The Roberts Court v. America
How the Roberts Supreme Court is using the First Amendment to craft a radical, free-market jurisprudence.
In the last few years, the Supreme Court and lower federal courts have shown a new hostility toward laws that regulate the economy and try to limit the effects of economic power. They have declared a series of laws unconstitutional, most famously limits on corporate campaign spending (the Supreme Court) and a key part of Congress’s 2010 health-care reform act (among others the 11th Circuit Court in Atlanta; the Supreme Court will decide the issue in the coming year). The Supreme Court has also held that Vermont cannot restrict drug companies’ access to the prescription records that they use to target their sales pitches, and struck down other state laws that try to constrain the effect of wealth on elections. These decisions don’t just trim around the edges of regulation: They go to the heart of whether government can act to balance out private economic power in an era of growing economic inequality and insecurity. These decisions chime with some of the more troubling themes of the time. They fit well with the economics-minded idea that most of life is best seen as a marketplace, and with the right-wing mistrust of government that has metastasized into Tea Party contempt and anger.
Liberals have denounced many of these decisions, but they have not yet spelled out the larger pattern. What’s missing from the criticism is a picture of what these cases add up to: an identity for the Roberts Court as the judicial voice of the idea that nearly everything works best on market logic, that economic models of behavior capture most of what matters, and political, civic, and moral distinctions mostly amount to obscurantism and special pleading.
The Supreme Court went down a similar road in the Gilded Age and afterward, defending laissez-faire economic principles against minimum wages, maximum hours, and other Progressive and New Deal regulation. The new cases have different doctrinal logic, and the economy has changed vastly, but the bottom lines are eerily alike: giving constitutional protection to unequal economic power in the name of personal liberty. The Supreme Court’s last go-round with economic libertarianism is often called the Lochner era, after the 1905 namesake case, Lochner v. New York, in which the Court invalidated a state law that set maximum daily and weekly hours for bakers. The Court ruled that the law violated constitutionally protected “liberty of contract,” the freedom of both employees and employers to make whatever agreements they saw fit. Minimum-wage laws were another prime target of Lochner reasoning because they limited the “freedom” to accept low pay. The Court also invalidated laws guaranteeing the right to join a union, struck down price regulations, and, more sympathetically, overturned barriers to entry in some trades and struck down a residential segregation law as a violation of the white owner’s right to sell his property to whomever he liked. Overall, between the 1880s and the 1930s, the Supreme Court struck down more than 200 pieces of state and federal legislation as violations of “economic liberty.”
If Chief Justice John Roberts’s Court develops the new cluster of anti-regulatory cases into a clear agenda, then the Roberts Court will be the twenty-first century’s answer to the courts of the Lochner era. The most extreme scenario would begin with invalidating the 2010 Affordable Care Act, but, win or lose, the mere fact that there is a viable constitutional argument against the law is a sign of how far the new economic libertarianism has gone. With or without that victory, such a jurisprudence would mean the end of regulation of campaign spending, virtually complete constitutional protection for advertising, and aggressive review of regulation in data markets or nearly any industry whose inputs or products are information. In other words, it would call into question whether government can regulate the basic engines of the new economy, just as Lochner jurisprudence did in the Industrial Age.
Information Age Laissez-Faire
For decades, progressive commentators denounced Lochner-style decisions (generally ignoring the anti-segregation holding) as willfully blind to the reality of unequal economic power between capitalists and workers. The Supreme Court, they said, was protecting the interests of employers under the disingenuous claim of preserving everyone’s liberty equally. In 1937, under political pressure from Franklin D. Roosevelt, economic pressure from the Great Depression, and intellectual pressure from critics outside and dissenters within, the Supreme Court abandoned Lochner jurisprudence and closed an era with cases such as West Coast Hotel v. Parrish, where the Court upheld a minimum-wage law against a freedom-of-contract challenge, remarking, “The Constitution does not speak of freedom of contract.” Lochner and “freedom of contract” became bywords for illegitimate judicial activism without roots in the text of the Constitution. Ever since, justices of all political persuasions have merrily accused one another of reviving Lochner. Conservatives see personal liberties such as abortion rights and protection for same-sex intimacy as invented for political purposes, while liberals invoke Lochner when the Court gets in the way of economic regulation, as it did in a set of cases compensating property owners for economic losses from environmental laws in the 1990s.
