D.C. Court of Appeals Puts Free Speech, Media at Risk

Court refuses to rehear anti-SLAPP decision, exposing media outlets and nonprofits to defamation lawsuits

After a lengthy two-year delay, today the D.C. Court of Appeals denied the Competitive Enterprise Institute’s (“CEI”) motion for rehearing en banc asking the full court to review a decision that will expose media and nonprofit organizations throughout D.C. to lawsuits claiming their stories and commentary are defamatory.

The original decision arose from a lawsuit filed by Michael Mann, a climate scientist embroiled in the scandal to “hide the decline” in the Earth’s temperature record, against CEI and others who criticized his work.  CEI moved to dismiss the case under D.C.’s Anti-SLAPP statute, a law designed to prevent frivolous lawsuits that are used to harass people exercising their free-speech rights; in this case, their First Amendment right to debate important issues of public policy.  The D.C. trial court refused to dismiss the lawsuit, and CEI appealed.  The appellate court upheld the initial ruling and refused to dismiss the case.

CEI then moved for rehearing en banc and dozens of amici from across the ideological spectrum urged the D.C. Court of Appeals to rehear the case because of the significant impact on First Amendment rights and the huge amount of public policy debate that occurs in the District.  Cause of Action Institute filed one of those amicus briefs on behalf of Dr. Judith Curry, a climate scientist who Michael Mann has consistently harassed using methods similar to those he complains CEI used against him.  Today, the court refused to rehear the case, without a single judge asking for rehearing.  The court’s decision in effect declares open season on media and nonprofit organizations located in the District of Columbia.

It would appear the two options available to CEI now are either to ask the U.S. Supreme Court to hear the case or to go back to the trial court and fight the case on the merits.

James Valvo is counsel and senior policy advisor at Cause of Action Institute.

Commercial Speech Doctrine Needs an Overhaul

Cause of Action Institute joined with the Cato Institute and Competitive Enterprise Institute in filing an amicus brief urging the U.S. Supreme Court to grant the petition for certiorari in CTIA v. City of Berkeley.  The commercial speech case involves an ordinance in Berkeley, California requiring cell phone retailers to make the following statement to their customers:

The City of Berkeley requires that you be provided the following notice:

To assure safety, the Federal Government requires that cell phones meet radio frequency (RF) exposure guidelines.  If you carry or use your phone in a pants or shirt pocket or tucked into a bra when the phone is ON and connected to a wireless network, you may exceed the federal guidelines for exposure to RF radiation.  Refer to the instructions in your phone or user manual for information about how to use your phone safely.[1]

The problem is that it is not entirely clear whether the harm described in this statement is actually true.  The current First Amendment commercial speech doctrine allows governments to compel commercial speech that is both “purely factual” and “uncontroversial.”[2]

The standard of review by which courts determine whether a particular compelled commercial statement meets this requirement can be the deciding factor in a case.  Take Berkeley, for example.  In this case, the record in the district court did “not offer[] any evidence that carrying a cell phone in a pocket is in fact unsafe.”[3]  That is, there is “no evidence in the record that the message conveyed by the ordinance is true.”[4]

Under any serious review of a governmental action impinging on a constitutional right—which compelled speech does—the absence of evidence to show that the government was indeed advancing a legitimate interest would be enough to strike down the ordinance.  But not in Berkeley.  The Ninth Circuit held that any “more than trivial” interest will suffice.[5]  No attention was paid to whether that interest, however trivial, is actually a legitimate one or if the compelled speech is advancing it.

The Supreme Court must step in

The commercial-speech doctrine is notoriously muddy.  Both Justice Thomas and Justice Ginsburg have recognized that the lower courts are in need of “guidance” on the “oft-recurring” and “important” subject of “state-mandated disclaimers.”[6]  And this guidance is necessary, the Justices wrote, because the Court has not “sufficiently clarified the nature and the quality of the evidence a State must present to show that the challenged legislation directly advances the governmental interest.”[7]

This lack of clarity has given rise to governments at various levels forcing commercial speakers to communicate disputed and politically charged statements, sometimes where the underlying factual issues are not resolved.  And lower courts are expanding government’s ability to commandeer commercial speaker’s message.  This contravenes the Constitution’s command that “Congress shall make no law” against free speech (incorporated against the states by the 14th Amendment).  This is precisely the type of behavior one would expect in a legal environment where the lines are not clear.

Commercial Speech Doctrine Must be Clear

The Supreme Court should grant the cert petition in Berkeley and ensure that moving forward when a government tries to compel commercial speech to carry the government’s message, the government must be able to, at a minimum, adduce evidence that (1) the purported harm actually exists, (2) mitigating that harm is a compelling government interest, (3) that the infringement on the speaker’s rights is narrowly tailored to advance that interest, and (4) that the compelled commercial speech actually does advance the interest.  We will continue to see doctrinal confusion and unnecessary compelled commercial speech absent that clarity, which should be avoided.

James Valvo is Counsel and Senior Policy Advisor at Cause of Action Institute.  You can follow him on Twitter @JamesValvo.

[1] Berkeley Municipal Code § 9.96.030(A).

[2] Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985).

[3] CTIA–The Wireless Ass’n v. City of Berkeley, California, 854 F.3d 1105, 1125 (9th Cir. 2017) (Friedland, J., dissenting in part).

[4] Id.

[5] Id. at 1117.

