Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980)
The case of Central Hudson Gas & Electric Corp. v.
Does a regulation enacted by the New York Public Service Commission, which prohibits promotional advertising by a utility company, violate the First and Fourteenth Amendments?
A four-part test evaluates restrictions on commercial speech: 1) The speech must concern lawful activity and not be misleading. 2) The asserted government interest must be substantial. 3) The regulation must directly advance the asserted government interest. 4) The regulation must not be more extensive than necessary to serve that interest.
The Supreme Court held that the PSC's complete ban on promotional advertising by Central Hudson violated the First Amendment because it was more extensive than necessary to serve the state's interest in conserving energy.
Central Hudson Gas & Electric Corp. v. Public Service Commission is critically important for law students because it is a seminal case in First Amendment jurisprudence that established a structured analysis for evaluating the constitutionality of restrictions on commercial speech. This 'Central Hudson test' remains the foundational framework used in courts today to balance government interests against free speech protections in the commercial context.