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January/ February 2014 The Corporate “Free Speech” Racket

How corporations are using the First Amendment to destroy government regulation.

By Haley Sweetland Edwards

The mother of all corporate First Amendment cases is, of course, Citizens United, in which the Supreme Court held in 2010 that any law constraining corporate political expenditures was a violation of companies’ rights to free speech. But it neither began nor ended there. Just a year after that precedent-contorting decision, the Supremes scrapped a Vermont state law on similar grounds. The law restricted data miners from selling pharmacy records to pharmaceutical companies, which were, in turn, using that data to target certain doctors for their sales pitches. The Vermont law was designed to protect doctors’ privacy and control health care costs, but the Court decided those weren’t compelling enough state interests to warrant violating the companies’ First Amendment-protected commercial speech. It was one of those decisions, a constitutional law professor told me, that was “like getting whacked by a two-by-four: what the hell? Where did that come from?”

There have been dozens more cases like it. Over the past few years, corporations like Nike, Verizon, Google, and the big credit ratings agencies like S&P and Moody’s have been crafting innovative new First Amendment defenses to parry all sorts of “government intrusions,” from antitrust suits to false advertising. Last summer, the U.S. Chamber of Commerce attacked two new Securities and Exchange Commission rules mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act that required publicly traded international corporations, including Exxon and Chevron, to disclose certain information to the public (such as how much they were paying host countries for their extraction rights). Forcing those companies to speak, the Chamber argued, was a violation of their First Amendment-protected commercial speech. The Chamber and Business Roundtable have appealed one of those cases to the D.C. Court of Appeals, which will hear it this month.

The same court will also hear another case this month from the American Meat Institute, representing behemoth meat-packers like Tyson and Cargill, which is taking a similar tack in an attempt to kill a Department of Agriculture rule mandated by consumer protection requirements in the 2002 Farm Bill. It requires meat-packers to label their products indicating in what country the animal, or animals, in their meat had been born, raised, and slaughtered. Forcing companies to use those labels, the meat-packers say, is equivalent to making them engage in speech they would not otherwise issue and is therefore a violation of their First Amendment-protected commercial speech.

While none of these cases is by itself a game changer, the collective weight of all of them—combined with sweeping decisions, like the one in the recent NLRB case—is enough to begin to bend legal precedent in favor of industry. Frederick Schauer, who was a First Amendment scholar at Harvard for nearly two decades and is now a professor of law at the University of Virginia School of Law, coined the term “First Amendment opportunism” more than a decade ago to describe precisely this trend. “It used to be that if a lawyer claimed free speech in most of the cases we’re seeing now, the judge would have looked at him and said, ‘Counselor, you can’t be serious,’‚ÄČ” Schauer told me. “But now you see them being taken seriously. That’s a very big battle they’ve already won.”

And if industry goes on to win the war—if they collect a body of First Amendment case law establishing that corporations’ First Amendment-protected speech cannot reasonably be fettered by economic regulation—our society will be in a world of hurt. There will be no corporate transparency whatsoever. No way to enforce workers’ rights. No way to compel companies to protect investors or shareholders. And all regulations that require corporate disclosure, including most financial regulations, will cease to exist in any meaningful way.

And if you don’t believe me, how about the late William Rehnquist? After the Supreme Court first granted that commercial speech considerations can trump state law in the 1970s, the famously conservative Supreme Court justice described a similar vision in his dissent, recalling, with a shudder, the “bygone era of Lochner v. New York.” Named for a case in which the Supreme Court overturned a law limiting the number of hours bakers could be forced to work, the Lochner Era describes a period from the Gilded Age to the Great Depression characterized by unchecked corporate power, untouchable monopolists, very few worker or consumer rights, rampant environmental degradation, and extreme inequality.

One of the primary reasons those social conditions persisted for so long was because of a fiercely libertarian intellectual culture in many federal courts at the time, and especially the U.S. Supreme Court, which, during a fifty-year period, struck down all or part of more than 200 state and federal laws, including those outlawing child labor, banning sweatshops, and establishing a minimum wage and fair working hours. In the Lochner Era, big industry groups and their allies on the Court wielded the notion of “freedom of contract”—any regulation that abridged it was chucked. Today, the notion of “freedom of speech” is being used virtually the same way, just as Rehnquist worried it might be. Any rule or law that abridges a company’s claims to First Amendment-protected speech is now vulnerable to attack.

Many members of the younger, more radical generation of conservative lawyers and judges now working in the lower federal courts and the U.S. Supreme Court dismiss their conservative forebears’ calls for judicial restraint; Rehnquist’s quaint worries are seen as outmoded by conservative activists today. They instead regard the First Amendment as one of the most powerful weapons in the battle to achieve “economic liberty.” And they are joined in their efforts by a cadre of eminent liberals who, having made their name in the 1970s arguing for the inviolability of the First Amendment under any circumstances, have been unwilling to unpack the flawed logic that got us here to begin with, and are now defending industry’s claims to free speech, lending both credibility and respectability to an argument powerful enough to dismantle the entire regulatory state.

The First Amendment dictates that “Congress shall make no law … abridging the freedom of speech.” It makes no mention of corporations, commercial transactions, or advertising, but nor does it name dissidents, or anarchists, or seditious radicals of any stripe, and for a long time, justices, judges, lawyers, and jurists were more or less in agreement that the First Amendment didn’t protect any of those things. In fact, it wasn’t until about eighty years ago that liberal judges and justices like Oliver Wendell Holmes and Louis Brandeis began, in isolated cases, to use the broad language of “free speech” to protect religious minorities and marginalized groups like Jehovah’s Witnesses and labor rights activists.

Haley Sweetland Edwards is an editor of the Washington Monthly.

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