[6] Borgner v. Florida Bd. of Dentistry, 537 U.S. 1080 (2002) (Thomas, J., joined by Ginsburg, J., dissenting from denial of certiorari).

[7] Id.

Opposing Government Retaliation Against Free Speech

Cause of Action Institute Files Amicus Brief in Support of LabMD’s Bivens Claim Against FTC Officials

Cause of Action Institute filed an amicus curiae brief (“Brief”) in Michael Daugherty, et al v. Alain Sheer, et al[1] in support of Appellees Michael Daugherty and LabMD, Inc. in their Bivens lawsuit against certain FTC employees in their individual capacities seeking monetary damages. The Brief argues that the Federal Trade Commission (“FTC”) Act does not displace Bivens or immunize First Amendment retaliation, and that  the misconduct and collusion of individual FTC staff directly infected the investigation and administrative prosecution of LabMD after the company’s CEO spoke out against the agency.

In Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S.C 388 (1971), the Supreme Court first recognized an implied private action, directly under the Constitution, for damages against federal officials alleged to have violated a citizen’s constitutional rights.

As our Brief argues, Appellees’ complaint “alleges a straightforward First Amendment retaliation claim actionable under Bivens: LabMD’s CEO, Michael Daugherty, publicly criticized the Defendants’ abusive investigation of LabMD. In response, Defendants retaliated by ramping up the investigation to harm LabMD; bamboozling the Commission into authorizing an administrative prosecution based on false pretenses and stolen files; and then continuing to retaliate against LabMD throughout the enforcement action (including by subpoenaing its CEO’s book drafts and allegedly importuning the creation of false evidence for use against LabMD).”

Importantly, the Brief continues, “Defendants’ conduct led to the destruction of LabMD, formerly a thriving cancer-detection business supporting numerous jobs. That is a plausible Bivens claim. Therefore, Appellees should be entitled to discovery and the opportunity to make their case on the merits.”

Cause of Action Institute adamantly opposes any administrative action that exceeds Constitutional bounds. As the Brief states, “[i]t is never permissible for federal law enforcement to retaliate against citizens or businesses for exercising their First Amendment rights, no matter how vigorously law enforcement may disagree with or is offended by the speaker’s message.”

In March, the United States District Court for the District of Columbia partially rejected Defendants’ motion to dismiss. As Judge Tanya Chutkan wrote, “[i]n the court’s view, Plaintiffs’ First Amendment rights to criticize the actions of the federal government without fear of government retaliation are as clearly established as can be, and a serious escalation of an agency’s investigation or enforcement against Plaintiffs for publicly criticizing the agency would appear to violate that clearly established constitutional right.”[2]

In July, the FTC issued a final rule permitting indemnification of FTC employees in certain circumstances for claims made against them as a result of actions taken by them in the scope of their employment.[3] This general statement of policy relating to FTC management and personnel was published without the opportunity for public notice and comment, pursuant to the Administrative Procedure Act. As the agency stated, “[t]his policy is applicable to actions pending against FTC employees as of its effective date, as well as to actions commenced after that date.”[4] According to Bloomberg Law, the “FTC didn’t mention the LabMD case when it rolled out its new liability protection policy, but Daugherty said he believes there’s an obvious connection. ‘We’re hard pressed to believe this isn’t about us,’ he said.”[5]

Nichole Wilson is strategy officer at Cause of Action Institute.

[1] 17-5128 Michael Daugherty, et al v. Alain Sheer, et al (1:15-cv-02034-TSC)

[2] https://law.justia.com/cases/federal/district-courts/district-of-columbia/dcdce/1:2015cv02034/175313/24/

[3] “Indemnification of Federal Trade Commission Employees,” July 5, 2017; Federal Register Number: 2017-14008 https://www.regulations.gov/document?D=FTC-2017-0049-0001

[4] Id.

[5] Bloomberg Law, “FTC Tackles ‘Intimidating’ Threat of Lawsuits Against Staff,” Alexei Alexis, July 12, 2017 https://biglawbusiness.com/ftc-tackles-intimidating-threat-of-lawsuits-against-staff/

Court Rightly Denies Rep. Van Hollen Request to Rehear Free Speech Case

Supporters of free speech and the First Amendment won a significant victory this week when a federal court denied a last ditch effort by Congressmen (and Senatorial candidate) Chris Van Hollen (D-Md.) to salvage his campaign finance case.

On January 21, 2016, a DC Circuit panel reversed the District Court for the District of Columbia and upheld a Federal Election Commission (“FEC”) regulation requiring unions and corporations (including nonprofit organizations) to disclose only those contributors who donate for the purpose of funding an election campaign.

Van Hollen had sued the FEC, arguing that such organizations should be required to reveal all donors, not just those that donate for an election. On appeal to the DC Circuit, CoA Institute filed an amicus brief in support of free speech principles. The DC Circuit agreed with the CoA Institute position that the FEC had struck an acceptable balance between disclosure requirements and First Amendment protections.  In so doing, the Court emphasized a number of points made in the CoA Institute brief, particularly the importance of protecting the constitutional rights of contributors to privacy and anonymous speech.

Following the DC Circuit decision, Van Hollen moved the entire DC Circuit to rehear the case (a rehearing en banc).  On September 27, 2016, the full court denied the petition.  Pending a Supreme Court appeal, the DC Circuit decision is now final.