Why There’s No First Amendment Right to Sell Personal Data

There are a number of really interesting cases pending in the First Circuit and its lower federal courts that raise questions of confidentiality and free speech in the context of the commercial trade in prescription drug information. In New Hampshire, Maine, and Vermont, data mining companies have raised First Amendment challenges to state laws that restrict the ability of pharmacists to sell information about which doctors prescribed which drugs. More information about these cases from the AP can be found here. I’ve written about this phenomenon here, arguing that there are sound doctrinal, jurisprudential, and policy reasons to reject any idea that regulation of the commercial data trade raises any serious First Amendment problems.

These cases all involve laws passed by states concerned about the sale of prescription information to data mining companies, who buy information about which doctors prescribe which drugs from pharmacies and then massage the data for use in marketing and other industry purposes. The laws vary in their particulars, but basically forbid or regulate the ability of pharmacies to sell the information. In April, a federal district court in the New Hampshire case struck down New Hampshire’s law under the Central Hudson test as violating the companies’ free speech rights. The First Amendment argument can be boiled down as follows: because the laws stop pharmacies from telling other people about their customers, they violate the pharmacy companies’ free speech rights and are therefore unconstitutional.

I think this is a silly argument, as I explain after the jump.

This is an unconvincing argument for a number of reasons. At the level of doctrine, the commercial trade in personal information isn’t the kind of free speech claim that the First Amendment is (or should be) concerned about. Lots of things that are done with words aren’t protected by the First Amendment – words are used to form contracts, to engage in insider trading, and to hire hitmen – but laws regulating such activities aren’t thought to implicate the First Amendment. Nor do we think of the attorney-client privilege as constituting a speech restriction on the ability of lawyers to inform the public with newsworthy disclosures about their clients. The boundaries of the First Amendment are fuzzy, but they tend to exclude purely commercial activity and they tend to exclude professional duties of confidentiality.

There are good reasons for this exclusion that involve why we do (and don’t) protect constitutional rights in the political and commercial areas. The data mining companies in this case essentially argue that the Constitution prohibits the government from interfering with their liberty of speech. As such, there are some striking parallels between these arguments and old “liberty of contract” claims from the Lochner era. But modern constitutionalism rests upon the premise that commercial activity can be freely regulated by the government, while only political and civil liberties justify heightened scrutiny of legislative rules. This can be a hard line to draw, but not in these cases, as there are no fundamental constitutional liberties threatened by the prescriber confidentiality statutes. The pharmacies want to sell information. The drug companies want to buy the information so that they market drugs to physicians more effectively. And that’s about it. The regulations don’t even cover advertising (which is protected First Amendment speech). So there is no reason to invoke the Central Hudson apparatus to assess these schemes.

What’s at stake in these cases is something really important, but it’s not the spurious free speech claims of the drug companies. It’s the ability of democratic legislatures and ultimately the people they represent to set the defining parameters for commercial uses of information. What’s at stake is the ability, in a world where information transfers are becoming ever more important and more lucrative, to set a sensible information policy. Treating these issues as involving the First Amendment turns the First Amendment into little more than a right to make money in the data trade. The First Amendment is of course very important – it safeguards our political, philosophical, and artistic expression, and protects our ability to debate matters of public concern. But it should not be interpreted to include a Lochner-style right to transfer databases free of government regulation. Hopefully, the First Circuit will realize this on appeal in the New Hampshire case, putting the power to set information policy in the legislatures rather than in the Courts, and preserving judicial review for First Amendment claims that involve more substantial issues.

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