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The Corporate Takeover of the First Amendment: Eyes on the Bay Area

Ellen P. Goodman
Jun 11, 2015 · 6 min read

Look to the Bay Area for new battles on the commercial speech front. In these fights, you can really see how the conservative movement’s campaign against regulation is deploying the First Amendment. First, there’s the cellphone industry fight against Berkeley’s new requirement that mobile phone vendors warn against cell phone radiation. The warning reads:

“If you carry or use your phone in a pants or shirt pocket or tucked into a bra when the phone is ON and connected to a wireless network, you may exceed the federal guidelines for exposure to RF (radio frequency) radiation.”

One knows this a movement issue by who is representing CTIA, the wireless industry association: Ted Olson, former George W. Bush Solicitor General, famed Supreme Court litigator on the right, and oral advocate for Citizens United. To see him on the brief for a little district court case shows how much potential the movement sees in First Amendment attacks on regulation. If the case progresses, I will not be surprised to see an amicus brief filed by the Washington Legal Foundation, which has been very active in this kind of litigation, especially concerning the regulation of tobacco advertising and labelling.

Some call sugar the new tobacco in terms of its health effects. Enter a proposed bill across the Bay in San Francisco to require vendors of sugary soda and other drinks to warn consumers about the health hazards of consumption.

San Francisco supervisors recently voted unanimously to approve health warnings on ads for sugar-sweetened drinks (defined as drinks with more than 25 calories from sweeteners per 12 ounces — a 12-ounce can of regular Coke contains 140 calories, all from sugar). The ordinance still has to go through another reading at the Board of Supervisors. It would require the warning on print advertising within city limits — billboards, walls, taxis and buses. It would not apply to newspaper ads, or to ads on broadcast outlets or the Internet.

WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.

Beverage companies and vendors have promised to sue if the ordinance is adopted.

In both of these cases, the industry’s argument is that government has “conscripted” industry into relaying messages they do not support and which are not true, and therefore constitute unconstitutionally compelled commercial speech. The constitutional question often turns on what level of scrutiny the court will apply: whether it will treat the labels as “right to know” factual statements like nutrition or as ideological interventions into disputed matters. There’s also the issue of whether the federal government — whether the FCC or the FDA — has preempted the field by deciding not to require these warnings.

The same arguments are progressing in the Grocery Manufacturers Association v. Sorrell in Vermont. At the end of April, a federal district court judge allowed the grocers’ challenge to Vermont’s law requiring GMO labeling to go forward. The court issued a complex decision that gave each side some of what it wanted. The industry didn’t get its injunction, but the court refused to find the labeling law obviously constitutional. The two central provisions of the law — one that prohibits GMO foods from being labeled “natural” and one that requires disclosure of GMO ingredients — will both get more First Amendment scrutiny as the case moves forward.

What’s happening in these cases is that states and localities are stepping in where there’s been federal inaction. Sometimes it’s to protect public health, as in the case of San Francisco and Berkeley. Sometimes it’s to satisfy a broad constituency which includes organic industry advocates as well as consumer advocates. Both San Francisco’s and Berkeley’s efforts at warning against sugar and cell phone radiation respectively come in the face of failures to pass similar labeling laws at the state level. Indeed, Berkeley’s cell phone radiation warning is similar to one that San Francisco adopted and was struck down on free speech grounds.

These cases raise issues about what is factual and noncontroversial information — questions I’ve addressed in my article on tobacco labels. The litigation is part of a growing trend of First Amendment opportunism, whereby business entities for whom expression is only incidental (unlike the press, for example) seek to constitutionalize ordinary economic regulation. Amanda Shanor & Robert Post along with Leslie Kendrick have recently written about it. Tamara Piety has a book chronicling and critiquing ever-increasing protections for commercial communications.

The Chamber of Commerce and Washington Legal Foundation are vigorously advancing this corporate colonization of the First Amendment, with Floyd Abrams and other First Amendment absolutists sometimes abetting the cause. On the other side — an NGO arguing in favor of a more humanistic understanding of free speech protections — is Free Speech for People. It is the sole nonprofit fighting the “corporations are people” expansion of corporate largesse.

Related to the First Amendment issues are questions of federalism and judicial activism. Are we going to let states and localities effectuate their own interests in informing consumers that may be different from the federal interest? This angle may divide think the cell phone radiation from the food labeling cases because of the alignment of state/local and federal interests. When it comes to cell phone radiation, federal regulators (FCC) are interested in the very same thing that the Bay Area regulators care about: health. When it comes to GMO, federal regulators (FDA) are interested in health, but the interests represented by the state include ethical, religious, and environmental concerns that federal regulators disregard.

The issue of sugar warnings falls somewhere in between. Federal regulators are concerned about the obesity epidemic in relation to added sugar. That’s why they’ve proposed this new food label highlighting added sugars.

But the feds have decided not to go farther and connect added sugar to health risks. The fact that San Francisco wants to provide this additional, undoubtedly true information to consumers does indeed burden businesses in its jurisdiction. But does it impermissibly burden their freedom of speech? To think that it does is an entirely new conception of corporate speech liberty that has never been part of First Amendment jurisprudence.

Another issue is what is the court’s role in parsing the meaning of the disclosure as opposed to the legislatures’ role? And which institution should determine whether the information is useful enough to consumers to warrant disclosure?

In a stunning recent draft of an article forthcoming in Constitutional Commentary, John C. Coates, IV analyzes the First Amendment claims that corporations are bringing at an accelerating pace and their success rate (better than 50%). Writing from a corporate law perspective, he considers this trend to be a “corporate takeover of the First Amendment” that injures the economy as well as the integrity of the democracy. When companies use the First Amendment to rid themselves of ordinary economic regulation, they “transfer power to set regulatory policy” from the state to the courts. One may agree or not with the importance or efficacy of a label or disclosure. But what First Amendment opportunism does is take the power to regulate “from ordinary individuals with identities and interests as voters, owners and employees, and transfer [it] to corporate bureaucrats pursuing narrowly framed goals with other people’s money. This is as radical a break from Anglo-American business and legal traditions as one could find in U.S. history.”

Ellen P. Goodman

Written by

Professor of Law, Rutgers University. Information law, free speech, disclosure, media, green marketing

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