478 U.S. 328, 340-344 (1986)
In 1948 the Puerto Rico Legislature enacted the Games of Chance Act authorizing roulette, dice, card games, bingo, and slot machines in licensed gambling rooms while directing that no gambling room shall be permitted to advertise or otherwise offer its facilities to the public of Puerto Rico.1 The Act's Statement of Motives explained that its purpose was to contribute to tourism development by authorizing games customary in major tourist centers. It also aimed to open an additional source of income for the Treasurer, with strict government surveillance to protect tourists.2 Regulations issued in 1957 and amended in 1971 by the Tourism Company of Puerto Rico, which assumed regulatory authority in 1970, prohibited concessionaires from advertising gambling parlors to the public in Puerto Rico while authorizing advertising outside Puerto Rico subject to prior editing and approval.3
In 1975 Posadas de Puerto Rico Associates, a Texas partnership operating as Condado Holiday Inn Hotel and Sands Casino, obtained a franchise to operate a gambling casino.4 In 1978 the Tourism Company twice fined Posadas for violating the advertising restrictions; Posadas protested in letters, and in February 1979 the Tourism Company issued a memorandum interpreting the ban to include the word casino on matchbooks, lighters, envelopes, napkins, brochures, menus, and numerous other items accessible to the public in Puerto Rico.5 The Tourism Company assessed additional fines and ordered Posadas to pay a total of $1,500 by March 18, 1979, or face nonrenewal of its franchise; Posadas paid under protest.6 In July 1981 Posadas was fined another $500 for further violations and again paid under protest to avoid nonrenewal.7
In February 1982 Posadas filed a declaratory judgment action in the Superior Court of Puerto Rico, San Juan Section, against the Tourism Company seeking a declaration that the Act and regulations violated its commercial speech rights under the First Amendment as well as equal protection and due process guarantees, both facially and as applied.8 After trial the Superior Court found the Tourism Company's past applications capricious, arbitrary, and unreasonable, issued narrowing constructions limiting the ban to advertising contracted for consideration to attract residents to bet, and allowed advertising in magazines for distribution primarily to tourists, in the New York Times, on cable television from outside Puerto Rico, and hotel trade names that do not use the word casino alone even if incidentally reaching residents.9 The Supreme Court of Puerto Rico dismissed Posadas's appeal on the ground that it did not present a substantial constitutional question.10
Posadas appealed to the United States Supreme Court. The record shows that Posadas raised its federal constitutional claims in a February 24, 1982 letter to the Tourism Company, in its complaint, and in its bill of appeal to the Supreme Court of Puerto Rico, and that the Supreme Court of Puerto Rico's dismissal constituted a decision on the merits in favor of validity under Puerto Rico law.11
Whether the Supreme Court has jurisdiction under 28 U.S.C. § 1258(2) to review the Supreme Court of Puerto Rico's dismissal of an appeal for lack of a substantial constitutional question?12
Under 28 U.S.C. § 1258(2), the Supreme Court has jurisdiction over appeals from the Supreme Court of Puerto Rico.13 This applies where the validity of a Puerto Rico statute is questioned on federal constitutional grounds and the decision below sustains its validity.14 A dismissal for lack of a substantial constitutional question constitutes a decision on the merits in favor of validity.15
Yes. Posadas raised its federal constitutional claims in a February 24, 1982 letter to the Tourism Company warning of a constitutional challenge, in its complaint alleging violations of the First Amendment, equal protection, and due process, and in its bill of appeal to the Supreme Court of Puerto Rico.16 The notice of appeal was timely under the nonjurisdictional Rule 53.1 as waived by the Puerto Rico Supreme Court.17
The Supreme Court has jurisdiction to review the decision of the Supreme Court of Puerto Rico.18
Whether the Puerto Rico Games of Chance Act and implementing regulations restricting casino advertising aimed at residents violate the First Amendment on their face?19
Under Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980), commercial speech concerning lawful activity that is not misleading may be restricted only if the government interest is substantial, the restrictions directly advance that interest, and the restrictions are no more extensive than necessary.20
