Proposed Federal Alcohol Labeling Revisions Retain Constitutionally Suspect Review Standards

TTBOn November 26, 2018, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published an extensive proposed rule that seeks to “reorganize and codify [labeling and advertising] regulations in order to simplify and clarify regulatory standards … and reduce the regulatory burden on industry members where possible.” The agency is accepting public comments on the proposal until June 26, 2019.

TTB’s efforts to streamline the rules and finally recognize long-standing First Amendment precedents are welcome. But parts of the proposed rule do not adequately protect the commercial speech rights of alcohol-beverage producers and consumers. We’ll focus here (as WLF will in its forthcoming public comment) on the prohibition of statements on labels or in advertisements that are disparaging, false, misleading, obscene, or indecent.

While encouraging civility in the wine, beer, and spirits marketplace may be a noble cause, simply stating that such regulation “reflects … longstanding ATF and TTB policy” will not save rules that restrict commercial speech from successful court challenges. Continue reading “Proposed Federal Alcohol Labeling Revisions Retain Constitutionally Suspect Review Standards”

The First Amendment in the Supreme Court: “Scandalous” Trademarks and Labor Unions

Megan Brown, Featured Expert Contributor, First Amendment

Continue reading “The First Amendment in the Supreme Court: “Scandalous” Trademarks and Labor Unions”

Ninth Circuit Narrowly Vindicates First Amendment in Bellwether Compelled Speech Case

Featured Expert Contributor, First Amendment

By Megan Brown, a Partner with Wiley Rein LLP, with Jeremy Broggi, an Associate with the firm.*  Wiley Rein LLP represents the United States Chamber of Commerce as amicus in American Beverage Ass’n v. San Francisco.

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The tide may be turning on commercial free speech in the context of forced disclosures and warnings, as parties wait for further clarification from the Supreme Court on the level of protection due private speech.  The Ninth Circuit’s recent en banc decision in American Beverage Association v. City and County of San Francisco, No. 16-16072 (9th Cir. Jan. 31, 2019), is a limited step in the right direction, though as concurring opinions make clear, much more needs to be done to fix the doctrinal confusion about compelled speech and properly limit the power of government. Continue reading “Ninth Circuit Narrowly Vindicates First Amendment in Bellwether Compelled Speech Case”

Expressions Hair Design Speech Case Back on Track after Detour to NY State Court

creditcardFor more than 40 years, merchants have sought the right to impose surcharges on customers who use credit cards when making purchases. They prefer customers to pay with cash because when a customer pays with a credit card, the merchant must pay a transaction fee to the credit-card issuer. To encourage cash transactions, many merchants would like to express their pricing in a way that conveys to customers that credit purchases lead to higher prices, but a number of States closely regulate how merchants may express that viewpoint.

A First Amendment challenge to such regulations reached the U.S. Supreme Court two terms ago. The Court granted merchants a preliminary victory in Expressions Hair Design v. Schneiderman, ruling that a New York pricing statute did, in fact, regulate speech and overturning a U.S. Court of Appeals for the Second Circuit decision that reached the opposite conclusion. Continue reading Expressions Hair Design Speech Case Back on Track after Detour to NY State Court”

In-N-Out Asks Supreme Court to Look at Labor Regulators’ Mistreatment of Commercial Speech

innout“It’s the only fast food chain I actually like.” That was Anthony Bourdain’s verdict on In-N-Out Burger. It is not an unusual opinion. Thanks to its clean halls, happy employees, and fresh produce, In-N-Out enjoys fanatical brand loyalty. Its new locations attract crowds and helicopters. Its drive-thru lines are measured from space. It is acclaimed far beyond its Southern California homeland.

In-N-Out is not just popular; it’s distinctive. Each location is a kind of motor oasis. The building is decked in neon lights, glossy tiles, and palm-tree listellos. The servers wear white uniforms and soda-jerk hats. The menu is little more than a hamburger, a cheeseburger, fries, and a milkshake. The look is classic. The feel is easy. The faithful are ecstatic. In-N-Out is a Norman Rockwell painting, The Endless Summer, and Saint Becket’s shrine rolled into one. Continue reading “In-N-Out Asks Supreme Court to Look at Labor Regulators’ Mistreatment of Commercial Speech”

Lessons from FTC’s Loss in, and Subsequent Abandonment of, DirecTV Advertising Case

Featured Expert Contributor, Antitrust & Competition Policy — Federal Trade Commission

06633 - Royall, M. Sean ( Dallas )M. Sean Royall, a Partner in the Dallas, TX office of Gibson, Dunn & Crutcher LLP, with Richard H. Cunningham, a Partner, and Brett S. Rosenthal and Emily Riff, Associates, with Gibson, Dunn & Crutcher LLP.

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The FTC recently suffered a significant setback in a closely watched advertising practices case against DirecTV.  Specifically, on August 16, 2018, Judge Gilliam of the U.S. District Court for the Northern District of California granted judgment in favor of DirecTV on the majority of the claims at the close of the FTC’s case in chief—including all claims relating to DirecTV’s disclosures in its advertising—before DirecTV began to present its own case in defense. And then yesterday, the FTC agreed to dismiss the remainder of its case voluntarily with prejudice, fully ending the enforcement action.

Judge Gilliam’s decision reflects an emphatic rejection of both the disclosure standards sought by the FTC and the agency’s proposed approach to monetary equitable remedies.  The court’s analysis should be of interest to companies that sell services on a subscription basis or that offer a variety of price, service, and promotional options. Continue reading “Lessons from FTC’s Loss in, and Subsequent Abandonment of, DirecTV Advertising Case”

HHS Drug Price Advertising Proposal Reveals Sweeping View of Government Power over Private Speech

Featured Expert Contributor, First Amendment

By Megan Brown, a Partner with Wiley Rein LLP, with Bert Rein and Steve Obermeier, Partners with the firm.

Ed. Note: This is Ms. Brown’s inaugural post as the WLF Legal Pulse’s latest Featured Expert Contributor.

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The Department of Health and Human Services has proposed a new rule to “require direct-to-consumer (DTC) television advertisements of prescription drugs and biological products for which payment is available through or under Medicare or Medicaid to include the Wholesale Acquisition Cost (WAC, or ‘list price’) of that drug or biological product.”  Put more simply, if a drug company runs a TV ad, it will have to include the “list price” of the drug, even though that is not what consumers or insurers would pay.  The proposed rule’s stated goal is to ensure that “beneficiaries are provided with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize not only their out-of-pocket costs, but also expenditures borne by Medicare and Medicaid.” Continue reading “HHS Drug Price Advertising Proposal Reveals Sweeping View of Government Power over Private Speech”