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~ ~ ~r»~ ~4„" ,~"a„y~i.vsC,,J !~'Jca d f~' .aR'w"~ MAY 2 0 191,155 M E M O R A N D U M z 0 F ti M From: Daniel J. Popeo, Chairman, Washington Legal Foundation Re: WLF Achievements in Defending Commercial Speech Date: May 19, 1993 ---------------------------------------------------------------------------------------------------- ---- WLF has developed a comprehensive program of litigation and advocacy in order to defend commercial speech rights in the legal arena. The following is a summary of WLF's accomplishments in this area over the past year or so: LITIGATION DIVISION - WLF's Litigation Division continues to participate in court cases and regulatory proceedings where there are important developments regarding commercial speech rights. • Cincinnati v:. Discovery Network (U. S. Supreme Court). On March 24, 1993 the High Court agreed with WLF's brief in this case involving First Amendment protection of commercial speech. The City of Cincinnati had attempted to prohibit the distribution of commercial publications (such as real estate listings) by means of newsracks placed on city streets, while at the same time allowing newsrack distribution of general-circulation newspapers. WLF's brief successfully argued that such content-based discrimination against commercial publications violates the First Amendment, which affords substantial protection to commercial speech. The brief was co-authored by Former Solicitor General of the United States and Harvard Law Professor Charles Fried, and former Assistant Attorney General Richard Willard. Status: Victory • Honig v. East Side Union School District (Superior Court of the State of California for the County of Santa Clara). On September 9, 1992, the court denied plaintiffs' request for a permanent injunction to stop the broadcast of Channel One in the East Side Union School District. In an earlier decision, the court agreed with WLF's arguments and refused to grant an injunction to stop the broadcast of Whittle Communications' "Channel One." Whittle provides free televisions and other communications equipment to schools willing to broadcast Whittle's daily 12-minute news program (which includes two minutes of advertisements). WLF argued that no students' First Amendment rights were infringed by the broadcast and further noted that no students are forced to watch the program. The defendant school district adopted WLF's First Amendment argument in its brief, and the Superior Court accepted that argument. I I Status: Victory TIMN 206466

Memorandum on WLF Achievements in Defending Commercial Speech May 19, 1993 Page Two • gra, f't, Inc. v. Federal Trade Commission (U. S. Supreme Court). On February 22, 1993, the High Court declined to hear this important case involving an attempt by the Federal Trade Commission (FTC) to suppress television and print advertisement by Kraft, Inc. The FTC contends that certain advertisements for "Kraft Singles" constitute false advertisement by implying untrue claims. WLF had filed a brief urging the Court to hear this case in order to clarify the First Amendment limitations on the FTC's enforcement powers because the FTC appears to have been operating under the misguided notion that commercial speech is entitled to little or no First Amendment protection. a Status: Petition for writ of certiorari denied • Association of National Advertisers v. Lungren (U. S. Court of Appeals for the Ninth Circuit). WLF will be filing-a brief in this case in which a coalition of advertising groups, manufacturers, and business associations are challenging the constitutionality of California's restrictions on "green advertising", the use of environmental claims on packaging and promotion materials. Status: Brief due in late July • WLF Objects to Labeling Rule Concerning CFCs (Environmental Protection Agency). On June 17, 1992, WLF filed comments with the EPA pointing out that the EPA's proposed warning labels - on products containing CFCs (chloroflourocarbons) and similar substances will infringe upon the First Amendment rights of producers and consumers. VVLF also pointed out that the proposed warning label will impose costs upon producers and consumers that will far exceed any alleged benefits. • WLF Opposes Commercial Censorship in National Parks (Department of the Interior). On July 7, 1992, the National Park Service adopted, over WLF's objection, a regulation that will permit the Superintendent of the Rock Creek National Park discretion to ban