Functionality: it’s in the bag

Posted on June 16, 2016 by rtushnet
Schutte Bagclosures
Inc. v. Kwik Lok Corp., No. 12-cv-5541 (S.D.N.Y. Jun. 14, 2016)
 
Following up from previous post on an earlier
ruling. (Thanks to an
eagle-eyed correspondent who probably knows way more than anyone else wants to
know about plastic bag closures.)  There’s
a bit of tacking here—the court finds that Kwik-Lok’s registrations for bag
closure designs cover current versions, despite some changes, forcing Schutte
to bear the burden of proof on functionality. 
That’s Kwik-Lox’s last victory, though. 
 
The court finds the
Kwik-Lok registered bag closures to be functional under Traffix, and just in case under Morton-Norwich
too, rejecting the proffered alternative designs (which were produced using 3-D
printers, for those of you tracking clever litigation innovations at home) as
unproven in their ability to hold up to the kind of rapid automated application
required for large-scale production of closed bags.  Apparently these things come in reels, like
ticket reels, and work in machines specifically designed to fit the closures.
 

Schutte on L; Kwik-Lok
on R.
 
Then, to be extra
extra sure, the court continued on to find that confusion was unlikely—these
are only sold in batches of at least 4000 to sophisticated consumers, in
clearly marked packages.  And, as I commented
in my initial post, the federal dilution claim failed for want of fame among
the general consuming public. 
Interestingly, the court then dismissed the state dilution claim as
preempted by patent law under Bonito
Boats, since the claim was one regarding product configuration trade dress.
While states can require labeling for trade dress to avoid confusion, NY
dilution law contemplated a flat ban on potentially patentable “publicly known
design and utilitarian ideas which were unprotected by the patent laws,” and
that’s a no-no.
 
I don’t recall
seeing this reasoning before, but the court cites a few similar cases: Luv N’
Care, Ltd. v. Regent Baby Prods. Corp., 841 F. Supp. 2d 753 (S.D.N.Y. 2012); E.
Am. Trio Prods., Inc. v. Tang Elec. Corp., 97 F. Supp. 2d 395 (S.D.N.Y. 2000); Escada
AG v. The Limited, Inc., 810 F. Supp. 571 (S.D.N.Y. 1993). 

Query: why not reason similarly about copyright, per Sears/Compco, and invalidate state dilution laws at least as based on copyrightable designs?

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A dog’s breakfast of false advertising counterclaims

Posted on June 15, 2016 by rtushnet
Blue Buffalo Co. v.
Nestlé Purina Petcare Co., No. 4:15 CV 384, 2016 WL 3227676 (E.D. Mo. Jun. 13,
2016)
 
Blue Buffalo sued
Purina for false advertising; Purina counterclaimed.  On a motion to dismiss the counterclaims, the
court got rid of most and kept a few. 
 
Super 7 Lifesource
Bits: Purina alleged that Blue Buffalo’s use of the term “Super 7 Lifesource
Bits” and associated graphics suggested that they were superior in nutrition to
other pet foods and that the products contained a significant amount of the
ingredients found in the Lifesource Bits, when the depicted fruits and
vegetables likely only made up .25% of the product overall. The challenged ads,
packaging, and website statements, taken as a whole, supported a plausible
claim for false advertising, though Purina’s claims were weak. Consumer
reaction evidence could prove them.
 

Website image touting “exclusive LifeSource Bits”

Savory Sizzlers: Purina
alleged that Blue Buffalo falsely advertised its Kitchen Cravings Savory
Sizzlers Homestyle Dog Treats as containing bacon as a main ingredient when in
fact the product contained no bacon. The front of the pork-based product
packaging states in prominent lettering that it features “USA PORK FIRST
INGREDIENT.” Likewise, the chicken-based version states “USA CHICKEN FIRST
INGREDIENT” prominently on the front of the package. “The only mention of bacon
is on the back of the package, which states in small lettering ‘If there’s one
thing that will bring dogs running, it’s the smell of bacon sizzling in the
pan. Tasty BLUE Sizzlers are the naturally healthy alternative to the real
thing, so you can feel good about rewarding your canine companion with the
bacon flavor he craves.’”  Purina
challenged this language, plus the clear window on the package showing that it
was shaped like bacon strips.
 
The court concluded
that “no reasonable consumer could believe that Savory Sizzlers contain bacon
as a main ingredient,” because the package clearly stated that pork or chicken
was the first ingredient [ed. note: I’m a vegetarian, but isn’t bacon made of
pork?], and “the only mention of bacon is in the context of a statement about
how Savory Sizzlers are not bacon, but rather, are an alternative to bacon.” Dismissal
on the pleadings was appropriate because  “the claim alleges that a consumer will read a
true statement on a package and will then disregard ‘well-known facts of life’
and assume things about the products other than what the statement actually
says.”
 
Health Bars: Purina
challenged the names and packaging of two BLUE Health Bars, alleging that they
indicated that certain ingredients were primary: Health Bars Baked with Banana
and Yogurt (with yellow and cream packaging; bananas and yogurt are ingredients
four and five) and Health Bars Baked with Bacon, Egg & Cheese (red
packaging; bacon is the fifth ingredient and dried egg and cheese powder are
seventh and eighth).  But this didn’t
plausibly allege misleadingness. These were dog biscuits; “reasonable consumers
know as a fact of life that biscuits are not composed primarily of fruit and
yogurt, but rather, like all baked goods, are primarily composed of grains and
flours…. While color schemes are often used to connote flavor, they do not
necessarily imply ingredient primacy.”
 
Family Favorite
Recipes: Mom’s Chicken Pie, Shepherd’s Pie, Backyard BBQ, Turkey Day Feast, and
Turducken flavors have photos on the product labels depicting the traditional
title dish, allegedly misleading consumers into thinking that the can contains
human-grade meals comprised of identical ingredients and ratios of ingredients
as those in the traditional dish, in combination with the “family favorite recipes”
tagline.  Specifically, Mom’s Chicken Pie
flavor doesn’t contain any pie crust or wheat; Shepherd’s Pie doesn’t contain
equal parts of meat mixture and potatoes [and no actual
shepherd either]; and the rest aren’t comprised of high-quality, whole
ingredients, nor are some of the ingredients depicted primary ingredients.  The court found these allegations to “defy
credulity. No reasonable consumer would expect these cans of dog food to
contain whole turkeys, turduckens, or pies. Nor would any reasonable consumer
believe that the Family Favorite Recipes’ references to traditional American
meals mean that the same, human grade ingredients are in the cans of dog food.”  [But see
the experience of Serena Williams.]
 
