Is Commercial Speech Still a “Second-Class Citizen” in the First Amendment Family?

Tiancheng “Tim” Lyu

I. Origins of the Commercial Speech Doctrine

Commercial speech has been defined by the U.S. Supreme Court as speech that does “no more than propose a commercial transaction”[1] or that is “related solely to the economic interests of the speaker and its audience,”[2] including all forms of marketing, such as advertising, labelling, and price information.[3] In fact, U.S. constitutional law initially perceived commercial advertising as falling wholly outside the First Amendment.[4] However, the landscape of First Amendment jurisprudence began to shift in mid-1970s when the Supreme Court decided that the First Amendment protects commercial speech in two cases originating in the public health context.

In Bigelow v. Virginia,[5] the Court overturned a publisher’s conviction under a Virginia law that criminalized running advertisements for abortion services, finding that the advertisements’ contribution to the “marketplace of ideas” outweighed the government’s interest in regulating the “marketplace of services.”[6] One year later, in Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council,[7] the Court invalidated under the First Amendment another Virginia law that banned pharmacists from advertising their prices for prescription drugs by recognizing the right of “the poor, the sick, and particularly the aged” to receive lawful information about drug prices.[8] The Court, however, cautioned that commercial speech is entitled to less protection than noncommercial, such as political, speech and can be regulated if deceptive or misleading.[9] The lower level of free-speech protection afforded to commercial speech, in the majority’s view, was justified by the inherent “hardiness” of such speech against overbroad regulation[10] and the notion that the truth of commercial speech is “more easily verifiable by its disseminator.”[11]

Later, in the monumental 1980 case, Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, the Supreme Court, driven by a similar instinct that commercial speech was “of less constitutional moment than other forms of speech,”[12] established the Central Hudson test—considered an intermediate standard of scrutiny—to determine if government restrictions on commercial speech are constitutional.[13] Indeed, following Central Hudson, later courts were able to uphold commercial speech restrictions,[14] even over arguments to subject such regulations to strict scrutiny.[15] As a result, commercial speech remained as a “second-class,” less protected “citizen” in the First Amendment family.[16] Nonetheless, by applying the Central Hudson test, courts also managed to strike down various federal and state laws regulating commercial speech, including ones that aimed to protect consumers and minors from health risks posed by tobacco and alcoholic products.[17]

II. Confusion over “Content-based” Commercial Speech

However, three decades after Central Hudson, commercial speech had its shot at “first-class citizenship” through Sorrell v. IMS Health Inc.,[18] where the Supreme Court struck down a Vermont restriction on drug companies’ use, for marketing purposes, of pharmacy-collected lists of the drugs each doctor prescribed.[19] The majority, citing Central Hudson only once,[20] concluded that “heightened scrutiny” applies to all governmental attempts to restrict speech “because of disagreement with the message it conveys[,]” and “[c]ommercial speech is no exception.”[21] Similarly, in Reed v. Town of Gilbert,[22] the Court followed Sorrell and further designed a two-step test for determining “content-based” restrictions: (1) whether a regulation of speech is “on its face” content-based, i.e., drawing distinctions based on the message a speaker conveys, and (2) if not, whether the law reflects a content-discriminatory purpose or justification.[23] If the answer to either prong is affirmative, then strict scrutiny applies.[24]

But what is the significance of the content-based distinction as applied to commercial speech? In other words, aren’t all commercial speech restrictions, to some extent, necessarily based on the speech’s content?[25] In fact, after Sorrell and Reed, many Circuits either avoided Reed[26] or continued to apply the Central Hudson intermediate scrutiny to regulations on commercial speech by distinguishing Reed.[27] Nevertheless, more recently, in Barr v. Am. Ass’n of Pol. Consultants,[28] a case concerning certain exemptions from governmental restriction on automated calls, the Court reiterated that strict scrutiny is the proper standard of review for content-based restrictions.[29]

In the aftermath of the Barr decision, the Sixth Circuit, in International Outdoor, Inc. v. City of Troy, Michigan,[30] read Barr as standing for the proposition that strict scrutiny has completely replaced Central Hudson analysis and now controls over content-based commercial speech,[31] thereby creating an apparent “circuit split.” As a result, a future court might choose to apply strict scrutiny to content-based government restrictions on commercial speech; alternatively, if the court decides to stick with intermediate scrutiny, the case might be appealed to the Supreme Court.[32]

III. Implications of Subjecting Commercial Speech Regulations to Strict Scrutiny

The case law on commercial speech, as it currently stands, leaves unclarified the question of how to draw a clear-cut, consistent line between commercial speech restrictions that are content-based and those that are not—the determination of which can dictate the applicable level of judicial scrutiny to such regulations. Consequently, it is foreseeable that, if strict scrutiny were to apply to all commercial speech restrictions, courts might invalidate more content-conscious but arguably necessary governmental attempts to regulate important aspects of public life, from consumer protection to personal privacy.

