Rebecca Tushnet

Judge Henderson dissented, believing the question of Zauderer’s appropriate scope to have been resolved in R.J. Reynolds and unfairly revisited.

Judge Brown also dissented, quite vigorously. Under the majority’s reasoning, “a business owner no longer has a constitutionally protected right to refrain from speaking, as long as the government wants to use the company’s product to convey ‘purely factual and uncontroversial’ information.” This ignored the government’s unique interest in preventing commercial deception and applied a standard that was more relaxed than rational basis review.  The majority searched “sua sponte through the underlying statute’s legislative record, desperately seeking justifications while ignoring the agency’s actual rulemaking record.”  Zaudereris about deception, and, worse than “nonsense on stilts,” “the court’s analysis in this case can best be described as delirium on a pogo stick.”  (I’m going to try to limit further outraged quotes until I get to the end.)

Zauderer said that, where deceptive advertising could be cured by more speech, the government may choose between requiring disclosure and directly prohibiting the advertisement. (I find this to be a weird description; the Court has sometimes suggested that the government is required to try disclosure if the speech is only potentiallymisleading, but that doesn’t seem like the same thing.)  But compelled speech can be as bad as banned speech, “and the government faces a heavy burden to justify involuntary affirmation (being forced to carry the government’s message).”  Zauderercontrasted the imposition of orthodoxy “in politics, nationalism, religion, or other matters of opinion” with regulation of deceptive commercial advertising.  The latter is ok as long as disclosure requirements are reasonably related to the State’s interest in preventing deception of consumers.  The Court wasn’t just distinguishing between disclosure and bans. “[T]he state’s option to require a curative disclosure cannot be disconnected from its right to entirely prohibit deceptive, fraudulent, or misleading commercial speech.”  The option to ban instead is what justifies requiring advertisers to provide more information than they’d otherwise be inclined to present.  (The greater includes the lesser?)  But Zaudererdoesn’t allow a commercial speaker to be forced to speak factual and noncontroversial information “in the first instance.”  Even potentially deceptive commercial speakers have “minimal First Amendment protections,” and when deception isn’t involved, “constitutional protections remain robust and undiminished.”

The Constitution adopted the principle of natural law “that an adult human being, as a free moral agent, cannot be coerced without good reason,” but also that “no one ever had a natural right to do wrong.” That’s the basis of commercial speech doctrine.  Disclosure wasn’t an exception to the First Amendment’s stringency, but rather an acknowledgement that sellers had no right to “wrongly deceive” consumers; the state can’t control opinion, but can require accuracy for commercial facts.  (Apparently there’s a right to rightly deceive consumers though.  Unclear why NYT v. Sullivancomes out the way it does on this reasoning, unless it’s not a natural wrong to deceive someone in a political context, but maybe it doesn’t come out the same way in this scheme.)

Supreme Court jurisprudence routinely refers to deception as the justification for controls on commercial speech, and its clear trajectory is to more protection, not less.  It doesn’t matter how small AMI’s interest in remaining silent is; the government has to show that its interest justifies the regulation.  Zauderer is, as the majority says, just a particular application of Central Hudson.  Central Hudson requires a substantial interest, and preventing “inherent or actual” deception is always substantial.  When a mandated disclosure is reasonably related to preventing deception, as Zauderer requires, it will always directly advance that substantial interest.  And it will be less restrictive than an outright ban, and no more restrictive than necessary.

(The Central Hudsontest part 1 explicitly exempts false and misleading speech from the test set out in parts 2-4; to then run what Judge Brown says are the only acceptable compelled disclosures, those that fight false and misleading speech, through Central Hudson analysis seems odd.  The reference to “inherent or actual” deception is a red flag—this is language from cases that say that the government has to try disclosures first if the speech is only “potentially” misleading, whereas it can outright ban speech that is “inherently or actually” misleading.  So in fact, Judge Brown has not applied Central Hudson to the key Zaudererclass of “potentially misleading” speech; however, she might well concede that the prevention of “potentially” misleading speech is a substantial government interest. 

