IMS Health Inc. v. Sorrell

Scope Remand of Issues on III. INC., LLC, Verispan, HEALTH IMS happen parties dispute what should Analytics, Inc., a Healthcare Source argues government remand. The

upon Health, subsidiary Kluwer of Wolters its have free rein make it should Inc., Pharmaceutical Research and force clause both the case under America, Plain Manufacturers 924(e)(2)(B)(i) residual clause § and the tiffs-Appellants, 924(e)(2)(B)(ii). § The defendants under get government should not argue that the Attorney SORRELL, as Gen William H. apple. two bites at Vermont, Jim eral of the State government’s theory the district capacity Douglas, his official as clause, the force courts based on was Vermont, Governor of State of 924(e)(2)(B)(i). govern- § the time the At capacity Hofmann, in his Robert opportunity to introduce ment had Secretary Agency of Human of the in- beyond the documents Shepard type Vermont, De Services of States theory its but support dictment alone fendants-Appellees. Because, however, both did not so. do 09-1913-cv(L), Docket Nos. district courts were government 09-2056-cv(CON). re- premise Mangos operating on the law, proffer failure to good mained Appeals, States Court of United was than understanda- such evidence more Second Circuit. clause, As the issue of the residual

ble. Oct. Argued: the use party no raised discussed 23, 2010. Decided: Nov. ACCA. that clause under the Under circumstances, no perceive we unfairness government opportuni- allowing force

ty pursue both the clause remand, using

residual clause theories on

Shepard approved documents.

IV. Conclusion above, va- provided

For reasons we appellants and

cate sentences of the resentencing.

remand for Julin, Isani, R. Z. Patri-

Thomas Jamie Acosta, LLP, cia Hunton Mia- & Williams mi, FL; Hemley, B. B. Robert Matthew Shea, P.A., Burlington, & Byrne, Gravel Goldstein, VT; Gump Akin Thomas C. LLP, Washington, Hauer & Feld Strauss DC, IMS Health Plaintiffs-Appellants for Analytics, Inc. Inc. Healthcare and Source Smith, Anderson, Ash, Blount, Mark A. ed District States Court for the District of Dorsett, (J. Jernigan, LLP, Mitchell & Ra- Murtha, Judge) Garvan find NC, leigh, Plaintiff-Appellant Verispan for ing to be a constitutional restric LLC. tion on pursuant Corp. Central Hudson &Gas Electric Weiner, L. Jeffrey

Robert N. Hand- York, Public Service Commission New werker, Arni, Brackney Sarah Arnold & 557, 561-66, U.S. DC; LLP, Washington, Porter Karen (1980), McAndrew, Dinse, finding L.Ed.2d 341 that sec Cohen, J. Knapp Linda McAndrew, P.C., tion 17 VT, does not violate the Burlington, & Commerce Clause, I, 3, Plaintiff-Appellant 8,§ cl. Pharmaceutical Re- art. of the United & search Manufacturers of America. States Constitution.1 IMS Health Inc. v. (D.Vt.2009). Sorrell, F.Supp.2d 434 Sorrell, Attorney H. William General of Vermont; of Bridget Asay, the State C. (1) appeal, appellants argue On the General; Attorney Assistant Sarah E.B. section 17 restricts non-commercial London, Duffy, Kate Cassetty, G. David R. (2) scrutiny, and cannot strict withstand General, brief, Attorneys Assistants on the if that even section 17 restricts com- VT, Montpelier, Defendants-Appellees. for mercial it cannot speech, withstand inter- scrutiny Hudson, mediate under Central Before: FEINBERG and (3) and that section 17 violates dor- LIVINGSTON, Judges, Circuit and mant by Commerce Clause prohibiting KOELTL, Judge.* District wholly commerce outside of Vermont. Judge LIVINGSTON dissents The appellees, Vermont Attorney General separate opinion. Sorrell, H. William Vermont Governor Jim Douglas, Secretary and Agency KOELTL, JOHN G. Judge: District Human Services of the State of Vermont Inc., appellants, IMS Health Veris- (1) Hofmann, Robert contend that section LLC, pan, Analytics, Source Healthcare implicate does not appellants’ First Inc., and Pharmaceutical Research and (2) rights, Amendment if even (“PhRMA”) Manufacturers of America 17 is a appellants’ restriction on the com- (collectively, appellants”) challenge “the mercial speech, section 17 survives inter- sale, banning statute trans- scrutiny narrowly mediate because it is a mission, or prescriber-identifiable use of directly tailored statute that advances Ver- (“PI data”) data promot- for mont’s substantial interest in protecting ing a prescription drug prescri- unless privacy, medical in controlling health care 2007, ber consents. In Vermont enacted costs, health, promoting public and and issue, the statute at namely Vt. Acts No. (3) appellants lack standing to 80, (2007), § 17 codified Vt. Stat. Ann. challenge section 17 under 18, (2007), § the dormant tit. by as amended Vt. that, event, Clause in any Commerce Acts No. 89 (changing effective date § January 17 from section 17 does not violate July the dormant 2009) (Act 17”). appel- “section Commerce Clause in- regulates because appeal judgment lants from a of the Unit- trastate commerce.

* Koeltl, The Honorable John G. upheld United 1. The district court also sections States District Court the Southern appellees District and 21 of Act do not York, by sitting designation. of New challenge holdings appeal. those Vermont, pharmaceutical primarily that because section 17 is We conclude that does manufacturers. The data sold speech restriction appellants data-mining stripped pa- directly advance the substantial state not information, Vermont, priva- protect patient tient and is asserted interests interests, Appellant cy. Pharmaceutical Research narrowly tailored to serve those (“PhRMA”) and Manufacturers of America statute cannot survive intermediate non-profit is a association representing under Hudson. There- scrutiny Central fore, researchers and manufac- judgment and remand the we reverse turers, primary court. customers of district

mining appellants. BACKGROUND Pharmaceutical manufacturers market means, products through their various in- Act 80 legislature passed The Vermont advertising cluding detailing. “Detail- health, 2007, intending protect public ing” by pharmaceutical to visits rep- refers protect prescriber privacy, to re- resentatives, detailers, called to individual 17 prohib- care duce health costs. Section provide to physicians spe- information on sale, license, exchange for value its the or use, prescription drugs, including cific the marketing promoting PI for a or data effects, drug side and risks of interactions. prohibits pharma- drug, and prescription PI Pharmaceutical use manufacturers data manufacturers and marketers ceutical identify to for marketing audiences their marketing using pro- PI data for efforts, marketing messages focus to drug, unless the moting prescription a to prescribers, individual direct scientific Ann. tit. consents. See Vt. Stat. prescriber messages physicians to in safety and most 4631(a) (d). amended, 18, § & As section information, of that to need track disease July 1, 2009. See Vt. was effective on enforcement, to progression, aid law to (2008). Acts No. 89 implement mitigation programs, risk and clinical trials post-market- to conduct and I. the ing required by surveillance United filling pharmacies prescriptions, When Drug and States Food Administration including in Vermont collect information (“FDA”). address, prescriber’s name the and part While section 17 aims de- name, dosage, quantity drug, and of the detailing, prescribers may crease want to and is place the date provide, the information detailers receive filled, age gender. and the patient’s event, and, in any prescribers are free to sell data Pharmacies this data meetings with detailers. decline Inc., mining appellants IMS Health Veris- LLC, noted, Analyt- pharmaceuti- As the court pan, Source Healthcare district ics, mining companies, industry spending detailing These all cal has in- Inc.2 data Vermont, along aggregate exponentially located outside of creased with rise only pre- mining. Detailing data cost- physician data to reveal individual a patterns drugs. and sell it outside of effective for brand-name When scribing rights "pub- pass appellants on information. Their de- 2. describe themselves as lishers,” plainly their pend they they term that furthers what on what do rather than argument. First The district Amendment opinion are called. This will follow the de- appellants as “data min- court, court referred to the by namely scription used the district ers,” a term that has been used in other cases. "data miners.” undisputed appellants It is collect patent expires, competitors can introduce covered section 17 are essential bioequivalent generic drugs. Bioequiva- ability mining appellants data necessarily are generic drugs other, lent provide permitted, PI data for these version, to the name identical brand but uses. required absorption an

are demonstrate percent

rate and 125 between 80 II. drug. absorp- brand-name Variations a. among rates or generic drugs tion branded reactions, may cause different such as side The Vermont law was adopted effects. The district court noted also wake of similar had statute that been drug necessarily while a brand-name is not Hampshire, shortly enacted New generic version, than its better brand- before another similar adopted statute drug typically expensive. name more Maine. Pharmaceutical manufacturers are not In Hampshire 2006 the New legis- state only purchase entities that PI data passed prohibiting lature statute mining appellants,

from the data although patient-identifiable transmission or use of pharmaceutical manufacturers and mar- purposes. and PI data for most commercial keters are the customers banned from See IMS Health Inc. v. Ayotte, 490 using PI data in their efforts (D.N.H.2007), F.Supp.2d rev’d, 170-71 state Vermont itself (1st Cir.2008). In relevant uses PI for law and oth- enforcement part, the statute reads: programs. er state Researchers use PI Records relative to informa- identify data to pharmaceuti- overuse of a tion containing patient-identifiable and cal in specific populations, develop to new prescriber-identifiable data not shall be drugs, and to facilitate identification of licensed, transferred, used, or sold ... potential patients in participate clinical any for purpose, except commercial for FDA, The trials. the Center for Disease purposes pharmacy the limited of reim- Control, Drug and the federal Enforce- bursement; formulary compliance; care Agency ment PI data use to monitor usage management; by utilization review of controlled to identify substances and provider, health care patient’s insur- prescribers who need safety time-sensitive provider agent either; ance or the of companies information. Insurance and research; health care or as otherwise pharmacy managers benefit use the data provided by law. purpose Commercial to process claims and manage formulary includes, to, but is not limited advertis- Moreover, compliance. compa- insurance ing, marketing, any promotion, or activi- governments nies state and like Vermont’s ty that could be used to influence sales encourage use PI data to of cheap- the use or market share er, generic very medications —the medi- product, influence or the pre- evaluate promote. cations section 17 seeks scribing behavior anof individual health companies While insurance govern- and professional, care or evaluate the effec- data, ments collect their own PI their data- of a professional pharmaceutical tiveness thorough bases are as those main- detailing sales force. mining tained the data appellants. To data, preserve the § value of their data min- N.H.Rev.Stat. Ann. 318:47-f. The stat- statute, ing companies typically ed re-publica- passed restrict intent without they provide tion of the data their legislative custom- formal findings, pro- was to ers. The appellants argue that the tect patient physician privacy sales and and to

