Commercial speech: strategic issues

Issues:  What questions are we asking
now? Where is the law going?
Moderator:  Timothy L. Alger, Greenberg Traurig LLP: In
today’s economy, what isn’t an ad?  Is
the death of the commercial/noncommercial distinction inevitable?
A: depends on
whether publication values integrity and editorial independence.  If it does, they’ll keep editorial separate.
Other risk: if this kind of advertising becomes conventional, it will be
accepted and lead to greater mistrust.
Piety: Why are ads
skull and crossbones? Implicates expertise, and whether everyone’s ideas are
equally valuable in all contexts. It’s suicidal: if editorial becomes
distrusted as advertising, then looking like editorial won’t provide any
competitive advantage. We have historical experience of more Darwinistic
selling environment, and it resulted in the Progressive era.
Q: does the category
commercial speech have any value?  What
would happen under strict scrutiny?
A: I would fear that
courts will feel the need to uphold various regulatory regimes, and do it in
ways that weaken strict scrutiny if they can’t distinguish different types of
A: what most clients
and lawyers are looking for is predictability. One strict scrutiny test +
$100,000 later you know the answer is no good to anyone/hurts the rule of
law.  There is an awful lot to the
problem of drawing arbitrary distinctions, but it’s difficult to advise clients
right now and that’s not good.
Kurnit: you could
have a different regime w/categories of speech, notwithstanding Reed. 
Attempt to avoid SEC: the Court is likely to say that the SEC and
perhaps the FDA can use the police power to protect consumers.  But it’s not definable as a practical matter
through who created it, what their motive was, etc.; these rules have been
displaced.  The impact is to chill the 1A
for the NYT/legacy media that value their curation, where there is an economic
value for trusted sources. But the WSJ has a wine club and the NYT sells
memorabilia, so effort to suggest that we can divide the world into
advertising/editorial is gone. The marketplace will reward integrity; bring
false advertising claims against those who lie to consumers in their
advertising of their own media.
Q: concept of
commercial speech isn’t just about ads and product labeling.  Many professions are constituted by
communication.  You have to be a member
of the bar to practice law—does that requirement pass strict scrutiny? 
Alger: if it’s a
good regulation shouldn’t it pass strict scrutiny?
Q: is it the least
restrictive means? Does that require CLE?
Alger: or we could
turn to the Commerce Clause.
Piety: that’s just
another way of restating carveouts, like commercial speech.  If strict scrutiny were really strict,
instead of “most everything fails,” it would be different.  Sullivan
produced Anderson v. Liberty Lobby—motion
to dismiss. As a practical matter, strict scrutiny means a lot of things will
fail, and lots of false/misleading speech will be allowed, as w/libel.
Alger: Reed says content discrimination is bad
but commercial speech is content based. 
Off-site and on-site distinctions are common, and those seem to be
content based.  Reed: some justices say that’s unaffected, but it is obviously a
content-based distinction. How do we fathom this?
Kurnit: False and
misleading is content-based; you’ll never have a 1A regime that protects fraud,
deception, securities violation—at some point, the gov’t must protect the
public weal through content-based carveouts. 
Stevens’ notion in Central Hudson:
you can do away w/the frivolous stuff, and have a category for that which is
false/deceptive and likely to influence a consumer’s purchasing decision.  Must structure analysis for that core.  Can’t imagine abolishing the SEC.  [Others in this room can imagine more than
that, which is an issue; also, that standard w/o more won’t distinguish the
non-seller’s false speech from the seller’s false speech, both of which are
likely to influence purchase.]  Looking
at who the speaker is, and whether it’s an ad, has to go.  It’s the content and whether it’s fraudulent,
not the speaker. [I don’t really understand how he can say this.  If his standard is fraud, then the speaker is
very important.]  In the 1900s when the
NY courts said that using a person’s image in advertising was a crime, no one
had any doubt what an ad was. 
Q: Alvarez: 1A will
protect lies unless there’s a pecuniary motive.
Piety: Why is
advertising to children ok? Adults can protect themselves, but can kids?
Kurnit: yes, though
it’s a Q of what they can perceive. They’re savvier consumers than most adults.
You can’t regulate the 1A down to what children can comprehend.  Favorite example: TV ad for doll: “doll doesn’t
walk” disclaimer while showing the doll walking; directed at 2-3 year olds and
thus disclaimer not effective.
Q: ROP statute was
enacted 115 years ago b/c a young woman’s picture was put on a flour bag. The
NYT led the push to get the statute enacted. Maybe that statute is unconstitutional
on its face, and certainly as applied. 
There have been about 70 lower court cases applying Reed, and only one involved a private civil law suit, and that’s
the Hurt Locker case. Jordan v. Jewel: jury was outraged and
gave Jordan $8.9 million, but Ed O’Bannon sought damages for a video game.  Q is whether ROP could form the basis for
antitrust injury; this mess that is the ROP is something we need to talk about.  Reed
doesn’t add a lot to the mix; also doesn’t know how that applies to fair use in
Kurnit: for ROP, you
must also require falsity to make it constitutional.  The notion that the little girl’s image on
the flour is important enough to do violence to the 1A in the greater scheme of
things is not sufficient.  §43(a)(1)(A) provides
a very solid ROP claim when there’s falsity about endorsement, participation,
etc.; that will work under the 1A b/c that’s false speech for commercial
purposes designed to influence purchasing decision.  [But that presupposes a
commercial/noncommercial distinction which he opposes, not to mention I wonder
about materiality v. puffery status of picture of girl w/r/t consumer decisionmaking.]
There is no longer emotional anguish connected w/being related to commerce.
[Nice to know that’s universally true.]
Alger: Sarver case
from 9th Cir. applied strict scrutiny in ROP case; made it easier
that it was a movie, noncommercial speech. But where do we draw those lines,
and what about mixed/hybrid situations that come up online all the time. DCt
cases have held, incorrectly, that advertising driven by content makes the
content commercial as well. 
So what’s the next
step, litigation-wise?
Q: Something so
egregious that the Ct will have to take a look, particularly w/8 Justices on
the Court.
Alger: perhaps cert
in Sarver, explaining why Sarver is different from NFL game cases.
Q: O’Bannon is
selling cars; justice to him requires a hard look.
Q: so he’s owed money
because he’s not making any of his own? 
Is your case against the networks, the NCAA, etc.?
Q: is a video game
the same as a newspaper?
Q: The cases that
come will be Ps’ attys who use FTC guidelines as a template to bring claims
over whether or not there was sufficient disclosure of the sponsorship of
content. Those are easy cases for Ps’ lawyers to construct.  [Given that most people in this space aren’t
following the FTC guidelines, as we’ve heard, I wonder whether that’s actually
Q: TOS might require
Q: Ps’ attys will
say they’re not binding.
Q: Cases like Sarver
implicate matters of public concern/public figure—status of particular person.
Can see SCt dodging the commercial speech issue and focusing on something they’re
more comfortable with, like 9th Circuit did.

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