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

Supreme rt,

vl) CP

OFFICE OF THE CLERK

No. 08-1202

IN THE

Supreme Court of the United States

IMS HEALTH, INC., and VERISPAN LLC,

Petitioners,

Vv.

KELLY A. 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 WASHINGTON LEGAL FOUNDATION,

CATO INSTITUTE, REASON FOUNDATION,

‘THOMAS F. REILLY, BILL DEWEESE,

KEN GUIN, RAY MERRICK, AND GLENN RICHARDSON

AS AMICI CURIAE IN SUPPORT OF PETITIONERS

Of Counsel: Daniel J. Popeo

Richard A. Samp

Ilya Shapiro (Counsel of Record)

Cato Institute Washington Legal Foundation

1000 Mass. Ave., NW 2009 Massachusetts Ave., NW

Washington, DC 20001 Washington, DC 20036

(202) 218-4600 (202) 588-0302

Date: April 27, 2009

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D.C. 20001

QUESTION PRESENTED

Amici curiae address the following issues only,

the first and second Questions Presented in the petition

for certiorari:

1. To what extent does the First Amendment

protect the acquisition, analysis, and publication of ac-

curate factual information that is used by third parties

for a commercial purpose?

2. Does the First Amendment permit a State to

prohibit the acquisition, analysis, and publication of

accurate factual information that is used by third parties

for acommercial purpose, when the State does so for the

purpose of “level{ing] the playing field” by reducing the

effectiveness of the third parties’ commercial speech,

while simultaneously permitting the use of the identical

information for communication of the State’s preferred

viewpoint?

lil

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES .. «20... ccc ccvcccce iv

INTERESTS OF AMICICURIAE .............. l

STATEMENT OF THE CASE .................. 3

REASONS FOR GRANTING THE PETITION .... 7

I. The Appeals Court’s Holding That the PIL

“Primarily Regulates Conduct” and Thus

Lacks First Amendment Protection

Conflicts With Numerous Decisions of

SIN a es ee ee ec a 10

II. Review Is Warranted Because This Case Is

a Good Vehicle for Examining the

Important First Amendment Issues Facing

Numerous States Seeking to Control

RORY Ge ND oo ok a 3 ee ee ss 15

III. The Appeals Court’s Alternative Holding

That New Hampshire May Restrict Speech

in Order to “Level the Playing Field”

Conflicts with This Court’s Jurisprudence

Regarding Commercial (and Other)

I sh ore sk Nediee se woke aes ae ee 19

EME i ak oo da so 4 Ke KK A ee ee 24

iv

TABLE OF AUTHORITIES

Cases:

44 Liquormart, Inc. v. Rhode Island,

517 U.S. 484 (1996)

Bd. of Trustees v. Fox,

492 U.S. 469 (1989)

Buckley v. Valeo,

424 U.S. 1 (1976)

Central Hudson Gas & Electric Corp. v.

Public Service Comm’n,

447 U.S. 557 (1980)

Consolidated Edison Co. v. Public Serv.

Comm’n, 447 U.S. 530 (1980)

Davis v. Fed. Election Comm’n,

128 S. Ct. 2759 (2008)

Dun & Bradstreet, Inc. v. Greenmoss

Builders, Inc., 472 U.S. 749 (1985)

Edenfield v. Fane,

507 U.S. 761 (1993)

First Nat’l Bank of Boston v. Bellotti,

435 U.S. 735 (1978)

Florida Star v. B.F.J.,

491 U.S. 524 (1989) 12, 15, 35

Los Angeles Police Dep’t v. United Reporting

Publishing Co., 528 U.S. 32 (1999)

McConnell v. Fed. Election Comm’n,

128 S. Ct. 2759 (2008)

New York Times Co. v. Sullivan,

376 U.S. 254 (1964)

Nike v. Kasky,

539 U.S. 654 (2003)

Smith v. Daily Mail Publishing Co.,

443 U.S. 97 (1979)

Thompson v. Western States Medical Center,

535 U.S. 357 (2002) 12, 18, 20, 22, 23

TransUnion v. FTC,

245 F.3d 809 (D.C. Cir. 2001),

cert. denied, 538 U.S. 915 (2002)

Virginia State Bd. of Pharmacy v. Virginia

Citizens Consumer Council, Inc.,

425 U.S. 748 (1976)

Statutes and Constitutional Provisions:

U.S. Const., amend i

U.S. Const., Commerce Clause

Prescription Information Law (PIL),

2006 N.H. Laws 328, codified as N.H.

Rev. Stat. Ann. 318:47-f & 318:47-g

& 318-B:12, IV (2006)

Section 318:47-f

BRIEF OF WASHINGTON LEGAL FOUNDATION,

CATO INSTITUTE, REASON FOUNDATION,

THOMAS F. REILLY, BILL DEWEESE,

KEN GUIN, RAY MERRICK, AND GLENN RICHARDSON

AS AMICI CURIAE IN SUPPORT OF PETITIONERS

INTERESTS OF AMICI CURIAE

Amici curiae are a bipartisan group of current

and former elected state government officials, and three

nonprofit organization; each strongly supports the First

Amendment rights of participants in the health care

industry to speak truthfully without unwarranted

government interference.’

