IMS Health Inc. v. Sorrell

09-1913-cv (L)
IMS Health Inc. V. Sorrell

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

____________________________________

August Term, 2009

(Argued: October 13, 2009 Decided: November 23, 2010)

Docket No. 09-1913-cv(L), 09-2056-cv(CON)
____________________________________

IMS HEALTH INC ., VERISPAN , LLC, SOURCE HEALTHCARE ANALYTICS , INC ., a
subsidiary of Wolters Kluwer Health, Inc., AND PHARMACEUTICAL RESEARCH
AND MANUFACTURERS OF AMERICA ,

Plaintiffs-Appellants,

—v.—

WILLIAM H. SORRELL , as Attorney General of the State of Vermont, JIM
DOUGLAS, in his official capacity as Governor of the State of
Vermont, and ROBERT HOFMANN , in his capacity as Secretary of the
Agency of Human Services of the States of Vermont,

Defendants-Appellees.

____________________________________

Before: FEINBERG and LIVINGSTON , Circuit Judges, and KOELTL , District
Judge.*
____________________________________

The petitioners appeal from a judgment of the United States

District Court for the District of Vermont (J. Garvan Murtha,

Judge) denying the plaintiffs’ motions for declaratory relief,

injunctive relief, and summary judgment, and upholding Vt. Acts

*
The Honorable John G. Koeltl, of the United States District Court
for the Southern District of New York, sitting by designation.
No. 80, § 17 (2007), codified as Vt. Stat. Ann. tit. 18, § 4631

(2007), as amended by Vt. Acts No. 89 (2008) (Act 80, “section

17”). The district court found that the Vermont statute is a

constitutionally permissible commercial speech restriction under

the test set forth in Central Hudson Gas & Electric Corp. v.

Public Service Commission of New York, 447 U.S. 557, 561-66

(1980), and that the statute does not violate the dormant

Commerce Clause. Because we find that section 17 is an

impermissible restriction on commercial speech under Central

Hudson, we reverse and remand.

Judge Livingston dissents in a separate opinion.

_________________________

THOMAS R. JULIN , Jamie Z. Isani, Patricia
Acosta, Hunton & Williams LLP, Miami,
FL; Robert B. Hemley, Matthew B. Byrne,
Gravel & Shea, P.A, Burlington, VT;
Thomas C. Goldstein, Akin Gump Strauss
Hauer & Feld LLP, Washington, DC, for
Plaintiffs-Appellants IMS Health Inc.
and Source Healthcare Analytics, Inc..

MARK A. ASH , Smith, Anderson, Blount, Dorsett,
Mitchell & Jernigan, LLP, Raleigh, NC,
for Plaintiff-Appellant Verispan LLC.

ROBERT N. WEINER , Jeffrey L. Handwerker, Sarah
Brackney Arni, Arnold & Porter LLP,
Washington, DC; Karen McAndrew, Linda J.
Cohen, Dinse, Knapp & McAndrew, P.C.,
Burlington, VT, for Plaintiff-Appellant
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 Pharmaceutical Research & Manufacturers
of America.

WILLIAM H. SORRELL , Attorney General of the
State of Vermont; Bridget C. Asay,
Assistant Attorney General; Sarah E.B.
London, Kate G. Duffy, David R.
Cassetty, Assistants Attorneys General,
on the brief, Montpelier, VT, for
Defendants-Appellees.

_________________________

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JOHN G. KOELTL , District Judge:

The appellants, IMS Health Inc., Verispan, LLC, Source

Healthcare Analytics, Inc., and Pharmaceutical Research and

Manufacturers of America (“PhRMA”) (collectively, “the

appellants”) challenge a Vermont statute banning the sale,

transmission, or use of prescriber-identifiable data (“PI

data”) for marketing or promoting a prescription drug unless

the prescriber consents. In 2007, Vermont enacted the statute

at issue, namely Vt. Acts No. 80, § 17 (2007), codified at Vt.

Stat. Ann. tit. 18, § 4631 (2007), as amended by Vt. Acts No.

89 (2008) (changing effective date of § 17 from January 1,

2008 to July 1, 2009) (Act 80, “section 17”). The appellants

appeal from a judgment of the United States District Court for

the District of Vermont (J. Garvan Murtha, Judge) finding

section 17 to be a constitutional restriction on commercial

speech pursuant to Central Hudson Gas & Electric Corp. v.

Public Service Commission of New York, 447 U.S. 557, 561-66

(1980), and finding that section 17 does not violate the

Commerce Clause, art. I, § 8, cl. 3, of the United States

Constitution.1 IMS Health Inc. v. Sorrell, 631 F. Supp. 2d

434 (D. Vt. 2009).

1

The district court also upheld sections 20 and 21 of Act
80, and the appellees do not challenge those holdings on
appeal.

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 On appeal, the appellants argue (1) that section 17

restricts non-commercial speech and cannot withstand strict

scrutiny, (2) that even if section 17 restricts only

commercial speech, it cannot withstand intermediate scrutiny

under Central Hudson, and (3) that section 17 violates the

dormant Commerce Clause by prohibiting commerce wholly outside

of Vermont. The appellees, Vermont Attorney General William

H. Sorrell, Vermont Governor Jim Douglas, and Secretary of the

Agency of Human Services of the State of Vermont Robert

Hofmann, contend (1) that section 17 does not implicate the

appellants’ First Amendment rights, (2) that even if section

17 is a restriction on the appellants’ commercial speech,

section 17 survives intermediate scrutiny because it is a

narrowly tailored statute that directly advances Vermont’s

substantial interest in protecting medical privacy, in

controlling health care costs, and in promoting public health,

and (3) that the appellants lack standing to challenge section

17 under the dormant Commerce Clause and that, in any event,

section 17 does not violate the dormant Commerce Clause

because it regulates intrastate commerce.

We conclude that because section 17 is a commercial

speech restriction that does not directly advance the

substantial state interests asserted by Vermont, and is not

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narrowly tailored to serve those interests, the statute cannot

survive intermediate scrutiny under Central Hudson.

Therefore, we reverse and remand the judgment of the district

court.

BACKGROUND

The Vermont legislature passed Act 80 in 2007, intending

to protect public health, to protect prescriber privacy, and

to reduce health care costs. Section 17 prohibits the sale,

license, or exchange for value of PI data for marketing or

promoting a prescription drug, and prohibits pharmaceutical

manufacturers and marketers from using PI data for marketing

or promoting a prescription drug, unless the prescriber

consents. See Vt. Stat. Ann. tit. 18, § 4631(a) & (d). As

amended, section 17 was effective on July 1, 2009. See Vt.

Acts No. 89 (2008).

I.

When filling prescriptions, pharmacies in Vermont collect

information including the prescriber’s name and address, the

name, dosage, and quantity of the drug, the date and place the

prescription is filled, and the patient’s age and gender.

Pharmacies sell this PI data to the data mining appellants IMS

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Health Inc., Verispan, LLC, and Source Healthcare Analytics,

Inc.2 These data mining companies, all located outside of

Vermont, aggregate the data to reveal individual physician

prescribing patterns and sell it outside of Vermont, primarily

to pharmaceutical manufacturers. The PI data sold by the

data-mining appellants is stripped of patient information, to

protect patient privacy. Appellant Pharmaceutical Research

and Manufacturers of America (“PhRMA”) is a non-profit

association representing pharmaceutical researchers and

manufacturers, the primary customers of the data mining

appellants.

Pharmaceutical manufacturers market their products

through various means, including advertising and detailing.

“Detailing” refers to visits by pharmaceutical

representatives, called detailers, to individual physicians to

provide information on specific prescription drugs, including

the use, side effects, and risks of drug interactions.

Pharmaceutical manufacturers use PI data to identify audiences

for their marketing efforts, to focus marketing messages for
2

The appellants describe themselves as “publishers,” a
term that plainly furthers their First Amendment argument.
The district court referred to the appellants as “data
miners,” a term that has been used in other cases. It is
undisputed that the appellants collect and pass on
information. Their rights depend on what they do rather than
what they are called. This opinion will follow the
description used by the district court, namely “data miners.”

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individual prescribers, to direct scientific and safety

messages to physicians most in need of that information, to

track disease progression, to aid law enforcement, to

implement risk mitigation programs, and to conduct clinical

trials and post-marketing surveillance required by the United

States Food and Drug Administration (“FDA”).

While section 17 in part aims to decrease detailing,

prescribers may want to receive the information detailers

provide, and, in any event, prescribers are free to decline

meetings with detailers.

As the district court noted, pharmaceutical industry

spending on detailing has increased exponentially along with

the rise of data mining. Detailing is only cost-effective for

brand-name drugs. When a patent expires, competitors can

introduce bioequivalent generic drugs. Bioequivalent generic

drugs are not necessarily identical to the brand name version,

but are required to demonstrate an absorption rate between 80

and 125 percent of the brand-name drug. Variations in

absorption rates among branded or generic drugs may cause

different reactions, such as side effects. The district court

also noted that while a brand-name drug is not necessarily

better than its generic version, the brand-name drug is

typically more expensive.

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 Pharmaceutical manufacturers are not the only entities

that purchase PI data from the data mining appellants,

although pharmaceutical manufacturers and marketers are the

only customers banned from using PI data in their marketing

efforts by section 17. The state of Vermont itself uses PI

data for law enforcement and other state programs.

Researchers use PI data to identify overuse of a

pharmaceutical in specific populations, to develop new drugs,

and to facilitate identification of potential patients to

participate in clinical trials. The FDA, the Center for

Disease Control, and the federal Drug Enforcement Agency use

PI data to monitor usage of controlled substances and to

identify prescribers who need time-sensitive safety

information. Insurance companies and pharmacy benefit

managers use the data to process claims and manage formulary

compliance. Moreover, insurance companies and state

governments like Vermont’s use PI data to encourage the use of

cheaper, generic medications—the very medications section 17

seeks to promote. While insurance companies and governments

collect their own PI data, their databases are not as thorough

as those maintained by the data mining appellants. To

preserve the value of their data, data mining companies

typically restrict re-publication of the data they provide

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their customers. The appellants argue that the sales covered

by section 17 are essential to the ability of the data mining

appellants to provide PI data for these other, permitted,

uses.

II.

a.

The Vermont law was adopted in the wake of a similar

statute that had been enacted in New Hampshire, and shortly

before another similar statute adopted in Maine.

In 2006 the New Hampshire state legislature passed a

statute prohibiting the transmission or use of patient-

identifiable and PI data for most commercial purposes. See

IMS Health Inc. v. Ayotte, 490 F. Supp. 2d 163, 170-71 (D.N.H.

2007), rev’d, 550 F.3d 42 (1st Cir. 2008). In relevant part,

the statute reads:

Records relative to prescription
information containing patient-
identifiable and prescriber-identifiable
data shall not be licensed, transferred,
used, or sold . . . for any commercial
purpose, except for the limited purposes
of pharmacy reimbursement; formulary
compliance; care management; utilization
review by a health care provider, the
patient’s insurance provider or the agent
of either; health care research; or as
otherwise provided by law. Commercial
purpose includes, but is not limited to,
advertising, marketing, promotion, or any

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 activity that could be used to influence
sales or market share of a pharmaceutical
product, influence or evaluate the
prescribing behavior of an individual
health care professional, or evaluate the
effectiveness of a professional
pharmaceutical detailing sales force.

N.H. Rev. Stat. Ann. § 318:47-f. The stated intent of the

statute, passed without any formal legislative findings, was

to protect patient and physician privacy and to reduce health

care costs. See Ayotte, 490 F. Supp. 2d at 171, 177. The

United States District Court for the District of New Hampshire

found the statute unconstitutional because it restricted

commercial speech without directly promoting substantial state

interests, and despite the existence of alternative approaches

to achieve these interests, in violation of the test for

restrictions on commercial speech set out in Central Hudson.

See Ayotte, 490 F. Supp. 2d at 183.

Maine also enacted a law in 2007 regulating the use of PI

data. The legislative findings indicate that the statute was

passed to improve public health, to reduce costs, and to

protect patient and prescriber privacy. See 22 Me. Rev. Stat.

Ann. tit. 22, § 1711-E(1-A, 1-B), invalidated by IMS Health

Corp. v. Rowe, 532 F. Supp. 2d 153 (D. Me. 2007), rev’d, IMS

Health Inc. v. Mills, 616 F.3d 7 (1st Cir. 2010). The Maine

statute prohibits the use of PI data for marketing purposes

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when the prescriber opts out of its use. In relevant part, it

reads:

[A] carrier, pharmacy or prescription drug
information intermediary may not license,
use, sell, transfer or exchange for value,
for any marketing purposes, prescription
drug information that identifies a
prescriber who has filed for
confidentiality protection . . . .