Wild Bones Dental Chews:
Purina alleged that the packaging misled consumers into thinking the product
contains actual bone. Membership in the Wilderness product line allegedly
implied “a link to nature and containing ingredients one would find in the
wild,” and other products in the Wilderness line contained real elk antlers and
beef bones, strengthening the impression. 
Also, the bones were in the shape and color of “true bones,” visible
through a clear window in the packaging. 
Again, the court was distinctly unimpressed.  The “bone” shape was “the shape of a cartoon
bone, sized just like a dog biscuit, and is embossed with the word ‘WILDNERNESS.’
The Wild Bones do not even remotely resemble real bones.”
 
Healthy Gourmet
Flaked Fish & Shrimp Entrée: the product name allegedly consumers into
believing that the product was “comprised primarily of wholesome seafood and
shrimp,” while shrimp was only the eighth ingredient, though “ocean fish” was
the first ingredient, and “fish broth” was the second. While the allegation
that the product was not “comprised primarily of wholesome seafood” was
therefore self-defeating, it was tenuously plausible that consumers would
believe that shrimp comprised more of the product than it actually does.  The claim “is not so incredible that a
reasonable consumer would have to disregard well-known facts of life to believe
it.”

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Best title of the year candidate

Posted on June 15, 2016 by rtushnet

Questions about Google autocompl, via Siva Vaidhyanathan.

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Political party bars use of name and logo by dissidents

Posted on June 14, 2016 by rtushnet
HT Eric Goldman.
This is one of those cases that seems to be an extreme outlier, but then again
see United We Stand America v. United We Stand
America, New York, applying
the Lanham Act to similar but perhaps more limited effect.

 

Canegata v. Schoenbaum, 2016 WL 3212270, SX-16-CV-324 (V.I. Super. Ct. May 27, 2016)

In early May, the
Territorial Committee of the Republican Party of the U.S. Virgin Islands held a
special meeting setting a date for the territorial convention; adopting rules
for selection of nominees and party officers at that convention; and amending
the Party’s rules. A few days later, John Canageta, the State Chairman of the
Republican Party of the U.S. Virgin Islands, and Robert Schanfarber, the
Secretary, issued a “Call of the 2016 Republican Territorial Convention” to Republican
voters telling them about the territorial convention.
Then, an alleged
majority of the Territorial Committee demanding that Canegata issue a call for
the territorial convention to take place on a different day. This group then
appointed some individual defendants as the Territorial Convention Subcommittee.
Herbert Schoenbaum, the First Vice-Chairman, then issued a call consistent with
the Committee’s demand, based on the written refusal of Canageta to abide by
the Committee’s demand. The Territorial Convention Subcommittee set up a
Facebook page “to communicate with registered Republicans who want to
participate in the [May 28, 2016] Territorial Convention.” The title of the
page was “Territorial Convention of the Republican Party of the USVI” and
identified the date of the convention as May 28. The profile picture contained
“an image commonly associated with the Republican Party of the U.S. Virgin
Islands,” a variation on the USVI flag, with a red, white and blue elephant
logo, with three stars across its back, in the center of an eagle and “GOP” underneath the eagle.

 

Plaintiffs sought a
TRO enjoining defendants’ use of (1) any symbol, emblem and insignia of the Republican
National Committee, namely the Elephant; and (2) the “Republican Party of the
U.S. Virgin Islands” name. Defendants voluntarily took down the logo, replacing
it with a red, white and blue elephant logo upholding five stars across its
back, and left the title and description of the Facebook page the same.
The court stated the
issue clearly: “the extent to which a political party may prevent a dissident
group from using the descriptive name and the symbol, emblem, or insignia of
said political party.”  Plaintiffs and
defendants were all members of the Republican party, rivals for control of the
Territorial Committee.  But defendants
were in violation of V.I. law because they didn’t have plaintiffs’ consent to
use the name, symbol, emblem, or insignia of the Republican party.
Title 18 V.I.C. §
301(c) provides that:
Whenever a political party in the Virgin Islands affiliates with a national
political party, committee, convention or organization, regardless of when such
affiliation took place, no association, group, club, organization or
instrumentality shall use the symbol, emblem, or insignia, of the national
political party, convention, committee or organization which has affiliated
with a Virgin Islands political party, without the express consent in writing
from the chairman and secretary of the Virgin Islands political party filed with
the Supervisor of Elections.
Without a word about
the obvious constitutional questions here (for a start, unless “use” means
“confusing trademark use,” there’s no way this can survive even gentle
scrutiny), the court tried to figure out what constituted “a symbol, emblem, or
insignia of the Republican National Committee.”
Given the replacement image’s similarity to the GOP elephant—both are
red, white, and blue, with stars across their backs—“the average layman could
very well interpret this image as a symbol, emblem, or insignia of the
Republican National Committee, especially when used in the context to call a
territorial convention of the Republican Party of the Virgin Islands.”  Thus, plaintiffs showed a reasonable
probability of success on the merits.
But the law didn’t
cover the party’s “name.”  (Cf. Qualitex, holding that “symbol” covers
everything that can hold meaning to consumers.)
But, wait for it, because defendants aren’t the Republican Party of the
VI, plaintiffs can also prevent the [trademark] use of the Party’s name via a
misappropriation theory.  “Those in
control of the Republican Party of the U.S. Virgin Islands may lawfully prevent
the appropriation of their name by organizations not functioning under the
aegis of the Republican Party of the U.S. Virgin Islands.”
Irreparable harm:
Plaintiffs pointed to the confusion “that will certainly ensue with regard to
the actual date of the territorial convention.”
This would harm the Party’s reputation and credibility, including with
the RNC.  “Loss of control of reputation
and loss of good will are established grounds for irreparable injury.” As for
harm to defendants, they wouldn’t be harmed by being enjoined from using a name
and a symbol they’re not entitled to use, though they could continue their
vigorous opposition to the present party leadership:
Defendants can continue to operate their Facebook Page. The relief
would be limited to enjoining Defendants from the use of the symbol, emblem, or
insignia of the Republican National Committee, namely the image of a red, white
and blue elephant logo upholding stars across its back and the use of the
“Republican Party of the U.S. Virgin Islands” name to avoid potential confusions
among citizens. The injunction need not extend to the point of excluding
entirely the use of the descriptive word “Republican”, so long as Defendants
make it clear that the named group is in opposition to those currently in
control of the Republican Party of the U.S. Virgin Islands. [ed. note: whose
full name they can’t use, by those terms.] The purpose here is to avoid
potential confusion.

