Amicus Curiae Brief — IMS Health Health, Inc. v. Ayotte (No. 08-1202)

Supreme Court, U_S.

FILED

U APR 2 4 2009

No. 08-1202 OFFICE OF THE CLERK

In the

Supreme Court of the United States

IMS HEALTH, INC. AND VERISPAN LLC,

Petitioners,

v.

KELLY M. AYOTTE, AS ATTORNEY GENERAL

OF THE STATE OF NEW HAMPSHIRE,

Respondent.

On Petition for a Writ of Certiorari to the United

States Court of Appeals for the First Circuit

BRIEF OF AMICI CURIAE NEW ENGLAND LEGAL

FOUNDATION, ASSOCIATED INDUSTRIES OF

MASSACHUSETTS, ASSOCIATED INDUSTRIES OF VERMONT,

MAINE MERCHANTS ASSOCIATION, AND AMERICAN

LEGISLATIVE EXCHANGE COUNCIL,

IN SUPPORT OF PETITIONERS

Counsel for Amici Curiae

Jo Ann Shotwell Kaplan

General Counsel

Counsel of Record

‘Martin J. Newhouse

President

New England Legal Foundation

150 Lincoln Street

Boston, MA 02111-2504

Tel.: (617) 695-3660 x 202

Fax: (617) 695-3656

joannkaplan@nelfonline.org

April 24, 2009

QUESTION PRESENTED

Amici curiae adopt the Questions Presented as stated

by Petitioners. This amicus brief focuses on the first question

as stated by Petitioners:

To what extent does the First Amendment proteci the

acquisition, analysis, and publication of accurate

factual information that is used by third parties for a

commercial purpose?

A A BPO pet den wef

TABLE OF CONTENTS

QUESTION PRESENTED cesicsenssscsisssaceonmmusavicioupaieeee

TABLE OF AUTHORETING 5.5.00 ee iii

INTEREST OF AMICI CURIAE......cccccscsssssssessessesesessescssesee 1

SUMMARY OF ARGUMENT ........cccccsececcessseeesessssrsaneneseeees 3

ARGUMENT. ....-5sccosss:nsccsocsuueagyiauaan en 4

a Certiorari is warranted because the First

Circuit’s decision conflicts with this Court’s

decisions holding that the transfer of information

constitutes speech protected by the First

A wipe mOtA |. 5 cs<incccnicaneascsiandlccsantuecaeeieiaiie anne 4

Ii. Certiorari is warranted because the First Circuit

has decided an important question regarding the

scope of the commercial speech doctrine under

the First Amendment in a way that conflicts with

this Court’s actual application of that doctrine

but derives from uncertainty created by the

Connrt’s Opeth «vicicsscscccasccebcereenetaateleaes 8

lil. Certiorari is warranted because the First

Circuit’s approach could significantly impede

the flow of information in our society............. 18

CONCLUSION ......0.ccc0s s<cnesaovessesesuasinieenasleanaen anna 20

TABLE OF AUTHORITIES

CASES

Bad Frog Brewery, Inc., v. N.Y. State Liquor Auth.,

134 F.3d 87 (2d Cir. 1998)

Bolger v. Youngs Drug Products Corp.,

463 U.S. 60 (1983)

Buckley v. Valeo, 424 U.S. 1 (1976)

Bartnicki v. Vopper, 532 U.S. 314 (2001) .........ssccersecreneees 5,6

Board of Trustees of State University of New York v. Fox,

492 U.S. 469 (1989)

Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n,

447 U.S. 557 (1980) §,8,16,17

City of Cincinnati v. Discovery Network, Inc.,

507 U.S. 410 (1993)

Commodity Futures Trading Comm'n v. Vartuli,

228 F.3d 94 (2d Cir. 2000)

Edenfield v. Fane, 507 U.S. 761 (1993)

El Dia, Inc. v. Puerto Rico Department of Consumer Affairs,

413 F.3d 110 (1st Cir. 2005)

Florida Bar v. Went for It, Inc., 515 U.S. 618 (1995)

Friedman v. Rogers, 440 U.S. 1 (1979)

IMS Health Incorporated v. Ayotte, 490 F. Supp. 2d 163

(D.N.H. 2007), rev'd, 550 F.3d 42 (1st Cir. 2008)

