Senate Judiciary Committee
May 13, 1998

Senator Hatch and members of the Senate Judiciary Committee.

My name is Burt Neuborne.1 Thank you for inviting me to testify before the Committee on the First Amendment issues raised by proposed restrictions on the advertising and marketing of tobacco products that are contained in four documents currently pending before the Senate: (1) the so-called global tobacco settlement entered into between more than 40 state attorneys general and the major tobacco companies in June, 1997; (2) S. 1530 (the Hatch Bill); (3) proposed rules and regulations promulgated by the FDA (61 Fed Reg 44396); and (4) S. 1415 (the McCain Bill).

In common with virtually every First Amendment scholar to have addressed the issue, I believe that the restrictions on advertising contained in the FDA rules and the McCain Bill will not survive serious First Amendment scrutiny.2 Conversely, I believe that the even more draconian restrictions contained in the global tobacco settlement would be fully enforceable because they are the result of a bargained contract, not government imposition. Accordingly, if the Committee’s aim is the restriction of tobacco advertising, I believe that support for the global settlement is clearly the preferable course.

I have spent a good deal of my career seeking to defend free speech. I served as National Legal Director of the ACLU during the 1980's, and have written widely on First Amendment issues raised by efforts to regulate the free flow of truthful commercial information concerning lawful products. During my career as an ACLU lawyer, I occasionally found myself in an uncomfortable situation. Often, as in cases involving hate speech, I was confronted with speech with which I profoundly disagreed, and which I feared might well be harmful to society. But, I was also confronted with the fact that if the speech I disliked were censored by the government, the free speech principle at the core of the First Amendment would be wounded, opening the way to broad censorship, and the loss of the remarkable benefits that flow to an open society genuinely committed to the free flow of ideas.

Faced with the dilemma of censoring speech that I disliked, and the erosion of free speech principles, I unhesitatingly chose to defend the First Amendment, even though the price was the toleration of speech that I dearly wished would go away.

Many people feel that way about the advertising of tobacco products. Critics of the industry argue that vigorous tobacco advertising is harmful to society, inducing adults to smoke, and unfairly influencing children to experiment with the use of tobacco products. Let’s assume that critics of the tobacco industry, in good faith, want to radically restrict tobacco advertising, as in the proposed FDA rules, because they genuinely believe it is harmful. In order to achieve the censorship, they would have to overcome a powerful First Amendment argument that, as long as tobacco remains a lawful product, it would violate the First Amendment to impose dramatic restrictions on truthful, non-deceptive advertising about it. If critics of the tobacco industry lose that First Amendment argument (and I believe they will), they would continue to be saddled with speech they deem extremely harmful. If, on the other hand, industry critics win the First Amendment argument, they will have established a dangerous precedent that weakens the fabric of our free speech heritage. Either way, it is a lose-lose situation.

I want to explore with you this morning whether it is possible to avoid such a lose-lose scenario by achieving a dramatic reduction in tobacco advertising without risking a potentially disastrous free speech precedent. I believe that the voluntary advertising restrictions contained in the global settlement and the voluntary protocol provided for in the Hatch Bill would result in a major curtailment of tobacco advertising -- without risking our free speech heritage. Moreover, from the perspective of the critics of the tobacco industry, the voluntary global settlement approach provides a sure-fire means of minimizing tobacco advertising now, as opposed to the strong likelihood that legislatively imposed restrictions would be invalidated, after years of litigation, as violative of the First Amendment.

I propose to divide my testimony into four sections. First, I will remind the Committee why the Supreme Court has granted free speech protection to commercial speech, and argue that efforts to impose dramatic restrictions on tobacco advertising run headlong into the Supreme Court’s rationale. Second, I will describe the advertising restrictions contained in each of the four documents before the Committee. Third, I will discuss the First Amendment validity of the voluntary but enforceable restrictions imposed by the global settlement. Fourth, I will discuss the First Amendment vulnerability of the advertising restrictions contained in the proposed FDA regulations and in certain versions of the McCain Bill. I will end by urging the Committee to recommend to the Congress that it adopt a win-win approach to tobacco advertising that would enable Congress to succeed in eliminating tobacco advertising without risk that the legislation will fail because the Supreme Court will strike it down, or that it will weaken the First Amendment.
I. Why Does the Supreme Court Protect Commercial Speech?

Supreme Court protection of truthful commercial speech about lawful products dates from Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council , 425 U.S. 748 (1976). In Virginia Pharmacy, the Court was confronted with a ban on price advertising on non-prescription drugs. Virginia defended the advertising ban as necessary to maintain the professionalism of pharmacists, and to assure the stability of the industry. Despite such a powerful defense, the Court invalidated the ban, holding that consumers were entitled to receive truthful information about lawful products.