A separate issue: Judge Brown argues that the remaining Central Hudson steps are pre-answered for false/misleading speech in terms of government interest and fit.  But Judge Brown puts the question in terms of Zauderer and not the ability to ban false/misleading speech outright.  Why not run all bans on commercial speech, including bans on false or misleading speech, through Central Hudsonfactors two through four?  Being explicit about that would probably raise the question of how an outright ban could ever be a proper fit, since disclosure requirements would regularly be an alternative, but her analysis depends on outright bans being okay.  Navigating this tangle would have to depend on some very thick theories of when consumers actually understand disclosures (spoiler: rarely); query how good courts are compared to regulators at identifying when disclosures would be sufficient.)

Anyhow, “Central Hudson—without any shortcuts— applies to disclosures that target interests other than deception.”  But the majority “disembowel[ed]” that case as well by holding such “amorphous” interests to be substantial.  And it relied on “interests the agency never asserted and even denied were rationales for the rule.”  As a matter of administrative law, this was wrong, and in any event heightened scrutiny couldn’t be satisfied by “hypothesized justifications” “based on a few scattered comments in the legislative record.”  Nor did the congressional record show that the interest, even if substantial, was properly fitted to this restriction.

The government only asserted the vague interest in providing consumers with information. But the government never explained why origin information matters.  (Contrast discourse about geographic indications, where vague assertions about terroir matter a lot, and proponents happily claim that the differences can’t be defined but are real.)  And even if it did, the government didn’t explain why coerced speech was the only solution.  (And we’re back to less restrictive alternatives!  Why isn’t counterspeech a less restrictive alternative to suppressing false commercial speech, as it is for false political speech?)

The result was “rational basis review minus any legitimate justification.”  Then res ipsa loquitur meant that disclosure was self-evidently likely to convey the information to recipients, thus advancing the government’s interest.  “Seriously? With logic like this, who needs a Ministry of Truth?”  (Okay, but what is the structural difference between this logic and Judge Brown’s reasoning above that requiring disclosures for misleading speech is self-evidently likely to further the government’s interest?)

Judge Brown also rejected reliance on the long history of country of origin labeling, because for a long time the First Amendment wasn’t enforced to protect commercial speech and litigants usually didn’t bother to argue about it, raising substantive due process claims instead. If the test of time were enough to protect a law, there’d be no commercial free speech at all.

The majority concluded that protectionism or patriotism was the true justification for COOL, “even if it is only acknowledged with a sly wink by the government.” But the government didn’t assert protectionism as a justification, and that would be a substantial justification for coerced speech only if “voluntary action and direct government speech were obviously inadequate.”  (Least restrictive means again.  Again, why doesn’t that also apply to false or misleading commercial speech?)  Anyway, the agency persistently denied protectionist motives, stating that COOL wouldn’t necessarily change aggregate consumer demand for products of any given origin and pointing to lack of participation in voluntary labeling programs as evidence that consumers don’t have a strong preference for COOL. 

Likewise, the government didn’t assert any health or safety interests, maintaining instead that food safety regulations governed all food and that traceability wasn’t the intent of the rule.  Indeed, the agency said that, though some evidence suggested that consumers used COOL as a proxy for safety information, that wasn’t a valid inference.  This undercut the idea that it was reasonable for Congress to anticipate consumer preferences.  (The government’s litigation position really is silly; by asserting factual premises that contradict consumer beliefs—those beliefs being that country of origin matters for various reasons, including safety risks—the government manages to be paternalistic in both directions.  Its position seems to be: “this information should be disclosed to you, consumers, even though you don’t know what you’re doing and your preferences are wrong.”)  The anecdotes in the legislative history didn’t suggest that COOL would be useful in a health crisis.  Rather, the agency determined that prevention and recall measures are the means to be used to protect health.

And now to the beating, Lochner-esque heart of the matter: this case isn’t about COOL, or patriotism or protectionism, or health and safety.  “[T]his is a case about seeking competitive advantage.”  The rule “benefits one group of American farmers and producers, while interfering with the practices and profits of other American businesses who rely on imported meat to serve their customers. Such a disproportionate burden ‘stands in sharp conflict with the First Amendment’s command that government regulation of speech must be measured in minimums, not maximums’” (citation omitted).  (But wait!  How, you might well ask, did an economic burden on conditions of production become a First Amendmentharm?  Money may be speech in campaign finance, but how is money spent to segregate animals by country of origin speech?  I think the dissent’s point must be that an interest in helping one group over another can’t be “substantial.”  But stated that way it’s a very broad claim, and one I don’t think the case law supports.)

