjures up potential advertisements that a utility might make that conceivably would result in net energy savings. The Court does not indicate that the New York Public Service Commission has, in fact, construed its ban on "promotional" advertising to preclude the dissemination of information that clearly would result in a net energy savings, nor does it even suggest that the Commission has been confronted with and rejected such an advertising proposal. [n6] The final part of the Court's test [p600] thus leaves room for so many hypothetical "better" ways that any ingenious lawyer will surely seize on one of them to secure the invalidation of what the state agency actually did. As MR. JUSTICE BLACKMUN observed in Illinois Elections Bd. v. Socialist Workers Party, 440 U.S. 173, 188-189 (1979) (concurring opinion):
A judge would be unimaginative indeed if he could not come up with something a little less "drastic" or a little less "restrictive" in almost any situation, and thereby enable himself to vote to strike legislation down.
Here, the Court concludes that the State's interest in energy conservation cannot justify a blanket ban on promotional advertising. In its statement of the facts, the Court observes that the Commission's ban on promotional advertising is not "a perfect vehicle for conserving energy." It states:
[T]he Commission's order prohibits promotional advertising to develop consumption during periods when demand for electricity is low. By limiting growth in "off-peak" consumption, the ban limits the "beneficial side effects" of such growth in terms of more efficient use of existing powerplants. [App. to Juris.Statement] 37a.
Ante at 559. The Court's analysis in this regard is in my view fundamentally misguided because it fails to recognize that the beneficial side effects of "more efficient use" may be inconsistent with the goal of energy conservation. Indeed, the Commission explicitly found that the promotion of off-peak consumption would impair conservation efforts. [n7] The Commission stated:
Increased off-peak generation, . . . while conferring [p601] some beneficial side effects, also consumes valuable energy resources and, if it is the result of increased sales, necessarily creates incremental air pollution and thermal discharges to waterways. More important, any increase in off-peak generation from most of the major companies producing electricity in this State would not, at this time, be produced from coal or nuclear resources, but would require the use of oil-fired generating facilities. The increased requirement for fuel oil to serve the incremental off-peak load created by promotional advertising would aggravate the nation's already unacceptably high level of dependence on foreign sources of supply, and would, in addition, frustrate, rather than encourage, conservation efforts.
App. to Juris.Statement 37a. [n8]
The Court also observes, as the Commission acknowledged, that the ban on promotional advertising can achieve only "piecemeal conservationism," because oil dealers are not under the Commission's jurisdiction, and they remain free to advertise. Until I have mastered electrical engineering and marketing, I am not prepared to contradict by virtue of my judicial office those who assume that the ban will be successful in making a substantial contribution to conservation efforts. [p602] And I doubt that any of this Court's First Amendment decisions justify striking down the Commission's order because more steps toward conservation could have been made. This is especially true when, as here, the Commission lacks authority over oil dealers.
The Court concludes that the Commission's ban on promotional advertising must be struck down because it is more extensive than necessary: it may result in the suppression of advertising by utilities that promotes the use of electrical devices or services that cause no net increase in total energy use. The Court's reasoning in this regard, however, is highly speculative. The Court provides two examples that it claims support its conclusion. It first states that both parties acknowledge that the "heat pump" will be "a major improvement in electric heating," and that, but for the ban, the utilities would advertise this type of "energy efficien[t]" product. [n9] The New York Public Service Commission, however, considered the merits of the heat pump and concluded that it would most likely result in an overall increase in electric energy consumption. The Commission stated:
[I]nstallation of a heat pump means also installation of central air-conditioning. To this extent, promotion of off-peak electric space heating involves promotion of on-peak summer air-conditioning, as well as on-peak usage [p603] of electricity for water heating. And the price of electricity to most consumers in the State does not now fully reflect the much higher marginal costs of on-peak consumption in summer peaking markets. In these circumstances, there would be a subsidization of consumption on-peak, and consequently, higher rates for all consumers.
