Thursday, June 28, 2012

The Stolen Valor Act and advertising/trademark law

U.S. v. Alvarez, 567 U. S. ____ (2012) (affirming the invalidation of the Stolen Valor Act)
I’m not hugely surprised by the result, and the plurality written by Justice Kennedy at least attempts to limit its rationale to the particulars of the case: a prohibition on intentionally false claims to have been awarded certain medals is unsustainable given the failure to show a need for the ban in order to prevent the identified harm.  Still, the wobbliness on “false factual speech has no value in itself” leaves some uncertain ground of interest to trademark and advertising lawyers.  In particular, the plurality opinion doesn’t miss a chance to link false (that is, untrue) commercial speech to fraud, when of course modern advertising regulation covers far more than deliberate fraud.  Thus, Virginia Pharmacy becomes a case standing for the proposition that “fraudulent speech generally falls outside the protections of the First Amendment” (emphasis mine).
In the key passage for broader lessons, the plurality says, “there are instances in which the falsity of speech bears upon whether it is protected. Some false speech may be prohibited even if analogous true speech could not be.  This opinion does not imply that any of these targeted prohibitions are somehow vulnerable. But it also rejects the notion that false speech should be in a general category that is presumptively unprotected.” 
The plurality doesn’t talk about trademark law, but it specifically distinguishes the Stolen Valor Act from the special protection for the Olympics: the law bars lies “entirely without regard to whether the lie was made for the purpose of material gain.  See San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U. S. 522, 539–540 (1987) (prohibiting a nonprofit corporation from exploiting the “commercial magnetism” of the word “Olympic” when organizing an athletic competition (internal quotation marks omitted)).”  So material gain is apparently a limit now--but of course much noncommercial speech, as defined by First Amendment doctrine, is published for material gain.
Perhaps unsurprisingly, weirder things are going on in Breyer’s concurrence, joined by Kagan.  Breyer, who favors a more contextual First Amendment analysis as compared to Kennedy’s categories, identifies a range of laws prohibiting false speech, with various levels of particularization in the harms targeted.  “Those [other] prohibitions, however, tend to be narrower than the statute before us, in that they limit the scope of their application, sometimes by requiring proof of specific harm to identifiable victims; sometimes by specifying that the lies be made in contexts in which a tangible harm to others is especially likely to occur; and sometimes by limiting the prohibited lies to those that are particularly likely to produce harm.”  Fraud statutes are an example of the first category, requiring proof of materiality, reliance, and injury.  But all the interesting work happens in the second and third, where legislators decide that categories of misrepresentations, or specific contexts, make harm particularly likely.  Alvarez suggests that a majority of the Supreme Court is skeptical of such findings, even though it accepts them as applied to perjury, misrepresentations that a private party comes from the government, and a few others.
Turning to the trademark analogies that made this case of particular interest to Lanham Act scholars, we don’t get much that’s satisfactory.  Either Breyer is deeply confused about what trademark law currently is and how infringement and dilution are proven, or he sees much better than we admit in reducing trademark law to dilution and presumptions to proof: 
Statutes prohibiting trademark infringement present, perhaps, the closest analogy to the present statute. Trademarks identify the source of a good; and infringement causes harm by causing confusion among potential customers (about the source) and thereby diluting the value of the mark to its owner, to consumers, and to the economy. Similarly, a false claim of possession of a medal or other honor creates confusion about who is entitled to wear it, thus diluting its value to those who have earned it, to their families, and to  their country.  But trademark statutes are focused upon commercial and promotional activities that are likely to dilute the value of a mark. Indeed, they typically require a showing of likely confusion, a showing that tends to assure that the feared harm will in fact take place.
If you just substitute “dilution” for “infringement” and “confusion,” this almost makes sense, but “(about the source)” makes clear that Breyer really did conflate infringement and dilution.  And “dilution causes dilution of value” as an explanation of harm is not really a rigorous definition of the harm.
