Free speech and business

Understanding the limitations on commercial speech


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Free speech is a quintessential American right. Both the Constitutions of the United States and New Hampshire expressly protect speech from suppression by the government. Courts interpreting these constitutional provisions have provided expansive protections both to actual speech as well as actions that constitute speech. Judges routinely strike down government actions that interfere with protected speech. Even heinous, objectionable and offensive speech may be protected. These freedoms and protections are uncommon in many other nations.

Not all speech, however, is constitutionally protected and free from recourse or limitation. Examples of speech that fall outside of First Amendment protection include incitements to violence, obscenity, child pornography, defamation and some forms of commercial speech.

These last two exceptions to free speech have been in the news with some regularity recently. Several New Hampshire Superior Court judges have been busy this year analyzing and deciding legal issues arising from personal attacks projected on electronic billboards around the state under claims that the speech is protected.

These personal attacks have targeted public figures, such as elected politicians and appointed judges. Others of these attacks have focused on private individuals. Some of the private individuals subjected to these personal attacks have sued the billboard owner for defamation. A co-owner of a business condominium, where one of the billboards is located, has also sued, claiming that the individual personal attacks violate covenants and bylaws of the building that limit use to commercial activity.

Both lawsuits have secured injunctions from different Superior Court judges to stop these personal attacks. The billboard owner claims that the speech is protected under the state and federal constitutions and has announced appeals to the New Hampshire Supreme Court.

In such a situation, the law does not support the billboard owner.

The constitutional protections are designed to stop the government from restricting many important types of speech. The protections do not provide a license to publicize knowingly or recklessly false or misleading information about private individuals (public figures are another story and beyond the scope of this piece).

Defamation is a well-recognized exception to the constitutional protections. Generally speaking, defamation is the communication of false information that damages the reputation of another. Slander is false statements about another. Libel is false writings about another. When an individual is defamed in his/her business, the harm is presumed.

A first cousin to defamation is false light liability. This arises when misleading information is communicated about a private individual. In such circumstances, the individual defamed can get money damages and in certain circumstances an injunction to stop this unlawful conduct.

Commercial speech is recognized as different from political speech and sometimes gets diminished protections.

In its decision in Central Hudson Gas & Electric. vs. Public Service Commission, the U.S. Supreme Court defines commercial speech as “expression related solely to the economic interests of the speaker and its audience.” The federal and state constitutions, it ruled, “accord a lesser protection to commercial speech than to other constitutionally guaranteed expression.”

The government has more latitude to regulate such speech. Indeed, the NH Supreme Court has upheld zoning ordinances that restrict what can be displayed on electronic billboards. When evaluating such restrictions, the court considers:

• Whether the advertising is neither unlawful nor misleading and therefore entitled to First Amendment protection

• Whether the ordinance seeks to implement a substantial governmental interest

• Whether the ordinance directly advances that interest

• Whether the ordinance reaches no further than necessary to accomplish its stated goals

Regulations that meet these criteria are lawful even when they impair speech.

Further, the more limited constitutional protections on commercial speech may be waived. Courts have recognized that restrictive covenants on commercial properties that limit advertising and speech are permissible. In such situations, the purchaser is placed on notice before the purchase that certain rules, regulations and/or restrictions govern the use of the property. Others may force compliance with those limitations. When that is the case, the purchaser is bound by these covenants and is unlikely to obtain any constitutional protections for speech that violates these rules.

The above scenario highlights that businesses have no refuge under claims of constitutionally protected speech if they defame others or violate the rules, covenants or restrictions that run with real estate they occupy.

W. Scott O’Connell is chair of the Litigation Department at Nixon Peabody LLP.

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