The definition of commercial speech

Speech:  The Definition Matters
Moderators:  Chris Beall, Levine Sullivan Koch &
Schulz LLP and Bruce Johnson, Davis Wright Tremaine LLP
Steven G. Brody,
Morgan, Lewis & Bockius LLP: We barely spoke about the definition of
commercial speech. Why?  Is it b/c Reed has left us in the dust?  Or is it something more than that?  Background: gov’t usually loses if the speech
is noncommercial, but if it’s commercial, courts are much more likely to allow
regulation.  Central Hudson has become tougher over time, but still has a lot of
leeway within it for judges to uphold restrictions.  Yet 40+ years since Va. Pharmacy, we still don’t know which communications fall within
commercial speech category and which are fully protected noncommercial speech.
Treated as
commercial: solicitation of employment on public speech; gripe websites;
itemization of tax on medical forms.
fortunetelling for a fee; advertising for a school; public ratings of corporate
Keeps lawyers
employed but doesn’t advance the rule of law. Focus on two inconsistent
definitions of commercial speech: Bolger & Va. Pharmacy.  SCt has vacillated, but relied more heavily on
the latter.  Va. Pharmacy: speech that
does no more than propose a commercial transaction. “No more than” test.  Say that it serves the underlying purpose of
the doctrine; receives less protection b/c inextricably tied to commercial
transactions. So it’s logical that it should extend only to proposals of
commercial transactions. Opponents say that’s too broad; advertisers can avoid
speech restrictions by including discussions of public policy or unrelated
images. Such ads “do more than” propose a transaction. 
Bolger: A message
may be considered commercial speech by asking (1) is it in the form of an ad;
(2) does it refer to specific product; (3) does speaker have economic
motivation?  One alone isn’t enough, but
a combination of the factors could be enough. Opponents argue that fundamental
1A values are risked by this definition. 
Two other
definitions of note: (1) Central Hudson itself defines commercial speech as
expression related solely to the economic interests of the speaker and its
audience.  Close cousin of “no more than”
test—keep an eye on it.  (2) Nike v.
Kasky, Cal. SCt definition: consider the speaker, the intended audience, and
the content of the message. Would include practically any statement of a
corporation about itself.
Joshua M. King, Chief
Legal Officer, Avvo, Inc.: Avvo was sued on launch, taking issue with profiles
of lawyers.  Argued that rating was
defamatory, and that the profiles were commercial speech, making us in
violation of unfair trade practices. Court concluded that profiles weren’t
commercial speech even though we had an economic motivation—akin to traditional
form of publishing. It’s something that keeps coming back.  Two class actions allege that profiles are
commercial speech violating attys’ publicity rights, b/c we’re monetizing
w/advertising.  Cuts to core of how media
works.  Commercial/noncommercial can be
the difference b/t dismissal on the pleadings and a long, expensive fight.
Most of lawyers who
use Avvo deal w/consumer issues, and are keenly aware of att’y advertising
regs.  Bar regulations are so far afield
from strict scrutiny!  Att’y ads were
mostly banned until 1977; begrudging acceptance of 1A right of att’ys to
advertise by state bars.  Many bar
regulators aren’t even willing to engage w/commercial speech doctrine, having mostly
kept pre-Bates rules (can’t give
someone something of value for a recommendation etc., except for paying
reasonable costs of advertising).  Bars
are struggling w/social media, new forms of advertising: an att’ys own
blog?  Pay per click ads?  Almost w/o exception, the bars don’t even pay
attn to 1A, just apply their own rules as conservatively as possible.  Unfortunate b/c this is not changing despite Sorrell and Reed etc.  Advisory opinions
from bars—Cal. is the only state that pays attn to 1A doctrine when coming up
with advisory opinions. Doesn’t slow down lawyers who are skirting ethics
anyway, but it does chill more cautious lawyers from engaging in social media
or writing for publication.
Denise Esposito,
Covington & Burling and Former Chief of Staff to the Commissioner of the
U.S. Food and Drug Administration (FDA): Food & drug lawyer.  Overall question: whether a regulatory
program can exist in the context of a 1A challenge if strict scrutiny applies
to food & drug law.  Implications for
tobacco, all medical products, and foods. 
FDA is charged w/premarket review, determining whether a drug is safe
and effective for intended use. Historically required 2 adequate clinical
trials; expensive and extensive. Labeling is approved, which is supposed to
explain what it means that the drug is safe & effective. Some believe that
if you apply strict scrutiny, there will be no FDA; any pharmaco can do a study
and say “my study shows it’s safe and effective.”  That raises the question: who is the arbiter
of good science?  A judge can use Daubert to keep science out of the
courtroom. FDA believes it’s the arbiter of safety and effectiveness.
