Posadas De Puerto Rico Associates v. Tourism Co. of Puerto Rico

478 U.S. 328, 106 S. Ct. 2968, 92 L. Ed. 2d 266, 1986 U.S. LEXIS 129, 13 Media L. Rep. (BNA) 1033, 54 U.S.L.W. 4956
CourtSupreme Court of the United States
DecidedJuly 1, 1986
Docket84-1903
StatusPublished
Cited by414 cases

This text of 478 U.S. 328 (Posadas De Puerto Rico Associates v. Tourism Co. of Puerto Rico) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Posadas De Puerto Rico Associates v. Tourism Co. of Puerto Rico, 478 U.S. 328, 106 S. Ct. 2968, 92 L. Ed. 2d 266, 1986 U.S. LEXIS 129, 13 Media L. Rep. (BNA) 1033, 54 U.S.L.W. 4956 (1986).

Opinions

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. Ap[331]*331pellant 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 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:

[332]*332“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, J.970, 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 reiterates the language of § 8. See 15 R. & R. P. R. § 76-218 (1972). Regulation 76a-l(7), as amended in 1971, provides in pertinent part:

“No concessionaire, nor his agent or employee is authorized to advertise the gambling parlors to the public in Puerto Rico. The advertising of our games of chance is hereby authorized through newspapers, magazines, radio, television and other publicity media outside Puerto Rico subject to the prior editing and approval by [333]*333the Tourism Development Company of the advertisement to be submitted in draft to the Company.” 15 R. & R. P. R. §76a-l(7) (1972).

In 1975, appellant Posadas de Puerto Rico Associates, a partnership organized under the laws of Texas, obtained a franchise to operate a gambling casino and began doing business under the name Condado Holiday Inn Hotel and Sands Casino.2 In 1978, appellant was twice fined by the Tourism Company for violating the advertising restrictions in the Act and implementing regulations. Appellant protested the fines in a series of letters to the Tourism Company. On February 16, 1979, the Tourism Company issued to all casino franchise holders a memorandum setting forth the following interpretation of the advertising restrictions:

“This prohibition includes the use of the word ‘casino’ in matchbooks, lighters, envelopes, inter-office and/or external correspondence, invoices, napkins, brochures, menus, elevators, glasses, plates, lobbies, banners, fly-ers, paper holders, pencils, telephone books, directories, bulletin boards or in any hotel dependency or object which may be accessible to the public in Puerto Rico.” App. 7a.

Pursuant to this administrative interpretation, the Tourism Company assessed additional fines against appellant. The Tourism Company ordered appellant to pay the outstanding total of $1,500 in fines by March 18, 1979, or its gambling franchise would not be renewed. Appellant continued to protest the fines, but ultimately paid them without seeking judicial review of the decision of the Tourism Company. In July 1981, appellant was again fined for violating the advertising restrictions. Faced with another threatened non-[334]*334renewal of its gambling franchise, appellant paid the $500 fine under protest.3

Appellant then filed a declaratory judgment action against the Tourism Company in the Superior Court of Puerto Rico, San Juan Section, seeking a declaration that the Act and implementing regulations, both facially and as applied by the Tourism Company, violated appellant’s commercial speech rights under the United States Constitution. The Puerto Rico Secretary of Justice appeared for the purpose of defending the constitutionality of the statute and regulations. After a trial, the Superior Court held that “[t]he administrative interpretation and application has [sic] been capricious., arbitrary, erroneous and unreasonable, and has [sic] produced absurd results which are contrary to law.” App. to Juris. Statement 29b. The court therefore determined that it must “override the regulatory deficiency to save the constitutionality of the statute.” The court reviewed the history of casino gambling in Puerto Rico and concluded:

“. . .We assume that the legislator was worried about the participation of the residents of Puerto Rico on what on that date constituted an experiment.... Therefore, he prohibited the gaming rooms from announcing themselves or offering themselves to the public — which we reasonably infer are the bona fide residents of Puerto Rico. . . . [WJhat the legislator foresaw and prohibited was the invitation to play at the casinos through publicity campaigns or advertising in Puerto Rico addressed to the resident of Puerto Rico. He wanted to protect him.” Id., at 32b.

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478 U.S. 328, 106 S. Ct. 2968, 92 L. Ed. 2d 266, 1986 U.S. LEXIS 129, 13 Media L. Rep. (BNA) 1033, 54 U.S.L.W. 4956, Counsel Stack Legal Research, https://law.counselstack.com/opinion/posadas-de-puerto-rico-associates-v-tourism-co-of-puerto-rico-scotus-1986.