Tuned in to the First Amendment: Court Upholds Satellite Radio’s Right to Choose Advertisers

sirius XMBusiness entities have endured increasingly strident criticism of their free speech rights in recent years. Thankfully, the US Supreme Court and most lower federal courts have declined to embrace critics’ ideologically-driven perspective that the First Amendment does not protect corporate speech. Such judicial respect for a business’s speech rights was recently on display in an unusual setting: a contract dispute between Sirius XM Radio and an advertiser. The court decision arising from that dispute, InfoStream Group v. Sirius XM Radio Inc., both demonstrates how the First Amendment can provide an effective defense and underscores the principle that not all speech by commercial enterprises is “commercial speech.”

Plaintiff InfoStream Group Inc. operates several “dating” websites connecting older, wealthy men with younger women. InfoStream’s advertisements pitch the “mutually beneficial relationship” it creates between its clients. For several years, InfoStream ran ad spots during Sirius radio programs. However, in 2014, Sirius changed its Standards and Practices to prohibit advertisements for, among other things, “services that discuss or suggest a mutually beneficial relationship or anything alluding to prostitution.” Sirius informed InfoStream that it would no longer run InfoStream’s ads. Nearly three years later, InfoStream filed a lawsuit alleging that Sirius acted in bad faith when it refused to air InfoStream’s ads.

Sirius filed a motion to strike the complaint under California’s anti-SLAPP (Strategic Lawsuits Against Public Participation) law, arguing that InfoStream’s lawsuit attempted to violate Sirius’s First Amendment rights. To prevail, Sirius needed to demonstrate that InfoStream’s complaint “arose from” Sirius’s protected activity—its speech in connection to a public issue—and whether Infostream was likely to prevail on its claim.

First, the court analyzed whether InfoStream’s complaint arose from Sirius’s protected activity.  The court quickly distilled the issue: “Sirius, as a broadcaster, has a First Amendment right to decline to run advertisements.” Thus, since “Plaintiff is suing because Defendant informed Plaintiff that it would no longer run Plaintiff’s advertisements,” InfoStream’s claim clearly arose from Sirius’s protected activity.

InfoStream argued that Sirius’s advertising decisions were covered by the commercial-speech exception of California’s anti-SLAPP statute because, as a for-profit corporation, all of Sirius’s speech must be “commercial.” But the district court rightly determined that a business’s speech is not automatically commercial. Instead, in the context of anti-SLAPP motions, a plaintiff must prove a four-prong test to meet the commercial-speech exception. Here, the court correctly distinguished Sirius’s protected editorial decision over what material it will run as advertisements from actions taken for the purpose of promoting its goods, one of the test’s prongs. Therefore Sirius’s speech was not commercial and the exception did not apply.

As to InfoStream’s likelihood to prevail, the court pointed out that in order to sustain a claim for breach of good faith, InfoStream needed to demonstrate that a contract existed between it and Sirius at the time Sirius implemented its updated Standards and Practices. Because InfoStream submitted no evidence to that effect, the district court granted Sirius’s Motion to Strike and dismissed the lawsuit with prejudice.

Courts have accorded businesses’ editorial decisions full First Amendment protection in other contexts as well. For instance, individuals unhappy with the search results rank of their product or service’s link have filed suit against Google. Most courts have applied the free-speech principles outlined in InfoStream Group to dismiss such complaints. Those courts have found, correctly, that search engines like Google maintain constitutionally-protected editorial judgment over the search results their algorithms produce.

Only by consistent enforcement of the First Amendment through anti-SLAPP provisions will plaintiffs learn that they cannot bully corporations into endorsing plaintiffs’ chosen messages. All businesses, just like all people, have the First Amendment right to associate themselves with whomever they chose, to speak when they want to, and, just as importantly, to refrain from speaking. These cherished protections are especially important for private enterprises whose livelihood can rise or fall based on their associations with others. Thankfully the judiciary has checked the more oppressive instincts of certain plaintiffs to infringe corporations’ free-speech rights.

Also published by Forbes.com on WLF’s contributor page.

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