269 majority The found that Ayotte, 550 F.3d at 64. See 490 health care costs. reduce Hampshire regulated the New statute at The United States F.Supp.2d 177. miners, the conduct of data and therefore the District New Court for District not violate their First Amendment found the statute unconstitu- did Hampshire rights. at 50-54. Even if the statute it commercial Id. because restricted tional speech, major- regulate did commercial directly promoting sub- without interests, despite ity that it would find that concluded state stantial scrutiny. approaches statute survived intermediate alternative existence result, interests, at in Concurring in violation of the Id. 54-60. these achieve speech Judge Lipez commercial concluded that the statute for restrictions on test speech, it Ayotte, regulates See but out Central Hudson. set Id. scrutiny survived intermediate review. F.Supp.2d 183. 64-65, J., (Lipez, concurring 79-102 regu- also enacted a law 2007 Maine dissenting). legislative use of PI The lating the data. indicate that the statute was findings Appeals First Court for the Cir health, to improve reduce public passed recently Ay its cuit followed decision costs, protect prescriber patient pre It otte. reversed the District Court’s Ann. tit. Me.Rev.Stat. privacy. See Rowe, liminary injunction and found the 1711-E(1-A, 1-B), § invalidated IMS regulating Maine the use of statute Rowe, F.Supp.2d Corp. v.

Health Mills, data to constitutional. be (D.Me.2007), rev’d, Health Inc. v. IMS Cir.2010). (1st Mills, F.3d prohibits the use of PI data Maine statute b. prescri- when the purposes passed In Act In relevant opts part, out its use. ber 17, legislation restricting aimed at the use reads: pharmaceutical marketing. of PI carrier, pharmacy or prescription [A] legislature explained The state that: intermediary may information drug assembly use, general It is the intent of the license, sell, or exchange transfer value, pro- to advance the state’s interest marketing purposes, for for Vermonters, health tecting public of information that iden- prescription drug privacy and protecting prescribers prescriber a has filed con- tifies who for information, prescribing and to ensure fidentiality protection.... private costs are contained health 1711-E(2- 22, § 22 Me.Rev.Stat. Ann. tit. sector, purchas- care as as well for state A). The District Court United States for through ers of prescription drugs, District of found the statute Maine promotion drugs of less and en- costly it did not unconstitutional because survive in- suring prescribers receive unbiased scrutiny despite opt-out intermediate formation. Rowe, F.Supp.2d See provision. 4631(a). 18, § tit. The stat- Vt. Stat. Ann. allowing appeal opt-in Maine ute an adopts approach, an of the district While in to the use of prescribers opt allow pending, court decision was Court See marketing purposes. their PI for for the First Circuit reversed the Appeals 4631(c)(1). Otherwise, § or the sale Hampshire of the district id. judgment New marketing pur- for transfer of PI data upheld constitutionality court marketing use of PI data for Hampshire Ayotte, poses, See or the the New statute. tient, pro- including options, treatment recall purposes, prohibited. The statute notices, safety trials; vides: or or clinical purposes for certain law enforcement as insurer, employ- a A health self-insured by law. otherwise authorized See id. at er, intermedi- an electronic transmission 4631(e)(1)-(7). § ary, entity or pharmacy, a other similar license, sell, exchange shall not or for legislature The state issued containing pres- regulated value records findings in thirty-one legislative support of information, per- criber-identifiable nor 80, § Acts No. the statute. See Vt. mit regulated the use of records contain- (2007). findings expressly The state the ing prescriber-identifiable information legislature’s intent interfere with the for or marketing promoting prescrip- a marketplace of ideas to promote inter- prescriber drug, tion unless the consents example, the state. ests of For the find- (c) provided as in subsection of this sec- ings note that legislature views the tion. Pharmaceutical manufacturers goals marketing as “of- and pharmaceutical marketers shall not ten in conflict goals with the the state.” information prescriber-identifiable use 1(3). § Id. at legislature expressed or promoting prescrip- “marketplace its concern that the for ideas drug prescriber tion unless consents safety on medicine and effectiveness is (c) provided as in subsection this sec- one-sided,” frequently leading doctors to tion. prescribe “drugs incomplete based 4631(d). § Id. at Marketing is defined 1(4). §at biased information.” Id. the statute to include legislature “[pjublic therefore found that

advertising, promotion, any activity health is ill served the massive imba- is intended be used or used to presented lance information to doctors influence or the of a 1(6). sales market share preseribers.” § and other Id. at presci'iption drug, influence or evaluate attempt Section 17 is the state’s to correct behavior prescribing of an individual it sees an marketplace what unbalanced health professional promote care of ideas undermines state’s inter- drug, market prescription health, promoting public ests in protecting drugs patients, or to evaluate the prescriber privacy, reducing health professional effectiveness of pharma- care costs. detailing

ceutical sales force. III. 4631(b)(5). §at

Id. expressly sale, The permits statute the data mining plaintiffs The filed suit on transfer, 29, of PI multiple or use data for August against 2007 the Vermont At- General, other purposes, including pur- enjoin the limited torney seeking enforce- reimbursement; poses of pharmacy pre- the prior ment of statute to its taking scription formulary drug compliance; pa- In effect. November 2007 the action was tient care management; by utilization review consolidated with a suit PhRMA professional, pa- a health care the against appellees seeking the declaratory insurer, tient’s health agent injunctive the ei- An relief. amended com- , ther; research; 14, health care dispensing plaint was filed on May 2008. After a medications; trial, prescription the transmis- bench the court district denied the sion of prescription prescriber plaintiffs’ data from declaratory motions for and in- pharmacy; junctive management; summary care edu- relief and judgment, for provided pa- cational communications to a and denied as moot the defendants’ mo-

271 Sorrell, is appellants’ principal argument The summary judgment. See tions rights 17 their under 464. that section violates F.Supp.2d at 631 First and Fourteenth Amendments. 17’s court that section The district found (“Congress shall See U.S. Const. amend. survived speech commercial restriction no law ... the freedom of abridging make Hud scrutiny under Central intermediate ”). The has speech.... First Amendment Sorrell, F.Supp.2d son. See applied against action been state that sec court likewise found The district Fourteenth Amendment. See Gitlow 17 did not violate the dormant Com tion York, New 268 U.S. 45 S.Ct. of the States Constit merce Clause United First (incorporating 69 L.Ed. 1138 id. at 456-59. ution.3 See speech against Amendment freedom of appealed judg- XIV). from the appellants under U.S. amend. states Const. court, arguing that of the district ment appellees that section Because contend 17 is either a restriction merely regulates that is not conduct scrutiny, or a re- requiring strict speech subject it protections, to First Amendment that does speech on commercial striction necessary to determine whether scrutiny. The not survive intermediate protected speech statute restricts before argue the statute re- also appellants determining whether restriction is commercial activities outside stricts permissible under First Amendment. Vermont, the dormant violation of appellees re- Clause. The I.

Commerce restricts conduct spond that statute court The district found that section speech, than even if the stat- rather speech, is a restriction on and does not it speech ute does restrict commercial merely regulate appellants’ conduct. scrutiny, and that intermediate survives Sorrell, F.Supp.2d at 445-47. See Commerce not violate dormant does appellees argue simply the statute is Because we find that section Clause. practice. on a restriction on commercial improper an restriction buy- They argue that data miners are under the test set forth Central ing selling commodity, which can be Hudson, find unconstitu- we the statute They that the activi- regulated. concede and reverse and remand. tional who pharmaceutical companies ties of the to use that to market

seek information DISCUSSION drugs is un- question a closer Amendment, they First but con- der the this case on constitutional Because turns tend that the statute is nevertheless issues, Boy our review is de novo. See restriction on commercial conduct Dale, Am. v. 648- Scouts of pharmaceutical companies. (2000); 147 L.Ed.2d court. City agree We with the district v. Bd. Educ. Sch. Melzer York, dry Amendment City protects “[e]ven 336 F.3d The First Dist. New of of (2d Cir.2003). information, 185, 198 advocacy, political devoid of upheld cause for advertise- court sections 20 sumer fraud of action 3. The district also Act, law. program in Vermont that violate federal creating of the funded ments and 21 9, 33, § Ann. tit. 2004 & tit. pharmaceutical manufacturers See Vt. Stat. a fee on Sorrell, 462, 2466a; concerning F.Supp.2d 464. professionals § health care educate holdings appellants dispute these of The do therapeutic and cost-effective utilization medications, here. creating appeal, and we do not address them a con- relevance, expression.” or artistic Univer of Appeals thought Court it would Studios, City sal Inc. Corley, v. the fabric ] of the First Amend- “stretch! (2d Cir.2001). 429, 446 See also Va. State beyond any ment rational measure” to Pharmacy Bd. v. Va. Citizens Consum treat a regulation of information different- Council, Inc., 748, 761-70, er 425 U.S. 96 ly regulation from a jerky” of “beef when 1817, S.Ct. (drug L.Ed.2d 346 the information is a product. Id. 53. price information in drug advertisements majority The Appeals the Court of con- Studios, speech); is City Universal 273 cluded that it was consistent with the First F.3d at 446-49 (computer program is Amendment for the “legislature ... to lev- speech). Furthermore, it plain is el the playing field not eliminating speech in a form that is profit sold for but, rather, speech by eliminating the de- entitled to protection. First Amendment ability tailers’ to use a particular informa- Bd., 761, See Va. State 425 U.S. at 96 S.Ct. tion -prescribing par- histories —in a asset— way.” However, ticular Id. at 54. as the Supreme affirmed,

