Should ads be protected speech?

[Gary Ruskin]

Commercial Alert			July 3, 2001

Below are two articles on commercial speech issues, 
following the U.S. Supreme Court ruling in Lorillard Tobacco Co. v.
Reilly.

>From today's Wall Street Journal: 

http://interactive.wsj.com/archive/retrieve.cgi?id=SB994110828939005085.djm

More Courts Grant Advertisements Protection Under First Amendment
By Robert S. Greenberger 

Should a company have as much right to free speech about its products as
people have to air their political views?

The courts' longtime answer has been no. Even though the First Amendment
bars laws "abridging the freedom of speech," the courts have deemed
advertising to be an exception. That distinction has allowed government
at all levels to impose consumer-protection rules on advertisers, such
as the ubiquitous health warnings on cigarette ads.

But a growing number of cases are challenging that concept. The latest
example is last week's Supreme Court ruling striking down a tough
Massachusetts law restricting tobacco advertising, including a ban on
ads within 1,000 feet of schools and children's facilities. The high
court said that laws regulating cigarette advertising were pre-empted by
the Federal Cigarette Labeling and Advertising Act. But the justices
said Massachusetts' limits on advertising of smokeless tobacco and
cigars violated the companies' First Amendment rights, on the grounds
that the state failed to prove that its regulations were "not more
extensive than necessary to advance the state's substantial interest in
preventing underage tobacco use."

Free-speech advocates see great significance in the decision. "Future
advertising restrictions can be expected to receive similar skeptical
treatment," says David Remes, a First Amendment lawyer who worked on the
case on the industry's side.

No one expects advertising to achieve the same constitutional protection
that individuals have to free speech. But courts around the nation are
narrowing the gap.

For instance, California's top appeals court last year ruled that a Nike
ad campaign in which the company denied using sweatshop labor has First
Amendment protection; an individual sued Nike for false advertising
under a state statute. The court said that consumers are entitled to
"access to the free flow of information and ideas both for purposes of
political decision-making in a democracy -- the traditional 'core' of
the First Amendment -- and for private decisions significant to the
conduct of life." The case is currently on appeal before Calif. Supreme
Court.

And the U.S. Court of Appeals in New York in 1998 struck down the New
York State Liquor Authority's decision to ban certain labels of Bad Frog
beer. The labels featured a frog with its middle finger extended and the
slogan "an amphibian with attitude." The appeals court rejected the
liquor authority's argument that it needed to shield children from
viewing the labels.

Such decisions reflect ongoing debate at the nation's top court, which
has struggled for decades over how much protection the Constitution
gives to commercial speech. One benchmark case in 1976 involved a
Virginia law that banned pharmacists from advertising prescription-drug
prices. The U.S. Supreme Court overturned the law, saying that
professional groups may set standards, but "may not do so by keeping the
public in ignorance of the lawful terms that competing pharmacists are
offering."

The ruling paved the way for retailers to advertise their prices for
prescription drugs; drug manufacturers rarely advertise based on price,
but the ruling allows them to do so also. When the case was argued
before the high court, Justice Byron White quipped to an attorney
opposing the ban: "I suppose your next case will involve lawyers." There
was laughter in the court. But the justices overturned rules barring
attorney ads the following year.

The pace of change began to accelerate about six years ago, as so-called
vice businesses -- liquor, gambling and tobacco -- rebelled against laws
curbing their ads on moral or health-related grounds. The high court's
rulings in these cases struck at the heart of the government's
longstanding argument that the public needs protection from products
deemed to be harmful or sinful. The justices countered that such rules
were overly broad and that the public didn't need such protection as
long as the advertising was truthful and not deceptive.

In 1995, the court rejected Bureau of Alcohol, Tobacco and Firearms
regulations that barred listing alcohol content on beer labels. The
government maintained such rules were necessary to prevent "strength
wars" among brewers. But the high court said the regulations violated
the First Amendment's protection of commercial speech.

In 1996, the court found unconstitutional Rhode Island's law restricting
liquor-price ads anywhere other than in the store where the liquor was
sold. The justices rejected the state's contention that its law helped
promote temperance. The law failed the "rigorous review" that the First
Amendment demands before such restrictions on commercial speech could be
declared constitutional, the court said.

Similarly, the court held in 1999 that broadcast ads by lawful private
gambling casinos couldn't be banned under a Federal Communications
Commission regulation. "The speaker and the audience, not the
government, should be left to assess the value of accurate and
nonmisleading information about lawful conduct," the court wrote.

The commercial-speech concept has also affected FDA regulations of
vitamin supplements. In 1994, Durk Pearson and Sandy Shaw, a married
couple who advocate and sell vitamin supplements, sought permission to
label three products with claims that they "may reduce the risk" of
certain maladies: antioxidants for some cancers, fiber for colorectal
cancer and omega-3 fatty acids for coronary heart disease. They also
wanted to promote a fourth supplement, 0.8 milligrams folic acid pills,
as being "more effective in reducing the risk of neural tube [birth]
defects than a lower amount in foods in common form."

When the FDA rejected all four claims, the couple filed suit claiming
their First Amendment rights were being violated.

The result was a landmark ruling in the broader fight that long has
pitted the $15 billion-a-year supplement industry against the FDA. The
FDA won the first round, in U.S. District Court for the District of
Columbia. But Mr. Pearson and Ms. Shaw triumphed in the U.S. Court of
Appeals. The FDA has said that supplement claims needed to be backed up
by "significant scientific agreement," an argument the court criticized
as "almost frivolous" because science is always changing, and it is
difficult to be absolute. It ordered the FDA to consider adding
mandatory disclaimers, such as, "The FDA does not approve this claim."
The victory allows other dietary-supplement makers who use the same
ingredients as Mr. Pearson and Ms. Shaw to make the same health claims,
an FDA spokeswoman says.

And the nation's top court is expected to continue to move towards
further protection of commercial speech. So far, the Court doesn't yet
have any other significant commercial-speech cases on its docket for
next year. But experts say more significant change is inevitable. "To
the extent commercial speech becomes assimilated into traditional
political speech, it could become a potent engine for government
deregulation," says Burt Neuborne, a New York University law professor.

<----article ends here---->

Following is an article in today's New York Times.

http://www.nytimes.com/2001/07/03/business/03ADCO.html?pagewanted=print

Advertising: Competing Views on Tobacco Ruling

By STUART ELLIOTT

A ruling by the Supreme Court that overturned efforts by Massachusetts
to restrict tobacco advertising is being hailed by the trade
associations that represent agencies and major marketers, which have
long pressed to have commercial speech more fully protected under the
First Amendment.

Others, however, are wondering whether the implications of the decision,
made on Thursday, are as far- reaching as they are being portrayed.

Among advocates of giving commercial speech complete First Amendment
protection, "it's fair to say this is not the broad, sweeping decision
people are waiting for," said Jeff Edelstein, a partner who specializes
in advertising law at Hall, Dickler, Kent, Goldstein & Wood, a law firm
in New York.

"The decision will make it more difficult for states and localities to
enact regulations to curtail advertising by the tobacco companies," he
added, "but the court is providing First Amendment protection for
commercial speech at a lesser level than noncommercial speech."

* 

  The ruling affects regulations in Massachusetts that are aimed at
sharply curtailing the advertising of cigarettes, cigars and smokeless
tobacco to discourage children from using those products. For instance,
the regulations, which never took effect, sought to ban billboards and
signs within 1,000 feet of schools or parks and to require signs in
stores to be at least five feet above the floor so they would not be
easily noticed by children.

The regulations, which were challenged by the tobacco industry,
represented an effort "to ‘childproof' the flow of information in our
society," said Daniel L. Jaffe, executive vice president at the
advertiser trade organization, the Association of National Advertisers,
based in Washington.

"Children deserve to be protected from inappropriate or harmful
material," he added, "but the government may not use the guise of
protecting children to impose sweeping restrictions on information
intended for adults."

The decision "sends a very clear signal to government officials at all
levels that broad advertising censorship will not be tolerated," Mr.
Jaffe said. "At a time when advertising is under attack in so many
arenas, this decision is very welcome."

In February, the advertiser association filed a supporting brief with
the Supreme Court, urging that the Massachusetts regulations be
overturned.

The agency organization, the American Association of Advertising
Agencies, filed a similar brief with the court in the same month.

The ruling was "enormously reassuring" because "First Amendment
protection for advertising is critical to us," said Dick O'Brien,
executive vice president for government relations at the agency
association, who is also the head of its Washington office.

"It bodes well for advertising," he added, "and our industry."

The decision caused some concern because it came in a case involving
tobacco advertising.

While the trade organizations remain stalwart in supporting the rights
of tobacco marketers to sell legal products to adults, many members of
the agency association have become increasingly outspoken in urging that
the health implications of smoking be considered in addition to the
First Amendment issues.

"There are those who feel it's important to promote the First Amendment
rights regardless of the product," Mr. Edelstein said, "and others who
are concerned about the health problems and feel that should enter into
this."

*

All nine Supreme Court justices agreed that the use of tobacco products
by those under legal age constitutes a serious public health problem
that government can properly address.

"But even with the harmful health aspects of smoking, the court
recognizes the companies have the right to advertise, and adults have
the right to get that information," said Jeff Greenbaum, a partner who
specializes in advertising law at Frankfurt, Garbus, Kurnit, Klein &
Selz in New York.

Mr. Greenbaum continued: "Even with the difficult context, the court
said, `We're going to look to see if government is doing more than it
needs to do' " in restricting commercial speech.

"It's a very, very positive decision for the advertising community
because it holds the states to proving that they're doing what they need
to and not more," he said.

Mr. O'Brien of the agency association agreed.

"Even in this most controversial of cases and categories, at the end of
the day, the First Amendment trumps everything," Mr. O'Brien said. "It's
good to have that."

Not surprisingly, the nation's largest tobacco marketer, the Philip
Morris U.S.A. division of the Philip Morris Companies, welcomed the
Supreme Court's decision.

The company's opposition to the Massachusetts regulations "had nothing
to do with youth smoking and everything to do with our ability to
communicate truthful information to adult smokers" like "cigarette
price, brand availability and average tar and nicotine yields," William
S. Ohlemeyer, vice president and associate general counsel at Philip
Morris U.S.A. in New York, said in a statement.

The American Cancer Society in Washington disputed that point of view,
along with the ruling.

"Placing cigarette advertisements near schools and playgrounds is no
accident," the organization, which filed a brief supporting the
Massachusetts regulations, said in a statement. "To the tobacco
industry, today's kid is tomorrow's customer."

<-------article ends here-------->

FOR MORE INFORMATION:
The Supreme Court ruling in Lorillard Tobacco Co. v. Reilly is available
at:
<http://a257.g.akamaitech.net/7/257/2422/28june20011130/www.supremecourtus.gov/opinions/00pdf/00-596.pdf>


Ralph Nader founded Commercial Alert in 1998 to keep the commercial
culture within its proper sphere, and to prevent it from exploiting
children and subverting the higher values of family, community,
environmental integrity and democracy. 

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Gary Ruskin | gary@essential.org 
Commercial Alert | Congressional Accountability Project
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