The Honorable Thomas F. Reilly served as

Attorney General of Massachusetts from 1999 to 2007.

Rep. Bill DeWeese is the Majority Whip in the

Pennsylvania House of Representatives and previously

served as Speaker of the House. Rep. Ken Guin is the

Majority Leader of the Alabama House of

Representatives and serves as Chair of the House Rules

Committee. Rep. Ray Merrick is the Majority Leader of

the Kansas House of Representatives. Rep. Glenn

Richardson is the Speaker of the Georgia House of

Representatives. While recognizing the need to keep

health care costs in check, each believes that

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

counsel for a party authored this brief in whole or in part; and that

no person or entity, other than amici and their counsel, made a

monetary contribution intended to fund the preparation and

submission of this brief. More than ten days prior to the due date,

counsel for amici provided counsel for Respondent with notice of

intent to file. All parties have consented to this filing; the parties

indicated their consent in a letter lodged with the Court.

2

suppressing truthful speech is not an effective means of

controlling costs and interferes. with the exchange of

information necessary to ensure medical advances.

The Washington Legal Foundation (WLF) is a

nonprofit public interest law and policy center based in

Washington, D.C., with supporters in all 50 States.

WLF regularly appears before federal and state courts to

promote economic liberty, free enterprise, and a limited

and accountable government. In particular, WLF has

devoted substantial resources to promoting free speech

rights of the business community, appearing before

numerous federal courts in cases raising First

Amendment issues. See, e.g., Nike v. Kasky, 539 U.S.

654 (2003). WLF has successfully challenged the

constitutionality of FDA restrictions on speech by

pharmaceutical manufacturers. Washington Legal

Found. v. Friedman, 13 F. Supp. 2d 51 (D.D.C. 1998),

appeal dism’d, 202 F.3d 331 (D.C. Cir. 2000).

The Cato Institute was:established in 1977 as a

nonpartisan public policy research foundation

dedicating to advancing the principles of liberty, free

markets, and limited government. Cato’s Center for

Constitutional Studies was established in 1989 to help

restore the principles of limited constitutional

government that are the foundation of liberty. Toward

those ends, the Cato Institute publishes books and

studies, conducts conferences, publishes the annual Cato

Supreme Court review, and files amicus briefs with the

courts. This case is of central concern to Cato because

it addresses the collapse of constitutional protections for

commercial speech and the attempt by government to

impede the free flow of information.

3

Reason Foundation is a national, nonpartisan,

and nonprofit public policy think tank, founded in 1978.

Reason’s mission is to promote liberty by developing,

applying, and communicating libertarian principles and

policies, including free markets, individual liberty, and

the rule of law. Reason promotes policies that allow and

encourage individuals and voluntary institutions to

flourish. Reason advances its mission by publishing

Reason Magazine, as well as commentary on its

websites, www.reason.com and www.reason.tv, and by

issuing policy research reports that promote choice,

competition, and a dynamic market economy as the

foundation for human dignity and progress. Reason

selectively participates as amicus curiae in cases raising

significant constitutional issues, to further Reason’s

avowed purpose to advance “Free Minds and Free

Markets.”

Amici are concerned that by unduly restricting

the dissemination of truthful information by Petitioners

and others, the State of New Hampshire is relegating

this important health care-related speech to a second-

class status. Amici are also concerned that the decision

below, if allowed to stand, sets a dangerous precedent

that all but eliminates First Amendment restrictions on

government efforts to “level the playing field” by

favoring speech by one side of debate over speech by the

other side.

STATEMENT OF THE CASE

Petitioners IMS Health Inc. and Verispan LLC

are companies in the business of collecting and

distributing health information, research, and analysis.

Petitioners’ reports provide detailed information

4

regarding individual physicians, their medical

specialties, and their prescribing patterns. That

information is immensely valuable to a wide variety of

users. For example, researchers use the information as

a means of locating doctors whose patients might be

interested in participating in clinical trials of new

medicines. The court of appeals explicitly found that

Petitioners’ “massive collections of information have

great utility” for entities such as “educational

institutions, public interest groups, and law

enforcement agencies.” Pet. App. 6.

The State of New Hampshire has become

concerned by the commercial use of Petitioners’

information by pharmaceutical companies. Those

companies regularly engage in a practice known as

“detailing,” whereby a company salesperson (or

“detailer”) visits with doctors in an effort to persuade

them to prescribe more of the company’s brand-name

(and thus, generally, higher-priced) drugs. It is widely

recognized that these visits are more effective if the

detailers come armed with information obtained from

Petitioners — the information allows them, based on a

doctor’s prescribing history, to tailor their sales pitches

in a manner likely to maximize prescriptions.