The Court of Appeals recently for Court the First Cir- courts cuit found that a do not Hampshire similar New have “freewheeling authority to de- statute was not a speech, categories restriction on but clare new speech outside the primarily conduct, a restriction on scope al- of the First Amendment.” United — though it considered only Stevens, the statute as it U.S.-, States v. 130 S.Ct. affected the activities of data miners rath- (2010). 176 L.Ed.2d 435 er than pharmaceutical manufacturers. obscure distinction speech between Ayotte, See 550 F.3d at 50-54. The court “information asset[s]” is an insufficient ba- therefore considered the statute to be “a sis for giving the government leeway to species of regulation,” economic subject “level playing subject field” only to review, to rational basis which the rational basis review. plaintiffs conceded the law satisfied. See

id. at 54. Here, legislature explicitly aimed to correct the “massive imbalance Ayotte,

In the court treated the New presented information to doctors and other Hampshire among statute the narrow cate- prescribes.” 1(6). § Vt. Acts No. 80 gories regulations restricting speech statute specifically decries that “[t]he mar are not entitled to First Amendment ketplace for ideas on medicine protection, safety the tradition of Chaplinsky ” effectiveness frequently Hampshire, New one-sided.... 571-72, 1(4). § Id. at The statute (1942), 86 L.Ed. is therefore which lewd, obscene, clearly found aimed at profane, libelous, influencing the supply of information, fighting words to core First categories be Amendment con wholly cern. outside Instead of protections mere rational of the basis re First view, Amendment. The Court of First Appeals inter- Amendment teaches that preted the courts Hampshire New should statute assume that truthful com principally a mercial regulation of conduct information “is not in because itself harm ful,” Bd., ability “restricts] Va. data miners to State 425 U.S. at aggregate, compile, and transfer informa- and conclude that when a stat tion narrowly destined for defined ute aims com- to restrict the availability of such mercial ends” in a transaction where the information some purposes, that re “information itself has become a commodi- striction judged must be under the First ty.” Ayotte, 550 F.3d at 52-53. The Amendment. to a First by private parties claim that the stat- argue also appellees

The information in right to access not Amendment conduct and only regulates ute no First have files. appellants government because non-public to access right Amendment the district court agree Because we with However, consent. without health records protected speech, that the statute restricts a First claimed have not appellants whether sec- necessary it to determine is obtain information. right Amendment appellants’ First tion 17 violates the on their challenge the restriction They rights. Amendment information and use purchase ability to them but for available otherwise II. prevents The statute restriction. state’s from willing buyers willing sellers that section 17 re appellants argue The to be used of information a sale completing though speech, even stricts noncommercial disapproves. the state that purposes for They profit. argue for a PI data is sold Indeed, prohibit not 17 does subject should be to strict that the statute not long as PI data so collection Bd. State Univ. scrutiny. See of Trs. of pro- the state has purposes used Fox, 109 S.Ct. N.Y. v. hibited. (“Some 3028, 106 of our L.Ed.2d 388 Supreme rely on appellees The fully protected valued forms of most Police Angeles in Los decision Court’s profit.”) The speech are uttered for Publish Reporting v. United Department contend, the district court appellees U.S. ing Corp., 528 only com that section 17 restricts agreed, (1999). However, that case L.Ed.2d subject to and therefore is speech, mercial argument is appellees’ why illustrates scrutiny under the test set intermediate Reporting, Su In United misplaced. Sorrell, See out Central Hudson. on ac that restrictions held preme Court court at 447-48. The district F.Supp.2d infor department police to certain cess commercial data has both noted PI facially unconstitutional were mation Sorrell, 631 uses. See and noncommercial Id. 34- First Amendment. under the can be used in at 447. The data F.Supp.2d Supreme Court 120 S.Ct. 483. the use of regarding research that, us is “what we have before noted medications, harmful conse identify governmental than a denial nothing more medications, and to particular quences posses information in its of access par prescribed who have warn doctors 120 S.Ct. 483. Id. at sion.” safety concerns that medication of ticular a case is not “[t]his also noted Court can FDA The data approval. arise after prohibiting government in which the purely for the also be used conveying information from speaker prescrip marketing branded purposes of Id. In already possesses.” speaker drugs. tion case, in the information is not this speech of both 17 restricts the Section Rather, possession. government’s repre- manufacturers pharmaceutical acquisition to limit the seeks state PhRMA, prohibited who are sented phar hands of use of information PI data for using from Vermont miners, macies, data mining appellants, and the data purposes, the ex This is a case about companies. selling or trans- prohibited who are reg governmental permissible tent of if is to the data ferring pri in the hands of information ulation of Vt. marketing purposes. See used for about a be It is not a case actors. vate 274 4631(d). 18, public thereby § Ann.

Stat. tit. We address debate’ is not entitled to the protection each in turn. constitutional afforded noncom- speech.”); mercial Frog Brewery, Bad Inc. a. Auth., 87, v. N.Y. Liquor State 134 F.3d 97 (2d Cir.1998) (holding product label to be pharmaceutical Section 17 prohibits despite commercial social commen- using PI data regard- manufacturers from tary purportedly communicated by the la- ing prescriptions dispensed written and in beling). Vermont in their efforts. See id. The statute therefore affects manufac- Therefore, although some of the ability promote turers’ brand-name information communicated detailers drugs through detailing, to doctors for ex- might fully be protected another ample, by making identify harder context, analyze we will section 17 as a physicians those for whom the message restriction on commercial speech with

will be most relevant and to tailor the respect pharmaceutical manufac detailing based messages on individual 68, turers. Bolger, See 463 U.S. at 103 physicians’ prescribing histories. (“A company S.Ct. 2875 has the full panoply of protections available to its notion’ “The ‘core of commercial direct public issues, comments on so speech is that does no “which more than ” there is no reason for providing similar commercial propose transaction.’ constitutional protection which such Treadwell, Anderson v. 460 statements are made context of (2d Cir.2002), quoting Bolger v. Youngs transactions.”). commercial Drug 60, 66, Corp., Prods. 463 U.S. 103 (1983). S.Ct. 77 L.Ed.2d 469 It can b. seriously not be disputed that the primary Section 17 prohibits also data miners purpose of is to detailing propose a com selling or transmitting PI data re- mercial transaction —the sale prescrip garding prescriptions written and dis- drugs tion patients. The manufacturers pensed in if that PI data will however, argue, detailing that the message later be marketing purposes. used for See fully protected speech, includes specifically 4631(d). 18, § Vt. Stat. Ann. tit. Data regarding “information medical conditions miners do not themselves use PI data prescribers treat and [a manufactur their Rather, own marketing efforts. data er’s] innovative treatments for those condi miners are in the business of aggregating tions” and scrutiny that strict apply should and selling the to pharmaceutical data here because Section restricts commer manufacturers, among entities, other so cial speech that is “inextricably inter that pharmaceutical manufacturers can use twined fully protected with otherwise marketing strategies. their speech.” Riley v. Nat’l Fed’n the Blind The data regulated miners’ speech is Inc., of N.C., therefore step one further removed from (1988). However, L.Ed.2d marketing goals pharmaceutical presence the mere of non-commercial in manufacturers, although it remains nec- formation in an otherwise commercial essary step manu- presentation not transform does the com facturers’ marketing efforts. fully protected munication into speech. See, e.g., Bolger, U.S. at protected sale of information is (“We Amendment, have made clear that advertis the First and is not necessar- ing product See, which ily ‘links a to a speech. e.g., current Univer- (find 17 advances three sub- leges that section Studios, 446-58 F.3d at City sal (1) interests: “the state’s stantial state and not speech, computer program ing health,” public protecting interest in scrutinizing it under (2) doctrine). privacy prescribers However, “protecting unlike the speech information,” an interest here, prescribing and data of PI miners’ sale data also refers to as an the state sometimes City Stu in program Universal computer privacy,” “medical protecting to interest in a chain intended step not a was dios (3) containing the state’s interest and marketing efforts. influence private in both the and health care costs finds that section this Court Because Ann. tit. sectors. See Vt. Stat. public miners cannot sur- on data 17’s restriction 4631(a). § scrutiny intermediate the lower vive even that court found Vermont’s of commercial The district regulations applies that public and health inter- deciding cost containment without speech, we assume government inter- mining appel- ests were substantial restricts the data the statute Sorrell, justify the statute. ests to speech. lants’ commercial at 449-50. The court found F.Supp.2d III. unnecessary to consider it was prescriber privacy was protecting whether Hudson, gov Under Central government substantial interest. also a speech may regulate commercial ernment appellants do not serious- Id. at 450. (1) neither communication is “the when that the state has a substantial ly dispute activi to unlawful misleading nor related public health and protecting interest (2) a sub ty;” government “assert[s] costs, although care containing health by the be achieved” interest stantial argue that section 17 does appellants do (3) di the restriction “must regulation; substantial directly advance these interest;” fi the state rectly advance state interests. interest governmental “if the nally by a more limited as well could be served dispute protecting whether parties speech, the ex on commercial restriction prescribing prescribers privacy cannot survive.” Cen restrictions cessive state interest. information is substantial Hudson, tral “protecting refers to 17 itself Section that the com allegation is no 2343. There in- prescribing privacy prescribers 17 is regulated mercial formation,” plainly the statute does not but an related to unlawful misleading or either Stat. Ann. privacy. Vt. protect physician Therefore, sur for the statute to activity. 4631(a). Physician privacy might § tit. scrutiny, government vive intermediate prohibited if the statute protected be state interest must assert substantial of PI data for aggregation collection statute, directly by the advanced if of such data the use any purpose, be more ex must not regulation and the compel- rare and permitted were gov necessary to achieve than tensive at issue The statute ling circumstances. interest. ernment’s however, here, not forbid the collec- does Fur- PI data in the first instance. tion of