Murdock v. Pennsylvania, 319 U.S. 105 (1943)......0...000000002.. 6

Nike, Inc. v. Kasky, 539 U.S. 654 (2003) 11,12,13

N.Y. State Ass'n of Realtors, Inc. v. Shaffer,

27 F.3d 834 (2d Cir. 1994)

QOhralick v. Ohio State Bar Ass'n, 436 U.S. 447 (1978)......... 6

Pharmaceutical Care Management Ass’n v. Rowe,

REP Fe Be ee I andes cick chs ass tadnn rn cevaviarsonvcissees 9

Smith v. California, 361 U.S. 147 (1959) ...............ccccscsceseesses 6

Stanley v. Georgia, 394 U.S. S557 (1969)........c.ccccssssecssessccosees 5

United States v. United Foods, Inc., 533 U.S. 405 (2001) .....8

Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council,

ee I evict enti va en ned concn sentnrncendaconrecoen 5

Wine and Spirits Retailers, Inc. v. R.1,,

Oe ics ciccrcn tsnsadsunvaesveessisevanarswads 10

Wine and Spirits Retailers, Inc. v. R.1.,

A BE ia ia indi cssivesninsodee sv tescesenscnscceneces 5,10

CONSTITUTIONAL PROVISIONS

Be I iia cain da snnesdvevednachai tnnesdannpseouvidaeeseumnbennen 6

OTHER AUTHORITIES \

Troy L. Booher, Scrutinizing Commercial Speech,

15 Geo. Mason U. Civ. Rts. L.J. 69 (2004) ...... ee. 16

Barry P. McDonald, The First Amendment and the Free Flow

of Information: Towards A Realistic Right to Gather

Information in the Information Age, 65 Ohio St. L.J.

sais ni ices cabbanss site ulataohpdcccnswecapetieebniibisar eieien 18

Eugene Volokh, Freedom of Speech and Information

Privacy: The Troubling Implications of a Right to Stop

People From Speaking About You, 52 Stan. L. Rev.

BU aici sccsixissaas incense enccaancas cringe 11,15,16,17

Solveig Singleton, Privacy as Censorship: A Skeptical View

of Proposals to Regulate Privacy in the Private Sector,

Cato Policy Analysis No. 295 (January 22, 1998),

http://www.cato.org/pubs/pas/pa-295 html... 18

1V

INTEREST OF AMICI CURIAE

Amici curiae New England Legal Foundation

(“NELF’”), Associated Industries of Massachusetts (“AIM”),

Associated Industries of Vermont (“AIV”), Maine Merchants

Association (“MMA”), and American Legislative Exchange

Council (“ALEC”) seek to share their views concerning the

need for this Court to clarify the fact and extent of the

protection afforded by the First Amendment of the US.

Constitution to the sale of information for commercial use.!

NELF is a nonprofit, nonpartisan, public interest law

firm, incorporated in Massachusetts in 1977 and

headquartered in Boston. Its membership consists of

corporations, law firms, individuals, and others who believe

in NELF’s mission of promoting balanced economic growth

in New England, protecting the free enterprise system, and

defending economic rights. NELF’s more than 130 members

and supporters include a cross-section of large and smali

businesses from all parts of New England and the United

States.

AIM is a 90-year-old nonprofit association with over

7,000 employer members’ doing’ business in the

Commonwealth of Massachusetts. AIM’s mission is to

promote the well-being of its members and their employees,

' Pursuant to Supreme Court Rule 37.6, counsel for amici state that no

counsel for a party authored this brief in whole or in part, and no counsel

or party made a monetary contribution intended to fund its preparation or

submission. Moreover, no person other than amici curiae, their members,

or their counsel made a monetary contribution to the brief’s preparation

or submission. Pursuant to Supreme Court Rule 37.2(a), counsel for

amici state that counsel of record for all parties received notice at least ten

days prior to the due date of amici’s intention to file this brief. The

parties have consented to its filing.

and the prosperity of the Commonwealth, by: improving the

state’s economic climate; proactively advocating fair and

equitable public policy; and providing relevant and reliable

information and excellent services.

Founded in 1920, AIV serves as an advocate for

Vermont’s industrial and business communities in the

formulation of public policy that protects and enhances

Vermont’s private enterprise economy. AIV_ provides

legislative and regulatory advocacy and representation at the

state and federal levels and its membership runs the full

range of the manufacturing, technology, and natural resource

sectors, with companies of every size and from every part of

the state.

