Instant Analysis: Sorrell v. IMS Health

June 23rd, 2011

In this post I will provide an Instant (not quite as Instant as usual, but hey, I was on a plane) Analysis of Sorrell v. IMS Health. I already blogged about the invocation of Lochner by Breyer and Kennedy.

Justice Kennedy’s Majority Opinion

After explaining commercial speech doctrine, Kennedy finds heightened scrutiny applies.

Act 80 is designed to impose a specific, content-based burden on protected expression. It follows that heightened judicial scrutiny is warranted.

Justice Breyer’s Dissent

Justice Breyer does not view this as a pure free speech issue. Rather he views it as a regulation on a commercial interest. Unsurprisingly, this continues the Citizens United meme about what kind of constitutional rights corporate entities can have.

In my view, this effect on expression is inextricably related to a lawful governmental effort to regulate a commercial enterprise. The First Amendment does not require courts to apply a special “heightened” standard of review when reviewing such an effort. And, in any event, the statute meets the First Amendment standard this Court has previously applied when the government seeks to regulate commercial speech. For any or all of these reasons, the Court should uphold the statute as constitutional.

Breyer views this is a simple balancing test (how else?) where the interests of the regulatory state win (how else?).

In this case I would ask whether Vermont’s regulatory provisions work harm to First Amendment interests that is disproportionate to their furtherance of legitimate regu- latory objectives. And in doing so, I would give significant weight to legitimate commercial regulatory objectives—as this Court did in Glickman. The far stricter, specially “heightened” First Amendment standards that the major- ity would apply to this instance of commercial regulation are out of place here.

And, in language evoking his opinion in Heller, Breyer speaks about “core” First Amendment rights.

Thus, the First Amendment imposes tight constraints upon government efforts to restrict, e.g., “core” political speech, while imposing looser constraints when the government seeks to restrict, e.g., commercial speech, the speech of its own employees, or the regulation-related speech of a firm subject to a traditional regulatory pro- gram.

The other day I blogged about Justice Scalia’s curious invocation of the word “core” to describe certain types of rights. Now, this makes more sense. I think this may be a new distinction. Core rights get protection. Penumbral rights get less protection.
After reciting the standards for intermediate scrutiny for commercial speech under Central Hudson, Breyer noted that “the Court has also normally applied a yet more lenient approach to ordinary commercial or regulatory legislation that affects speech in less direct ways.” Breyer proceeds in a paen to judicial deference, with specific refernces to the Due Process and Commerce Clause (I wonder why he would mention that???):

The Court has also normally applied a yet more lenient approach to ordinary commercial or regulatory legislation that affects speech in less direct ways. See Glickman, supra, at 475–476. “Our function” in such cases, Justice Brandeis said, “is only to determine the reasonableness of the legislature’s belief in the existence of evils and in the effectiveness of the remedy provided.”

Then, Breyer cites Lee Optical and Carolene Products, the apogee of judicial deference!

Williamson v. Lee Optical of Okla., Inc., 348 U. S. 483, 488 (1955) (“It is enough that there is an evil at hand for correction, and that it might be thought that the particular legisla- tive measure was a rational way to correct it”); United States v. Carolene Products Co., 304 U.S. 144, 152 (1938) (“[R]egulatory legislation affecting ordinary commercial transactions is not to be pronounced unconstitutional” if it rests “upon some rational basis within the knowledge and experience of the legislators”).

I would caution Justice Breyer to consider the entirety of Carolene Products FN 4, including the part about protecting enumerated rights—hint hint, second amendment.

Justice Breyer thinks applying a regular First Amendment analysis of an economic regulation violates with this “constitutional approach.”

To apply a strict First Amendment standard virtually as a matter of course when a court reviews ordinary economic regulatory programs (even if that program has a modest impact upon a firm’s ability to shape a commercial mes- sage) would work at cross-purposes with this more basic constitutional approach.

And by this “constitutional approach,” he means the jurisprudence of maximized deference—a position in which he is in the minority (at least on this issue, I think).

Breyer notes that this approach will empower judges to make legislative determinations (I’ll blog more about how Breyer loves making these decisions for other rights he appreciates, see Carhart).

Since ordinary regulatory pro- grams can affect speech, particularly commercial speech, in myriad ways, to apply a “heightened” First Amendment standard of review whenever such a program burdens speech would transfer from legislatures to judges the primary power to weigh ends and to choose means, threat- ening to distort or undermine legitimate legislative ob- jectives.

And, in the Godwin’s Law of legal debate, Justice Breyer invokes, drom-roll please (!), Lochner!

To apply a “heightened” standard of review in such cases as a matter of course would risk what then-Justice Rehnquist, dissenting in Central Hudson, described as a
“retur[n] to the bygone era of Lochner v. New York, 198 U. S. 45 (1905), in which it was common practice for this Court to strike down economic regulations adopted by a State based on the Court’s own notions of the most appropriate means for the State to imple- ment its considered policies.” 447 U. S., at 589.

