Commercial Speech & the First Amendment

From Yale Law School’s Abrams Institute for Freedom of
Speech: Commercial Speech and the First Amendment
Floyd Abrams: does commercial speech protection affect
non-commercial speech law, for example by decreasing protection for political
speech?  We’ve found that political
speech proponents now cite commercial speech cases given how robust the
protection is.  So the concern about
defining scrutiny downwards for noncommercial speech hasn’t materialized.  SCt now believes that commercial speech is
more important than some thought, and that limitations on nonfraudulent speech
are more threatening than many thought.
Commercial Speech Post-NIFLA v. Becerra:  Legitimate Check on Compelled Speech or
Weaponization of the First Amendment?
Moderator: Joel Kurtzberg – Partner, Cahill Gordon &
Reindel LLP
Calls to overturn Central Hudson at least for
truthful/nonmisleading speech. Sorrell v. INS Health applied “heightened”
scrutiny. What does that mean?  Our part
of the bar argued for strict scrutiny. Sorrell went on to invalidate the law at
issue under Central Hudson, so it wasn’t clear. Content-based: not subject to
Central Hudson intermediate scrutiny? 
But what does that mean, given that commercial speech as a category is
content based?  Breyer issued the first
of many dissents: opened the floodgates to dangerous litigation.  Regulatory programs necessarily draw
distinctions based on content. 
Electricity regulators oversee company statements about electricity:
specific to content. The Federal Reserve regulates interest rate disclosures,
but only by financial institutions. The FDA oversees labeling and advertising
for drugs, but not furniture. It’s all content based. 
Reed v. Town of Gilbert: Reed found everything to be content
based and everything content based subject to strict scrutiny?  If law applies b/c of topic discussed, then
it’s content based according to Reed regardless of gov’t motive and content
neutrality of justification. Breyer concurred in judgment but warned again, you
can’t possibly mean this is true.  [It
just means the distinctions will be less predictable and more subject to
judicial reevaluation of the facts.]  The
entire regulatory state is built on laws that target specific content. [Which
is pretty much the point for some: they don’t like the regulatory state and
think that common law is enough.]
NIFLA: compelled speech case.  He litigated the graphic cigarette warning
cases.  Zauderer: rational basis,
essentially.  If Zauderer doesn’t apply
(purely factual/uncontroversial—calories on menus) what is the standard?  Strict scrutiny? Central Hudson? NIFLA
answers that question by saying Zauderer doesn’t apply when it’s content based
and it’s strict scrutiny. [This wouldn’t be my summary, but ok.]  Struck down California’s disclosures required
for anti-abortion clinics (licensed clinics had to post disclosures about
California’s own services for pregnant people; unlicensed clinics had to post
disclosure that it wasn’t a licensed medical clinic).  Court struck down both provisions: altered
the content of clinics’ speech and was therefore content based.  Rejected professional speech concept as to
the clinics b/c failed under intermediate scrutiny; no traditional exception of
lesser protection for professional speech. 
However, Court said it wasn’t calling into question legality of health
and safety warnings long considered permissible.
Panelists: Jane Bambauer, Professor of Law, James E. Rogers
College of Law, The University of Arizona: Zauderer apparently survives, but
strict scrutiny for everything else, and it’s an acidic test.  Any error of over or underinclusion will lead
to flunking even intermediate scrutiny. She’s more ok with that than others
Two big limits of NIFLA: Zauderer. Not totally unambigous in
the opinion, but looks largely intact. The first thing the majority does is
acknowledge that these statements, while factual, are not uncontroversial.
Doesn’t explain why it’s not uncontroversial, but everything to do with
abortion is controversial.  [If it’s litigated,
it’s controversial in a trivial sense.] Court probably isn’t ready to define
controversial—her own work has begun to look at how this might be done.  This is probably not the right set of facts.
Second: informed consent in the medical context.  The majority treats it as so traditional that
it’s basically a mere conduct regulation. NIFLA does some damage to the work
the Court has been doing to clarify the separation between what’s speech and
what’s conduct.  “Talk therapy” as
conduct and not speech—older case.  Led
eventually to NIFLA; this Court seems to suggest you can’t take an entire
category of speakers and describe what they’re doing as conduct. At the same
time the Court characterized informed consent as regulating the conduct of
providing medical care.  Biggest internal
inconsistency is treatment of Casey:
Bambauer can’t see daylight b/t disclosures required of abortion providers
under Casey and disclosures
unconstitutional in NIFLA.  [Which is why
having courts decide what’s uncontroversial/factual is about arrogating
political power to them.]  The increased
scrutiny may turn out to be messy and subjective—a problem of epistemology:
which branch of gov’t is better at sifting messy evidence.  Often framed as whether courts are better
than legislatures; this is why Breyer cautions modesty.  Courts are interested in epistemic modesty,
but they think regulators and
[RT: but not private parties] should be more modest and
commercial speech is a case study of why this might be.  Assumptions used by regulators in 1970s were
challenged and found to be lacking—limiting optometry offices from listing
prices was bad for consumers. Gov’t will mess up even the goals it intends to
pursue.  [… and we’re at Lochner.]  Regulation shouldn’t apply to information
transmission unless two branches of gov’t have looked at the same body of
evidence and agreed it would be good for consumers. Mandatory disclosures
haven’t been good for consumers and getting rid of that style of regulation may
be good for them. 
Kurtzburg: off-label promotion of drugs: is this truthful
and nonmisleading?  [Amarin, I think.]
The judge didn’t want to have to answer that question, but he did, and found
the FDA went too far.
Robert Post – Sterling Professor of Law at Yale Law School:
Why wasn’t commercial speech protected before Central Hudson? Because we had
free speech for a reason: to make the gov’t responsive to us, as required for a
democracy.  Trying to form public
opinion=state is responsive to us. That logic gives rise to speaker rights, b/c
we want state to be responsive to people who are talking. Why not approve
content discrimination? We want public opinion to set the agenda for the gov’t,
not the other way around in choosing this not that topic.  Content discrimination ban preserves that
priority. Often described in terms of marketplace of ideas, as Thomas does in
NIFLA. Epistemological justification. 
Any institution that produces truth does not have a
marketplace of ideas. That’s not how you run a university—any institution that
produces truth makes judgments about competence and incompetence. There are
better and worse ideas.  The notion that
there’s no such thing as a false idea implies that there’s no such thing as a
true idea, which is the opposite of the idea of truth winning a competition in
the market. The equality here is political, not epistemological: politically,
we are all equal, even though there is epistemological truth.
When Court extended protection to commercial speech, it was
an audience based justification.  Right
to receive information (as it is known in Europe).  Not a subordinate set of protections: a
different kind of right for different reasons, and the Court was very clear
about that b/c it had in the back of its mind Lochner. The Court has lost this distinction, putting autonomy into
the commercial speaker and back into Lochner, second-guessing any commercial
regulation.  This is cool if you like
Lochner, not cool if you don’t. Those are the stakes.
Does NIFLA make any sense in its own terms? Thomas says
content discrimination prevents a market for ideas in which truth will prevail,
so every mandatory disclosure is subject to strict scrutiny.  Imagine: you give a lousy opinion letter and
get sued for malpractice.  Is this
subject to strict scrutiny? Why isn’t this just a marketplace of ideas?  Doctor falsely tells you you don’t have
cancer: is this subject to strict scrutiny? Professional speech is supposed to
be governed by standards of competence of the profession.  Doesn’t make sense to say all compelled
speech is subject to strict scrutiny: in commercial real estate, endless
statutes require disclosures in leases. Under NIFLA, that’s subject to strict
scrutiny?  Does it make sense to have a
court epistemologically determining the truth of these disclosures?  Mandatory disclosure of latent defects
subject to strict scrutiny. The opinion is crudely written as “speech content
regulation bad.”   If you say there are exceptions,
the exceptions contradict the general logic. 
A hunting license for conservative judges to decide what social
regulations they don’t like.  It has
nothing to do with truth or self-government but with entrenchment of a
political party.  If courts are busy with
striking down the SEC, they will not be rigorous when the gov’t tries to lock
up terrorists.
Coleen Klasmeier – Partner and Global Coordinator of the
Food, Drug and Medical Device Regulatory Practice Area Team at Sidley &
Austin LLP
NIFLA’s antecedents: Sorrell, Reed [but not Casey!] have a
lot of resonance on the same intellectual level, and Central Hudson is still
being applied. Her expectation is that courts of appeal will continue to use
those rubrics. Not sure that Central Hudson or Zauderer were ever particularly
helpful analytical tools. Rules of thumb: gov’t’s view of what’s smart decision
doesn’t count (graphic tobacco disclosures). 