Concerned that detailing was leading to increased

prescriptions for high-priced drugs (and thus was

causing significant increases in State health care costs),

the New Hampshire legislature determined that it

would take steps to control the effects of detailing.

The means devised by New Hampshire for

controlling those price effects, however, was highly

unusual. New Hampshire did not impose any direct

controls on detailing. Instead, New Hampshire adopted

5

a statute, the Prescription Information Law (PIL),’

which imposes restrictions on entities, such as

Petitioners, that supply prescriber-identifiable

information to pharmaceutical companies. New

Hampshire’s theory is that if pharmaceutical companies

are denied access to prescriber-identifiable data, their

detailing activity will be less successful in inducing

doctors to prescribe higher-priced drugs, and thus State

medical costs will be reduced.

The PIL provides, inter alia, that (subject to

limited exceptions) no “prescriber-identifiable data”

relative to prescription information may be “licensed,

transferred, used, or sold” by any “pharmacy benefits

manager, insurance company, electronic transmission

intermediary, retail, mailorder, or Internet pharmacy or

other similar entity, for any commercial purpose.” N.H.

Rev. Stat. Ann. 318:47-f. The PIL defines a “commercial

purpose” as including, but not limited to, “advertising,

marketing, promotion or any activity that could be used

to influence sales or market share of a pharmaceutical

product, influence or evaluate the prescribing behavior

of an individual health care professional, or evaluate the

effectiveness of a professional pharmaceutical detailing

sales force.” Id. Section 318:47-f has been construed by

the appeals court as prohibiting Petitioners from

conveying their prescriber-identifiable data to

pharmaceutical companies for use in their detailing

activities, but permitting Petitioners to convey the same

data to others. Pet. App. 25.

* 2006 N.H. Laws 328, codified as N.H. Rev. Stat. Ann.

318:47-f & 318:47-g¢ & 318-B:12, [V (2006).

6

Petitioners contend that the PIL, by imposing

content-based restrictions on their rights to convey

truthful information to others, violates their First

Amendment rights. After conducting a trial, the U.S.

District Court for the District of New Hampshire

agreed, holding that the PIL did, indeed, violate

Petitioners’ First Amendment rights; it enjoined

enforcement of the statute. Pet. App. 153-197.

The U.S. Court of Appeals for the First Circuit

reversed, Id. at 1-151.* The appeals court held that the

First Amendment was completely inapplicable to

Petitioners’ claims because “the challenged portions of

the statute principally regulate conduct, and to the

extent that the challenged portions impinge at all upon

speech, that speech is of scant societal value.” Id. at 22.

The court recognized that the PIL implicated First

Amendment rights because of its impact on the detailing

activities of pharmaceutical companies, but it

determined that Petitioners lacked standing to assert

those rights. Id. at 12-17.

As an alternative basis for its decision, the

appeals court held that even if Petitioners’ transfer of

information to pharmaceutical companies were entitled

to First Amendment protection, the PIL survives First

° In addition to rejecting Petitioners’ First Amendment

claims, the First Circuit also rejected two other claims that the

district court had not addressed: Petitioners’ claims that the PIL

was void for vagueness, id. at 42-46, and that it violated the

dormant Commerce Clause. /d. at 46-50. One member of the panel

dissented on the Commerce Clause issue; he would have remanded

the case to the district court for an initial determination of the

issue. Id. at 142-150 (Lipez, J., concurring and dissenting).

7

Amendment scrutiny under the standard established by

Central Hudson Gas & Electric Corp. v. Public Serv.

Comm ’n, 447 U.S. 557 (1980), for evaluating restrictions

on commercial speech. Jd. at 26-41. In particular, the

court held that the regulation of Petitioners’ speech is

“no more extensive than necessary to serve [New

Hampshire’s] interest in cost containment.” Jd. at 38.

The court determined that one suggested alternative

regulation that would not have entailed restrictions on

Petitioners’ speech — a counter-detailing program

' whereby New Hampshire would “educate doctors to

prescribe low-cost generic drugs whenever possible” -

“fails as a matter of simple economics.” Jd. at 39a. The

court explained that the “the marketplace of ideas”

lacked “equilibrium” because pharmaceutical companies

spend $4 billion each year on detailing, and New

Hampshire and like-minded States are not equipped to

(and thus should not be forced to) expend a similar sum

to restore that equilibrium. Id. at 40. Thus, the Court

held, New Hampshire did not violate the First

Amendment — the State properly concluded that it could

restore equilibrium only by imposing the PIL’s speech

restrictions on Petitioners (thereby, in New

Hampshire’s view, making detailing activities less

effective in inducing prescriptions of expensive brand-

name drugs). Id.