22 Me. Rev. Stat. Ann. tit. 22, § 1711-E(2-A). The United

States District Court for the District of Maine found the

statute unconstitutional because it did not survive

intermediate scrutiny despite the opt-out provision. See

Rowe, 532 F. Supp. 2d at 182.

While an appeal of the Maine district court decision was

pending, the Court of Appeals for the First Circuit reversed

the judgment of the New Hampshire district court and upheld

the constitutionality of the New Hampshire statute. See

Ayotte, 550 F.3d at 64. The majority found that the New

Hampshire statute regulated only the conduct of data miners,

and therefore did not violate their First Amendment rights.

Id. at 50-54. Even if the statute did regulate commercial

speech, the majority concluded that it would find that the

statute survived intermediate scrutiny. Id. at 54-60.

Concurring in the result, Judge Lipez concluded that the

statute regulates commercial speech, but that it survived

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intermediate scrutiny review. Id. at 64-65, 79-102 (Lipez,

J., concurring and dissenting).

The Court of Appeals for the First Circuit recently

followed its decision in Ayotte. It reversed the District

Court’s preliminary injunction in Rowe, and found the Maine

statute regulating the use of PI data to be constitutional.

Mills, 616 F.3d 7.

b.

In 2007, Vermont passed Act 80, section 17, legislation

aimed at restricting the use of PI data in pharmaceutical

marketing. The state legislature explained that:

It is the intent of the general assembly
to advance the state’s interest in
protecting the public health of
Vermonters, protecting the privacy of
prescribers and prescribing information,
and to ensure costs are contained in the
private health care sector, as well as for
state purchasers of prescription drugs,
through the promotion of less costly drugs
and ensuring prescribers receive unbiased
information.

Vt. Stat. Ann. tit. 18, § 4631(a). The statute adopts an opt-

in approach, allowing prescribers to opt in to allow the use

of their PI data for marketing purposes. See id. at

§ 4631(c)(1). Otherwise, the sale or transfer of PI data for

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marketing purposes, or the use of PI data for marketing

purposes, is prohibited. The statute provides:

A health insurer, a self-insured employer,
an electronic transmission intermediary, a
pharmacy, or other similar entity shall
not sell, license, or exchange for value
regulated records containing prescriber-
identifiable information, nor permit the
use of regulated records containing
prescriber-identifiable information for
marketing or promoting a prescription
drug, unless the prescriber consents as
provided in subsection (c) of this
section. Pharmaceutical manufacturers and
pharmaceutical marketers shall not use
prescriber-identifiable information for
marketing or promoting a prescription drug
unless the prescriber consents as provided
in subsection (c) of this section.

Id. at § 4631(d). Marketing is defined by the statute to

include

advertising, promotion, or any activity
that is intended to be used or is used to
influence sales or the market share of a
prescription drug, influence or evaluate
the prescribing behavior of an individual
health care professional to promote a
prescription drug, market prescription
drugs to patients, or to evaluate the
effectiveness of a professional
pharmaceutical detailing sales force.

Id. at § 4631(b)(5).

The statute expressly permits the sale, transfer, or use

of PI data for multiple other purposes, including the limited

purposes of pharmacy reimbursement; prescription drug

formulary compliance; patient care management; utilization

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review by a health care professional, the patient’s health

insurer, or the agent of either; health care research;

dispensing prescription medications; the transmission of

prescription data from prescriber to pharmacy; care

management; educational communications provided to a patient,

including treatment options, recall or safety notices, or

clinical trials; and for certain law enforcement purposes as

otherwise authorized by law. See id. at § 4631(e)(1)-(7).

The Vermont state legislature issued thirty-one

legislative findings in support of the statute. See Vt. Acts

No. 80, § 1 (2007). The findings expressly state the

legislature’s intent to interfere with the marketplace of

ideas to promote the interests of the state. For example, the

findings note that the legislature views the goals of

pharmaceutical marketing as “often in conflict with the goals

of the state.” Id. at § 1(3). The legislature expressed its

concern that the “marketplace for ideas on medicine safety and

effectiveness is frequently one-sided,” leading doctors to

prescribe “drugs based on incomplete and biased information.”

Id. at § 1(4). The legislature therefore found that “[p]ublic

health is ill served by the massive imbalance in information

presented to doctors and other prescribers.” Id. at § 1(6).

Section 17 is the state’s attempt to correct what it sees as

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an unbalanced marketplace of ideas that undermines the state’s

interests in promoting public health, protecting prescriber

privacy, and reducing health care costs.

III.

The data mining plaintiffs filed suit on August 29, 2007

against the Vermont Attorney General, seeking to enjoin

enforcement of the statute prior to its taking effect. In

November 2007 the action was consolidated with a suit by PhRMA

against the appellees seeking declaratory and injunctive

relief. An amended complaint was filed on May 14, 2008. After

a bench trial, the district court denied the plaintiffs’

motions for declaratory and injunctive relief and for summary

judgment, and denied as moot the defendants’ motions for

summary judgment. See Sorrell, 631 F. Supp. 2d at 464.

The district court found that section 17’s restriction of

commercial speech survived intermediate scrutiny under Central

Hudson. See Sorrell, 631 F. Supp. 2d at 455. The district

court likewise found that section 17 did not violate the

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dormant Commerce Clause of the United States Constitution.3

See id. at 456-59.

The appellants appealed from the judgment of the district

court, arguing that section 17 is either a restriction on

speech requiring strict scrutiny, or a restriction on

commercial speech that does not survive intermediate scrutiny.

The appellants also argue that the statute restricts

commercial activities outside of Vermont, in violation of the

dormant Commerce Clause. The appellees respond that the

statute restricts conduct rather than speech, that even if the

statute does restrict commercial speech it survives

intermediate scrutiny, and that it does not violate the

dormant Commerce Clause. Because we find that section 17 is

an improper restriction on commercial speech under the test

set forth in Central Hudson, we find the statute

unconstitutional and reverse and remand.

3

The district court also upheld sections 20 and 21 of the
Act, creating a program funded by a fee on pharmaceutical
manufacturers to educate health care professionals concerning
therapeutic and cost-effective utilization of prescription
medications, and creating a consumer fraud cause of action for
advertisements in Vermont that violate federal law. See Vt.
Stat. Ann. tit. 33, § 2004 & tit. 9, § 2466a; Sorrell, 631 F.
Supp. 2d at 462, 464. The appellants do not dispute these
holdings on appeal, and we do not address them here.

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 DISCUSSION

Because this case turns on constitutional issues, our

review is de novo. See Boy Scouts of Am. v. Dale, 530 U.S.

640, 648-49 (2000); Melzer v. Bd. of Educ. of the City Sch.

Dist. of the City of New York, 336 F.3d 185, 198 (2d Cir.

2003).

The appellants’ principal argument is that section 17

violates their rights under the First and Fourteenth

Amendments. See U.S. Const. amend. I (“Congress shall make no

law . . . abridging the freedom of speech . . . .”). The

First Amendment has been applied against state action by the

Fourteenth Amendment. See Gitlow v. New York, 268 U.S. 652,

666 (1925) (incorporating First Amendment freedom of speech

against the states under U.S. Const. amend XIV). Because the

appellees contend that section 17 merely regulates conduct

that is not subject to First Amendment protections, it is

necessary to determine whether the statute restricts protected

speech before determining whether that restriction is

permissible under the First Amendment.

I.

The district court found that section 17 is a restriction

on speech, and does not merely regulate the appellants’

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conduct. See Sorrell, 631 F. Supp. 2d at 445-47. The

appellees argue that the statute is simply a restriction on a

commercial practice. They argue that the data miners are

buying and selling a commodity, which can be regulated. They

concede that the activities of the pharmaceutical companies

who seek to use that information to market prescription drugs

is a closer question under the First Amendment, but they

contend that the statute is nevertheless a restriction on the

commercial conduct of the pharmaceutical companies.

We agree with the district court. The First Amendment

protects “[e]ven dry information, devoid of advocacy,

political relevance, or artistic expression.” Universal City

Studios, Inc. v. Corley, 273 F.3d 429, 446 (2d Cir. 2001).

See also Va. State Bd. of Pharmacy v. Va. Citizens Consumer

Council, Inc., 425 U.S. 748, 761-70 (1976) (drug price

information in drug advertisements is speech); Universal City

Studios, 273 F.3d at 446-49 (computer program is speech).

Furthermore, it is plain that speech in a form that is sold

for profit is entitled to First Amendment protection. See Va.

State Bd., 425 U.S. at 761.

The Court of Appeals for the First Circuit found that a

similar New Hampshire statute was not a restriction on speech,

but primarily a restriction on conduct, although it considered

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the statute only as it affected the activities of data miners

rather than pharmaceutical manufacturers. See Ayotte, 550

F.3d 50-54. The court therefore considered the statute to be

“a species of economic regulation,” subject only to rational

basis review, which the plaintiffs conceded the law satisfied.

See id. at 54.

In Ayotte, the court treated the New Hampshire statute

among the narrow categories of regulations restricting speech

that are not entitled to First Amendment protection, in the

tradition of Chaplinsky v. New Hampshire, 315 U.S. 568, 571-72

(1942), which found lewd, obscene, profane, libelous, and

fighting words to be categories of speech wholly outside the

protections of the First Amendment. The Court of Appeals

interpreted the New Hampshire statute as principally a

regulation of conduct because it “restrict[s] the ability of

data miners to aggregate, compile, and transfer information

destined for narrowly defined commercial ends” in a

transaction where the “information itself has become a

commodity.” Ayotte, 550 F.3d at 52-53. The Court of Appeals

thought it would “stretch[] the fabric of the First Amendment

beyond any rational measure” to treat a regulation of

information differently from a regulation of “beef jerky” when

the information is a product. Id. at 53. The majority of the

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Court of Appeals concluded that it was consistent with the

First Amendment for the “legislature . . . to level the

playing field not by eliminating speech but, rather, by

eliminating the detailers’ ability to use a particular

information asset—prescribing histories—in a particular way.”

Id. at 54. However, as the Supreme Court recently affirmed,

courts do not have “freewheeling authority to declare new

categories of speech outside the scope of the First

Amendment.” United States v. Stevens, 130 S. Ct. 1577, 1586

(2010). The obscure distinction between speech and

“information asset[s]” is an insufficient basis for giving the

government leeway to “level the playing field” subject only to

rational basis review.

Here, the legislature explicitly aimed to correct the

“massive imbalance in information presented to doctors and

other prescribers.” Vt. Acts No. 80 § 1(6). The statute

specifically decries that “[t]he marketplace for ideas on

medicine safety and effectiveness is frequently one-sided

. . . .” Id. at § 1(4). The statute is therefore clearly

aimed at influencing the supply of information, a core First

Amendment concern. Instead of mere rational basis review, the

First Amendment teaches that courts should assume that

truthful commercial information “is not in itself harmful,”

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Va. State Bd., 425 U.S. at 770, and conclude that when a

statute aims to restrict the availability of such information

for some purposes, that restriction must be judged under the

First Amendment.

The appellees also argue that the statute only regulates

conduct and not speech because the appellants have no First

Amendment right to access non-public health records without

consent. However, the appellants have not claimed a First

Amendment right to obtain information. They challenge the

restriction on their ability to purchase and use information

otherwise available to them but for the state’s restriction.

The statute prevents willing sellers and willing buyers from

completing a sale of information to be used for purposes that

the state disapproves. Indeed, section 17 does not prohibit

the collection of PI data so long as it is not used for

purposes that the state has prohibited.

The appellees rely on the Supreme Court’s decision in Los

Angeles Police Department v. United Reporting Publishing

Corp., 528 U.S. 32 (1999). However, that case illustrates why

the appellees’ argument is misplaced. In United Reporting,

the Supreme Court held that restrictions on access to certain

police department information were not facially

unconstitutional under the First Amendment. Id. at 34-37.

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The Supreme Court noted that, “what we have before us is

nothing more than a governmental denial of access to

information in its possession.” Id. at 40. The Court also

noted that “[t]his is not a case in which the government is

prohibiting a speaker from conveying information that the

speaker already possesses.” Id. In this case, the

information is not in the government’s possession. Rather,

the state seeks to limit the acquisition and use of

information in the hands of pharmacies, data miners, and

pharmaceutical companies. This is a case about the extent of

the permissible governmental regulation of information in the

hands of private actors. It is not a case about a claim by

private parties to a First Amendment right to access

information in government files.

Because we agree with the district court that the statute

restricts protected speech, it is necessary to determine

whether section 17 violates the appellants’ First Amendment

rights.

II.

The appellants argue that section 17 restricts

noncommercial speech, even though PI data is sold for a

profit. They argue that the statute should be subject to

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strict scrutiny. See Bd. of Trs. of State Univ. of N.Y. v.