Later, Breyer brings up but doesn’t resolve the applicability of the Lanham Act to political speech:
Some lower courts have upheld the constitutionality of roughly comparable but narrowly tailored statutes in political contexts.  See, e.g., United We Stand America, Inc.  v. United We Stand, America New York, Inc., 128 F. 3d 86, 93 (CA2 1997) (upholding against First Amendment challenge application of Lanham Act to a political organization); Treasure of the Committee to Elect Gerald D. Lostracco  v.  Fox, 150 Mich. App. 617, 389 N. W. 2d 446 (1986) (upholding under First Amendment statute prohibiting campaign material falsely claiming that one is an incumbent).  Without expressing any view on the validity of those cases, I would also note, like the plurality, that in this area more accurate information will normally counteract the lie.
The dissent, written by Alito, makes the most of the trademark analogy, endorsing on the way the idea that a proper function of trademarks is to signal exclusivity:
It is well recognized in trademark law that the proliferation of cheap imitations of luxury goods blurs the “‘signal’ given out by the purchasers of the originals.”  Landes & Posner, Trademark Law: An Economic Perspective, 30 J. Law & Econ. 265, 308 (1987).  In much the same way, the proliferation of false claims  about military awards blurs the signal given out by the actual awards by making them seem more common than they really are, and this diluting effect harms the military by hampering its efforts to foster morale and esprit de corps.  Surely it was reasonable for Congress to conclude that the goal of preserving the integrity of our country’s top military honors is at least as worthy as that of protecting the prestige associated with fancy watches and designer handbags.  Cf. San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U. S. 522, 539-541 (1987) (rejecting First Amendment challenge to law prohibiting certain unauthorized uses of the word “Olympic” and recognizing that such uses harm the U. S. Olympic Committee  by “lessening the distinctiveness” of the term).
I think the dissent’s most important point is largely put in a footnote: there is a potentially big difference between “each plaintiff/prosecution must show individualized harm” and “the legislature can reasonably decide that a situation poses so much risk of harm that it may be banned/criminalized,” and lumping them together makes distinguishing between constitutionally ok laws and the invalidated Stolen Valor Act more difficult.  The dissent reiterates previous language that false speech has never been protected for its own sake, and finds the plurality’s more wishy-washy “the falsity of speech bears upon whether it is protected” to be “a dramatic—and entirely unjustified—departure from the sound approach taken in past cases.” 
Alvarez and his supporting amici argued that only falsity proved to cause specific harm lacks First Amendment protection, but the various categories of examples offered don’t show that (unless, which the dissent apparently isn’t willing to do, you regularly allow legislative predictions to substitute for case-by-case litigation).  These examples include “(3) false speech that does not cause detrimental reliance (neither perjury laws nor many of the federal false statement statutes require that anyone actually rely on the false statement); (4) particular false statements that are not shown in court to have caused specific harm (damages can be presumed in defamation actions involving knowing or reckless falsehoods, and no showing of specific harm is required in prosecutions under many of the federal false statement  statutes); and (5) false speech that does not cause harm to a specific individual (the purpose of many of the federal  false statement statutes is to protect government processes).”
And I present this paragraph just for irony, given how the dissenters voted on another case that came out today:
The problem that the plurality foresees—that legislative bodies will enact unnecessary and overly intrusive criminal laws—applies regardless of whether the laws in question involve speech or  nonexpressive conduct. If there is a problem with, let us say, a law making it a criminal offense to falsely claim to have been a high school valedictorian, the problem is not the suppression of speech but the misuse of the criminal law, which should be reserved for conduct that inflicts or threatens truly serious societal harm. The objection to this hypothetical law would be the same as the objection to a law making it a crime to eat potato chips during the graduation ceremony at which the high school valedictorian is recognized.  The safeguard against such laws is democracy, not the First Amendment. Not every foolish law is unconstitutional.
Eat your broccoli!

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