Court Extends Commercial Speech Protections

In an important but little-noted First Amendment case decided Thursday, Sorrell v. IMS Health Inc., the Supreme Court correctly invalidated a particular regulation of commercial speech but unfortunately left intact the general doctrine that distinguishes and privileges noncommercial speech.  Justice Kennedy authored the 6-3 decision (joined not just by the “conservatives” but also Justice Sotomayor) that struck down a Vermont law prohibiting the sale of information about doctors’ prescription histories as making viewpoint-based speech restrictions in violation of the First Amendment. 

In so ruling, the Court effectively affirmed a Second Circuit decision (involving a similar Connecticut law) I discussed previously.  Cato filed amicus briefs in both the Second Circuit and Supreme Court.

The Supreme Court first found that Vermont’s law is subject to heightened scrutiny—not simply the “intermediate” scrutiny typically applied to restrictions on commercial speech—because, on its face, it enacts content- and speaker-based burdens on protected expression.  It then rejected the two justifications for the statute the state had asserted: (1) that it is necessary to protect medical privacy, including physician confidentiality, avoidance of harassment, and the integrity of the doctor-patient relationship; and (2) that it is integral to the achievement of policy objectives—namely, improved public health and reduced healthcare costs.

That’s fine as far as it goes, but it leaves open the possibility for broader restrictions on speech, such as if a state wanted to prohibit all prescription-related speech, not just that by data-mining companies to pharmaceutical companies who would use it to tailor their marketing efforts.  Our Supreme Court brief, in contrast, argued that the Court should abandon the unworkable distinction between commercial and noncommercial speech established in the 1980 case of Central Hudson Gas & Electric v. Public Service Commission

The Central Hudson rule should be abandoned in favor of strict scrutiny of all speech restrictions because innovative and valuable commercial expression deserves full First Amendment protection.  For more on our preferred approach, see this blogpost.

Still, even as Sorrell v. IMS Health doesn’t entirely eliminate the commercial speech doctrine, the Court does make clear that information—even commercial information sold for commercial purposes—is more than a mere commodity (Vemont had likened it to beef jerky).  Commercial speech provides valuable information to the marketplace; by definition, the more such information consumers receive, the better-informed decisions they can make.

I could end my analysis there, but one amusing postscript is that the dissent, written by Justice Breyer and joined by Justices Ginsburg and Kagan, resorts to argument ad Lochneram.  That is, just as one should discount any political argument invoking Hitler and Nazis, a legal argument invoking the alleged horrors of the Lochner era (striking down regulations on economic liberty grounds) is inherently suspect.  Indeed, Justice Kennedy dismisses Breyer’s concern by noting that while the enactment of “Mr. Herbert Spencer’s Social Statics” is not at issue—alluding to Oliver Wendell Holmes’s Lochner dissent—the duly binding First Amendment is.

In any event, the battle line between the majority and dissent is clear—and it is telling that Justices Sotomayor and Kagan are on opposite sides.  (Recall that the scope of First Amendment protection was an issue in Justice Kagan’s confirmation hearings.)  If indeed Justice Breyer’s prediction that this decision “opens a Pandora’s Box of First Amendment challenges to many ordinary regulatory practices that may only incidentally affect a commercial message,” this case may have revealed not the views of Justice Kennedy—who is strongly libertarian on speech issues—but the true First Amendment colors of President Obama’s two appointees.

Thanks to Cato legal associate Caitlyn Walsh McCarthy for her help with our briefing and this blogpost.