REASONS FOR GRANTING THE PETITION

The petition raises issues of exceptional

importance. Although the PIL indisputably prohibits

Petitioners from conveying information that is highly

valued by its customers, the appeals court held that the

PIL is altogether “outside the ambit of the First

Amendment,” explaining that the “challenged portions

8

of the statute principally regulate conduct, and to the

extent that the challenged portions :mpinge at all upon

speech, that speech is of scant societal value.” Pet. App.

22. The appeals court likened Petitioners’ speech to

other forms of speech (e.g., obscenity, libel, insulting or

“fighting” words, and communications in furtherance of

a crime) that according to the court le “outside the

compass of the First Amendment.” Jd. at 20. Review is

warranted because the appeals court’s conclusion that

the PIL’s prohibition against the transfer of information

“principally regulates conduct” conflicts with numerous

decisions of this Court and of other federal appeals

courts. That conclusion threatens a radical curtailment

of First Amendment rights by creating a previously

unrecognized category of speech to which the First

Amendment ostensibly does not apply.

As the Petition notes, laws similar to New

Hampshire’s have been adopted in two other States and,

in light of the First Circtu:it’s decision upholding the PIL,

numerous other States are actively considering following

suit. Review is also warranted in order to provide those

States with guidance regarding the constitutionality of

such statutes. It is highly unlikely that challenges to

similar laws will reach the Court in the next several years;

unless review is granted here, state legislatures will be

confronted with proposals to adopt statutes similar to the

PIL without any guidance from the Court. Moreover, this

case is a particularly good vehicle for addressing the First

Amendment questions presented by the Petition. The

case has been brought by entities that supply information

to the pharmaceutical industry; such entities are far better

positioned than are pharmaceutical companies to raise

First Amendment issues in a manner that will permit a

meaningful merits resolution by the Court. In particular,

9

the PIL operates most directly against entities such as

Petitioners who are in the business of transferring

prescriber-identifiable data to consumers of such data (such

as pharmaceutical companies). While the PIL creates

difficulties for pharmaceutical companies by making it

more difficult for them to obtain such data and thus has

a significant impact on their ability to solicit customers,

that impact is largely indirect in nature.

Moreover, such customer solicitation activity clearly

constitutes commercial speech, a category of speech that

has received somewhat less First Amendment protection

than other forms of speech. While amici would welcome

a reconsideration of the Court’s downgrading of

constitutional protections for commercial speech, it is far

from clear that Petitioners’ activity -conveying truthful

information to customers for a fee — should even be deemed

commercial speech. Petitioners thus have a far stronger

claim that their speech is entitled to full First Amendment

protection. Accordingly, it would make little sense to deny

review in this case and await a challenge by a

pharmaceutical company, when this case presents the

strongest possible case for First Amendment invalidation

of the PIL.

Review is also warranted because the First Circuit’s

alternative holding — that the PIL passes constitutional

muster even if examined under a commercial speech lens

—so clearly conflicts with this Court’s commercial speech

jurisprudence. In concluding that the regulation of

Petitioners’ speech met the fourth prong of the Central

Hudson test (narrow tailoring), the appeals court rejected

as infeasible several alternative regulations that would

not have restricted Petitioners’ speech — yet its grounds

for doing so conflicted with decisions of this Court. In

10

particular, the appeals court held that New Hampshire

was entitled to a “level playing field” —-on which the State

and pharmaceutical companies would have roughly equal

influence over doctors’ prescribing decisions — without

having to pay the large sums that would be necessary to

establish a comprehensive counter-detailing program.

Pet. App. 39-40. On that basis, the appeals court

determined that an expanded counter-detailing program

did not qualify as a more-narrowly-tailored non-speech

alternative regulation, because it would have cost New

Hampshire too much to establish the “level paying field”

it had a right to demand. Id.. That determination conflicts

with numerous holdings of this Court that a desire to create

a “level playing field” among competing points of view

does not justify imposing speech restrictions on the party

with greater financial resources. See, e.g., Buckley v. Valeo,

424 US. 1, 48-49 (1976).

I. The Appeals Court’s Holding That the PIL

“Primarily Regulates Conduct” and Thus

Lacks First Amendment Protection Conflicts

With Numerous Decisions of This Court

The First Circuit found a simple way to avoid

addressing all of the complex First Amendment issues

raised by this case: it held that the PIL is altogether

“outside the ambit of the First Amendment” because it

principally regulates conduct, not speech. Pet. App. at

22. Review is warranted because the appeals court’s

characterization of Petitioners’ information distribution

as mere “conduct” is unprecedented under First

Amendment law and conflicts with numerous decisions

of this Court and other federal appeals courts.