 

The public interest
also favored prevention of confusion about the Republican Party, which would
also protect voters’ rights. TRO granted.

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Commercial speech: strategic issues

Posted on June 13, 2016 by rtushnet
Strategic
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
speech.  
 
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
true.]
 
Q: TOS might require
arbitration.
 
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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Brand journalism: sponsored content/the 1A

Posted on June 13, 2016 by rtushnet
Brand Journalism,
Sponsored Content and the First Amendment
 
Moderator:   Scott Dailard, Cooley LLP
 
Mary K. Engle,
Federal Trade Commission, Associate Director, Division of Advertising Practices:
We’re going to proceed as if there is a commercial/noncommercial divide.  To hold otherwise would upend FTC, FDA, SEC,
USDA—lots of regulations regulate speech. FTC: most based on idea that false
and misleading commercial speech is not protected by the 1A.  RJR advertorial: “on cigarettes and science”—FTC
elaborated on Bolger factors: does it
promote demand for product/service; does it refer to specific product/service
(whether or not brand specific); does it include info about product/service
attributes such as price/quality/health effects. Means used to publish speech,
including whether paid-for ads; speaker’s economic or commercial
motivation.  Used this standard a few
years ago for Pom Wonderful for
claims made in media appearances by Pom executives.
 
Basic principle:
advertising should be intelligible to consumers as advertising.  Business Guide on Native Advertising—applies to
commercial speech; has examples of what is/isn’t commercial speech, as well as
commercial speech that nonetheless doesn’t require disclosures (b/c it’s
obviously advertising or it’s not material that it’s advertising).  Example: paid ad “20 Most Beautiful Places to
Vacation,” by shoe company—b/c has nothing to do w/company’s products, and is
just a branding exercise, this wouldn’t be commercial speech that needed to be
identified as such.  Of course it would
be presented by the company/have their logo—the company wants to be associated
w/it, but doesn’t need to have the label as far as the FTC is concerned.  Journalistic ethics will also dictate
disclosures, but FTC wasn’t going to intervene.
 
Likewise, when an ad
is obviously an ad (shoe promotion w/slogan on a financial news website) it
doesn’t need extra disclosures.
 
Video game virtual
world: We assume video games are fully protected.  Consumers will understand in-game billboards
as ads. To the extent that the ads are for actual products, consumers will
attribute them to sponsoring advertisers and no separate disclosure is required,
but sponsoring advertisers would be liable for any deceptive product claims.  Advertising content w/in nonadvertising
content.  (As I said, like ads
interleaved in the pages of a print magazine.) 
What if they aren’t billboards in the game, but products are quests that
you have to interact w/?  If the game
conveys no objective claims about the products, that doesn’t require disclosure
b/c whether it’s paid placement or video game artist’s artistic judgment is
unlikely to be material to consumers. 
Simple product placement is commercial speech, but doesn’t need to be
labeled as such b/c its commercial nature is not material to consumers.
 
Deirdre Sullivan,
The New York Times Company: If it comes from our creative agency studio, we
disclose it.  Our disclosure has been
iterated, and highly negotiated down to saturation of blue, and serifs on
font.  We’re trying to create enough
distinction.  Cole Haan paid post: CH
doesn’t make ballet shoes; post was about dancers and their relationship to
their shoes; we make clear it’s sponsored content, though we don’t use the word
“ad”; business decision as much as a regulatory one.  We make no material claims, just interviews
w/ballet dancers, so there’s a good argument we wouldn’t need to label by FTC
standards.  Our subscriptions can’t
decline b/c of our ad choices—need to keep both constituents happy. Journalists
protect core of our product and keep subscription revenue up.  Newsroom felt that to do that we needed clear
language at the bottom of every paid post.
 
Q: did they execute
model releases?
 
Sullivan: Yep.  It’s a huge deal, and related to labeling
everything that comes out of the studio. 
Every paid post shouldn’t come to me; as a matter of course, all of our
journalists—studio is populated by folks from editorial background—go through
painful learning process about rights of publicity in their new profession.
 
Q: does that chill
content production?
 
Sullivan:
advertisers take care of some of that; most brands aren’t interested in coming
close to controversial subject matters. Some advocacy groups are more
interested in coming close.
 
Allison Lucas,
BuzzFeed, General Counsel: Similar approach. Almost everything we do falls into
the no material claims category, but we do put disclosures on everything b/c of
journalistic ethics and b/c brands want to say they’re doing it.  Publishers do a lot of mobile; can also talk
about social media and other platforms. 
Home page: we use “promoted by.” 
Story page: we put “brand publisher” for stories—brand had input into
it.  If it were commercial speech, that
might not be adequate for the FTC, but the content has nothing to do
w/Shutterfly, it’s just what children say they want to give their fathers for
Father’s Day.
 
Q: has FTC
considered requiring disclosure when consideration is paid, like FCC does?
 
Engle: No, we don’t
use that standard. We did take action against ADT when they hired spokespeople
to promote a new security system on Today
etc. and didn’t disclose they were working for ADT. That’s stealth advertising
that should have been disclosed; FCC didn’t take action [presumably b/c the
stations weren’t getting paid].  Even
when you see the “promotional consideration provided” disclosure squished and fast
in the end credits, we wouldn’t consider that adequate disclosure.
 
Almost all TV shows
for kids are effectively selling the characters; doesn’t want to go there.
 
Piety: what are the
reasons for doing native advertising? This has implications for whether
disclosure works. Ad Age asked: why would advertisers want to mimic content
when that’s so labor intensive and expensive and others can do it better?
 
Lucas: Clickthrough
is just infinitely higher.  B/c people
actually want to read and share it. 
Buzzfeed never did banner ads.
 
Sullivan: ads are
dying b/c of distraction, resistance, mobile; native advertising is a
lucrative, thoughtful way to do it. 
Advertisers like it b/c it resonates. 
One advertiser didn’t want it to be off the table for an advertiser to
win a Pulitzer.  Brand is just trying to
tell you something about who they are. 
Many advertisers have content studios in-house.
 
Piety: if you have
to disclose it, it’s partly b/c the concern about low levels of credibility for
advertising.  Maybe people don’t care so
much about Orange is the New Black, but for Scientology sponsoring they
do.  If skepticism increases, that’s a
problem.
 
Sullivan:
absolutely: there’s an integrity you think you can rely on from the NYT, and we
have to be up front about the ad content—we think it’s good, but you should
know its origin. Business decision as much as anything.
 
Q: does FTC’s
content-sensitive approach reconcile w/Sorrell
and Reed and right of publicity case
law?
 
Rick Kurnit,
Frankfurt Kurnit Klein + Selz PC: Maybe the message here is that the greatest
chilling effect on free speech will be from ROP concerns. Those concerns come
from the mess that is the ROP and the absence of commercial speech analysis for
ROP.  That’s why I want to move away from
Bolger.  My favorite false advertising case: NYT v. Sullivan.  An ad taken out by a corp. for the purpose of
raising money.  Individual claimed that
the context of what was described sufficiently identified him, anticipating White v. Samsung.  Unfortunately for him, he cast his claim as
defamation rather than ROP. 
 
Sullivan was a commercial/paid media insertion. SCt understood that there was
no such thing as advertising.  SCt understood
that it needed to deal w/ ability of wealthy individuals to use tort law in
Southern states to drive hated news organizations out of business b/c they
hated them. Then the worst decision ever: Zacchini,
which opened the floodgates.  9th
Cir. then embarrassed itself in Hoffman
v. Capital Cities. Bounced around the circuit courts in search for some
kind of coherence; Rogers v. Grimaldi
is probably the best.  Cts are still
trying to say that almost everything is commercial for ROP purposes.  Jordan
v. Jewel Food Stores: idiotic for a court in 2014 to believe that there is
still something to the notion that this (or anything) is an “ad.”  The ad was a free page in the publication for
putting up racks to distribute Sports
Illustration—not even a paid media insertion. “Ad” is created by SI +
Jewel.  [I don’t understand why he thinks
Rogers is good but there is no such
thing as an “ad.”  Maybe he means
artistic relevance should apply to everything, leaving zero space for a ROP
claim?  I could actually go for that.]
 
Gov’t regulation should
be of false or deceptive content material to a consumer purchasing
decision.  Commercial speech regulation
is dependent on deception. Fear that people would make bad decisions if given
truthful information is insufficient; shouldn’t use truthful info to define
something as advertising.  Reed suggests that gov’t shouldn’t be
regulating based on who the speaker is or what the nature of the speech is
advertising. [So, no FDA then?]  FTC
policy statement is all about protecting consumers against deception, and he
doesn’t think anyone will have a problem recognizing that this benefits all
commerce, including legit publications. 
One departure: FTC embraced the notion that it could regulate not just the
integrity of the content (brand influence, false claims) but also the publisher’s
effort to distinguish themselves by maintaining value of their curation; should
not have required disclosure for curation. 
Chilling effect of burdening speech bears on the question of whether FTC’s
effort to provide consumers w/ a heads-up is ok; agrees that people would like
to know more about the content, but it’s virtually impossible to give consumers
all the relevant info about the author and what their biases are. So it’s
always only partial information [and thus I take it disclosure is unjustified].  While it would be nice to know when the NYT
is not pure editorial speech, it never is.
 
If disclosure is
limited only to when there are claims about the product or service, then maybe
that’s ok.  Then all the brand content
doesn’t need to be labeled as ads.  Right
now, people are still using labels disfavored by FTC; hard to get clients to be
the first one to accept a change.  FTC
policy statement in support of requiring disclosure that they’re moving from
editorial to brands is defended based on the precedent of the misleading
door-opener. But a high-powered salesman in your living room is more deserving
of regulation than a click where you only see it’s advertising once you’ve landed
on the page.
 
Engle: what about a
spam email? CAN-SPAM says ad has to be labeled as such.
 
Kurnit: Consumers
like it, but questions whether it holds up to 1A scrutiny. Should not be
treated as ad even if topic/interest is related to brand if it doesn’t make
claims about the brand. Chasm between what consumers are engaged w/online—celebrities,
excitement, Gawker—and what you do in advertising; this runs a risk of driving
the good players out of business and leaving us w/just the Darknet where the
FTC can’t ID the source of content.
 
Q: what’s the gap
b/t your approach and Engle’s?
 
Kurnit: the labeling
that you’re about to click on a brand’s site. 
If that site is mix of editorial and selling, I shouldn’t have to warn
people away.  Right now, there’s a
disconnect that I don’t need to label the ad b/c it makes no claims but I do
need to label the website.
 
Engle: that’s a
misinterpretation.
 
Q: Reed?
 
Engle: Reed isn’t a commercial speech case; we’re
looking at Zauderer in commercial
speech.  You could question whether we’ve
made the right choice about what’s misleading; we’d have to defend that line,
but we do contend it’s misleading if it’s not identifiable as an ad.
 
Q: Reed is a billboard advertising case,
though. [Um.]
 
Engle: subsequent
cases have distinguished commercial speech. Can’t imagine SCt would overturn 40
years of doctrine w/o mentioning Central
Hudson; even Sorrell says it isn’t
talking about false/misleading speech.
 
Q: Kurnit’s argument
that there’s no such thing as advertising is that paying for space isn’t enough
and that saying nice things about your brand isn’t enough (in an op-ed by the
head of Exxon), but it sure seems like the combination ought to be enough.
 
Kurnit: Speech by
someone with a motivation to influence you to purchase a product who is telling
you something about the product likely to influence consumer decision—that’s
the heart of commercial speech. But there’s trouble finding a simple label.
Efforts to make a bright line, particularly in Bolger (ad format), are not helpful.  Bolger
isn’t consistent w/NYT v. Sullivan which
made clear that ads are within the 1A—a holding that’s gone ignored. [That’s
b/c it’s a misdescription of the holding, which was that this issue ad, which was not commercial speech, was fully protected
by the 1A, not that all ads were.]  FTC wants you to say “ad” but that’s like a
mandated skull and crossbones; it’s a stay-away label.  FTC has told everyone that “presented by” and
“powered by” and “brought to you by” are ok for editorial, but the world [to
wit, advertisers] wants something between pure editorial and pure advertising,
where brands get more “engagement” with the content. 

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The definition of commercial speech

Posted on June 13, 2016 by rtushnet
Commercial
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.
 
Noncommercial:
fortunetelling for a fee; advertising for a school; public ratings of corporate
debt.
 
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
benefits.
 
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
that
 
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.

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The commercial/noncommercial boundary

Posted on June 13, 2016 by rtushnet
The Shifting
Boundaries Between Commercial & Non-Commercial Speech
Moderator:  Vince Blasi, Corliss Lamont Professor of
Civil Liberties, Columbia Law School
 
Tamara Piety,
Phyllis Hurley Frey Professor of Law, University of Tulsa College of Law: Book,
Brandishing the First Amendment. 
Different origin stories, one presented by Kozinski and Banner (minority
position)—that origin story is that commercial speech was always protected, then
unaccountably removed in 1942, the Valentine
case involving a flyer advertising a submarine tour.  The more common understanding of where the doctrine
came from was 1976 decision in Va.
Pharmacy, price advertising for pharmaceuticals.  Wasn’t really clear from Va. Pharmacy or Central
Hudson etc. what commercial speech was—a bit of “I know it when I see it.” Belotti, not a commercial speech case,
asked whether corporations had speech rights, but Ct instead asked whether this
was the type of speech that’s traditionally been protected: answer there was
yes.  That characterization of
corporation as valuable speaker and of listener’s interests in receiving the
speech regardless of source came back to commercial speech.
 
Va. Pharmacy did something interesting w/truth, fleshed
out by Central Hudson.  Lawful, truthful, nonmisleading—then it got
relatively strong protection, requiring substantial gov’t interest advanced by
regulation, w/o unreasonable interference w/1A rights. Truth, then, is what
gives commercial speech coverage.  But
truth is precisely what we worry about the gov’t testing in the political
sphere!
 
However, SCt is interpreting
this test as closer to strict scrutiny than intermediate scrutiny over time.
Compared to rational basis, the obverse of strict scrutiny, for economic
regulation.  We’ve also seen articulation
of content neutrality and idea of speaker discrimination in commercial speech
context in ways that give rise to Qs about whether or not this is a distinctive
area.  If so, then the regulatory state
like the FDA and FTC are broadly under threat. 
One example: Daubert
distinguishes between types of testimony that are allowed; is that gov’t
discrimination based on the content of speech? 
Securities regulation, campaign finance, professional speech of doctors,
occupational licensing.
 
Martin Redish, Louis
and Harriet Ancel Professor of Law and Public Policy, Northwestern University
School of Law: Underlying theory of commercial speech protection. Describing
his own scholarly saga.   He invented
constitutional protection for commercial speech.  His first article was the first article to
suggest that commercial speech deserved significant constitutional protection;
not well received at Harvard where he wrote it! 
Began using as a foil Meiklejohn, whose 1A theory protected only
political speech. Premise: important actor under the 1A is not the speaker but
the listener, exercising self-gov’t, who needs info/opinions to make
self-governing choices. Redish said: let me stipulate to that for purposes of
argument; commercial speech then facilitates self-government, not in collective
sense where individual just has one vote, but in private self-gov’t sense where
individual has 100% control of his/her life—what car to buy, what house to buy,
what TV to buy—all central to self-realization. 
[Of course, the individual doesn’t have 100% control over any of these;
she is hostage to what’s on the market, unless she has the power of eminent
domain.]
 
SCt then defined commercial
speech as proposing a commercial transaction—Ralph Nader gets full 1A
protection for criticizing the Corvair, but Chevy doesn’t get protection when
responding (pre-Va. Pharmacy).  One side of a debate gets protection, the
other doesn’t.  Consumer Reports gets full 1A protection for saying Hoover is the
best vacuum, but when Hoover quotes that it doesn’t b/c they’re proposing a
commercial transaction—exact same speech to exact same people, burdened
separately b/c of speaker’s motivation. In no other area of law does speaker’s
self-interest reduce 1A protection.  Anti-tax
groups argue against taxes = self-interest. Unions pushing increased tariffs =
personal self-interest. Civil rights protestors = self-interest. You may like
that self-interest and not commercial self-interest, but that’s not an
appropriate basis of distinction. To reduce protection is to insert
anti-capitalist undertone to the 1A.  [Or
it’s about regulating commercial transactions.]
 
Rehnquist didn’t
like any free speech protection, so I disqualify him from consideration.  [Blasi asks: isn’t that disqualifying him
based on motivation.]  The number of
scholars who want to give no protection to commercial speech while protecting
others is Twilight Zone viewpoint regulation—drawing an exception for no reason
other than that you don’t like the promotion of that thing.  Steve Shiffrin’s response: kids today are thinking
about nothing but materialism; these aren’t the values we should instill.  Proves Redish’s point. It’s not b/c
commercial speech isn’t as valuable, it’s b/c they don’t like the message being
sent. Serious pathology. Irony: SCt in Sorrell
recognized that: otherwise unjustified distinctions in regulating speakers is
invidious viewpoint regulation, but hasn’t realized that, by that standard,
commercial speech doctrine violates the 1A.
 
Floyd Abrams,
Partner, Cahill Gordon & Reindel LLP: Two big cases: until 2011, whatever
else the SCt was saying was that commercial speech was different, and to be
treated differently.  Moved in Sorrell to unified treatment.  Heightened scrutiny, referring to consumer’s likely
greater interest in commercial information than in politics.  Dissent said: this means everything commercial
gets heightened scrutiny, which we’ve never done before.  FDA’s regulation of promotion of off-label
uses, for example.
 
