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.” Continue reading

Corrosive Legal Uncertainty Remains after DC Circuit’s Rehearing Denial in “Net Neutrality” Case

RothGuest Commentary

By Arielle Roth, The Hudson Institute*

It came as no surprise last week when the US Court of Appeals for the DC Circuit denied the request for en banc rehearing in US Telecom v. FCC, better known as the “net neutrality” case.  As a technical matter, the panel decision upheld the Federal Communication Commission’s 2015 Title II order, which reclassified broadband Internet as a “telecommunications service” and in turn subjected broadband providers to common carriage regulation. Such a grant would have been rare in any event. Further, in the view of Judge Sri Srinivasan’s opinion concurring in the denial of rehearing, the issues were unfit for judicial review in light of the announcement by current FCC Chairman Ajit Pai of a rulemaking to reverse the previous FCC’s order.

On the contrary, it is precisely because the current FCC seeks to undo the rules in question that the DC Circuit ought to have granted en banc rehearing. Continue reading

Department of Labor’s Fiduciary Rule Is Vulnerable on First Amendment Grounds

DOLPromulgated in April 2016, the Department of Labor’s (DOL) highly controversial Fiduciary Rule drastically expands the universe of retirement investment advisors and employees who are deemed to be “fiduciaries” under federal law. Abandoning 40 years of settled statutory interpretation of the Employee Retirement Income Security Act of 1974 (ERISA) and parallel provisions of the Internal Revenue Code (IRC), DOL now maintains that a fiduciary is anyone who provides “recommendations” that are individualized or directed to a specific recipient for consideration in making investment or management decisions with respect to securities or other property of an ERISA plan or an IRA. Continue reading

Change Coming for SEC’s Controversial Conflict Minerals Rule

Featured Expert Contributor — Corporate Governance/Securities Law

bainbridgeStephen M. Bainbridge, William D. Warren Distinguished Professor of Law, UCLA School of Law.

Section 1502 of the 2010 Dodd-Frank Act required the Securities and Exchange Commission (SEC) to develop disclosure rules requiring public companies to disclose whether their products contained “conflict minerals.” The minerals in question included cassiterite, columbite-tantalite, gold, wolframite, or their derivatives, all of which are used in a variety of common products, including computers, smart phones, and other everyday technology. In order to be deemed conflict minerals, they had to be sourced from the Democratic Republic of the Congo (DRC) or its adjoining countries. Continue reading

Are Anti-SLAPP Statutes Toothless in Federal Courts?

cnnAs the Internet increasingly has become the dominant means of conveying both facts and opinions, the number of defamation and other speech-related lawsuits filed in state and federal courts has risen markedly. Responding to what some lawmakers characterize as “strategic lawsuits against public participation” (SLAPP)—suits aimed at suppressing legitimate speech or public debate through imposing the financial burdens of litigation—many states have enacted so-called anti-SLAPP statutes. One characteristic feature of all anti-SLAPP statutes is that they provide an expedited mechanism whereby a defendant can have a qualifying SLAPP suit dismissed quickly. Continue reading

CFPB Proposal Unconstitutionally Imposes Prior Restraint on Regulated Entities’ Speech

rublin_burt_102_recodelnero_daniel_2Guest Commentary

By Burt M. Rublin, Partner, and Daniel L. Delnero, Associate, Ballard Spahr LLP

Prior restraints on speech are highly disfavored and presumptively unconstitutional. See Tory v. Cochran, 544 U.S. 734, 738 (2005) (“Prior restraints on speech and publication are the most serious and the least tolerable infringement on First Amendment rights.”). Yet the Consumer Financial Protection Bureau (CFPB) proposed exactly that in its Proposed Rule Relating to Disclosure of Records and Information (Proposed Rule), CFPB-2016-0039, 81 Fed. Reg. 58310 (Aug. 24, 2016). CFPB seeks to prohibit the recipient of a civil investigative demand (CID) or letter from the agency providing notice and opportunity to respond and advise (NORA letters) from disclosing the CID or NORA letter to third parties without prior written consent of a high-ranking CFPB official.  In effect, this would constitute a “gag” rule that would stifle constitutionally protected speech.

The proposed gag rule is not only ill-advised as a matter of public policy, it is also unconstitutional both as a prior restraint on speech and a content-based restriction.  It would be subject to strict scrutiny, and the CFPB would have to show a compelling government interest to justify it, which it could not.  Indeed, CFPB has not claimed, nor could it claim, that the absence of a similar gag rule since the creation of CFPB has hindered or impaired its effectiveness.  Continue reading

Federal Judge “SLAPPs” Down Lawsuit Demanding “R” Rating for All Movies Depicting Tobacco Use

ratingsOn November 10, 2016, a California federal judge dismissed a putative class-action lawsuit designed to force the Classifications and Rating Administration (CARA) to give an “R” rating to any film containing tobacco use.  Alleging that around 200,000 young people would start smoking every year after seeing tobacco use in G, PG, and PG-13 rated movies, the plaintiff in Forsyth v. Motion Picture Association of America, Inc. sued the Motion Picture Association of America (MPAA) (CARA is operated as a division of the association), the National Association of Theater Owners, and various major movie studios.  Because injunctive relief alone isn’t enough in most class actions, the complaint also sought $20 million in damages. Continue reading