During the American Bar Association 2013 Administrative Law Conference, legal players described the controversy around whether requirements for disclosing ingredients are considered regulating speech or regulating conduct.
Administrative law and regulatory practice experts on the Nov. 7 panel “Speak No Evil: Changing Controls on Commercial Speech by Federal Enforcement Agencies” also discussed the roles of various government agencies and advertisers when it comes to commercial speech and consumer protection.
“The traditional definition is, commercial speech is speech that does no more than simply propose a commercial transaction,” said Richard Samp, chief counsel of the Washington Legal Foundation. “However, if you really stuck with that definition, much of what government regulates now would not be subject to this more relaxed standard.”
He said that under the traditional Supreme Court definition, the labeling of a drug would not be commercial speech, yet generally it has been considered as such because the courts usually apply a much broader definition.
Katherine Van Tassel, director of the Public Health Law and Science Center and the Health Law Certificate Program at the University of Akron, said that because the government has a substantial interest in protecting public health, compelled commercial speech — such as labeling requirements — is permitted based on the Central Hudson test, which determines whether a governmental regulation of speech is constitutional.
Forcing more transparency for food ingredients helps the public and the FDA quickly determine whether there is a public health issue through big data-gathering strategies.
Van Tassel cited the genetically modified organisms and nanotech products that are present in popular consumer goods such as tortilla chips and sunscreen. “With nanotech, like other innovative technologies, the development of the technology generally outpaces the science necessary to test the risks associated with that product,” she said. “There is at this point no pre-market testing or approval.”
Van Tassel explained that the government has to prove in production that the product has some hazard before it can regulate the product. “This means the manufacturers are free to market nanotech consumer products with little to no regulation, and importantly, there is no obligation to list nanotech ingredients on product labels,” she said.
If the U.S. adopted the European Union system of ingredient labeling, Van Tassel said, the post-market surveillance via search engines and social media could provide an adequate public health product safety net. She referenced a recent study conducted by Microsoft, Stanford University and Columbia University that looked into data from major search engines to determine unreported prescription drug side effects.
For this system to work correctly, Van Tassel said it’s key to list the novel ingredients, or what the European Commission describes as those ingredients that have not been used for human consumption to a significant degree in the EU before May 15, 1997. This allows the consumer to understand that the side effect is not from the host product, but the novel ingredient, she said.
For lawyers representing a company or particular industry, the inconsistencies in regulations for different sectors of business are particularly troubling.
As a lawyer who has represented Spirit Airlines, David Kirstein, a partner at Kirstein & Young PLLC, experienced this disparity when the U.S. Department of Transportation insisted that airlines list the full price with all taxes and fees included but not specify the amount that goes toward taxes and fees.
“If you look across other industries: cellphones, your telephone bills, your utility bills, your cable company bills, hotel advertisements, they all still advertise essentially a base fare and then the taxes separately,” Kirstein said. “What we have here is the DOT carving out the airline industry for special treatment.”
He noted that the Federal Trade Commission seems to be watching DOT’s actions and recently sent letters to 22 hotel chains to warn them about their pricing in Internet ads.
According to Richard Leighton, partner at Keller and Heckman LLP, the current FTC requirement for commercial speech is equivalent to letting people have a parade, then telling the parade organizers that they have to wait 10 years and cough up $1 million to get a permit in order to hold that parade.
In two cases, one involving pomegranate juice producer POM Wonderful and another involving a doctor who wrote a press release touting an off-label use, Leighton said the attitudes of the FTC and FDA regulators will be tested. At issue in both cases are establishment claims, or claims for which the advertiser has clinical proof, Leighton said. “The FTC says they don’t need to do consumer surveys to find out what the intended audience will infer from a claim. They say they can tell when there is an establishment claim,” he said.
The level of testing the FTC demands would “kill the thought of making such a claim,” Leighton said, saying that it’s hard to determine what is a reliable-enough test.
While companies and industries are committed to winning over consumers, the role of the government agencies at play is to protect people from harm. As Mary Engle, associate director of the FTC’s Division of Advertising Practices, said at the 2013 American Bar Association Consumer Protection Conference in Washington earlier this year, “If we see deceptive claims out there, we’ll take action.”
The American Bar Association 2013 Administrative Law Conference took place at the Georgetown University Hotel and Conference Center and was sponsored by the ABA Section of Administrative Law and Regulatory Practice, the American University Washington College of Law and The George Washington Law School.