478 U.S. 328 (1986), 84-1903, Posadas de Puerto Rico Associates, dba Condado Holiday Inn v. Tourism Company of Puerto Rico

Docket Nº:No. 84-1903
Citation:478 U.S. 328, 106 S.Ct. 2968, 92 L.Ed.2d 266, 54 U.S.L.W. 4956
Party Name:Posadas de Puerto Rico Associates, dba Condado Holiday Inn v. Tourism Company of Puerto Rico
Case Date:July 01, 1986
Court:United States Supreme Court
 
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Page 328

478 U.S. 328 (1986)

106 S.Ct. 2968, 92 L.Ed.2d 266, 54 U.S.L.W. 4956

Posadas de Puerto Rico Associates, dba Condado Holiday Inn

v.

Tourism Company of Puerto Rico

No. 84-1903

United States Supreme Court

July 1, 1986

Argued April 28, 1986

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

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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

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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 [106 S.Ct. 2971] 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.

REHNQUIST, J., lead opinion

JUSTICE REHNQUIST delivered the opinion of the Court.

In this case, we address the facial constitutionality of a Puerto Rico statute and regulations restricting advertising of casino gambling aimed at the residents of Puerto Rico. Appellant Posadas de Puerto Rico Associates, doing business in Puerto Rico as Condado Holiday Inn Hotel and Sands Casino, filed suit against appellee Tourism Company of Puerto Rico in the Superior Court of Puerto Rico, San Juan Section. Appellant

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sought a declaratory judgment that the statute and regulations, both facially and as applied by the Tourism Company, impermissibly suppressed commercial speech in violation of the First Amendment and the equal protection and due process guarantees of the United States Constitution.1 The Superior Court held that the advertising restrictions had been unconstitutionally applied to appellant's past conduct. But the court adopted a narrowing construction of the statute and regulations, and held that, based on such a construction, both were facially constitutional. The Supreme Court of Puerto Rico [106 S.Ct. 2972] dismissed an appeal on the ground that it "d[id] not present a substantial constitutional question." We postponed consideration of the question of jurisdiction until the hearing on the merits. 474 U.S. 917 (1985). We now hold that we have jurisdiction to hear the appeal, and we affirm the decision of the Supreme Court of Puerto Rico with respect to the facial constitutionality of the advertising restrictions.

In 1948, the Puerto Rico Legislature legalized certain forms of casino gambling. The Games of Chance Act of 1948, Act No. 221 of May 15, 1948 (Act), authorized the playing of roulette, dice, and card games in licensed "gambling rooms." § 2, codified, as amended, at P.R.Laws Ann., Tit. 15, § 71 (1972). Bingo and slot machines were later added to the list of authorized games of chance under the Act. See Act of June 7, 1948, No. 21, § 1 (bingo); Act of July 30, 1974, No. 2, pt. 2, § 2 (slot machines). The legislature's intent was set forth in the Act's Statement of Motives:

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The purpose of this Act is to contribute to the development of tourism by means of the authorization of certain games of chance which are customary in the recreation places of the great tourist centers of the world, and by the establishment of regulations for and the strict surveillance of said games by the government, in order to ensure for tourists the best possible safeguards, while at the same time opening for the Treasurer of Puerto Rico an additional source of income.

Games of Chance Act of 1948, Act No. 221 of May 15, 1948, § 1. The Act also provided that "[n]o gambling room shall be permitted to advertise or otherwise offer their facilities to the public of Puerto Rico." § 8, codified, as amended, at P.R.Laws Ann., Tit. 15, § 77 (1972).

The Act authorized the Economic Development Administration of Puerto Rico to issue and enforce regulations implementing the various provisions of the Act. See § 7(a), codified, as amended, at P R. Laws Ann., Tit. 15, § 76a (1972). Appellee Tourism Company of Puerto Rico, a public corporation, assumed the regulatory powers of the Economic Development Administration under the Act in 1970. See Act of June 18, 1970, No. 10, § 17, codified at P.R.Laws Ann., Tit. 23, § 671p (Supp.1983). The two regulations at issue in this case were originally issued in 1957 for the purpose of implementing the advertising restrictions contained in § 8 of the Act. Regulation 76-218 basically...

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