So, Court-watchers across the political spectrum have cried wolf before; but this time the paw prints are very large indeed. This is more than the usual name-calling because the new jurisprudence shares some special features with the old—in particular, a meshing of constitutional principle with economic libertarianism that calls into question the authority of democratic government to shape markets and, above all, check economic power. The Lochner era matters today because the Supreme Court back then did more than find a way to invalidate some laws that were inconvenient for employers. It gave constitutional expression to Gilded Age economic ideas that stood in the way of essential reforms. Lochner-era cases gave constitutional weight to an ideological view of the economy: that the market was a realm of individual freedom that should be kept separate from government interference, which would corrupt the virtuous effects of private bargaining. Its decisions chimed with the laissez-faire theory that celebrated unfettered industrial capitalism as the greatest triumph of progress and freedom that humanity had ever produced.
If today’s courts go that far, they will be armed with new constitutional tools for a new era of capitalism. A free-market jurisprudence for an economy built on information and consumption looks different from a classically laissez-faire theory suited to industrial capitalism. Ironically enough, its most important tool looks to be that icon of liberal constitutional faith, the First Amendment.
Expensive Free Speech
The principle that Congress “shall make no law…abridging the freedom of speech” is perhaps the most familiar phrase in the Constitution and a liberal touchstone. Recently, though, it has become a linchpin in the Supreme Court’s anti-regulatory cases. Constitutional protection of speech increasingly means protection of spending, advertising, and even markets in the data that advertisers use to craft their messages. In the name of free speech, the Court has overturned regulation in each of these areas. Lurking behind these doctrinal changes is an image of a world in which politics and argument are pretty much the same as pursuing one’s preferences through spending and seeking profit by advertising—a view that levels traditional speech down to the same plane as spending, marketing, and data-mining. Ironically, the result is to elevate spending, marketing, and data-mining to the constitutional protection traditionally given to speech. By passing through this looking glass, the Court has made the First Amendment a new anti-regulatory hammer.
In the instantly infamous 2010 Citizens United v. Federal Election Commission decision, Justice Anthony Kennedy applied these principles in full-throated fashion to strike down a ban on certain corporate spending in elections. Limits on spending count as limits on speech, he wrote, so the power to write a million-dollar check for a wave of last-minute advertising has about the same constitutional status as the right to post a blog entry making the case for your candidate. The principle that spending equals speech was not new, only amplified: It dated back to a 1976 case, Buckley v. Valeo, which overturned limits on individual spending as unconstitutional speech restrictions. The new part of Citizens United was the principle that corporations’ political speech (read: spending) enjoys the same constitutional protection as individuals’ speech. Taken together, these principles implied that Congress could not limit corporate spending to offset the enormous economic power of big companies; doing so was just as unconstitutional as banning a flesh-and-blood person from arguing for or against health-care reform. Kennedy’s language was dire: “The censorship we now confront is vast in its reach.” He warned, quoting an earlier opinion by Justice Antonin Scalia, that the government “has muffle[d] the voices that best represent the most significant segments of the economy.” The decision’s effect on campaigns was immediate and dramatic: The advocacy group Public Citizen reports that in the 2010 elections, spending by newly constitutionally empowered outside groups rose by more than 400 percent over the 2006 midterms.
Just a year later, Kennedy wrote the Court’s opinion in Sorrell v. IMS Health, the Vermont pharmaceutical decision. The backdrop of the case was the enormous amount that drug companies spend marketing their products to doctors and consumers—estimated at more than $30 billion annually in a 2008 study, which put marketing ahead of research and development as a share of industry spending. Pharmacies and data-miners serve drug marketers by selling them doctors’ prescription records, which the marketers use to target their sales efforts. Vermont had barred the sale (or giveaway) of prescription information and its use in marketing, except where physicians gave permission for their records to be used. The policy was meant to protect doctors’ and patients’ privacy, and also to offset some of the market power of the big drug companies, in the hope that more doctors would prescribe less-expensive generic medicines instead.