Fox, 492 U.S. 469, 482 (1989) (“Some of our most valued forms

of fully protected speech are uttered for a profit.”) The

appellees contend, and the district court agreed, that section

17 restricts only commercial speech, and therefore is subject

to intermediate scrutiny under the test set out in Central

Hudson. See Sorrell, 631 F. Supp. 2d at 447-48. The

district court noted that PI data has both commercial and

noncommercial uses. See Sorrell, 631 F. Supp. 2d at 447. The

data can be used in research regarding the use of prescription

medications, to identify harmful consequences of particular

medications, and to warn doctors who have prescribed a

particular medication of safety concerns that arise after FDA

approval. The data can also be used for the purely commercial

purposes of marketing branded prescription drugs.

Section 17 restricts the speech of both the

pharmaceutical manufacturers represented by PhRMA, who are

prohibited from using Vermont PI data for marketing purposes,

and the data mining appellants, who are prohibited from

selling or transferring Vermont PI data if the data is to be

used for marketing purposes. See Vt. Stat. Ann. tit. 18, §

4631(d). We address each in turn.

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 a.

Section 17 prohibits pharmaceutical manufacturers from

using PI data regarding prescriptions written and dispensed in

Vermont in their marketing efforts. See id. The statute

therefore affects manufacturers’ ability to promote brand-name

drugs to doctors through detailing, for example, by making it

harder to identify those physicians for whom the message will

be most relevant and to tailor the detailing messages based on

individual physicians’ prescribing histories.

“The ‘core notion’ of commercial speech is that ‘which

does no more than propose a commercial transaction.’”

Anderson v. Treadwell, 294 F.3d 453, 460 (2d Cir. 2002),

quoting Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 66

(1983). It cannot be seriously disputed that the primary

purpose of detailing is to propose a commercial

transaction—the sale of prescription drugs to patients. The

manufacturers argue, however, that the detailing message

includes fully protected speech, specifically “information

regarding medical conditions the prescribers treat and [a

manufacturer’s] innovative treatments for those conditions”

and that strict scrutiny should apply here because Section 17

restricts commercial speech that is “inextricably intertwined

with otherwise fully protected speech.” Riley v. Nat’l Fed’n

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of the Blind of N.C., Inc., 487 U.S. 781, 796 (1988).

However, the mere presence of non-commercial information in an

otherwise commercial presentation does not transform the

communication into fully protected speech. See, e.g., Bolger,

463 U.S. at 68 (“We have made clear that advertising which

‘links a product to a current public debate’ is not thereby

entitled to the constitutional protection afforded

noncommercial speech.”); Bad Frog Brewery, Inc. v. N.Y. State

Liquor Auth., 134 F.3d 87, 97 (2d Cir. 1998) (holding product

label to be commercial speech despite social commentary

purportedly communicated by the labeling).

Therefore, although some of the information communicated

by detailers might be fully protected in another context, we

will analyze section 17 as a restriction on commercial speech

with respect to the pharmaceutical manufacturers. See Bolger,

463 U.S. at 68 (“A company has the full panoply of protections

available to its direct comments on public issues, so there is

no reason for providing similar constitutional protection

which such statements are made in the context of commercial

transactions.”).

-26-
 b.

Section 17 also prohibits data miners from selling or

transmitting PI data regarding prescriptions written and

dispensed in Vermont if that PI data will later be used for

marketing purposes. See Vt. Stat. Ann. tit. 18, § 4631(d).

Data miners do not themselves use PI data in their own

marketing efforts. Rather, data miners are in the business of

aggregating and selling the data to pharmaceutical

manufacturers, among other entities, so that pharmaceutical

manufacturers can use the data in their marketing strategies.

The data miners’ regulated speech is therefore one step

further removed from the marketing goals of the pharmaceutical

manufacturers, although it remains a necessary step in the

pharmaceutical manufacturers’ marketing efforts.

The sale of information is protected by the First

Amendment, and is not necessarily commercial speech. See,

e.g., Universal City Studios, 273 F.3d at 446-58 (finding

computer program is speech, and not scrutinizing it under the

commercial speech doctrine). However, unlike the data

miners’ sale of PI data here, the computer program in

Universal City Studios was not a step in a chain intended to

influence marketing efforts.

-27-
 Because this Court finds that section 17’s restriction on

data miners cannot survive even the lower intermediate

scrutiny that applies to regulations of commercial speech, we

assume without deciding that the statute restricts the data

mining appellants’ commercial speech.

III.

Under Central Hudson, the government may regulate

commercial speech when (1) “the communication is neither

misleading nor related to unlawful activity;” (2) the

government “assert[s] a substantial interest to be achieved”

by the regulation; (3) the restriction “must directly advance

the state interest;” and finally (4) “if the governmental

interest could be served as well by a more limited restriction

on commercial speech, the excessive restrictions cannot

survive.” Central Hudson, 447 U.S. at 564. There is no

allegation that the commercial speech regulated by section 17

is either misleading or related to an unlawful activity.

Therefore, for the statute to survive intermediate scrutiny,

the government must assert a substantial state interest that

is directly advanced by the statute, and the regulation must

not be more extensive than necessary to achieve the

government’s interest.

-28-
 a.

The second prong of Central Hudson requires that the

state “assert a substantial interest to be achieved by

restrictions on commercial speech.” Id. Vermont alleges that

section 17 advances three substantial state interests: (1)

“the state’s interest in protecting the public health,” (2)

“protecting the privacy of prescribers and prescribing

information,” an interest the state sometimes also refers to

as an interest in protecting “medical privacy,” and (3) the

state’s interest in containing health care costs in both the

private and public sectors. See Vt. Stat. Ann. tit. 18, §

4631(a).

The district court found that Vermont’s cost containment

and public health interests were substantial government

interests to justify the statute. Sorrell, 631 F. Supp. 2d at

449-50. The court found that it was unnecessary to consider

whether protecting prescriber privacy was also a substantial

government interest. Id. at 450. The appellants do not

seriously dispute that the state has a substantial interest in

protecting public health and containing health care costs,

although the appellants do argue that section 17 does not

directly advance these substantial state interests.

-29-
 The parties dispute whether protecting the privacy of

prescribers and prescribing information is a substantial state

interest. Section 17 itself refers to “protecting the privacy

of prescribers and prescribing information,” but the statute

plainly does not protect physician privacy. Vt. Stat. Ann.

tit. 18, § 4631(a). Physician privacy might be protected if

the statute prohibited the collection and aggregation of PI

data for any purpose, or if the use of such data were

permitted in only rare and compelling circumstances. The

statute at issue here, however, does not forbid the collection

of PI data in the first instance. Furthermore, the statute

does not ban any use of the data other than for marketing

purposes, including widespread publication to the general

public. There is nothing in the statute that would prevent

the use of such data for journalistic reports about

physicians.

Vermont contemplates that the data will still be

collected and used, albeit for purposes other than marketing.

For example, the state acknowledges that the statute permits

the use of PI data for “health care research, treatment, and

safety-related uses.” The statute only imposes restrictions

on the sale or use of such data for marketing or promoting a

prescription drug. Vermont does not explain how the continued

-30-
collection of PI data, and its use for non-marketing purposes,

is compatible with an alleged interest in protecting physician

privacy. Indeed, the concern that patient information can be

gleaned from PI data is not reduced in any way by section 17,

and the statute does not prohibit wide public dissemination of

PI data.

The appellees argue that the state’s interest in privacy

is “that pharmaceutical marketers should not be exerting undue

influence and intruding on the doctor-patient relationship” by

marketing prescription drugs using PI data. According to this

argument, the state has an interest in preventing

pharmaceutical manufacturers from using PI data to persuade

doctors to prescribe brand-name medications “because patient

care can be compromised [and] because patient trust in the

health care system is undermined.” Therefore, what the

appellees refer to as “medical privacy” is actually two

distinct interests. The first is an interest in the integrity

of the prescribing process itself, and the second is an

interest in preserving patients’ trust in their doctors by

preventing patients from believing that their physicians are

inappropriately influenced by PI data-driven marketing.

However, the state’s asserted interest in medical privacy

is too speculative to qualify as a substantial state interest

-31-
under Central Hudson. Intermediate scrutiny requires that the

state “demonstrate that the harms it recites are real.” Rubin

v. Coors Brewing Co., 514 U.S. 476, 487 (1995). On the record

in this case, Vermont has not shown any effect on the

integrity of the prescribing process or the trust patients

have in their doctors from the use of PI data in marketing.

Vermont’s own expert was unaware of any instance in which a

detailing interaction caused a doctor to prescribe an

inappropriate medication. To the extent that the record might

suggest PI data has damaged the relationship between doctors

and patients, the evidence is either speculative or merely

indicates that some doctors do not approve of detailing or the

use of PI data in detailing. For example, Vermont’s expert

witness Dr. David Grande opined that the use of PI data “will

make patients only feel more anxious about whether or not in

fact their interests are being put first,” but he had not

conducted any studies of patient perception of PI data to

support that conclusion.

Therefore, we agree with the district court that Vermont

does have a substantial interest in both lowering health care

costs and protecting public health. However, the state’s

asserted interest in “medical privacy” is too speculative to

satisfy the second prong of Central Hudson.

-32-
 b.

The third prong of Central Hudson requires that the

regulation “directly advance the state interest involved.”

Cent. Hudson, 447 U.S. at 564; see also Edenfield v. Fane, 507

U.S. 761, 767 (1993) (describing third prong of Central Hudson

as “whether the challenged regulation advances these interests

in a direct and material way”). “It is well established that

‘the party seeking to uphold a restriction on commercial

speech carries the burden of justifying it.’” Edenfield, 507

U.S. at 770 (alteration omitted) (quoting Bolger v. Youngs

Drug Prods. Corp., 463 U.S. 60, 71 n.20 (1983)). This prong

is “critical” and requires invalidating a regulation that

restricts commercial speech “‘if it provides only ineffective

or remote support’” for the government’s interest. Greater

New Orleans Broad. Ass’n v. United States, 527 U.S. 173, 188

(1999) (quoting Cent. Hudson, 447 U.S. at 564).

The Vermont statute cannot be said to advance the state’s

interests in public health and reducing costs in a direct and

material way. Section 17 can advance the state interests in

protecting public health and reducing health costs only by the

following route: the statute prevents PI data from being

transferred from data miners to pharmaceutical manufacturers

for marketing purposes, who in turn are prevented from using

-33-
the data in their marketing efforts. Failure to use PI data

in marketing results in less effective marketing for brand-

name prescription drugs, some of which—although not all—are

more expensive yet provide no therapeutic advantage over

generic alternatives. Less effective marketing will result in

doctors writing fewer prescriptions for brand-name

prescription drugs, thereby reducing health care costs and

protecting public health by minimizing prescriptions for more

expensive or less tested medications. The state’s own

explanation of how section 17 advances its interests cannot be

said to be direct. The statute does not directly restrict the

prescribing practices of doctors, and it does not even

directly restrict the marketing practices of detailers.

Rather, it restricts the information available to detailers so

that their marketing practices will be less effective and less

likely to influence the prescribing practices of physicians.

The appellees have failed to cite to any case from the

Supreme Court or this Court that has upheld a regulation on

speech when the government interest in the regulation is to

bring about indirectly some social good or alter some conduct

by restricting the information available to those whose

conduct the government seeks to influence. Cf. Cent. Hudson,

477 U.S. at 566 n.9 (“We review with special care regulations

-34-
that entirely suppress commercial speech in order to pursue a

nonspeech-related policy.”). Regulations of conduct are

permitted, but only if the government interest is “unrelated

to the suppression of free expression.” United States v.

O’Brien, 391 U.S. 367, 377 (1968). However, the legislative

findings are explicit that Vermont here aims to do exactly

that which has been so highly disfavored—namely, put the

state’s thumb on the scales of the marketplace of ideas in

order to influence conduct. The legislature found that the

“marketplace for ideas on medicine safety and effectiveness is

frequently one-sided in that brand-name companies invest in

expensive pharmaceutical marketing campaigns to doctors. The

one-sided nature of the marketing leads to doctors prescribing

drugs based on incomplete and biased information.” Vt. Acts

No. 80, § 1(4). In other words, the statute seeks to alter

the marketplace of ideas by taking out some truthful

information that the state thinks could be used too

effectively.