No. The advertising of casino gambling aimed at residents concerns lawful activity and is not misleading.21 The interest in reducing demand among residents to protect health, safety, and welfare from excessive gambling is substantial, as evidenced by the legislature's Statement of Motives and the traditional concerns motivating most states to prohibit casino gambling.22 The restrictions directly advance the interest because the legislature reasonably believed advertising would increase demand, a belief shared by Posadas in litigating the case.23 The Superior Court's narrowing construction limits the ban to advertising contracted for consideration to attract residents while permitting tourist-directed advertising even if incidentally reaching residents, satisfying the fourth prong.24
The restrictions do not violate the First Amendment on their face.25
Related opinions on this issue
Joined by Justice Marshall And Justice Blackmun
Justice Brennan dissented on the ground that Puerto Rico may not suppress truthful commercial speech to discourage residents from lawful activity.26 He argued that the interest in discouraging casino gambling is not substantial because the legislature legalized the activity and permitted other forms of gambling to be advertised freely, indicating no belief that serious harm would result.27 Even assuming a substantial interest, Brennan concluded the ban fails the direct advancement and narrow tailoring prongs because alternative measures such as enforcement of criminal laws or counterspeech could address harms without suppressing speech, and the Court improperly deferred to legislative judgment rather than requiring the government to prove less restrictive alternatives inadequate.28
Joined by Justice Marshall And Justice Blackmun
Justice Stevens dissented on the ground that Puerto Rico's restrictions discriminate among publications, audiences, and words in a manner forbidden by the First Amendment.29 He noted that the narrowing construction favors identifiable publications such as out-of-island media while imposing rigid controls on local publications such as the San Juan Star, permits advertising addressed only to tourists while disfavoring residents, and singles out the word casino for special opprobrium.30 Stevens further observed that the construction creates a regime of prior restraint requiring Tourism Company approval of ad text and yields hopelessly vague and unpredictable standards, rendering the regulations plainly unconstitutional regardless of the greater-includes-the-lesser theory.31
Whether the restrictions are unconstitutionally vague under the Due Process Clause?32
The restrictions are not unconstitutionally vague because the Superior Court's narrowing construction provides sufficient guidance on what advertising is prohibited.33
No. The bare statutory language referring to advertising or offering facilities to the public of Puerto Rico might raise vagueness concerns.34 However, the Superior Court's narrowing construction supplies concrete guidance.35 It limits the prohibition to paid advertising intended to attract residents.36 It also enumerates permissible tourist-directed forms.37
Examples include ads in the New York Times, cable television from outside Puerto Rico, and hotel trade names that do not use the word casino alone.38 This construction, approved sub silentio by the Supreme Court of Puerto Rico, eliminates the risk of arbitrary enforcement.39
The restrictions are not unconstitutionally vague under the Due Process Clause.40
Related opinions on this issue
Joined by Justice Marshall And Justice Blackmun
Justice Stevens separately emphasized the vagueness problem created by the Superior Court's construction.41 He pointed out that the court left uncertain whether an ad in a publication with 95 percent local circulation could be saved merely by claiming it is addressed to tourists.42 The court itself acknowledged that a clausus enumeration is unforeseeable.43
The guidelines may be amended in the future.44 Stevens concluded that the resulting standard is so unpredictable that sanctions for speech become as haphazard as the roll of dice in a casino.45
Whether the restrictions violate the equal protection or due process guarantees of the Constitution?46
Where commercial speech restrictions satisfy the Central Hudson test, they also satisfy rational-basis review under the equal protection guarantee because the fit between means and ends is sufficient.47
No. The same legislative classification that distinguishes casino gambling from traditional Puerto Rican games such as horse racing, cockfighting, and the lottery for purposes of the advertising ban satisfies equal protection because the legislature reasonably viewed casino gambling as presenting greater risks.48 The narrowing construction ensures the restrictions are not arbitrary, and the same analysis that upholds the restrictions under the First Amendment confirms they pass rational-basis equal protection scrutiny.49
The restrictions do not violate the equal protection or due process guarantees of the Constitution.50