Appeals Court Holds Advertising Limits Satisfy the Central Hudson Test
The U.S. District Court for the Northern District of West Virginia granted summary judgment to the plaintiffs, holding that the act’s prohibitions violated the First Amendment. It acknowledged case law that held that weaker protections apply to commercial speech, but then read the U.S. Supreme Court decision in Barr v. American Association of Political Consultants to require strict scrutiny of laws that regulate the content of advertisements. It therefore applied strict scrutiny to the act’s prohibitions since they were based on the content of advertisements, as opposed to when or where the advertisements were made.
The district court held that the government failed to meet its burden to show, among other things, that the act was “narrowly tailored to serve compelling state interests.” It further held that West Virginia failed to attempt less restrictive alternatives to the act to prevent misleading advertising. It also decided the prohibition was duplicative of West Virginia Rule of Professional Conduct 7.1, which prohibits misleading advertisements. And it held that the act’s prohibition of the term “recall” when describing voluntary product recalls did not prevent misleading speech since it would be an accurate description of a voluntary recall.
The appeals court reversed. It began its analysis by citing the U.S. Supreme Court’s ruling in Central Hudson Gas & Electric Corp. v. Public Service Commission to establish that the First Amendment does not protect commercial speech to the same extent as political speech. It held that the district court incorrectly read Barr to overrule Central Hudson, especially because Barr acknowledged that the First Amendment permits burdens on commercial speech. It then applied Central Hudson’s “intermediate scrutiny” test to the act, holding that speech must “concern lawful activity and not be misleading” for the First Amendment to protect it. Even then, the court held, the act must directly advance a substantial governmental interest and not be “more extensive than is necessary to serve that interest” to survive review.
The appellate court held that the inclusion of government logos and terms like “consumer alert” in legal advertisements are misleading because of how unsophisticated readers may understand them, and therefore the First Amendment does not protect their use. It also held that the West Virginia legislature could decide that the word “recall” was misleading when it described a voluntary product recall, since the term suggests a government action. It concluded that “objectively truthful speech can still be misleading” because its precise meaning may not “fully align with the ordinary meaning that a consumer would assign.” It recognized that attorney advertisements may still accurately explain voluntary recalls without using the word “recall.”
The appellate court also rejected the district court’s claim that the state should have attempted less restrictive alternatives than regulating advertisement content. It held the state did not need to employ the “least restrictive means” to achieve its interest but that a “reasonable” means is sufficient. And it decided that the act’s prohibitions are a reasonable way to ensure that the public does not misunderstand attorney advertising and that they do not prevent attorneys from accurately marketing their services.
Appeals Court Holds Disclosure Requirements Satisfy the Zauderer Requirements
The district court had also rejected the act’s disclosure requirements, applying the test set forth by the U.S. Supreme Court in Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio. That test requires compelled speech to be “reasonably related to a substantial governmental interest” and “purely factual and uncontroversial.” The district court held that the statement that readers should not stop taking medication without consulting a doctor was not “purely factual,” but instead “indisputably medical advice.” It also held that the required disclosure that certain drugs are approved by the FDA is unrelated to a state interest and actually the subject of controversy, but did not explain either conclusion.
The appellate court rejected the district court’s analysis of Zauderer. It held that the statement that consumers consult with their doctor was purely factual when read together with another statement the act required: that patients risk “injury or death” if they stop taking certain medication. It decided that this statement was true and that it was also uncontroversial and true that consultation with a doctor was how a patient can properly mitigate the risk of terminating his or her medication. It also held the true statement that certain drugs had FDA approval to be uncontroversial.
Act’s Regulation of Lawyer Speech Is Constitutional
Several Litigation Section leaders agree that the act addresses a genuine concern about deceptive advertising. “Misleading advertisements are definitely a problem,” affirms Cassandra Robertson, Cleveland, OH, chair of the Appellate Litigation Subcommittee of the Section’s Civil Rights Litigation Committee. But she observes that they are “more likely to happen in the criminal justice arena” than in the products liability field.
Despite this genuine concern, Section leaders note that corporate interests promoted the act. “These advertising restrictions were supported by pharmaceutical companies that are regularly sued in products liability cases,” explains Thomas G. Wilkinson Jr., Philadelphia, PA, a member of the Section’s Ethics & Professionalism Committee. “Those companies will presumably lobby for similar restrictions in other jurisdictions,” he adds. Robertson agrees that the act “is pushed by the drug and device manufacturers who really don’t like class actions or drug and device lawsuits.”
Even so, Section leaders believe that Recht properly allows the state to protect public health. “Every state has an interest in ensuring that the public is not misled, and that is especially true when it comes to matters of public health,” comments John M. Barkett, Miami, FL, cochair of the Section’s Ethics & Professionalism Committee.
And even though the act’s restrictions are constitutional since “misleading professional speech has never been protected,” observes Robertson, the U.S. Supreme Court may apply a different approach than the Fourth Circuit. “The Court in recent years has taken the view that restrictions are restrictions whether they are commercial or not commercial,” she concludes.