App. to Juris.Statement 58a. Subsidization of peak consumption not only may encourage the use of scarce energy resources during peak periods, but also may lead to larger reserve generating capacity requirements for the State.
The Court next asserts that electric heating, as a backup to solar and other heat, may be an efficient alternative energy source. Ante at 570. The Court fails to establish, however, that an advertising proposal of this sort was properly presented to the Commission. Indeed, the Court's concession that the Commission did not make findings on this issue suggests that the Commission did not even consider it. Nor does the Court rely on any support for its assertion other than the assertion of appellant. Rather, it speculates that,
[i]n the absence of authoritative findings to the contrary, we must credit as within the realm of possibility the claim that electric heat can be an efficient alternative in some circumstances.
Ordinarily it is the role of the State Public Service Commission to make factual determinations concerning whether a device or service will result in a net energy savings and, if so, whether and to what extent state law permits dissemination of information about the device or service. Otherwise, [p604] as here, this Court will have no factual basis for its assertions. And the State will never have an opportunity to consider the issue, and thus to construe its law in a manner consistent with the Federal Constitution. As stated in Barrows v. Jackson, 346 U.S. 249, 256-257 (1953):
It would indeed be undesirable for this Court to consider every conceivable situation which might possibly arise in the application of complex and comprehensive legislation. Nor are we so ready to frustrate the expressed will of Congress or that of the state legislatures. Cf. Southern Pacific Co. v. Gallagher, 306 U.S. 167, 172.
I think the Court would do well to heed the admonition in Barrows here. The terms of the order of the New York Public Service Commission, in my view, indicate that advertising designed to promote net savings in energy use does not fall within the scope of the ban. The order prohibits electric corporations "from promoting the use of electricity through the use of advertising, subsidy payments . . . or employee incentives." App. to Juris.Statement 31a (emphasis added). It is not clear to me that advertising that is likely to result in net savings of energy is advertising that "promot[es] the use of electricity," nor does the Court point to any language in the Commission order that suggests it has adopted this construction. Rather, it would seem more accurate to characterize such advertising as designed to "discourage" the use of electricity. [n11] Indeed, I think it is quite likely that the Commission [p605] would view advertising that would clearly result in a net savings in energy as consistent with the objectives of its order, and therefore permissible. [n12] The Commission, for example, has authorized the dissemination of information that would result in shifts in electrical energy demand, thereby reducing the demand for electricity during peak periods. Id. at 37a. [n13] It has also indicated a willingness to consider at least some other types of "specific proposals" submitted by utilities. Id. at 37a-38a. And it clearly permits informational, as opposed to promotional, dissemination of information. Id. at 43a-46a. Even if the Commission were ultimately to reject the view that its ban on promotional advertising does not include advertising that results in net energy savings, I think the Commission should at least be given an opportunity to consider it.
It is, in my view, inappropriate for the Court to invalidate the State's ban on commercial advertising here, based on its speculation that, in some cases, the advertising may result in a net savings in electrical energy use, and in the cases in which it is clear a net energy savings would result from utility advertising, the Public Service Commission would apply its [p606] ban so as to proscribe such advertising. Even assuming that the Court's speculation is correct, I do not think it follows that facial invalidation of the ban is the appropriate course. As stated in Parker v. Levy, 417 U.S. 733, 760 (1974),
even if there are marginal applications in which a statute would infringe on First Amendment values, facial invalidation is inappropriate if the "remainder of the statute . . . covers a whole range of easily identifiable and constitutionally proscribable . . . conduct. . . ." CSC v. Letter Carriers, 413 U.S. 548, 580-581 (1973).
This is clearly the case here.
For the foregoing reasons, I would affirm the judgment of the New York Court of Appeals.
1. The New York Court of Appeals stated:
In light of current exigencies, one of the policies of any public service legislation must be the conservation of our vital and irreplaceable resources. The Legislature has but recently imposed upon the commission a duty
to encourage all persons and corporations . . . to formulate and carry out long-range programs . . . [for] the preservation of environmental values and the conservation of natural resources.