To illustrate, U.S. Food and Drug Administration (“FDA”) has long been imposing content-based restrictions on the marketing and promotion of “off-label” uses of prescription drugs, namely the use of pharmaceuticals for unapproved symptoms or conditions, in unapproved patient groups, or in unapproved dosages.[33] In fact, although the Second Circuit ruled that the government cannot prosecute pharmaceutical manufacturers under the Food, Drug, and Cosmetics Act for speech promoting the lawful, off-label use of an FDA-approved drug,[34] the FDA can still regulate such commercial speech in other ways. For example, under the False Claims Act, advertisements that encourage off-label uses of drugs can be strictly prohibited for reimbursement by Medicare or Medicaid.[35] However, regulations of this sort to date have survived, to some extent, by virtue of past courts’ reliance on intermediate “commercial speech” review.[36] Therefore, if future courts agree that strict scrutiny supplants Central Hudson analysis, then FDA’s restrictions on the marketing of off-label uses will be challenged by drug manufacturers and, more likely than not, found unconstitutional.

 

[1] Pittsburgh Press Co. v. Pittsburgh Comm’n on Human Relations, 413 U.S. 376, 385 (1973).

[2] Central Hudson Gas & Elec. Corp. v. Public Service Commission of New York, 447 U.S. 557, 561–62 (1980) (alteration added).

[3] Jennifer L. Pomeranz, United States: Protecting Commercial Speech under the First Amendment, 50 J. L. & Ethics 265, 267 (2022).

[4] Jonathan Weinberg, On Commercial—and Corporate—Speech, 99 Marq. L. Rev. 559, 561 (2016).

[5] 421 U.S. 809 (1975).

[6] Id. at 826–29; see also Weinberg, supra note 4, at 562.

[7] 425 U.S. 748 (1976).

[8] See id. at 757–73.

[9] See id. at 771; see also David Schultz, Commercial Speech, The First Amendment Encyclopedia (last visited Nov. 8, 2022), https://www.mtsu.edu/first-amendment/article/900/commercial-speech.

[10] Id. at 771 n.24 (suggesting that “commercial speech may be more durable than other kinds. Since advertising is the Sine qua non of commercial profits, there is little likelihood of its being chilled by proper regulation and forgone entirely”).

[11] Id.; see also David L. Hudson Jr., The Content-Discrimination Principle and the Impact of Reed v. Town of Gilbert, 70 Case W. Rsrv. L. Rev. 259, 273 (2019).

[12] Central Hudson Gas & Elec. Corp, 447 U.S. at 562 n.5.

[13] Specifically, under this test, courts first determine (1) whether the expression is protected by the First Amendment, meaning that it must relate to a lawful activity and not be false, deceptive, or misleading. If it is found to be protected, the court must ask whether (2) the government asserted a substantial interest to be achieved by restricting commercial speech; (3) the regulation directly advances this interest; and (4) the restriction is not more extensive than necessary to serve this interest. See id. at 557.

[14] See, e.g., Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 508–12 (1981) (concluding that a San Diego ordinance, to the extent that it banned offsite commercial advertising on fixed-structure signs, meets the constitutional requirements of the Central Hudson test because the law “directly advance[d]” substantial governmental interests in traffic safety and the city’s appearance); Posadas de Puerto Rico Associates v. Tourism Company of Puerto Rico, 478 U.S. 328, 344–45 (1986) (applying the Central Hudson test to uphold a Puerto Rico law that barred casinos from advertising gambling to its residents).

[15] See 44 Liquormart, Inc. v. Rhode Island, 527 U.S. 484, 521–22 (1996) (Thomas, J., concurring); see also Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 573–86 (2001) (Thomas, J., concurring); see also David L. Hudson, Jr., Justice Clarence Thomas: The Emergence of a Commercial Speech Protector, 35 Creighton L. Rev. 485, 497 (2002).

[16] See Hudson Jr., supra note 11, at 274.

