People v. Mobil Oil Corp.

• Decision Date: 23 October 1979
• Citation: 397 N.E.2d 724,48 N.Y.2d 192,422 N.Y.S.2d 33
• Parties: , 397 N.E.2d 724, 5 Media L. Rep. 2145 The PEOPLE of the State of New York, Appellant, v. MOBIL OIL CORPORATION, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 33

422 N.Y.S.2d 33

48 N.Y.2d 192, 397 N.E.2d 724, 5

Media L. Rep. 2145

The PEOPLE of the State of New York, Appellant, v. MOBIL OIL CORPORATION, Respondent.

Court of Appeals of New York.

Oct. 23, 1979.

Samuel S. Yasgur, County Atty. (Lester D. Steinman and Jonathan Lovett, White Plains, of counsel), for appellant.

Frederick J. Martin, Bleakley Schmidt, P. C., and Hugh D. Fyfe, White Plains, for respondent.

OPINION OF THE COURT

MEYER, Judge.

The issue in this case is whether a county may ban all signs on or near service station premises which refer directly or indirectly to the price of gasoline, and thus limit service station price advertising to the uniform price signs atop the gasoline pumps which the ordinance requires. We hold section 3 of the Westchester County law in question when read in the context of the entire law to be unconstitutional because, in violation of the First Amendment to the United States Constitution as made applicable by the Fourteenth Amendment to the States, it makes speech impermissible solely on the basis of content.

The facts are not in dispute. Defendant, Mobil Oil Corporation, was found guilty of violating section 3 of Local Law No. 9 of the Local Laws of 1974 of the County of Westchester because it posted at its gasoline station and car wash in Tuckahoe along the curb side of the station premises, facing in opposite directions, so that the large lettering of the signs could be seen by passing motorists, two signs, approximately four feet by four feet in size and reading "Check Our Low Low Low Prices". Mobil conceded that the purpose of the signs was "to attract persons to the gas pumps as well as the car wash". On appeal, the Appellate Term reversed on the law and dismissed, two Judges holding section 3 unconstitutional, and the third being of the opinion that the sign did not violate the ordinance. ¹ The matter is here by leave of a Judge of this court.

Local Law No. 9 in its first two sections details specifications as to size, lettering, content, placement and visibility of price signs it requires to be posted on each individual pump from which gasoline or diesel fuel is sold. Sections 3 and 4 of the law then provide:

"Section 3. No sign or placard stating or referring directly or indirectly to the price or prices of gasoline or diesel motor fuel other than such signs or placards as hereinabove provided shall be posted or maintained on, at, near or about the premises on which said gasoline is sold or offered for sale.

"Section 4. Fraudulent Practices. It shall be unlawful for any person, firm or corporation to sell or offer for sale gasoline or diesel motor fuel in any manner so as to deceive or tend to deceive the purchaser as to the price, nature, quality or identify thereof." Violation of the law is an offense punishable by fine, each day of noncompliance after a notice of violation constituting a separate offense.

In People v. Arlen Serv. Stas., 284 N.Y. 340, 31 N.E.2d 184, we considered a local law of the City of New York which contained essentially the same requirements as to posting signs on individual pumps and which included a provision substantially identical with section 3 of the Westchester law. In Arlen the law was attacked as in violation of the due process and equal protection clauses, but not on free speech grounds, presumably because the then understanding (proven correct some two years later by the Supreme Court's holding in Valentine v. Chrestensen, 316 U.S. 52, 62 S.Ct. 920, 86 L.Ed. 1262) was that commercial speech was not protected by the First Amendment. The intervening years have seen Chrestensen first distinguished (Bigelow v. Virginia, 421 U.S. 809, 95 S.Ct. 2222, 44 L.Ed.2d 600), then expressly overruled by Virginia Pharmacy Bd. v. Virginia Consumer Council, 425 U.S. 748, 765, 96 S.Ct. 1817, 48 L.Ed.2d 346, and the law of commercial speech expounded and delimited in a series of decisions, which are considered below. The result with respect to the instant case has been that on this appeal the law in question is attacked on all three grounds. Since we hold it unconstitutional on free speech grounds, we do not reach or consider the due process and equal protection grounds argued by the parties.

