Federal Court Rulings Reflect a “Commercial Speech” Doctrine in Need of Recalibration

Cross-posted at Forbes.com on WLF’s contributor site

In the past month, two different federal circuits held that Seattle’s Yellow Pages are noncommercial speech (Dex Media West v. Seattle) and a Texas trial lawyer’s website address is (probably) commercial speech (Gibson v. Tex. Dept. of Ins.). These divergent rulings, and the differing level of First Amendment protection they impose, reinforce Washington Legal Foundation’s long-held opinion that the U.S. Supreme Court must reconsider its “commercial speech doctrine.” Below, we offer some thoughts on a different approach.

Line Drawing. U.S. Supreme Court precedent requires judges to draw lines around speech when analyzing government restrictions. Court rulings in 1976 and 1980 determined that speech which does “no more than propose a commercial transaction” is entitled to less First Amendment protection than “pure” political speech. Some communications, such as advertisements, obviously fit on the “commercial” side of the line. But other speech isn’t so easily categorized, leading to needlessly convoluted judicial review which can silence or chill valuable speech.

What are the Yellow Pages? For instance, in Dex Media West, the Ninth Circuit had to categorize Seattle’s Yellow Pages, the distribution of which the city wanted to curtail for environmental reasons. Common sense may dictate that the Yellow Pages are quintessentially commercial. But the circuit court concluded that the existence of some noncommercial information – maps, individuals’ phone numbers, government office locations – in the Yellow Pages rendered the entire volume noncommercial.

The court could have stopped there and struck down the Seattle distribution restrictions as unconstitutional. Instead, it went on and discussed the Supreme Court’s complex jurisprudence on the “inextricable intertwining” of commercial and noncommercial speech. The two different types of speech were clearly intertwined and could not be unwound, the court reasoned, because the ads subsidized the noncommercial items. Seattle has asked the Ninth Circuit to grant en banc review of the three-judge panel’s ruling.

Does a web address speak? The combination of “commercial” and “noncommercial” speech, and speech which could arguably be either, can arise even more easily and frequently online. In Gibson, the Fifth Circuit had to determine the constitutionality of a Texas regulation prohibiting the commercial use of certain government-implicated words on attorney websites, such as “Texas” and “Workers Comp.” Gibson’s website was “texasworkerscomplaw.com.”

While the circuit panel admitted that the speech status of web addresses was “res nova,” it nonetheless went on to state that Gibson’s web address “might qualify as commercial speech if the website itself is used almost exclusively for commercial purposes.” Such a statement flies in the face of Supreme Court precedent that the speaker’s purpose cannot alone determine the speech category. If profit motive was a sole determinant, newspapers, movies, books, and anything else which is created and sold to make money could be more easily restricted as “commercial speech.”

The Fifth Circuit remanded the case back to the trial court, where Texas must justify its regulation under the Central Hudson test and where Gibson can adduce evidence that his site did much more than “propose a commercial transaction.”

A Different Approach. The need to sort speech into Supreme Court-created boxes, and the analytical gymnastics required when it doesn’t fit neatly, can inspire a great deal of harmful censorial mischief. The First Amendment and those whose rights it protects deserve a better approach.

The Court wasn’t wrong 30+ years ago when it said that government has a stronger interest in regulating speech on commercial matters than on political matters. False or misleading information, or speech that promotes an illegal transaction, undermine a free market system. The Framers knew this when they drafted the Bill of Rights. As Judge Robert Bork wrote in a 1996 WLF Legal Backgrounder, “The First Amendment was adopted against the backdrop of a venerable common-law tradition of prohibiting commercial misrepresentation.”

The Court should, when given the opportunity, bring assessment of speech which may be “commercial” back in line with the First Amendment as the Framers wrote it. An appropriate analytical framework could begin with two basic initial questions:

  1. Does the speech being regulated directly relate to the characteristics of a product or service offered for sale?
  2. Does the challenged government restriction seek to address speech proposing an illegal transaction or speech that is false or misleading?

If the answers are affirmative on both, then courts should proceed with an exacting application of intermediate scrutiny. Such scrutiny must require government to prove a close fit between the means utilized and the ends sought with something more than “history, consensus, or simple common sense.”

Regulations that don’t meet both conditions should be reviewed under strict scrutiny. Such an approach will permit government to police the free market by targeting false or misleading commercial information which harms competition and disserves consumers. It will also prevent government from inappropriately regulating speech to achieve policy goals unrelated to the speech. Goals such as environmental protection (the justification for Seattle’s ordinance in Dex Media West), promoting temperance (Rubin v. Coors; 44 Liquormart), and lowering healthcare costs (Sorrell v. IMS Health) may be compelling state interests, but none relate to preventing false or misleading commercial information.

This approach should also ensure that businesses can publicly oppose PR attacks on their brand without the fear of being sued for false advertising under state laws, as happened in 2002’s Nike v. Kasky. There, the California Supreme Court labeled Nike’s statements countering allegations of abusive overseas labor practices as “commercial speech,” and allowed private lawsuits to proceed. The Supreme Court failed to correct this miscarriage of justice, so the chilling precedent endures.

Recalibration of constitutional doctrine does not come easily at the Supreme Court, nor should it in most instances, but in the interests of Americans’ most cherished right — freedom of speech — the effort must be made.

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