Under The Radar: The Supreme Court, Commercial Speech and the First Amendment
October 31, 2011
By: Charles M. "Chip" English*
National Law Review
Over the past several years, a great deal has been written about the U.S. Supreme Court’s expansive view of the First Amendment as applied especially to political speech. In both the 2010 and 2011 terms the Court in dramatic and well-publicized cases struck down federal (Citizens United) and state (Arizona Free Enterprise Club’s Freedom PAC) campaign finance restrictions as applied to corporate political donations and laws supporting public financing of candidates who forgo private donations. These are of course significant, far-reaching decisions with major impacts on political discourse in the United States. But even more may be going on in First Amendment jurisprudence when one looks beyond the headline-grabbing cases to less well publicized commercial speech cases.
More often than not the Court moves not dramatically, but in incremental steps as both the law and the Justices evolve and the Court personnel change. Such an incremental step appears to have been taken by the Court this year with respect to commercial speech regulation – speech intended not for political discourse, but by commercial entities seeking to buy, sell, advertise, market or provide information to each other and consumers.
On June 23, 2011, the Court, in a 6-3 majority, issued Sorrell v. IMS Health, Inc., No. 10-779, striking down on First Amendment grounds Vermont’s law that prohibited the sale and use of physician prescription data for commercial purposes especially by pharmaceutical companies wishing to use that data to advertise and otherwise reach out to physicians in order to market their drugs. Having monitored the case closely and attended the Court’s oral argument, I don’t think that the result itself was much of a surprise. The Court concluded that the regulated activity interfered with the exchange of ideas and was thus speech and then concluded that the protected speech could not be regulated by Vermont in the fashion proposed.
What to many observers was less predictable was the breadth of the decision and the language employed in the majority opinion written by Justice Anthony Kennedy and joined both by the four justices normally considered “conservative”, but also joined by Justice Sonia Sotomayor. The majority appears to have applied a stricter standard to the “content and speaker-based” commercial speech restrictions than it has applied in the past. So the question arises: Is the Court moving, however incrementally, towards a change in how it treats commercial speech under the First Amendment – one that would increase the level of scrutiny applied to restraints on such speech?
While Sorrell received far less coverage than many of other cases decided by the Court in the 2011 Term, commercial speech proponents have been quick to embrace the decision and to assert broader commercial speech rights. After the Food and Drug Administration adopted new cigarette warning label requirements in the summer of 2011, R.J. Reynolds, together with other tobacco companies and supported by national advertising organizations, were quick to seek court intervention against the new warning label requirements. They relied in no small part on the expansive language found in Sorrell. That suit, filed in mid-August, is set for a decision on motions for a preliminary injunction and summary judgment after a hearing before Judge Richard Leon in the U.S. District Court for the District of Columbia on September 21, 2011.
To understand where the Court may be heading, it is important first to know where we have been. While the First Amendment, which is also applicable to the States, might appear to the casual reader to be absolute – “Congress shall make no law . . . abridging the freedom of speech. . .”, it in fact has not been so regarded historically by the Court. In 1942, the Court declared that commercial speech was not protected by the First Amendment at all. The Court reversed course in 1976, declaring that some form of intermediate protection did exist for commercial speech, and established in 1980 a multi-part test (Central Hudson) for evaluating the constitutionality of commercial speech restrictions: In order to regulated non-misleading commercial speech regarding otherwise legal activity, the government must establish that there is a substantial state interest, that the regulation directly advances that state interest, and that the regulation is narrowly tailored to advance that substantial interest.
It doesn’t take a lawyer to conclude that this test is confusing, and not surprisingly, most observers from a wide array of the political spectrum have concluded that the results of the cases decided under Central Hudson are unpredictable and that the test is simply unworkable. Importantly, Justice Clarence Thomas has repeatedly criticized the Court’s commercial speech jurisprudence directly, with some indirect support from others from the Court’s so-called conservative wing.
The majority in Sorrell certainly did not overrule (at least not expressly or entirely) Central Hudson. However, the majority opinion , however subtly, appears to provide a measurable shift in the First Amendment analysis by the Court by carving out in commercial speech cases types of restrictions to which the majority appears to provide some form of scrutiny greater than the protections found in the Central Hudson test. Indeed and perhaps most tellingly the minority opinion written by Justice Stephen Breyer accuses the majority of having created a new test, stricter than Central Hudson, for content-based or speaker-based speech that undermines the differentiation of commercial speech from what is often called core First Amendment speech. If so, the court may have indirectly moved towards Justice Thomas’ assertion that commercial speech should not be treated differently from core speech.
In the short run, we should expect the decision in Sorrell to actually add to the confusion that surrounds Central Hudson. Will lower courts such as the one now presented with the cigarette warning dispute conclude that there is a new, higher standard? If so, in which cases will this new standard apply, and how will those cases be decided? This is not an academic or legalistic point. Both business and government thrive on certainty in results, and legal uncertainty is simply very expensive for everyone: When states lose these First Amendment cases, they normally must pay the attorneys’ fees to the prevailing party; meanwhile, businesses subject to regulation of uncertain legality incur costs in complying and challenging such regulation. Nobody benefits from this kind of uncertainty – well, except for the lawyers of course.
Of course, we may not have long to wait after all. The case of the FDA regulation of cigarette packaging, or possible other cases involving other governmental regulation of health-care claims or of health insurance, or new food safety regulation – any one of these could give rise to litigation that provides new guidance, clarity or even another incremental step. However, when one goes back to the text of the First Amendment and its absolute prohibition on abridging the freedom of speech, examines the Court’s recent dramatic political speech cases in the past two terms, considers the muscular conservative majority, and carefully reads between the lines of Sorrell (decided with six votes in the majority), one must conclude that we are in for interesting times, and that advocates of commercial speech restrictions, including anti-smoking advocates, may now face a greater uphill battle in defending and maintaining what have come to be accepted restrictions in marketing and advertising in the United States.
* Chip English is a former Ober|Kaler Food and Agriculture Group attorney.
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