Thursday, July 31, 2014

COOL story, part 3: dissents

Judge Henderson dissented, believing the question of Zauderer’s appropriate scope to have been resolved in R.J. Reynolds and unfairly revisited.

Judge Brown also dissented, quite vigorously. Under the majority’s reasoning, “a business owner no longer has a constitutionally protected right to refrain from speaking, as long as the government wants to use the company’s product to convey ‘purely factual and uncontroversial’ information.” This ignored the government’s unique interest in preventing commercial deception and applied a standard that was more relaxed than rational basis review.  The majority searched “sua sponte through the underlying statute’s legislative record, desperately seeking justifications while ignoring the agency’s actual rulemaking record.”  Zauderer is about deception, and, worse than “nonsense on stilts,” “the court’s analysis in this case can best be described as delirium on a pogo stick.”  (I’m going to try to limit further outraged quotes until I get to the end.)

Zauderer said that, where deceptive advertising could be cured by more speech, the government may choose between requiring disclosure and directly prohibiting the advertisement. (I find this to be a weird description; the Court has sometimes suggested that the government is required to try disclosure if the speech is only potentially misleading, but that doesn’t seem like the same thing.)  But compelled speech can be as bad as banned speech, “and the government faces a heavy burden to justify involuntary affirmation (being forced to carry the government’s message).”  Zauderer contrasted the imposition of orthodoxy “in politics, nationalism, religion, or other matters of opinion” with regulation of deceptive commercial advertising.  The latter is ok as long as disclosure requirements are reasonably related to the State’s interest in preventing deception of consumersThe Court wasn’t just distinguishing between disclosure and bans. “[T]he state’s option to require a curative disclosure cannot be disconnected from its right to entirely prohibit deceptive, fraudulent, or misleading commercial speech.”  The option to ban instead is what justifies requiring advertisers to provide more information than they’d otherwise be inclined to present.  (The greater includes the lesser?)  But Zauderer doesn’t allow a commercial speaker to be forced to speak factual and noncontroversial information “in the first instance.”  Even potentially deceptive commercial speakers have “minimal First Amendment protections,” and when deception isn’t involved, “constitutional protections remain robust and undiminished.”

The Constitution adopted the principle of natural law “that an adult human being, as a free moral agent, cannot be coerced without good reason,” but also that “no one ever had a natural right to do wrong.” That’s the basis of commercial speech doctrine.  Disclosure wasn’t an exception to the First Amendment’s stringency, but rather an acknowledgement that sellers had no right to “wrongly deceive” consumers; the state can’t control opinion, but can require accuracy for commercial facts.  (Apparently there’s a right to rightly deceive consumers though.  Unclear why NYT v. Sullivan comes out the way it does on this reasoning, unless it's not a natural wrong to deceive someone in a political context, but maybe it doesn't come out the same way in this scheme.)

Supreme Court jurisprudence routinely refers to deception as the justification for controls on commercial speech, and its clear trajectory is to more protection, not less.  It doesn’t matter how small AMI’s interest in remaining silent is; the government has to show that its interest justifies the regulation.  Zauderer is, as the majority says, just a particular application of Central Hudson.  Central Hudson requires a substantial interest, and preventing “inherent or actual” deception is always substantial.  When a mandated disclosure is reasonably related to preventing deception, as Zauderer requires, it will always directly advance that substantial interest.  And it will be less restrictive than an outright ban, and no more restrictive than necessary.

(The Central Hudson test part 1 explicitly exempts false and misleading speech from the test set out in parts 2-4; to then run what Judge Brown says are the only acceptable compelled disclosures, those that fight false and misleading speech, through Central Hudson analysis seems odd.  The reference to “inherent or actual” deception is a red flag—this is language from cases that say that the government has to try disclosures first if the speech is only “potentially” misleading, whereas it can outright ban speech that is “inherently or actually” misleading.  So in fact, Judge Brown has not applied Central Hudson to the key Zauderer class of “potentially misleading” speech; however, she might well concede that the prevention of “potentially” misleading speech is a substantial government interest. 

