Crime in the Suites: An Analyis of Current Issues in White Collar Defense
Posts Tagged ‘First Amendment’
Jan 25
2013

Court Finds State Ban on Sex Offenders’ Use of Social Media Tramples Speech Rights

In a January 23, 2013, ruling, the U.S. Court of Appeals for the 7th Circuit held that an Indiana law that prohibited most registered sex offenders from using social media websites was unconstitutional because it was “not narrowly tailored to protect the state’s interest.” The decision was restricted to the Indiana statute on sex offenders and did not extend its reasoning to another, related issue – whether courts can permissibly, as a condition of probation or supervised release, restrict white-collar criminals from using the Internet.

The fatal flaw of the Indiana law, the appeals court held, was that it was overbroad because it targeted substantial protected speech, rather than retaining a narrow focus on the specific evil of improper communication to minors.

The 7th Circuit noted that the Indiana statute affected First Amendment rights because it controlled expression via social media and limited the ability to receive information and ideas.

In recent cases of various sorts, including e-commerce cases, federal courts have proved all too willing to imposed Internet bans that trample on various constitutional rights. We focused on this problem in a National Law Journal article a couple of years ago that argued that courts go too far when they impose a broad ban on the use of the Internet against a defendant who had committed online fraud.

In the sex-offender case, Doe v. Marion County Prosecutor, the 7th Circuit acknowledged the strong state interest in protecting minors from harmful online communication, but explained that the ban must be narrowly tailored to target only the appropriate evil. All parties agreed that there is nothing inherently dangerous about using social media – except when a sex offender communicates with minors, which is only a “minuscule subset of the universe of social network activity.”

The same principle ought to be applied to restrictions on Internet use placed upon those who have been found guilty of fraud in e-commerce. Not all Internet usage should be treated as suspect.

Towards the end of its opinion, the court discussed Internet restrictions in the context of conditions of probation or supervised release. The court distinguished between a criminal statute, as in Indiana, that governs the protected speech of the general populace (including registered sex offenders) and the sentences imposed by district courts that may govern Internet usage.

The court said its opinion “should not be read to affect district courts’ latitude in fashioning terms of supervised release.” It elaborated that “Our penal system necessarily implicates various constitutional rights . . . a court could conceivably limit a defendant’s Internet access if full access posed too high a risk of recidivism.”

Somewhat ironically, the court noted that “The alternative to limited Internet access may be additional time in prison, which is surely more restrictive of speech than a limitation on electronics.” Although the 7th Circuit was not willing to expand its protection of Internet usage to the sentencing and probation context, we still think that its strong protection of Internet usage in the First Amendment context bodes well for future challenges in that context.

Dec 06
2012

‘Off-Label’ FDA Cases Can Run Afoul of First Amendment, Appeals Court Holds

A recent decision by the U.S. Court of Appeals for the Second Circuit may significantly curtail enforcement efforts relating to the so-called “off-label” use of drugs approved by the Food and Drug Administration for specific uses and/or populations. Finding that the government’s prosecution of promotional statements supporting off-label use of an FDA-approved drug would violate the First Amendment, the court ruled that the Federal Drug and Cosmetic Act (FDCA) must be construed narrowly to avoid unconstitutionally prohibiting such statements.

As we have explained in previous blog posts, when the FDA approves use of a drug, it does so for a specific illness or condition and/or for certain populations. It is not illegal for physicians to prescribe approved drugs for off-label use, and such uses sometimes constitute commonly recommended courses of treatment. Law enforcement efforts (both criminal and civil) have focused on the marketing and promotion of drugs for off-label use by pharmaceutical manufacturers and their representatives.

Civil and criminal enforcement against promotion of off-label use has been extensive in recent years and has resulted in some massive fines for pharmaceutical manufacturers. But in United States v. Caronia, decided December 3, 2012, the government’s enforcement efforts ran smack into the First Amendment’s protection of speech, including commercial speech.

The government prosecuted Alfred Caronia, the representative of a pharmaceutical manufacturer, for conspiracy to introduce a misbranded drug into interstate commerce, a misdemeanor violation of the FDCA, 21 U.S.C. sections 331(a) and 333(a)(1). Under this section of the FDCA, a drug is “misbranded” if, among other things, its labeling fails to bear “adequate directions for use,” 21 U.S.C. section 352(f), and FDA regulations define this term as “directions under which the lay[person] can use a drug safely and for the purposes for which it is intended.” 21 C.F.R. section 201.5.