MMA is a nonprofit organization with over 400

members and represents the interests of the retail merchant

industry before elected Maine officials. MMA’s lobbying

and issue education efforts are designed to ensure sound

policy decisions on issues that directly affect Maine

businesses, including wage and hour issues, workers’

compensation and healthcare costs, employee benefits, and

taxes.

ALEC is a nonprofit organization dedicated to the

advancement of the Jeffersonian principles of free markets,

limited government, federalism, and individual liberty,

through a nonpartisan public-private partnership of

America’s state Jegislators, members of the private sector, the

federal government, and the general public. More than 25%

of all state legislators belong to ALEC, along with more than

300 corporate and private foundation members.

e.

—

NELF, AIM, and ALEC have regularly appeared as

amici curiae in cases raising issues of general significance to

their members.” This is such a case, and NELF, AIM, AIV,

MMA, and ALEC (hereafter, ““Amici”) believe that this brief

provides an additional perspective which may aid the Court

in determining whether to grant the Petition For A Writ of

Certiorari (“‘Pet.”).

SUMMARY OF ARGUMENT

The First Circuit decision that has occasioned this

petition is in conflict with the decisions of this Court

providing that the transfer of information constitutes speech

entitled to First Amendment protection. The First Circuit’s

decision is likewise in conflict with the decisions of this

Court applying the commercial speech doctrine, although

language in certain of the Court’s opinions has engendered

2 See, e.g., Ysursa v. Pocatello Educ. Ass'n, _U.S._, 129 S. Ct. 1093

(2009); District of Columbia v. Heller, U.S.__, 128 S. Ct. 2783 (2008);

Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007);

Davenport v. Wash. Educ. Ass'n, 551 U.S. 177 (2007); Watters v.

Wachovia Bank, N.A., 550 U.S. 1 (2007); League of United Latin Am.

Citizens v. Perry, 548 U.S. 399 (2006); Rapanos v. United States, 547

U.S. 715 (2006); S.D. Warren Co. v. Maine Bd. of Envtl. Prot., 547 U.S.

370 (2006); Kelo v. City of New London, 545 U.S. 469 (2005); San Remo

Hotel, L.P. v. City of San Francisco, 545 U.S. 323 (2005); Exxon Mobil

Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005); Comm’r v.

Banks, 543 U.S. 426 (2005); Commonwealth v. Fremont Inv. & Loan, 452

Mass. 73 (2008); Saab v. Massachusetts CVS Pharmacy, LLC, 452 Mass.

564 (2008); Thurdin v. SEI Boston, LLC, 452 Mass. 436 (2008); Salvas v.

Wal-Mart Stores, Inc., 452 Mass. 337 (2008); Jannacchino v. Ford Motor

Co., 451 Mass. 623 (2008); Moelis v. Berkshire Life Ins. Co., 451 Mass.

483 (2008).

considerable confusion regarding the proper contours of that

doctrine, as evidenced by conflicting decisions among the

circuits and even within the First Circuit.

The Court should issue a writ of certiorari to resolve

this doctrinal confusion in favor of the “proposes a

commercial transaction” definition of commercial speech.

The Court would thereby prevent the substantial harm to

social and economic interests that could result if, as the First

Circuit has decided, every sale of information for a

commercial purpose deemed by the judiciary to have

minimal societal value may on that basis be denied First

Amendment protection or afforded the lower level of

protection from government regulation that attaches to

commercial speech.

ARGUMENT

I. Certiorari is warranted because the First Circuit’s

decision conflicts with this Court’s decisions holding

that the transfer of information constitutes speech

protected by the First Amendment.

As District Judge Barbadoro noted when he enjoined

the statute’s enforcement, the New Hampshire Prescription

Information Law, 2006 N.H. Laws § 328, codified at N.H.

Rev. Stat. Ann. §§ 318:47-f, 318:47-g, 318-B:12(IV) (2006),

“bars pharmacies, insurance companies, and similar entities

from transferring or using prescriber-identifiable data for

certain commercial purposes.” JMS Health Incorporated v.

Ayotte, 490 F. Supp. 2d 163, 165 (D.N.H. 2007), rev’d, 550

F.3d 42 (1st Cir. 2008). Judge Barbadoro further recognized,

4

as the First Circuit apparently does not, that this constitutes a

direct restriction on the “transmission of truthful

information,” and therefore on “speech.” /d. at 175. See

Bartnicki v. Vopper, 532 U.S. 514, 526-27 (2001) (a

“prohibition against disclosures is fairly characterized as a

regulation of pure speech”); Stanley v. Georgia, 394 U.S.