A separate issue: Judge Brown argues that the remaining Central Hudson steps are pre-answered for false/misleading speech in terms of government interest and fit.  But Judge Brown puts the question in terms of Zauderer and not the ability to ban false/misleading speech outright.  Why not run all bans on commercial speech, including bans on false or misleading speech, through Central Hudson factors two through four?  Being explicit about that would probably raise the question of how an outright ban could ever be a proper fit, since disclosure requirements would regularly be an alternative, but her analysis depends on outright bans being okay.  Navigating this tangle would have to depend on some very thick theories of when consumers actually understand disclosures (spoiler: rarely); query how good courts are compared to regulators at identifying when disclosures would be sufficient.)

Anyhow, “Central Hudson—without any shortcuts— applies to disclosures that target interests other than deception.”  But the majority “disembowel[ed]” that case as well by holding such “amorphous” interests to be substantial.  And it relied on “interests the agency never asserted and even denied were rationales for the rule.”  As a matter of administrative law, this was wrong, and in any event heightened scrutiny couldn’t be satisfied by “hypothesized justifications” “based on a few scattered comments in the legislative record.”  Nor did the congressional record show that the interest, even if substantial, was properly fitted to this restriction.

The government only asserted the vague interest in providing consumers with information. But the government never explained why origin information matters.  (Contrast discourse about geographic indications, where vague assertions about terroir matter a lot, and proponents happily claim that the differences can’t be defined but are real.)  And even if it did, the government didn’t explain why coerced speech was the only solution.  (And we’re back to less restrictive alternatives!  Why isn’t counterspeech a less restrictive alternative to suppressing false commercial speech, as it is for false political speech?)

The result was “rational basis review minus any legitimate justification.”  Then res ipsa loquitur meant that disclosure was self-evidently likely to convey the information to recipients, thus advancing the government’s interest.  “Seriously? With logic like this, who needs a Ministry of Truth?”  (Okay, but what is the structural difference between this logic and Judge Brown’s reasoning above that requiring disclosures for misleading speech is self-evidently likely to further the government’s interest?)

Judge Brown also rejected reliance on the long history of country of origin labeling, because for a long time the First Amendment wasn’t enforced to protect commercial speech and litigants usually didn’t bother to argue about it, raising substantive due process claims instead. If the test of time were enough to protect a law, there’d be no commercial free speech at all.

The majority concluded that protectionism or patriotism was the true justification for COOL, “even if it is only acknowledged with a sly wink by the government.” But the government didn’t assert protectionism as a justification, and that would be a substantial justification for coerced speech only if “voluntary action and direct government speech were obviously inadequate.”  (Least restrictive means again.  Again, why doesn’t that also apply to false or misleading commercial speech?)  Anyway, the agency persistently denied protectionist motives, stating that COOL wouldn’t necessarily change aggregate consumer demand for products of any given origin and pointing to lack of participation in voluntary labeling programs as evidence that consumers don’t have a strong preference for COOL. 

Likewise, the government didn’t assert any health or safety interests, maintaining instead that food safety regulations governed all food and that traceability wasn’t the intent of the rule.  Indeed, the agency said that, though some evidence suggested that consumers used COOL as a proxy for safety information, that wasn’t a valid inference.  This undercut the idea that it was reasonable for Congress to anticipate consumer preferences.  (The government’s litigation position really is silly; by asserting factual premises that contradict consumer beliefs—those beliefs being that country of origin matters for various reasons, including safety risks—the government manages to be paternalistic in both directions.  Its position seems to be: “this information should be disclosed to you, consumers, even though you don’t know what you’re doing and your preferences are wrong.”)  The anecdotes in the legislative history didn’t suggest that COOL would be useful in a health crisis.  Rather, the agency determined that prevention and recall measures are the means to be used to protect health.

