The Tobacco Industry and the First Amendment (1): An Analysis of the 1998 Master Settlement Agreement

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I. INTRODUCTION

Prior to 1995, the tobacco industry was an impenetrable fortress. The industry admitted nothing, denied everything, and successfully defended nearly every lawsuit filed against it. (2) Then, in 1995, a war was waged against the tobacco industry by both the federal and state governments. The war began on the federal level with President Clinton's approval of federal legislation that declared nicotine an addictive drug and authorized the Federal Food and Drug Administration (FDA) to seek jurisdiction over tobacco products as "drug delivery devices." (3) Additionally, the President announced broad executive action which sharply restricted the advertising, promotion, distribution and marketing of tobacco products with the goal of protecting children and adolescents from the dangers of tobacco products. (4)

Following President Clinton's lead, U.S. Attorneys General from 46 states (5) joined forces to file a single lawsuit that has made the participating tobacco companies (6) willing to settle to terms that will change the tobacco industry forever. (7) This settlement is known as the Master Settlement Agreement. For example, banned are advertisements on billboards, in sports arenas and stadiums, shopping malls, buses and trains. Sales of T-shirts, caps and other merchandise are banned, as well as promotion of tobacco products in movies, TV shows, theater productions, music performances, videos and video games. (8)

Because a number of the terms contained in the Master Settlement Agreement have sharply restricted the tobacco industry's ability to market and advertise its products, the settlement agreement has First Amendment commercial speech implications. Should challenges to the Master Settlement Agreement arise, the Supreme Court would employ the pathbreaking decision for determining when the government may restrict commercial speech, Central Hudson Gas & Electric Corp. v. Public Service Commission of New York (9) and its progeny to assess its constitutionality. (10)

This Note discusses and assesses the Government's likelihood of passing constitutional scrutiny with the Master Settlement Agreement's restrictions in light of the First Amendment case law. A majority of the restrictions will likely pass constitutional scrutiny because they meet the demanding requirements of Central Hudson and its progeny. The author believes that a few of the restrictions need to be more narrowly tailored in order to pass constitutional scrutiny. Suggestions on how to narrowly tailor the restrictions to comport with Central Hudson are proffered by the author.

Section II provides an overview of the history of First Amendment commercial speech jurisprudence. It discusses cases that foreshadowed the Central Hudson decision, the Central Hudson decision itself, the progeny of Central Hudson which has slightly refined the original four prong test for commercial speech, and addresses the possible trends in light of the progeny. Section III of the note addresses why the Master Settlement Agreement may have problems passing constitutional scrutiny and what parties may have standing to challenge the provisions. Section IV gives an in-depth look into how the restrictions will fare when analyzed under the Central Hudson four prong test, and individually assesses selected restrictions. Finally, Section V makes suggestions on how the government can cure the restrictions that may be found constitutionally infirm.

II. THE COMMERCIAL SPEECH DOCTRINE

A. The Supreme Court's Traditional View on Commercial Speech

In the early days of the commercial speech doctrine, the Supreme Court afforded no protection to "expression related solely to the economic interests of the speaker and its audience." (11) The Court stressed the "traditional view" that communications to which First Amendment protection would be given were not of a purely commercial nature. (12) The Supreme Court, however, rejected the traditional view that commercial speech was not subject to First Amendment protection when it decided Virginia State Board of Pharmacy v. …