The appeals court appa’ently arrived at its “conduct”

11

determination because it viewed Petitioners’ data transfers

as fundamentally different from “stereotypical commercial

speech.” /d. at 4. In characterizing Petitioners’ activities,

the court opined, “Unlike stereotypical commercial speech,

new information is not filtered into the marketplace with

the possibility of stimulating better informed consumer

choices (after all, physicians already know their own

prescribing histories).” Jd. While the court was

undoubtedly correct that Petitioners’ information transfers

do not resemble typical commercial speech (e.g., Petitioners

are not advertising their services or otherwise proposing

a commercial transaction), that distinction suggests that

Petitioners’ activities constitute fully protected non-

commercial speech, not that the activities do not constitute

speech at all. The appeals court asserted that Petitioners’

information transfers to pharmaceutical companies have

“scant societal value ,” id. at 22, but that assertion is belied

by the evidence at trial: pharmaceutical companies and

other customers pay many millions of dollars every year

for the information supplied by Petitioners.

As this Court has made clear, “the general rule is

that the speaker and the audience, not the government,

assess the value of information presented.” Edenfield v.

Fane, 507 U.S. 761 (1993). The appeals court can only

be understood to have been saying that the information

supplied by Petitioners was not being used wisely,* not

that the information lacked value. But such negative

assessments regarding the uses to which truthful

information will be put has never been deemed grounds

* See, e.g., id. at 4(“[T}he societal benefits flowing from the

prohibited transactions [2.e., supply of information from Petitioners

to pharmaceutical companies] pale in comparison to the negative

externalities produced.”).

12

for denying First Amendment protection. To the contrary,

the Court has regularly condemned government efforts

to prohibit “the dissemination of truthful information in

order to prevent members of the public from making bad

decisions with the information.” Thompson v. Western

States Medical Center, 535 U.S. 357, 374 (2002).

Remarkably, the panel held that the Act does not

implicate IMS Health’s First Amendment rights without

citing a single case that so much as suggests that the

publication of truthful data about individuals does not

constitute First Amendment-protected speech. In fact,

every prior federal appellate decision that has addressed

the issue has concluded (or at least strongly suggested)

that such publication is, indeed, protected by the First

Amendment, regardless whether the published information

is deemed a matter of public concern.

For example, the Court has stated that although

it is a matter of public concern that the crime of rape has

occurred, a mere list of the names of rapes victims is not

a matter of public concern but rather is only a matter of

“private concern.” Florida Star v. B.F.J., 491 U.S. 524,

536-37 (1989). The Court nonetheless held that the listing

of such names by a commercial newspaper is speech entitled

to substantial First Amendment protection and noted

pointedly that “our decisions have without exception upheld

the press’ right to publish” information of only private

concern. Id. at 530 (emphasis added).° Similarly, the Court

° Importantly, the appeals court did not base its decision on

any asserted privacy rights of physicians, id. at 28, and thus that

issue plays no role in this Petition. Judge Lipez explicitly rejected

privacy concerns as a basis for upholdingthe PIL. /d. at 101 (Lipez,

J., concurring and dissenting). Indeed, any privacy defense is

13

has upheld the First Amendment right of newspapers to

publish the names of juvenile offenders (at least where

it has lawfully obtained the names), even though States

routinely treat such names as matters of private concern

that should be kept confidential. Smith v. Daily Mail

Publishing Co., 443 U.S. 97, 104 (1979). Given that listing

personal] data consti? ites “speech” when performed by

commercial newspapers, there can be no grounds for

stripping it of all constitutional protection simply because

it is undertaken instead by other types of commercial

entities, such as Petitioners.®

The Court has further made clear, in Dun &

Bradstreet, Inc. v.Greenmoss Builders, Inc.,472 U.S. 749

(1985), that First Amendment protections apply to

doomed to failure, given that New Hampshire disclaims an interest

in preventing the dissemination of prescriber-identifiable data to

anyone other than a drug company planning to use the data to

assist with detailing. As the Court explained in Florida Star, States

may not, consistently with the First Amendment, prohibit news-

papers on privacy grounds from publishing rape victims’ names

unless they apply the prohibition across the board. Florida Star,

491 U.S. at 540. “When a State attempts the extraordinary

measure of punishing truthful publication in the name of privacy,

it must demonstrate its commitment to advancing this interest by

applying its prohibition evenhandedly, to the smallest disseminator

as well as the media giant.” /d.; see also, id. at 541-42 (Scalia, J.,

concurring in part and concurring in the judgment).

° Of course, the purposes for which speech is uttered may

dictate the level of First Amendment protection to which it is

entitled; e.g., commercial speech (that is, speech that “proposes a

commercial transaction,” Bd. of Trustees v. Fox, 492 U.S. 469, 473

(1989)) is entitled to a somewhat lesser degree of protection than

other forms of speech. But a commercial purpose has never been

deemed grounds for denying First Amendment protection

altogether.

14

aggregated financial data regarding businesses

disseminated for a profit by a credit reporting agency.

In Dun & Bradstreet, the plaintiff alleged that unfavorable

financial data disseminated by the credit reporting agency

was false; it sued for libel. The only issue that divided

the Court was the degree of First Amendment protection

to which the credit reporting agency was entitled; all nine

members of the Court agreed that agency’s dissemination

of aggregated financial data was speech that was entitled

to some First Amendment protection. See, e.g.,472 U.S.

at 759-60 (plurality opinion).’

