Did the Supreme Court Explode Drug Regulation While No One Was Looking? Don’t Panic!

Back in 2012, CLB Fellow Matt Lamkin blogged about a case that still haunts our nightmares. In United States v. Caronia, the U.S. Court of Appeals for the Second Circuit held that FDA regulations prohibiting off-label marketing of drugs violate the First Amendment … or, at least, hinted at that conclusion. The majority didn’t quite come out and squarely declare drug advertising regulation unconstitutional, much to our relief.

The regulatory state as we know it dodged a bullet in Caronia; ever since, Matt and I have been hoping and praying that the Supreme Court would never take up the case. We scanned the dockets for anything Caronia and, mercifully, it never appeared.

… or did it? What if the Supreme Court snuck Caronia’s holding into a different case, right beneath our noses? What if its holding was even broader than Caronia, threatening not just drug regulation but practically all advertising regulation and professional oversight? What if that case was decided 9-0? What if a leading expert said of the decision that its logic “would roll consumer protection back to the 19th century” … ?

Have you woken up in a cold sweat yet? This isn’t a bad dream. The case is real, and its name is Reed v. Town of Gilbert. But it’s also not quite the boogeyman it sounds like. My view is that the decision certainly goes “bump” in the night, but, much like the monster you once could have sworn lived under your bed, its threat is more imagined than real.

Here’s a quick overview. The town of Gilbert, AZ, had some ordinances governing the display of signs. The details aren’t important except to say that plaintiff Clyde Reed, a local pastor, was understandably miffed that the rules for signs informing parishioners about weekly church services were stricter than those for signs plugging ideological messages or political candidates. His quest for relief from this silly restriction sent him all the way to the highest court in the land.

In a sweeping opinion, Justice Thomas took a familiar principle of First Amendment doctrine and weaponized it. Generally, regulations of speech need to be “content-neutral” — the government can’t discriminate against discussion of particular topics just-because. Laws that aren’t content-neutral are presumed unconstitutional — as good as dead. But what exactly is a content-neutral regulation? Before Reed, two lines of Supreme Court precedent said somewhat contradictory things about it. That’s confusing, but it happens all the time, usually because each line is motivated by a common-sense principle that can’t be reconciled with the other, yet neither can be discarded completely.

So it was here. A few cases, including Discovery, Simon, and Turner, said that a law stops being content-neutral as soon as either its language or its intent discriminates against particular topics. So, for example, if a local fireworks stand has bought up all the billboards along the Old Highway and the City has a problem with it, the City is not allowed to create an ordinance that says “no more ads for fireworks” because that’s not content-neutral. It’s also not allowed to create one that says “no more ads along the Old Highway” (because the ad space is all owned by the fireworks stand, so the law is clearly intended to regulate signage about fireworks).

Meanwhile, in an important case called Ward, the Court said that the “principal inquiry” in assessing content-neutrality is whether a given law was motivated by “disagreement” with a speaker’s message. So in our fireworks example, the important thing would be whether the city government enacted the sign ordinance out of disagreement with the idea of people buying and using fireworks (not okay) or because the brightly colored signs were distracting drivers along the Old Highway (perfectly fine).

Maybe there was some way to reconcile Ward and the Discovery-Simon-Turner line, but Justice Thomas didn’t look for it. Instead he argued that Ward only applies to laws that are content-neutral on their face (the “no more ads along the Old Highway” category). Any law that purports to regulate by topic, on this approach, is drawing dead. See the disruption this causes? As the New York Times article covering the case put it, “Securities regulation is a topic. Drug labeling is a topic. Consumer protection is a topic.

Suffice it to say, that legal theory sounds like Caronia on steroids. Off-label drug marketing is a topic. So is the marketing of unapproved experimental drugs. And of medical devices. And of medical services from unlicensed physicians. Extend the list with whatever ridiculous addition you can imagine. The weaponized Thomas approach is a supremely blunt instrument: if it’s a topic, there’s no content-neutral way to regulate it. Your signage rules apply to all of the signs or none of them. Hail, hail Caronia, land where the speech is free …

So, now that we have seen how the Court’s decision in Reed could ruin everything forever, let’s discuss why it probably won’t. Here are three reasons not to panic.

  1. The Meaning and Authoritativeness of the Decision Are Unclear At Best


Remember when I said that Reed was decided 9-0? Not all 9-0 opinions are created equal. Depending on how we agree to split hairs, the decision could be thought of as 6-3, or 3-6, or even 3-3-3. Or, to get really weird, 6-3-1-3, which adds up to way more than nine! All of which is to say, nobody can really say for certain what binding authority Reed has created (beyond “Pastor Reed wins, the City of Gilbert loses”).