The state’s approach to regulating the interaction

between detailers and doctors is premised on limiting the

information available to physicians as a means of impacting

their conduct. This approach is antithetical to a long line

of Supreme Court cases stressing that courts must be very

-35-
skeptical of government efforts to prevent the dissemination

of information in order to affect conduct. See 44 Liquormart,

Inc. v. Rhode Island, 517 U.S. 484, 503 (1996) (“The First

Amendment directs us to be especially skeptical of regulations

that seek to keep people in the dark for what the government

perceives to be their own good.”); Va. State Bd., 425 U.S. at

770 (alternative to ban on pharmacist advertising “is to

assume that this information is not in itself harmful, that

people will perceive their own best interests if only they are

well enough informed, and that the best means to that end is

to open the channels of communication rather than to close

them.”). Even if section 17 is successful in altering the

conduct of physicians in their prescribing practices, the

Supreme Court reminds us that “[i]t is precisely this kind of

choice, between the dangers of suppressing information, and

the dangers of its misuse if it is freely available, that the

First Amendment makes for us.” Va. State Bd., 425 U.S. at

770; see also Thompson v. W. States Med. Ctr., 535 U.S. 357,

373 (2002) (“If the First Amendment means anything, it means

that regulating speech must be a last—not first—resort.”).

The appellees place extensive reliance on Anderson v.

Treadwell, 294 F.3d 453 (2d Cir. 2002). In Anderson, this

Court upheld a New York statute banning in-person real estate

-36-
solicitations of homeowners in certain zones designated by the

Secretary of State if the homeowner indicated that the

homeowner did not wish to receive such solicitations. Id. at

456-58. The statute was designed to prevent

“blockbusting”—the practice of obtaining real estate listings

by emphasizing that a neighborhood is undergoing a religious,

racial, or ethnic change. Id. at 457. However, this Court

upheld the statute on the basis of the government interest in

protecting the privacy of homeowners from harassing real

estate solicitations, an interest that is not present here.

See id. at 461. The statute in Anderson directly regulated

the potentially harassing sales calls. It directly targeted

the harassing visits that were viewed as problematic. The

statute in Anderson did not ban any entity from transmitting

marketing data that would be useful to real estate agents in

deciding which homeowners to target. It did not seek to

affect the conduct of homeowners by limiting the information

available to them. In contrast, section 17 does not ban

detailing, even when that detailing is seen as harassment by

an individual physician. It does not even restrict such

detailing. The opt-in provision of section 17 does not make

the statute comparable to the statute in Anderson. The opt-in

provision in the Vermont statute relates solely to a

-37-
physician’s agreement that the physician’s PI data can be

used. Physicians in Vermont can always choose to decline to

be visited by detailers, even without section 17. The opt-in

provision in the statute in Anderson was a consent to be

solicited by real estate licensees, not a consent to have

information used.4

Because section 17 is an attempt to influence the

prescribing conduct of doctors by restricting the speech of

others—namely data miners and pharmaceutical manufacturers—it

does not directly advance the state’s interests in protecting
4

Anderson is consistent with those cases that have
approved procedures for unwilling listeners to decline to
receive speech as less restrictive regulations than those
preventing speech unless a listener has affirmatively chosen
to receive such messages. See, e.g., Martin v. City of
Struthers, Ohio, 319 U.S. 141, 147-49 (1943) (invalidating ban
on door-to-door solicitation while noting that regulation
banning solicitation when homeowner has indicated a desire not
to be disturbed is appropriate); see also Mainstream Mktg.
Servs., Inc. v. F.T.C., 358 F.3d 1228, 1242-43, 1246 (10th
Cir. 2004) (upholding “do not call” list as constitutional
restriction on commercial speech in part because consumers
actively joining “do not call” registry before commercial
telephone calls are barred is less restrictive of speech than
requiring consumers to consent to receiving such calls before
they could be made).
The Court of Appeals for the First Circuit recently noted
that Maine’s statute was similar to “do not mail lists”
because prescribers are entitled to have their information
protected from disclosure only if they choose to seek
confidentiality protections. Mills, 616 F.3d at 21-22. The
Vermont statute at issue in this case, however, uses the
broader approach of prohibiting the designated uses of PI data
unless a prescriber affirmatively chooses to have that
prescriber information made available.

-38-
public health and reducing health care costs. Instead, the

statute restricts protected speech when uttered for purposes

the government does not approve of in order to reduce the

effectiveness of marketing campaigns and, ultimately, alter

the behavior of prescribers, who are not regulated by the

statute. This route is too indirect to survive intermediate

scrutiny.

c.

Section 17 also fails under the final prong of Central

Hudson, which requires invalidating the restriction “if the

governmental interest could be served as well by a more

limited restriction on commercial speech.” 447 U.S. at 564.

The Government is not required to employ
the least restrictive means conceivable,
but it must demonstrate narrow tailoring
of the challenged regulation to the
asserted interest—“a fit that is not
necessarily perfect, but reasonable; that
represents not necessarily the single best
disposition but one whose scope is in
proportion to the interest served.”

Greater New Orleans Broad., 527 U.S. at 188 (quoting Fox, 492

U.S. at 480). The burden is on the government to show that it

“carefully calculated” costs and benefits of burdening speech.

Id. While the fit need not be perfect, “if the Government

could achieve its interests in a manner that does not restrict

-39-
speech, or that restricts less speech, the Government must do

so.” Thompson, 535 U.S. at 371.

The regulation at issue here applies to all brand name

prescription drugs, irrespective, for example, of whether

there is a generic alternative or whether an individual drug

is effective or ineffective. This is a poor fit with the

state’s goal to regulate new and allegedly insufficiently

tested brand-name drugs in cases where there are cheaper

generic alternatives available. The statute targets the use

of PI data to market all brand name prescription drugs, not

merely new brand-name drugs or those brand-name medications

for which there are generic alternatives.

The appellees argue that the Court should defer to the

legislative determination that the statute is a reasonable fit

so long as that determination is itself reasonable. The

appellees rely on this Court’s recent decision in Clear

Channel Outdoor, Inc. v. City of New York, 594 F.3d 94, 104

(2d Cir. 2010), for the proposition that this Court should

defer to a government’s reasonable determination regarding how

to regulate commercial speech. However, reliance on Clear

Channel is misplaced because that decision specifically

addresses a regulation of commercial billboards, a distinctive

method of speech that poses unique problems such as the

-40-
potential to distract drivers and is therefore particularly

amenable to government regulation. See id. at 108. This

Court stressed the particular government interests involved in

“‘the law of billboards.’” Id. (quoting Metromedia, Inc. v.

City of San Diego, 453 U.S. 490, 501 (1981)).

In any event, we need not decide what level of deference

is appropriate here. The statute prohibits the transmission

or use of PI data for marketing purposes for all prescription

drugs regardless of any problem with the drug or whether there

is a generic alternative. The statute bans speech beyond what

the state’s evidence purportedly addresses. It seeks to

discourage detailing about new brand-name prescription drugs

which may not be efficacious or which may not be more

effective than generic alternatives. However, it does that by

precluding the use of PI data for the marketing of any brand-

name prescription, no matter how efficacious and no matter how

beneficial those drugs may be compared to generic

alternatives. Even if the Court defers to the legislature’s

determinations, those determinations cannot support banning

speech in circumstances that the state’s evidence does not

address. The fact that section 17 sweeps beyond Vermont’s

interests in public health and health care costs undermines

-41-
the state’s argument that the statute is a reasonable fit with

its interests.

Moreover, Vermont does have more direct, less speech-

restrictive means available. The state could wait to assess

what the impact of its newly funded counter-speech program

will be, including academic detailing and sample generic

vouchers. The state could mandate the use of generic drugs as

a first course of treatment, absent a physician’s

determination otherwise, for all those patients receiving

Medicare Part D funds. All of these means could be targeted

at new brand-name drugs particularly when there are

alternatives available, unlike section 17’s approach that

applies to every prescription drug regardless of whether it is

a less tested version of an existing medication or a

breakthrough drug with no reasonable alternative. All of

these alternative means would directly promote the state’s

interests, although they would do so without impacting First

Amendment rights.

The district court found that section 17 satisfied the

narrow tailoring requirement of Central Hudson because the

statute allows prescribers to determine how their PI data

would be used, just as the statute at issue in Anderson

allowed homeowners to determine whether they would receive

-42-
solicitations from real estate agents. See Sorrell, 631 F.

Supp. 2d at 455 (citing Anderson, 294 F.3d at 462). We reject

the comparison of section 17 with the statute at issue in

Anderson, for the reasons explained above. Moreover, the

district court did not consider whether there are any

reasonable alternatives that would be less speech-restrictive

than section 17. While we agree with the district court that

Central Hudson does not require the state to use the least

restrictive means available to it to achieve its goals, this

Court has examined the available alternatives in other cases

to determine whether there was a reasonable fit between the

regulation and the state’s asserted interests. See N.Y. State

Ass’n of Realtors, Inc. v. Shaffer, 27 F.3d 834, 844 (2d Cir.

1994) (invalidating regulation banning real estate brokers

from soliciting residential property owners in certain

designated areas when defendant failed to provide empirical

evidence regarding whether less speech-restrictive approaches

would sufficiently promote the asserted government interests).

The state argues that section 17 is narrow because it

does not ban detailing and is therefore narrower than speech

restrictions that have been struck down. See Ayotte, 550 F.3d

at 53; id. at 97 (Lipez, J., concurring). The district court

agreed with this reasoning. See Sorrell, 631 F. Supp. 2d at

-43-
455. The statute may be narrow in the sense that it does not

prohibit detailing and does not proscribe any particular claim

or message. However, the statute does ban a set of messages

that Vermont itself contends are particularly effective,

namely, messages informed by PI data, and curbs the ability of

pharmaceutical manufacturers to market brand-name drugs.

Vermont argues that, unlike other regulations that have

been struck down, the statute at issue here does not ban an

entire category of speech because doctors can permit their own

PI data to be transmitted and used for marketing purposes.

Cf. Alexander v. Cahill, 598 F.3d 79, 96 (2d Cir. 2010)

(finding statute banning potentially, but not actually,

misleading use of nicknames in attorney advertising an

unconstitutional regulation of commercial speech). However,

the mere fact that the statute does permit doctors to choose

to make their PI data available for marketing purposes, even

if a substantial number of doctors would do so, “does not

render the disputed provisions any less categorical.” See id.

The statute bans the transmission or use of PI data for

marketing purposes, unless the prescriber consents, without

regard to whether the data pertains to a prescription drug

that is efficacious and whether or not it has a generic

alternative. It is the fact that the statute does not

-44-
distinguish between brand-name drugs, no matter how unique and

efficacious, that renders the statute a categorical ban.

The appellees failed to explain how section 17 is no more

extensive than necessary to serve its asserted interests in

health care costs and public health, or why the proposed

alternatives would be inadequate. The state did present

limited testimony at trial relating to these alternatives.

For example, Dr. Aaron Kesselheim testified that the

pharmaceutical industry’s total annual detailing budget was

approximately $8 billion and that it was not realistic for

Vermont to spend this amount on academic detailing. Dr.

Kesselheim also testified that “[formularies, step therapy,

and prior authorization] have been in place . . . for a few

years [but] . . . we still see . . . overuse of products that

potentially place patients at risk.” However, the testimony

fell far short of demonstrating that the alternatives would be

inadequate. Therefore, section 17 cannot survive Central

Hudson scrutiny because Vermont did “not offer[] any reason

why these possibilities, alone or in combination, would be

insufficient to [achieve the government’s interests].”

Thompson, 535 U.S.at 373.

Vermont does argue in its brief that the statute is

narrowly tailored because it “focuses on the specific problem

-45-
identified by the Legislature: the use of [PI data] to fuel

marketing campaigns.” However, this argument is not

responsive to the inquiry under Central Hudson. Vermont has

not asserted a substantial state interest in curbing the use

of PI data in marketing campaigns. To satisfy the final prong

of Central Hudson, Vermont must show that section 17 is

narrowly tailored to serve the substantial state interests

that it contends justify the speech restriction – containing

health care costs and protecting public health.

Because the statute restricts speech even with regard to

prescriptions of breakthrough brand-name medications for which

there are no generic alternatives, and because the state could

pursue alternative routes that are directly targeted at

encouraging the use of generic drugs the state wishes to

promote, the state has not demonstrated that its interests in

protecting public health and containing health care costs

could not be as well served by a more limited restriction on

speech. Therefore, section 17 cannot survive intermediate

scrutiny and is an unconstitutional regulation of commercial

speech under the test set forth in Central Hudson.5

5

The appellants also argue that section 17 violates the
dormant Commerce Clause because it restricts commerce outside
Vermont. Because we find section 17 unconstitutional pursuant
to the Central Hudson test, we need not reach this argument.

-46-
 CONCLUSION

For the reasons explained above, we reverse and remand

the judgment of the district court.

-47-
DEBRA ANN LIVINGSTON , Circuit Judge, dissenting:

Misconstruing Vermont’s prescription confidentiality law, Vt.

