Opinion ID: 2630594
Heading Depth: 3
Heading Rank: 3

Heading: Holding's Commercial Free Speech Rights

Text: Holding next argues that restricting his ability to advertise interferes with his rights of commercial free speech as protected by article I, section 5 of the Alaska Constitution, and the First Amendment of the United States Constitution. He discusses the Anchorage regulation in the context of the four-prong test described in Alaska Transportation Commission v. AIRPAC, Inc. [15] First, he asserts that the activitiesincluding his lessees' acts in operating adult-oriented businesses and his acts in placing and paying for the advertisingare legal, and that because the advertisements do not say who placed the ads, they are not misleading. Second, Holding concedes the substantiality of the governmental interests in protecting the general welfare, minimizing a decline in property values, minimizing criminal activity, and protecting families. Holding challenges the third prong by arguing that the subsection does not advance the governmental purposes because regulating who places ads does not serve to protect property values, minimize crime, or protect families. Finally, Holding claims that it is difficult to determine whether the ordinance is more restrictive than necessary to advance the governmental interests because, he argues, it does not further a legitimate governmental interest. He therefore concludes that the subsection is unconstitutional. The hearing officer ruled that the subsection did not violate Holding's free speech rights because it only required Holding to get a license before he advertises; the subsection did not altogether prohibit him from advertising. The superior court wondered whether Holding meant to assert that his free speech rights entitled him to advertise for any business he does not own. It concluded that the restriction, as part of a larger regulatory scheme, promotes responsibility and discourages misleading information. In Barber v. Municipality of Anchorage, [16] we recognized that commercial speech commands less protection than noncommercial speech. We said that the First Amendment does not impede the state from ensuring that commercial information is not misleading. We held that a content-neutral restriction on sign-posting was not an unconstitutional restriction on commercial speech because the questioned ordinance is narrowly tailored to achieve the Municipality's aesthetic goal of eliminating visual blight, and ... alternative means of communication remain available to Barber. [17] The ordinance here does not restrict what the advertisements can say; it only restricts who can place the advertisements. But just because the law does not restrict what can go into the advertisement does not necessarily mean the law is a content-neutral regulation. The Anchorage Municipal Code contains no general requirement that a person must have a license to operate a business before he or she can advertise for that business. Instead, the code only prohibits persons from advertising for adult-oriented entertainment establishments, [18] masseuses, [19] private detectives, [20] and public concerts [21] without having municipal licenses to conduct those activities. The situation is similar to one addressed by the United States Supreme Court in Carey v. Brown. [22] In that case, the Court struck down a state statute that prohibited picketing of residences or dwellings but exempted the peaceful picketing of a place of employment involved in a labor dispute. [23] Although the law did not in any way regulate what the picketers could say, the Court nonetheless observed that the regulation was a content-based restriction on speech: It is, of course, no answer to assert that the ... statute does not discriminate on the basis of the speaker's viewpoint, but only on the basis of the subject matter of his message. [24] The Anchorage ordinance does not limit what an advertisement for an adult-oriented entertainment establishment may contain. It does, however, limit the topics about which a party may advertise without a license to operate the subject of the advertisement. For example, under the Anchorage Municipal Code persons are free to advertise for validly-licensed used automobile display lots even if they do not have the license to operate them. [25] Similarly, a person who does not have the license to operate a licensed carnival may advertise for it. [26] But under the AMC, only the licensed operator may advertise for an adult-oriented entertainment establishment or a public concert. Despite the nature of the ordinance, we have conducted a Central Hudson analysis [27] and we conclude that AMC 10.40.050(B)(5) does not impermissibly interfere with Holding's commercial free speech rights. First, the subsection regulates commercial speech concerning a lawful activityadult-oriented entertainmentand the advertisements are not misleading. Second, as Holding concedes, the municipality's interest in regulating adult-oriented businesses is substantial. The preamble to the ordinance explains that regulating and licensing adult-oriented establishments protect the general welfare, health, and safety of residents, maintains property values, reduces the level of criminal activity, and enforces community standards of morality. [28] Third, limiting the ability to advertise for adult-oriented businesses to those persons licensed to operate those businesses directly advances the municipality's interests. The subsection closed a significant loophole in the regulation. Holding invokes the lack of operator continuity as his justification for placing advertisements to achieve business-name and telephone continuity. But Holding's justification for advertising is the very reason for closing the loophole. By forcing Holding to become licensed, or by forcing the license-holders to place their own advertisements, the subsection encourages compliance with municipal regulation. It also encourages owners like Holding to lease to reliable operators. And it may discourage unscrupulous owners from tacitly permitting and profiting from improper on-premises activities while periodically replacing lessees to avoid complete closure. The municipality argues that the ordinance prevents those who advertise adult-oriented entertainment establishments from operating without a license. The municipality further asserts that regulation of these establishments prevent[s] them from degenerating into prostitution houses and [prevents] other criminal activity from occurring on the premises.... We find this a plausible explanation that is consistent with the legislative purposes expressed in the ordinance. Operator turnover diminishes the ability to regulate on-site activities. But given this lack of operator continuity, it is reasonable for the municipality to regulate an activity, perhaps the only activitythe placing and paying for advertisingthat has continuity. Fourth, the subsection is no more restrictive than necessary to advance the state's interests. The only precondition for advertising the businessa licenseis also a precondition for operating or maintaining the business. It does not irrevocably prohibit Holding from advertising. He does not claim that he is ineligible to become a license holder. We therefore assume that the subsection as applied to Holding is narrowly tailored and allows him to advertise if he submits himself to the valid regulatory scheme by becoming licensed. Holding's free speech rights are not unconstitutionally infringed by AMC 10.40.050(B)(5).