Unclear how far the
Court had gone, and remains unclear; Court hasn’t taken a commercial speech
case since then, though it has had Reed
v. City of Gilbert. Majority: says that any content discrimination triggers
strict scrutiny, citing among other things Sorrell,
which would indicate end of commercial speech doctrine; Breyer’s concurrence
objected strongly to that.  Question
remaining: did they mean it?  SEC, FEC,
it’s all content regulation—speech about airplanes!  More likely: strict scrutiny would be watered
down to sustain the regulatory state.  In
the securities area, he thinks that when stockholder votes on management, b/c
of Reed, it’s much more likely than
ever before that normal 1A rules will be applied, but will they be applied
literally?  Last week, 3d Cir. used the
phrase “drastically rewritten” 1A jurisprudence, reversing itself and holding a
statute unconstitutional w/r/t porn regulations. 7th Cir. and 1st
also reversed themselves in cases about bars on panhandling.  W/o proof that there’d been panhandling in
garages, couldn’t ban panhandling in garages.
 
Blasi: Scalia was at
pains to call himself a textualist. 
Should we think about commercial speech any differently b/c it says “Congress
shall make no law abridging the freedom
of speech,” rather than “speech”?
 
Piety: that’s also
an argument for a more robust press clause, which has been subsumed into
speech. Not sure how this cuts b/c she thinks we don’t want to destabilize an
entire edifice of criminal law, libel law. Can’t take it so literally as to
mean “any speech.”  But that then takes
us back to Scalia’s resort to original meaning. 
What was the Framers’ idea of “freedom of speech”?
 
Abrams: Scalia said “the”
was the key word: takes us back to English law before the adoption of the Bill
of Rights, contrary to what Justice Black and others said, which was that the
whole purpose of the Bill of Rights was to escape from/move ahead of the old
England.
 
Redish: the most
textualism can do for you is fight back against the idea that there was
absolute protection for speech, which is infeasible.  “The freedom” doesn’t say you can never
regulate speech, if you have a compelling interest.  Beyond that, textualism doesn’t tell you very
much, and nothing about commercial speech. 
If it did, it would be that there’s no rational basis for distinguishing
b/t commercial and noncommercial speech.
 
Piety: one canon of
construction: you should not interpret a statute so that some part is
surplusage. There’s also a commerce clause. 
When we talk about freedom of speech, we seem to have moved into a back
and forth b/t theoretical, descriptive assessment and a legal assessment that
departs from full descriptiveness. It’s true that, in gay marriage for example,
there’s an expressive aspect to running a business.  But that may not be a very good principle to
apply to the regulation of commerce if we are to regulate commerce at all. If
all businesses are expressive then it seems like what you have is a 1A that
swallows the Commerce Clause. And New Deal aside, we are talking about putting
a constitutional cloud on an enormous number of statutes; that seems
ill-advised. Reed has created
doctrinal uncertainty.
 
Redish: Straw man;
you can use O’Brien to separate
expressive from nonexpressive. Your belief that African-Americans shouldn’t eat
in your restaurant doesn’t mean that you can keep African-Americans out.
Operating the business itself is not the same as speech, which is why the Lochner analogy breaks down.  Vitally important to separate them out—regulating
activity b/c of its communicative value and regulating b/c of its
noncommunicative harms.
 
Abrams: we don’t
advance the ball by reading “speech” in a way so broad as to include every use
of words. Perjury is speech. Spying is speech. [Or at least data
collection.]  There are words that all
agree are categorically excepted out of “the freedom of speech” because we’ve
always done it and the Framers must have meant that. We do need a bit of theory
here.
 
Blasi: Redish has
developed a very sophisticated and creative argument that many regulations of
commercial advertising have an element of viewpoint discrimination.  What’s motivating the regulation is an
ideological position.  Sorrell can be narrowly read to be about
viewpoint discrimination: Vermont was taking a position on generic drugs and
the like.  What Reed does is to conflate viewpoint regulation w/content-sensitive
regulation. There was no viewpoint discrimination in Reed. 
 
I’ll go further:
there’s not a judge I respect more than Kagan or a lawyer more than Abrams;
both agree that Reed’s law didn’t pass the laugh test, but he disagrees. Those
regulations were about duration and size of signs. The rationale for the
distinctions was that signs directing people to a location don’t have to be
big, and the smaller the better for clutter/aesthetics, b/c the potential
audience is looking for them.  Political
signs don’t need to stay up after election. For nonpolitical ideological
self-expression, that’s the strongest case for thinking the sign needs to be
both big and lasting. So that reflected sensible distinctions about which
speech needs which freedoms.
 
Key: Reed treats content-sensitive regulation
as viewpoint-discrimination, which is why it has such big potential
implications.
 
Piety: selling
stuff: is viewpoint-neutral. Not all of us would agree that Sorrell is about viewpoint.  As for O’Brien:
where’s the speech in selling data?  Not
an apparent connection to speech; the connection is to later use in marketing.
Marketing as such is not a viewpoint, which goes back to her point about the Commerce
Clause. 
 
Abrams: everyone has
an economic interest in what they do or say on certain occasions.  Content-sensitive is a very soft, euphemistic
way of saying “content distinction” or content-based.  Often viewpoint rooted even if hard to prove,
and we don’t want to get into legislature’s motive.
 
Redish: if a city
passes an ordinance saying that cars w/Trump bumper stickers can’t park in the
city parking lot, parking spaces aren’t speech but that’s discrimination
against someone b/c of her speech. Data mining isn’t speech, but there’s
discrimination against speakers b/c of their views.  Viewpoint discrimination is not normally from
the regulator, but from the court.  If
the court defines commercial speech not by the substance of what’s being said but
solely the commercial/noncommercial motivation of the speaker, that’s hostility
to capitalist interest of trying to make money. 
Speech about commercial products = would be a content-based regulation.  Exact same speech to same audience but
differently regulated = covert viewpoint regulation.
 
Piety: note that
businesses are supposedly always seeking to increase their profits, even with
speech that doesn’t immediately seem to benefit it. But we need to think about
what the rules of the commercial game are—antifraud laws are an important
boundary; without this line b/t commercial and noncommercial, then you get Rehnquist’s
concern: corporations may become more involved in politics, and indeed that
happened.  Speech/act distinction is
problematic.
 
Redish:
overtheorized.
 