[17] See, e.g., Rubin v. Coors Brewing Co., 514 U.S. 476 (1995) (striking down Section 5(e)(2) of the Federal Alcohol Administration Act – which prohibited beer labels from displaying alcohol content – because the government’s interest in curbing “strength wars” among brewers who competed based on the potency of their beer, albeit substantial, fails Central Hudson’s requirement that the measure directly advances such interest); 44 Liquormart, Inc., 527 U.S. at 500 (invalidating a Rhode Island law banning the advertisement of retail liquor prices, with four of the Justices concluding that the law, constituting “a blanket prohibition against truthful, non-misleading speech about a lawful product [that] serves an end unrelated to consumer protection, must be reviewed with “special care” under Central Hudson) (citing Central Hudson, 477 U.S. at 566 n.9); Lorillard, 533 U.S. at 565–67 (holding that Massachusetts regulation prohibiting advertising of smokeless tobacco or cigars within 1,000 feet of school or playground violated the First Amendment because the law fails the fourth prong of the Central Hudson analysis); Thompson v. Western States Medical Center, 535 U.S. 357, 358, 377 (2002) (invalidating a federal law that exempted certain “compounded drugs” from FDA-required testing but banned advertising or promotion of such drugs because the law fails the Central Hudson test, as “the Government can achieve its interests in a manner that does not restrict commercial speech, or that restricts less speech”).

[18] 564 U.S. 552 (2011).

[19] Id. at 580.

[20] Id. at 572.

[21] Id. at 566.

[22] 576 U.S. 155 (2015).

[23] See id. at 165–66.

[24] See id.

[25] See Pomeranz, supra note 3, at 269.

[26] See Educational Media Co. at Va. Tech, Inc. v. Insley, 731 F.3d 291, 298 n.4 (4th Cir. 2013) (“To be sure, the question of whether Sorrell’s ‘heightened scrutiny’ is, in fact, strict scrutiny remains unanswered”); see also Express Oil Change, L.L.C. v. Miss. Bd. of Licensure for Prof’l Eng’rs & Surveyors, 916 F.3d 483, 493 n.18 (5th Cir. 2019) (“We do not reach the issue of whether Sorrell ... altered the commercial speech analysis”).

[27] See Hudson Jr., supra note 11, at 274; see also, e.g., Lone Star Security & Video, Inc. v. City of Los Angeles, 827 F.3d 1192, 1200 n.5 (9th Cir. 2016) (upholding a city ordinance that prohibited advertising billboards on moving vehicles by finding that “unlike Reed, the mobile billboard ordinances do not single out a specific subject matter for differential treatment” and thus, like content-neutral “time, place, and manner” restrictions, are subject to intermediate scrutiny); Missouri Broadcasters Ass’n v. Lacy, 846 F.3d 295, 300 n.5 (8th Cir. 2017) (reaffirming that content- and speaker-based commercial speech restrictions are evaluated under Central Hudson); Vugo, Inc. v. City of New York, 931 F.3d 42, 50 (2d Cir. 2019) (“We agree with our sister circuits that heave held that Sorrell leaves the Central Hudson regime in place, and accordingly we assess the constitutionality of the City’s ban under the Central Hudson standard”); Aptive Environmental, LLC v. Town of Castle Rock, 959 F.3d 961 (10th Cir. 2020).

[28] 140 S.Ct. 2335 (2020).

[29] Id. at 2346–47.

[30] 974 F.3d 690 (6th Cir. 2020).

[31] Id. at 706.

[32]James M. Beck, First Amendment Circuit Split Develops, Drug & Device Law (Nov. 20, 2020), https://www.druganddevicelawblog.com/2020/11/first-amendment-circuit-split-develops.html.

[33] Richard C. Ausness, “There’s Danger Here, Cherie!”: Liability for the Promotion and Marketing of Drugs and Medical Devices for Off-Label Uses, 73 Brooklyn Law Review 1253, 1254 (2008).

[34] See United States v. Caronia, 703 F.3d 149, 169 (2d Cir. 2012).

[35] Off-Label Marketing and the First Amendment: Are Pharmaceutical Companies Protected?, Berger Montague (last visited Nov. 12, 2022), https://bergermontague.com/off-label-marketing-and-the-first-amendment-are-pharmaceutical-companies-protected/.

[36] James M. Beck, Sixth Circuit Limits “Commercial Speech” First Amendment Analysis to Content-neutral Governmental Regulation, Washington Legal Foundation (Nov. 20, 2020), https://www.wlf.org/2020/11/20/publishing/sixth-circuit-limits-commercial-speech-first-amendment-analysis-to-content-neutral-governmental-regulation/.