a. thermore, not ban use the statute does marketing pur- other than for of the data of Central Hudson prong The second widespread publication to including poses, a substan- the state “assert requires that nothing There is public. general restrictions achieved tial interest to be the use of prevent that would al- the statute Id. Vermont speech.” on commercial journalistic such reports ny requires about the state “demonstrate physicians. that the harms it recites are real.” Rubin Co., v. Brewing Coors 514 U.S. contemplates the data will (1995). 1585, 115 S.Ct. 131 L.Ed.2d 532 used, still be collected and for pur- albeit case, On the in record this Vermont has poses marketing. example, other than For any not shown integrity effect on the acknowledges state the statute the prescribing process or the pa- trust permits the use of PI data for “health care tients have in their doctors from the use of research, treatment, safety-related PI data in marketing. own Vermont’s ex- only imposes uses.” The statute restric- pert any was unaware of in instance which tions on the sale or of such use data for detailing a interaction caused a doctor to marketing or a promoting prescribe an inappropriate medication. To drug. explain Vermont does not how the the extent that the might suggest record data, continued collection of PI and its use PI data damaged has the relationship be- for non-marketing purposes, compatible is tween patients, doctors and the evidence is with an alleged phy- interest in protecting speculative either merely indicates that Indeed, privacy. sician the concern that some doctors do approve detailing patient can gleaned information be from or the use of PI data in detailing. For any PI data is not in way by reduced example, 17, expert Vermont’s Dr. witness prohib- and the statute does not opined David Grande the use of PI public wide dissemination of PI data. data “will make patients only feel more appellees argue The that the state’s in- anxious about whether or not in fact their privacy terest in is “that first,” interests are being put but he had marketers should not be exerting undue any not conducted patient per- studies of influence and intruding doctor-pa- on the ception of PI data support that conclu- tient relationship” by marketing prescrip- sion. drugs using tion According data. argument, this the state has an interest in Therefore, agree we with the district preventing pharmaceutical manufacturers court that Vermont does have substantial using from PI data persuade doctors to interest in both lowering health care costs prescribe brand-name medications “be- and protecting public However, health. patient cause care can be compromised the state’s asserted interest “medical patient because [and] trust the health privacy” is speculative too to satisfy the system care Therefore, is undermined.” prong second of Central Hudson. what appellees refer to as “medical

privacy” actually two distinct interests. b. The first is an interest in the integrity of prong third of Central Hudson re itself, the prescribing process and the sec- quires that the regulation “directly ad ond is an interest in preserving patients’ vance the state interest involved.” Cent. trust their preventing pa- doctors Hudson, 564, 2343; 447 U.S. at 100 S.Ct. tients believing physicians their Fane, see also v. Edenfield are inappropriately influenced PI data- 767, 113 123 L.Ed.2d 543 driven marketing. (describing prong third of Central Hudson

However, the state’s asserted inter as “whether challenged regulation ad est in privacy medical is too speculative to vances these interests a direct ma qualify as a substantial state interest un terial way”). “It is well established that der Central Hudson. Intermediate scruti- ‘the party seeking to uphold restriction less practices carries burden will be effective and less speech on commercial likely to Edenfield, prescribing practices it.’” influence justifying U.S. (alteration omitted) physicians. 770, 113 S.Ct. 1792 Drug Bolger Youngs Prods. (quoting appellees have failed to cite to 60, 71 n. Corp., 463 U.S. Supreme case from the or this Court (1983)). prong This L.Ed.2d upheld a regulation Court that has invalidating regu- requires “critical” government interest when “ speech ‘if lation that restricts commercial regulation bring indirectly is to about only or sup- it ineffective remote provides by alter good some social some conduct ” the government’s for interest. port’ the information to restricting available Broad. New Orleans Ass’n Greater government those whose conduct seeks States, 188, 173, 119 S.Ct. 527 U.S. United Hudson, to Cent. 447 influence. U.S. Cf. (1999) 1923, (quoting 144 L.Ed.2d 161 (“We 9, at 566 n. 100 2343 S.Ct. review Hudson, 564, 447 at 100 S.Ct. Cent. U.S. special regulations entirely with care that 2343). suppress speech in order to pursue nonspeech-related policy.”). be The Vermont statute cannot Regulations permitted, of conduct are but in to advance the state’s interests said if only government “unrelat interest is in reducing health and costs a direct public suppression expression.” ed to the of free way. 17 can material advance Section O’Brien, 367, United States v. 391 U.S. protecting public the state interests 1673, (1968). 672 S.Ct. L.Ed.2d by costs reducing health health However, legislative findings are ex following prevents the statute route: that plicit exactly Vermont here aims to do being from transferred from data highly that which so has been disfavored— pharmaceutical miners to manufacturers namely, put the state’s on the thumb marketing in turn purposes, for who are of marketplace scales ideas in order using the data in their prevented to legislature influence conduct. The marketing efforts. Failure to use PI data “marketplace found that the for ideas on marketing in less effective mar results safety medicine and effectiveness is fre prescription drugs, for brand-name keting quently in that one-sided brand-name com although not all—are some which— panies expensive invest in yet expensive provide therapeutic more no marketing campaigns to doctors. The advantage generic over alternatives. Less one-sided to marketing nature leads marketing effective will result doctors prescribing drugs doctors on incom based writing fewer for prescriptions brand- plete and Acts biased information.” Vt. thereby prescription drugs, reducing name 80, 1(4). § words, No. In other the statute protecting public health care costs and marketplace seeks to alter the of ideas by minimizing prescriptions health taking truthful that out some information expensive more or less tested medications. the state thinks could be effec used too own of how explanation The state’s tively. its cannot be 17 advances interests said to not directly approach regulating be direct. statute does The state’s to prescribing practices of doc interaction and doctors restrict between detailers tors, directly premised limiting and it does not is even restrict the information im- marketing practices physicians of detailers. available as a means of Rather, information pacting approach restricts the avail their conduct. This long Supreme that their antithetical to a line of able detailers so if the stressing Secretary that courts must be of State homeowner indi- Court cases did not very skeptical government efforts cated the homeowner wish to of information in prevent the dissemination receive such solicitations. Id. 456-58. See Liquor designed prevent order to affect conduct. The statute was Island, mart, obtaining Inc. v. “blockbusting” practice Rhode —the 1495, 134 L.Ed.2d 711 listings emphasizing real estate (“The directs First Amendment us be neighborhood undergoing a religious, ra- regulations cial, especially skeptical or ethnic Id. at 457. change. Howev- in the dark for keep people seek to what er, this upheld Court statute on the to be their own government perceives basis of government pro- interest Bd., 425 U.S. at good.”); Va. State tecting privacy of homeowners from (alternative to ban on pharma solicitations, harassing real estate an inter- to assume that this advertising cist “is est that is not here. See present id. harmful, information is not in itself directly 461. The statute Anderson people perceive will their own best inter regulated potentially harassing the sales informed, if only they enough ests are well targeted harassing directly calls. It the and that means to that the best end is to problematic. visits that were viewed as open the channels of communication rather The statute in Anderson did not ban them.”). than to close Even if section 17 is entity transmitting marketing data successful in the conduct altering physi of that agents would be useful real estate in prescribing practices, cians their the in deciding which homeowners to target. Supreme Court us that “[i]t reminds is It did not affect the seek to conduct of choice, precisely this between kind of by limiting the homeowners information information, dangers suppressing contrast, In available to 17 them. section dangers misuse if it freely of its is detailing, does not ban even when that available, the First Amendment detailing by is seen harassment an indi- Bd., makes for us.” State 425 Va. U.S. at physician. vidual It does not even restrict 770, 1817; see Thompson 96 S.Ct. also opt-in provision such The detailing. Ctr., W. States Med. U.S. 122 section 17 make the does not statute com- (2002) (“If 152 L.Ed.2d parable to in the statute Anderson. The anything, First Amendment means opt-in provision in Vermont statute speech means that regulating must be a solely physician’s relates agreement to a resort.”). last—not first — physician’s that the PI data can be used. Physicians can always appellees The choose place extensive reliance Treadwell, detailers, by to decline to on be visited even Anderson v. 294 F.3d 453 (2d Cir.2002). Anderson, opt-in provision without section 17. The In this Court upheld a banning New York statute in- statute Anderson was consent to licensees, person real estate be solicited estate solicitations home- real not owners in designated by certain zones consent to used.4 have information (invalidating with Anderson is consistent those cases that ban door-to-door solicitation approved regulation procedures unwilling noting banning have lis while solicita speech teners to receive decline to as less tion when homeowner has indicated a desire regulations preventing appropriate); restrictive than not to is those be disturbed see also Servs., F.T.C., speech affirmatively Mktg. unless a listener has cho Mainstream Inc. v. 1242-43, See, Cir.2004) (10th messages. e.g., sen to receive F.3d such Mar Struthers, Ohio, City (upholding tin v. 319 U.S. “do call'' list as not constitutional 147-49, speech part L.Ed. 1313 restriction on commercial be- achieve “if the Government could perfect, in- attempt to 17 is an Because not in a manner does its interests conduct of doctors prescribing fluence restricts less speech, or restrict of others —name- restricting speech must do so.” speech, manu- the Government miners ly data 371, 122 S.Ct. 1497. Thompson, directly not advance does facturers —it public health protecting interests state’s ap at issue here regulation Instead, health care costs. reducing drugs, prescription to all brand name plies protected restricts the statute example, of whether there irrespective, for government purposes uttered for when an alternative or whether indi generic is a in order to reduce approve of does not This drug effective or ineffective. vidual and, marketing campaigns effectiveness goal regu poor fit with the state’s prescri- ultimately, alter behavior insufficiently allegedly tested late new bers, regulated by the statute. who are not in cases where there drugs brand-name inter- too indirect to survive This route is alternatives available. cheaper generic áre scrutiny. mediate of PI targets the use The statute drugs, market all brand name

