Commercial Speech Test (Central Hudson)

The Central Hudson test, established in Central Hudson Gas & Electric Corp. v. Public Service Commission (1980), provides the framework for analyzing government regulations of commercial speech -- speech that proposes a commercial transaction. Commercial speech receives intermediate First Amendment protection, less than the full protection afforded to political speech but more than the minimal protection given to categories like obscenity.

The Central Hudson test is a four-part analysis. First, the court asks whether the speech concerns lawful activity and is not misleading. If the speech is misleading or proposes an illegal transaction, it receives no First Amendment protection and may be freely regulated. If the speech passes the first prong, the court proceeds to the remaining three prongs: (2) the government must assert a substantial interest in regulating the speech; (3) the regulation must directly advance that interest (not merely provide indirect or speculative benefits); and (4) the regulation must not be more extensive than necessary to serve the government's interest.

The fourth prong does not require the least restrictive means, but there must be a reasonable fit between the regulation and the government's objective (Board of Trustees of SUNY v. Fox, 1989). Recent cases have applied the Central Hudson test with increasing rigor. In Sorrell v. IMS Health Inc. (2011), the Court applied heightened scrutiny to a law restricting pharmaceutical data mining, suggesting that content-based restrictions on commercial speech may receive stricter review. In 44 Liquormart, Inc. v. Rhode Island (1996), the Court struck down a ban on advertising liquor prices, emphasizing that blanket bans on truthful commercial speech are particularly disfavored.