Rehnquist’s admonition is wrong as a historical and legal matter (see Bernstein’s book), but Breyer’s invocation of Lochner here is nothing more than a bogeyman to alarm people.

Breyer proceeds to list a number of reasons why heightened scrutiny should not apply here.

For one thing, Ver- mont’s statute neither forbids nor requires anyone to say anything, to engage in any form of symbolic speech, or to endorse any particular point of view, whether ideological or related to the sale of a product. . . . For another thing, the same First Amendment stan- dards that apply to Vermont here would apply to similar regulatory actions taken by other States or by the Federal Government acting, for example, through Food and Drug Administration (FDA) regulation. . . . . Further, the statute’s requirements form part of a tra- ditional, comprehensive regulatory regime. . . . Finally, Vermont’s statute is directed toward informa- tion that exists only by virtue of government regulation. Under federal law, certain drugs can be dispensed only by a pharmacist operating under the orders of a medical practitioner.

Breyer’s major concern seems to be impeding regulatory means. This does not make him happy.

If the Court means to create constitutional barriers to regulatory rules that might affect the content of a com- mercial message, it has embarked upon an unprecedented task—a task that threatens significant judicial interfer- ence with widely accepted regulatory activity.

His opinion has a real New Deal tone to it. In addition to the invocations of Carolene Products and Lochner, Breyer cites a message to Congress from FDR in 1937.

Any statutory initiative stems from a legislative agenda. See, e.g., Message to Congress, May 24, 1937, H. R. Doc. No. 255, 75th Cong., 1st Sess., 4 (request from President Franklin Roosevelt for legislation to ease the plight of factory workers).

His view of the First Amendment is purely Holmesian—the value of free speech is not because of some innate liberty or freedom of expression, but rather it exists to enable the operation of the state and the marketplace of ideas.

In short, the case law in this area reflects the need to ensure that the First Amendment protects the “market- place of ideas,” thereby facilitating the democratic creation of sound government policies without improperly hamper- ing the ability of government to introduce an agenda, to implement its policies, and to favor them to the exclusion of contrary policies. To apply “heightened” scrutiny when the regulation of commercial activities (which often in- volve speech) is at issue is unnecessarily to undercut the latter constitutional goal. The majority’s view of this case presents that risk.

Again, Breyer invokes Lochner, and makes a reference to Holmes quip about Herbert Spencer’s social statics.

Moreover, given the sheer quantity of regulatory initia- tives that touch upon commercial messages, the Court’s vision of its reviewing task threatens to return us to a happily bygone era when judges scrutinized legislation for its interference with economic liberty. History shows that the power was much abused and resulted in the constitu- tionalization of economic theories preferred by individual jurists. See Lochner v. New York, 198 U. S. 45, 75–76 (1905) (Holmes, J., dissenting). By inviting courts to scrutinize whether a State’s legitimate regulatory inter- ests can be achieved in less restrictive ways whenever they touch (even indirectly) upon commercial speech, today’s majority risks repeating the mistakes of the past in a manner not anticipated by our precedents.

The irony, of course is that Holmes, and Breyer (by extension) are much closer to Spencer’s views about the unchecked ability of majorities to rule in certain spheres (see Bernstein’s book).

In a throw-away paragraph, Breyer notes that the Court doesn’t merely rubberstamp economic regulations that have an impact on speech—no the Court applies a rational basis test (what’s the difference?).

This does not mean that economic regulation having some effect on speech is always lawful. Courts typically review the lawfulness of statutes for rationality and of regulations (if federal) to make certain they are not “arbi- trary, capricious, [or] an abuse of discretion.” 5 U. S. C. §706(2)(A). And our valuable free-speech tradition may play an important role in such review. But courts do not normally view these matters as requiring “heightened” First Amendment scrutiny—and particularly not the un- forgiving brand of “intermediate” scrutiny employed by the majority. Because the imposition of “heightened” scrutiny in such instances would significantly change the legislative/judicial balance, in a way that would signifi- cantly weaken the legislature’s authority to regulate commerce and industry, I would not apply a “heightened” First Amendment standard of review in this case.

Just for good measure, Justice Breyer cites Lochner a third time (it must be like clicking your heels, except instead of returning to Kansas, you return to a bakery in New York in 1905).

At best the Court opens a Pandora’s Box of First Amendment challenges to many ordinary regulatory practices that may only incidentally affect a commercial message. See, e.g., supra, at 7–8, 9–11. At worst, it re- awakens Lochner’s pre-New Deal threat of substituting judicial for democratic decisionmaking where ordinary economic regulation is at issue. See Central Hudson, 447 U. S., at 589 (Rehnquist, J., dissenting).

This opinion will continue the debate over rights of corporations began in Citizens United, and by proxy continued in Iqbal and Wal-Mart v. Dukes.