In the case of Reilly, Postmaster v. Pinkus (1949), the U.S. Supreme Court was tasked with determining whether or not a business's advertisements were fraudulent and thus subject to postal fraud orders under Section 259(a) of Title 39 U.S.C.A., which prohibits using mail for fraudulent purposes. The American Health Aids Co., also known as Energy Food Center, had been advertising that their products could cure various ailments such as obesity and arthritis without any scientific evidence to support these claims. The court ruled in favor of Pinkus, stating that while his advertisements may have contained false statements, they did not constitute fraud because there was no proof he intended to deceive customers or knew his claims were false when making them. This decision clarified the definition of "fraud" within this context - it is not enough for statements to be untrue; there must also be an intent to deceive.

In the dissenting opinion for Reilly v. Pinkus, Justice Douglas argued that the majority's decision was a dangerous overreach of governmental power and an infringement on free speech rights. He contended that while some may find Pinkus' advertising distasteful or misleading, it is not within the government's purview to censor such content unless it poses a clear and present danger to public health or safety. The justice also raised concerns about potential abuse of this new precedent by future administrations who might use it as justification for suppressing any form of commercial speech they deem undesirable. Furthermore, he criticized the majority’s reliance on expert testimony in determining what constitutes deceptive advertising, arguing that such decisions should be left up to consumers themselves rather than unelected officials or experts with potentially biased views.