How Businesses Are Testing the Limits of Free Speech

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Wharton's Amanda Shanor discusses her research on how commercial cases coming before the U.S. Supreme Court are challenging the boundaries of free speech.

The American legal system is wrestling with increasingly complex questions about the scope of the First Amendment. Commercial cases on everything from contract regulation to workplace harassment are challenging the boundaries of free speech. Wharton professor of legal studies and business ethics Amanda Shanor tackles this topic in her dissertation, “The New Lochner,” which focuses on First Amendment protections for commercial interests. She joined Knowledge@Wharton to discuss the changing ethos of the Supreme Court and its implications.

An edited transcript of the conversation follows.

Knowledge@Wharton: Your dissertation focuses on questions that are emerging about the boundaries of the First Amendment. How did we get to this point?

Amanda Shanor: My research focuses primarily on constitutional law, and in particular the First Amendment and freedom of speech. My recent work, including my dissertation, explores the changing relationship between the Constitution and modern economic regulation and the modern regulatory state. It traces how, over the last three decades, we’ve seen a marked increase in First Amendment challenges to economic regulation — anything from cigarette warning labels to credit card swipe fee laws to the FDA’s drug regulatory power. The last term alone, the Supreme Court heard three cases involving the First Amendment and economic life: Masterpiece Cakeshop v. Colorado Civil Rights Commission, about a baker’s decision to decline to sell a cake to a gay couple; a case called Janus v. AFSCME about a First Amendment challenge to public sector union agency fees; and a case involving mandated disclosures for crisis pregnancy centers, which implicates how professionals like doctors and lawyers can be regulated by the state.

What’s fascinating is that these sorts of challenges didn’t exist a few decades ago but now are some of the most pitched battles in courts across the country. The First Amendment has long been considered a mainstay of political liberty, but increasingly, constitutional law is now important to economic ordering — or maybe more precisely, the way in which it’s important is changing. That’s what my research focuses on.

Knowledge@Wharton: Where is this coming from? How are people thinking about this differently in leading to these types of challenges?

“The First Amendment has long been considered a mainstay of political liberty, but increasingly, constitutional law is now important to economic ordering.”

Shanor: That’s a fascinating question. That’s really what got me interested in this particular set of research. What we’re seeing is a big change, not just in First Amendment law, but in constitutional law more broadly. The first chapter of my dissertation focuses on some of the origins of that. I identify two main things. One is what I describe as a business-led social movement. In constitutional law, people often talk a lot about how social movements can change the meaning of the Constitution or how its interpreted, so things like the civil rights movement or the women’s rights movement. But what I identify in my dissertation is the way in which the business community is increasingly important in the way in which the Constitution is being interpreted, particularly in the context of the First Amendment.

On the other side, I trace the way in which the federal, state and local governments are changing how they regulate economic entities. Those things together, I argue, are increasing the conflict between the First Amendment and the modern regulatory state.

Knowledge@Wharton: You write that there’s been this ideological shift in which more conservative members of the Supreme Court used to view these types of challenges as nonproductive and are now viewing it, in some cases, as a way to remove oversight. Could you explain?

Shanor: To recognize how something big is happening constitutionally, you have to understand the background. For decades, since the period after the Great Depression, it’s been bedrock constitutional law that courts give more lenient review to economic regulations and more stringent review to fundamental rights, like free speech.

One thing that I didn’t even know before I started studying this is that First Amendment cases are very recent in the Court’s history. For many, many years, the Supreme Court heard no First Amendment cases, and there really wasn’t First Amendment law or First Amendment jurisprudence. It was only in the beginning of the 20th century that we began to have First Amendment cases, really around World War I. The protection for commercial speech emerged in the 1970s, which is in constitutional time of quite recent origin.

What’s fascinating is that around that time, when the Court began to extend protections to commercial speakers, the justices who opposed this were the conservative justices, in particular Justice William Rehnquist, who thought this was absolutely constitutionally anomalous and horrible. But what’s happened through the 1990s and to today is there has been an ideological shift on the Court, where the conservative justices are more embracing of more stringent protections for commercial speakers. And the more liberal justices are more interested in preserving the state’s power to regulate in areas from drug regulatory power to antidiscrimination laws.

Knowledge@Wharton: You have some personal experience with this. You represented the gay couple in Masterpiece Cakeshop v. Colorado Civil Rights Commission as a staff attorney for the ACLU. How did you see this play out in court?

Shanor: It was such an honor to be part of that case. I spent the last year as a staff attorney in the National Legal Department of the ACLU, working on a bunch of their Supreme Court cases, including Masterpiece Cakeshop.