Stat. Ann. tit. 18 § 4631 (2007) (hereinafter “section 17”),1 as a

direct restriction on pharmaceutical marketing, which is indisput-

ably a form of “commercial speech” for purposes of the First

Amendment, the majority extends First Amendment protection to data

miners and pharmaceutical companies principally challenging a

restriction on access to otherwise private information. In so

doing, the majority not only reaches the wrong result in this case,

but creates Circuit precedent likely to have pernicious broader

effects in a complex and evolving area of First Amendment law.

Because I would find that section 17 permissibly restricts access

to information that Vermont requires pharmacies to collect and that

the statute has very limited, if any, effects on First Amendment

activity, I respectfully dissent.

I.

I begin with common ground: there is no dispute that

prescriber-identifiable data – i.e., data which documents the

prescribing habits of a particular doctor (“PI data”) – is

exceptionally valuable to pharmaceutical companies, who make use of

it to market their highly profitable brand name drugs through a

1
While the Vermont law is captioned “Confidentiality of
prescription information,” it is disingenuously referred to as a
“Prescription Restraint Law” by plaintiffs-appellants IMS Health
Inc., Verispan LLC, and Source Healthcare Analytics, Inc. Data
Mining Appellants’ Br. at 2.
process known as “detailing.”2 There also is no dispute that the

marketing messages “detailers” deliver in meetings with doctors

constitute protected First Amendment activity. Finally, there is

no dispute that section 17 does not directly regulate those

messages or the marketing practices of detailers. Maj. Op. at 33.

Instead, Vermont’s law regulates the dissemination of confidential

information – specifically, PI data – and the process by which it

is collected and sold. Because section 17 targets that process

rather than detailing itself, “understanding the sequence of

events” section 17 regulates – that is, the process by which PI

data travels from the prescription pad to the hands of a pharmaceu-

tical detailer – “is crucial to understanding the statute’s legal

status.” IMS Health Inc. v. Mills, 616 F.3d 7, 40 (1st Cir. 2010)

(Lipez, J., concurring in part and dissenting in part).

Pursuant to Vermont law, every time a pharmacy fills a

prescription within the state, it is required to collect certain

information about the doctor, the patient, and the medication being

prescribed. See, e.g., Vt. Bd. of Pharmacy Admin. Rules §§ 9.1,

9.24, 9.26 (eff. Oct. 2009).3 Because that information is so

2
As discussed further below, “detailing” involves the
face-to-face promotion of a particular brand name drug by sales
representatives – known as “detailers” – who are employed by the
pharmaceutical company that manufactures and distributes that
drug and make in person visits to physicians for the purpose of
such promotion.
3
The state rules are available at
http://vtprofessionals.org/opr1/pharmacists/rules/Pharmacy%20Adopted%2

2
valuable to any number of third parties, including the plaintiffs-

appellants in this case, pharmacies, for some time, have made a

practice of selling it – often without the knowledge or permission

of the doctor, let alone the patient – to various third parties,

including data mining vendors such as plaintiffs-appellants IMS

Health Inc., Verispan, LLC, and South Healthcare Analytics

(collectively, the “data mining appellants”).4 These vendors

aggregate and compile the data they acquire from pharmacies and

then license it to pharmaceutical companies, represented here by

plaintiff-appellant Pharmaceutical Research and Manufacturers of

America (“PhRMA”), who use the information to guide some of their

marketing and in particular, their “detailing,” efforts. Specifi-

cally, pharmaceutical companies use PI data to identify particular

doctors for “detailing,” to monitor the success of their detailing

efforts, and to compensate individual detailers based on the

0Rules%20Effective%20October%201,%202009%20PDF%20Version.pdf (last
visited Nov. 18, 2010).
4
The information commonly sold includes the prescriber’s
name and address; the name, dosage, and quantity of the drug
prescribed; the date and location at which the prescription was
filled; and the patient’s age and gender. The patient’s name is
encrypted, but this “de-identified” personal data still permits
the data miners to track the patient’s use of a drug or drugs
over time and to associate this use with a given prescriber,
payment source, and pharmacy. Accordingly, even as “de-
identified,” the data is such that a purchaser would know that “a
50-year-old woman who lives in Central Vermont; has prescriptions
filled in Montpelier; [and] is a patient of Dr. Jones in
Montpelier . . . regularly takes an antidepressant and a
cholesterol-lowering drug.” Respondents’ Br. at 7.

3
prescriptions written by the doctors they meet with. Pharmaceuti-

cal detailers do not, however, directly reference PI data in their

meetings with doctors, and in fact, are prohibited from doing so by

the terms of their employers’ licensing agreements with the data

mining appellants.

Accordingly, before a detailer ever sets foot in a doctor’s

office – that is, before the commercial speech the majority focuses

on ever occurs – at least three events take place: first, a

pharmacy gathers information from patients seeking to fill

prescriptions; second, it collects and sells that data to third

parties, principally “data vendors” or “data miners” such as

appellants here; and third, these data miners repackage that data

and license it to pharmaceutical companies. See generally IMS

Health Inc. v. Ayotte, 550 F.3d 42, 48-49 (1st Cir. 2008). Only

after these three transactions occur does PI data land in the hands

of detailers who then use it to facilitate their detailing efforts.

Troubled by this sequence of events whereby otherwise

confidential information ends up in the hands of pharmaceutical

detailers and in response to concerns about (1) medical privacy,

(2) threats to patient health, and (3) rising health care costs

attributable to the widespread use of new brand name prescription

drugs (which the record indicates are those most likely to be the

subject of extensive detailing efforts) Vermont enacted its

prescription confidentiality law. In relevant part, the law

4
prohibits any “health insurer, [ ] self-insured employer, [ ]

electronic transmission intermediary, [ ] pharmacy, or other

similar entity” from “sell[ing], licens[ing], [ ] exchang[ing] for

value” or otherwise “permit[ing] the use” of “prescriber-identifi-

able information for marketing or promoting a prescription drug”

absent the prescriber’s consent. The law further prohibits

“pharmaceutical manufacturers and [ ] marketers” from “us[ing]

prescriber-identifiable information for marketing or promoting a

prescription drug” unless the prescriber consents in the manner

provided by statute. Vt. Stat. Ann. tit. 18, § 4631(d).

Focusing heavily on that last restriction, the majority begins

its analysis at the end of the “sequence of events” – i.e., at the

point at which PI data is already in the hands of pharmaceutical

companies – and concludes that the law impermissibly “restricts the

speech of both the pharmaceutical manufacturers . . . who are

prohibited from using Vermont PI data for marketing purposes, and

the data mining appellants, who are prohibited from selling or

transferring Vermont PI data if the data is to be used for

marketing purposes.” Maj. Op. at 24. The law, however, starts at

the beginning, and seeks to cut off the flow of PI data at its

source: section 17 prohibits any pharmacy from “sell[ing] . . .

prescriber-identifiable information . . .[or] permitting its use .

. . for marketing or promoting a prescription drug.” Vt. Stat.

5
Ann. tit. 18, § 4631(d) (emphasis added).5 Because the restric-

tions imposed by section 17 begin there, and because that first

restriction prevents PI data from ever reaching the hands of

plaintiffs-appellants, the principal question to be resolved – and

one the majority wholly overlooks – is whether the restriction on

pharmacies implicates the First Amendment interests of the data

miners and pharmaceutical companies before the Court.6

In considering that restriction, I begin with the undisputed

fact that Vermont pharmacies have access to and collect prescrip-

tion information only under the direction and authority of state

law. As noted, Vermont requires pharmacies to collect information

such as the name of the prescribing doctor, the name and age of the

patient, and the drug and dose prescribed. Having mandated the

collection of that otherwise highly confidential information, the

state unquestionably has an interest in controlling its further

dissemination. It is that interest that section 17 effectuates –

5
As noted above, the law also prohibits such sales by
health insurers, self-insured employers, and electronic
transmission intermediaries. See Vt. Stat. Ann. tit. 18, §
4631(d). The record, however, is clear that pharmacies are the
principal, if not sole, source of the PI data aggregated and then
licensed by data mining appellants in this case.
6
The rules of professional conduct applicable to
pharmacies in Vermont place strict limits on the unauthorized
release of “patient or practitioner information,” defining it as
“unprofessional conduct” subject to discipline. See Vt. Bd. of
Pharmacy Admin. Rules § 20.1(I). Because no pharmacy is a party
to this action, neither the First Amendment rights, if any, of
pharmacies to sell PI data, nor the impact of these restrictions
on the assessment of any such rights need be addressed.

6
with respect to appellants, Vermont’s law operates principally to

prevent them from obtaining otherwise private PI data, and as such,

does no more than restrict their unfettered access to information.

This the First Amendment permits. See Zemel v. Rusk, 381 U.S.

1,17 (1965) (First Amendment “does not carry with it the unre-

strained right to gather information”).

In finding that section 17 operates principally as a permissi-

ble regulation on access to information, I am guided by the Supreme

Court’s decision in Los Angeles Police Department v. United

Reporting Publishing Corporation, 528 U.S. 32 (1999). There, a

private publishing company challenged a California state law that

restricted access to information collected by local police

departments respecting those arrested within the state. The Court

found that, at least with respect to that plaintiff, the law had no

First Amendment implications because it did no more than “regulate[

] access to information in the hands of the police department.”

Id. at 40. As the Court further noted, “California could decide

not to give out arrestee information at all without violating the

First Amendment.” Id.

The majority attempts to distinguish United Reporting on the

ground that while the California law amounted to “a government

denial of access to information in its possession,” id. (emphasis

added), here “the information is not in the government’s posses-

sion” but instead “in the hands of pharmacies.” Maj. Op. at 23.

7
As a preliminary matter, the argument completely disregards the

fact that the information is only “in the hands of” pharmacies

because the state has directed them to collect it. As such,

Vermont’s interest in controlling the further dissemination of that

information is not conceptually different from California’s

interest in stemming the further dissemination of information in

the hands of local police departments. Under the majority’s

reasoning, United Reporting hinges on the fact that the City of Los

Angeles used its own police officers – rather than the private

prison or security contractors it might have relied on – to process

and house its arrestees. See Clifford J. Rosky, Force, Inc.: The

Privatization of Punishment, Policing, and Military Force in

Liberal States, 36 Conn. L. Rev. 879, 903 (2004) (noting the rapid

growth of private prisons and their use in more than half the

country). I see no basis for reading United Reporting that

narrowly.

But second, the majority’s attempt to distinguish United

Reporting would lead to the rather startling proposition that the

First Amendment rights, if any, of those seeking access to

information turn on whom they are requesting it from. Under the

majority’s analysis, for example, the Family Educational Rights and

Protection Act – which prohibits universities from disseminating

information collected about enrolled students, see 20 U.S.C. §

1232g(b)(1) – operates as a permissible restriction on access to

8
information if a request for student records is denied by a public

university but implicates the requestor’s First Amendment rights if

it leads to a denial by a private school. I find that outcome both

illogical and untenable. Cf. United States v. Miami Univ., 294 F.3d

797, 820-24 (6th Cir. 2002) (interpreting FERPA and rejecting

asserted “First Amendment right of access to student records”).

Indeed, for the putative gatherer of information, the difference is

of no discernable let alone constitutional significance. Cf.

Houchins v. KQED, Inc., 438 U.S. 1, 11 (1978) (“There is an

undoubted right to gather news . . . but that affords no basis for

the claim that the First Amendment compels others – private persons

or governments – to supply information.” (plurality opinion)

(emphasis added)).

No doubt sensing the tenuous nature of that position, the

majority argues that appellants “have not claimed a First Amendment

right to obtain information” but instead challenge section 17

insofar as it regulates the “use of information” already “in

[their] hands.” Maj. Op. at 23. Cf. United Reporting, 528 U.S. at

40 (“This is not a case in which the government is prohibiting a

speaker from conveying information that the speaker already

possesses.”). The argument rests on a fundamental misunderstanding

of section 17 – of the “sequence of events” that it regulates.

Because, as noted, the majority begins at the end of that sequence,

it ignores the fact that section 17 regulates the flow of PI data

9
well before it ever comes to be “in the hands” of appellants.

Indeed, under operation of the law, appellants can only possess PI

data if they have obtained it from pharmacies on the condition that

it not be used for “marketing or promoting of a prescription drug.”

Having thus obtained PI data with conditions clearly attached,

appellants cannot subsequently contend those conditions amount to

restrictions on information they “already possess.”