Judge Brown predicted that today’s victors will live to regret this when other objectionable disclosure requirements burden  them, like disclosures about cattle feeding or raising practices, environmental effects of beef production, “or even the union status or wage levels of their employees.”  

If “Made in the USA” worked, producers and sellers would happily and noisily disclose, and consumers’ desires to buy American could be satisfied by voluntary action.  But mandatory COOL just facilitated rent-seeking.  By accepting such flimsy, nebulous interests, the court allowed the government to “commandeer the speech of others” on any ground, including motives “in aid of any sort of crony capitalism or ideological arm-twisting.”  The government’s alleged interest in providing information will result in higher prices because of the cost of monitoring the supply change, taking away the price advantage currently enjoyed by some producers.  “Query whether the protections of the First Amendment should be abrogated for some businesses in order to benefit other businesses.” (Query whether the First Amendment analysis should turn on which businesses are benefited by a regulation.  I think there are good non-speech-related reasons we might want to limit big producers’ comparative advantage in the meat production process; I also think that the “crony capitalism” objection may well be valid.  I merely doubt that the D.C. Circuit Court of Appeals is the appropriate governmental body to resolve it, and in particular that the First Amendment is the appropriate mechanism by which to do so.)

Judge Brown concluded that “[t]he First Amendment ought not be construed to allow the government to compel speech in the service of speculative or hypothetical interests for purely private benefits.”  (What counts as a public benefit?  If there’s no such thing as society, aren’t all benefits private?)  Under this reasoning, there’s no limit to what government could compel.  “[I]f this example of cronyism is okay, who will balk at any other economic or ideological discrimination?” This result dissolved “the whole idea of a right not to speak. … And it does so to facilitate coercion and the imposition of orthodoxy. What is more uncontroversial than orthodoxy?”

(I’m unclear on the fact/orthodoxy relationship here.  I’m also unclear about the orthodoxy being enforced by this regulation.  I will absolutely buy that, in the context of American society, COOL implicitly carries a “buy American” message.  But compared to, say, Christian prayer at the beginning of a legislative session, or mandatory ultrasounds and “disclosures” that abortion is associated with suicide, I find it hard to identify ideological coercion here.  There’s something here about the fever pitch of American politics of late, I think.  If putting country of origin labeling on meat is tyranny, what do we call it when the government jails journalists for reporting, or collects all our private communications in case they might be useful later?)

And the final heights:

There can be no right not to speak when the government may compel its citizens to act as mouthpieces for whatever it deems factual and non-controversial and the determination of what is and what is not is left to the subjective and ad hoc whims of government bureaucrats or judges. In a world in which the existence of truth and objective reality are daily denied, and unverifiable hypotheses are deemed indisputable, what is claimed as fact may owe more to faith than science, and what is or is not controversial will lie in the eye of the beholder.

On one reading of this claim, SEC disclosures, the FTC’s consumer protection side, and most of what the FDA does are equally unconstitutional, since only the speaker should decide for herself what facts are “true.” On another, judges (and bureaucrats?) can decide some truths, but not this one—mandatory disclosures are ok but have to address real deception, however narrowly Judge Brown would define that. I think the dissent does itself a disservice by mushing this all together.  The objection to allowing the government to find “facts” is itself not a First Amendment objection, but rather an argument—Lochner again!—that the government should not be allowed to regulate at all.  (Also, and consistent with Judge Brown’s dislike of commercial speech doctrine, note how commercial speakers have become unmodified “citizens,” as if the majority’s holding allowed disclosure mandates in noncommercial speech as well.)

American Meat Institute v. U.S. Dep’t of Agriculture, No. 13-5281 (D.C. Cir. July 29, 2014)

The D.C. Circuit here, en banc, upholds country of origin labeling (COOL) requirements for meat, and in the process holds that Zauderer’s standard for compelled commercial disclosures does not require the government interest at issue to be the prevention of deception. This holding, however, reveals deep divides among the judges about compelled commercial disclosures, with both concurrences and dissents that try to frame the issue differently—looking ahead to the inevitable cert petition.

