As Congress Resets the Clock Until After the Elections, the Supreme Court Issues Significant Opinions Limiting Governmental Power to Restrict Commercial Speech

On July 9, 2012, President Obama signed into law the Food and Drug Administration Safety and Innovation Act giving the FDA two years to “issue guidance that describes Food and Drug Administration policy regarding the promotion, using the Internet (including social media), of medical products…”  The FDA has been studying this issue since 1996.  It has held numerous hearings, issued notices and guidance, and pursued countless enforcement actions based on on-line content.  Nonetheless, despite over 16 years of deliberations, the rules remain unclear.  In FDA’s defense, technology is a moving target and new media continues to evolve and revolutionize how society behaves and shares information.  However, the lack of clear guidance has significantly silenced the one voice with the most reliable scientific information concerning medical products - the manufacturer.  While it is not clear what guidance FDA will ultimately issue, it is clear that Congress has reset the clock for FDA to provide “guidance” until after the 2012 elections.  

Despite Vague Rules, Civil Penalties and Criminal Prosecutions Set New Records

On July 2, 2012, the Department of Justice announced its landmark $3 billion dollar settlement of civil and criminal charges with GlaxoSmithKline concerning, among other things, its promotion of products for uses not approved by the FDA.  Vague rules create an unfair playing field where regulatory agencies “interpret the rules as they see fit” and the risk to industry in defending protracted civil and criminal litigation includes exclusion from government programs, additional criminal prosecutions and, possibly, debarment (i.e. corporate death penalty of exclusion from marketing products).      

The Supreme Court is Increasingly Critical of Vague Regulations that Limit Speech

Meanwhile, over in the Supreme Court and barely audible in the din of recent Court rulings on immigration and healthcare, the Supreme Court issued decisions in two significant cases involving vague regulations applied to limit commercial speech.  In FCC vs. Fox, a case concerning broadcast content, the Supreme Court stated “[w]hen speech is involved, rigorous adherence to [due process] is necessary to ensure ambiguity [in the rules] does not chill protected speech.”  The Court went on to state that, “[a] statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law.”  Also largely unreported was the Supreme Court’s opinion in Christopher v. SmithKline where the Court stated, “[deference to regulatory agencies] creates a risk that agencies will promulgate vague and open-ended regulations that they can later interpret as they see fit, thereby ‘frustrat[ing] the notice and predictability purposes of rulemaking.’”  

According to the Supreme Court: 
[i]t is one thing to expect regulated parties to conform their conduct to an agency’s interpretations once the agency announces them; it is quite another to require regulated parties to divine the agency’s interpretations in advance or else be held liable when the agency announces its interpretations for the first time in an enforcement proceeding and demands deference.  

Supreme Court Holds that Even “False” Speech is Protected by the First Amendment

The Government has taken a number of approaches to avoid Due Process and First Amendment concerns.  Among the approaches is that any “suggest[ion] that [a] drug is safe and effective” for an off-label use is “false or misleading,” irrespective of the scientific support for the suggestion.  According to the Government, false and misleading statements are not protected by the First Amendment.  Yet, in US v. Alvarez, decided by the Supreme Court on June 28, 2012, the Court stated: “[t]he Court has never endorsed the categorical rule the Government advances: that false statements receive no First Amendment protection.”  Accordingly, even if the government declares “truthful” information to be “false,” the Supreme Court holding in Alvarez nonetheless extends Due Process and First Amendment protections to such speech. 

3 Things to Focus on: Compliance, Compliance, Compliance

Understanding the rules, educating the workforce, establishing robust oversight and vigilance in taking corrective measure have never been more urgent or complex, particularly in this evolving era of online communication. Companies who redouble their efforts to continually assess, implement, educate, enforce, correct and revise their compliance programs will be rewarded, or at least not be punished.  Those who do not, may find themselves operating under a government drafted Corporate Integrity Program.

Implement: A written policy based on your unique products and marketing.  Employees must be informed of the regulatory significance of online content that is attributed to the company and its products.
o Establish a regular program of education. 
o Employees must know when on-line content is personal and when it is attributable to the company. 
Enforce: Review online content.  Know what your employees and third parties are saying about your products.
Correct: Take immediate corrective action when inappropriate content is identified: remove it, request it be removed (if you do not control it), and renounce it. 
Reassess: As social media continues to evolve, take inventory of the social media technology and platforms that are being used and determine whether your compliance program fits. 
  • what is the business interest the use advances;
  • does the use advance that business interest;
  • does the use comply with applicable law or require oversight; and
  • is the use covered by the Compliance Program?  If not, 
  • Revise: Compliance Program documents are a constant work-in-progress.  If you do have the review of your Social Media Compliance Program on your to-do list, you may stay ahead of the regulators.  If not, now is a good time. 
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Categories: Social Media | Supreme Court | Technology

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