(Public Service Law, § 5, subd. 2). Implicit in this amendment is a legislative recognition of the serious situation which confronts our State and Nation. More important, conservation of resources has become an avowed legislative policy embodied in the commission's enabling act (see also Matter of New York State Council of Retail Merchants v. Public Serv. Comm. of State of N.Y., 45 N.Y.2d 661, 673-674).
Consolidated Edison Co. v. Public Service Comm'n, 47 N.Y.2d 94, 102-103, 390 N.E.2d 749, 753 (1979).
2. In Brown v. Glines, 444 U.S. 348 (1980), for example, we recently upheld Air Force regulations that imposed restrictions on the free speech and petition rights of Air Force personnel. See also, e.g., Parker v. Levy, 417 U.S. 733 (1974) (commissioned officer may be prohibited from publicly urging enlisted personnel to disobey orders that might send them into combat); Snepp v. United States, 444 U.S. 507 (1980) (employees of intelligence agency may be required to submit publications relating to agency activity for pre-publication review by the agency).
3. In this regard, the New York Court of Appeals stated:
Public utilities, from the earliest days in this State, have been regulated and franchised to serve the commonweal. Our policy is
to withdraw the unrestricted right of competition between corporations occupying . . . the public streets . . . and supplying the public with their products or utilities which are well nigh necessities
(People ex rel. New York Edison Co. v. Willcox, 207 N.Y. 86, 99; Matter of New York Elec. Lines Co., 201 N.Y. 321). The realities of the situation all but dictate that a utility be granted monopoly status (see People ex rel. New York Elec. Lines Co. v. Squire, 107 N.Y. 593, 603-605). To protect against abuse of this superior economic position, extensive governmental regulation has been deemed a necessary coordinate (see People ex rel. New York Edison Co. v. Willcox, supra at pp. 93-94).
47 N.Y.2d at 109-110, 390 N.E.2d at 757.
4. The Commission's restrictions on promotional advertising are grounded in its concern that electric utilities fulfill their obligation under the New York Public Service Law to provide "adequate" service at "just and reasonable" rates. N.Y.Pub.Serv.Law § 65(1) (McKinney 1955). The Commission, under state law, is required to set reasonable rates. N.Y.Pub.Serv.Law §§ 66(2) and 72 (McKinney 1955); § 66 (12) (McKinney Supp. 1979). The Commission has also been authorized by the legislature to prescribe "such reasonable improvements [in electric utilities' practices] as will best promote the public interest. . . ." § 66(2). And in the performance of its duties, the Commission is required to
encourage all persons and corporations subject to its jurisdiction to formulate and carry out long-range programs, individually or cooperatively, for the performance of their public service responsibilities with economy, efficiency, and care for the public safety, the preservation of environmental values, and the conservation of natural resources.
N.Y.Pub.Serv.Law § 5(2) (McKinney Supp. 1979). Here, I think it was quite reasonable for the State Public Service Commission to conclude that the ban on promotional advertising was necessary to prevent utilities from using their broad state-conferred monopoly power to promote their own economic wellbeing at the expense of the state interest in energy conservation -- an interest that could reasonably be found to be inconsistent with the promotion of greater profits for utilities.
5. Although the Constitution attaches great importance to freedom of speech under the First Amendment so that individuals will be better informed and their thoughts and ideas will be uninhibited, it does not follow that "people will perceive their own best interests," or that, if they do, they will act to promote them. With respect to governmental policies that do not offer immediate tangible benefits and the success of which depends on incremental contributions by all members of society, such as would seem to be the case with energy conservation, a strong argument can be made that, while a policy may be in the long-run interest of all members of society, some rational individuals will perceive it to their own short-run advantage to not act in accordance with that policy. When the regulation of commercial speech is at issue, I think this is a consideration that the government may properly take into account. As was observed in Townsend v. Yeomans, 301 U.S. 441, 451 (1937), "the legislature, acting within its sphere, is presumed to know the needs of the people of the State." This observation, in my view, is applicable to the determination of the State Public Service Commission here.