557, 564 (1969) (“It is now well established that the

Constitution protects the mght to receive information... .

This right . . . is fundamental to our free society.”).’

The First Circuit appears to have been disturbed by

the fact that, in this instance, the information to be transferred

has monetary value and is therefore bought and sold like a

“commodity.” App. at 23. However, the transfer or

dissemination of information does not lose its status as

speech under the First Amendment merely because money

passes hands. See, e.g., Va. State Bd. of Pharmacy v. Va.

Citizens Consumer Council, Inc., 425 U.S. 748, 761 (1976)

> As the First Circuit’s opinion does recognize, the First Amendment

applies to even “pure informational data.” Appendix to Petition for a Wnt

of Certiorari (“App.”) at 19. It is, in fact, because product advertising

conveys factual information that even it has First Amendment protection.

See Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S.

557, 563 (1980) (“The First Amendment’s concern for commercial

speech is based on the informational function of advertising.”); Va. State

Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748,

765 (1976) (Advertising, however tasteless and excessive it sometimes

may seem, is nonetheless dissemination of information as to who is

producing and selling what product, for what reason, and at what price

....{[TJhe free flow of commercial information is indispensable.”); Wine

and Spirits Retailers, Inc. v. R.L, 481 F.3d 1, 6 (1st Cir. 2007)

(acknowledging that the “dissemination of information about . . . prices

and products to other retail stores and to the public at large” constitutes

“speech” for First Amendment purposes).

5

(speech “carried in a form that is ‘sold’ for profit” does not

lose protection); Smith y. California, 361 U.S. 147, 150

(1959) (“It is of course no matter that the dissemination takes

place under commercial auspices.”); Murdock vy.

Pennsylvania, 319 U.S. 105, 111 (1943) (“It should be

remembered that the pamphlets of Thomas Paine were not

distributed free of charge.’’).

Nor is the First Circuit correct that the Prescription

Information Law principally regulates conduct rather than

speech. App. at 22-26. Again, the statute directly regulates

the disclosure of truthful information by pharmacies and

others to the petitioners and “|i]f the acts of ‘disclosing’ and

‘publishing’ information do not constitute speech, it is hard

to imagine what does... .” Bartnicki, 532 U.S. at 527; see

also Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 457

(1978) (distinguishing the regulation of a ‘business

transaction [face-to-face solicitation of clients by lawyers] in

which speech is an essential but subordinate component”

from the direct regulation of speech).

Finally, the First Circuit is incorrect to the extent it is

suggesting that a complete ban on any transfer of this

information would be necessary to tngger First Amendment

protection. App. at 23-24 (“The plaintiffs may still gather

and analyze [prescriber-identifiable information]; and may

publish, transfer, and sell this information to whomever they

choose so long as that person does not use the information

for detailing.”) The First Amendment proscribes laws

“abridging,” or restricting, free speech, as well as those that

ban speech. U.S. Const. amend. I; see also Florida Bar v.

6

Went for It, Inc., 515 U.S. 618, 622 (1995) (“[T]he First

Amendment guards against government restriction of speech

in most contexts... .”).

The fundamental basis for the First Circuit’s approach

in this case appears to be an erroneous belief that courts are

free to act on their own judgments about the value to society

of particular information. Amici do not begin to agree with

the First Circuit’s conclusion that the speech at stake here is

“of scant societal value.” App. at 22. Even more importantly,

however, Amici do not find in this Court’s First Amendment

jurisprudence permission for either state legislatures or

federal judges to ignore the First Amendment because they

perceive the speech at issue to be lacking in value. See

Edenfield v. Fane, 507 U.S. 761, 766 (1993) (“[TJhe general

rule is that the speaker and the audience, not the government,

assess the value of the information presented.”’)

The implications of the First Circuit’s approach

extend far beyond the specific context of pharmaceutical

marketing at issue in this case. Amici’s members include

representatives of a wide variety of industries, and Amici are

deeply concerned that if information used to market drugs

can be suppressed without regard to First Amendment

protections, the same fate can befall information that other

enterprises require to market their products and services or

otherwise run their businesses.

This Court should issue a wnt of certiorari to evaluate

the First Circuit’s dangerous departure from the Court’s First

Amendment precedent.

II. Certiorari is warranted because the First Circuit

has decided an important question regarding the

scope of the commercial speech doctrine under the

First Amendment in a way that conflicts with this

Court’s actual application of that doctrine but

derives from uncertainty created by the Court’s

opinions.

