Monday, June 13, 2016

Commercial speech: strategic issues

Strategic Issues:  What questions are we asking now? Where is the law going?
Moderator:  Timothy L. Alger, Greenberg Traurig LLP: In today’s economy, what isn’t an ad?  Is the death of the commercial/noncommercial distinction inevitable?
A: depends on whether publication values integrity and editorial independence.  If it does, they’ll keep editorial separate. Other risk: if this kind of advertising becomes conventional, it will be accepted and lead to greater mistrust.
Piety: Why are ads skull and crossbones? Implicates expertise, and whether everyone’s ideas are equally valuable in all contexts. It’s suicidal: if editorial becomes distrusted as advertising, then looking like editorial won’t provide any competitive advantage. We have historical experience of more Darwinistic selling environment, and it resulted in the Progressive era.
Q: does the category commercial speech have any value?  What would happen under strict scrutiny?
A: I would fear that courts will feel the need to uphold various regulatory regimes, and do it in ways that weaken strict scrutiny if they can’t distinguish different types of speech.  
A: what most clients and lawyers are looking for is predictability. One strict scrutiny test + $100,000 later you know the answer is no good to anyone/hurts the rule of law.  There is an awful lot to the problem of drawing arbitrary distinctions, but it’s difficult to advise clients right now and that’s not good.
Kurnit: you could have a different regime w/categories of speech, notwithstanding Reed.  Attempt to avoid SEC: the Court is likely to say that the SEC and perhaps the FDA can use the police power to protect consumers.  But it’s not definable as a practical matter through who created it, what their motive was, etc.; these rules have been displaced.  The impact is to chill the 1A for the NYT/legacy media that value their curation, where there is an economic value for trusted sources. But the WSJ has a wine club and the NYT sells memorabilia, so effort to suggest that we can divide the world into advertising/editorial is gone. The marketplace will reward integrity; bring false advertising claims against those who lie to consumers in their advertising of their own media.
Q: concept of commercial speech isn’t just about ads and product labeling.  Many professions are constituted by communication.  You have to be a member of the bar to practice law—does that requirement pass strict scrutiny? 
Alger: if it’s a good regulation shouldn’t it pass strict scrutiny?
Q: is it the least restrictive means? Does that require CLE?
Alger: or we could turn to the Commerce Clause.
Piety: that’s just another way of restating carveouts, like commercial speech.  If strict scrutiny were really strict, instead of “most everything fails,” it would be different.  Sullivan produced Anderson v. Liberty Lobby—motion to dismiss. As a practical matter, strict scrutiny means a lot of things will fail, and lots of false/misleading speech will be allowed, as w/libel.
Alger: Reed says content discrimination is bad but commercial speech is content based.  Off-site and on-site distinctions are common, and those seem to be content based.  Reed: some justices say that’s unaffected, but it is obviously a content-based distinction. How do we fathom this?
Kurnit: False and misleading is content-based; you’ll never have a 1A regime that protects fraud, deception, securities violation—at some point, the gov’t must protect the public weal through content-based carveouts.  Stevens’ notion in Central Hudson: you can do away w/the frivolous stuff, and have a category for that which is false/deceptive and likely to influence a consumer’s purchasing decision.  Must structure analysis for that core.  Can’t imagine abolishing the SEC.  [Others in this room can imagine more than that, which is an issue; also, that standard w/o more won’t distinguish the non-seller’s false speech from the seller’s false speech, both of which are likely to influence purchase.]  Looking at who the speaker is, and whether it’s an ad, has to go.  It’s the content and whether it’s fraudulent, not the speaker. [I don’t really understand how he can say this.  If his standard is fraud, then the speaker is very important.]  In the 1900s when the NY courts said that using a person’s image in advertising was a crime, no one had any doubt what an ad was. 
Q: Alvarez: 1A will protect lies unless there’s a pecuniary motive.
Piety: Why is advertising to children ok? Adults can protect themselves, but can kids?
Kurnit: yes, though it’s a Q of what they can perceive. They’re savvier consumers than most adults. You can’t regulate the 1A down to what children can comprehend.  Favorite example: TV ad for doll: “doll doesn’t walk” disclaimer while showing the doll walking; directed at 2-3 year olds and thus disclaimer not effective.
Q: ROP statute was enacted 115 years ago b/c a young woman’s picture was put on a flour bag. The NYT led the push to get the statute enacted. Maybe that statute is unconstitutional on its face, and certainly as applied.  There have been about 70 lower court cases applying Reed, and only one involved a private civil law suit, and that’s the Hurt Locker case. Jordan v. Jewel: jury was outraged and gave Jordan $8.9 million, but Ed O’Bannon sought damages for a video game.  Q is whether ROP could form the basis for antitrust injury; this mess that is the ROP is something we need to talk about.  Reed doesn’t add a lot to the mix; also doesn’t know how that applies to fair use in ©.
Kurnit: for ROP, you must also require falsity to make it constitutional.  The notion that the little girl’s image on the flour is important enough to do violence to the 1A in the greater scheme of things is not sufficient.  §43(a)(1)(A) provides a very solid ROP claim when there’s falsity about endorsement, participation, etc.; that will work under the 1A b/c that’s false speech for commercial purposes designed to influence purchasing decision.  [But that presupposes a commercial/noncommercial distinction which he opposes, not to mention I wonder about materiality v. puffery status of picture of girl w/r/t consumer decisionmaking.] There is no longer emotional anguish connected w/being related to commerce. [Nice to know that’s universally true.]
Alger: Sarver case from 9th Cir. applied strict scrutiny in ROP case; made it easier that it was a movie, noncommercial speech. But where do we draw those lines, and what about mixed/hybrid situations that come up online all the time. DCt cases have held, incorrectly, that advertising driven by content makes the content commercial as well. 
So what’s the next step, litigation-wise?
Q: Something so egregious that the Ct will have to take a look, particularly w/8 Justices on the Court.
Alger: perhaps cert in Sarver, explaining why Sarver is different from NFL game cases.
Q: O’Bannon is selling cars; justice to him requires a hard look.
Q: so he’s owed money because he’s not making any of his own?  Is your case against the networks, the NCAA, etc.?
Q: is a video game the same as a newspaper?
Q: The cases that come will be Ps’ attys who use FTC guidelines as a template to bring claims over whether or not there was sufficient disclosure of the sponsorship of content. Those are easy cases for Ps’ lawyers to construct.  [Given that most people in this space aren’t following the FTC guidelines, as we’ve heard, I wonder whether that’s actually true.]
Q: TOS might require arbitration.
Q: Ps’ attys will say they’re not binding.
Q: Cases like Sarver implicate matters of public concern/public figure—status of particular person. Can see SCt dodging the commercial speech issue and focusing on something they’re more comfortable with, like 9th Circuit did.

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