Don’t burden speech b/c you find it too persuasive (Sorrell).  Don’t manipulate consumers with neuroscience
(tobacco again) [which is totally fine for private sellers]. But there are
exceptions, historically accepted health/safety warnings—she has no idea what
that might include. Thomas might use that for FTC rules. Another rule of thumb:
Don’t create a stupid record—9th Cir. American Bev. case—had record
ev. that 10% of ad devoted to warning would be enough but required a 20%
warning. CMS proposed rule requiring disclosures of list price in TV ads: the
entire record says we’re doing this because we think it might work but we’re
not sure.  That’s a bad record.  [Having read the proposed rule, I disagree
with this characterization of the evidence and its characterization, but that’s
not surprising.]  Breyer understands that
FDA is threatened by the language in these cases.  All of the labeling rules raise these
issues.  There’s a drug warning on a
diabetes drug saying it causes thyroid cancer, but it’s not based on human
data. The FDA wants doctors to know of the risk; it works in judgments, not in
facts. The agency needs facts, but it judges
those facts.  Judges make decisions about
data all the time.  The epistemology
question does go to competence—FDA’s primary jurisdiction is an issue, but
judges do have a role b/c they’re good at judging too. 
Amarin: the FDA didn’t want offlabel marketing even though
pharmaco proved that its claim was accurate; not allowed on label and thus FDA
said marketing wasn’t allowed, b/c other drugs indicated that early data of the
type you generated don’t necessarily correspond to longterm cardio benefit that
consumers would expect from a drug of this type—an extrinsic factor having
nothing to do with the drug itself [um, that conclusion doesn’t logically
follow at all—especially if you believe in misleadingness]. You can debate
whether it’s sound public health policy, but it’s not a great rationale for a
speech regulation.  Hijacking labels for
the agency’s view of public health, which is a pathology.  Agency has now internalized some of the
lessons of the cases.
Kurtzburg: Why isn’t having exceptions enough?  Zauderer: Can compel if speech is factual, noncontroversial,
and not unduly burdensome?  Gov’t can
also regulate conduct w/incidental impact on speech.  Two other exceptions he think exists: under
precedents, gov’t may not impose content based restrictions w/o persuasive
evidence of a long, if heretofore unrecognized, tradition to that effect. If
there’s a long history of requiring disclosures in commercial real estate
transactions, that’s ok.  The opinion
says it’s not calling into question health and safety warnings long considered
permissible.  Emphasis on tradition, not
just about health and safety. Doesn’t the analysis of professional speech
suggest that if the gov’t could come forward and show the long tradition, it
would be ok?  Why is Post so
worried?  It can’t be that every
regulation is really going to be called in question.  [Which is also the hunting license point:
we’re now in the business of randomly targeting things.]
Post: he has a bridge he’d like to sell you.  How much work has “tradition” done in public
forum doctrine done?  None.  It depends on who gets to say what tradition
is.  Also, redefines Zauderer by putting
the burden on the state, which is not what Zauderer was. And changes the
meaning of “controversial.”  If it means
“can’t be about controversial subject” then it takes the disclosure away when
it is needed most.  How do you
distinguish between speech/conduct when regulating the language of a
contract?  We’ve tried that for 50 years
and failed. It’s an invitation to ad hoc judgments reflecting political
prejudices of courts.  SEC required
disclosures: is that a long enough tradition? 
Why shouldn’t the gov’t be able to experiment w/ new forms of
disclosure? This is about ending the development of regulation: command and
control wasn’t good, but information forcing disclosures became preferred. It’s
not traditional so you can’t do it: but why does that make any sense given
evolving knowledge?  Also, if you want to
talk tradition, commercial speech protection was unknown to the Framers; it’s
not traditional at all! 
Compelled speech serves the very constitutional value for
which we created commercial speech doctrine in the first place, and NIFLA
treats getting more information as a bad thing.
Health/safety as tradition: commercial leases and SEC
disclosures aren’t health/safety.  Is
that in the exception?  What does it
mean?  Thomas is just carving stuff
arbitrarily as it comes into his mind, not thinking about how markets are
formed and regulated in the US.  Amarin:
missed the main justification for why you’d want safety & effectiveness
data for offlabel use: that’s an information forcing device to require
producers to come forth with information. Judge had such a poor understanding
of basic foundations of regulatory scheme. Now, you can get safety &
effectiveness approval for one indication and market it for something
else—that’s law made by a judge who admits he can’t operate his own toaster.
Klasmeier: there is appropriately a burden on manufacturers
to substantiate safety/effectiveness for initial marketing. We don’t have fully
publicly funded research. Offlabel use has been allowed for decades; FDA has
accepted that. It can’t regulate doctors b/c they’re ungovernable; tried to
regulate manufacturer speech instead. Not a foundational principle of food
& drug law that it’s illegal to disseminate info: an artifact of 1970s
Post: it was illegal to market to general public.  [What makes it a drug is how you advertise
Klasmeier: the policies are generally agnostic to audience.  [Certainly Amarin suggest you could market
directly to consumers.] Patients are entitled to receive information about
offlabel uses, so they can go to doctors. 