As District Judge Barbadoro’s decision in this

litigation again recognizes, the contours of “commercial

speech” are not entirely clear from this Court’s decisions.

Ayotte, 490 F. Supp. 2d at 176. In its decision in Central

Hudson, the Court appeared to define commercial specch as

that which “proposes a commercial transaction,” but also

indicated that commercial speech is “related solely to the

economic interests of the speaker and its audience.” Cent.

Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S.

557, 561-63 (1980). The Court’s decision in Board of

Trustees of State University of New York v. Fox, 492 U.S.

469 (1989), rendered after Central Hudson, very clearly

employed the “proposes a commercial transaction”

definition, describing it as “the test for identifying

commercial speech.” /d. at 473-74. This suggests that the

language in Central Hudson regarding the speaker’s and

listener’s economic interests was meant to be descriptive of

speech that “proposes a commercial transaction,” rather than

an independent definition of commercial speech. See United

States v. United Foods, Inc., 533 U.S. 405, 409 (2001)

(commercial speech is “usually defined as speech that does

no more than propose a commercial transaction’);

Commodity Futures Trading Comm'n v. Vartuli, 228 F.3d

94, 110 n.8 (2d Cir. 2000) (discussing ramifications of using

the Central Hudson “description as a definition’). However,

in City of Cincinnati v. Discovery Network, Inc., 507 U.S.

410, 422 (1993), the Court interpreted Central Hudson as

suggesting that there could be speech that does not propose a

commercial transaction and yet qualifies as commercial

speech because it is “related solely to the economic interests

of the speaker and its audience.”

As the petitioners explain, the uncertainty in the

Court’s decisions regarding the definition of “commercial

speech” has led to conflicting decisions among the circuits.

Pet. at 21-23. The First Circuit in this case has employed the

broader “economic interests” concept as an actual definition

of commercial speech, citing its prior decisions in

Pharmaceutical Care Management Ass'n v. Rowe, 429 F.3a

294 (lst Cir. 2005) and El Dia, Inc. v. Puerto Rico

Department of Consumer Affairs, 413 F.3d 110 (ist Cir.

2005). App. at 27-28. The Second Circuit, however, applies

the “proposes a commercial transaction” definition. See Bad

Frog Brewery, Inc. v. N.Y. State Liquor Auth., 134 F.3d 87,

96-97 (2d Cir. 1998) (Bad Frog’s label “‘serves to propose a

commercial transaction” and communicates the source of the

product such that it “suffices to invoke the protections for

commercial speech... .”); N.Y. State Ass’n of Realtors, Inc.

v. Shaffer, 27 F.3d 834, 840-41 (2d Cir. 1994) (solicitation of

homeowners by realtors seeking the right to sell residential

property “ ‘is primarily aimed at proposing a commercial

transaction’ ” and should therefore be considered commercial

9

/

speech). Since this contrary Second Circuit precedent will

govern the pending challenge to Vermont’s version of the

Prescription Information Law,’ the conflict in circuit

decisions on this fundamental question is manifest even in

the limited arena of pending litigation over state statutes

restricting the transfer and use of prescriber-identifiable data.

The confusion that reigns regarding the scope of the

commercial speech designation is further evidenced by

conflicting decisions from the First Circuit itself. Thus,

while the Pharmaceutical Care and El Dia First Circuit

decisions cited by that court in its opinion in this case apply

the broader “economic interests” formulation, see discussion

supra p. 9, other First Circuit decisions apply the “proposes a

commercial transaction” test. See Wine and Spirits Retailers,

Inc. v. RI., 418 F.3d 36, 49 (ist Cir. 2005) (“The provision

of advertising and licensing services is not speech that

proposes a commercial transaction and therefore does not

constitute commercial speech.” (citing Fox, 492 U.S. at 482,

as indicating that the “proposal of a commercial transaction

_ ‘is what defines commercial speech,’ .. .”)); Wine and

Spirits Retailers, Inc. v. R.I., 481 F.3d 1, 6 (1st Cir. 2007)

(same).° This conflict even within a single circuit

*The Vermont case is JMS Health v. Sorrell, No. 1:07-cv-00188,

consolidated with 1:08-cv-00220 (D. Vt. filed Aug. 29, 2007).

> The fact that Circuit Judge Selya wrote the two Wine and Spirits

decisions as well as the First Circuit’s decision in this case compounds

the confusion. .

