Earlier this month, Paul Clement, a really smart guy who used to be Solicitor General of the United States, came to Philadelphia to present an overview of the Supreme Court’s last term. According to the Legal Intelligencer’s (that’s our local Philly legal newspaper) article about the event, he suggested that the Supreme Court’s “stolen valor” case, United States v. Alvarez, 132 S.Ct. 2537 (2012), would be of use to folks, like us, who are interested in First Amendment protection of truthful promotion of off-label use. According to the Legal:
Lawyers representing pharmaceutical companies in litigation over off-label marketing may want to read up on the U.S. Supreme Court’s decision in the so-called “Stolen Valor” case, former U.S. Solicitor General Paul Clement said. . . . The Stolen Valor case, United States v. Alvarez, was a “great illustration of how pro-First Amendment this court is,” Clement said. . . . “This case is useful in off-label marketing cases and fraud prosecution,” Clement said. He noted that the government has settled these types of cases for high-dollar figures and there are a number of lawsuits against pharmaceutical companies regarding off-label marketing. But Clement said the [C]ourt’s willingness to give “breathing space” to speech may benefit the drug companies.
Legal Intelligencer, “Clement, Prolific in High Court Arguments, Reviews Latest Term” (para 1-7) (July 18, 2012).
Since one could say that we’re interested in that subject, we decided to take him up on it.
There aren’t that many facts necessary to understand Alvarez − just two, actually. (1) Congress passed the “Stolen Valor” Act, 18 U.S.C. §704, making it a crime for anyone to “falsely represent himself or herself . . . to have been awarded any decoration or medal authorized by Congress for the Armed Forces of the United States.” Alvarez, 132 S. Ct. at 2543. (2) The appellant falsely represented himself as having been awarded the Congressional Medal of Honor in a town hall meeting. Id. at 2542.
First impression: Alvarez is about admittedly “false” speech. Anything the Court holds concerning First Amendment protection of false speech will be a fortiori (legal Latin for “that goes double for”) where truthful off-label promotion is involved.
Now, figuring out the Court’s “holding” will be a little difficult. There’s no majority opinion. Justice Kennedy wrote the lead opinion in Alvarez joined by only three other members of the Court (Roberts, C.J., Ginsberg, and Sotomayor). There’s a concurring opinion written by Justice Breyer, joined by Justice Kagan. That makes six justices voting to hold the Stolen Valor act unconstitutional under the First Amendment.
The lead opinion starts out well. “[T]he First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its content.” 132 S. Ct. at 2543 (we’ll only say “citations and quotation marks omitted” once, since quotations abound − consider yourself warned). That’s useful and certainly not limited to false speech. “[T]his Court has rejected as ‘startling and dangerous’ a free-floating test for First Amendment coverage based on an ad hoc balancing of relative social costs and benefits.” Id. at 2544. Ditto.
Next, the plurality listed the “long familiar” exceptions that allow “content-based restrictions” on speech: those being, incitement of “imminent lawless action”; obscenity; defamation; “speech integral to criminal conduct”; “fighting words”; child pornography; fraud; “true threats”; and “speech presenting some grave and imminent threat the government has the power to prevent.” Id.
Second impression: Notably lacking from Alvarez’s list of exceptions allowing content-based restriction is “commercial speech.” Instead, the seminal commercial speech case, Virginia Board v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976), is listed as a “fraud” case. That’s particularly interesting because of the application in Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011), of a more robust First Amendment test than previously used in commercial speech cases. The negative implication is that commercial speech − other than “fraud” − cannot be subjected to “content-based restrictions.” That’s good for those of us who support truthful off-label promotion.
There is no “general exception” to the First Amendment allowing the government to ban “false statements” anywhere at any time. Alvarez, 132 S. Ct. at 2544. “[F]alse statements are inevitable if there is to be an open and vigorous expression of views in public and private conversation.” Id. Even in the context of fraud (where the opinion put Virginia Board), falsity alone was not determinative:
The Court has never endorsed the categorical rule the Government advances: that false statements receive no First Amendment protection. . . . Even when considering . . . fraud, moreover, the Court has been careful to instruct that falsity alone may not suffice to bring the speech outside the First Amendment. The statement must be a knowing or reckless falsehood.
Id. at 2545.
Third impression: Wow! Under this standard, the False Claims Act, particularly as it has been construed in the First Circuit, may well be unconstitutional as applied, since the “false statements” it purportedly punishes aren’t limited to “knowing or reckless falsehood.” Alvarez certainly would seem to have application to off-label promotion cases where the supposedly “false” claims aren’t really false and definitely aren’t intentional.
Well, maybe not. The Court doesn’t discuss the False Claims Act, but it does discuss a general statute criminalizing false statements made to government officials:
The federal statute prohibiting false statements to Government officials punishes “whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government . . . makes any materially false, fictitious, or fraudulent statement or representation.” Section 1001’s prohibition on false statements made to Government officials, in communications concerning official matters, does not lead to the broader proposition that false statements are unprotected when made to any person, at any time, in any context.
Alvarez, 132 S. Ct. at 2546. We’re not specialists in false claims, but our impression in reading qui tam cases involving off-label promotion, is that these cases tend to be brought on a whole lot less than “materially false, fictitious, or fraudulent statement[s]” made directly to the government. We’ll leave it at that. The Alvarez plurality seems to us to require, as a matter of constitutional law, a much higher standard of falsity than is generally asserted by current relators in False Claims litigation.
The plurality in Alvarez goes on to state that “[s]ome false speech may be prohibited even if analogous true speech could not be.” 132 S. Ct. at 2546. That’s generally where we’ve been with off-label promotion. We don’t have a problem with willfully false off-label promotion being prohibited. But where off-label promotion is in fact true, then there doesn’t seem to be any basis, particularly under current First Amendment jurisprudence, for banning it. The only justification has been the lesser protection of “commercial” speech, and in Alvarez, the plurality appears to be equating the “commercial speech” exception with “fraud.”