Congress required COOL on many foods, including some meat products, and passed a law defining “country of origin” for meat to be based on where the animal had been born, raised, and slaughtered—the three major production steps. After a WTO panel found the first implementing regulations to violate our international obligations (they allowed multiple countries to be listed, and further allowed commingling of meat from animals of different origins as long as the label listed all the countries from which the animals might have come), the Secretary promulgated a rule requiring more precise information on the location of each production step.  The new rule also eliminated the flexibility allowed in labeling commingled animals, which promises increased costs for certain operators.  (Here’s another variant of the First Amendment as Lochner: it’s a labeling rule, but it will demand changes in production practices so that producers can actually identify the thing that needs to be labeled; this is an economic regulation, but its output is information, so now it’s a First Amendment problem.  But the producers’ objection isn’t really to the compelled speech; it’s to the expense of implementing the new production practices required of them.)

AMI argued that Zaudererdidn’t apply to government interests other than preventing consumer protection, and that this regulation flunked Central Hudson. The parties agreed that Zauderer applied to mandatory disclosure of “purely factual and uncontroversial information” appropriate to prevent deception in the regulated party’s commercial speech. What of purely factual and uncontroversial disclosures serving other government interests?  AMI argued that even if Zauderer did extend that far, the government had no substantial interest in COOL.

Zauderer itself isn’t clear; the government’s interest in that case, and the subsequent Milavetz case was in preventing deception, and thus the language could simply have conformed to that.  However, the language Zauderer used to justify its approach was far broader.  Zaudererrejected Central Hudson analysis as unnecessary in light of the “material differences between disclosure requirements and outright prohibitions on speech.” The Court continued: “the First Amendment interests implicated by disclosure requirements are substantially weaker than those at stake when speech is actually suppressed.” The speaker’s interest was “minimal”: “Because the extension of First Amendment protection to commercial speech is justified principally by the value to consumers of the information such speech provides, appellant’s constitutionally protected interest in not providing any particular factual information in his advertising is minimal.” These reasons seem “inherently applicable beyond the problem of deception,” and the en banc majority noted that other circuits have so found.

Okay then.  Is the government’s interest in COOL adequate?  AMI disparaged the interest at stake as merely satisfying consumers’ “idle curiosity.”  The Supreme Court hasn’t told us whether a Zauderer-passing interest has to qualify as “substantial” under Central Hudson, and anyway what counts as a substantial interest “itself seems elusive.”  However, several aspects of COOL for food combined to make a substantial interest: “the context and long history of country-of-origin disclosures to enable consumers to choose American-made products; the demonstrated consumer interest in extending country-of-origin labeling to food products; and the individual health concerns and market impacts that can arise in the event of a food-borne illness outbreak.”

COOL has “an historical pedigree that lifts it well above ‘idle curiosity,’” dating to 1890.  “[T]he ‘time-tested consensus’ that consumers want to know the geographical origin of potential purchases has material weight in and of itself.”  The value of this information is a matter of common sense.  Congresspeople identified the statute’s purpose as “enabling customers to make informed choices based on characteristics of the products they wished to purchase, including United States supervision of the entire production process for health and hygiene.”  Some believed that COOL would lead to consumers choosing to buy American.  “Even though the production steps abroad for food imported into the United States are to a degree subject to U.S. government monitoring, it seems reasonable for Congress to anticipate that many consumers may prefer food that had been continuously under a particular government’s direct scrutiny.” 

Congresspeople also indicated that people “would have a special concern about the geographical origins of what they eat.”  The legislative history refers to “the collapse of the cantaloupe market when some imported cantaloupes proved to be contaminated and consumers were unable to determine whether the melons on the shelves had come from that country.” This anecdote “more broadly suggests the utility of these disclosures in the event of any disease outbreak known to have a specific country of origin, foreign or domestic.”  (This discussion is conducted in a weird vacuum, with no mention of just how few USDA inspectors there are and just how little food gets inspected—here and elsewhere.  Is it ironic that many of the people who might buy American based on assumptions about superiority may well have voted for representatives who have made American origin less and less a guarantee of safe and hygenic production?)