10

demonstrates the extent of the confusion generated by

Central Hudson and its progeny.

Despite the confusion generated by the “economic

interests” language in Central Hudson, this Court has never

actually found speech to be “commercial speech” except

where it involves direct or indirect advertising. See Eugene

Volokh, Freedom of Speech and Information Privacy: The

Troubling Implications of a Right to Stop People From

Speaking About You, 52 Stan. L. Rev. 1049, 1082 (2000).° In

fact, the Court has struggled with applying the “commercial

speech” label even in the advertising context. Thus, in

Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 66-67

(1983), the Court, after designating as commercial speech

mailings of unsolicited advertisements for contraceptives that

consisted primarily of price and quantity information,

indicated that it was addressing a “closer question” in

classifying as commercial speech what the Court

subsequently described as “informational pamphlets that

were concededly advertisements referring to a specific

product”—i.e., advertising combined with other

informational speech. City of Cincinnati, 507 U.S. at 422-23

(discussing Bolger).

The separate opinions of several justices in the case of

Nike, Inc. v. Kasky, 539 U.S. 654 (2003), in which the Court

dismissed a previously granted wnt of certiorari as having

been improvidently granted, are also instructive. A

California citizen sued Nike for false advertising and unfair

® Amici have conducted independent research on this question, and this

appears to continue to be the case post-2000.

11

business practices based on a report and other publications

(press releases, letters to newspaper editors, and letters to

university presidents and athletic directors) by Nike denying

allegations of poor working conditions at its facilities in

foreign countries. The California Supreme Court found that

“ ‘iblecause the messages in question were directed by a

commercial speaker to a commercial audience, and because

they made representations of fact about the speaker’s own

business operations for the purpose of promoting sales of its

products, .. . [the] messages are commercial speech.’ ” /d. at

657 (Stevens, J., concurring) (quoting Kasky v. Nike, Inc., 27

Cal. 4th 939, 946 (2002)). Concurring in the Court’s reversal

of its prior decision to hear the case, Justice Stevens (joined

by Justices Ginsburg and Souter) characterized Nike’s speech

as combining commercial speech, noncommercial speech,

and public discourse, and indicated that the case therefore

raised novel First Amendment issues better addressed on a

fuller factual record. J/d. at 663-64. Focusing on Nike’s

“direct communications with customers and potential

customers that were intended to generate sales—and possibly

to maintain or enhance the market value of Nike’s stock,” the

concurring justices raised the prospect of according even

misstatements contained in_ that speech protection

comparable to the “broad protection for misstatements about

public figures that are not animated by malice,” becausc

these communications with actual and potential customers

“were part of an ongoing discussion and debate about

important public issues... .” /d. at 664.

Similarly, Justice Breyer (joined by Justice

O’Connor), dissenting from the Court’s decision not to hear

the Nike case, wrote that even the direct correspondence with

university presidents and athletic directors who were actual

and potential Nike customers was distinguishable from

“purer forms of commercial speech, such as simple product

advertisements,” and should, given the circumstances

presented as to “format, content, and regulatory context,” be

subjected to heightened scrutiny. /d. at 678-79 (Breyer, J.,

dissenting). Justice Breyer further opined that “it is likely, if

not highly probable, that, if this Court were to reach the

merits, it would hold that heightened scrutiny applies... .”

- Id. at 681.

In Nike, therefore, five justices (including four who

remain on the Court) indicated at least an inclination to treat

certain direct speech by a business to its customer base

designed to encourage purchase of its products as deserving

of heightened protection associated with noncommercial

speech. Those justices would likely find such heightened

protection even more appropriate here, where a statute

restricts informational transfers that neither constitute nor are

combined with direct or indirect product promotions.

In sum, while the Court has never expressly

disavowed the Central Hudson “economic interests”

phraseology, its later decisions demonstrate a ~!ear reluctance

to apply the “commercial speech” label except to speech that

primarily entails advertising or marketing. Moreover, a

frequently cited explanation for granting commercial speech

lesser protection than other speech is the fact that it is

13

“linked inextricably’ with the commercial arrangement that

it proposes, so the State’s interest in regulating the

underlying transaction may give it a concomitant interest in

the expression itself.” Edenfield v. Fane, 507 U.S. 761, 767

(1993) (citation omitted); see also Friedman v. Rogers, 440

U.S. 1, 10 n.9 (1979). This justification for lesser First

Amendment protection applies only to speech that directly

proposes a commercial transaction, and not to other speech

that relates solely to economic interests. Cf Bolger, 463

U.S. at 65 (“In light of the greater potential for deception or

confusion in the context of certain advertising messages,

content-based restrictions on commercial speech may be

permissible.) (emphasis supplied) (citation omitted).

