The state gas tax in Illinois had been slated, by laws passed before this year, to increase by 2.4 cents/gallon in about six weeks, on July 1, 2022. Also scheduled to increase by 1% the same day was the sales tax on grocery items (that are taxed). The state legislature deferred both of these scheduled increases last month when it passed a state budget for the upcoming year. The gas tax increase is now put off until January 1, 2023, and the grocery tax increase is waived for a year, until next summer.
Such are election-year politics in a time of inflation and (somewhat) plentiful state coffers. What is more unusual, and more controversial, is an additional feature of the budget bill relating to these tax-increase deferments, namely efforts by the legislature and the governor to make use of gas stations and grocery stores to publicize the deferments. In particular, the law requires each gas retailer, under pain of $500/day fines and criminal liability, post a 4″ x 8″ placard on each pump that says:
As of July 1, 2022, the state of Illinois has suspended the inflation adjustment to the motor fuel tax through Dec. 31, 2022. The price on this pump should reflect the suspension of the tax increase.
The new law also requires supermarkets to print a notice on their receipts, if feasible, that the 1% sales tax on groceries has been waived for one year. If not, “then the retailer shall post the statement on a sign that is clearly visible to customers.” Importantly, however, grocery stores, unlike gas stations, are not threatened with civil fines or criminal liability if they don’t obey the requirement.
As various journalists in Illinois have been pointing out in recent days, the Illinois Fuel and Retail Association seems to be gearing up to contest the constitutionality of this signage requirement.
“It’s not our job to be the state of Illinois’ publicity department,” Josh Sharp, the association’s CEO, has been quoted as saying. “Our members just do not like being told that they have to engage in and participate in speech that they don’t want to have anything to do with,” Sharp said. “The state of Illinois doesn’t get to tell our members what they have to say at the pump. That’s not their job, and doing so, we feel, is unconstitutional.”
Sharp has also been quoted to the effect that the gas industry is being treated unfairly insofar as it is being treated differently from other businesses whose customers will also enjoy tax benefits or deferments under the recently enacted budget law.
It turns out the state issued an order similar to the gas-signage requirement 20 years ago. But that order was never litigated as the one the current one seems likely to be. Putting aside claims that may be brought under the Illinois Constitution (on which I do not want to weigh in without more research), what are the chances for success under the federal Constitution?
I think the chances of prevailing in a federal constitutional challenge are not zero, but they are also not great. (It’s not impossible to imagine a federal district court embracing them, but the chances for success go down the farther up the appellate ladder one proceeds.) Let’s first dispense with the claim of inequitable discrimination against gas retailers compared to other businesses. Differential treatment can, in theory, give rise to violations under the Fourteenth Amendment’s Equal Protection Clause, but the Supreme Court has made clear that where “areas of social and economic policy” are involved, “a statutory classification that neither proceeds along suspect lines [such as race or sex] nor infringes fundamental constitutional rights must be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification.” This so-called rational basis review “is a paradigm of judicial restraint.” As the Court has made clear, “[t]he Constitution presumes that, absent some reason to infer antipathy, even improvident decisions will eventually be rectified by the democratic process and that judicial intervention is generally unwarranted no matter how unwisely we may think a political branch has acted.”
For this reason, the U.S. Supreme Court has not invalidated a garden-variety economic regulation on equal protection grounds for almost a century. During that time, laws that obviously and without strong policy reasons favor ophthalmologists and optometrists over opticians, laws that favor lawyers over professional debt adjustors, and laws that favor established businesses over newcomers have been rubber stamped.
What of the compelled-speech First Amendment claim? The road there is much more complicated, but still probably somewhat uphill. Perhaps the best starting point for analysis of the compelled-speech realm remains Wooley v. Maynard (1977). There, the Court struck down on First Amendment grounds a New Hampshire statute requiring that each passenger car registered in the State bear a license plate containing the unobstructed words “Live Free or Die” (the State’s motto).
Some folks might try to distinguish Wooley by saying gas stations are not being required by Illinois to say anything, they are simply required to do something, to post placards. But this conduct/speech distinction proves too much. In Wooley, one could have argued that what New Hampshire was requiring—the affixing upon each passenger car a certain specific kind of license plate—was conduct. Providing space on your car for a state-mandated license plate is no more expressive than is posting placards near a gas pump.
But the Wooley Court understood that what mattered was not whether the regulated persons were engaging in speech or conduct, but instead whether private individuals were being forced to allow the government’s speech—New Hampshire’s motto—on the private persons’ property (their cars). As the Wooley Court wrote, the question presented was “whether the State may constitutionally require an individual to participate in the dissemination of an ideological message by displaying it on his private property. . . . New Hampshire’s statute in effect requires that [drivers] use their private property as a ‘mobile billboard’ for the State’s ideological message.”
What about the fact that no reasonable outside observer would mistakenly believe that gas stations—simply because they post these placards—actually agree with or embrace the implicit credit the Illinois government apparently seeks to claim concerning the deferment of the tax increase?
