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Sorrell v. IMS Health: Corporate Commercial Speech in the Age of Citizens United

June 24, 2011

Monday -- the last day of the Court’s Term -- is shaping up to be First Amendment Day at the Supreme Court.  Two of the four remaining cases to be decided raise important questions concerning the meaning of the First Amendment.  The Court is expected to release its long awaited opinions in Brown v. EMA, concerning the constitutionality of state regulation of violent video games, and McComish v. Bennett, the sequel to last Term’s blockbuster campaign finance ruling in Citizens United v. FEC.  With these landmark rulings still to come, it would be easy to lose sight of yesterday’s ruling in Sorrell v. IMS Health, a commercial speech case that has gotten almost no attention this Term.  But Sorrell should not be missed.  The 6-3 ruling written by Justice Kennedy – also the author of Citizens United – lays the framework for a major expansion in the protection the First Amendment affords to commercial speech by corporations and other businesses.

For the last thirty-five years, the black letter First Amendment law has been that commercial speech is protected by the First Amendment, but that restrictions on speech proposing a commercial transaction are subject to a more lenient form of judicial review in light of the differences between commercial and political speech at the core of the First Amendment and the government’s greater interest in regulating commerce and the economy.  This balance reflects two settled and fundamental propositions: (1) the First Amendment affords some protection to the economic speech of corporations, but that corporations do not have the same First Amendment rights as living persons; and (2) governments have broad latitude to regulate the commercial speech of corporations to protect consumers and safeguard the health, safety and welfare of “We the People.”  To guide lower courts to properly resolve First Amendment challenges, the Supreme Court in a 1980 case called Central Hudson adopted a form of intermediate scrutiny for commercial speech cases.

Justice Kennedy’s opinion in Sorrell takes a step back – possibly a substantial one – from this established framework.  Sorrell involves a Vermont statute regulating marketing of drugs by pharmaceutical manufacturers.  The statute denied to marketers information in the form of pharmacy records – collected by the government – about the prescribing practices of individual physicians.  In striking down the Vermont regulation, Justice Kennedy invoked the same basic First Amendment precepts which he trumpeted in Citizens United.  “Heightened judicial scrutiny is warranted,” Justice Kennedy wrote, because the law “burdens disfavored speech by disfavored speakers.”  “Content- and speaker-based restrictions” on commercial speech, Justice Kennedy explained, offend basic First Amendment principles and require heightened judicial review (presumably a form of strict scrutiny and certainly a good deal stricter than Central Hudson).  While Sorrell did not specifically rely on Citizens United, the imprint of Kennedy’s campaign finance blockbuster is hard to miss.

While Citizens United emphasized that protection of political speech is at the core of the First Amendment, Justice Kennedy’s opinion in Sorrell suggested that commercial speech may be deserving of no less protection.  “A consumer’s concern for free flow of commercial speech may often be keener than his concern for urgent political dialogue.”  In explaining why the Vermont statute was unconstitutional, Justice Kennedy likened the statute to one that suppressed political speech, criticizing Vermont for “tilt[ing] public debate in a preferred direction.”  All the while, Justice Kennedy paid lip service to the established First Amendment tradition that states have a freer hand to regulate speech that proposes a commercial transaction to protect the public welfare.

Justice Breyer’s dissent, joined by Justices Ginsburg and Kagan, saw in Justice Kennedy’s majority opinion a new, more demanding standard for commercial speech cases, and sharply criticized it as inconsistent with both precedent as well as first principles.  To the dissenters, Kennedy’s demand for heightened scrutiny was a return to the infamous Lochner era, the heyday of constitutional protection for corporations, today reviled by both liberals and conservatives alike.  As Justice Breyer observed, “[t]o apply heightened scrutiny, when the regulation of commercial activities is at issue (which often involves speech)” is to undercut much federal and state legislation “inextricably related to a lawful governmental effort to regulate a commercial enterprise.” Kennedy’s pointed response – “The Constitution ‘does not enact Mr. Herbert Spencer’s Social Statics.’  It does enact the First Amendment.” – all but admits the charge.  In Justice Kennedy’s view, the Justices are there to enforce the First Amendment, including by overturning economic regulation of commercial speech by corporations.

Sorrell throws commercial speech doctrine into a state of considerable confusion.  The Court has not overruled Central Hudson, but at the same time it has undermined the ruling by introducing a new, undefined, yet clearly stricter standard of review.  The majority found the statute wanting under both tests, so it was not forced to choose between the two.  Sorrell suggests that the Court’s commercial speech doctrine may be in a state of great flux in the years to come, and that Justice Kennedy and his colleagues are eager to expand, possibly quite substantially, the constitutional protections available to corporations and other businesses.  This is an area that deserves to be closely watched.

 

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