The Stolen Valor Act, admirable as its intent was, was thus toast under the First Amendment:
The Act by its plain terms applies to a false statement made at any time, in any place, to any person. . . . [T]he sweeping, quite unprecedented reach of the statute puts it in conflict with the First Amendment. . . . The statute seeks to control and suppress all false statements on this one subject in almost limitless times and settings. And it does so entirely without regard to whether the lie was made for the purpose of material gain. . . . Permitting the government to decree this speech to be a criminal offense, whether shouted from the rooftops or made in a barely audible whisper, would endorse government authority to compile a list of subjects about which false statements are punishable. That governmental power has no clear limiting principle.
Alvarez, 132 S. Ct. at 2547 (citations − including to George Orwell’s 1984 − omitted) (we had to mention that one).
Fourth impression: Imagine the Court’s reaction if the same prohibition were extended to true statements. That’s the FDA’s off-label promotion ban. The only countervailing factor, as we’ve noted is the Court’s comment about “the purpose of material gain.” Would the prospect of “material gain” be enough for the Court to wave through the FDA’s off-label promotion ban “at any time, in any place, to any person”? Perhaps, but we rather doubt it.
Even as a limited prohibition, the Stolen Valor Act was subject to “exacting scrutiny.” Id. at 2548. The government’s purpose was a valid one: fostering “esprit de corps” in the military to “reinforce the pride and national resolve that the military relies upon to fulfill its mission.” Id. There’s national security wrapped in the flag − can’t get more bedrock than that. But was a ban “actually necessary”? Id. at 2549. The plurality said no. There was no evidence that such false statements taint “public perception” of military honors. Id. Nor could the government show “why counterspeech would not suffice to achieve its interest.” Id.
Fifth impression: We’ve argued, in the context of commercial speech, that disclaimers would suffice to prevent anyone from having the false impression that off-label promotion involved something that the FDA had evaluated. Here’s the same First Amendment point − even in the context of banning concededly false speech. In either case, “[t]he remedy . . . is speech that is true.” Alvarez, 132 S. Ct. at 2550. “Truth needs neither handcuffs nor a badge for its vindication.” Id. at 2551. We’d say the same goes double for FDA approval.
That’s the plurality. To make a majority, at least in Alvarez, required Justice Breyer’s concurrence. We note that, in Sorrell − also authored by Justice Kennedy, all of the dissenters found truthful pharmaceutical promotion First Amendment protected (although neither of the concurring justices here in Alvarez did).
Justice Breyer would find the Stolen Valor Act unconstitutional under “intermediate scrutiny” − that’s the same level scrutiny that is (or used to be) applied to commercial speech.
The dangers of suppressing valuable ideas are lower where, as here, the regulations concern false statements about easily verifiable facts that do not concern such subject matter. Such false factual statements are less likely than are true factual statements to make a valuable contribution to the marketplace of ideas.
Alvarez, 132 S. Ct. at 2552 (emphasis added).
Sixth impression: After having said this, Justice Breyer will have trouble finding an administrative justification for banning truthful off-label promotion − but he could certainly try. What’s more likely to “make a valuable contribution to the marketplace of ideas”; lying about being awarded a military medal or truthful information about uses of drugs/devices that could save people’s lives? We know which way we’d vote.
Justice Breyer then recites “value” that can be found even in false statements. Id. at 2553. Moreover, “the threat of criminal prosecution for making a false statement can inhibit the speaker from making true statements, thereby ‘chilling’ a kind of speech that lies at the First Amendment’s heart.” Id. Imagine how much more “chilling” he might find an absolute ban on undisputedly truthful speech. That’s the old a fortiori again.
Other prohibitions of false statements, Justice Breyer believes, are properly limited in scope. In particular, there’s fraud. “Fraud statutes, for example, typically require proof of a misrepresentation that is material, upon which the victim relied, and which caused actual injury.” Id. at 2554. None of those limiting features is found in the FDA’s ban on truthful off-label promotion. It doesn’t matter if the off-label promotion changes anyone’s mind or if it causes any harm to anyone.
The Stolen Valor Act “lacks any such limiting features.” Id. at 2555. Even if construed to prohibit only deliberate falsehood, it still applies in any context, public or private − just as the FDA’s prohibition applies to private conversations between sales reps and doctors. See, e.g., United States v. Caronia, 576 F. Supp.2d 385 (E.D.N.Y. 2008) (prosecuting private conversation with a physician from which no prescription resulted from truthful off-label promotion − because the physician was also a government informant). “[T]he risk of censorious selectivity by prosecutors is also high.” Alvarez, 132 S. Ct. at 2555. See Caronia, supra. And how much of the FDA’s information about off-label promotion comes from competitors motivated (selectively) by commercial reasons? We’d say a lot.
Finally, Justice Breyer embraces the concept of “less burdensome” alternatives − such as the truth. “I would also note, like the plurality, that in this area more accurate information will normally counteract the lie.” Alvarez, 132 S. Ct. at 2556. Less restrictive alternatives were available, so the prohibition on false statements failed intermediate scrutiny. Id.
Final impression: While there’s a lot about Alvarez that’s distinguishable from a First Amendment case involving truthful off-label promotion, most of those distinguishing factors cut in favor of more, not less, constitutional protection of truthful speech, particularly if the particular off-label statements were made in an innocuous context, such as a private presentation to a skilled audience (a trained physician) that includes some scientific papers and other core First Amendment protected speech, and involve intrinsically valuable information that could save lives or promote health.
In short, the illustrious Mr. Clement is in all probability correct in his observation − at least on this subject.