Geographically Underinclusive “Green Power” Advertising Bans Fail Central Hudson; Post‑Litigation Interests Rejected and Superseded Disclosures Rendered Moot

Introduction

In Retail Energy Advancement League v. Anthony Brown (4th Cir. May 15, 2026), two retail electricity-supply plaintiffs— Retail Energy Advancement League and Green Mountain Energy Company—sought a preliminary injunction against Maryland’s “green power” marketing law, Md. Pub. Util. § 7-707. The defendants were Maryland’s Attorney General and officials of the Maryland Public Service Commission (PSC), sued in their official capacities.

The case sits at the intersection of (i) deregulated retail electricity markets (Maryland’s 1999 “Choice Act”), (ii) renewable energy credit (REC) accounting—used because electrons on the grid cannot be traced to a specific generator—and (iii) First Amendment limits on government regulation of commercial advertising and compelled disclosures.

The key issues on appeal were whether the district court correctly denied a preliminary injunction under Winter v. Natural Resources Defense Council, Inc., and, more specifically:

  • Whether § 7-707(c)’s restriction on using terms like “green,” “clean,” and “100% renewable” (unless the supplier meets Maryland’s REC/geography-based criteria) is constitutional under the First Amendment.
  • Whether § 7-707’s disclosure regime is constitutional—an issue complicated by the PSC’s post-ruling promulgation of new, mandatory disclosure language.

Summary of the Opinion

The Fourth Circuit reversed in part and remanded with instructions.

  • Speech restriction (§ 7-707(c)): The court held plaintiffs were likely to succeed even under intermediate scrutiny for commercial speech, because Maryland’s restriction did not materially advance the asserted consumer-protection interest. The Fourth Circuit directed the district court to preliminarily enjoin § 7-707(c).
  • Compelled disclosures (§ 7-707(f), (g) as implemented): Because the PSC issued materially different disclosure language after the district court’s ruling, the Fourth Circuit declined to decide the constitutionality in the first instance and remanded for the district court to evaluate the operative disclosure under Zauderer v. Office of Disciplinary Counsel and related cases.

Analysis

Precedents Cited

1) Preliminary injunction framework and appellate review

  • Winter v. Natural Resources Defense Council, Inc.: The governing four-factor test (likelihood of success, irreparable harm, balance of equities, public interest). The Fourth Circuit applied it de novo as to legal issues.
  • Pierce v. N.C. State Bd. of Elections: The standard of review—abuse of discretion, with legal conclusions reviewed de novo and factual findings for clear error.
  • W. Va. Ass'n of Club Owners & Fraternal Servs., Inc. v. Musgrave and In re Murphy-Brown, LLC: In First Amendment cases, irreparable harm is effectively presumed once a likely constitutional violation is shown.
  • Legend Night Club v. Miller: Balance of equities and public interest generally favor enjoining unconstitutional speech restrictions.

2) Facial challenges and overbreadth framing

  • Greater Balt. Ctr. for Pregnancy Concerns, Inc. v. Mayor of Balt. and United States v. Stevens: The court recited the demanding standards for facial invalidation (no valid applications, no “plainly legitimate sweep,” or substantial overbreadth). The opinion, however, ultimately turned on plaintiffs’ likelihood of success at the preliminary-injunction stage rather than a final facial-invalidation holding.

3) Commercial speech restriction doctrine

  • Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n: The four-part test for restrictions on non-misleading commercial speech (lawful/not misleading; substantial interest; direct advancement; not more extensive than necessary). The Fourth Circuit resolved the appeal on the third factor—lack of material advancement—without deciding whether strict scrutiny might apply.
  • Recht v. Morrisey, Edenfield v. Fane, and In re R.M.J.: These cases informed the court’s “misleadingness” analysis. The court held Maryland failed to prove the prohibited “green” terms are inherently misleading, because they can be used in non-deceptive ways (e.g., to describe REC-backed products). Under In re R.M.J., potentially misleading speech generally cannot be absolutely banned if it can be presented non-deceptively.
  • Rubin v. Coors Brewing Co.: Used for the “fit” concept—whether the regulation’s means sensibly match its ends.
  • Greater New Orleans Broad. Ass'n, Inc. v. United States and Grimmett v. Freeman: The court relied on underinclusiveness/exemptions as evidence that the law does not materially advance the stated interest, describing the regime as “pierced by exemptions and inconsistencies.”
  • Williams-Yulee v. Fla. Bar: Cited for the proposition that underinclusiveness may “raise doubts” about whether the government is pursuing the interest it invokes.
  • Fla. Bar v. Went for It and Fla. Bar v. Went for It, Inc., plus Aptive Env't, LLC v. Town of Castle Rock: These cases anchored the requirement that the government show real harms and that the restriction alleviates them “to a material degree,” not through speculation.
  • Anheuser-Busch, Inc. v. Schmoke: Invoked for the idea that sustaining commercial speech restrictions requires a logical correlation between objective and means.