Kennedy wrote that the law was unconstitutional because it burdened speech—i.e., marketing—based on the identity of the speaker (patent-holding pharmaceutical companies) and the content of their message (advertising of drugs). Kennedy described the issue as follows: “The State may not burden the speech of others in order to tilt public debate in a preferred direction. ‘The commercial marketplace, like other spheres of our social and cultural life, provides a forum where ideas and information flourish.’” There is, of course, something otherworldly about describing as “public debate” companies’ targeted pitches to physicians. This constitutional peculiarity has two sources, one very much in line with Citizens United, the other even stranger and more innovative.
The one that is in line with Citizens United is the Court’s growing protection for business’s commercial speech. For more than three decades, the Supreme Court has moved toward treating advertising as strongly protected constitutional speech. While the Court wrote in 1942 that “purely commercial advertising” did not enjoy the First Amendment’s shield, in 1976 (the year of Buckley v. Valeo) the justices reversed themselves in Virginia Pharmacy Board v. Virginia Consumer Council, striking down a state law that forbade pharmacists to advertise drug prices, which was supposed to protect professionalism and discourage race-to-the-bottom competition. The decision established that purely economic speech, such as announcing low prices to potential customers, enjoyed the protection of the First Amendment. The Court reasoned that advertising conveyed useful information to consumers, which made their decisions more efficient, and observed that a listener’s interest in the price of medicine might be “as keen, if not keener by far, than his interest in the day’s most urgent political debate.” There was something reasonable in the idea: The plaintiffs were consumers, not marketers, and the Court observed that, with advertising forbidden, drug prices varied widely around the state.
In the decades since, although the Court has tenuously maintained the formula that commercial speech receives lower protection than “core” political speech, it has struck down limits on advertising for legal services, liquor stores, and tobacco products (in the last instance, invalidating a law that forbade tobacco advertising near schools). A certain amount of the everything-for-sale quality of our public spaces owes directly to the Court’s protection of commercial speech. The justices have never said, though, that advertising deserves the same very strict protection as political debate. Sorrell v. IMS, the Vermont case, comes as close as any to dissolving all distinction between advertising and argument.
The stranger and more innovative aspect of Sorrell is that the case extended First Amendment protection beyond anything recognizable as speech. Campaign spending purchases speech, and advertising “propose[s] a commercial transaction,” in the Court’s phrase, but most of what the Vermont decision protects is not verbal expression or even political spending but simply the sale of data. Sorrell moves toward constitutionalizing an open market in information, at least where the data will inform marketing decisions and the regulation has different effects on different market actors. As the right to speak implied the right to spend and the right to argue implied a right to advertise, now spending and advertising imply a right to buy and sell the information that will go into marketing (which is itself robustly protected as speech). So there is now a constitutionally protected interest in exchanging information on the same terms as everyone else in the market. Any limit on information markets, Kennedy reasoned, would tilt the playing field in favor of those who had more access to data—in Vermont’s case, generic drug companies and public-health agencies.
As Justice Stephen Breyer pointed out in dissent, regulators control the form and content of information transfer all the time—for instance, in guidelines for public and shareholders’ communications by energy and financial companies, restrictions on the uses pharmaceutical companies may recommend for their drugs, and various controls on disclosure of patient information by doctors and hospitals. Many of these regulations are specific to the content of the speech and identity of the speaker, which was the constitutional problem with the Vermont law. It would be simplistic to say that those regulations are on the chopping block, but the reasoning of Sorrell puts their constitutionality in doubt. If nothing else, that reasoning creates a powerful and flexible tool for limiting the regulation of information markets, and further amplifies the Court’s solicitude for marketing as a core constitutional concern. For instance, post-2008 financial regulations requiring disclosure of standard-form information for certain financial products and services, or limiting the kinds of claims hedge funds or mortgage providers can make to clients, could be subject to constitutional attack.
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