In the twenty-two years since Virginia Pharmacy, the Supreme Court has repeatedly re-affirmed the basic rationale of Virginia Pharmacy that consumers have the right to make informed and autonomous choices about economic matters free from the paternalistic hand of the state. Over and over, the Court has stressed that consumers must be trusted to deal with truthful commercial speech, just as voters must be trusted to deal with political assertions. Thus, the Court has systematically rejected paternalistic efforts to “protect” consumers against the use of figures, colors and vigorous assertions in commercial advertising. Eg. Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 763-65 (1976)(right to receive commercial messages); Linmark Associates, Inc. v. Willingboro Tp., 431 U.S. 85, 96-97 (1977)(right to receive real estate information); Carey v. Population Services, Int'l., 431 U.S. 678, 701 (1977)(right to receive birth control information); Bates v. State Bar of Arizona, 433 U.S. 350, 374-75 (1977)(right to receive price information on legal services); Central Hudson Gas & Elec. Corp. v. Public Service Comm'n, 447 U.S. 557, 567-68 (1980)(right to receive information on electrical services); In re R.M.J., 455 U.S. 191 (1982)(right to receive information on legal services); Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 69 (1983)(right to receive birth control information); Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 643, 646-47 (1985)(right to receive information on legal services; right to use colors and figures); Shapero v. Kentucky Bar Ass'n, 486 U.S. 466 (1988)(same); Peel v. Attorney Registration and Disc. Comm'n, 496 U.S. 91 (1990)(same); City of Cincinnati v. Discovery Network, 113 S.Ct. 1505 (right to receive commercial information generally); Edenfield v. Fane, 113 S.Ct. 1792 (1993)(right to receive face-to-face commercial information); Ibanez v. Florida Dep’t of Business and Professional, 512 U.S. 136 (1994)(right to engage in face-to-face solicitation); Rubin v. Coors Brewing Co., 115 S.Ct. 1585 (1995)(right to receive information on product content); 44 Liquormart v. Rhode Island, 116 S.Ct. 1495 (1996)(ban on liquor price advertising unconstitutional).

The key to the Supreme Court’s commercial speech jurisprudence is the close analogy that exists between a free market driven by consumer choice, and a free polity driven by voter choice. Consumers vote with their dollars, just as voters cast formal ballots. Both the free market and democracy depend on a free flow of information designed to permit autonomous and informed choice by the individual. When the government distorts the flow of that information, even for the best of motives, it usurps the power of choice that is at the heart of free institutions. Thus, a legislative effort to restrict tobacco advertising dramatically would, I believe, be viewed by the Supreme Court as an unconstitutional effort to cut-off information about a lawful economic option to consumers because the government believes that they cannot be trusted to deal with it adequately. In effect, banning tobacco advertising would be an effort to substitute the choice of a well meaning government censor for the informed choice of a freestanding individual.
II. The Restrictions Imposed on Tobacco Advertising by the Documents Before the Committee

The various documents before the Committee impose significant restrictions on tobacco advertising. The global settlement minimizes tobacco advertising. Pursuant to the terms of the global settlement, the major tobacco companies pledge to cease enormous categories of advertising and promotion. Moreover, the companies agree to expend substantial sums to persuade teen-agers not to smoke, and to pay what amounts to substantial penalties if the rate of teen smoking does not fall by an acceptable amount.

The proposed FDA rules, codified in the McCain Bill, also impose dramatic restrictions on tobacco advertising. Outdoor advertising is forbidden within 1,000 ft of a school or playground. When it is permitted, it must use black & white text, without images or figures. Tobacco advertising in most newspapers and magazines is restricted to black & white text, without the use of figures or images, except in limited settings where there is virtually no youth readership. Advertising at point of purchase is restricted to black & white text only messages, without the use of figures or images. The FDA rules also contemplate forced spending by the tobacco companies urging people to refrain from smoking.