Surveys in the record indicated that 71-73% of consumers would be willing to pay for COOL.  Though consumers tend to overstate their willingness to pay, these studies, plus the many favorable comments received during rulemaking, reinforced the historical basis for treating such information as valuable.  

This will be important later: The interests served by the rule were those advanced by Congress when it adopted the statute, even if the agency didn’t discuss those interests.  In defense of this position, the en banc majority stated that it didn’t want to allow “perfectly adequate legislative interests properly stated by congressional proponents” to be “doomed by agency fumbling (whether deliberate or accidental),” because that rule would “allow the executive to torpedo otherwise valid legislation simply by failing to cite to the court the interests on which Congress relied,” and allow the next President to reinstate a regulation by citing the right interests. “We do not think the constitutionality of a statute should bobble up and down at an administration’s discretion.” 

Anyway, the agency sufficiently invoked the relevant interests. Agency statements from prior rulemakings claiming that COOL serves no food safety interest weren’t inconsistent with the government’s litigation position.  “Simply because the agency believes it has other, superior means to protect food safety doesn’t delegitimize a congressional decision to empower consumers to take possible country-specific differences in safety practices into account.”  (Compare this idea to the Pom Wonderful statement that the FDA isn’t as expert about consumer understanding as market participants are.  When regulators fail to protect us, who can take up the slack, and how?)

Given an adequate interest, the remaining Zauderer question is whether the regulation fits the interest.  The en banc majority comments that the Zauderer test “differs in wording, though perhaps not significantly in substance,” from the Central Hudson test, at least on these facts.  Central Hudson would require the court to determine whether “the regulatory technique [is] in proportion to [the] interest,” an inquiry comprised of assessing whether the chosen means “directly advance[s] the state interest involved” and whether it is narrowly tailored to serve that end.  A Central Hudson analysis commonly requires evidence of a regulation’s effectiveness, but “such evidentiary parsing is hardly necessary when the government uses a disclosure mandate to achieve a goal of informing consumers about a particular product trait.”  Zauderer is like res ipsa loquitur: “by acting only through a reasonably crafted disclosure mandate, the government meets its burden of showing that the mandate advances its interest in making the ‘purely factual and uncontroversial information’ accessible to the recipients.”  The disclosure must however relate to the good or service offered by the regulated party.

The majority also commented that “[t[he self-evident tendency of a disclosure mandate to assure that recipients get the mandated information may in part explain why, where that is the goal, many such mandates have persisted for decades without anyone questioning their constitutionality.”  COOL isn’t the only required disclosure about product attributes—others include fiber content, care instructions for clothing items, and listing of ingredients. 

“Notwithstanding the reference to ‘narrow tailoring,’ the Court has made clear that the government’s burden on the final Central Hudson factor is to show a ‘reasonable fit,’ or a ‘reasonable proportion,’ between means and ends.”  When the government’s interest is to ensure that consumers receive particular information, this means-ends fit is “self-evidently satisfied when the government acts only through a reasonably crafted mandate to disclose ‘purely factual and uncontroversial information’ about attributes of the product or service being offered.”  Mandatory disclosures will therefore almost always have a reasonable means-ends relationship, unless disclosure is unduly burdensome in a way that chills protected speech.

Applying Zaudererhere, the disclosures were “purely factual and uncontroversial information” about the good or service being offered.  AMI objected to the word “slaughter,” but the court didn’t need to address its objections because the rule allows retailers to use “harvested” instead, and AMI didn’t object to that.  AMI also didn’t disagree with the truth of the facts to be disclosed, so they weren’t controversial “in that sense.”  Nor was COOL controversial “in the sense that it communicates a message that is controversial for some reason other than dispute about simple factual accuracy.”  Some required factual disclosures could be so one-sided or incomplete that they wouldn’t qualify as “factual and uncontroversial” (note: but not abortion disclosures; never those), but not these.  (Note the tension with the idea that consumers could believe that foreign countries might provide dangerous food.)  COOL doesn’t require corporations to carry messages biased against or expressly contrary to the corporation’s views. Nor is it so detailed that it effectively rules out ordinary advertising methods.  As a result, the government’s interests here were sufficient to sustain COOL under Zauderer.