6. Indeed, appellee, in its brief, states:
[N]either Central Hudson nor any other party made an attempt before the Commission to demonstrate or argue for a specific advertising strategy that would avoid the difficulties that the Commission found inherent in electric utility promotional advertising. The Commission, therefore, continued to enforce its ban on promotion which it had instituted in 1973.
Brief for Appellee 15. The Court makes no attempt to address this statement, or to explain why, when no state body has addressed the issue, the Court should nonetheless resolve it by invalidating the state regulation.
7. In making this finding, the Commission distinguished
between promotional advertising designed to shift existing consumption from peak to off-peak hours and advertising designed to promote additional consumption during off-peak hours.
App. to Juris.Statement 58a, n. 2. It proscribed only the latter. Ibid.
8. And in denying appellant's petition for rehearing, the Commission again stated:
While promotion of off-peak usage, particularly electric space heating, is touted by some as desirable because it might increase off-peak usage, and thereby improve a summer-peaking company's load factor, we are convinced that off-peak promotion, especially in the context of imperfectly structured electric rates, is inconsistent with the public interest, even if it could be divorced in the public mind from promoting electric usage generally. As we pointed out in our Policy Statement, increases in generation, even off-peak generation, at this time, requires the burning of scarce oil resources. This increased requirement for fuel oil aggravates the nation's already high level of dependence on foreign sources of supply.
Id. at 58a (footnotes omitted).
9. As previously discussed, however, it does not follow that, because a product is "energy efficient," it is also consistent with the goal of energy conservation. Thus, with regard to the heat pump, counsel for appellees stated at oral argument that "Central Hudson says there are some [heat pumps] without air conditioning, but . . . they have never advised us of that." Tr. of Oral Arg. 333. The electric heat pump, he continued,
normally carr[ies] with it air conditioning in the summer, and the commission found that this would result in air conditioning that would not otherwise happen.
Id. at 33. This is but one example of the veritable Sargasso Sea of difficult nonlegal issues that we wade into by adopting a rule that requires judges to evaluate highly complex and often controversial questions arising in disciplines quite foreign to ours.
10. Even assuming the Court's speculation is correct, it has shown too little. For the regulation to truly be "no more extensive than necessary," it must be established that a more efficient energy source will serve only as a means for saving energy, rather than as an inducement to consume more energy because the cost has decreased or because other energy using products will be used in conjunction with the more efficient one.
11. This characterization is supported by the reasoning of the New York Court of Appeals, which stated:
[P]romotional advertising . . . seeks . . . to encourage the increased consumption of electricity, whether during peak hours or off-peak hours. Thus, not only does such communication lack any beneficial informative content, hut it may be affirmatively detrimental to the society. . . . Conserving diminishing resources is a matter of vital State concern, and increased use of electrical energy is inimical to our interests. Promotional advertising, if permitted, would only serve to exacerbate the crisis.
47 N.Y.2d at 110, 390 N.E.2d at 757-758.
12. At oral argument, counsel for appellant conceded that the ban would not apply to utility advertising promoting the nonuse of electricity. Tr. of Oral Arg. 6. Indeed, counsel stated:
If the use reduces the amount of electricity used, it is not within the ban. The promotional ban is defined as anything which might be expected to increase the use of electricity.
Ibid. And counsel for appellee stated that "the only thing that is involved here is the promotion by advertising of electric usage." Id. at 30. "And if a showing can be made that promotion in fact is going to conserve energy," counsel for appellee continued,
which . . . has never been made to us, the commission's order says we are ready to relax our ban, we're not interested in banning for the sake of banning it. We think that is basically a bad idea, if we can avoid it. In gas, we have been relaxing it as more gas has become available.
Id. at 40.
13. By contrast, as previously discussed, the Public Service Commission does not permit the promotion of off-peak consumption alone. Supra at 600-601, and n. 8.