4) Rejecting post hoc governmental justifications

  • United States v. Virginia and Kennedy v. Bremerton Sch. Dist.: The court refused to credit Maryland’s newly emphasized interest in “promoting development of renewable energy sources in Maryland and the PJM region,” finding it was not genuinely asserted pre-litigation. These precedents supplied the rule against hypothesized, post hoc rationales.

5) Mootness and “court of review, not first view” principles

  • Leaders of a Beautiful Struggle v. Balt. Police Dep't, Arizonans for Off. Eng. v. Arizona, City of Erie v. Pap's A.M., and Norfolk S. Ry. Co. v. City of Alexandria: These cases supported the holding that the dispute over the statute’s model disclosure text became moot once the PSC adopted superseding, operative disclosure language.
  • Cutter v. Wilkinson and Holland v. Big River Mins. Corp.: The Fourth Circuit declined to decide the constitutionality of the new PSC disclosure language in the first instance, emphasizing appellate restraint.
  • Nat'l Assoc. of Diversity Officers in Higher Educ. v. Trump and Nat'l Urb. League v. Trump: Cited for the notion that facial attacks are poor vehicles where implementation details are unknown—and that once an agency implements, plaintiffs can challenge the actual interpretation.
  • Goodman v. Praxair, Inc.: Justified providing remand guidance for efficiency.

6) Compelled commercial disclosures

  • Zauderer v. Office of Disciplinary Counsel: The baseline test for compelled disclosure requirements in commercial speech—must be purely factual and uncontroversial, reasonably related to preventing deception, and not unjustified or unduly burdensome.
  • Nat'l Inst. of Fam. and Life Advocs. v. Becerra (NIFLA) and Md. Shall Issue, Inc. v. Anne Arundel County: These cases informed the remand guidance, especially the concern that lengthy required messages can “drown out” the speaker’s own message.

7) Severability

  • Leavitt v. Jane L.: Severability is a matter of state law.
  • Jackson v. Dackman Co.: Reinforced Maryland’s strong presumption of severability.

Legal Reasoning

1) The court bypassed the strict-scrutiny fight by finding failure under intermediate scrutiny

Plaintiffs argued § 7-707(c) is content- and viewpoint-based and therefore triggers strict scrutiny. The Fourth Circuit did not decide that question, because it held plaintiffs were likely to win even applying the commercial-speech test of Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n.

2) “Inherently misleading” was not established

Maryland tried to characterize “100% wind,” “100% solar,” and similar “green” claims as inherently misleading because the delivered electricity cannot be traced to a specific source. The court rejected this categorical view, reasoning that suppliers can market “green” products in a non-deceptive way by accurately explaining that “green-ness” is delivered via RECs. Under In re R.M.J. and Edenfield v. Fane, speech that can be presented non-deceptively may not be absolutely prohibited.

3) Consumer protection was the only “genuine” interest the court would consider

Maryland asserted (i) consumer protection and (ii) promoting renewable development in Maryland/PJM. The Fourth Circuit accepted consumer protection as substantial, but rejected the second interest as a post hoc litigation rationale under United States v. Virginia and Kennedy v. Bremerton Sch. Dist., emphasizing the lack of contemporaneous legislative evidence and the State’s late pivot.

4) The decisive failure: no material advancement (“fit” problem) due to geographic underinclusiveness

The opinion’s core doctrinal move is its application of Central Hudson’s third factor: even where consumer confusion about RECs is “real,” the restriction must alleviate the harm “to a material degree.” The court found a mismatch between Maryland’s goal (reducing confusion about “green” claims and REC mechanics) and the mechanism chosen (a geography-bound REC eligibility threshold).

Section 7-707(c) allows “green” marketing if the supplier’s renewable attributes are backed by RECs from within PJM, but forbids the same claims if RECs are sourced outside PJM—even if the electricity is fully backed by renewable attributes. That structure, the court reasoned, permits the very confusion Maryland identified to persist: consumers may still be sold “green” electricity “through credits” and remain unclear about what they are buying. The restriction therefore provides, at best, “ineffective or remote support” for the asserted consumer-protection purpose (quoting Central Hudson logic).

Maryland argued the restriction should be assessed together with disclosures. The court rejected this “tandem” defense on the ground that, in this statutory scheme, the disclosures—rather than the geographic ban—do the informational work. A restriction that is itself poorly fitted does not become constitutional merely because separate compelled speech might correct the confusion.

5) Winter factors followed from the First Amendment analysis

Once likely success was shown, the Fourth Circuit treated irreparable harm as essentially automatic in a First Amendment setting (per Musgrave and In re Murphy-Brown, LLC), and found the balance of equities and public interest favored enjoining unconstitutional enforcement (per Legend Night Club v. Miller).