Both judges and commentators have noted significant

concerns with reliance on the broader language of Central

Hudson as a definition of commercial speech. The following

discussion is illustrative:

The Court has at times suggested that the

commercial speech category may also generally

cover speech that is ‘related solely to the

economic interests of the speaker and its

audience,’ and some lower courts have accepted

this definition. But this can’t be right. Consider

the newspaper that discusses business

affairs, almost entirely in order to make money

by helping its readers do well in business.

Consider a product review written by its author

because he wants to be paid, published by the

newspaper because it wants to keep its paying

14

subscribers, and read by readers because they

want to know how to best spend their money.

Consider a union buying TV ads urging people

to ‘Buy American’ because that’s the best way

of maintaining the viewers’ (and the union

members’) standard of living.

. . .That [such commentary] has to do with the

listeners’ economic interests merely highlights

its importance—for most people, economic

well-being is more important than politics, art,

social concerns, or often even religion, and

speech on economic matters often has more

effect on the nation than does most art or

theology, or even much political debate.

Volokh, 52 Stan. L. Rev. at 1081-82 (footnotes omitted);’ see

’ Professor Volokh continues:

If communicating information about a person’s bad credit

record is mere ‘commercial speech,’ then communicating

information about a business’s bad service record should

be too. Both, after all, involve speech on economic

matters. Both involve speech that’s primarily of

economic interest to listeners. Both are motivated by the

speaker’s economic interest -- either a desire to get money

from the buyer of the information, or a desire to get

redress from the business. Either both are commercial

speech or neither is.

In a free and competitive economy, people naturally want

to talk about economic matters. Often their motives for

such speech are largely economic: They want to leam

how to make more money. They want to persuade people

that some course of action is economically better. They

15

also Troy L. Booher, Scrutinizing Commercial Speech, 15

Geo. Mason U. Civ. Rts. L.J. 69, 70 (2004) (“[S]peakers are

rarely motivated by a monolithic desire for profit and . . . it is

difficult to determine when speech is sufficiently motivated

by a desire for profit to warrant a different level of

protection.”).

Justice Stevens anticipated thesc problems in his

concurring opinion in Central Hudson:

The Court first describes commercial speech as

‘expression related solely to the economic

interests of the speaker and its audience.’

Although it is not entirely clear whether this

definition uses the subject matter of the speech

or the motivation of the speaker as the limiting

factor, it seems clear to me that it encompasses

speech that is entitied to the maximum

protection afforded by the First Amendment.

Neither a labor leader’s exhortation to strike,

nor an economist’s dissertation on the money

supply, should receive any lesscr protection

because the subject matter concerns only the

want to alert people to what they think are others’

dishonest business practices. Giving the government an

ill-defined but potentially very broad power to restrict

such speech -- not just speech that proposes a commercial

transaction between speaker and listener and thus directly

implicates the risk of fraud -- risks exposing a great deal

of speech to government policing.

Id. at 1087.

16

economic interests of the audience. Nor should

the economic motivation of a speaker qualify

his constitutional protection; even Shakespeare

may have been motivated by the prospect of

pecuniary reward. Thus, the Court’s first

definition of commercial speech is

unquestionably too broad.

447 U.S. at 579-80 (Stevens, J., concurring) (citation

omitted).

The transfer, whether by sale or otherwise, of

prescriber-identifiable data or other factual information from

one willing business to another obviously does not “propose

a commercial transaction.” “It doesn’t advertise anything, or

ask the receiving business to buy anything from the

communicating business .. .. The recipient business does

intend to use the information to more intelligently engage in

commercial transactions, but that’s equally true of

businesspeople reading Forbes.” Volokh, 52 Stan. L. Rev. at

1082-83 (footnotes omitted). And yet the First Circuit has

concluded that such transfers, if they constitute speech at all,

are entitled to only the lesser degree of protection from

government regulation afforded commercial speech.