In yet another factually analogous case, all nine

Supreme Court justices indicated that regulation of

dissemination of aggregated data should be deemed

regulation of speech. Los Angeles Police Dep’t v. United

Reporting Publishing Corp., 528 U.S. 32 (1999), involved

plaintiffs who faciaily challenged a California statute that

prohibited disclosure of police department arrest records

to firms that refused to agree not to use those records for

commercial purposes (e.g., sales to attorneys who were

interested in soliciting business from arrestees). A majority

of the Court rejected the facial challenge, finding that the

First Amendment was not implicated when a government

allows some citizens access to public records but denies

access to others. But all nine justices agreed that if the

plaintiffs could gain access to the records without

government assistance, any government effort to prevent

’ The Court ultimately held that the First Amendment does

not prohibit States from permitting the award of presumed or

punitive damages in libel cases involving wholly false speech where

(asin Dun & Bradstreet) the defamatory statements do not involve

matters of public concern, even in the absence of a showing of

“actual malice.” Id. at 755-761 (plurality).

15

their use would implicate the First Amendment. See

United Reporting, 528 U.S. at 40 (“This is not a case in

which the government is prohibiting a speaker from

conveying information that the speaker already

possesses.”); id. at 42-43 (Ginsburg, J., with whom

O’Connor, Souter, and Breyer, JJ., joined, concurring)

(“Anyone who comes upon arrestee information in the

public domain is free to use the information as she sees

fit. [Once the information is published in a legal newspaper,

the challenged statute] would indeed be a speech restriction

if it then prohibited people from using that published

information to speak to or about arrestees.”) (emphasis

added); id. at 46 (Stevens, J., with whom Kennedy, J.,

joined, dissenting).

The panel arrived at its the-First-Amendment-is-not-

applicable conclusion without even mentioning Florida

Star, Smith, Dun & Bradstreet, United Reporting, or any

of the numerous federal appeals court decisions that have

concluued that dissemination of aggregated data is entitled

to First Amendment protection. See, e.g., TransUnion

v. FTC, 245 F.3d 809 (D.C. Cir. 2001), cert. denied, 538

U.S. 915 (2002). Review is warranted in light of the conflict

between the decision below and the numerous decisions

of this Court and other federal appellate courts regarding

whether the transfer of aggregated data constitutes

“speech” worthy of First Amendment protection.

IT, Review Is Warranted Because This Case Is

a Good Vehicle for Examining the Important

First Amendment Issues Facing Numerous

States Seeking to Control Health Care Costs

Review is also warranted because the issues raised

in the Petition are arising with increasing frequency as

16

States look for novel ways to control their health care costs.

As the Petition notes, two other States (Maine and

Vermont) have adopted statutes substantially similar to

the PIL; and following the First Circuit’s decision

upholding the PIL, numerous other States are considering

similar legislation. Pet. 11. Review is warranted to provide

those States with guidance regarding the constitutionality

of such statutes. While litigation challenging the Maine

and Vermont statutes is pending, the posture of those suits

makes it highly unlikely that either suit could reach this

Court for some years to come. Accordingly, if the Court

is to provide any guidance to the more than 20 state

legislatures that are considering similar legislation, it must

come in connection with this Petition.

This case is a particularly good vehicle for addressing

the First Amendment questions presented by the Petition.

The case has already been tried in the district court, and

the record is fully developed. The First Circuit addressed

the merits of Petitioners’ claims and determined that any

First Amendment rights possessed by Petitioners are not

infringed by the PIL. The appeals court directed entry

of final judgment for New Hampshire, and thus there is

no further opportunity for development of the record.

Moreover, companies (such as Petitioners) that

collect and distribute prescriber-identifiable data are the

entities best situated to raise all aspects of the First

Amendment issues implicated by the PIL’s speech

prohibitions. Such companies are the ones most directly

targeted by the PIL because they sre the ones prohibited

from transferring information to drug companies that

would use the information to enhance their detailing

capabilities. While the PIL may also infringe the First

Amendment rights of drug companies, its impact on them

17

is largely indirect in nature — their ability to communicate

with doctors is abridged only because they cannot obtain

data from companies such as Petitioners. Accordingly,

it would make little sense to deny certiorari for the purpose

of awaiting a challenge to the PIL brought by a drug

company; this suit already includes the plaintiffs most

directly affected by the statute.

This case is a superior vehicle for addressing First

Amendment issues implicated by the PIL because, in all

likelihood, Petitioners’ speech interests are entitled to

significantly more First Amendment protection than are

the speech interests of drug companies. When drug

companies undertake detailing, they undoubtedly are

engaging in commercial speech, a form of speech receiving

a somewhat reduced level of First Amendment protection.

