Opinion ID: 4413296
Heading Depth: 5
Heading Rank: 1

Heading: Central Hudson or Zauderer

Text: The parties agree that Berkeley’s ordinance is a regulation of commercial speech. Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 561 (1980); see Hunt v. City of L.A., 638 F.3d 703, 715 (9th Cir. 2011). However, they disagree about whether the ordinance’s compliance with the First Amendment should be analyzed under Central Hudson or under Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985). Under Central Hudson, the government may restrict or prohibit commercial speech that is neither misleading nor connected to unlawful activity, as long as the governmental interest in regulating the speech is substantial. 477 U.S. at 564. The restriction or prohibition must “directly advance the governmental interest asserted,” and must not be “more extensive than is necessary to serve that interest.” Id. at 566. Under Zauderer as we interpret it today, the government may compel truthful disclosure in commercial speech as long as the compelled disclosure is “reasonably related” to a CTIA V. CITY OF BERKELEY 19 substantial governmental interest, Zauderer, 471 U.S. at 651, and involves “purely factual and uncontroversial information” that relates to the service or product provided. NIFLA, 138 S. Ct. at 2372 (quoting Zauderer, 471 U.S. at 651). We apply the intermediate scrutiny test mandated by Central Hudson in commercial speech cases where the government acts to restrict or prohibit speech, on the ground that in such cases intermediate scrutiny appropriately protects the interests of both the speaker (the seller) and the audience (the purchaser). But one size does not fit all in commercial speech cases. In Central Hudson itself, the Supreme Court cautioned, “The protection available for particular commercial expression turns on the nature both of the expression and of the governmental interests served by its regulation.” Central Hudson, 477 U.S. at 563. Five years after Central Hudson, the Court held that Central Hudson’s intermediate scrutiny test does not apply to compelled, as distinct from restricted or prohibited, commercial speech. In Zauderer, defendant Zauderer advertised legal services to prospective Dalkon Shield plaintiffs in a number of Ohio newspapers. The advertisement stated, inter alia, “‘The cases are handled on a contingent fee basis of the amount recovered. If there is no recovery, no legal fees are owed by our clients.’” Zauderer, 471 U.S. at 631. Zauderer was disciplined under Ohio state bar disciplinary rules on the ground that the advertisement was “deceptive” within the meaning of the rules, id. at 633, because it failed to disclose “the client’s potential liability for costs even if her suit were unsuccessful.” Id. at 635. The Court noted that the bar disciplinary rules required Zauderer to “include in his advertising purely factual and uncontroversial information about the terms under which his 20 CTIA V. CITY OF BERKELEY services will be available.” Id. at 651. The Court wrote, “Ohio has not attempted to prevent attorneys from conveying information to the public; it has only required them to provide somewhat more information than they might otherwise be inclined to present.” Id. at 650. The Supreme Court declined to apply the Central Hudson test: Because the extension of First Amendment protection to commercial speech is justified principally by the value to consumers of the information such speech provides, appellant’s constitutionally protected interest in not providing any particular factual information is minimal. . . . We recognize that unjustified or unduly burdensome disclosure requirements might offend the First Amendment by chilling protected commercial speech. But we hold that an advertiser’s rights are adequately protected as long as disclosure requirements are reasonably related to the State’s interest in preventing deception of consumers. Id. at 651 (internal citation omitted). See also Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S. 229, 253 (2010) (following Zauderer and using its “preventing deception” language).