c. merely drugs brand-name new final fails under 17 also Section medications for which those brand-name Hudson, requires which of Central prong generic there are alternatives. govern- “if the

invalidating the restriction argue that the Court appellees could served as well mental interest be legislative to the determina- should defer on commercial a more limited restriction a fit tion that the statute is reasonable so 564, at 100 S.Ct. 2343. 447 U.S. speech.” is itself reason- long as that determination required not to em- The is Government appellees rely The on this Court’s able. means conceiv- the least restrictive ploy Outdoor, recent decision Clear Channel able, narrow but it must demonstrate York, City New Inc. v. of challenged regulation tailoring of the (2d Cir.2010), proposition that this for not interest —“a fit that is the asserted rea- government’s should defer to Court reasonable; necessarily but perfect, regarding how to sonable determination necessarily single represents However, re- regulate speech. scope one whose disposition but best misplaced be- liance on Channel Clear served.” to the interest proportion specifically addresses cause that decision billboards, Broad., a dis- regulation of commercial 527 U.S. at New Orleans Greater Fox, speech poses of tinctive method (quoting 119 S.Ct. 1923 3028). potential unique problems such as is on 109 S.Ct. burden at particular- and is therefore “carefully that it distract drivers to show government regulation. burdening ly government amenable to and benefits of calculated” costs stressed the id. at 108. This Court the fit need not be See Id. While speech. only they if choose to seek actively joining ed from disclosure “do not cause consumers Mills, telephone registry confidentiality protections. 616 F.3d at call” before commercial calls are barred is less restrictive at issue in this 21-22. The Vermont statute requiring to consent to re- however, than consumers case, approach broader uses the made). ceiving they could be such calls before designated uses of PI data prohibiting the Appeals First Circuit Court of for the affirmatively prescriber chooses to unless a was simi- recently noted that Maine's statute made avail- prescriber information have that prescribers "do not mail lists” because lar to able. protect- to have their information are entitled particular government approach applies every interests involved “ ” (quoting drug regardless ‘the law of billboards.’ Id. Me it whether is a less tromedia, City Diego, existing Inc. v. San 453 tested version of an medication or a breakthrough drug U.S. 69 L.Ed.2d with no reasonable (1981)). alternative. All of these alternative means directly promote would the state’s inter- event, In any we need not decide what ests, although they would do so without appropriate level of deference is here. impacting First rights. Amendment prohibits The statute the transmission or of PI marketing purposes use data for The district court found that section 17 prescription drugs regardless any all tailoring satisfied the narrow requirement problem drug with the or whether there is of Central Hudson because the statute generic prescribers alternative. The statute bans allows to determine how their speech beyond used, what the state’s just evidence data would be as the statute purportedly addresses. It seeks to dis- at issue in Anderson allowed homeowners courage detailing about new brand-name they determine whether would receive prescription drugs may which not be effi- agents. solicitations from real estate See may Sorrell, cacious or which not be more F.Supp.2d effective (citing However, Anderson, 462). than generic alternatives. reject 294 F.3d at We does that precluding the use of PI comparison of section 17 with the statute for the any Anderson, brand-name pre- issue in for the reasons ex- scription, no matter how plained Moreover, efficacious and no above. the district matter how beneficial drugs may those be court did not consider whether there are compared generic if alternatives. Even reasonable alternatives that would be the Court legislature’s defers to the speech-restrictive deter- less than section 17. minations, those determinations agree cannot While we with the district court that support banning speech in circumstances Central require Hudson does not the state that the state’s evidence does not address. to use the least restrictive means available The fact that section sweeps beyond to it to goals, achieve its this Court has public Vermont’s interests in health and examined the available alternatives in oth- health care costs undermines the state’s er cases to determine whether there was a argument that the statute is a reasonable reasonable fit between the regulation and fit with its interests. the state’s asserted interests. See N.Y. Realtors, State Ass’n Shaffer, Inc. v. Moreover, Vermont does have more di- (2d Cir.1994) F.3d (invalidating rect, less speech-restrictive means avail- regulation banning real estate brokers able. The state could wait to assess what soliciting property residential owners impact newly of its funded counter- designated certain areas when defen- be, speech program will including aca- provide dant failed to empirical evidence detailing demic sample generic vouch- regarding whether speech-restrictive less ers. The state could mandate the use of approaches sufficiently promote would generic drugs as a first course of treat- interests). government asserted ment, physician’s absent a determination otherwise, for all patients those receiving argues The state that section 17 is nar- Medicare Part D All funds. of these row because it does not detailing ban means could targeted be at new brand- is therefore narrower than speech restric- drugs name particularly when there are tions that have been struck down. See available, 53; alternatives unlike Ayotte, J., section 17’s (Lipez, 550 F.3d at id. at 97 example, For Dr. Aaron Kessel agreed court natives. The district concurring). Sorrell, that the in 631 heim testified reasoning. See this with detailing budget annual may dustry’s be total was at 455. statute F.Supp.2d and that approximately billion was pro- that it does not $8 in the sense narrow any spend not realistic for Vermont this proscribe detailing and does hibit However, detailing. Dr. amount on academic Kes message. claim or particular “[formularies, also testified that messages selheim does ban set of the statute step therapy, prior authorization] particularly are itself contends Vermont years ... for a few place have been effective, messages informed namely, prod ... overuse of ... we still see data, ability pharma- [but] PI and curbs patients at potentially place ucts that to market brand- manufacturers ceutical However, testimony fell far risk.” drugs. name the alterna demonstrating short of that, regu- other argues unlike Vermont Therefore, inadequate. tives would be sec down, the have been struck lations that tion 17 cannot survive Central Hudson an en- here does not ban statute at issue scrutiny because did “not offer[ ] Vermont speech because doctors category tire why possibilities, any reason these alone PI to be trans- their own data permit can combination, would be insufficient to marketing purposes. mitted and used government’s interests].” [achieve (2d Cahill, 79, 96 Alexander Cf. Cir.2010) 373, 122 Thompson, 535 U.S. at banning poten- (finding statute argue does in its brief that the actually, misleading use of Vermont tially, but not narrowly tailored because it “fo- attorney advertising an un- statute nicknames specific problem identified cuses on regulation of constitutional However, the use of Legislature: [PI data] mere fact that the speech). However, marketing campaigns.” this to choose to fuel permit does doctors statute marketing argument responsive inquiry is not available for make their has not if number of under Central Hudson. Vermont even a substantial purposes, so, state interest “does not render the asserted substantial doctors would do of PI data in categorical.” curbing the use disputed provisions less satisfy prong To the final campaigns. the transmission id. The statute bans See Hudson, must show marketing purposes, PI data for Central or use of consents, narrowly tailored to serve the re- section 17 is prescriber without unless that it contends to a substantial state interests pertains to whether the data gard justify containing drug speech that is efficacious and prescription restriction — public protecting health care costs and generic or not it has a alternative. whether not health. It the fact that the statute does no drugs, between brand-name distinguish speech restricts Because statute efficacious, that unique

matter how and regard prescriptions break- even with categorical a ban. renders the statute medications for which through brand-name alternatives, and be- generic there are no explain failed to how sec- appellees alternative pursue cause the state could no more extensive than neces- tion 17 is directly targeted at encour- in routes that are its asserted interests sary to serve health, generic drugs the state aging the use public care costs and health the state has not dem- promote, be wishes to alternatives would why proposed protecting its interests limited onstrated inadequate. present The state did health care containing and public alter- health testimony relating at trial to these I. costs could not be as well served on speech. more limited restriction begin I with ground: common there is Therefore, section 17 cannot survive inter dispute prescriber-identifiable no scrutiny is an unconstitutional mediate and i.e., pre data which documents the data — regulation of commercial under the (“PI scribing particular habits of a doctor test set forth Central Hudson.5 data”) exceptionally phar valuable to —is CONCLUSION companies, maceutical who make use of it to market highly profitable their brand above, explained For reasons we drugs through process name known as judgment reverse remand the of the “detailing.”2 dispute There also is no court. district marketing messages “detailers” deliver LIVINGSTON, DEBRA ANN Circuit meetings with pro doctors constitute Judge, dissenting: activity. tected First Amendment Finally, dispute there is no that section 17 does not

