Wednesday, April 23, 2014
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Free speech: The new kryptonite for regulators?

Supposedly conservative jurists are embracing a new style of judicial activism: Letting corporations use the First Amendment as a shield against regulation.

Free speech: The new kryptonite for regulators?

With a fight looming over the future of the U.S. Court of Appeals for the D.C. Circuit, law professor Tim Wu offers an excellent analysis of one of the most significant legal trends to emerge as supposedly conservative jurists - including some on that key appeals court - have embraced a new avenue of judicial activism: allowing corporations to use the First Amendment as a shield against regulation.

Citizens United v. Federal Election Commission, the 2010 case in which the Supreme Court said corporations were entitled to the same free-speech rights as individuals, is much better known. But Wu sees it as part of a larger, long-term fight against any restrictions on corporate "speech" - a position that, if applied to ordinary commercial speech, can undermine the government's ability to regulate any marketplace activity.

In The Right to Evade Regulation How corporations hijacked the First Amendment in the New Republic, Wu says a key commercial-speech case came a year after Citizens United, when the high court sided with pharmaceutical marketers on free-speech grounds in a data-mining case.  In Sorrell v. IMS Health, the court overturned a Vermont law that barred the sale of "de-identified" prescription records to drugmakers - data that identified doctors but not patients, and that enabled drugmakers to target marketing efforts at physicians deemed more likely to prescribe their products. The court said barring data miners from selling their knowledge violated their corporate First Amendment rights.

Wu writes:

Once the patron saint of protesters and the disenfranchised, the First Amendment has become the darling of economic libertarians and corporate lawyers who have recognized its power to immunize private enterprise from legal restraint. It is tempting to call it the new nuclear option for undermining regulation, except that its deployment is shockingly routine.

Last summer, the tobacco industry used the First Amendment to have new, scarier health warnings on cigarette packaging thrown out on the grounds that the labels constituted a form of compelled speech. Ratings agencies like Standard and Poor’s and Fitch, whose erroneous and possibly fraudulent AAA ratings of worthless securities helped cause the banking crisis, have leaned heavily on a defense that deems their ratings mere opinions and therefore protected by the First Amendment. The U.S. Chamber of Commerce is pushing to gut the disclosure requirements in new securities regulations, citing the free speech rights of hedge funds and publicly traded companies. Attorneys working for Google have argued that, since search results are speech, its rights are impinged by the enforcement of tort and antitrust laws. Southwest and Spirit airlines have employed the First Amendment to resist efforts to force them to list the full price of tickets. The incomplete, misleading cost, they have argued, is a form of free speech, too.

Fred Schauer of the University of Virginia calls such claims “First Amendment opportunism.” Free speech is a cherished American ideal; companies are exploiting that esteem, as he puts it, “to try to accomplish goals that are not so clearly related to speech.” The co-opting of the First Amendment has happened slowly, but not at all by accident. First, it was helped along by questionable court decisions. Today, it is being accelerated by a strange alliance between two groups: a new generation of conservative judges, who have repudiated the judicial restraint their forebears prized, and legendary liberal lawyers, like Floyd Abrams and Laurence Tribe, who, after building their reputations as defenders of free speech, are using their talents to deploy it as a tool of corporate deregulation.

The irony, of course, is that conservatives once complained about the left's First Amendment activism. But it's worth recalling the history Wu recounts of how pre-New Deal courts used corporations' constitutional rights to reject laws that most Americans now consider untouchable, such as restrictions on child labor, and considering what a return to that kind of judicial activism could portend. Wu writes:

Few industries these days can resist First Amendment defenses of even the most outrageous conduct. In 2007, Verizon was caught secretly monitoring customers on behalf of the federal government. The company asserted that what Congress calls illegal surveillance was actually a form of protected speech—and that Verizon has a prerogative to hand over customer records, especially in times of “armed conflict with foreign enemies.” More recently, Verizon saw a threat to its First Amendment protections in the Federal Communication Commission’s (FCC) net-neutrality rules. According to Verizon, if it wants to speed up some websites, and slow down others, it has a constitutional right to do so.

Wu doesn't dispute that regulations can sometimes impose undue burdens - a question that rule-making procedures, backed up by the political process, should address. But the Columbia University scholar is rightly troubled by corporate attorneys' attempt to play the First Amendment as a "trump card."

"These massive corporations are not the Jehovah’s Witnesses, unpopular outsiders needing a safeguard that legislators and law enforcement could not be moved to provide. They are active, influential participants in American politics turning to the Constitution for a second bite at the apple when the political process fails to give them what they want," Wu says. "Every time that strategy succeeds, the underlying debate is placed beyond democratic decision-making, supposedly because the authors of the First Amendment would have wanted it that way two centuries ago. Whatever your politics, it seems a strange way to conduct economic and regulatory policy."

Jeff Gelles Inquirer Business Columnist
About this blog

Jeff Gelles, who writes the Inquirer's weekly Consumer 14.0 and Tech Life columns, takes a broad look at the marketplace of goods, services, and ideas.

Reach Jeff at jgelles@phillynews.com.

Jeff Gelles Inquirer Business Columnist
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