Amarin case: off-label marketing.  FDA’s
position was that off-label marketing was evidence that you intended it to be
used for an off-label purpose, and thus mislabeling.  Caronia:
court disagreed.  Off-label marketing
restrictions have also been challenged: sending doctors reprints of studies
that discussed unapproved indication. 
FDA tried to change its policies, but Sorrell intervened; the FDA wasn’t paying much attention b/c it
looked like a data sales case. But then the SCt said unconditionally that pharma
ads were commercial speech subject to different levels of scrutiny depending on
what opinion you’re looking at.
At the end of the day,
if FDA can’t ban truthful and nonmisleading speech, what can it do? If it puts
a drug on the market, can it do any regulation of the advertising as long as
the company has evidence to back up its claim b/c FDA is no longer the arbiter
of what’s truthful and nonmisleading? FDA says: we’re still the arbiter;
proceed at your own risk. If we find your studies to be poorly designed/misleading
of doctor or patient, we can still ban your speech.
Caronia: DoJ decided to test pure ban on off-label statements. There were a
number of false statements as well; the rep said to doctors, on tape, “this
drug is safer than aspirin,” but it’s the date rape drug.  DoJ didn’t pursue those claims b/c it wanted
to test the waters on whether rep could say “we are studying the drug for X, Y,
Z (unapproved) and our studies suggest that it works.”
Amarin: A company that promotes fish oil, which has a very good safety
profile. The public health argument was a little weaker b/c drug was relatively
safe, and the evidence was strong. Amarin had approval for product for lowering
high triglycerides, and wanted next level of approval for mid-level
triglycerides. FDA wanted a supplemental application, and Amarin did an
adequate clinical trial whose design FDA approved, and the clinical endpoints
showed what they wanted. FDA denied approval based on subsequent science
suggesting there was no clinical benefits to lowering triglycerides in that
group of patients b/c it didn’t seem to affect cardiac events. But Amarin said:
we’re willing to say “FDA doesn’t agree w/us that this should be approved.” 
Amarin has threaded through the industry in unhealthy ways. Clients say “I’ve
read Amarin, I can say anything as long as I do a 10-person study.”  Instead: be tempered, esp. w/public health
interest. Live w/fact that advertising is commercial speech, but can’t say
whatever they want based on any study, even w/disclaimers; FDA can’t say “you
can’t say X until we review and approve.” All the action will be about what’s
misleading, even if not false.  Caronia
quote: sales rep says marketing is part of strategy to manipulate doctors. FDA
plays a role here.  DTC ads to consumers
are also a big deal, can be manipulated by complex data.
Rebecca Tushnet,
Professor of Law, Georgetown Law School: I’m one of the people Professor Redish
labeled pathological in the previous panel. 
Just note about the First Amendment as the new Lochner: the example Redish gave of a city that bars its parking
lot to cars with Trump bumper stickers is structurally identical to the FDCA
regime: you can sell anything you want, but if you say it’s for diagnosing/treating a medical condition, then the FDCA
has jurisdiction and you can’t sell it while making those representations.  You might think that the FDCA is better
justified, but the point is that it’s really easy to make modern economic
regulation look like speech regulation.
From my area,
advertising law: Ford sucks said by GM is regulated the same way as Ford is
great said by Ford.  And gov’t’s having a
viewpoint, even if it were anticapitalist (which I strongly doubt) doesn’t mean
that laws it enacts reflecting that viewpoint constitute viewpoint
discrimination for 1A purposes.  If you
want to call perjury laws and fraud laws viewpoint discrimination, you can do that—they do reflect the
government’s view that those lies are particularly bad, and they do penalize
speech that would be blameless if uttered on stage or to a spouse—but I think
that concept muddies viewpoint discrimination into meaninglessness.
My preferred
approach to commercial speech is that advocated by Justice Stevens: the
distinction is government’s regulation of commercial transactions in order to
protect the parties to the transaction should generally be treated like any
economic regulation, even if the regulation operates by way of speech. Consumer
Reports isn’t making the exact same speech as Hoover, and Hoover’s relationship
to the transaction makes an important difference just as lawyer-client
privilege makes an important difference to how one can and should regulate
speech between lawyers and clients.  That
means that the gov’t’s reason to
regulate is important, though it is often possible to identify a consumer
protection purpose for many regulations. 
Stevens’ perspective also helps us identify what is commercial speech:
when it is sufficiently associated with a relevant transaction.  