Q: City of Santa
Monica decided to accept only ads that proposed commercial transactions on its
buses.  Reason: precedent where
Arab-Israeli conflict got played out on side of buses.  Everything said in 2d panel was turned on its
head; I had to demonstrate that AIDSwalk was engaged in a commercial
transaction in order to advertiser.  Led
me to Kozinski’s viewpoint: overtheoreticalization leads us down bad roads.
 
Abrams: one of the
few areas where American law provides less protection than available elsewhere.
Canada ruled that buses could and were entitled to have political ads on them;
legislature couldn’t prevent it.
 
Q: Alito’s
concurrence in Reed wrote as if he
were speaking for most of the bench when it said the Court wouldn’t be wiping
out a whole series of regulations, including distinction b/t on-site signage
and on-site signage—isn’t that content-based? 
If that’s true, what happens without Scalia?
 
Abrams: Alito was
trying to minimize the impact of the majority. True that the example Alito uses
is inconsistent w/the holding.
 
Blasi: Lower courts
since Reed have often found no
content discrimination. If you’re going to make content discrimination so
crucial, then there will be a struggle about what really counts as such. So
far, the pattern of interpretation has had the greatest impact w/panhandling regulation.
 
Q: where will we/should
we get limiting principles from about what the 1A will apply to?  Redish is saying that some things like
employment discrimination are outside the scope of the 1A, but that’s not
self-evident.
 
Abrams: Although I
mock some of the Reed outrage, I also
think it can’t mean what it seems to say. Two vulnerable points: What counts as
content based?  What counts as strict
scrutiny?  Last Term, there was a strict
scrutiny case for judicial campaigning, where it was clear to Abrams that the
dissenters had the better of the argument that, based on prior opinions, strict
scrutiny hadn’t been satisfied.  Under
the challenged rule: As long as the judge doesn’t make the solicitation
herself, everything was ok—he’s skeptical of that. Court may be moving in
direction of making strict scrutiny less fatal. 
Not a complete upheaval of the regulatory state, but a number of
sensitive areas—campaigns for shareholder voting sound like election campaigns.  For that to be subjected to the rigor of SEC
regulation as it is now is dubious post-Reed,
but he doesn’t think that sec. 11 of the 1933 Act will fall (false statements,
even negligently made or good faith, create strict liability).
 
Blasi: Breyer
emphasizes, both in Sorrell and in Reed, the quantitative dimension. He
talks about regulatory state, but what about impact on 1A itself? Is the 1A a
commitment that can be cheapened by overuse, disconnected from historic
struggles and just commonly invoked? I see it every September; only in last 3-4
years have there been a flood of second-year students w/potential 1A notes, b/c
in their law firms all of a sudden they’re thinking more about the 1A than ever
before.  [I believe Blasi
may have written something about this.]
 
Redish: I don’t
believe there’s a need to draw on historic struggles. There’s nothing special
about history.  Framers agreed that
blasphemy wasn’t protected; flagburning was never even thought about.  [Ah, levels of generality.] The constitution
evolves, as long as you’re not exceeding the outer limits of the text and have
a coherent account.
 
Piety: Evidence,
civil forfeiture—in both these areas, SCt precedent conflicts.  Her sense is that notwithstanding the
invitation in Reed, the Court will
continue trying to duck it. Worst case scenario: watering down strict scrutiny
in areas we really want strict scrutiny. 
 
Abrams: One of the
objections to protecting commercial speech was that it would cheapen the
1A.  Now one writes briefs in political
speech cases, hoping to get as much protection.
 
Redish: Blasi has
argued the pathological perspective before. Question-begging: if commercial
speech is really fostering the same values, then it should get the same
protection. So we’re back to defining value. Also, there’s a danger of reverse
dilution, given pathology of regulation of truthful speech based on
paternalistic notion that people can’t decide for themselves; gov’t has to
intervene to make choices for them. If we accept that basic rationale, it should
apply to politics. If people are sheep, they are sheep. [This actually doesn’t
track with what we know about consumers as consumers—they’re vulnerable in
certain contexts, and not in others; it’s perfectly possible to be a sheep as
to topic X and a scholar as to topic Y. 
And as a matter of prophylactic constitutional law, deciding that the
gov’t is really bad in ruling in its own direct favor seems quite reasonable.]
 
Piety: we often want
gov’t to make our lives easier. Trial and error isn’t great for what’s
poisonous.  The paternalism argument is
often when the consumer is saying “I don’t want to receive robocalls” and goes
to the gov’t and the gov’t creates the Do Not Call list.  Response: if you knew what was good for you,
you’d receive these messages.  Same
argument was made in Sorrell. Yet we
know that the cognitive load from a deluge of messages is a big deal.  Rational response may be to ask the gov’t to
help you implement your own choice.  It
may be that we distrust the gov’t most in the political sphere. 
 
Redish: If you
understand public choice, that’s wrong.

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Judge Alex Kozinski likes free speech and Lochner

Posted on June 13, 2016 by rtushnet
Commercial Speech
Conference, Abrams Institute
 
Interview: Who’s
Afraid of Commercial Speech? — 26 Years Later
 
Ron Collins (Harold
S. Shefelman Scholar, University of Washington, School of Law) & Judge Alex
Kozinski (U.S. Court of Appeals for the Ninth Circuit). (Both, incidentally,
won their episodes of The Dating Game.)
 
Collins: Skelly
Wright said commercial speech doesn’t directly communicate ideas and thus isn’t
at the core of the First Amendment.
 
Kozinski: clearly it
does communicate ideas.  As a clerk,
watched the argument in Bates lawyer advertising case.  The idea that ideas belong in one
intellectual realm and commerce in a different realm is discredited.
 
Collins: does the 1A
have a central purpose as such?
 
Kozinski: clearly
not, if you mean the 1A as a whole. 
Speech/press/assembly: never thought of it that way.  Probably, an idea like the 2A’s: a way to
protect against gov’t overreach.  A
popular check on what gov’t can do.
 
Collins: what is
commercial speech?
 
Kozinski: A
noncategory.  Valentine case: strike it
from the lexicon. Doesn’t make sense to have a hierarchy, both theoretically
and practically.
 
Collins: You’ve
criticized theory-based approaches.  So
one theory is that speech is more protected the more it furthers democratic
self-governance.
 
