November 10th, 2003

Will the Right to Pester Hold Up? The First Amendment Protects Marketers. But Spam May Shift the Equation

By Lorraine Woellert

In the late 1940s, door-to-door salesmen were fanning out across the suburbs, hawking subscriptions to The Saturday Evening Post, Ladies’ Home Journal, and Newsweek to busy homemakers. The scenario of pushy strangers interrupting housewives’ daily routines didn’t sit well with the U.S. Supreme Court. In 1951, it labeled such solicitors "nuisances" and "opportunists" and said that the First Amendment didn’t give companies free rein to invade "the living rights of others to privacy and repose."

More than fifty years later, privacy and commercial speech are again on a collision course. Thanks to technology, today’s salesmen—telemarketers and spammers—are decidedly more invasive, disruptive, and burdensome to the economy. Fierce complaints by the public have state and federal lawmakers racing to stamp out these nuisances. On Oct. 22, for instance, the Senate passed a Do Not Spam Registry 97-0.

INTELLECTUAL SHIFT? But regulators are running into a big problem: Spam, telemarketing, and other forms of advertising are protected by the First Amendment. Since the 1970s, the U.S. Supreme Court has issued a series of landmark decisions that has rolled back restrictions on commercial speech. In September, U.S. District Judge Edward W. Nottingham in Denver, citing those precedents, ruled that the Federal Trade Commission’s wildly popular Do Not Call Registry infringes on corporate First Amendment rights. The 10th Circuit Court of Appeals stayed that decision and has scheduled a hearing on the matter in Tulsa on Nov. 10.

But a change in the intellectual climate may be on the horizon. Many devoted civil libertarians and consumer advocates are starting to question whether contemporary commercial free speech doctrine goes too far. While these types generally believe that information should be allowed to travel without boundaries, new technologies that give individual hucksters the ability to invade millions of people’s home computers and telephones are changing the legal calculation. Even veteran free speech defenders are singing a new tune. Regulations on spam and telemarketing should not be "suffocated by a dogmatic adherence to the idea that truthful information can never cause harm," says Harvard Law School professor Laurence H. Tribe.

BACKLASH. If this view gains support at the Supreme Court, which has a keen interest in First Amendment issues, it could have an enormous impact on all forms of corporate communication. Companies that market risky or potentially dangerous products to consumers—everything from cars to drugs to to mutual funds—could face tighter government regulation of their promotions. All of these industries have benefited from strong commercial free speech rights that give them a wide berth to pitch products to potential customers.

Certainly, the recent backlash against spam and telemarketing represents an intellectual sea change. For years, civil libertarians and consumer rights attorneys have advocated increasing First Amendment protection for business. They cheered the Supreme Court’s activism in the area because its rulings largely targeted paternalistic state laws that, among other things, prevented lawyers from advertising and protected drug companies from competition. In the 1976 case Virginia State Board of Pharmacy vs. Virginia Citizens Consumer Council Inc., the high court struck down a law that barred pharmacists from advertising the price of prescription drugs. "Both the individual consumer and society in general may have strong interests in the free flow of commercial information," wrote Justice Harry A. Blackmun.

The hurdle to regulating commercial speech was set even higher in the 1980 ruling Central Hudson Gas & Electric Corp. vs. Public Service Commission of New York. As long as an advertisement is truthful, the Supreme Court held, lawmakers need to prove that any restriction advances a critical goal, that there are no alternatives to the proposed law, and that the restriction is drafted as narrowly as possible. The Central Hudson case has been used by the Supreme Court and lower courts to strike down a wide variety of regulations. In 1996, for instance, when Rhode Island tried to combat alcoholism by limiting liquor store ads, the Supreme Court tossed out the law, saying the state could advocate temperance through other means, such as public education.

But consumer advocates fret that if courts continue to loosen restrictions on commercial advertising, the American public will lose. Unlike previous cases, the First Amendment now is butting up against another cherished right—privacy. "U.S. doctrine is way out of balance," says Georgetown University law professor Lawrence O. Gostin. "If a corporation is merely trying to get a consumer to buy its product, the idea that that has the same value as social, political, and artistic discourse has no ethical justification."

OPEN FORUM. Telemarketers respond that the government has no business deciding what information is valuable. Pointing to Central Hudson, they say there are better ways to assure privacy than a blanket ban on commercial calls. Industry executives say Do Not Call legislation has been driven by populist politics instead of reasoned policymaking, and regulators have undervalued the economic role of advertising. In the end, efforts to ban marketing will cost jobs and raise prices. "A trend toward less information doesn’t help consumers," says Glen Lammi, general counsel of the Washington Legal Foundation.

Whatever the 10th Circuit rules on Do Not Call, both sides think the issue has a good chance of landing in the Supreme Court. At the moment, the most committed commercial free speech hawks are Justices Antonin Scalia and Clarence Thomas. Like a growing number of conservative legal philosophers, they put commercial speech on a par with political speech. This camp believes that an open forum of ideas is essential for democracy and the marketplace, especially in today’s information economy.

That view prevailed last year in a 5-4 Supreme Court vote that voided a Food & Drug Administration rule banning pharmacies from advertising services to mix prescription drug compounds to suit patients’ specific needs. The agency worried that the potions were not approved by regulators and could accidentally harm patients. The ruling was derided by many health advocates. Justice Stephen G. Breyer wrote on behalf of the minority that "the Court seriously undervalues the importance of the government’s interest in protecting the health and safety of the American public." Will spam and telemarketing be the issues that push this view into the majority? Many legal experts bet that the answer is yes.

Sidebar: Why Spam Has Constitutional Rights

Over the past 25 years, the U.S. Supreme Court has made it harder to regulate commercial speech. Here are the key cases:

1975: Bigelow vs. Virginia: Commercial speech is protected for the first time when a state ban on ads for abortion referrals is overturned. Commercial speech “is not valueless in the marketplace of ideas,” says the court.

1976: Virginia State Board of Pharmacy vs. Virginia Citizens Consumer Council Inc.: The court allows pharmacists to advertise prices of prescription drugs, noting that consumers may have a “strong interest” in the free flow of commercial information.

1980: Central Hudson Gas & Electric Corp. vs. Public Service Commission of New York: Commercial speech is broadly protected if it is not misleading.

1996: 44 Liquormart Inc. vs. Rhode Island: The court overturns a state law banning ads with liquor prices, saying the public interest in limiting alcohol consumption can be achieved without impairing speech.

2002: Tommy G. Thompson, U.S. Secretary of Health & Human Services vs. Western States Medical Center: Justices reject an FDA rule that bans pharmacists from advertising some custom drug compounds. “Regulating speech must be a last – not first – resort.”


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