What I think is interesting about Masterpiece Cakeshop is that a lot of people think about the case as involving gay people or wedding cakes or maybe the question of whether or not cakes are art and should be protected by the First Amendment. But if you look at it just a little bit harder, you recognize that something much deeper and bigger is at play, which is whether or not the Constitution protects a right to discriminate in ordinary market transactions, or whether the Constitution says, “No, we protect the ability of governments to mandate open access to the basic social, civic, and economic institutions of our society.”

It’s fascinating because a number of these cases where people have raised constitutional objections to anti-discrimination laws had been brought before Masterpiece, and a number of them had made it to the Supreme Court. For instance, there was a really famous case called Heart of Atlanta Motel Inc. v. United States involving a hotel that said, “I have a Fifth Amendment right not to serve black people in my motel.” There was another case involving a famous law firm saying, “I have a First Amendment right, a freedom of association right, not to have women partners in my law firm.” At every juncture, the Supreme Court has rejected those claims.

“What we’re seeing is a big change, not just in First Amendment law, but in constitutional law more broadly.”

Masterpiece brought this case that raised the same question, whether or not a business entity has a right to turn people away. The Court had been so consistent in all these cases, like a case about a barbecue joint that didn’t want to serve black people, and the Court had rejected all these challenges, so it was very surprising that the Supreme Court took the case. When they did, a lot of people thought it must mean that the Court was going to change the rules. What was fascinating, in fact, is that they didn’t. The Court rejected the basic argument made by the bakery that it had either free speech or a freedom of religion argument not to make the cake, and instead decided on the most narrow grounds that in this particular case, and in this case alone, the agency was biased.

The next day, if [the owner of the bakery] turned around and refused to sell a cake to a gay couple, the law would still apply like it always did, just like it did in the motel case, in the barbecue case, etc. That was actually a really big win for the ACLU and for the forces of equality.

Knowledge@Wharton: That’s interesting because I don’t think it was portrayed that way at all.

Shanor: Right. The bakery won in a certain limited sense, but it didn’t win on the important legal question. The Court said a lot of things that are supportive of the idea that anti-discrimination laws don’t raise constitutional questions. But the makeup of the Court is changing. We’ll see whether or not there will be another one of these cases and what a new Court may or may not decide.

Knowledge@Wharton: There is a lot of ground left to cover by the courts in these types of cases. Can you give us an idea of what’s at stake in terms of how we view commercial speech through the lens of free speech?

Shanor: The types of First Amendment cases that the courts are seeing today are very wide-ranging. They range from cases raising a tension between equality and freedom of speech, to other sorts of cases that are more like straight-up economic liberty. Like, “I don’t want to put a disclosure on my product that says it’s dangerous or it has 300 calories.” They run the gamut. The larger question is, what does the First Amendment mean today? And what should it mean in economic life? That may have a range of different answers in terms of how we want to structure our society and what we think freedom of speech really means and should mean.

Knowledge@Wharton: What would you hope that people who are thinking about bringing these cases would keep in mind going forward?

Shanor: First, I think it’s important to understand that big things are at play in the First Amendment, and constitutionally things are changing. Where that goes will make a huge difference in terms of what businesses can do, what freedoms people have, and what abilities governments have to raise to the challenges of today’s biggest economic and social issues.

“The types of First Amendment cases that the courts are seeing today are very wide-ranging.”

In the context of the anti-discrimination cases, I think that it’s very important for governments to be able to mandate open access to marketplaces. That’s been a part of American social life for centuries now, which is why the court has rejected these sorts of challenges. I would hope that the courts would recognize that moving forward, which is not to say that these claims are at all frivolous or illegitimate, but just that First Amendment protections are very important.

Knowledge@Wharton: This relationship between businesses and government is getting more complicated. I can also see a conflict between requiring businesses to say things that are maybe in some dispute, such as climate change or abortion. What kind of position does that leave the courts in?

Shanor: The Court actually addressed an abortion disclosure this last term. It essentially said, “Abortion is a particularly fraught area of moral/political/social import today.” And it held that the California disclosure laws that were at stake in the case were unconstitutional. I think that that signals that, at least in the context of abortion disclosures, we’re going to see pretty aggressive court oversight. Something like climate change is probably quite different.

In general, climate change seems like it would fall more in the realm of traditional state powers to regulate. Disclosures about the miles per gallon on cars, for instance, I can’t imagine that a court would strike those down on free speech grounds. But where that limit is, is really a question: Where, from abortion laws to calorie disclosures, will the Court decide is actually the boundary of the First Amendment? The courts are kind of running in that direction, and that’s the big question on the table. What I research is where that boundary should be and where the courts will go with it.

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