Well, the plaintiffs in Wooley prevailed even though there wasn’t a misattribution problem there either: Nobody seeing a standard-issue New Hampshire license plate on the road is going to necessarily believe that the driver himself embraces Patrick Henry’s famous “give me liberty or give me death” creed. Indeed, the lower courts in Wooley had made a specific finding to this effect—that “defendants’ membership in a class of persons required to display plates bearing the State motto carries no implication . . .that they endorse that motto or profess to adopt it as matter of belief”—and the majority at the Supreme Court did not challenge this conclusion.
And yet the Wooley Court still said New Hampshire couldn’t force private persons to engage in conduct that facilitates the government’s message being communicated using their property.
Another initially attractive but ultimately unworkable distinction involves the ability of gas stations to distance themselves from the government’s message if they want, by, for example, adding another sign on the pump saying that the “State gas tax rates are too high anyway even with the deferment of the increase!” But this option was true in Wooley too: The New Hampshire statute did not forbid a person from placing a bumper sticker above his license plate saying “I disagree with New Hampshire’s motto.”
And in any event, the suggestion that the First Amendment problem dissolves because regulated individuals remain free to speak themselves is in deep tension with the reasoning of other precedents of the Court.
For example, in 1974 in Miami Herald Publishing Co. v. Tornillo, the Court invalidated an “equal time” law that required a newspaper to provide space to political candidates who had been attacked in print. In doing so, the Court rejected the notion that the newspaper could always distance itself from anything a political candidate said in the space provided him, by merely writing its own editorials responding to the candidate’s speech. Indeed, the Court noted that putting pressure on the newspaper to speak in order to distance itself from, or respond to, a message it was required by law to host itself burdens the newspaper’s First Amendment rights.
A plurality of the Court made much the same observation in Pacific Gas & Electric Co. v. Public Utilities Commission of California (PGE), where the Court invalidated a requirement that a utility company provide access to the extra space in the billing envelopes it sends to customers for a ratepayer advocacy group whose views might be very different from the utility’s own. This was so even though the utility could have countered the advocacy group’s speech with its own message had it wanted to.
Notwithstanding all these unsuccessful distinctions of Wooley, I think the First Amendment challenge to the gas-tax-deferment placard is unlikely to succeed, for two other reasons. First, the placards required are more informational than ideological. To be sure, the state probably wants to draw attention to the gas tax deferment to get some political credit, but the message is not nearly as politically slanted as was the message in Wooley. Indeed, Illinois could argue, at least with a straight face, that the required notices are designed to enlist consumers in ensuring that gas retailers are not improperly collecting more gas tax than state law requires/permits, rather than to generate any political goodwill on behalf of incumbent legislative or executive officials.
This is not to say all informational-placard requirements are valid. Indeed, just four years ago, in National Institute of Family and Life Advocates v. Becerra, the Court invalidated a California law that required clinics that primarily serve pregnant women to provide certain notices that: (1) make clear that the state of California provides free or low-cost services, including abortions, for pregnant women, and; (2) provide a phone number to call. Its stated purpose was to make sure that state residents knew their rights and what health care services were available to them. But the Court struck the law down, in large part because one of the sponsored services that the licensed notice requires clinics to advertise is abortion—the very practice that many of the clinics that brought the challenge (Catholic so-called pregnancy-crisis counseling centers) were adamantly opposed to. Requiring an entity to bear the government’s (even factual) message advertising a practice that directly contradicts the message than a non-profit entity is institutionally devoted to proclaiming is very different from requiring for-profit businesses like gas stations, that exist primarily to sell gas.
This brings me to the important point that the individual dignitary and autonomy interests that led the Court to protect the individual drivers in Wooley don’t necessarily apply to impersonal (and sometimes large) business entities. A car is much like a person’s home or a person’s clothing—it is an extension of the person and his sense of privacy—and what the Wooley Court called the “individual’s First Amendment right to avoid becoming [a] courier” seems strongest in an intimate context.
The larger, the more businesslike, and the more impersonal the setting, the less plausible it is to invoke the kind of dignitary and autonomy interests that drive the result in Wooley. So, for example, consistent with Wooley, I think it permissible for the federal government to require industrial employers to post placards about unionization rights, workplace safety and the like. The government may even require businesses to post signs advertising war bonds; places of business have fewer privacy and dignitary rights. That is true even of sole proprietorships that are not engaged in activities that inherently expressive.
But, as noted above, not all places of business are the same. Certain organizations, like newspapers (see Tornillo), are distinctively created for and devoted to expressive association. So whether an organization has a right to exclude government speech with which it disagrees may depend on how central speech and expression are to its own mission. This is why, for example, the Miami Herald, even though it is a for-profit institution, may not be required to run government ads if it doesn’t want to.
My argument here might be in some tension with the PGE result. In dissent there, Justice Rehnquist (joined by Justices White and Stevens) argued that “[e]xtension of the individual freedom of conscience decisions to [all] business corporations strains the rationale of those decisions to the breaking point.” It may be time for this argument to be directly addressed by the Supreme Court, where, notwithstanding the Court’s receptivity to First Amendment claims generally, it has a good chance of prevailing.