FDA regulations permit the use of promotional statements as evidence of the intended use for this purpose and, because off-label use is (by definition) neither approved by the FDA nor addressed on the label authorized for the drug by the FDA, the FDA has concluded that “[a]n approved drug that is marketed for an unapproved use . . . is misbranded because the labeling of such drug does not include ‘adequate directions for use.’ ” The prosecution of Caronia was based on his statements to a government cooperator in which he promoted the use of a drug for off-label use by a segment of the population for which the FDA had not approved the drug.

After rejecting the government’s claim on appeal that it had used Caronia’s statements merely as evidence of intent, the appeals court found that the government’s interpretation of the FDCA as criminalizing Caronia’s statements would violate the First Amendment’s protection of free speech. The court began with the expression of principle in the Supreme Court’s decision in Sorrell v. IMS Health, Inc., 131 S.Ct. 2653 (2011) that “[s]peech in aid of pharmaceutical marketing . . . is a form of expression protected by the Free Speech Clause of the First Amendment.”

The court found that the restriction on speech that would result if the FDCA were read as prohibiting Caronia’s statements was content-based because it disfavored the point of view he expressed (supporting off-label use) and was speaker-based because other actors (such as physicians and academics) were free to make similar statements without fear of prosecution. Accordingly, the court found that the restriction on the speech was subject to heightened scrutiny.

The court then found that it was unnecessary to determine what level of heightened scrutiny would apply because the government’s proposed restriction did not satisfy even the least exacting level of heightened review. First, the court found that the restriction on off-label promotional speech did not directly and effectively advance the government’s justifiable interest in drug safety. The court noted that the FDA’s approval process contemplates that there will be off-label use of approved drugs and even includes a safe harbor for manufacturers to make statements about such uses. The court concluded that a prohibition of truthful statements about off-label use paternalistically interfered with the ability of doctors and patients to make well-informed choices about treatment and did not reduce the risk that patients would be exposed to unsafe or ineffective drugs. Second, the court found that a prohibition on such statements – and criminalization of that conduct – was not a narrowly drawn restriction on speech, and noted a number of other approaches that could more narrowly limit such speech in the interest of promoting the FDA’s goals.

The court unequivocally rejected the ability of the government to pursue criminal prosecution of this conduct, writing;

Accordingly, even if speech can be used as evidence of a drug’s intended use, we decline to adopt the government’s construction of the FDCA’s misbranding provisions to prohibit manufacturer promotion alone as it would unconstitutionally restrict free speech. We construe the misbranding provisions of the FDCA as not prohibiting and criminalizing the truthful off-label promotion of FDA-approved prescription drugs. Our conclusion is limited to FDA-approved drugs for which off-label use is not prohibited, and we do not hold, of course, that the FDA cannot regulate the marketing of prescription drugs. We conclude simply that the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA-approved drug.

The court’s decision clearly leaves the FDA with significant power to regulate and punish pharmaceutical companies in connection with its oversight over the approval and marketing of prescription drugs – for example, in cases in which manufacturers make false statements about off-label use of their products. But, assuming that other courts reach similar conclusions, the ability of the federal government to act against off-label promotion may be significantly diminished.

Nov 21
2012

Domain Names and the First Amendment: The Latest Word

The intersection of domain names and the First Amendment is not new. Indeed, in the early days of the domain name system, courts considered the issue of whether a domain name registrar could prohibit the registration of domain names on the basis of content – for instance, domain names containing profanities. See Nat’l A-1 Advertising, Inc. v. Network Solutions, Inc., 121 F. Supp. 2d 156 (D.N.H. 2000); Seven Words LLC v. Network Solutions, Inc., 260 F.3d 1089 (9th Cir. 2001). However, the U.S. Court of Appeals for the Fifth Circuit recently was confronted, in Gibson v. Texas Dep’t of Insurance, with a new twist on the First Amendment as it applies to domain names: whether a particular domain name is pure “commercial speech” (entitled to only limited First Amendment protection) or “expressive speech” (entitled to more extensive protection).

The Texas Labor Code prohibits the use together of the words and phrases “Texas,” and “Workers Compensation,” or similar abbreviations. Nonetheless, Gibson, a workers compensation lawyer in Texas, registered the domain name texasworkerscomplaw.com. On the associated website, Gibson discusses matters relating to Texas workers compensation law and, of course, advertises his law practice. The Texas Department of Insurance took offense to Gibson’s domain name, and sent Gibson a cease and desist letter. Gibson, being a lawyer, sued in federal court, alleging that the Texas Labor Code restrictions violated his constitutional rights.