I do not question the proposition that different consider-

ations apply where the government is “prohibiting a speaker from

conveying information that the speaker already possesses.” I

simply conclude that none of the appellants in this case are so

affected by operation of section 17. Nor do I pass on the concern

– not pressed by appellants here – that selectively restricting

access to information may raise First Amendment concerns. United

Reporting, 528 U.S. at 42 (Scalia, J., concurring) (allowing

selective access may create “restriction[s] upon speech rather than

upon access to government information”); id. at 43 (Ginsburg, J.,

concurring) (selective restrictions on access could “impermissibly

burden[ ] speech” where selection is based upon an “illegitimate

criterion”). I simply conclude that, based on the record before

this Court, section 17 operates as a permissible restriction on

access to information that the government has directed pharmacies

to collect, and the majority errs in concluding to the contrary.

10
 II.

Because I thus conclude that section 17 should be upheld as a

permissible restriction on access to information, I could end my

analysis there. The majority, however, proceeds to the question of

whether, as applied to appellants, Vermont’s law regulates conduct

or speech. Because I view that issue as one of some importance,

and because I am deeply troubled by the majority’s discussion of

it, I, too, address the issue in order to express considerable

doubt that, as applied to the data mining appellants in particular,

section 17 can properly be characterized as a restriction on

speech. In considering the law as applied to data miners and

pharmaceutical companies, I once again reject the majority’s

approach and follow the “sequence of events” the law regulates,

beginning, here, with the restriction as applied to the data

miners.

As a preliminary matter – overlooked by the majority – the

parties dispute whether section 17 actually restricts the data

miners at all. Indeed, section 17 makes no mention of data miners

or vendors. Accordingly, it is not clear to me that data miners

have any interests – First Amendment or otherwise – at stake here.

Section 17, would, at most, appear to eliminate a substantial

market for data miners’ services by eliminating the desire of

pharmaceutical companies to purchase marketing information the

statute prohibits them from using. As the First Circuit recently

11
observed, however, “the First Amendment does not safeguard against

changes in commercial regulation that render previously profitable

information valueless.” Ayotte, 550 F.3d at 53 (quoting Wine &

Spirits Retailers, Inc. v. Rhode Island, 418 F.3d 36, 48 (1st Cir.

2005)). Nevertheless, because section 17 restricts “other similar

entities” from “sell[ing], licens[ing], or exchang[ing] for value”

PI data if the transfer is made “for marketing or promoting a

prescription drug,” and because a data miner could conceivably be

deemed a “similar entity” and thus so regulated, I proceed to

consider the law as it might be applied to them.

The question, thus, is whether that restriction, should it be

imposed, infringes data miners’ First Amendment rights. There are

significant reasons to conclude that it does not. As the majority

concedes, these data miners – who disingenuously style themselves

“publishers” for purpose of this litigation – “do not themselves

use PI data” but instead “are in the business of aggregating and

selling data.” Maj. Op. at 27. Nevertheless, citing our opinion

in Universal City for the proposition that “[t]he First Amendment

protects ‘even dry information, devoid of advocacy, political

relevance, or artistic expression,” Maj. Op. at 19 (citing Universal

City Studios, Inc., 273 F.3d at 446) (alteration omitted), the

majority concludes that the data miners’ sale of that “dry

information” constitutes protected speech, even implying that it may

constitute non-commercial speech. Id. at 19, 26.

12
 I do not read Universal City to support such a sweeping

proposition. There, we observed in dicta that “even dry informa-

tion” may be protected “speech” and held, specifically, that

“computer programs constructed from code[ ] can merit First

Amendment protection,” 273 F.3d at 446, 449 (emphasis added); see

also id. at 445 (noting that in the modern age, this Court has taken

“an ‘evolutionary’ approach . . . favoring ‘narrow’ holdings that

would permit the law to mature on a ‘case-by-case’ basis”) (quoting

Name.Space, Inc. v. Network Solutions, Inc., 202 F.3d 573, 584 n.11

(2d Cir. 2000)). On the facts of that case, we concluded that the

computer code in question warranted First Amendment protection

because it had the capacity to communicate information to human

beings and had promoted both “discourse among computer scholars” and

the “exchange of ideas and expression.” Id. at 448. However, in

so doing, we distinguished Commodity Futures Trading Commission v.

Vartuli, 228 F.3d 74, 111 (2d Cir. 2000) (Sack, J.), where we found

that the computer program in question there did not warrant First

Amendment protection on the ground that “the values served by the

First Amendment were not advanced by [the Vartuli code].” Id. at

449 (citing Vartuli 228 F.3d at 111); see also Vartuli, 228 F.3d at

111 (noting that those “values” include “the pursuit of truth, the

accommodation among interests, the achievement of social stability,

the exposure and deterrence of abuses of authority, personal

autonomy and personality development, [and] the functioning of

13
democracy”).

Accordingly, the critical question in applying Universal City

is not merely whether the appellants are engaged in the sale of “dry

information” but rather whether they are engaged in a sale of “dry

information” that “advance[s]” the “values served by the First

Amendment.” Cf. Vartuli, 228 F.3d at 111 (“Language serves a variety

of functions, only some of which are covered by the special reasons

for freedom of speech.” (quoting Kent Greenwalt, Speech and Crime,

4 Am. B. Found. Res. J. 645, 784 (1980)). Here, there are strong

reasons to question whether the data mining appellants are engaged

in conduct that meets that standard. As the majority characterizes

them, the data mining appellants are in the “business of aggregat-

ing and selling data” – data which communicates nothing about them

nor allows them to express or communicate anything at all. Maj. Op.

at 27.

To be clear, the dissemination of dry information can qualify

for First Amendment protection. For instance, as we observed in

Universal City, “courts have subjected to First Amendment scrutiny

restrictions on the dissemination of technical scientific informa-

tion and scientific research.” Universal City, 273 F.3d at 447

(internal citations omitted); see also Miller v. California, 413

U.S. 15, 34 (1973) (“The First Amendment protects works which, taken

as a whole, have serious literary, artistic, political, or

scientific value.” (emphasis added)). But here, data mining

14
appellants do not contend on appeal that section 17 precludes them

from distributing data to foster scientific or medical research. To

the contrary, to the extent Vermont’s law applies to them at all,

it merely prevents them from licensing their data for a single use

– the marketing of prescription drugs. Nor do data mining

appellants contend the statute prohibits them from fostering public

opinion or debate – to the contrary, as noted above, data mining

appellants actually prohibit their customers from disclosing the

data they license to anyone else, much less the general public. As

such, I have some difficulty comparing the data they sell to

“discourse” or the “exchange of ideas.”

The First Circuit, in evaluating a similar law, concluded that

PI data was just a product, not distinguishable from the data

miners’ perspective to widgets, or, as the First Circuit suggested,

“beef jerky.” Ayotte, 550 F.3d at 53. As such, the court found

that “this is a situation in which information itself has become a

commodity” – an “informational asset.” Id. at 53; cf. Reno v.

Condon, 528 U.S. 141, 148 (2000) (sale of collected driver

information proper subject of federal regulation because the

“information is, in this context, an article of commerce”). Under

these circumstances, that court was unwilling to conclude that

simply because a party’s “product is information” that “any

regulation [of that product] constitutes a restriction on speech.”

Ayotte, 550 F.3d at 53. Such an interpretation, it concluded,

15
“stretches the fabric of the First Amendment beyond any rational

measure.” Id.

The majority rejects, out of hand, the First Circuit’s “beef

jerky” analogy and labels “obscure” its distinction between speech

and “information asset[s].” I do not necessarily mean to endorse

that court’s approach or even its ultimate conclusion. But I am

deeply troubled by the fact that the majority opinion – which

becomes the first circuit-level opinion to hold that data miners’

sale of PI data constitutes First Amendment activity7 – does not

even bother to engage in the fundamental First Amendment analysis

our case law requires. The majority offers no cogent reason for why

this “dry information” falls into the category the First Amendment

protects, nor any discussion of how this “dry information” can be

deemed to “advance” the “values served by the First Amendment.” See

Vartuli, 228 F.3d at 111.

To reiterate, I do not question that dry information may be of

First Amendment importance given the role information frequently

plays in forming public opinion or fostering the marketplace of

ideas. Indeed, dry information – in the form of a professor’s

7
While Judge Lipez, concurring in part and dissenting in
part in Ayotte, argued that the New Hampshire law, as applied to
pharmaceutical companies’ use of PI data, restricted commercial
speech, he found it “self-evident” that the data miners’
“acquisition, aggregation, and sale of prescriber-identifiable
data” is “not speech within the purview of the First Amendment.”
Ayotte, 550 F.3d at 64 (Lipez, J., concurring in part and
dissenting in part).

16
research or a programmer’s code – may frequently be of core First

Amendment value. But in an era where “increasingly, information is

sold as a commodity without being embedded in any practice that

could reasonably be regarded as an effort to communicate,“ Robert

Post, Prescribing Records and the First Amendment – New Hampshire’s

Data-Mining Statute, New Eng. J. Med., Feb. 19, 2009 at 745, 746,

I am unwilling to presume that simply because a business is engaged

in the transfer of information rather than widgets that its

activities are automatically entitled to the potent shield of the

First Amendment. And I cannot join a majority opinion that offers

no principled basis for determining when such conduct should and

should not be considered protected First Amendment activity.

With respect to the pharmaceutical companies, section 17

primarily prohibits them from accessing and acquiring PI data for

a particular purpose – i.e., for use in marketing – and assuming

they do acquire it, prohibits them from using it for that purpose.

With respect to the first and primary restriction, I would find for

the reasons set forth above, that section 17 operates as a perfectly

permissible restriction on access to information and thus does not

implicate appellants’ First Amendment rights. With respect to the

second restriction, I note as I did above that to the extent

pharmaceutical companies obtain PI data under the express condition

that they cannot use it for marketing purposes, they cannot

subsequently be heard to complain that those express conditions-to-

17
receipt operate as restrictions on information already within their

possession.

More generally, I question whether First Amendment protection

should be afforded to what amounts to a business method or practice,

cf. Wine & Spirits Retailers, Inc. v. Rhode Island, 481 F.3d 1, 6-7

(1st Cir. 2007) (ban on joint advertising strategies permissible

restriction on conduct or business method, not speech), one that

itself has no expressive quality, but is instead meant at most to

facilitate the delivery of other expressive conduct. There is no

dispute that the practice of detailing itself – that is, of

delivering a marketing message to doctors – constitutes commercial

speech. There is also no dispute, however, that pharmaceutical

detailers do not refer to PI data in their conversations with

doctors. The data is used, instead, to identify doctors most likely

to prescribe particular kinds of drugs so that sales pitches may be

effectively directed at them, to monitor the success of these

detailing efforts by tracking any changes in the prescribing habits

of the doctors thereby targeted, and to compensate detailing

personnel based on the success of their efforts.

The majority concludes that section 17 impacts pharmaceutical

companies’ “speech” interests because it “affects manufacturers’

ability to promote brand-name drugs to doctors . . . by making it

harder to identify those physicians for whom the message will be

most relevant and to tailor the detailing messages based on

18
individual physicians’ prescribing histories.” Maj. Op. at 25.

However, the majority cites no authority for the proposition that

the First Amendment provides protection – let alone, the strong

protection the majority affords here – for the methods of identify-

ing an audience, and while the process of “tailoring detailing

messages” arguably comes closer to First Amendment activity, the

record provides little basis for evaluating the extent to which PI

data is actually used in that manner. Accordingly, even if section

17 has some minimal and indirect effect on the manner in which

detailers “tailor” those messages, that effect is a very thin reed

on which to hang a finding that section 17 restricts First Amendment

activity rather than conduct. Cf. Rumsfeld v. Forum for Acad. &

Inst. Rights, Inc. (FAIR), 547 U.S. 47, 62 (2006) (“‘[I]t has never

been deemed an abridgment of freedom of speech or press to make a

course of conduct illegal merely because the conduct was in part

initiated, evidenced, or carried out by means of language, either

spoken, written, or printed.’” (quoting Giboney v. Empire Storage

& Ice Co., 336 U.S. 490, 502 (1949)).

III.

Finally, however, even if I were to conclude that section 17’s

total effect on detailing was sufficient to constitute a restriction

on commercial speech, I would nonetheless uphold the statute because

I would find that it complies with the standard set forth in Central

Hudson.

19
 Under Central Hudson, to regulate commercial speech that is

“neither misleading nor related to unlawful activity,”8 the

government must (1) assert a “substantial interest” to be achieved,

and demonstrate that (2) the restriction “directly advances” that

interest, and (3) the limitation “is not more extensive than

necessary to serve that interest.” Cent. Hudson Gas & Elec. Corp.

v. Pub. Serv. Comm’n, 447 U.S. 557, 564-66 (1980); Anderson v.

Treadwell, 294 F.3d 453, 460-61 (2d Cir. 2002). As we have

previously observed, the latter two steps “coalesce to require ‘a

reasonable fit between the legislature’s ends and the means chosen

to accomplish those ends.’” Anderson, 294 F.3d at 462 (quoting

Lorillard Tobacco, Co. v. Reilly, 533 U.S. 525, 556 (2001)).

