Other Work

Case Report

10/20/06

Posadas de Puerto Rico Associates v. Tourism Company of Puerto Rico, 478 U.S. 328 (1986)

San Francisco Arts and Athletics v. U.S. Olympic Committee, 483 U.S. 522 (1987)

In Posadas de Puerto Rico, the appellant, Posadas de Puerto Rico Associates was fined by the appellee, Tourism Company of Puerto Rico for violating the advertising restrictions in Puerto Rico’s Games of Chance Act of 1948. The Act legalized certain forms of casino gambling in licensed places, but also prohibited these establishments from advertising or offering their facilities to the public of Puerto Rico. Appellant then filed suit against appellee in the Puerto Rico Superior Court, looking for a declaratory judgment that the Act and regulations suppressed commercial speech in violation of the First Amendment, equal protection and due process guarantees of the Federal Constitution.

The court held that the restrictions had been unconstitutionally applied, but declared that the Act prohibited local advertising directed to residents of Puerto Rico, but not local advertising addressed to tourists even though it might reach the attention of residents. The Puerto Rico Supreme Court dismissed appellant’s appeal on the ground that it didn’t present a significant constitutional question.

In San Francisco Arts and Athletics, section 110 of the Amateur Sports Act of 1978 grants respondent, the United States Olympic Committee (USOC) the right to prohibit certain commercial uses of the word “Olympic.” The petitioner, San Francisco Arts and Athletics (SFAA) was promoting the “Gay Olympic Games” to be held in 1982 by using those words on newspapers and merchandise. The USOC requested to the SFAA that it stop using the word “Olympic” in its publicity for the games. When the SFAA failed to do so, the USOC brought suit in Federal District Court for injunctive relief.

The court granted the USOC summary judgment and a permanent injunction. The Court of Appeals affirmed, holding that the Act granted the USOC exclusive use of the word “Olympic.” The court did not reach the petitioner’s claim that the respondent’s enforcement of its rights was discriminatory in violation of the equal protection component of the Fifth Amendment, because it held that the USOC is not a governmental actor to which the Constitution applies.

These cases are similar because they both deal with advertising issues, more specifically commercial speech. In both cases, the appellees brought suit to the appellants based on violations of preexisting Acts, and won their cases.

In addition, these cases are different because in Posadas, the court dismissed appellant’s appeal on the ground that a significant constitutional question was not presented. In San Francisco, the court held that since the USOC is not a government institution, raising a constitutional question did not apply.

In Posadas, the legal issues were: First Amendment rights, commercial speech and gambling advertising.

In San Francisco, the issues were: Fifth Amendment rights, commercial speech and administrative regulations of advertising.

In Posadas, the court ruled in favor of the appellee, the Tourism Company of Puerto Rico.

In San Francisco, the court ruled in favor of the respondent, the U.S. Olympic Committee.

In Posadas, Justice Rehnquist delivered the opinion. Bound by the Superior Court’s narrowing construction of the statute, the U.S. Supreme Court did not find the statute to be unconstitutionally vague. There is no merit to the appellant’s argument that, having chosen to legalize casino gambling for Puerto Rico residents, the legislature is prohibited by the First Amendment from using restrictions on advertising.

In San Francisco, Justice Powell delivered the opinion. The reasoning was that the First Amendment does not prohibit Congress from granting a trademark in a word when it acquires value as the result of labor, skill and money by an entity. That entity constitutionally may obtain a limited property right in the word. The SFAA’s claim that the USOC had enforced its 110 rights in a discriminatory manner in violation of the Fifth Amendment fails, because the USOC is not a governmental actor to whom the Fifth Amendment applies.

The rulings for both cases were similar in that the Supreme Court affirmed the previous decision by the appellate court, and in both cases the appellee won. The reasoning in each case was a bit different. In Posadas, the decision was based on the fact that the statute was not vague, and that the First Amendment did not prevent restrictions on advertising. In San Francisco, the reasoning was that the USOC is not a government institution, and therefore, the equal protection rights within the Fifth Amendment do not apply to it.

In Posadas, there were two dissenting opinions. One was written by Justice Brennan. He stated that neither the language of the Act, nor the applicable regulations define what constitutes “advertising or otherwise offering gambling facilities to the public of Puerto Rico,” so appellee Tourism Company was found to have applied the Act in an arbitrary and confusing manner.

The other dissenting opinion was written by Justice Stevens. He said that Puerto Rico does not simply “ban advertising of casino gambling.” Rather, it discriminates in its punishment of speech depending on the publication, audience, and words employed. Moreover, the prohibitions establish a regime of prior restraint and a standard that is vague and unpredictable.

In San Francisco, there was one opinion that concurred in part and dissented in part, and another that dissented. Justice O’Connor concurred in part, agreeing with the court’s construction of 110 of the Amateur Sports Act, and with the statute being within constitutional bounds. She dissented in part, because the United States Olympic Committee and the United States are joint participants in the challenged activity, and as such, are subject to the equal protection provisions of the Fifth Amendment.

The dissenting opinion was written by Justice Brennan. He stated that the court failed to appreciate the congressional interdependence between the U.S. Olympic Committee and the United States. The court also dismissed the extent to which 110 of the Amateur Sports Act infringes on noncommercial speech. The action of the USOC challenged here is government action and discriminates on the basis of content.