certain sponsorship and product advertising at events in the Rock Creek Park Tennis Center. WLF pointed out that the proposal may run counter to the First Amendment's protection of truthful, non- misleading commercial free speech. i LEGAL STUDIES DIVISION I WLF's Legal Studies Division conducts a comprehensive program to address the commercial speech issue through publications and public events. WLF's publications are carefully marketed to judges and their clerks, the media, the corporate community, legislators, regulators, and other policymakers and influence leaders. Many of WLF's Working Luncheons, Media Briefings, and other public appearances serve to educate the legal community about important commercial speech issues. TIMN 206467

Memorandum on WLF Achievements in Defending Commercial Speech May 19, 1993 Page Three Publications Proposed Alcohol Ad Warnings Are Contrary To Free Speech Values And Consumer Interests. John E. Calfee, a professor at the School of Management at Boston University who will be joining the Brookings Institution as a senior fellow, discusses the damage a proposal now being considered in Congress to require rotated warnings on written, oral, and televised alcohol ads will do to First Amendment values and consumer interests. LEGAL OPINION LETTER. Recent Commercial Speech Decision Casts Doubt On Bans Of Advertising Names Or Images. Alan M. Slobodin, President and General Counsel of WLF's Legal Studies Division, discusses a recent federal court decision upholding commercial speech protection and how it will affect attempts to prevent the use of cartoon characters in ads. LEGAL OPINION LETTER. Proposal To Eliminate Tax Deductibility For Advertising Expenses Is Unconstitutional. Robert S. Peck, Legislative Counsel of the American Civil Liberties Union (ACLU), disputes the increasingly prevalent argument that ads by certain industries and for certain products can be justifiably singled out for far more severe restriction than that to which other products are subjected. This argument was most recently presented in the "Moran Bill", which specifically takes aim at the deductibility of expenses for advertising of alcohol and tobacco products. LEGAL OPINION LETTER. California Proposal To Ban Cartoon Advertising For "Inherently Unsafe" Products Is Unconstitutional. Daniel E. Troy, a partner specializing in media and advertising law at Washington, D.C.'s Wiley, Rein and Fielding, argues that a new bill before the California legislature, which would ban the use of cartoon figures in ads for any product which may not lawfully be possessed by a minor, does not pass constitutional muster. LEGAL OPINION LETTER. Anti-Industry Propaganda Is Constitutionally Suspect. Alan M. Slobodin, President and General Counsel of WLF's Legal Studies Division, argues that California's multi-million dollar propaganda blitz against the tobacco industry may be constitutionally suspect, because it is government propaganda that is funded by the targets of that propaganda under the compulsion of state law. LEGAL OPINION LETTER. Product Placement In Movies Cannot Be Regulated As Commercial Speech Under The First Amendment. Jeffrey R. Chanin and James E. Boasberg, a partner and associate, respectively, with the San Francisco, California law firm of Keker, Brockett & Van Nest, discuss product placement, and argue that the practice does not constitute "commercial speech" under the Supreme Court's First Amendment jurisprudence, and thus cannot be regulated as such by the government. LEGAL BACKGROUNDER. TIMN 206468

Memorandum on WLF Achievements in Defending Commercial Speech May 19, 1993 Page Four z ¢w v Q Constitutionally Suspect Ad Ban Enacted In Seattle. P. Cameron DeVore, a noted First Amendment attorney and partner with the Seattle, Washington office of the law firm of Davis Wright Tremaine, argues that the recently enacted ban on tobacco advertising in county-owned or operated facilities in King County, Washington may run afoul of advertisers' commercial free speech rights. LEGAL OPINION LETTER. Will FTC Win Battle Against Kraft t But Lose War In Its Effort To Limit Commercial Speech? Hugh Latimer, a partner with the Washington, D.C. law firm of Wiley, Rein & Fielding, discusses the possible ramifications that a case decided in the Court of Appeals for the Seventh Circuit may have on the FTC's regulation of advertising. LEGAL OPINION LETTER. HHS Secretary Sullivan's Meddling In Export Policy Is Bad For The Economy. Glenn G. Lammi, Chief Counsel to WLF's