Accordingly, while Central Hudson compels more searching review of

a restriction on commercial speech than a restriction on pure

conduct, it does not require strict scrutiny. See id. at 460 (“[T]he

8
While Vermont conceded below that the speech at issue
here is not “misleading,” the record provides some evidence to
the contrary. For example, one former sales representative
testified that PI data was used to create sales presentations
that are “very skewed” and “distorted.” Another expert testified
that PI data was used to tailor detailing messages such that
“information [is] provided in . . . a selective manner.” The
state does not raise the issue on appeal and thus I do not
consider it here but note only in passing that, if construed as a
law meant to restrict misleading speech or advertising, section
17 would be subject to far less searching review and would
unquestionably be within the bounds of the state’s regulatory
authority. See, e.g., Edenfield v. Fane, 507 U.S. 761, 768
(1993) (“[O]ur cases make clear that the State may ban commercial
expression that is . . . deceptive without further
justification.” (collecting cases)).

20
[Supreme] Court has rejected the argument that strict scrutiny

should apply to regulations of commercial speech . . . , adhering

instead to the somewhat less rigorous standards of Central Hudson.”

(collecting cases)).

a.

With respect to the first factor, Vermont identifies three

“substantial interests” section 17 advances: (1) an interest in

“protecting the public health,” (2) an interest in “protecting the

privacy of prescribers and prescribing information,” and (3) and an

interest in “ensur[ing] costs are contained” in the health care

sector. The majority concludes that the first and third constitute

“substantial” state interests but that the second is “too specula-

tive” to qualify. Maj. Op. at 31-32. I would conclude that all

three constitute “substantial” state interests. With respect to the

second, which is the only asserted interest on which the majority

and I diverge, I am unable to accept the majority’s conclusion that

the state’s interest in medical privacy is “too speculative” to

qualify as a substantial interest. The majority’s analysis – which

focuses on the evidence, or asserted lack thereof, of section 17’s

effect on medical privacy – is relevant only to whether section 17

“directly advances” the state interest.9 It has no bearing on

9
For similar reasons, I reject the majority’s suggestion
that Vermont has no legitimate interest in medical privacy
because the state allows the dissemination of PI data for certain
non-marketing purposes. The argument, which also bears on the
effectiveness of section 17 in furthering the interest in medical

21
whether that interest is real and substantial, an issue which the

majority does not directly question. Indeed, neither appellants nor

the majority advances any serious argument that the state does not

have a legitimate and substantial interest in medical privacy, nor

am I aware of any. To the contrary, in an era of increasing and

well-founded concern about medical privacy and the rampant

dissemination of confidential information, the federal government

has repeatedly acted on that interest and legislated to protect the

privacy of medical records, see, e.g., 45 C.F.R. §§ 164.501-164.520

(protecting information collected pursuant to the Health Insurance

Portability and Accountability Act); 42 U.S.C. § 2000ff et seq.

(protecting privacy of genetic information); 42 C.F.R. §§ 431.300,

431.303 (protecting records of Medicaid patients), and thirteen

states and the District of Columbia have considered or enacted bills

aimed at protecting medical privacy in the very same way Vermont’s

statute does. See Br. of Amicus Curiae Elec. Privacy Inf. Ctr.

(“EPIC”) at 2 (collecting statutes). Accordingly, I would find that

all three of the state’s asserted interests are “substantial” for

purposes of Central Hudson and proceed to evaluate whether section

17 “directly advances” those interests.

privacy rather than on the legitimacy of that interest, suggests,
at most, that section 17 may be “underinclusive.” However, as
noted below, underinclusiveness, even if established, is not a
basis for voiding a statute under Central Hudson analysis.

22
 b.

The second and third prongs of the Central Hudson test require

us to consider whether the regulation at issue “directly advances”

the asserted state interests as well as whether the restriction “is

not more extensive than necessary to serve th[ose] interest[s].”

Cent. Hudson, 447 U.S. at 564, 566. To meet these requirements, the

government carries “the burden of establishing a reasonable fit

between the [law’s] ends and the means chosen to achieve those

ends.” City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410,

414 (1993) (internal quotation marks omitted). However, as we have

recently observed, a “reasonable fit” is not a “least restrictive

means” test, Clear Channel Outdoor, Inc. v. Atl. Outdoor Advertis-

ing, Inc., 594 F.3d 94, 104 (2d Cir. 2010), and thus we do not ask

whether there is “no conceivable alternative” but instead demand

“‘only that the regulation not burden substantially more speech than

is necessary to further the government’s legitimate interests.’”

Id. (quoting Bd. of Trs. of the State Univ. of N.Y. v. Fox, 492

U.S.469, 478 (1989)). The critical inquiry, as the district court

noted, is therefore whether the restriction on speech is “in

reasonable proportion to the substantial state interest[s]

served.”10 Sorrell, 631 F. Supp. 2d at 454 (internal quotation

10
As the majority correctly notes, in Thompson v. Western
States Medical Center, 535 U.S. 357, 371 (2002), the Supreme
Court observed that “if the Government could achieve its
interests in a manner that does not restrict speech, or that
restricts less speech, the Government must do so.” However, there

23
marks omitted).

With respect to these factors, the government carries the

burden of showing that its law furthers at least one interest “in

a direct and material way,” Edenfield v. Fane, 507 U.S. 761, 767

(1993), and accordingly we ask whether the state has demonstrated

“that the harms it recites are real and that [the restriction] will

alleviate them to a material degree.” Anderson, 294 F.3d at 462

(internal citation and quotations omitted). In evaluating whether

the government has met that burden, the parties dispute the level

of deference, if any, we owe to the legislature’s determination.

Specifically, the parties dispute whether we should apply so-called

Turner deference and thereby “accord substantial deference to the

predictive judgments” of legislative bodies which, as

“institution[s] [are] far better equipped than the judiciary to

amass and evaluate the vast amounts of data bearing upon legislative

questions.” Turner Broad. Sys. Inc. v. Fed. Comm. Comm’n, 520 U.S.

180, 195 (1997) (internal quotation marks and citations omitted).

Like the majority, I feel no need to decide the issue, as I would

is no indication that the Court’s observation was meant to
displace the entirely consistent principle that Central Hudson
does not require consideration of every “conceivable alternative”
or amount to a “least restrictive means” test. Instead, the
Thompson court was reacting to the government’s failure, there,
to “even consider . . . any other alternatives” – i.e., to the
fact that a restriction on speech “seems to have been the first
strategy the Government thought to try.” Id. at 373; cf. id. at
368 (affirming that Cental Hudson controls and finding “no need
in this case to break new ground”).

24
conclude that even without applying Turner deference, Vermont meets

its burden. Because I feel the majority overstates that burden,

however, I explain briefly what I consider the prevailing standard

to be.

As appellants correctly note, Turner did not address a

restriction on commercial speech, a context in which the Supreme

Court, independent of Turner, has repeatedly urged deference to

legislative findings. See Ayotte, 550 F.3d at 93 (Lipez, J.,

concurring in part and dissenting in part) (“[T]he general principle

of legislative deference” articulated in Turner “also is compatible

with the Court’s commercial speech precedent.”). Specifically, the

Court has found that the commercial speech doctrine allows “some

room for the exercise of legislative judgment,” 44 Liquormart, Inc.

v. Rhode Island, 517 U.S. 484, 508 (1996) (plurality opinion), and

cautioned that, where a legislature has deemed a particular

regulation a properly tailored response to a substantial interest,

“we have been loath to second-guess the [g]overnment’s judgment to

that effect.” Fox, 492 U.S. at 478. Accordingly, as we recently

observed in upholding a commercial speech regulation, “if [a

government] determination about how to regulate [commercial speech]

is ‘reasonable’ . . . then we should defer to that determination.”

Clear Channel, 594 F.3d at 104. Such deference is “all the more

appropriate” where, as here, the law targets a form of commercial

speech that has “traditionally been subject to extensive regula-

25
tion,” Anderson, 294 F.3d at 463, or where the regulation fits

within a broader regulatory or policy framework. Cf. Clear Channel,

594 F.3d at 105 (“[I]t is not this Court’s role to second guess the

City’s urban planning decisions.”)

Accordingly, in evaluating legislative findings and conclusions

in the context of a commercial speech regulation, we do not

necessarily demand hard evidence, particularly, where, as here, the

statute had yet to take effect when first challenged, but instead

ask “whether the government is able to support its restriction on

speech by adduc[ing] either empirical support or at least sound

reasoning on behalf of its measure.” Ayotte, 550 F.3d at 93 (Lipez,

J., concurring in part and dissenting in part) (internal quotation

marks and alterations omitted) (emphasis added); see also id. at 55

(“A state need not go beyond the demands of common sense to show

that a statute promises directly to advance an identified government

interest.” (citing Burson v. Freeman, 504 U.S. 191, 211 (1992))).

The majority, while declining to determine what level of

deference is appropriate, contends that Clear Channel should be

limited to the context of “commercial billboards.” Maj. Op. at 40.

There is nothing in the language of that opinion to suggest as much,

and indeed, the Clear Channel opinion cites Ward v. Rock against

Racism, 491 U.S. 781 (1989) – a case that did not involve outdoor

advertising at all – for the proposition that deference to a

government’s determination of reasonableness is appropriate. See

26
Clear Channel, 594 F.3d at 104. Moreover, as noted above, Clear

Channel is entirely consistent with a much broader body of our case

law making clear that deference to legislative findings in the

context of restrictions on commercial speech – and, particularly,

commercial speech in a heavily regulated industry – is appropriate.

Accordingly, as I proceed to ask whether section 17 “directly

advances” at least one of the three asserted government interests

and whether it is “not more extensive than necessary to serve

th[ose] interest[s],” I engage in de novo review of the record.

Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S. 485, 499

(1984). But in so doing, I do not substitute my judgment for that

of the legislature and instead defer to that body’s determinations

where “reasonable.” Clear Channel, 594 F.3d at 94; see also Ayotte,

550 F.3d at 93 (Lipez, J., concurring in part and dissenting in

part) (“If the government makes the requisite showing, we defer to

the legislative judgment to adopt the challenged measure.”).

Moreover, I am cognizant of the context in which the restriction was

passed and examine section 17 “in relation ‘to the overall problem

the government seeks to correct.’” Clear Channel, 594 F.3d at 94

(quoting Ward, 491 U.S. at 801). Engaging in such review, I would

conclude that the statute directly advances each of the asserted

interests in a material manner, and that it is “reasonably propor-

tional” which is to say that it does not burden “substantially more

speech than is necessary to further the government’s legitimate

27
interests.” Id. at 104.

c.

First, I would find on this record that section 17 “directly

advances” all three of Vermont’s asserted substantial interests.

With respect to cost containment and the public health, the district

court found, and the record supports the finding that, section 17

materially advances both. The record establishes that pharmaceuti-

cal companies spend billions to “detail” new brand name prescription

drugs that are more expensive, although not necessarily more

effective, than generic class equivalents and whose effects and

potential risks are less well known than those associated with

generic class equivalents. Sorrell, 631 F. Supp. 2d at 451-54. The

record further establishes that detailing works – doctors who are

“detailed” are more likely to prescribe new brand name drugs,

despite the fact that generic class equivalents are more cost-

effective and their risks are better known. Id. Finally, the

record establishes that PI data is a critical tool for increasing

the effectiveness of detailing. IMS Health, for example, promises

“big returns” for its PI data clients, noting that a sample client

“increased its market share 86% with PI data.” Id. at 451.

Vermont thus took the reasonable course of restricting use of

that critical tool. By preventing pharmaceutical companies from

using PI data, section 17 makes detailing less effective, which in

turn, makes it less likely that doctors will prescribe less cost-

28
effective, and potentially riskier brand name drugs over generic

class equivalents. That “sound reasoning,” which is amply supported

by the testimony of expert witnesses – including some of appellants’

witnesses – and other evidence adduced by the state, is sufficient

to satisfy the second prong of the Central Hudson standard. Ayotte,

550 F.3d at 93 (Lipez, J., concurring in part and dissenting in

part).

The majority, in concluding otherwise, does not dispute any of

the state’s evidence or contest the district court’s findings.

