Vugo, Inc. v. City of New York

January 21, 2020 • Legal Briefs
By Jacob Huebert, Ilya Shapiro, Sam Spiegelman, & Trevor Burrus

Vugo is a company that provides a software platform for rideshare drivers to display entertainment and advertising in their vehicles on an iPad or other tablets. New York City, however, prohibits advertising on the exterior and interior of “for‐​hire vehicles,” including rideshare vehicles like Uber and Lyft, without authorization from the Taxi and Limousine Commission. The commission allows some advertising in taxis, which is displayed on screens (“Taxi TV”) that the commission required taxis to install.

Vugo challenged the city’s ban as a violation of the First Amendment. Since the law restricts commercial speech (advertising) but not non‐​commercial speech, Vugo challenged the advertising ban as an unconstitutional content‐​based restriction on speech—that is, a limit on speech based on what it says rather than how it is said. Vugo also argued that the restriction violated the First Amendment because the city has different rules for taxis and rideshare vehicles.

On its face, the First Amendment does not discriminate between commercial and non‐​commercial speech, and any content‐​based restrictions on either should be subject to the strictest scrutiny. In 2015, in Reed v. Town of Gilbert, the Supreme Court confirmed that content‐​based restrictions on speech can be sustained only if the law is narrowly tailored to further a “compelling interest”—a high bar that is rarely met. Reed did not, however, extend this standard of review to commercial speech, and for years lower courts have offered myriad explanations as to why speech advertising goods and services is somehow less deserving of First Amendment protection.

Vugo won at the district court level but lost at the Second Circuit. Now Vugo is asking the Supreme Court to take the case, and the Goldwater Institute and Cato have filed a brief in support. We argue that different standards for commercial and non‐​commercial speech have no basis in the Constitution or in good public policy. Courts have argued that commercial speech should be less protected because false advertising harms consumers’ pocketbooks, or it harms the fair exchange of commerce. But false non‐​commercial speech has many negative effects—especially in the political realm—and the harms likely dwarf those of falsities perpetuated in pursuit of profit. Yet few would argue that the regulation of non‐​commercial speech should be subject to anything less than strict scrutiny. Politicians’ lies are and should be protected by the First Amendment. Shouldn’t the government’s purpose for rooting out the lesser evil of false commercial advertising be subject to the same exacting level of scrutiny?

Vugo is a good case for the Supreme Court to reconsider its existing commercial speech precedent and, ideally, apply the Reed standard to content‐​based restrictions on commercial speech. The Court should take the case and ensure that future efforts to regulate commercial speech face a far more exacting level of scrutiny than they do now.

About the Authors
Jacob Huebert
Ilya Shapiro

Ilya Shapiro is the director of the Robert A. Levy Center for Constitutional Studies at the Cato Institute and publisher of the Cato Supreme Court Review.

Trevor Burrus

Research Fellow, Robert A. Levy Center for Constitutional Studies