Legal Studies Division, criticizes HHS Secretary Louis Sullivan's statements inviting foreign nations that were at that time in negotiations with U.S. Trade Representatives over advertising and other trade restrictions to consult with him when developing "anti-tobacco campaigns" and analyzes their possible impact on the economy and U.S. trade policy. LEGAL OPINION LETTER. What Cinollone Means For Future Preemption Arguments. Robert L. Willmore, Of Counsel to the Washington, D.C. law firm of Arent Fox Kintner Plotkin & Kahn, interprets the Supreme Court's 1992 decision, Cipollone v. Liggett Group, Inc., and discusses three possible ramifications the case could have on future preemption arguments before lower federal courts. LEGAL BACKGROUNDER. Advisory Council's Ad Ban Recommendation Has No Place In Health Care Debate. Alan M. Slobodin argues that President Bush's Advisory Council on Social Security's recommendation that all forms of tobacco product advertising be prohibited is a clear violation of the First Amendment right to commercial free speech. LEGAL OPINION LETTER. New York City's Attempt To Limit Tobacco Ads Is Constitutionally Suspect. Daniel E. Troy, a partner specializing in media and advertising law at Washington, D.C.'s Wiley, Rein and Fielding, questions the constitutionality of a New York City ordinance requiring a minimum of one public health message for every three advertisements displayed on any city-owned property which must be comparable in size, location, or visibility to the tobacco advertisements. LEGAL OPINION LETTER. I TIMN 206469

Memorandum on WLF Achievements in Defending Commercial Speech May 19, 1993 Page Five Q 0 ~ m 0 N California's Environmental Advertising Law -- An Unconstitutional Restraint on Free Speech? Rex S. Heinke and Kelli L. Sager, attorneys with the Los Angeles office of Gibson, Dunn & Crutcher, discuss a lawsuit filed by a coalition of advertising groups, manufacturers, and business associations challenging the constitutionality of California's restrictive "green marketing" law and argue that the plaintiffs' claims have.legal merit. LEGAL OPINION LETTER. Supreme Court Should Affirm Strong Protection For Commercial Speech. Robert S. Peck, Legislative Counsel with the American Civil Liberties Union, argues that the Supreme Court should use the opportunity presented in Cincinnati v. Discovery Network, Inc. to articulate very substantial First Amendment protections that will protect speech from discriminatory and overly paternalistic regulation by government. LEGAL OPINION LETTER. California Proposal To Ban Cartoon Figures In Advertising Violates First Amendment. Daniel E. Troy, a partner specializing in media and advertising law with the Washington, D.C. firm of Wiley, Rein & Fielding, argues that a recent California proposal to ban the use of cartoon figures in advertising runs afoul of the First Amendment right to commercial free speech. LEGAL OPINION LETTER. BACKGROUNDER. Project "ASSIST": Federal Funds For Speech And Behavior Control. Jonathan W. Emord, a noted First Amendment scholar specializing in communications law, argues that HHS's plan to provide $115 million to state and local anti-smoking political coalitions is a misguided and improper use of the federal government's power which also implicates several constitutional concerns. LEGAL Protecting A Corporation's Free Speech Rights During Trial: A Case Study. Martin H. Redish, Professor of Law at Northwestern University, and Stuart E. Rickerson, Vice President and General Counsel of Keene Corporation, describe the assault in some state courts upon a corporation's free speech rights to advocate legal reform. They argue that such restrictions violate the First Amendment's protection of free expression. LEGAL BACKGROUNDER. BATF Restriction On Truthful Health Claims In Wine Advertising Violates First Amendment. John A. Hinman, a partner in the San Francisco, California law firm of Hinman & Carmichael, which specializes in alcoholic beverage law, argues that the Bureau of Alcohol, Tobacco and Firearms' move to stop a winery from making truthful claims about the health benefits of moderate wine consumption in a newsletter is an unconstitutional breach of the winery's First Amendment commercial free speech rights. LEGAL BACKGROUNDER. I TIMN 206470