Misconstruing prescription Vermont’s directly law, regulate messages those or the confidentiality Vt. Stat. Ann. tit. 18 (2007) (hereinafter 17”),1 § marketing practices Maj. Op. “section of detailers. Instead, pharmaceutical as a direct restriction on regulates at 277. Vermont’s law marketing, indisputably which is a form of the dissemination of confidential informa speech” purposes “commercial of the specifically, PI pro data —and the tion— Amendment, First majority extends cess which is collected and sold. First protection Amendment to data min- targets process Because section 17 pharmaceutical companies princi- ers and itself, detailing rather than “understanding pally challenging a restriction on access to the sequence of events” section 17 regu private otherwise In information. so do- is, process by lates —that which PI ing, majority reaches the prescription pad travels case, wrong result in this but creates Cir- hands of a detailer—-“is precedent likely cuit pernicious to have understanding crucial to legal the statute’s complex broader effects in a evolving Mills, status.” IMS Health Inc. v. area of First Amendment law. Because I (1st Cir.2010) J., (Lipez, F.3d concur would find that section 17 permissibly re- ring part dissenting part). stricts access to information that law, requires every Pursuant to Vermont pharmacies to collect and that time a limited, very pharmacy statute has if any, effects on fills within the state, First Amendment activity, respectfully required it is to collect certain infor- dissent. doctor, mation about the patient, appellants argue 5. The also Analytics, (collectively, that section 17 Healthcare Inc. mining violates the dormant Commerce appellants”). Mining Ap- Clause be- "data Data cause it restricts pellants’ commerce outside Vermont. Br. at 2. we Because find section 17 unconstitutional below, "detailing” test, As discussed further pursuant to the Central Hudson we need promotion involves the face-to-face of a argument. not reach this particular drug by repre- brand name sales captioned 1. While the Vermont law is "Confi- sentatives —known as "detailers” —who are information,” dentiality prescription employed by pharmaceutical company it is the disingenuously "Prescription drug referred to as a that manufactures and distributes that by plaintiffs-appellants Restraint Law” in-person physicians IMS and make visits to Inc., LLC, Verispan Health purpose promotion. and Source the of such See, majority the focuses on being prescribed. medication the Rules least three events take Pharmacy Admin. ever occurs—at Bd. of e.g., Vt. (eff.Oct.2009).3 first, Because 9.1, 9.24, gathers informa- place: pharmacy 9.26 §§ is so valuable prescrip- information to fill patients seeking tion from including the parties, of third tions; second, number it collects and sells that data case, pharma in this plaintiffs-appellants third parties, principally “data vendors” time, practice made a cies, have for some here; appellants miners” such as or “data knowledge the selling it—often without third, repackage these data miners and doctor, alone the let permission or pharmaceutical and license it to that data including parties, third patient various generally —to IMS Health companies. See plaintiffs-ap mining vendors such data (1st Ayotte, 48-49 Inc. Inc., LLC, Verispan, IMS Health pellants Cir.2008). Only after these three transac- (collec Analytics South Healthcare and PI land in the hands tions occur does data mining appellants”).4 tively, the “data it to facilitate of detailers who then use compile the aggregate and These vendors detailing their efforts. and acquire pharmacies from they data by sequence of events Troubled this compa license then whereby otherwise confidential informa- nies, plaintiff-appel here represented up pharmaceuti- tion ends in the hands of Research and Manu lant Pharmaceutical response cal and in to concerns (“PhRMA”), detailers who use of America facturers (2) (1) privacy, medical threats to guide some of their about information to and, health, patient rising their “detail and health care marketing particular, Specifically, pharmaceutical widespread use of ing” efforts. costs attributable to the (which identify particu PI data to companies prescription drugs use name new brand “detailing,” to monitor lar doctors for likely record indicates are those most efforts, detailing and to of their success subject detailing of extensive to be the detailers based compensate efforts) individual prescription Vermont enacted its by the doctors prescriptions written part, In confidentiality law. relevant detailers meet with. Pharmaceutical they insurer, prohibits any [ ] law “health self- not, however, directly reference do employer, electronic transmis- [] insured doctors, meetings with in their intermediary, pharmacy, or other [] sion fact, so doing from prohibited are entity” “selling], licensing], similar licensing agree employers’ terms of their or otherwise exchanging] for value” [] mining appellants. the data ments with “permitting] “preseriber-identi- the use” of pro- or fiable information for sets Accordingly, before a detailer ever is, drug” absent moting office—that before foot in a doctor’s patient's to track the use of a http:// the data miners rules are available 3. The state vtprofessionals.org/oprl/pharmacists/rules/ drug drugs this over time and associate source, 20Adopted% 20Effec- Pharmacy% payment 20Rules% given prescriber, use with a 201,% 202009% 20PDF% tive% 20October% Accordingly, pharmacy. even as "de- 18, 2010). (last 20Version.pdf Nov. visited identified,” purchaser the data is such that 50-year-old woman who would know that “a commonly includes sold 4. The information Vermont; prescriptions lives in Central has name, address; prescriber’s name and patient Montpelier; is a of Dr. [and] filled in drug prescribed; dosage, quantity regularly Montpelier ... takes an Jones in prescrip- at which the date and location cholesterol-lowering antidepressant and a filled; patient's age and the tion was Respondents' drug.” Br. at 7. encrypted, patient’s name is but gender. The permits personal data still "de-identified” this prescriber’s pro- consent. The law further the data miners com- “pharmaceutical hibits manufacturers and panies before the Court.6 “us[ing] prescriber- [] marketers” from restriction, In considering begin I marketing identifiable information for or undisputed with the fact that Vermont promoting prescription drug” unless pharmacies have pre- access to and collect prescriber provid- consents in the manner scription information under the di- by 18, ed statute. Vt. Stat. Ann. tit. authority rection and of state law. As 4631(d). § noted, requires pharmacies Vermont to restriction, Focusing heavily on that last collect information such as the name of the majority begins analysis its at the end doctor, prescribing age the name and i.e., “sequence of the at the events” — patient, drug and the pre- and dose point already at which PI data is in the Having scribed. mandated the collection of pharmaceutical companies hands —and of that highly otherwise confidential infor- impermissibly concludes that the law “re- mation, the state unquestionably has an pharmaceuti- stricts the of both the interest in controlling its further dissemi- cal manufacturers ... who prohibited are nation. It is that interest that section 17 using from data for respect effectuates —with appellants, to purposes, and the mining appellants, data operates Vermont’s law principally pre- prohibited who are from selling or trans- vent them obtaining from pri- otherwise ferring Vermont PI data if the data is to data, such, vate PI and as does no more be used marketing purposes.” Maj. than restrict their unfettered access to in- law, Op. however, at 273. The starts at formation. This the First Amendment beginning, and seeks to cut off the Rusk, permits. 1, See Zemel v. of PI flow data at its source: section 17 17, 14 L.Ed.2d 179 prohibits any pharmacy “selling] ... (First Amendment carry “does not with it prescriber-identifiable information ... [or] right the unrestrained gather informa- permitting its use ... for marketing or tion”). promoting a prescription drug.” Stat. Vt. 4631(d) added).5 § Ann. tit. (emphasis In finding that section 17 operates prin- Because the imposed by restrictions sec- cipally as a permissible regulation on ac- there, tion begin information, and because that first cess to guided am by the prevents restriction PI data from ever Supreme Court’s decision in Angeles Los reaching the hands of plaintiffs-appellants, Police Department v. United Reporting principal question to be resolved—and Publishing Corporation, 528 U.S. one the majority wholly (1999). overlooks—is There, 145 L.Ed.2d 451 whether the pharmacies restriction on private im- publishing company challenged a plicates the First Amendment interests of California state law that restricted access above, prohibits As noted the law also such on the "patient unauthorized release of insurers, sales employ- health self-insured information,” practitioner defining it as "un- ers, and electronic transmission intermediar- professional subject conduct” discipline. 18, 4631(d). ies. § See Vt. Stat. Ann. tit. Pharmacy See Vt. Bd. of Admin. Rules record, however, pharmacies is clear that are 20.1(1). § pharmacy party Because no is a sole, principal, if not source of the PI data action, this neither the First Amendment aggregated mining then licensed rights, data, any, pharmacies if to sell PI appellants in this case. impact nor the of these restrictions on the professional rights 6. The rules of assessment applicable conduct such need be ad- pharmacies place in Vermont strict limits dressed. police to information collected local to the rather startling proposition de- that the rights, any, First if partments respecting those arrested with- Amendment those seeking to turn that, access information in the The at state. Court found they whom it requesting are Under plaintiff, least to that respect with the law from. majority’s the analysis, example, implications had no First Amendment be- Family Rights Educational and Protection “regulate[ cause more than it did no ac- ] prohibits Act—which universities from dis cess to information in the hands of the seminating information collected about en police department.” Id. 120 S.Ct. students, rolled see 20 U.S.C. noted, 483. As the further Court “Califor- § 1232g(b)(1) operates permissible as a — give nia could decide not out arrestee restriction on access to information if a violating information at all without request for denied by student records is a First Amendment.” Id. public university implicates but the re majority attempts to distinguish questor’s rights Amendment First if it ground on the Reporting United that while leads to a private denial school. govern- the California law amounted “a that illogical find outcome both and unten Univ., ment denial of access information in its able. United States Miami Cf. (6th Cir.2002) (inter added), possession,” (emphasis 820-24 id. here preting rejecting FERPA and asserted government’s “the information is not right “First Amendment of access to stu “in the possession” but instead hands records”). Indeed, putative dent for the pharmacies.” Maj. Op. at 273. pre- As a information, gatherer the difference is of matter, liminary argument completely no discernable let alone constitutional sig disregards the fact that the information is KQED, Inc., nificance. Houchins v. Cf. pharmacies “in the hands of’ because L.Ed.2d has directed them to it. state collect (1978) (“There right is an undoubted such, As interest in controlling Vermont’s gather news ... that affords no but basis further dissemination that informa- for the claim that the First Amendment tion is different conceptually not from Cali- compels private persons gov or others — stemming fornia’s interest the further (plural information.” supply ernments —to dissemination of information the hands added)). ity opinion) (emphasis police departments. of local Under the sensing No doubt the tenuous nature of majority’s reasoning, Reporting United position, majority argues that that ap hinges the City on the fact of Los pellants a First “have not claimed Amend Angeles police its own used officers—rath- right ment to obtain information” but in er than private prison security con- stead challenge section insofar as it might pro- tractors it have relied on—to regulates the of information” already “use cess and house its arrestees. See Clifford Maj. Op. “in at 273. [their] hands.” Cf. Force, Rosky, J. Inc.: The Privatization of 40, 120 Reporting, United 528 U.S. at Punishment, Policing, and Force Milita^ (“This the gov case which States, in Liberal 36 Conn. L.Rev. prohibiting speaker ernment con growth (noting rapid private veying speaker information that al prisons in more and them use than half the ready possesses.”). argument rests country). reading I see no basis for Unit- misunderstanding on a fundamental sec Reporting narrowly. ed tion 17—of of events” it “sequence second, noted, majority’s Because, But attempt regulates. majority distinguish begins sequence, Reporting United would lead the end of regulates applied appellants, regu- law

