The Scylla and Charybdis of Central Hudson

Leave a comment

May 2, 2013 by Tamara Piety

I have said elsewhere in an article in the Alabama Law Review (“A Necessary Cost of Freedom”?) that the Supreme Court’s decision in Sorrell v. IMS Health may have, for all intents and purposes, done away with the Central Hudson test which heretofore applied to any regulation relating to commercial speech. Any regulation had to pass that test. That test, for those unfamiliar with the doctrine has 4 parts. The first two elements are almost never controversial. Prong 1 is whether the product or service is legal and whether the speech in question about that legal product or service is truthful and not misleading. That sounds like more than one thing but all of that is encompassed in the first prong. Also, there is a wealth of complication in this deceptively simple requirement that something be truthful and not misleading and be about a lawful product. But that is a post for another day. Suffice it to say that this is not usually where the fights are.

Prong 2 asks whether a substantial government interest is involved. Again, this is not usually the question around which a fight arises.

The disputes usually arise around prongs 3 and 4 of the test. Prong 3 requires that the government show that its regulation “directly advance” the goal in prong 2 and Prong 4 requires that it does so without being “more extensive than necessary” to advance that goal in prong 2. And there resides a formidable barrier because a regulation that meets prong 3 will likely violate prong 4, while one that meets 4 will likely then run afoul of 3. Hence the reference to Scylla and Charybdis.

As we look at the many public health issues – off label use marketing of pharmaceutical drugs, junk food marketing and many other issues – you might notice a problem. Regulatory efforts which are likely to be effective because they are broad – say banning certain types of advertising altogether or banning it in particular venues — will likely now run afoul of prong 4.

In contrast, when agencies or legislators try to very narrowly tailor a particular rule, chances are very good that the rule in question will be so modest that it will be much harder for it to be effective and certainly harder to measure its effectiveness. If this is the case, it may fail the 3rd prong that requires that the law be effective. Now notice that there is no requirement that the rule in question completely and conclusively solve the problem at hand. That would be unreasonable. But prong 3 of Central Hudson does require that the government be able to show that its proposed regulation will help. This is very hard to do prospectively, before you’ve tried a particular intervention. It is even harder if the proposal faces a skeptical court.

In this last we have some evidence not only that courts have been interpreting Central Hudson more strictly and setting a fairly high bar, but this trend is consistent with the courts willingness to interpret the standards for the admissibility of expert evidence generally with a demand for fairly unreasonable standards of proof for causation. The controlling case providing the standards for screening expert testimony is Daubert v. Merrill Dow. Many courts have interpreted Daubert to permit exclusion of evidence where an expert could not prove causation between, for example an environmental spill, and the plaintiff’s injuries or illness. It should be obvious that exclusion of expert evidence in a context where it is necessary to win puts a fairly heavy thumb on the scale. At the least it offers some advantages to those defendants able to marshal a great deal of resources in service of casting doubt on a particular claim.

So even before the Sorrell case made Central Hudson potentially irrelevant, it was already the case that Central Hudson itself offered ample grounds for excluding any adventures in governmental regulation for consumer protection since prongs 3 and 4 can prove a very difficult needle to thread indeed in the face of judicial skepticism.

This may be only one of many reasons not to mourn the potential irrelevance of Central Hudson, although I caution that it is nominally still good law and the Court appeared to take pains not to overrule it.

But many an effective intervention could easily get crushed between the jaws of prongs 3 and 4, particularly in the current environment where courts seem inclined to treat claims for freedom for commercial speech so generously. That is probably bad news for the public health community and perhaps for the regulation of the marketing practices of the financial industry.

An earlier version of this post first appeared on The Faculty Lounge.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: