## Facts

- During the 1973–74 energy crisis, New York’s Public Service Commission (PSC) ordered electric utilities to stop all advertising that promoted the use of electricity, citing inadequate fuel supplies.
- After the fuel shortage ended, the PSC in 1976 made the ban permanent, allowing only “informational” advertising intended to shift usage from peak to off-peak periods.
- Central Hudson Gas & Electric Corp., an electric utility, sought to run promotional advertising and claimed the continuing ban violated the First and Fourteenth Amendments as an unconstitutional restraint on commercial speech.
- New York trial and appellate courts, including the New York Court of Appeals, upheld the PSC order.
- The U.S. Supreme Court reviewed the constitutionality of the comprehensive ban on promotional utility advertising.

## Issues

1. Whether a regulation that completely bans an electric utility’s promotional advertising about electricity use violates the First and Fourteenth Amendments.
2. What analytical framework governs government restrictions on lawful, non-misleading commercial speech.

## Decision

- The Court reversed and held the PSC’s complete ban on promotional advertising unconstitutional under the First and Fourteenth Amendments.
- The Court concluded the advertising concerned lawful activity and was not misleading, so it received First Amendment protection.
- The State’s interests in energy conservation and in avoiding rate-related inequities were substantial.
- The ban directly advanced the conservation interest, but the connection to the rate-structure rationale was insufficient.
- The regulation failed because it swept too broadly by barring all promotional advertising regardless of its actual effect on overall energy use and because the State did not show that narrower measures would be inadequate.

## Legal Principles

- Commercial speech is protected by the First Amendment when it concerns lawful activity and is not misleading, even though it may receive less protection than other expression.
- The constitutionality of commercial-speech restrictions is evaluated under a four-part test:
  - The speech must concern lawful activity and not be misleading.
  - The government’s asserted interest must be substantial.
  - The restriction must directly advance the asserted interest.
  - The restriction must be no more extensive than necessary to serve that interest.
- A blanket prohibition on truthful promotional advertising is invalid when the government can pursue its goals through narrower limits on advertising content or by regulating consumption or rates directly.

## Conclusion

The Court invalidated New York’s categorical ban on electric-utility promotional advertising and established the four-part Central Hudson test, requiring that restrictions on lawful, non-misleading commercial speech directly serve substantial governmental interests and be narrowly drawn.


Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S. 557 (1980)