ignores the fact that section Vermont’s I speech. the flow of PI data well before it ever lates conduct or Because view importance, “in one appellants. comes to be the hands” of that issue as of some Indeed, law, operation appel- deeply by under of the because I am troubled the ma- it, I, too, they jority’s PI if have address the possess lants can data discussion pharmacies express obtained it from on the condi- issue order considerable that, “marketing applied mining tion that not be used for or as to the data doubt promoting prescription drug.” particular, of a Hav- can appellants section 17 PI data with ing properly thus obtained conditions be characterized as restriction attached, clearly cannot appellants speech. considering ap- subse- In the law as quently plied contend those conditions amount to data miners they companies, again reject majori- to restrictions on information “al- I once ready possess.” ty’s approach “sequence and follow the here, regulates, beginning, events” the law question proposition I do not applied with the restriction as to the data apply different considerations where the miners. government “prohibiting speaker from conveying speaker information that al preliminary As a matter —overlooked ready I possesses.” simply conclude that majority parties dispute whether —the appellants none of the in this case are so actually section 17 min- restricts by operation affected of section 17. Nor Indeed, ers at all. section 17 makes no pass do I on the pressed concern—not mention of data miners or vendors. Ac- appellants here —that selectively restrict cordingly, it is not clear to me that data ing may access to information raise First miners have interests —First Amend- Reporting, Amendment concerns. United ment or otherwise—at stake here. Section (Scalia, J., 528 U.S. at 120 S.Ct. 483 17, would, most, appear to eliminate a concurring) (allowing may selective access substantial market for data miners’ ser- create upon speech rather “restrietion[s] by eliminating pharma- vices desire upon than access to government informa companies purchase ceutical tion”); id. at (Ginsburg, 120 S.Ct. 483 information the statute prohibits them (selective J., concurring) restrictions on ac using. recently from As the First Circuit “impermissibly cess could burden[ ] observed, however, “the First Amendment speech” upon where selection is based an safeguard does not against changes criterion”). “illegitimate I simply conclude commercial regulation previ- that render that, based on the record before this ously profitable information valueless.” Court, operates section 17 permissible as a Ayotte, 550 F.3d at (quoting Wine & restriction on access to information that Retailers, Island, Spirits Inc. v. Rhode government pharmacies has directed (1st Cir.2005)). Nevertheless, F.3d collect, majority and the errs in conclud because section 17 restricts “other similar ing contrary. entities” “sell[ing], licensing], or ex- changing] for value” data if the trans-

II. fer is made “for marketing promoting Because I thus conclude that section 17 drug,” and because a data upheld should permissible be as a restric- conceivably miner could be deemed a “sim- information, tion on access to I entity” could end ilar regulated, pro- thus so my analysis however, majority, there. The might ceed to consider the law as it be proceeds whether, question to the applied to them. (Sack, J.), that the com where we found thus, that re- is whether question, there did not infringes program question

striction, imposed, puter it be should rights. protection First Amendment First Amendment warrant miners’ data by to conclude reasons that “the values served significant ground are There majority con- by As the not. were not advanced it does First Amendment disingenu- cedes, miners —who (citing data these Id. at 449 code].” Vartuli [the Vartuli, for “publishers” style 111); themselves ously at see also 228 F.3d Vartuli not them- litigation- this of purpose (noting at 111 that those “values” 228 F.3d —“do in “are PI data” but instead use selves truth, of the accommo pursuit include “the selling data.” and aggregating of business interests, the achievement of among dation Nevertheless, our citing Maj. Op. at 274. and deter stability, exposure social City proposi- for the in opinion Universal authority, personal au rence of abuses of protects First Amendment “[t]he tion that tonomy personality development, [and] information, advocacy, devoid of dry ‘even democracy”). functioning of ” relevance, expression,’ or artistic political in Accordingly, question ap the critical City (citing Maj. Op. at 271-72 Universal merely plying City Universal is not wheth 446) (alteration Studios, Inc., at 273 F.3d engaged in the appellants er the are sale omitted), majority concludes that the rather whether “dry information” but “dry information” miners’ sale of that data “dry informa they engaged are a sale imply- speech, even protected constitutes tion” that the “values served “advance[s]” non-commercial may that it constitute ing Vartuli, Amendment.” the First Cf. 271, speech. Id. (“Language at 111 serves a vari 228 F.3d City support I do not read Universal functions, only of which are ety of some There, we sweeping proposition. such special covered reasons for freedom dry that “even informa in dicta observed Greenwalt, (quoting Kent speech.”) held, “speech” and may protected be tion” Crime, 4 B. Found. Speech and Am. Res. con “computer programs specifically, (1980)). Here, 645, strong there are J. can merit First code[ ] structed min question whether the data reasons to 446, 273 F.3d protection,” Amendment engaged are conduct ing appellants added); at 445 see also id. (emphasis majority meets that standard. As age, in the modern this Court (noting that them, mining appel characterizes the data ... ‘evolutionary’ approach “an has taken aggregating lants are the “business per holdings ‘narrow that would favoring which communi selling data”—data ‘case-by-case’ to mature on a mit the law them nothing about them nor allows cates basis”) Net Name.Space, Inc. v. (quoting at all. anything or communicate express Solutions, Inc., 573, n. 202 F.3d work Maj. at 274. Op. Cir.2000)). (2d the facts of On clear, dry To the dissemination be case, computer that the code we concluded First Amend- qualify information can First Amendment question warranted instance, as we ob- protection. ment For capacity it had the because protection City, “courts have served Universal beings to human communicate information scrutiny re- subjected to First Amendment among both “discourse promoted and had on the dissemination of technical strictions “exchange computer scholars” re- information and scientific scientific How Id. at 448. expression.” ideas and at 447 City, 273 F.3d search.” Universal ever, distinguished we Com doing, in so (internal omitted); Miller citations see also v. modity Trading Futures Commission (2d Cir.2000) California, Vartuli, (1973) (“The concluded, 37 L.Ed.2d 419 First “stretches the fabric of the which, protects Amendment works taken beyond any First Amendment rational whole, artistic, literary, as a have serious measure.” Id.

political, (emphasis value.” scientific hand, majority rejects, out of added)). here, But mining appellants jerky” First Circuit’s analogy “beef appeal do not contend on that section 17 labels “obscure” its distinction between precludes distributing them from data to speech and “information asset[s].” do foster scientific or medical research. To not necessarily mean to endorse that contrary, to the extent Vermont’s law approach court’s or even its ultimate con applies all, to merely prevents them at it clusion. But I am deeply troubled them from licensing their data for a single fact majority opinion that the be —which use—the marketing drugs. comes the opinion first circuit-level to hold mining Nor do data appellants contend the that data miners’ sale of PI data consti prohibits statute fostering pub- them from tutes First activity7 Amendment —does opinion lic contrary, or debate —to the as engage even bother to in the funda above, mining noted data appellants actu- analysis mental First Amendment our case ally prohibit their customers from disclos- requires. law majority offers no co ing else, they anyone data license to gent why “dry reason for this information” such, much general public. less the As falls into the category the First Amend difficulty have some comparing the data protects, ment any nor discussion of how they sell to “exchange “discourse” or the “dry this information” can be deemed to ideas.” “advance” the “values served the First Circuit, The First evaluating in a similar Vartuli, Amendment.” See 228 F.3d at law, just concluded that PI data was 111. product, not distinguishable from the data reiterate, To question I do not dry that miners’ perspective widgets, or, to as the information may be of First Amendment First suggested, Circuit jerky.” Ay “beef importance given the role information fre otte, such, F.3d 53. As the court quently plays in forming public opinion or found that “this is a situation in which fostering marketplace of ideas. In information itself has become a commodi deed, dry information —in the form of a ty”- 53; “informational asset.” Id. at —-an professor’s research or a programmer’s Condon, Reno v. cf may frequently be of core First (2000) (sale 145 L.Ed.2d 587 code— Amendment value. But in an era where collected driver information proper subject “increasingly, information is of federal sold as a com regulation because the “informa modity is, without context, being tion in embedded in this an article of com merce”). practice circumstances, reasonably that could regarded Under these be that communicate,” court as an unwilling Post, was effort to simply conclude that Robert because a party’s “product Prescribing is information” Records and the First Amend “any regulation that product] [of con Hampshire’s ment —New Data-Mining stitutes a speech.” Statute, restriction on Ayotte, Med., Eng. New J. Feb. 550 F.3d at 745, 746,1 53. Such an interpretation, am unwilling presume Judge Lipez, concurring While part in "acquisition, the data aggrega- miners' dissenting tion, part Ayotte, argued in prescriber-identifiable that the and sale of data” law, Hampshire New applied pharma- purview is "not within the of the First data, companies’ ceutical use of PI Ayotte, restricted Amendment.” (Lipez, 550 F.3d at 64 J., speech, he concurring found it part dissenting "self-evident” part). not refer to PI data in their conver- engaged ers do business simply because used, rather than sations with doctors. The of information the transfer instead, identify likely automatically are doctors most that its activities widgets drugs prescribe particular shield of the First kinds so potent to the entitled majority may effectively directed at join pitches I cannot sales be And Amendment. them, basis for to monitor the success of these de- principled that offers no opinion tailing by tracking any changes should and efforts determining when such conduct prescribing First habits of the doctors there- protected not be considered should by targeted, compensate detailing and to activity. Amendment on the success of their personnel based com- respect pharmaceutical to the With efforts. them primarily prohibits section 17 panies, PI data for a accessing acquiring majority that section 17 concludes in market- purpose i.e., for use particular — companies’ impacts it, pro- assuming they acquire do ing—and interests it “affects man “speech” because using purpose. it for that hibits them ability promote to ufacturers’ brand-name re- primary to the first and respect With by making ... it harder drugs to doctors striction, I find for the reasons set would identify physicians for whom the to those above, operates that forth section to message will be most relevant and tailor on access restriction perfectly permissible detailing messages based on individual implicate not and thus does to information Maj. prescribing histories.” physicians’ rights. Amendment With appellants’ First However, majority cites Op. at restriction, I note as to the second respect that authority proposition no for the pharmaceuti- I above that to the extent did provides protection First Amendment —let PI data under the companies cal obtain alone, majority strong protection they that cannot use it condition express identify affords here —for the methods of they cannot sub- marketing purposes, for audience, ing process an and while the that complain heard to those sequently be detailing messages” arguably “tailoring as re- conditions-to-receipt operate express activity, to Amendment comes closer First already within strictions on information little for evaluat provides the record basis possession. their actually ing the extent to which even if Accordingly, in that manner. question whether used generally, More minimal and indirect be af- section 17 has some protection Amendment should First manner in which detailers to a business effect on the forded to what amounts messages, that effect is a Spirits & “tailor” those practice, method or Wine cf. Island, 1, Retailers, very hang finding reed on which to thin Inc. v. Rhode Cir.2007) (ban (1st Amendment joint advertising that section 17 restricts First 6-7 activity rather than conduct. Rums restriction on con- strategies permissible Cf. method, Rights, speech), one v. Forum Acad. & Inst. or business duct feld (FAIR), 47, 62, 126 S.Ct. quality, but is Inc. 547 U.S. expressive that itself has no (“ (2006) has ‘[I]t facilitate the 164 L.Ed.2d 156 meant at most to instead of free abridgment never been deemed an delivery expressive of other conduct. make a course of speech press or practice no that of dom dispute There is is, illegal merely because the conduct delivering conduct detailing itself—that initiated, evidenced, or carried part message to doctors—constitutes was language, spoken, means of either also no dis- out speech. commercial There is ”) written, Giboney (quoting however, printed.’ detail- that pute, Co., Empire Storage conduct, & Ice restriction on pure it does not (1949)). require scrutiny. strict See id. at 93 L.Ed.