What’s going on here is that several justices wrote separate opinions in the case, so, the consensus ends at “Reed wins.” These kinds of fractured rulings confuse even the sharpest of legal eagles. Justice Thomas delivered the Opinion of the Court, as it’s called, but three others — Alito, Sotomayor, and Kennedy — signed on to a concurrence. Meanwhile, Justice Kagan filed an opinion “concurring in the judgment,” joined by Breyer and Ginsburg. (Justice Breyer also filed his own separate opinion concurring in the judgment, but this web is tangled enough without him trying to exist in two places at once.) When a judge concurs in the judgment only, this is a polite way of saying “my colleagues picked the right winner, but for reasons I strenuously disagree with.” So, we can immediately strike three votes from the scary interpretation of Reed; Justice Kagan’s opinion is forcefully worded and reads for all the world like a dissent.

As for the Alito-Sotomayor-Kennedy concurrence, those three are as a matter of formality endorsing Justice Thomas’ reasoning in ruling for Reed, purporting to add only “explanation” to it. But it is difficult to see this concurrence as a mere supplement. Justice Alito delivers a long list of sign regulations that he believes would survive in the wake of Reed, and advises that, “properly understood,” the decision will not quash legitimate public safety regulations.

The implication is telling — Justice Alito seems to hint that if this case has a disruptive effect, it will be attributable to lower courts improperly understanding it. Not exactly a ringing endorsement. Moreover, Justice Sotomayor — arguably the Court’s foremost champion of a robust administrative state — signed her name to this concurrence. She (and probably Justice Kennedy) would not have joined Justice Alito unless they were satisfied that Reed’s effect will be somewhere between “negligible” and “modest.”

And indeed, no Supreme Court opinion is completely interpretation-proof. (Not even the snappy six-word ones: “The United States never pay costs.” United States v. Barker, 15 U.S. 395 (1817).) Where the rubber really meets the road is in the lower courts’ application of Supreme Court precedent. There is ample play in the meanings of the operative words at issue here — “speech,” “content,” “neutral,” and “topic,” just to name a few. Each of them can and will bend to accommodate the tension that Reed seems to exert.

Nervous court-watchers might point out that a few courts (notably the Fourth and Seventh Circuits) have already treated Reed as a serious departure from business as usual. But the laws in these cases — a panhandling ordinance and an anti-robo-call statute —were hardly central pillars of the regulatory system. When a more disruptive case comes along, other circuits may well find ways to sidestep Reed.

  1. Even If Reed Is Authoritative, It Simply Can’t Mean What It Says


There are not five votes on the Supreme Court to uphold the maximalist interpretation of Reed. My hunch is that there may not even be four. If it comes to the point where Reed wreaks the kind of havoc envisioned above, the Court will be forced to confront its mistake.

Formally, nothing stops the justices from doubling down at this point. As a practical matter, the fact that we live in the 21st Century should provide reason enough to walk back the precedent. Even a thoroughly rote and wooden judicial philosophy must acknowledge that the judiciary can’t upend a widely relied-upon structural assumption about our government all at once; inherent in jurisprudence is a duty to maintain some minimal semblance of pragmatism. While the Supreme Court can certainly enact (or bless) significant changes in society, bringing large swaths of the contemporary administrative state to a screeching halt would go beyond its accepted institutional role.

  1. The Case’s Legal Rationale Is Crucially Flawed


Recall that Justice Thomas in Reed was faced with the clash between the Discovery-Simon-Turner line and the Ward case, which he resolved by limiting Ward‘s significance to facially content-neutral laws. His reasoning for this? He cites to another important case, Hill v. Colorado, quoting a passage that insists the Ward framework “applies only if a statute is content neutral.”

The problem is, that passage comes from the dissent in Hill. It is not binding authority. Heck, the law challenged in Hill was held to be content-neutral despite its facial non-neutrality.

Breaking the rules by citing to a dissent as though it were law is not exactly standard practice, but the Supreme Court’s word is law, so opinions fudge it every now and again and usually little can be done. But in a case so likely to be revisited, be assured that this faux pas will come back to haunt the majority, especially since it lies at the very heart of the opinion’s reasoning. Deprived of the convenient misreading of Hill, the Court will be forced to revisit how to reconcile Ward and Discovery-Simon-Turner. A more elegant solution will, one hopes, follow.

So, don’t panic. At some point or another, cooler heads will prevail and Reed will come to mean something plausible, and this period of uncertainty will go the way of so many dreams, directly from short-term memory to oblivion. We hope!

Roland Nadler, JD, Fellow, Stanford Center for Law and the Biosciences