Balkinization: The Supreme Court Avoids a Broad Ruling on Free Speech in Expressions Hair Design

The Supreme Court Avoids a Broad Ruling on Free Speech in Expressions Hair Design

Guest Blogger

Cortelyou Kenney and Amy Kapczynski

On Wednesday, the U.S. Supreme Court ruled that the manner in which a New York law prohibits merchants from imposing credit card surcharges amounts to a regulation of their speech. The Court sidestepped, however, the thorny issue of the legal standard by which that regulation of speech should be judged. It returned the case to the Second Circuit Court of Appeals to determine in the first instance whether the law violates the First Amendment, an issue with potentially far-reaching implications for the regulation of economic activity.

The case was closely watched, in particular by those concerned with the integrity of the regulatory state. Historically, First Amendment law has sharply distinguished between types of speech, for example providing strong protection for political speech, but far less protection for commercial speech. (Politicians can lie with immunity, but firms can be subject to laws forbidding fraud and deception.) First Amendment doctrine also has long given a wide berth to regulations that protect health and consumers. The Food and Drug Administration’s authority to regulate the safety and efficacy of drugs, for example, hinges on regulation of manufacturers’ speech. Companies are only allowed to promote drug products if they first prove that the drugs are safe and efficacious. This requirement protects patients and ensures that high quality information is produced about medicines. And though it implicates speech, it has never been considered to be in tension with the First Amendment.

Recent First Amendment cases have begun to threaten core FDA powers such as these. Concerned that the credit card surcharge case would take us further down that road, consumer protection and health law scholars, represented by the Collaboration for Research Integrity and Transparency (CRIT) and the Abrams Institute for Freedom of Expression at Yale Law School, filed an amicus brief in December arguing that an expansive ruling characterizing the price-setting behavior regulated by the New York law as “speech,” rather than “conduct,” could call into question the validity of many public health and consumer protection laws like these. And if the law does restrict speech, the brief argued, it is an acceptable form of consumer-protecting speech regulation akin to product labeling requirements and other mandatory disclosures.

The New York law challenged in the case provides that “[n]o seller in any sales transaction may impose a surcharge on a holder who elects to use a credit card in lieu of payment by cash….” The Court’s ruling addressed the specific question of whether this law regulates the speech or the conduct of a merchant who posted a single cash price and an additional credit card surcharge.

The Court’s opinion leaves for another day the proper standard by which the law’s impact on speech should be judged. It holds only that the law, as applied, does regulate a merchant’s speech. Even in making this narrow holding, the Court took care not to expand the category of “speech” subject to First Amendment scrutiny beyond existing Supreme Court precedent. Indeed, both the opinion for the Court by Chief Justice Roberts and, more prominently, a concurrence by Justice Breyer, rely substantially on the arguments distinguishing “speech” from “conduct” that were advanced in the scholars’ brief. The opinion does not move the law in any significant way.

First, the Court was careful to note that not all laws regulating the communication of information are subject to First Amendment scrutiny, preserving the “speech” and “conduct” distinction. The Court cites with approval its early ruling in Giboney v. Empire Storage v. Ice Co., 336 U.S.490 (1949), which held that laws regulating “a course of conduct” that is “initiated, evidenced, or carried out by means of language” are not subject to First Amendment scrutiny, despite their incidental impact on speech. In the FDA context, this should mean that the First Amendment imposes no limit on the agency’s ability to require a drug manufacturer that markets its product as, say, a “cancer cure,” to test the product for safety and efficacy before it is marketed. It also suggests that the FDA can indeed regulate “off label” marketing, namely marketing for unapproved uses, notwithstanding that the manufacturer’s speech is the “evidence” of such conduct.

Second, because the merchant’s dropped their facial challenge to the New York law and only pursued an “as applied” challenge, the Court analyzed the statute only with regard to the specific behavior the petitioners sought to pursue—stating that their price for products was X plus Y for a credit surcharge. Under an existing line of cases, the Court found the New York law, as applied to this situation, operated to regulate the merchant’s speech communicating prices to consumers. Again, the Court constrained the reach of its holding, and declined to consider other forms of pricing behavior possibly regulated by the statute.

Third, the Court remanded the case back to the Court of Appeals for the Second Circuit for a determination of what level of protection the First Amendment accords to the merchant’s speech in this case. Some speech receives minimal protection, as in the advertising context, where government regulations of almost every flavor mediate how merchants and manufacturers interact with consumers. For example, the FDA has strict requirements regulating what companies can say about drugs, but these are constitutionally unproblematic because they help ensure consumers are well informed. The New York law here may well be viewed similarly on remand if the Second Circuit views the statute as a consumer protection statute, requiring merchants to include any credit card charges in their stated base price.

Fourth, and perhaps most interestingly, Justice Breyer’s concurrence picks up a theme from CRIT’s brief: the ubiquity of “speech.” Justice Breyer reasoned that all economic regulations necessarily regulate “speech” to some extent, so that whether a law regulates “speech” or “conduct” is not the relevant question. Instead, the question to ask is whether the subject regulated by the law implicates First Amendment protections for the content of speech. For example, under Justice Breyer’s approach, core “political” speech or activity should receive the highest level of protection, while commercial activity should receive a lesser level. Justice Breyer seems to anticipate a move towards the “speech-ification” of all laws, and seeks to guard against further encroachments of the judiciary into policy decisions properly let to the political branches.

Cortelyou Kenney is a Research Scholar in Law and Staff Attorney at Yale Law School and the Collaboration for Research Integrity and Transparency (CRIT). You can reach her by e-mail at cortelyou.kenney at yale.edu

Amy Kapczynski is a Professor of Law at Yale Law School and a faculty director of the Collaboration for Research Integrity and Transparency (CRIT) and the Global Health Justice Partnership (GHJP). You can reach her by e-mail at amy.kapczynski at yale.edu

Crossposted at CRITical Thinking, a blog by the Collaboration for Research Integrity and Transparency at Yale, and Case Disclosed, a blog by the Media Freedom & Information Access Clinic at Yale Law School.

Posted 3:49 PM by Guest Blogger [link]