Supreme Court Observations: Sorrell v. IMS Health Inc.

Guest Commentary

Paul M. Smith, Jenner & Block LLP*

Sometimes a Supreme Court dissent ends up being far more interesting than the majority.   In Sorrell v. IMS Health Inc., the First Amendment analysis applied in Justice Kennedy opinion for the Court, joined by the Chief Justice and Justices Scalia, Thomas, Alito and Sotomayor, was relatively straightforward.  A Vermont statute prohibits pharmacies from selling to “data miners” information about the prescription practices of individual physicians (identifiable patient information is not included).  It also prohibits pharmacies from permitting use of such information for marketing of drugs.  Finally, it also prohibits pharmaceutical companies, which obtain this information from data miners, from using it to market their products to doctors.  The only exception is where a given doctor has consented.  The primary avowed purpose of these laws was to lessen the effectiveness of marketing to physicians by drug makers of brand-name prescription drugs.   The State also claimed an interest in protecting the privacy of doctors.

The Court had no difficulty in holding this law unconstitutional.  It held that the law draws lines based on the content of speech and the identity of speakers – indeed, that it smacks of viewpoint discrimination.  The Court then easily dispatched all of Vermont’s arguments for avoiding heightened First Amendment scrutiny:  the law, it held, is not merely a regulation of commerce, because it regulates speech; it is not analogous to a limitation on dissemination of information by government because the information here is in private hands; nor can a limitation on release of data be said to regulate only conduct when there are content-based exceptions.  The Court did not need to decide whether the applicable test is (1) the usual one for commercial speech or (2) some more stringent First Amendment standard.  The outcome, it said, would be the same.  Any state interest in protecting physician privacy is negated by the numerous exceptions in the law.  As for the state’s interest in lowering the costs of prescription drugs, it is substantial but it may not be pursued by means of distorting the flow of information in order to influence physicians into making different prescription decisions.

So far so good.  But then there is Justice Breyer’s dissent joined by Justices Ginsburg and Kagan.  He would have treated the restrictions on release of data by pharmacies as routine regulations of businesses raising little or no First Amendment issue.  And he would have upheld the restriction on use of such data in marketing by pharmaceutical companies as amply justified by the goal of reducing expenditures on brand-name drugs.  In so arguing, he strongly reaffirmed the constitutional double-standard for judging laws regulating commercial speech as opposed to “core” speech like political speech (a disparity several Justices have previously questioned).  And he explained that he would be more lenient still with regard to laws that merely affect commercial speech indirectly – by, for example, limiting release of information that might make commercial speech more effective.  Justice Breyer argued that lots of regulatory programs indirectly impact speech without triggering First Amendment issues.  He even compared the application of heightened First Amendment scrutiny to a return to Lochner-style constitutional scrutiny of economic regulation.

This dissent reflects a remarkable indifference to the core First Amendment principle that government should not use direct or indirect regulation of speech as a means of influencing people not to make perfectly lawful decisions.  Clearly, that was Vermont’s purpose.  But if we countenance that kind of interest as a justification for distorting the marketplace of ideas about commercial transactions (or any other lawful behavior), then the First Amendment loses a substantial chunk of its force.  Such a justification, after all, could lead to all sorts of regulations of speech about products and activities that government might be able to regulate directly but would prefer to affect by regulating speech.

*Mr. Smith is Chair of the firm’s Appellate and Supreme Court Practice and a Co-Chair of the Media and First Amendment Practice.  He was Counsel of Record for the U.S. Chamber of Commerce for its amicus brief in support of the Respondent in Sorrell.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s