And now to the beating, Lochner-esque heart of the matter: this case isn’t about COOL, or patriotism or protectionism, or health and safety.  “[T]his is a case about seeking competitive advantage.”  The rule “benefits one group of American farmers and producers, while interfering with the practices and profits of other American businesses who rely on imported meat to serve their customers. Such a disproportionate burden ‘stands in sharp conflict with the First Amendment’s command that government regulation of speech must be measured in minimums, not maximums’” (citation omitted).  (But wait!  How, you might well ask, did an economic burden on conditions of production become a First Amendment harm?  Money may be speech in campaign finance, but how is money spent to segregate animals by country of origin speech?  I think the dissent’s point must be that an interest in helping one group over another can’t be “substantial.”  But stated that way it’s a very broad claim, and one I don’t think the case law supports.)

Judge Brown predicted that today’s victors will live to regret this when other objectionable disclosure requirements burden  them, like disclosures about cattle feeding or raising practices, environmental effects of beef production, “or even the union status or wage levels of their employees.”  

If “Made in the USA” worked, producers and sellers would happily and noisily disclose, and consumers’ desires to buy American could be satisfied by voluntary action.  But mandatory COOL just facilitated rent-seeking.  By accepting such flimsy, nebulous interests, the court allowed the government to “commandeer the speech of others” on any ground, including motives “in aid of any sort of crony capitalism or ideological arm-twisting.”  The government’s alleged interest in providing information will result in higher prices because of the cost of monitoring the supply change, taking away the price advantage currently enjoyed by some producers.  “Query whether the protections of the First Amendment should be abrogated for some businesses in order to benefit other businesses.” (Query whether the First Amendment analysis should turn on which businesses are benefited by a regulation.  I think there are good non-speech-related reasons we might want to limit big producers’ comparative advantage in the meat production process; I also think that the “crony capitalism” objection may well be valid.  I merely doubt that the D.C. Circuit Court of Appeals is the appropriate governmental body to resolve it, and in particular that the First Amendment is the appropriate mechanism by which to do so.)

Judge Brown concluded that “[t]he First Amendment ought not be construed to allow the government to compel speech in the service of speculative or hypothetical interests for purely private benefits.”  (What counts as a public benefit?  If there’s no such thing as society, aren’t all benefits private?)  Under this reasoning, there’s no limit to what government could compel.  “[I]f this example of cronyism is okay, who will balk at any other economic or ideological discrimination?” This result dissolved “the whole idea of a right not to speak. … And it does so to facilitate coercion and the imposition of orthodoxy. What is more uncontroversial than orthodoxy?”

(I’m unclear on the fact/orthodoxy relationship here.  I’m also unclear about the orthodoxy being enforced by this regulation.  I will absolutely buy that, in the context of American society, COOL implicitly carries a “buy American” message.  But compared to, say, Christian prayer at the beginning of a legislative session, or mandatory ultrasounds and “disclosures” that abortion is associated with suicide, I find it hard to identify ideological coercion here.  There’s something here about the fever pitch of American politics of late, I think.  If putting country of origin labeling on meat is tyranny, what do we call it when the government jails journalists for reporting, or collects all our private communications in case they might be useful later?)

And the final heights:

There can be no right not to speak when the government may compel its citizens to act as mouthpieces for whatever it deems factual and non-controversial and the determination of what is and what is not is left to the subjective and ad hoc whims of government bureaucrats or judges. In a world in which the existence of truth and objective reality are daily denied, and unverifiable hypotheses are deemed indisputable, what is claimed as fact may owe more to faith than science, and what is or is not controversial will lie in the eye of the beholder.

On one reading of this claim, SEC disclosures, the FTC’s consumer protection side, and most of what the FDA does are equally unconstitutional, since only the speaker should decide for herself what facts are “true.” On another, judges (and bureaucrats?) can decide some truths, but not this one—mandatory disclosures are ok but have to address real deception, however narrowly Judge Brown would define that. I think the dissent does itself a disservice by mushing this all together.  The objection to allowing the government to find “facts” is itself not a First Amendment objection, but rather an argument—Lochner again!—that the government should not be allowed to regulate at all.  (Also, and consistent with Judge Brown’s dislike of commercial speech doctrine, note how commercial speakers have become unmodified “citizens,” as if the majority’s holding allowed disclosure mandates in noncommercial speech as well.)

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