No more than a few minutes into the Supreme Court’s argument Tuesday on the new information technology of data-mining, it became very clear that the Justices — perhaps more than a simple majority — see this first test case as one about corporate free speech.  That might not turn out to be true in every case of data-mining that comes along, but it would certainly seem so when a legislature blatantly sets out to curb the use of that technology to convey a commercial message, made up of truthful information.
So heavy was the defense of corporate expression in the opening stages of the argument in Sorrell, et al., v. IMS Health, et al. (10-779) that the lawyer for Vermont — the state involved — obviously had to continue her argument under siege. Only later did it seem that some of the Justices wanted to provide some leeway for states to regulate data-mining that threatened to invade privacy, perhaps by crafting a less far-reaching final decision.
An assistant state attorney general, Bridget C. Asay of Montpelier, Vt., had barely begun when Chief Justice John G. Roberts, Jr., said the Vermont law that restricts the sale and use, for drug-marketing purposes, of data drawn from doctors’ prescription blanks had the purpose of barring drug companies’ sales representatives from seeing doctors to promote their company products.  Asay could only answer that she disagreed, as Justice after Justice — especially Antonin Scalia — asserted that the state was simply trying to intervene in the marketplace for drugs to promote a message that it liked and to block one that it did not like: that is, the sale of brand-name drugs.
“Let’s not quibble over what the purpose is,” Justice Scalia said. It is, he insisted, to set up an impediment to drug company “detailers” contacting the doctors, whose prescription information they had gathered by data-mining, to sell the companies’ own products.
And, driving home the point that the law singles out drug companies to restrict their marketing, Justice Samuel A. Alito, Jr., noted that it could be argued that the prescription form data could be used by commercial or educational adversaries of the drug companies to counter their effort to sell their drugs. Asay said the law would not allow that, but Justice Anthony M. Kennedy quickly speculated that the law would allow research organizations to get the same data and sell it. The state’s lawyer disputed that, but her answer appeared to contradict what she had said a bit earlier to Justice Ruth Bader Ginsburg.
It was by then becoming clear that Asay was having trouble keeping her argument together in the face of the quite aggressive questioning. Several of the Justices suggested that she was claiming, wrongly, that the law actually worked to protect the privacy of the prescribing doctors, when — as Scalia suggested — it had no such effect because of the wide distribution of the prescription patterns. She struggled in trying to define just how the law supposedly protected physicians’ privacy.
She also got into some trouble, with Justice Kennedy, for telling the Court that the state’s desire to reduce health care costs by limiting the use of the prescription data would not limit what information doctors got about drugs, even though the state’s aim was clearly to promote the message that doctors should prescribe cheaper generic drugs. The state is “regulating speech,” Kennedy said bluntly. Kennedy, Scalia, and the Chief Justice suggested that Vermont was trying to curb the drug companies’ speech just because it was effective in selling their products.
Asay also was pressed hard by several Justices over saying one thing to the Court and another to the Second Circuit Court earlier in the case, on just what transactions the state law sought to regulate.  Justice Alito even read back to her a portion of the Circuit Court decision on that point, implying that perhaps the state had misled the lower court. Asay made an effort to recover, but it did not appear successful.
The same skepticism that the Justices displayed toward Asay about whether the law did anything to protect doctors’ privacy, and whether Vermont was trying to regulate drug companies’ marketing communication only because it had been effective, came out further when Deputy Solicitor General Edwin S. Kneedler was at the podium. It seemed that he, no more than the state’s lawyer, had not persuaded the Court on either point.  Much of Kneedler’s argument was focused on the fact that the prescribing of drugs was a highly regulated activity, giving the legislature more option to limit how data generated in that system could be used outside of it.
The more subdued arguments of the state’s lawyer and Kneedler turned out to be in sharp contrast to a high-energy effort to orchestrate the ebb and flow of the argument by Thomas C. Goldstein, arguing for the data-mining companies and the drug manufacturers. Goldstein, ever the conductor, went to some lengths to make sure that the Justices had before them, at key points in his argument, when he intended for them to follow along. For example, at the opening, he said: “You will want to have available to you the red brief….”
The overall thrust of Goldstein’s argument, though, was more modest than the intensity of his advocacy style. He suggested that the Court should not decide the case “as a matter of “absolutes,” but should try to find a middle position between Vermont’s and the business firms gathering and using the data. Given that much of the questioning from the Justices while he was at the lectern was aimed at defining such where such a middle position might be placed, that was a useful strategy.  Goldstein took advantage of that seeming interest in narrower alternatives by repeatedly characterizing the Vermont law as one of exceptional sweep. “Why did they do this?” he said of the state legislature, several times, and he was eager to supply the answer, often from the explanation that the state legislature itself used to make clear at what commercial marketing it was aiming.
Of course, it did not harm Goldstein’s cause at all that the other two lawyers had, unwittingly, produced a Court that was ready to hear sympathetically the other side.
The Court is expected to decide the case before recessing for the summer.
(Disclosure: Mr. Goldstein is with the firm of Goldstein, Howe & Russell, which sponsors this blog. The author of this post operates independently of the law practice.)
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