The Fifth Circuit, in an interesting opinion, addressed the commercial speech/pure speech dichotomy inherent in domain names used by commercial enterprises, but artfully dodged the question of whether the domain name was in fact commercial speech. Instead, the court first analyzed whether, if the domain name was in fact commercial speech (which can under some circumstances be restricted), it was the sort of commercial speech that the Texas Department of Insurance could restrict.

The court found, correctly, that commercial speech can be restricted only if it is “inherently likely to deceive.” The state argued that Gibson’s domain name implied a connection with or approval of the state. The Fifth Circuit dispensed with the state’s argument, noting that since there was nothing to suggest that texasworkerscomplaw.com could not be viewed in a non-deceptive fashion (a truism), the state could not restrict the use of the domain name as commercial speech.

There is a second exception allowing a restriction on commercial speech: A state may regulate non-deceptive commercial speech if the restriction “advances a substantial state interest” and is narrowly tailored to serve that interest. On this issue, the Fifth Circuit sent the case back to the federal district court to develop a factual record. It seems unlikely that the Texas Department of Insurance will prevail in the end, as the statute on which its objection is based is vastly overreaching, and would prohibit anyone providing services relating to workers compensation in Texas from registering domain names that accurately describe what they do. For instance, a physician who performs workers compensation examinations could not register texasworkerscompdoc.com (as of this writing, this domain name is available for the taking).

Obviously, such a domain name is not misleading, and there is no legitimate basis upon which the state can restrict it. Domain names are often a form of speech. Just because they are a relatively new format of expression does not change this fact and give the government a basis to attempt to restrict their use.

posted in:
Internet Law
Apr 26
2012

U.N. Should Keep Its Hands Off the Internet

In March 2012, a resolution was introduced in the U.S. House of Representatives that would urge the U.S. Permanent Representative to the United Nations to oppose any resolution that would regulate the Internet. It is unfortunate that it turns out to be necessary to forestall Internet regulation at the U.N. level, but that appears to be the case. We support this resolution.

The resolution, House Concurrent Resolution 114, was introduced by Rep. Michael McCaul (R-Tex.) and Rep. Jim Langevin (D-R.I.), co-chairs of the House Cybersecurity Caucus, in response to growing fears that some nations will seek to regulate and censor the Internet. The sponsors cited a September letter from China, Tajikistan, Russia, and Uzbekistan outlining their plan to introduce a United Nations resolution on Internet governance.

Rep. Langevin said in a statement, “The proposals by some nations to gain international approval of policies that could result in Internet censorship would be a significant setback for anyone who believes free expression is a universal right. It must be made clear that efforts to secure the Internet against malicious hacking do not need to interfere with this freedom and the United States will oppose any attempt to blur the line between the two.”

The resolution was referred to the House Committee on Foreign Affairs on March 26, 2012, and no action has occurred on it since then.

Internet freedom has been a hotly debated issue on Capitol Hill in recent months with the Senate’s Protection of Intellectual Property Act (PIPA) and the House’s Stop Online Privacy Act (SOPA) becoming the focus of protests  that eventually helped defeat the bills. 

The Issue of Internet privacy will soon be dealt with at the international level. The World Conference on International Telecommunications (WCIT) is scheduled for December 2012, and countries such as China and Russia are expected to try to expand the authority of the International Telecommunications Union (ITU). The ITU is the United Nations agency that is responsible for worldwide standards in telecommunications, including regulation of the Internet.

The proposals that are expected to be considered could dramatically affect the Internet. Russian Prime Minister Vladimir Putin said last June that his goal is to establish “international control over the Internet” through the ITU. Accordingly, it’s understandable that many Americans fear that other nations could employ a new regulatory scheme to censor the Internet and control access to information. One reason that some of the protesters were so strongly opposed to SOPA and PIPA was the fear that once tools exist for regulating Internet content, they can be prone to abuse.

Internet access improves the quality of life for people across the world and represents a triumph of freedom of expression. Any agreement like the ones expected to be sought at the WCIT could have dramatic chilling effects on the freedom of the Internet. We will keep you up to date on any movement in Congress or in the United Nations regarding Internet freedom.

posted in:
Cybersecurity
Jan 03
2012

Protests Mount Against Proposed Law That Would Cripple the Internet

From the Arab Spring to the Occupy Wall Street movement, 2011 was a year of protests. It was capped off with a little-covered (by traditional media) but important protest that will carry on into 2012. We’ll call it the “Pioneers Strike Back” movement of Internet entrepreneurs. The issue is a piece of controversial legislation pending before Congress — H.R. 3261, commonly known as the Stop Online Piracy Act, or SOPA.