6) Narrow injunction and severability

The court limited relief to § 7-707(c) and rejected plaintiffs’ request to treat the scheme as inseverable. Relying on Maryland’s severability statute (Md. Gen. Provisions § 1-210) and Jackson v. Dackman Co., the court applied a strong presumption that invalid provisions can be severed unless the remainder is unworkable.

7) Disclosures: mootness and remand for first-instance review under Zauderer

The district court had evaluated the statute’s model disclosure under Zauderer v. Office of Disciplinary Counsel. After that ruling, however, the PSC promulgated materially new disclosure text in Md. Code Regs. 20.53.07.07(B)(4). The Fourth Circuit held that litigating the constitutionality of the now-superseded model language would be moot under cases like Leaders of a Beautiful Struggle v. Balt. Police Dep't.

The court declined to assess the new disclosure language itself on appeal, invoking the “court of review, not of first view” principle from Cutter v. Wilkinson. On remand, it directed the district court to evaluate whether portions of the mandated message—particularly claims about supporting renewable development “in the region” and environmental benefits—are “purely factual and uncontroversial,” and whether the overall disclosure is unduly burdensome or “drown[s] out” suppliers’ own speech (citing Nat'l Inst. of Fam. and Life Advocs. v. Becerra (NIFLA) and Md. Shall Issue, Inc. v. Anne Arundel County).

Impact

  • Central Hudson “material advancement” has teeth against underinclusive, geography-based marketing bans. The opinion signals that if a state claims it is preventing consumer deception about “green” electricity, it cannot rely on a restriction that primarily sorts RECs by geography while leaving the consumer’s core misunderstanding (REC-backed vs. physically delivered renewable electrons) largely intact.
  • Post hoc state interests are vulnerable in intermediate-scrutiny review. By applying United States v. Virginia and Kennedy v. Bremerton Sch. Dist. in this commercial-speech setting, the court raises the evidentiary stakes for states: legislative record and contemporaneous justifications matter, even outside strict scrutiny.
  • Agency implementation can moot statutory-text challenges and shift the battlefield to regulations. The compelled-disclosure fight moved from statutory “model language” to the PSC’s actual mandated message—illustrating how regulated parties should track agency rulemaking to maintain a live controversy.
  • Zauderer scrutiny will likely focus on “uncontroversial” and “drown-out” constraints. The remand guidance suggests heightened attention to whether required text strays from neutral explanation into advocacy-like statements about regional development and environmental benefits, and whether the mandated length/placement burdens marketing communications.
  • Practical compliance consequences for energy marketers. Pending remand proceedings, suppliers gain protection against enforcement of § 7-707(c)’s term restrictions, but still face uncertainty about the PSC’s compelled language—inviting careful drafting of marketing materials and parallel litigation strategy on the disclosure rule.

Complex Concepts Simplified

Renewable Energy Credits (RECs)
A REC is a certificate representing that one megawatt-hour of electricity was generated from a qualifying renewable source. Because electricity on the grid is fungible, RECs are used to “claim” renewable attributes even though the consumer cannot receive physically traceable renewable electrons.
PJM region
PJM is a regional transmission organization managing a large multi-state electric grid region. Maryland’s REC definition is partly geographic: only RECs from within PJM (or adjacent control areas / Atlantic outer continental shelf) count for certain Maryland purposes.
Commercial speech and Central Hudson
Commercial speech is advertising or marketing speech proposing a commercial transaction. Under Central Hudson, truthful, non-misleading commercial speech can be restricted only if the state has a substantial interest, the restriction materially advances that interest, and the restriction is appropriately tailored.
Compelled disclosures and Zauderer
Under Zauderer, the government may require certain factual disclosures in advertising to prevent deception, but the compelled statements must be factual and uncontroversial and not so burdensome that they effectively overwhelm the advertiser’s own message.
Mootness
A court cannot decide questions that no longer matter in practice. Once the PSC replaced the statutory “model” disclosure with a new mandatory disclosure, the fight over the model text could no longer provide meaningful relief.

Conclusion

The Fourth Circuit’s decision establishes a practical rule for “green” marketing regulations: a state cannot justify a speech restriction aimed at preventing consumer deception when the restriction’s mechanics—here, a geography-based REC eligibility line—do not materially reduce the confusion the state identifies. The opinion also tightens scrutiny of governmental justifications by rejecting interests that appear only after litigation begins.

Finally, the case highlights the procedural and substantive importance of agency implementation in compelled-speech regimes: once the PSC issued new disclosure language, the constitutional inquiry shifted to whether that specific text is “purely factual and uncontroversial,” reasonably related to preventing deception, and not unduly burdensome under Zauderer and NIFLA.