Detailing meets the classic definition of commercial speech:

speech (such as advertising) that “propose[s] acommercial

transaction.” Fox, 492 U.S. at 473. In contrast,

Petitioners’ activities do not so easily fit into the

commercial speech mold. When Petitioners transfer

information to a drug company, they are not proposing

that the company engage in any sort of commercial

transaction, and the transfer takes place “outside a

traditional advertising format, such as a brief television

or newspaper advertisement.” Nike v. Kasky, 539 U.S.

654, 677 (2003) (Breyer, J., dissenting from dismissal of

the writ). As Justice Breyer has explained, those

noncommercial characteristics of speech by a business

entity strengthen the entity’s claim to heightened First

Amendment protection. Id.® Accordingly, if the Court

® The Court has never suggested that speech not falling

within the classic definition of “commercial speech” is nonetheless

18

is to consider First Amendment issues raised by the PIL,

it makes much more sense to do so in the context of a

challenge raised by Petitioners than in connection with

a challenge raised by a drug company.

Several justices have expressed dissatisfaction with

the Court’s current approach to commercial speech cases,

particularly where the speech at issue arises outside the

context of traditional advertising and/or the government

is seeking to restrict the speech for reasons other than

its potential falsity. See, e.g., Western States, 535 U\S. at

377 (Thomas, J., concurring); 44 Liquormart, Inc. v. Rhode

Island, 517 U.S. 484, 517-18 (1996) (Scalia, J., concurring

in part and concurring in the judgment). Given the context

within which Petitioners’ claims arise (speech arising

outside of the traditional advertising context, with no

suggestion that Petitioners’ speech is false), this case would

be an ideal vehicle for the Court to examine whether to

modify existing commercial speech standards.

While it is true that the appeals court denied

Petitioners’ standing to assert the First Amendment rights

of drug companies, that denial does nothing to detract from

the attractiveness of this case as a vehicle for considering

whether the PIL and/or similar laws pass First Amendment

entitled to reduced First Amendment protection simply because the

speech arises in a commercial context. To the contrary, the Court

has explicitly rejected the notion that a profit motive lessens the

constitutional protection otherwise afforded to speech, stating,

“Some of our most valued forms of fully protected speech are

uttered for a profit.” Fox, 492 U.S. at 482. See also Consolidated

Edison Co. v. Public Serv. Comm’n, 447 U.S. 530, 537 1980). The

Court has, for example, afforded full First Amendment protection

to the contents of a paid advertisement soliciting money. New York

Times Co. v. Sullivan, 376 U.S. 254 (1964).

1%

muster. For the reasons explained above, Petitioners’ First

Amendment claims are significantly stronger than the

First Amendment claims of any drug company whose

activities are affected by the PIL. Thus, First Amendment

claims would not be significantly strengthened by

combining the claims of Petitioners and a drug company

inasingle case. Petitioners’ First Amendment claimsare

based on an asserted right to convey information to drug

manufacturers, and those claims are not dependent on

a showing that the PIL also interferes with drug companies’

ability to communicate effectively with doctors.

In sum, this case presents an ideal vehicle for

addressing First Amendment issues raised by state efforts

to restrict speech that allows detailing to be effective.

Ill. TheAppeals Court’s Alternative Holding That

New Hampshire May Restrict Speech in Order

to “Level the Playing Field” Conflicts with

This Court’s Jurisprudence Regarding

Commercial (and Other) Speech

Review is also warranted because the First Circuit’s

alternative holding — that the PIL passes constitutional

muster even if examined under a commercial speech lens

~- so clearly conflicts with this Court’scommercial speech

jurisprudence.

The flaws in the First Circuit’s commercial speech

analysis are most evident in connection with its

consideration of the fourth prong of the Central Hudson

test: whether challenged regulation restricts speech no

more than is necessary to further the governmental interest

purportedly advanced by the regulation. Central Hudson,

20

447 U.S. at 556. The appeals court recognized, in accord

with established case law, that a speech restriction does

not survive this narrow tailoring test if the governmental

interest would be equally well served by measures that

do not involve regulation of speech: “Our starting point

is well marked: ‘If the First Amendment means anything,

it means that regulating speech must be a last — not first

~resort.’” Pet. App. 38 (quoting Western States, 535 U.S.

at 373).

But the appeals court then proceeded to reject each

of the non-speech measures suggested by Petitioners. In

particular, it rejected a suggestion that New Hampshire

adopt an expanded counter-detailing program, whereby

state officials would seck to persuade doctors to prescribe

low-cost generic drugs in place of the more expensive brand-

name drugs being pushed by detailers. Jd. at 39-40. It

stated that a counter-detailing program would not

accomplish New Hampshire’s governmental interest in

“restor|ing) equilibrium to the marketplace of ideas” in

the absence of a multi-billion dollar expenditure designed

to match the pharmaceutical companies’ “marketing

juggernaut”: the over $4,000,000 they spend per year on

detailing. Jd.* The court reasoned that, in light of what

it viewed as the prohibitive cost, a counter-detailing

program was not an adequate substitute means for leveling

the playing field. Jd.