The bill, which is supported by Hollywood, major media companies, and labor unions – along with many corporate monoliths – is supposed to combat copyright and trademark infringement over the web. The general tactic is to create new causes of action against websites for facilitating intellectual property violations. The problem is that the legislation is so broad that it could change the dynamics and use of the Internet as we know it. And in the process, it could run roughshod over the Constitution – undermining free speech and due process.

Through a notice and cutoff system, SOPA would allow private parties to effectively shut down any supposedly infringing site based merely upon the rights-holder’s allegations. For instance, a rights-holder could require payment processors and advertising networks to sever ties with an allegedly infringing site upon a five-day notice. Any subsequent determination by a court in favor of the alleged infringer could be too little, too late.

And SOPA goes even further: Service providers would be forced (for their own protection) to shut down entire domains, without regard to the content of each specific site.

Also troubling is the evisceration of safe harbors for websites established under the Digital Millennium Copyright Act. The DMCA limited websites’ responsibility to monitor content posted by users. Under SOPA, so long as a site is determined to “facilitate” infringing behavior, it could be considered liable under the law. So Facebook could find itself in hot water for something a user posted on his or her Facebook profile. The law, therefore, would require websites to institute policing measures to avoid liability. The law would also make it hard for smaller, emerging services to stay clear of litigious online entities that may constantly challenge the new sites’ content and/or architecture.

The prospective law’s measures risk stifling speech and innovation. Moreover, as many have pointed out, it could institute a framework for government censorship. (See an interesting review of this by the Cato Institute.)

These concerns over SOPA, along with concerns about potential cyber security and stability risks, have been written about extensively across the web and have been addressed to Congress. Most compelling is an open letter to Congress signed by 100+ law professors who express concern about both technological and constitutional infirmities of the law.

But the legislation, with some 31 co-sponsors, may very well make its way through committee to a potentially successful House vote. The reason would be the extensive big business backing of the bill. A non-exhaustive list of supporters identifies major players such as the Chamber of Commerce, News Corp., CBS, Viacom, MasterCard and Visa, and the Teamsters Union, just to name a few (some strange bedfellows, by the way!). In the world of political currency, the deep pockets that support the bill are formidable competitors. OpenCongress.org provides detail by identifying which deep pockets are supporting which congressmen.

SOPA supporters argue that the legislation is important to protecting intellectual property. The Chamber of Commerce, for instance, has estimated that online piracy costs U.S. companies roughly $135 billion a year. Detractors have a very different take on the economic – and non-economic costs – of the legislation.

Fortunately, all hope is not lost. Internet pioneers and entrepreneurs have been actively countering supporters of the bill. GoDaddy, which initially supported the bill, was “encouraged” to change its position after a registrant rebellion incited by Reddit.com. RedState.com is going after supporting legislators. And, best of all, major online presences like Google, Facebook, Yahoo!, and Amazon are taking a stand against the legislation, even considering the “nuclear option” of temporarily shutting down their services in protest. Yahoo! is rumored to have declined to renew its membership to the Chamber of Commerce in response to the group’s support of the bill. There is speculation that Google will do the same. Hopefully these moves will signify success for the Pioneers, and not the Empire.

posted in:
Internet Law
Jul 20
2011

Journalist Challenges DOJ Subpoena, Claims Reporter’s Privilege

James Risen, an investigative journalist for The New York Times, is currently challenging a subpoena issued by the U.S. Department of Justice seeking testimony from him against a CIA agent accused of leaking classified information. The subpoena highlights a trend in which the government attempts to use journalists’ testimony against government employees who reveal information in exchange for anonymity. Risen, citing reporter’s privilege, is seeking to have the subpoena quashed, although federal prosecutors claim that his testimony “is directly relevant to, and powerful evidence of, facts that are squarely at issue in this trial—including the identity of the perpetrator.”

The subpoena in question was originally issued to Risen, but then abandoned, by the Bush administration. The Obama administration revitalized the subpoena, which would force Risen to testify in the whistleblower prosecution of Jeffrey Sterling, a former CIA agent. In December 2010, a federal grand jury in Alexandria, Va., indicted Sterling on 10 counts, including unauthorized disclosure of national defense information and obstruction of justice. Sterling is accused of leaking to Risen the story of a severely botched agency plot, from 11 years ago, to infiltrate Iran’s nuclear program. The story was published under the condition of anonymity in newspaper articles and in Risen’s 2006 book “State of War: The Secret History of the CIA and the Bush Administration.”

