Ch. 7

Front 1

Valentine vs. Chrestensen

Back 1

1942. handed out leaflets advertising submarine tours. Illgeal to hand out commerical leaflets. The Supreme Court ruled that commerical speech was not protected by the first amendment.

Front 2

New York Times vs. Sullivan

Back 2

Political speech protected at the highest level by 1st Amendment and doesn’t forfeit that protection simply because it appears in a paid ad.

First U.S. Supreme Court case to rule that 1st Amendment protects paid advertising (although this is NOT advertising designed to sell a commerial product or service)

Front 3

Bigelow vs. Virginia

Back 3

Virginia newspaper is prosecuted for publishing an ad for a New York abortion clinic. Both abortions, and advertising for abortions, were illegal at the time in Virginia.
contained factual material of clear public interest.
Because it conveyed fact and information of potential interest and value to general public merits considerable first amendment protection

Front 4

Virginia Citizens Consumer Council v. Virginia Board of Pharmacy

Back 4

Question of can one advertise the price of perscription drugs.
the emphasis is on the importance of the message to the audience rather than the right of companies to communicate.
Court rules limitations on price advertising violate the 1st Amendment.

Front 5

Central Hudson Gas & Electric v. Public Service Commission

Back 5

Utility challenges New York ban on all advertising by electrical utilities. Court comes up with four-part test that determines whether government limitations on advertising violate the 1st Amendment.
Court finds it does not pass the 4th element of the test and therefore the prohibition is unconstituional.

Front 6

Posadas de Puerto Rico Associates v. Tourism Company of Puerto Rico

Back 6

Passed the Central Hudson Test
Since it was advertising for a product/service that the government could ban altogether(gambling) it did not go too far.
government had substantial interest in banning ads that encouraged the disruption of moral and cultural patterns and increased potential for crime and that the ban advanced the government interest and did not go too far

Front 7

Warner-Lambert Co. v. Federal Trade Commission

Back 7

W.L. maker of Listerine said it prevents colds. It does not. FTC orders Warner-Lambert to air Corrective Advertising telling consumers that its product does NOT prevent colds
Court rules against Warner-Lambert: false and deceptive advertising is NOT protected by 1st Amendment AND government has broad powers to protect consumers from harm caused by such ads, even to the extent of ordering a company to produce corrective advertising that could discourage purchases of its products.

Front 8

FTC Enforcement Remedies

Back 8

Letters of Compliance, Consent Agreements, Cease and Desist Orders, Affirmative Disclosures, Substantiation of Claims, Affirmative Acts, Corrective Advertising and Trade Rules

Front 9

Letters of Compliance

Back 9

1. Consumers or competitors of a company complain to FTC of false or deceptive advertising. FTC notifies company. 2. Company agrees by letter to stop the false or deceptive practice.

Front 10

Consent Agreements

Back 10

Same as No. 1 above, but company disputes the complaint. FTC hearing examiner informally solicits information from both parties and either dismisses the complaint as unfounded OR rules against the company and drafts a Consent Agreement. If the company signs the Consent Agreement drafted by the hearing examiner and agrees to cease the false or deceptive practice, the case ends. If not, the case is appealed and heard by a more formal hearing panel.

Front 11

Cease and Desist Orders

Back 11

If the appellate hearing examiner rules in favor of the company, the complaint is dismissed. If the hearing examiner upholds the complaint, a Cease and Desist Order is issued to the company ordering it to stop the offending practice. Appeals from a Cease and Desist Order go to the U.S. Court of Appeals for the District of Columbia.

Front 12

Affirmative Disclosures

Back 12

This FTC remedy requires advertisers to offer evidence of underlying claims (such as for health products) or specific information about interest rates or deferred-payment arrangements.

Front 13

Affirmative Acts

Back 13

this FTC remedy essentially requires an advertiser to do what they promised to do in the ad--sell the product at the advertised price, give away prizes in a contest campaign, etc.

Front 14

Trade Rules

Back 14

This FTC remedy is not connected to a specific complaint against an advertiser, but rather is designed to address an industry-wide problem. After an extensive series of hearings to explore a problem within a particular industry, the FTC adopts Trade Rules by publishing them in the Federal Register. They become law after a statutory period unless specifically rejected by majority vote in Congress.