Since the Virginia Pharmacy case was decided we have had two occasions to consider regulations of commercial speech (People v. Remeny, 40 N.Y.2d 527, 387 N.Y.S.2d 415, 355 N.E.2d 375, and Suffolk Outdoor Adv. Co. v. Hulse, 43 N.Y.2d 483, 402 N.Y.S.2d 368, 373 N.E.2d 263) and the Supreme Court has dealt with the question in Linmark Assoc. v. Willingboro, 431 U.S. 85, 97 S.Ct. 1614, 50 L.Ed.2d 155; Bates v. State Bar of Ariz., 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810; Ohralik v. Ohio State Bar Ass'n, 436, 447, 98 S.Ct. 1912, 56 L.Ed.2d 444; and Friedman v. Rogers, 440 U.S. 1, 99 S.Ct. 887, 59 L.Ed.2d 100. ²

In Remeny (supra), we held invalid a New York City ordinance that absolutely prohibited any street distribution of commercial or business advertising because its absolute prohibition went far beyond the reasonable regulation of time, place and manner of distribution of commercial speech that is constitutionally permissible. In Suffolk Outdoor Adv. Co. (supra), we upheld a Southampton ordinance prohibiting nonaccessory billboards as a proper exercise of the police power to improve the aesthetics of the community, noting with respect to the free speech aspect of the case that the same governmental interest in aesthetics authorized regulation of the place and manner of speech and that the challenged ordinance made no attempt to regulate the content of speech appearing on the billboards. Those two decisions, while strongly suggestive of unconstitutionality of the law in question, are not, however, determinative, in view of the limitation of the First Amendment overbreadth doctrine recognized in the subsequent Supreme Court commercial speech decisions.

The first of those decisions, Linmark, held invalid an ordinance proscribing, in an effort to stem white flight from a racially integrated community, the posting of "for sale" or "sold" signs on all but model homes. The Supreme Court held that the fact that the ordinance restricted only one method of communications (signs) did not save it because, though other alternative methods of selling houses were theoretically available, real estate is not marketed through leaflets or sound trucks and other available media involved greater cost and less autonomy (and consequently less effectiveness) than a sign in front of the house to be sold, and because having prohibited but one type of lawn sign it had not been enacted to protect aesthetic values. Concluding that the township's interest was in regulating content rather than time, place and manner of posting and was not in preventing deception, the court struck the ordinance down because Willingboro had failed to establish that content regulation was needed to assure that the community remained integrated.

The Bates decision is particularly pertinent because it held that a State disciplinary rule prohibiting attorneys from advertising could not constitutionally be applied to an advertisement of "legal services at very reasonable fees" which listed specific services and fees. The court recognized that misleading advertising can be restrained and that an advertising claim with respect to the quality of services, because not readily susceptible of verification, might be misleading. With respect to the advertisement in question, however, it found none of the justifications offered for the regulation to be an acceptable reason for suppression of all advertising by attorneys. Holding inapplicable to professional advertising the overbreadth doctrine (which permits free speech attack without a demonstration that the challenger's specific conduct is constitutionally protected), the court considered the specifics of the advertisement in issue and found neither its reference to "legal clinics" not its offer of services at "very reasonable" prices to be misleading. Ohralik, on the other hand, upheld the prohibition against in-person solicitation by an attorney because of the potential for, and legitimate State interest in preventing those aspects of solicitation involving, fraud, undue influence, intimidation and overreaching. It expressly held that a lawyer can be disciplined for soliciting under circumstances likely to result in such adverse consequences, without a showing that in the particular instance they did result.

Friedman, the most recent decision of the Supreme Court on the subject, upheld a Texas act prohibiting the practice of optometry under a trade name. Noting that use of a trade name conveyed no information about price or the nature of the services offered and presented numerous possibilities for deception with which the Texas Legislature was familiar, which had been reviewed in an earlier Texas Supreme Court decision, and some of which had been substantiated as to Rogers, one of the plaintiffs in the Friedman case, by deposition testimony, the Supreme Court stated that "Even if Rogers' use and advertising of the trade name were not in fact misleading, they were an example of the use of a trade name to facilitate the large-scale commercialization which enhances the opportunity for misleading practices" (440 U.S. 1, 15, 99 S.Ct. 887, 896-897, 59 L.Ed.2d 100, Supra ) and concluded that the statute was a constitutionally permissible regulation for the protection of the public from deceptive use of optometrical trade names.

Against this background we consider the arguments advanced by the parties. Mobil's position is that Westchester's law regulates content rather than time, place and manner, that its total prohibition bears no relation to the purpose it purports to serve, and that there are no effective alternate channels of communication. The county contends that Mobil has not borne its burden of overcoming the presumption of...