Memorandum on WLF Achievements in Defending Commercial Speech May 19, 1993 Page Six z 0 ~ F d A 3 BATF Censorship Is Hazardous To Health Of Alcohol Market And Free Speech. John E. Calfee, an associate professor of marketing at Boston University's School of Management, argues that the Bureau of Alcohol, Tobacco and Firearms' rigid and arbitrary regulation results in dangerous censorship of messages and information that consumers need to make purchasing decisions in the free market. LEGAL OPINION LE'I'rER. Pepsico And Other Corporate Boycotts, 1990s Style: First Amendment Issues And Response. Elliot M. Mincberg, Legal Director of People For the American Way, a national anti-censorship and constitutional liberties organization, discusses some recent secondary boycotts aimed at American corporations and argues that these companies should exercise their own First Amendment rights to effectively resist this new breed of boycott threat. LEGAL OPINION LETTER. Proposal Forcing Preclearance Of Drug Advertising Would Violate First Amendment. Alan R. Bennett, a partner with the Washington, D.C. law firm of Fox, Bennett & Turner, argues that a proposal forwarded by Representative Pete Stark (and likely to be re-introduced in the 103rd Congress) that would require pharmaceutical manufacturers to obtain prior clearance for promotional "prescription-related advertisements" would be found unconstitutional. LEGAL BACKGROUNDER. Open Season On Commercial Speech. Stephen R. Bergerson, an attorney with the Minneapolis, Minnesota firm of Fredrikson & Byron, and chairman of the American Advertising Federation's Self-Regulation Committee, provides a concise summary of attacks on the freedom to advertise and how the U.S. Supreme Court has treated such attacks under the First Amendment, and argues that all those who care about free speech rights and oppose censorship must speak out against such threats to commercial speech. LEGAL BACKGROUNDER. Media Briefin2s March 17, 1993. WLF and the American Civil Liberties Union (ACLU) appeared together at a news conference to discuss why restrictions on the tax deductibility of advertising expenses on a product-specific basis would trample First Amendment protection of commercial speech. WLF and the ACLU believe these restrictions would set a dangerous precedent, possibly leading to further erosion of commercial speech concerning other legal products. February 19, 1993 at the National Press Club. WLF hosted a media briefing on key cases of the Supreme Court term featuring Lloyd Cutler and Philip Lacovara. The Edge Broadcasting case was previewed and other commercial speech cases were assessed. I TIMN 206471

Memorandum on WLF Achievements in Defending Commercial Speech May 19, 1993 Page Seven z 0 N September 21, 1992 at the National Press Club. WLF hosted a media briefing on key cases of the upcoming Supreme Court term featuring former Attorney General Benjamin Civiletti, E. Barrett Prettyman, Jr., and Richard Willard. Among the cases discussed was the Discovery Network case. September 11, 1992 at the National Press Club. WLF hosted a media briefing on the lower federal courts featuring U.S. Solicitor General Kenneth Starr, Betty Jo Christian, and Robert Anthony. Key business cases, including commercial speech cases, were discussed. June 30, 1992 at the National Press Club. WLF hosted a media briefing reviewing the Supreme Court term featuring Stuart Eizenstat and A.B. Culvahouse. The Discovery Network case was previewed. Working Luncheons March 26, 1993 at the Washington, D. C. Sheraton-Carlton Hotel. Gale Norton, the Attorney General of the State of Colorado, spoke about "What Free Enterprise Should Expect From State Attorneys General, In 1993," with a particular focus on state-level ad bans and other commercial speech topics. Other Public Appearances May 17, 1992 at the American Wholesale Marketers Association. WLF's Alan Slobodin spoke on the "new censorship" of commercial speech. September 19, 1992 at the New York State Convention on Tobacco and Candy Distributors. WLF's Alan Slobodin spoke on the "new censorship" of commercial speech. Education of the Policymakers & the Public In May 1992, Daniel J. Popeo, Chairman of WLF, and Alan Slobodin, President & General Counsel of the Legal Studies Division of WLF, wrote an Op-ed piece called "Why Advertising Bans Are Wrong," that was distributed to and appeared in newspapers across the nation. In August 1992, U.S. Senator Wendell Ford, the Majority Whip, sought out WLF's expertise on the constitutionality of repealing the deductibility of certain business advertising expenses. WLF's analysis was utilized in the floor debate on this proposal and reprinted in the Congressional Record. I TIMN 206472