Kozinski: Bull.  Society is not compartmentalized between gov’t
and other endeavors. Speech is speech, just as a functional matter. You get
ideas and they feed into popular culture, which leads to changes in gov’t.  Example: article
on criminal law I wrote in Geo. L.J., including on forensic science used by
prosecutors.  State of science in
criminal cases is a shambles. Basically voodoo. 
As a result of writing this article, I was invited to be a member of a
presidential commission dealing w/forensic science.  My piece in academia then is part of the wave
of ideas that (hopefully) affects and is affected by gov’t.  After all, nobody but the occasional
prosecutor wants to convict the innocent. And some of that speech started in
purely scientific fields.
 
You can characterize
everything as democratic self-governance; it’s not that everything feeds into
governance, but what we do in gov’t has effects in real life.
 
Collins: Meiklejohn
had a theory of free speech; ran into difficulties when Harry Kalven asked him
about artistic expression, and he expanded his views to include art.  Is artistic expression, when done for
commercial purposes, is that self-realization, or self-governance, or something
else? I ask b/c these theories are the constructs by which speech is gauged as
protected or not. A talented artist who says she’s in it for the money: what is
that?
 
Kozinski: it’s
difficult and futile to characterize speech that way. Useless. Subjective
intent of artist: baring soul or trying to make a buck, doesn’t matter.  [I’d like to know why the question is being
asked: what regulation might stand or fall on the artist’s intent?]
 
Collins: you said reason
for lower protection for commercial speech was in history, not logic; view
echoed by Justice Thomas in 44 Liquormart.  So someone selling cars, and making claims
about those cars, should be treated the same way as speech in the political
arena by Mr. Trump?
 
Kozinski: depends on
what you mean and for what purposes.  When
there are commercial transactions, you can have fraud, civil liability and
criminal liability based on speech.  Blackmail,
securities transactions—those are possible, which should not be possible for
political speech.  As a matter of theory
they aren’t different.
 
Collins: but what
you just said indicates that political speech is more protected in your view
than commercial, b/c of how you treat false speech.
 
Kozinski: some
things have implications that allow for punishment, b/c of direct harm to
victims from speech itself; that’s a narrow category. [Directness doesn’t do the
job he thinks it does—remember caveat emptor and letting the market decide.]  Doesn’t mean that speech is less important.
 
Collins: current
constitutional status, in your view?
 
Kozinski: SCt takes
cases at the margin, not the center; doesn’t mean a test is bad, just that
sometimes all tests have difficult applications.
 
Collins: then can
bright line rules survive in any constitutional context?
 
Kozinski: they’d
better, b/c the alternative is “who’s the panel?”  At least tests give you some broad ability to
predict/advise clients.  In 90% of cases
overall, it doesn’t matter who the panel is. 
Need to give a rationale that’s capable of application in future cases;
that’s part of the appellate judge’s role. Having tests w/prongs channels this
thinking, channels att’n of future decisionmakers and gives some measure of
predictability.  The fact that
close/difficult cases are still uncertain doesn’t negate that principle or
prove that tests are useless.
 
Collins: one taboo
of our time is “Lochner.”  Linda
Greenhouse: the Court returns to the bygone era of Lochner by labeling econ. reg.
of business conduct as a restraint on free speech.  (Borrowed from Rehnquist dissent in Central Hudson.) Others have echoed that charge, criticizing the Roberts Court for
using 1A as a deregulatory tool.  Your thoughts?
 
Kozinski: Can’t
speak to Rehnquist, but he likes Lochner, so that’s ok with him.  He doesn’t see a problem w/that.  When you talk about regulation, you’re
talking about gov’t control. 1A as a way of controlling gov’t: regulatory state
is a reality.  Does more day to day
governing our conduct than actual legislation. 
Good thing to put another check on gov’t regulation.
 
Collins: What about
data as speech/algorithmic securities trading?
 
Kozinski: it surely
is a form of communication, becoming the dominant form.  Has 1A implications, but not prepared to say
to what extent.
 
Collins: we tend to
think of speech as person to person, but when computers are sending data to
each other, the result of which is a commercial transaction, do you think it’s
w/in the umbrella of 1A coverage (whether or not protected)?
 
Kozinski: Doesn’t
see why not.
 
Collins: TM and free
speech: any thoughts about how to approach such issues?
 
Kozinski: wrote an
article, Trademarks Unplugged, about how TMs get injected into culture; easiest
way to communicate may be to use TM as shorthand for communicating an idea.
Displace other ways of saying the same things; give up the right to control
such uses.
 
Collins: what about
offensive speech in a TM context?
 
Kozinski: won’t try
to decide the REDSKINS case. Hard to say in the abstract; depends on the Q. If
Q is whether you want to make a reference to the TM in communication, that’s
different from whether TM owner is entitled to a particular mark that’s
offensive.
 
Collins: off-label
promotion by pharma cos?
 
Kozinski: Possible
fraud issue. 
 
Collins: if
truthful?
 
Kozinski: full
answer: claim that it’s truthful is beginning of inquiry. Might be truthful but
misleading, particularly w/things that are highly regulated like drugs. Ability
to mislead or create harmful effects w/truth is pretty high.  Concurrence in Alvarez: not a big believer in truth as a talisman; lying is part
of life. Distinction b/t truth and lying is not that useful in the 1A context.
 
Collins: porn is a
$97 billion global industry.  Some men
are convinced that porn sabotaged their sexual responses.  What sort of considerations would come into
play if a gov’t tried to regulate porn on public health grounds? 
 
Kozinski: can be
asked about other kinds of speech, such as Stevens
(crush videos) and violent video games. 
Had some doubts, similar to those of Alito’s dissent in Brown. Part of the problem is that Cal. didn’t
do particularly thorough job of documenting link b/t violent video games and
bad effect, but if there were really good, reliable research on a type of
speech doing harm, particularly to minors, gov’t should have ability to
restrict it.  For adults, that’s a more
difficult question; probably not, but trouble coming up w/principled reason.

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One reason the DMCA is no substitute for anti-harassment policies

Posted on June 13, 2016 by rtushnet

Another reason the DMCA is not a good
anti-harassment tool: it
requires contact information, which is sent to the party posting the challenged
content.

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