Notably, Kasky definition is for the purpose of applying false advertising laws. Full quote: (1)
Because the messages in question were directed (a) by a commercial speaker (b)
to a commercial audience,  (2) and
because they made (c) representations of fact (d) about the speaker’s own
business operations (e) for the purpose of promoting sales of its products,
(3) we conclude that
these messages are commercial speech (f) for purposes of applying state laws
barring false and misleading commercial messages.
 [Reed is
unsustainable: I too find it notable that Scalia’s own opinion listed as ok
some clearly content-based restrictions that he didn’t even bother to correct
in response to the concurrences pointing that out. I do agree that watering
down of strict scrutiny is one likely result, as well as invalidating very
desirable regulations—worst of both worlds.]
Outside the Supreme
Court, the distinction between commercial and noncommercial speech remains
vital on a day to day basis.  Lanham Act:
Critics v. competitors—commercial speech provides a dividing line b/t
defamation law and false advertising law, which is strict liability for very
good historical and theoretical reasons. 
Also need to warn media lawyers specifically, who think that Sorrell and Reed are great news: be careful what you wish for.  Worse w/o the doctrine: Second Circuit: can
infringe TM by content of expressive work; right of publicity cases—recent 9th
Circuit case applying Reed to strike down right of publicity as applied to
noncommercial works like movies, but what if you can’t make that distinction.
Q: Microsoft just
bought LinkedIn: how much do developments in social media bear on what’s
commercial speech.  E.g., what is a like
on Facebook—commercial speech?
Brody: Social media
is good b/c combines commercial and noncommercial speech. Buzz marketing,
stealth marketing, blogs—very hard to pull them apart. Inextricably intertwined
doctrine: 9th Cir. supports that.
King: We see a lot
of bar regulators who think any use of social media is subject to att’y
advertising rules: can do it, but you must retain copies for years, use
disclaimers, etc.  I always tell att’ys
that you shouldn’t be marketing on social media b/c people don’t want that. You
should just be having a conversation. 
Test is still maddeningly unclear.
Esposito: FDA’s world,
warning letters are one enforcement mechanism. 
Interesting social media warning letters, including Kim Kardashian’s
Instagram.  But when does she stop being
a paid spokesperson?  Social media: FDA
requires fair balance, which means you need to talk about risks as well as
RT: Social media
offer new methods for manipulation: called “stealth” marketing for a reason—that’s
the advertiser’s own paternalistic assumption that though you would ignore
marketing if you knew it was marketing, you’ll be happy to receive the information
if you don’t know.  Another example: my
competitor has people posing on social media as disappointed customers.
Q: are video games
commercial speech?
Brody: No. Art/game.
RT: Right now, it
doesn’t matter for the ROP. FTC standard: if there’s a paid-for factual
representation by the seller, then substantiation required just for that; doesn’t
allow FTC to regulate any other aspect of the game.
Q: don’t assume that
all media lawyers welcome Reed.  Instead a consensus that a tight definition
of commercial speech from SCt would solve a lot of problems.
Beall: uncertainty
of what constitutes commercial speech allows collateral effects of either
watering down strict scrutiny or deterring speech.  Rogers v. Grimaldi rule depends on
commercial/noncommercial divide. The advertising of the expressive work can
then use name/likeness and is not actionable appropriation of celebrity name. The
problem is what is actually the commercial part of the speech?
Piety: guidelines on
native advertising?
Beall: Reed and questions of imposing gov’t
regulation on the basis of content is deeply problematic for FTC regulations;
FTC is all about regulating the content of commercial speech.
Esposito: Breyer’s Sorrell dissent discusses this: if you
have a regulatory system, it will “discriminate”
based on content & speaker. Definition is less important than pragmatics.
Brody: Reed goes toward enhanced commercial
speech protection, but Zauderer and
its progeny moves in another direction.
Johnson: Zauderer plays a role in FDA b/c of
compelled speech.
Esposito: FDA has
tried to force graphic warnings on tobacco label; doesn’t happen in drug world,
where companies often want tort protection by using disclaimers.
King: Lawyers love
disclaimers, even though people don’t read them.  Bars love to come up with disclaimer
requirements and that’s under litigation now—they should only get reasonable
basis if necessary to cure deceptive speech, but other courts take position
Q: Derogatory
statements based on social network from competitor who pretends to be
dissatisfied consumer.  Why wouldn’t
defamation take care of that?
RT: B/c it might not
be defamatory.  “The technician was rude
and I felt uncomfortable”—even though that was totally false, falsity isn’t
enough unless it’s defamatory, under defamation law as opposed to false
advertising law.

from Blogger

This entry was posted in Uncategorized and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s