Consistent w/listener-oriented rationale.
Bambauer: Post said regulatory state used information as
better version of regulation.  80% agree
that more information is generally better, but that’s too facile.  It’s really hard to use facts to convince
people.  If you try to regulate directly,
like taxing soda, the politics show the public [or relevant interest groups]
isn’t ready, but a speech regulation can be slipped in w/o as much political
awareness.  That may be good or bad, but
it doesn’t mean that the 1A check is undemocratic.
Kurtzburg: en banc 9th Circuit American Bev.
Ass’n v. SF applied NIFLA to sugar-sweetened beverage warning.  Majority applied NIFLA.  Maybe NIFLA is much ado about nothing
(concurrence said it would have gone further, because health/safety didn’t
traditionally include any warnings about sugar sweetened beverages).
Bambauer: the issue is there are so many requirements that
you can go in any order and likely invalidate a regulation.  Makes more sense to look at
factual/uncontroversial as prerequisites for Zauderer, rather than undue
burden.  9th Cir. seems to say
that warning may be factual and uncontroversial; only the burden part indicates
that NIFLA might have put more teeth in the analysis. Worries that NIFLA will
be construed in a way that will always find a way for the gov’t regulation to
fail, but only in undue burden.  Case
suggests that factual/uncontroversial disclosures will often be ok.  [But see the weird discussion of diabetes,
where the argument is that it’s not “factual” b/c it doesn’t sufficiently
distinguish type 1 and type 2 diabetes.]
Post: DC Circuit has been at war w/Zauderer for a while
now.  Misleadingness correction
only?  DC Circuit recently went en banc
and said it wasn’t just for misleadingness, but was basically just Central
Hudson.  9th Circuit similarly
set up a situation where Zauderer can always be rejected in favor of strict
scrutiny. When you can’t predict how the opinion should be applied, and when
there is so much commercial speech regulation, you’re giving a hunting license
to courts.  Much less worried about the
difference b/t Central Hudson & strict scrutiny—not interested in
fetishizing strict v. intermediate scrutiny, which is an evasion of the central
Q: what constitutional values are you trying to protect?
Being forced to carry a calorie label is not being forced to
affirm that one believes “Live free or die.”  We now have gov’t speech doctrine saying gov’t
can say anything, no matter its falsity: how does that go along with this other
Klasmeier: A defendant in a wire fraud case was subject to a
DOJ press release that was concededly inaccurate. The defendant sued over DOJ’s
statutory authority; DC Circuit rejected idea that DOJ should have to account
for its falsehoods under Data Quality Act. We litigated it as a case about
fairness and equality; disappointing result.
Post: the gov’t is absolutely privileged to defame: Paul v.
Kurtzburg: we normally defer to agencies w/in their area of
expertise.  Should we defer to FDA on
safety & effectiveness judgments? 
[Note how this is a Lochner Q.] 
Does the 1A tip too far in the other direction?
Klasmeier: trends seem to be converging against
deference.  A lot of these cases are
Chevron step 1 cases: deference is not appropriate.  Reluctant to live in apocalyptic world Post
describes because that’s awful, but Thomas may be trying to move towards idea
that we don’t know legislative motives of yore, while we have information about
today, and we see bad records from today [so yesterday’s bad decisions are fine
and can’t be changed, especially if they were from the common law, I guess].
Moving forward, can’t politicize questions of conscience and value [like
whether to defraud consumers?]—but doesn’t know what to make of Reed in that light, since that wasn’t a
bad record [or a question of conscience and value].
Kurtzburg: false/misleading can be regulated under
commercial speech: it’s a big carveout.  Consistent
w/NIFLA’s holding: there’s a long tradition of allowing the regulation of
commercial speech that is potentially false or misleading, and no one could
argue to the contrary. [Wait for it: I’m about to discuss a 5th
Circuit case that doesn’t just argue but holds to the contrary.]  It’s an exception to the ban on content
Post: sign regulation was a longer tradition, and now
there’s Reed.  Street sign, house number,
those distinctions have been made at least as long as misleadingness.
Bambauer: whether we talk about long tradition or deference
to regulatory agencies, neither really make sense for constitutional law: we
had a long tradition of racial discrimination [and more to the point, of
defamation law]. The disagreement is more about what we’re trying to
accomplish. Even the libertarians seem to recognize that fraud and things close
to fraud are unprotected not just b/c of tradition but for actual substantive
Post: but you could never have that for political speech:
false statements about Brexit. We do apply that rule to commercial speech. Why
would that distinction matter? Could it be that not all speech is the same?

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