Instead, it argues the “route” by which section 17 furthers the

state’s interests is “too indirect to survive intermediate scru-

tiny.” Maj. Op. at 39. However, it is that very same “route” that

the majority travels in order to find a First Amendment implication

– and thus a need to apply Central Hudson – in the first place. As

the majority argues, section 17 implicates First Amendment interests

because it restricts access to PI data which in turn “affects

manufacturers’ ability to [detail]. . . by making it harder to

identify those physicians for whom the message will be most relevant

and to tailor the detailing messages based on individual physicians’

prescribing habits.” Maj. Op. at 25. In other words, the

majority’s First Amendment holding is premised on the understanding

that section 17 not only travels that route, but travels that route

successfully – it achieves its purpose of making detailing more

difficult and less effective, which in turn promotes the state’s

29
asserted interests in controlling costs and protecting the public

health. Cf. Sorrell, 631 F. Supp. 2d. at 451 (“strongest evidence”

that section 17 advances state interests is the fact that “if PI

data did not help sell new drugs, pharmaceutical companies would not

buy it.”) Having found section 17’s route sufficiently direct to

establish the First Amendment violation in the first place, the

majority’s conclusion that the statute is too indirect to survive

Central Hudson is nothing short of bewildering.

No doubt, there are more direct ways Vermont could contain

costs or promote health, many of them, I note, far more restrictive

of detailers’ activities and First Amendment conduct than the

regulation actually passed. But that is not what the second prong

of the Central Hudson test requires. Instead, all that standard

demands is that the “harms” the state identifies “ are real and that

[the] restriction will in fact alleviate them to a material degree.”

Anderson, 294 F.3d at 462. I would find, on this record, that

Vermont meets that standard. The evidence developed below and

unchallenged by the majority here establishes that the harms – i.e.,

exorbitant health care costs and threats to patient safety – are

real, and that section 17, by restricting access to PI data, makes

detailing more difficult and less effective, which, in turn, reduces

the pressure on doctors to prescribe more expensive, less proven

drugs. Indeed, as discussed above, the majority agrees that section

17 is likely to be effective in this regard.

30
 Moreover, I note that I would also find that section 17

“directly advances” the state’s third interest – i.e., in “protect-

ing the privacy of prescribers and prescribing information.”

Without question, the law restricts the flow of otherwise private

information about doctors’ prescribing habits and the care they

provide to their patients. No party seriously disputes that.

Appellants contend that the interest cannot be deemed “directly

advanced” because section 17 still permits the sale and use of PI

data for other purposes. As a preliminary matter, I note that the

record supports the conclusion that section 17 does not just reduce

but dramatically reduces the spread of PI data. As the district

court found, with respect to PI data, pharmaceutical companies are

the data mining appellants’ “only paying customers.” Sorrell, 631

F. Supp. 2d at 451. More important, what amounts to an

“underinclusiveness” argument is not availing in the context of

Central Hudson, which does not require strict scrutiny. See Posadas

de Puerto Rico Assocs., 478 U.S. 328, 342 (1986) (statute’s

“underinclusive[ness]” not controlling of determination as to

whether it “directly advances” state interests); Clear Channel, 594

F.3d at 110 (“[T]he Supreme Court has made clear that

underinclusiveness will not necessarily defeat a claim that a stat

interest has been materially advanced.”). All that Central Hudson

demands is that a regulation materially advance a real harm, which

section 17 plainly does.

31
 Accordingly, I would find that section 17 meets the second

Central Hudson factor.

d.

The third Central Hudson factor requires consideration of

whether the statute is “not more extensive than necessary to serve”

the asserted state interests. Because, as noted, this “narrow

tailoring” requirement is not a “least restrictive means” test, we

look only for a fit “that is not necessarily perfect, but reason-

able” and ask whether the restriction is one “whose scope is in

proportion to the interest served.” Greater New Orleans Broad.

Ass’n, 527 U.S. at 188.

Because we thus look for “proportion[ality],” the inquiry

inherently requires us not simply to evaluate the extent to which

the statute furthers the state interests, but also to quantify and

then balance the actual burden imposed on speech. It is this latter

inquiry that the majority wholly sidesteps in its analysis but that

I begin with, because to the extent section 17 restricts commercial

speech – a finding that, as set forth above, I doubt – the restric-

tion imposed is both minimal and indirect. At most, section 17

indirectly limits the message detailers convey by preventing them

from “tailoring” their message based on a particular doctor’s past

prescribing habits. The law does not otherwise affect the message

they deliver, nor does it directly restrict detailing in any way.

Indeed, as the majority notes, section 17 “does not . . . directly

32
restrict the marketing practices of detailers.” Maj. Op. at 34.

Given that minimal and indirect burden on speech, section 17 is

inherently distinct from the sorts of “categorical” and direct bans

on commercial speech the Supreme Court has previously struck down.

See Ayotte, 550 F.3d at 97 (Lipez, J., concurring in part and

dissenting in part) (“[T]he restriction on speech imposed by the

Prescription Act is significantly more limited than similar

restrictions on commercial speech that have been considered by the

Supreme Court. It is neither a complete ban on the marketing or

advertising of a product . . . nor a blanket prohibition on in-

person solicitation.”) (internal citations omitted). It is with

that limited burden imposed by section 17 in mind, that I consider

the “proportion[ality]” of the law.

I would find that the minimal and indirect burden section 17

imposes on speech is not “more than is necessary to further” the

government’s three asserted interests. Clear Channel, 594 F.3d at

104 (quoting Fox, 492 U.S. at 478). The statute directly advances

three substantial state interests in material ways, and it does so

by imposing exceedingly limited burdens on commercial speech. As

such, I find a “reasonable fit” between the burdens imposed and the

interests furthered. In so finding, I would note that many of the

alternatives proposed by appellants and the majority are actually

far more restrictive of appellants’ activities. For example, the

data mining appellants suggest the state could instead “limit

33
advertising of drugs that it concluded were unnecessarily expen-

sive,” while the majority suggests, “mandat[ing] the use of generic

drugs as a first course of treatment . . . for all those patients

receiving Medicare Part D funds.” Maj. Op. at 42. The state

instead adopted a regulation that promotes all three interests

without directly regulating speech or the content of detailers’

messages, and without unduly interfering in the prescribing habits

of doctors. As such, I would find it to be a “reasonable” regula-

tory choice, one that deserves deference from this Court. See Clear

Channel, 594 F.3d at 104.

The majority contends that section 17 cannot be deemed

“narrowly tailored” because it is overinclusive in several respects.

First, the majority contends that section 17 is over-inclusive

because it applies “without regard to whether the data pertains to

a prescription drug that is efficacious.” Maj. Op. at 44. However,

the very harm section 17 seeks to avoid is aggressive marketing of

drugs whose efficacy is not yet known because the drug has not been

subject to much actual use or patient experience. Alternatively,

the majority contends that section 17 is over-inclusive because it

applies even where no generic alternative exists or where a new drug

is “unique.” The majority’s analysis, however, overlooks the

state’s third asserted interest – that in protecting medical

privacy. Because I do not overlook that interest, I would reject

both overinclusiveness arguments on the ground that section 17

34
furthers the state interest in protecting medical privacy by

prohibiting the transfer of PI data for marketing purposes irrespec-

tive of whether the brand-name drug being detailed is effective or

has a generic equivalent.

Alternatively, the majority contends that section 17 is not

“narrowly tailored” because Vermont failed to consider “less speech-

restrictive means available.” Maj. Op. at 42. As noted, among

those “less speech-restrictive” measures the majority posits are

mandating the use of generic drugs. Alternatively, the majority

suggests that, among other things, Vermont could await the results

of a “counter-speech” measure already adopted by the state. First,

none of these “less restrictive” means would address all three state

interests because none would further the state’s substantial

interest in protecting medical privacy. That alone is grounds for

accepting the state’s decision not to seriously pursue those

alternatives. Cf. Thompson v. Western States Med. Ctr., 535 U.S.

357, 371 (2002) (“[I]f the Government could achieve its interests in

a manner that does not restrict speech . . . the Government must do

so.”).

But second, as noted above, many of the less speech-restrictive

alternatives the majority considers to be “available” are, in fact,

far more intrusive restrictions on appellants’ business practices or

doctors’ prescribing habits. And while Central Hudson and its

progeny make clear that a state may not default to speech restric-

35
tions where other, equally effective remedies are available, I do

not read that body of law to require a state to adopt far more

restrictive and intrusive measures simply because the less restric-

tive measure imposes an incidental burden on speech.

Finally, where, as here, the state is legislating within an

already heavily regulated field, we owe particular deference to the

specific regulatory choice the state makes. See Anderson, 294 F.3d

at 463. Especially in that context, it is not the role of this

Court to “second guess” a legislature’s decision as to which

regulatory approach is best. See Fox, 492 U.S. at 478; Clear

Channel, 594 F.3d at 105. It is, instead, our role to ensure that

the restriction chosen is “reasonably proportional” to the interests

it furthers. Section 17 meets that standard. Indeed, the majority

offers no significant argument to the contrary – it does not engage

in proportionality analysis at all – and instead converts the

“reasonable proportionality” standard into a far more aggressive

form of inquiry which in effect, if not form, bears striking

resemblance to strict scrutiny.

I am unwilling to proceed down that road, particularly where,

as here, the law restricts the sale and use of an informational

product – PI data – and does not directly limit commercial speech.

Because I would find that section 17 constitutes a reasonable

restriction that satisfies Central Hudson, I would defer to the

state’s conclusion that this particular method of furthering its

36
substantial interests is best. See Clear Channel, 594 F.3d at 105.

I would thus conclude that to the extent section 17 can be construed

as a restriction on commercial speech, it satisfies Central Hudson

and should therefore be affirmed.

IV.

Because I would find that appellants’ First Amendment challenge

fails, I briefly address the data mining appellants’ additional

dormant Commerce Clause challenge. I would reject that challenge as

well, substantially for the reasons cogently set forth by the

district court. See Sorrell, 631 F. Supp. 2d at 457-59.

The so-called “dormant Commerce Clause,” which refers to the

“negative implication” the Supreme Court has long drawn against

state interference in Congress’ constitutional authority to regulate

interstate commerce, Dep’t of Revenue of Ky. v. Davis, 553 U.S. 328,

337 (2008), prohibits states from regulating “commerce occurring

wholly outside [a] State’s borders.” Healy v. Beer Inst., Inc., 491

U.S. 324, 332 (1989). In evaluating whether a state law violates

the dormant Commerce Clause, the Supreme Court has articulated two

primary concerns: first, a concern about “economic protectionism –

that is, regulatory measures designed to benefit in-state interests

by burdening out-of-state [interests],” Davis, 553 U.S. at 337-38

(internal quotation marks omitted); and, second, a concern about

“inconsistent legislation” or incompatible cross-state regulatory

regimes “arising from the projection of one state regulatory regime

37
into the jurisdiction of another State,” Healy, 491 U.S. at 337.

Section 17 implicates neither concern. Section 17 does not

discriminate against out-of-state entities in favor of in-state

competitors nor does it risk imposing regulatory obligations

inconsistent with those of other states. Instead it restricts the

sale of data collected within the state and the use of that data

within the state. That data mining appellants seek to take that

data out of state to compile it does not relieve them of restric-

tions on their in-state purchase of that data and in-state re-sale

of that data. Cf. Mills, 616 F.3d at 28 (finding similar Maine

statute “implicates none” of the “concerns [ ] central to the way

the Supreme Court has framed the dormant Commerce Clause in its

recent opinions”).

Accordingly, I would find no basis in dormant Commerce Clause

jurisprudence to disturb Vermont’s statute.

V.

In striking down section 17, the majority not only misconstrues

a statutory ban on access to private information as a speech

restriction, but it then breaks from the law of this Court, first,

in labeling data miners’ sale of “dry information” protected First

Amendment activity, and, second, in applying an aggressive form of

Central Hudson that affords insufficient deference to legislative

findings and determinations. As a result, I cannot and do not sign

on either to the majority’s outcome or the manner by which it

38
arrives thereto.

As noted above, the transfer of data has become a burgeoning

business, with those engaged in such transfers frequently having no

intention of engaging in expressive or communicative conduct. For

the reasons set forth above, I am unwilling to accept the majority’s

conclusion that such business operations have an inherent right to

invoke the First Amendment as a shield against reasonable regulation

simply because their business deals in “dry information” rather than

dry goods. Moreover, I express serious concern that the majority’s

discussion not only of the First Amendment interests at issue here

but also of the standard imposed by Central Hudson will make it

unduly and inappropriately difficult for states to properly and

constitutionally regulate in furtherance of substantial interests,

including a state’s very serious interest in the protection of

private information.

I would thus affirm section 17 as a legitimate restriction on

access to information and commercial conduct with few, if any,

attenuated effects on First Amendment activity. Alternatively, even

were I to conclude that section 17 restricts First Amendment

activity, in applying Central Hudson, I would afford far greater

deference to the eminently reasonable legislative judgments the

state has made here in furtherance of several substantial state

interests and the reasonably proportional response its statute

effects. Accordingly, I respectfully dissent.

39
40