Some are even proposing to go even further than the FDA rules, absolutely banning outdoor advertising, absolutely banning colors, figures and images even in magazines with no youth readership, banning tobacco advertising on the Internet, and banning the paid use of tobacco products to “glamorize” smoking in movies and other entertainment. Such an approach is even more likely to be declared unconstitutional.
III. The Enforceability of Advertising Restrictions in the Global Settlement

I do not believe that serious questions exist about the enforceability of the restrictions on tobacco advertising contained in the global settlement. The global settlement restrictions are the result of voluntary action by the tobacco companies as part of a negotiated resolution of good faith claims against them. Thus, the advertising restrictions in the global settlement are not government imposed within the meaning of the First Amendment, but rather are the result of individual choice by the tobacco companies. Of course, the restrictions are not “voluntary” in the sense that the companies did not wish to stop advertising. But the legally relevant definition of voluntary is whether, given all the facts and circumstances, the decision to accept the restrictions was freely entered into by the tobacco companies because they believed it to be in their long-term self interest. Of course, if the government’s coercive power forced individuals to waive their constitutional rights, the waiver would be invalid. But, in our view, no such coercion took place in connection with the global settlement. In effect, therefore, the global settlement restrictions are freely bargained contractual provisions that do not implicate the First Amendment. Snepp v. United States, 444 U.S. 507 (1980).

In Snepp, the Supreme Court upheld the validity of a contract between a CIA agent and the United States requiring pre-clearance of all writing, even after the agent left government employment. When the agent published a book without pre-clearance, the Supreme Court directed that all profits from the book be forfeited to the government as damages for breach of contract, even though the parties agreed that there was nothing in the book that would have endangered national security. If a CIA agent can bargain away the right to be free of prior restraints, surely the tobacco companies can bargain away the right to advertise.

Moreover, I do not believe that efforts to enforce the restrictions in court would turn the contract into state action. The only time in the Supreme Court’s history that judicial enforcement of a contract has been held to be state action was in Shelley v. Kraemer, 334 U.S. 1 (1948), when the Court invalidated the judicial enforcement of racially restrictive real estate covenants. Shelley has never been applied to contracts generally. Moreover, the special circumstance of Shelley are not present in the tobacco setting. In Shelley, the restrictive covenants “bargained” away the rights of prospective minority purchasers, who never participated in the contract negotiations. The rights being bargained away by the tobacco companies are, however, their own. See United Egg Producers v. Standard Brands, Inc., 44 F3rd 940, 943 (11th Cir. 1995). Thus, the global settlement is far closer to a classic private contract than the “private lawmaking” at issue in Shelley.

Nor could the global settlement be effectively attacked by third-parties, like advertising agencies or billboard companies, who might suffer economic injury because of its terms. While such affected third-persons might have standing to challenge the settlement, and would not be subject to issue or claim preclusion, Martin v. Wilks, 490 U.S. 755 (1989), they would not have a viable claim on the merits. No one has a First Amendment right to make another private person speak, if he wishes to remain silent Columbia Broadcasting Company v. Democratic National Committee, 412 U.S. 94 (1973). In effect, a third-party challenger would be forced to argue that no one has the right to waive a constitutional right, an impossible position to sustain.

Finally, the global settlement is not vulnerable under the unconstitutional conditions doctrine. The tobacco companies made a judgment that the deal offered by the states was worth accepting. In return for giving up the right to advertise, the companies received valuable consideration, most importantly, a long-term limit on potential damages for past conduct. Thus, the tobacco companies are in the identical position as a candidate for President who gives up the right to raise and spend campaign funds in return for public funding. In Buckley v. Valeo, 424 U.S. 1 (1976), the Court explicitly held that such a freely bargained arrangement did not constitute an unconstitutional condition.

Moreover, the same analysis would render the voluntary commitment to spend money to persuade teens to refrain from smoking, and the acceptance of penalty payments if teen smoking does not decline by an acceptable amount, fully enforceable with no serious constitutional impediments. Private contracts binding the parties to fund speech, or to pay penalties for failure to achieve contract goals, simply do not raise constitutional questions.

Thus, the global settlement would minimize tobacco advertising immediately, fund anti-smoking campaigns aimed at teen-agers, and make the tobacco companies guarantors of a significant decline in teen smoking -- and all without a serious challenge to the First Amendment.
IV. The Unconstitutionality of Advertising Restrictions in the McCain Bill

The advertising restrictions in the original McCain Bill are almost certainly unconstitutional. Flat bans on outdoor advertising, flat bans in the United States on Internet advertising, interference with the depiction of smoking in films and plays, and the complete elimination of color and the use of figures and images in tobacco advertising would almost certainly be viewed by the current Supreme Court as efforts to protect adults from their own alleged incompetence. Such an effort to infantilize the consumer has been repeatedly rejected by the Supreme Court. The use of colors, images and figures in commercial advertising was explicitly deemed as protected as words in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 643, 646-47 (1985). Flat bans on outdoor advertising would violate Metromedia, Inc., v. City of San Diego, 453 U.S. 490 (1981), and City of Ladue v. Gilleo, 114 S.Ct. 2038 (1994). A flat ban on tobacco advertising on the Internet would violate Reno v. ACLU, 117 S.Ct. 2329 (1997). Efforts to interfere with artistic judgment involving the “glamorization” of smoking would violate the most basic First Amendment norms forbidding content-based regulation of the arts.