This Court should issue a writ of certiorari in this case

so as to resolve the widespread confusion, evidenced by

conflicting judicial decisions, concerning the definition of

commercial speech and, for the reasons noted by both judges

and commentators, limit its scope to speech that proposes a

commercial transaction. Resolution of the question, and in

this way, could not be more important because proper

17

application of the “commercial speech” label is necessary to

“ensure that speech deserving of greater constitutional

protection is not inadvertently suppressed.” Bolger, 463 U.S.

at 66. °

iI. Certiorari is warranted because the First Circuit’s

approach could significantly impede the flow of

information in our society.

It is well recognized that “scientific and technological

advances facilitate the ability to both gather and disseminate

information, increasing the demand for and uses of

information ... .” Barry P. McDonald, The First Amendment

and the Free Flow of Information: Towards A Realistic

Right to Gather Information in the Information Age, 65 Ohio

St. LJ. 249, 262 (2004). Market forces provide the

incentives and resources needed to meet this increased

demand for information. See Buckley v. Valeo, 424 U.S. 1, 19

(1976) (“[V]irtually every means of communicating ideas in

today’s mass society requires the expenditure of money.”);

Solveig Singleton, Privacy as Censorship: A Skeptical View

of Proposals to Regulate Privacy in the Private Sector, Cato

Policy Analysis No. 295 (January 22, 1998), http://

www.cato.org/pubs/pas/pa-295.html (“The formal

® Indeed, it is unclear to Amici that there will be any compilation and

transfer of prescriber-identifiable data at all, in order for it to serve

noncommercial purposes such as healthcare research, if the Prescription

Information Law and other statutes like it are upheld. To the extent these

laws effectively restrict all transfers and uses of prescriber-identifiable

data by eliminating the market incentives and resources that permit the

aggregation and dissemination of the data, see discussion infra pp. 18-20,

the statutes undeniably impinge on noncommercial speech.

18

mechanisms that businesses have developed to transfer

information about consumers, borrowers, and _ other

businesses serve valuable economic and social purposes

formerly served by person-to-person informal information

networks.”’)

Just as speech “does not lose its First Amendment

protection because money is spent to project it,” City of

Cincinnati, 507 U.S. at 420, the mere fact that a business has

disseminated information should not make that publication

commercial speech. In our “information age,” sales and

other voluntary transfers of data by and between businesses

are fundamental to the efficient operation of the free

enterprise system and often serve, as in this instance, societal

needs as well as the interests of individual businesses. Thus,

treating the sale of information for a commercial purpose as

less deserving of First Amendment protection than other

informational transfers can be expected to have serious,

adverse ramifications for both economic and social interests

served by the free flow of information in our society.

If, for example, the transfer of prescriber-identifiable

data for a commercial purpose can be proscribed, the effect

may be to circumscribe as well the compilation and transfer

of prescriber-identifiable data for noncommercial purposes

such as healthcare research. In addition, if pharmaceutical

companies are unable to focus their marketing activities

based on prescriber-identifiable data, those marketing efforts

will be less efficient and more expensive. This could lead to

higher prescription drug prices and associated higher health

insurance costs for employers, including Amici’s many

19

members already struggling to meet their employees’

healthcare needs.

In short, because market forces fuel the compilation

and publication of most information in modern society,

efforts to restrict the transfer and use of data for commercial

purposes will likely have consequences far beyond that

intended focus to the detriment of the public interest. It is

therefore critical that direct, legislative restrictions on the sale

of information for commercial purposes such as that

contained in the Prescription Information Law not escape

First Amendment scrutiny or be evaluated under the lesser

standard of scrutiny applicable to commercial speech. This

Court’s attention to the matter could not be more important

or timely.

CONCLUSION

For the reasons stated above, the Court should grant

the Petition For A Wnt of Certioranr' of IMS Health, Inc. and

Verispan LLC.

20

a a ll i a lc a dm tt A A A lh A

April 24, 2009

Respectfully submitted,

NEW ENGLAND LEGAL FOUNDATION,

ASSOCIATED INDUSTRIES OF

MASSACHUSETTS, ASSOCIATED

INDUSTRIES OF VERMONT, MAINE

MERCHANTS ASSOCIATION, AND

AMERICAN LEGISLATIVE EXCHANGE

COUNCIL

By their attorneys,

hotel Kehr

o Ann Shotwell Kaplan,

General Counsel

Counsel of Record

Martin J. Newhouse, President

New England Legal Foundation

150 Lincoln Street

Boston, MA 02111-2504

Telephone: (617) 695-3660 x 202

Facsimile: (617) 695-3656

joannkaplan@nelfonline.org