Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Supreme Court rejects ad restriction, RICO, unfair trade practices petitions, (Jan 11, 2016)

By Greg Hammond, J.D.

The High Court denied three petitions for review today concerning American Freedom Defense Initiative v. Massachusetts Bay Transportation Authority (Dkt. 15-141), Brink v. Continental Insurance Co. (Dkt. 15-604), and Ortho-McNeil-Janssen Pharmaceuticals, Inc. v. South Carolina (Dkt. 15-600).

Advertising, injunctive relief. The American Freedom Defense Initiative was denied review of a decision by the U.S. Court of Appeals in Boston that affirmed denial of preliminary injunction on the grounds that the Massachusetts Bay Transportation Authority’s advertising space is a limited public forum and that its restrictions on American Freedom’s speech were reasonable and viewpoint neutral. In its petition, American Freedom asked: (1) whether the Massachusetts Bay Transportation Authority (MBTA) created a public forum by accepting for display on its property a wide array of controversial political and public-issue ads, including ads that address the same controversial subject matter as Petitioners’ pro-Israel ad, and thus violated the First Amendment by rejecting Petitioners’ ad on its content; and (2) regardless of the nature of the forum, whether the MBTA’s rejection of Petitioners’ advertisement based on an advertising guideline that prohibits ads considered by MBTA officials to be “demeaning and disparaging” was a viewpoint-based restriction of speech in violation of the First Amendment (American Freedom Defense Initiative v. Massachusetts Bay Transportation Authority, Dkt. 15-141).

RICO, enterprise. A group of U.S. government contractor employees, who suffered severe injuries in Iraq and Afghanistan, were denied their petition, seeking Supreme Court review of a decision entered by the U.S. Court of Appeals in Washington, D.C. that affirmed dismissal of the contractors’ claims brought under the Racketeer Influenced and Corrupt Organizations Act (RICO). With regard to the RICO claim, the petitioners asked whether RICO can apply to an “enterprise” created by contracting companies, their insurance carriers, and third party administrators who utilize the enterprise to commit fraudulent acts that proximately caused independent harm to covered workers and their families, and thousands similarly situated persons (Brink v. Continental Insurance Co., Dkt. 15-604).

Unfair trade practices, drug labeling. Ortho-McNeal-Janssen Pharmaceuticals, Inc. was also denied its challenge to a South Carolina Supreme Court decision, finding that the pharmaceutical company violated the South Carolina Unfair Trade Practices Act (SCUTPA) by intentionally failing to disclose known risks and side effects associated with its antipsychotic drug Risperdal in both its product labeling and physician letters, and ultimately imposing a $124 million civil penalty. The questions presented were: (1) whether a state violates the First Amendment by penalizing a defendant for the content of its speech without requiring proof that the speech contains a knowing or reckless falsehood; (2) whether the Federal Food, Drug, and Cosmetic Act preempts a state enforcement action that serves no compensatory purpose and instead simply seeks to penalize a pharmaceutical company for actions that are comprehensively regulated and overseen by the Food and Drug Administration; and (3) whether the imposition of a $124 million civil penalty, without any showing of actual deception, reliance, or injury, violates the Excessive Fines Clause (Ortho-McNeil-Janssen Pharmaceuticals, Inc. v. South Carolina, Dkt. 15-600).

Companies: American Freedom Defense Initiative; Massachusetts Bay Transportation Authority; Continental Insurance Co.; Ortho-McNeil-Janssen Pharmaceuticals, Inc.

News: Advertising RICO StateUnfairTradePractices