The DOJ now wants to force Risen to testify under oath about whether Sterling was his source. In a somewhat unusual move, the government filed a motion in limine — a tool typically used to focus the evidence to be used at trial — along with the subpoena. In its motion, the government argues that Risen is an eyewitness to the alleged crime and that no federal law exists that exempts a reporter from his or her obligation to testify. On July 7, 2011, the court entered a minute entry on the government’s motion in limine, noting that it was taking the motion under advisement.

Risen has categorically refused to reveal his source. Like other reporters in his situation, Risen is relying on the reporter’s privilege to avoid giving up his sources. Interestingly, Risen and four other reporters were held in contempt of court in 2004 for refusing to disclose confidential sources in a lawsuit against the government brought by former Los Alamos scientist Wen Ho Lee. There, the judge ordered a fine of $500 per day until the reporters complied with the order. In exchange for getting the contempt charges dropped, five news organizations—The New York Times, ABC News, The Associated Press, the Los Angeles Times and The Washington Post —eventually agreed to pay an unprecedented $750,000 as their share of a settlement.

Although 40 states and the District of Columbia have shield laws that exempt reporters from disclosing confidential sources, there is no such statute at the federal level. Some federal courts, however, have interpreted the Supreme Court’s 1972 decision in Branzburg v. Hayes — a landmark decision invalidating the use of the First Amendment as a defense for reporters summoned to testify before a grand jury —  as providing a qualified privilege shielding journalists from forced disclosure of confidential sources, especially in civil cases.

Sterling is the fifth known leaker prosecuted by the Obama administration. According to Risen, the Sterling prosecution and the accompanying subpoena to him represent an attempt by the government to chill the exercise of basic rights of whistleblowers and reporters who challenge government secrecy. Whether Risen can successfully challenge the government’s subpoena remains to be seen.

Oct 19
2010

More Than Anti-Piracy, This Bill Is Internet Censorship

Last month, Democratic Senator Patrick Leahy of Vermont introduced U.S. Senate Bill S. 3804, also known as the “Combating Online Infringement and Counterfeits Act.” While the bill has a bipartisan roster of co-sponsors and is supported by many in the entertainment industry as a major step in combating online piracy, in our view and in that of many others its passage would seriously threaten Internet freedom at home and abroad.

The bill had been on a fast track for a few weeks but has now been delayed until after the November elections. We consider that a small victory for free speech and fair use online.

The Leahy bill would give the Justice Department new powers to seek a U.S. District Court injunction against any Internet domain name that it regards as “dedicated to infringing activities.” If the injunction is granted, it would compel the registrar of the domain name to suspend operation of, and lock, the domain name. Similar actions could be taken against foreign websites.

The bill would also encourage service providers to go after sites that the Justice Department puts on a public blacklist. This blacklist would consist of two publicly available lists of domain names. The first list would contain domain names against which the Justice Department has obtained injunctions, and the second list would contain a list of domains alleged by the department to be infringing, but against which no action has been taken.

Opponents of this bill, consisting of Internet companies and free speech advocates, call it “outright censorship.” The legislation could potentially affect several prominent file-sharing and file-storing websites, including Dropbox, MediaFire, and RapidShare. Had this bill been passed five or ten years ago, such popular entertainment sites as YouTube might not be in existence today. Although a site like YouTube would probably survive this legislation, the bill could potentially threaten new companies whenever copyrighted materials appear on their sites. The bill marks a drastic departure from current law by permitting the government not only to strip the copyrighted materials from an infringing website, but to lock down the offending domain name altogether.

And there is always the additional risk that the department’s new powers will be expanded well beyond online piracy. This bill could be the stepping stone to future legislation that permits the department to try to shut down any website that may be offensive not just from a copyright infringement standpoint, but from any standpoint that the Justice Department deems reasonable.

In a somewhat analogous case, the Commonwealth of Kentucky, acting under legislation permitting the seizure of “gambling devices,” has already sought the seizure of the domain names of 141 Internet poker and gaming websites, with claims that these sites compete with the state lottery and horse racing industry.

posted in:
Internet Law
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About Ifrah Law

Crime in the Suites is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, healthcare, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen, David Deitch, and associates Rachel Hirsch, Jeff Hamlin, Steven Eichorn, Sarah Coffey, Nicole Kardell, Casselle Smith, and Griffin Finan. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

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