Review is warranted because the appeals court’s

level-the-playing-field rationale conflicts with numerous

* The court earlier explained that New Hampshire sought

“to level the playing field” by rendering detailing less effective “by

eliminating the detailers’ ability to use a particular informational

asset — prescribing histories — in a particular way.” Pet. App. 25-26.

21

decisions of this Court. In the context of campaign

financing, the Court has repeatedly held that a desire to

create a “level playing field” among competing points of

view does not justify imposing speech restrictions on the

party with greater financial resources. See, e.g., Buckley

v. Valeo, 424 U.S. 1, 48-49 (1976). As Buckley explained:

(T]he concept that government may restrict the

speech of some elements of our society in order to

enhance the relative voice of others is wholly foreign

to the First Amendment, which was designed “to

secure the widest possible dissemination of

information from diverse and antagonistic sources”

and “to assure unfettered interchange of ideas for

the bringing about of political and social changes ©

desired by the people.” ... The First Amendment’s

protection against government abridgement of free

expression cannot properly be made to depend on

a person’s financial ability to engage in public

discussion.

Id. (quoting New York Times Co. v. Sullivan, 376 U.S.

at 266, 269). See also McConnell v. Fed. Election Comm’n,

540 U.S. 93, 227 (2003) (citing Buckley).

The Court recently observed that government efforts

to restrict speech in order to “level the playing field” have

“ominous implications,” because they necessarily require

the government to get into the business of evaluating the

relative strength of speakers. Davis v. Fed. Election

Comm’n, 1285S. Ct. 2759, 2773 (2008). The Court stated

that it is up to the people, not the government, to make

those kinds of determinations: “‘[T]he people in our

democracy are entrusted with the responsibility for

evaluating the relative merits of conflicting arguments’

22

and ‘may consider, in making their judgment, the source

and credibility of the advocate.’” Id. at 2773-74 (quoting

First Nat’! Bank of Boston v. Bellotti, 435 U.S. 765, 791-92

(1978)).

This Court’s commercial speech case law includes

nothing to suggest that the aversion to level-the-playing

-field speech restrictions is reduced in the commercial

speech context. To the contrary, the Court has repeatedly

spoken out against government restrictions on commercial

speech that are based on a government desire to protect

listeners from their own misuse of too much speech. The

Court has “rejected the notion that the Government has

an interest in preventing the dissemination of truthful

information in order to prevent members of the public

from making bad decisions with the information.” Western

States, 535 U.S. at 374.

For example, in rejecting Virginia laws designed

to protect consumers from too much drug-price advertising

that might cause them to make unwise purchasing

decisions, the Court explained:

There is, of course, an alternative to this highly

paternalistic approach. That alternative is to

assume that this information is not itself harmful,

that people will perceive their own best interests

if they are well enough informed, and that the best

means to that end is to open the channels of

communications rather than to close them....

Virginia is free to require whatever professional

standards it wishes of its pharmacists; it may

subsidize them or protect them from competition

in other ways. But it may not do so by keeping the

public in ignorance of the entirely lawful terms that

23

competing pharmacists are offering.

Virginia State Bd. of Pharmacy v. Virginia Citizens

Consumer Council, Inc., 425 U.S. 748, 770 (1976).

If New Hampshire wishes to ensure that doctors

receive what it deems a more-balanced presentation

regarding the relative merits of competing prescription

drugs, nothing prevents it from “open[ing] the channels

of communication” by adopting an expanded counter-

detailing program. But Western States and Virginia State

Bd. of Pharmacy make clear that New Hamphire is not

free to restrict the truthful speech of pharmaceutical

companies (or, even worse, restrict the truthful speech

of Petitioners and others who do not make any commercial

pitches to New Hampshire’s doctors) in an effort to “level

the playing” field between itself and the pharmaceutical

industry. It may fear that doctors will make unwise use

of the information supplied to them by detailers, but such

fears do not justify restrictions on truthful speech.

In sum, review is warranted because the appeals

court’s justification for upholding the PIL as a valid

restriction on commercial speech — that it serves to “level

the playing field” in terms of the quantity of speech

reaching New Hampshire doctors — conflicts with this

- Court’s jurisprudence regarding commercia! speech and

many other kinds of speech.

24

CONCLUSION

Amici curiae request that the Court grant the

petition for a writ of certiorari.

Respectfully submitted,

Of Counsel: Daniel J. Popeo

Richard A, Samp

Ilya Shapiro (Counsel! of Record)

Cato Institute Washington Legal Foundation

1001 Mass. Ave., NW 2009 Massachusetts Ave., NW

Washington, DC 20001 Washington, DC 20036

(202) 218-4600 (202) 588-0302

Dated: April 27, 2009