Posadas De P.R. Assocs. v. Tourism Co., 478 U.S. 328 (1986)

Posadas de Puerto Rico Associates, dba Condado Holiday Inn v.

Tourism Company of Puerto Rico
No. 84-1903

Argued April 28, 1986
Decided July 1, 1986
478 U.S. 328

APPEAL FROM THE SUPREME COURT OF PUERTO RICO

Syllabus

Puerto Rico’s Games of Chance Act of 1948 (Act) legalizes certain forms of casino gambling in licensed places in order to promote the development of tourism, but also provides that "[n]o gambling room shall be permitted to advertise or otherwise offer their facilities to the public of Puerto Rico." Implementing regulations prohibit the advertising of gambling parlors to the public in Puerto Rico, but permit restricted advertising through publicity media outside Puerto Rico. Appellant, a partnership franchised to operate a casino in Puerto Rico, was fined by appellee public corporation, which is authorized to administer the Act, for violating the advertising restrictions in the Act and the regulations. Appellant then filed suit against appellee in the Puerto Rico Superior Court, seeking a declaratory judgment that the Act and regulations, both facially and as applied by appellee, impermissibly suppressed commercial speech in violation of the First Amendment and the equal protection and due process guarantees of the Federal Constitution. The court held that the advertising restrictions had been unconstitutionally applied to appellant’s past conduct, but the court then adopted a narrowing construction of the Act and regulations, declaring that they prohibited local advertising addressed to inviting residents of Puerto Rico to visit casinos, but not certain local advertising addressed to tourists, even though it might incidentally reach the attention of residents. The court then held that, based on its construction of the laws, the statute and regulations were facially constitutional. The Puerto Rico Supreme Court dismissed appellant’s appeal on the ground that it "d[id] not present a substantial constitutional question."

Held:

1. This Court has jurisdiction to review the Puerto Rico Supreme Court’s decision pursuant to 28 U.S.C. § 1258(2), which authorizes an appeal to this Court from a decision of the Puerto Rico Supreme Court that is in favor of the validity of a Puerto Rico statute challenged as being repugnant to the Federal Constitution. Appellant’s federal constitutional claims were adequately raised at every stage of the proceedings below, and under Puerto Rico law appellant had the right to appeal the Superior Court’s decision to the Puerto Rico Supreme Court on the ground that the case involved or decided a substantial constitutional question under the Federal Constitution. Thus, the Puerto Rico Supreme Court’s dismissal of the appeal for want of a substantial constitutional question constituted a decision on the merits in favor of the validity of the challenged statute and regulations. This Court’s jurisdiction is not affected by appellant’s late filing, under Puerto Rico’s Rules of Civil Procedure, of its notice of appeal to the Puerto Rico Supreme Court, since that court has held the filing requirement to be nonjurisdictional, and its failure to dismiss on timeliness grounds must be viewed as a waiver of the requirement. Pp. 337-339.

2. In reviewing the facial constitutionality of the Act and regulations, this Court must abide by the narrowing constructions announced by the Superior Court and approved sub silentio by the Puerto Rico Supreme Court. This would be the rule in a case originating in one of the 50 States, and Puerto Rico’s status as a Commonwealth dictates application of the same rule. P. 339.

3. The Act and regulations, as construed by the Superior Court, do not facially violate the First Amendment. The advertising restrictions pass muster under the four-pronged test of Central Hudson Gas & Electric Corp. v. Public Service Comm’n of New York, 447 U.S. 557. First, the particular kind of commercial speech at issue concerns a lawful activity, and is not misleading or fraudulent, at least in the abstract, and thus is entitled to a limited form of First Amendment protection. Second, Puerto Rico’s interest in restricting advertising to reduce the demand for casino gambling by Puerto Rico’s residents, and thus protect their health, safety, and welfare, constitutes a "substantial" governmental interest. Third, the restrictions on commercial speech "directly advance" the government’s asserted interest, and are not under-inclusive simply because other kinds of gambling may be advertised to Puerto Rico residents. And fourth, the restrictions are no more extensive than necessary to serve the government’s interest since, as construed by the Superior Court, they do not affect advertising aimed at tourists, but apply only to advertising aimed at Puerto Rico residents. Carey v. Population Services International, 431 U.S. 678, and Bigelow v. Virginia, 421 U.S. 809, distinguished. There is no merit to 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 to accomplish its goal of reducing demand for such gambling. Pp. 340-347.

4. The Puerto Rico Supreme Court properly concluded that, as construed by the Superior Court, the Act and regulations do not facially violate the due process or equal protection guarantees of the Constitution. Even assuming that appellant’s argument that the advertising restrictions are unconstitutionally vague, in violation of due process requirements, has merit with respect to the bare statutory language, nevertheless this Court is bound by the Superior Court’s narrowing construction of the statute. Viewed in that light, and particularly with the interpretive assistance of the regulations as modified by the Superior Court, the statute is not unconstitutionally vague. Pp. 347-348.

Affirmed.

REHNQUIST, J., delivered the opinion of the Court, in which BURGER, C.J., and WHITE, POWELL, and O’CONNOR, JJ., joined. BRENNAN, J., post, p. 348, and STEVENS, J., post, p. 359, filed dissenting opinions, in which MARSHALL and BLACKMUN, JJ., joined.