Nor, in my opinion, would the FDA restrictions codified in the McCain Bill survive serious First Amendment scrutiny. I assume that the FDA rules will be defended as a “narrowly tailored” effort to protect children. In fact, the rules appear to use protecting children as a justification for banning advertising aimed at adults.

The Supreme Court has repeatedly made it clear that merely because Congress claims to be protecting children, it may not unnecessarily interfere with the free flow of information to adults. Thus, the Supreme Court has repeatedly invalidated efforts to impose the standards of children on what adults may read. In Sable Communications v. FCC, 492 U.S. 115 (1991), for example, Congress banned so-called "dial-a-porn" services used by adults in order to shield children from the morally degrading material. The Supreme Court unanimously invalidated the ban, ruling that Congress had failed to demonstrate that a flat ban on speech directed to adults was necessary to protect children.3

The Court's refusal in Sable Communications to permit a legitimate concern with children to be parlayed into a full-blown device to censor adults was not new law. In Butler v. Michigan, 352 U.S. 380 (1957), a unanimous Supreme Court invalidated a Michigan statute that forbade the public distribution of books, pictures and movies potentially harmful to minors. Justice Frankfurter, in invalidating the law, ruled that it was "not reasonably restricted to the evil with which it is said to deal", id at 388, because it reduced adults to reading only that which is fit for children. Similarly, in Bolger v. Youngs Drug Products Corp., 463 U.S. 60 (1983), the Court struck down a postal ban on unsolicited birth control advertisements directed to the home, holding that concern for children could not justify a broad-based ban on material directed to adults.

As the Court recognized in Sable Communications, unless would-be censors are held to a rigorous standard of narrow tailoring in child-protective settings, the temptation to use children as a stalking horse for censorship of adults will become overwhelming. See also Reno v. ACLU, 117 S.Ct. 2329, 2346 (1997).

Indeed, the FDA rules are even more objectionable than the regulations struck down in Reno v. ACLU. In Reno, the words alone were said to cause harm to the psyche of children. In the context of tobacco advertising, the words must be shown to lead to conduct before any harm to children occurs. Accordingly, at a minimum, the regulations must be narrowly drawn to cover only those advertisements proven to be particularly attractive to children.

A review of the broad sweep of the FDA tobacco ad restrictions belies any effort to characterize them as “narrowly tailored” to protect children. For example, the complete ban on the use of color, images or figures in all outdoor advertising cannot be persuasively characterized as necessary to protect children. Whatever the validity of a narrow ban on certain imagery particularly appealing to children (itself a dubious standard), a flat ban on color is simply far too broad. Moreover, the ban on outdoor advertising within 1000 feet of a playground or school constitutes a flat ban in urban areas, since virtually everything falls within the prohibited area. More importantly, there is no persuasive evidence that the mere existence of outdoor advertising has an impact on teen smoking.

Similarly, the ban on colors, figures and imagery from virtually all magazine and newspaper advertising, with the narrow exception of written material with virtually no youth readership is far too broad. Once again, the FDA’s insistence on going beyond narrowly defined displays particularly appealing to children, to a flat ban on color, figures, and imagery in virtually every mass circulation periodical belies the true intention of the rules. Protection of children is being used as a stalking horse for censoring adults, and the Supreme Court will not permit it.4

In addition, there is real doubt about the constitutionality of a legislative requirement that tobacco companies fund anti-smoking campaigns. The Supreme Court has held that compelled speech violates the First Amendment. Eg. Wooley v. Maynard, 430 U.S. 705 (1977); Communications Workers of America v. Beck, 487 U.S. 735 (1988); Pacific Gas & Electric Co., v. Public Utilities Co., 475 U.S. 1 (1986); Glickman v. Wileman Bros & Elliot, Inc., 117 S.Ct. 2130, 2139 (1997). Forcing tobacco companies legislatively to fund anti-smoking speech with which they disagree would, therefore, raise very serious free speech issues.

Of course, the Congress may choose to play Russian Roulette. Congress may ignore the virtually unanimous view of the First Amendment community, and seek to impose dramatic legislative restrictions on tobacco advertising. But it is a long-shot. The far safer route to dramatic restrictions on tobacco advertising would be to take advantage of the tobacco settlement, and leave the First Amendment alone. If tobacco advertising is really the evil that critics claim, critics will use this opportunity to end that evil immediately, instead of gambling that they can extract a higher price from the tobacco industry.