Arguing Against the Regulation of Truthful, Non-Misleading Corporate Speech
This case, in which NELF has filed an amicus brief supporting the business’s Petition for Certiorari, deals with the First Amendment’s protection of speech concerning an industry’s economic activity--an issue that follows from the Court’s recent decision in Sorrell v. IMS Health, in which NELF filed an amicus brief on the merits. IMS Health was an important victory for so-called “commercial speech.” In IMS Health the Supreme Court invalidated, under the First Amendment, a Vermont statute prohibiting pharmacies from selling factual data to pharmaceutical marketers about doctors’ prescribing practices (data that revealed nothing confidential).
At issue in this case is a Department of Transportation (“DOT”) regulation whose stated purpose is to protect consumers from confusion about the total price of airfares. On that basis, the regulation requires that airlines display prominently the total price that a consumer must pay for an airline ticket. That part of the regulation is not objectionable to NELF because it serves the government’s legitimate purpose of protecting consumers. However, the regulation does not stop there and aggressively regulates the manner in which airlines may advertise their competitive base fares and the substantial, applicable federal taxes and fees—i.e., the component prices that comprise the total price. These component prices are not, according to DOT’s own findings, the source of any consumer confusion. Therefore, DOT lacks a constitutional basis to regulate their manner of expression. In particular, the regulation requires that, if the airline wants to list separately these component prices (the base fare and government charges), they may only do so literally “in fine print,” in “significantly smaller type” than the total price, and in a less prominent position in the advertisement. DOT even specifies that the “[t]he break-out of charges should not have special highlighting that sets it apart and makes it more prominent than the total price (e.g., bold font, underlined, or italicized).”
A few airlines challenged this regulation on First Amendment grounds, arguing primarily that the regulation must fail under strict scrutiny because, in obscuring the government’s “cut” of the total price, the rule restricts core political speech that is critical of government. By a vote of two-to-one, a split panel in the D.C. Circuit found that the regulation passed First Amendment muster, but there was a strongly worded dissent from the Chief Judge agreeing with the airlines; the airlines are now seeking certiorari from the Supreme Court.
NELF’s amicus brief in support of the airlines argued that this case neatly follows from the groundwork already laid by the IMS Health decision, in which the Court broadened the First Amendment protection for so-called commercial speech and held that a content-based regulation of speech concerning a business’ economic activity warrants heightened scrutiny. Moreover, under IMS Health, a regulation should fail heightened scrutiny where, as NELF argues is the case here, the regulation lacks a neutral justification. In short, NELF argued that, if the Court takes the case, it will have the opportunity to clarify the extent to which the First Amendment limits government action (under the guise of consumer protection) that has the purpose or effect of stifling an industry’s efforts both to promote its competitive prices and to hold the government accountable for its “cut” of the total price.
The Supreme Court denied the petition for certiorari in this case on April 1, 2013.
This case, in which NELF has filed an amicus brief supporting the business’s Petition for Certiorari, deals with the First Amendment’s protection of speech concerning an industry’s economic activity--an issue that follows from the Court’s recent decision in Sorrell v. IMS Health, in which NELF filed an amicus brief on the merits. IMS Health was an important victory for so-called “commercial speech.” In IMS Health the Supreme Court invalidated, under the First Amendment, a Vermont statute prohibiting pharmacies from selling factual data to pharmaceutical marketers about doctors’ prescribing practices (data that revealed nothing confidential).
At issue in this case is a Department of Transportation (“DOT”) regulation whose stated purpose is to protect consumers from confusion about the total price of airfares. On that basis, the regulation requires that airlines display prominently the total price that a consumer must pay for an airline ticket. That part of the regulation is not objectionable to NELF because it serves the government’s legitimate purpose of protecting consumers. However, the regulation does not stop there and aggressively regulates the manner in which airlines may advertise their competitive base fares and the substantial, applicable federal taxes and fees—i.e., the component prices that comprise the total price. These component prices are not, according to DOT’s own findings, the source of any consumer confusion. Therefore, DOT lacks a constitutional basis to regulate their manner of expression. In particular, the regulation requires that, if the airline wants to list separately these component prices (the base fare and government charges), they may only do so literally “in fine print,” in “significantly smaller type” than the total price, and in a less prominent position in the advertisement. DOT even specifies that the “[t]he break-out of charges should not have special highlighting that sets it apart and makes it more prominent than the total price (e.g., bold font, underlined, or italicized).”
A few airlines challenged this regulation on First Amendment grounds, arguing primarily that the regulation must fail under strict scrutiny because, in obscuring the government’s “cut” of the total price, the rule restricts core political speech that is critical of government. By a vote of two-to-one, a split panel in the D.C. Circuit found that the regulation passed First Amendment muster, but there was a strongly worded dissent from the Chief Judge agreeing with the airlines; the airlines are now seeking certiorari from the Supreme Court.
NELF’s amicus brief in support of the airlines argued that this case neatly follows from the groundwork already laid by the IMS Health decision, in which the Court broadened the First Amendment protection for so-called commercial speech and held that a content-based regulation of speech concerning a business’ economic activity warrants heightened scrutiny. Moreover, under IMS Health, a regulation should fail heightened scrutiny where, as NELF argues is the case here, the regulation lacks a neutral justification. In short, NELF argued that, if the Court takes the case, it will have the opportunity to clarify the extent to which the First Amendment limits government action (under the guise of consumer protection) that has the purpose or effect of stifling an industry’s efforts both to promote its competitive prices and to hold the government accountable for its “cut” of the total price.
The Supreme Court denied the petition for certiorari in this case on April 1, 2013.
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