(“[T]he [Supreme] rejected Court has argument scrutiny that strict apply should III. regulations ..., speech however, Finally, even if I were to con- adhering instead to the somewhat rig- less 17’s total effect on clude de- (col- orous standards Central Hudson.” sufficient constitute a re- tailing was cases)). lecting speech, I on commercial would striction uphold statute because I nonetheless a. complies with the find that stan-

would respect factor, With to the first in Central Hudson. dard set forth identifies three “substantial interests” sec- (1) tion 17 advances: an “pro- interest Hudson, regulate Central com Under (2) tecting public health,” an interest mercial is “neither misleading “protecting privacy prescribers activity,”8 nor related to unlawful gov (3) information,” prescribing an inter- (1) ernment must assert a “substantial in est in “ensuring] costs are contained” in achieved, terest” to be and demonstrate the health care sector. majority con- (2) “directly the restriction advances” cludes that the first and third constitute interest, the limitation “is not “substantial” state interests but that the more necessary extensive than to serve second is “too speculative” qualify. that interest.” Cent. Hudson Gas & Elec. Maj. Op. at 275-76. I would conclude that Comm’n, Corp. 557, v. Pub. Serv. 447 U.S. all three constitute “substantial” state in- 564-66, 2343, 100 S.Ct. 65 L.Ed.2d 341 respect second, terests. With to the which (1980); Treadwell, v. Anderson 294 F.3d only is the asserted interest on which the (2d Cir.2002). 453, 460-61 As we have majority I diverge, I am unable to observed, previously the latter steps two accept majority’s conclusion that require “coalesce to ‘a reasonable fit be state’s interest medical privacy is “too tween legislature’s ends and the means speculative” qualify as a substantial in- ” chosen to accomplish those ends.’ terest. The majority’s analysis fo- —which Anderson, 294 F.3d at 462 (quoting Loril evidence, cuses on the or asserted lack Tobacco, lard Reilly, 525, Co. v. 533 U.S. thereof, of section 17’s on medical effect 556, 2404, 121 S.Ct. 150 L.Ed.2d 532 privacy only relevant to whether sec- —is (2001)). Accordingly, while Central Hud “directly tion 17 advances” the state inter- compels son more searching review of a est.9 It has bearing no on whether that restriction on commercial speech than a substantial, interest is real and an issue 8. While Vermont conceded subject below that would be searching to far less review speech at "misleading,” issue here is not unquestionably and would be within the provides record some evidence to the con- regulatory authority. bounds of the state's trary. example, For repre- one former sales See, Fane, 761, 768, e.g., v. Edenfield sentative testified that PI data was used to 113 S.Ct. 123 L.Ed.2d 543 presentations create sales "very that are ("[0]ur may cases make clear that the State skewed” and “distorted.” expert Another tes- expression ban commercial decep- that is ... tified that PI data detailing was used to tailor justification.” tive without (collecting further messages provided such that "information [is] cases)). ... a selective manner.” The state does reasons, appeal not raise 9. For reject majority's the issue on similar I and thus I do not that, suggestion consider it here passing legitimate but note that Vermont has no if construed as a law meant to privacy restrict mis- interest in medical because the state leading speech advertising, section 17 allows the dissemination of PI data for certain

291 regulation at issue “direct directly ques er whether majority does not which ly advances” the asserted state interests Indeed, appellants nor neither tion. as well as whether the restriction “is not argument serious majority advances necessary than more extensive serve legitimate have a state does not that the Hudson, Cent. 447 th[ose] interest[s].” privacy, in medical interest and substantial 564, 566, 100 S.Ct. 2343. To meet U.S. any. contrary, To nor am aware requirements, government these car increasing and well-founded in an era of establishing a reason ries “the burden of and the privacy medical concern about ends and the able fit between the [law’s] in of confidential dissemination rampant those ends.” means chosen to achieve formation, has re government the federal Network, City Discovery v. Cincinnati legis acted on that interest peatedly Inc., 410, 414, 507 113 S.Ct. U.S. of medical privacy protect lated to (1993) (internal quotation 123 L.Ed.2d 99 see, §§ records, 164.501- e.g., C.F.R. omitted). However, marks as we have collected information (protecting 164.520 observed, recently a “reasonable fit” is Insurance Portabil pursuant to the Health test, not a “least restrictive means” Clear Act); Accountability 42 U.S.C. ity and Outdoor, City Inc. v. New Channel ge seq. (protecting privacy § 2000ff et (2d York, Cir.2010), 431.300, information); §§ netic C.F.R. thus we do not ask whether there is “no pa of Medicaid (protecting records 431.303 conceivable alternative” but instead de tients), the District and thirteen states and “ ‘only regulation mand that the not bur or enacted have considered of Columbia substantially speech than is den more privacy medical protecting aimed at bills necessary government’s to further the le way statute does. very same Vermont’s ” gitimate (quoting interests.’ Id. Bd. Privacy Elec. Br. of Amicus Curiae See Fox, Trs. the State Univ. (“EPIC”) (collecting of N.Y. stat Inf. Ctr. U.S. 106 L.Ed.2d utes). I would find that all Accordingly, (1989)). inquiry, The critical as the interests are three of the state’s asserted noted, court is therefore whether district Hud purposes of Central “substantial” speech the restriction on is “in reasonable proceed to evaluate whether sec son and inter proportion to the substantial state “directly those interests. tion 17 advances” Sorrell, F.Supp.2d served.”10 631 est^] (internal omitted). quotation b. at 454 marks factors, the prongs respect gov- third of the With to these The second and showing us to consid- ernment cames the burden of require Hudson test Central speech, argument, a that not restrict or non-marketing purposes. manner does speech, that less the Government of sec- restricts which also bears on the effectiveness However, furthering in medical must do so." there is no indication tion 17 in the interest legitimacy that meant to privacy rather than on the the Court’s observation was interest, most, suggests, displace entirely principle that section 17 consistent However, may require as noted be “underinclusive.” Central Hudson does not consider- underinclusiveness, established, below, every even if alternative” or ation of “conceivable voiding a a statute under means” test. is not basis for amount to a "least restrictive Instead, analysis. reacting Thompson Central Hudson Court was failure, there, government's to "even con- i.e., notes, to the majority correctly Thomp sider ... other 10. As alternatives” — Center, speech fact that a restriction on “seems 535 U.S. son v. Western States Medical 371, 1497, 357, strategy the Government have the first 152 L.Ed.2d 563 been 122 S.Ct. 1497; 373, (2002), thought try.” "if Id. at 122 Supreme observed that Court 368, (affirming that id. at 122 S.Ct. 1497 achieve its interests the Government could cf. 292 legislative judgment,”

that its law furthers at least one interest exercise of Li way,” “in Island, a direct and material Inc. v. quormart, Rhode 517 U.S. Edenfield Fane, 761, 767, 1792, 507 U.S. 113 S.Ct. 484, 508, 116 S.Ct. 134 L.Ed.2d (1993), accordingly 123 L.Ed.2d (1996) (plurality opinion), and cautioned we ask whether the state has demonstrat- that, legislature where a has deemed a ed “that the harms it recites are real and particular regulation properly tailored them [the will alleviate restriction] interest, response to substantial “we Anderson, a material degree.” second-guess have been loath to [g]ov (internal quotations at 462 citation and Fox, judgment ernment’s to that effect.” omitted). evaluating gov- In whether the 492 U.S. at 109 S.Ct. 3028. Accord burden, ernment has met that parties ingly, recently as we observed in upholding deference, dispute any, the level of if we speech regulation, “if gov [a owe to the legislature’s determination. determination reg ernment] about how to Specifically, parties dispute whether speech] ulate [commercial is ‘reasonable’ apply we should so-called Turner defer- ... then we should defer to that determi thereby ence and “accord substantial def- Channel, nation.” Clear 594 F.3d at 104. predictive judgments” leg- erence to the “all appropri Such deference is the more which, islative bodies as “institution^ where, here, ate” targets as the law a form far equipped judicia- [are] better than the of commercial has “traditional ry to amass and evaluate the vast amounts ly subject been regulation,” to extensive bearing of data upon legislative questions.” Anderson, 294 F.3d at or where the Sys. Turner Broad. Inc. v. Fed. Comm. regulation fits within a broader regulatory Comm’n, policy Channel, framework. Clear Cf. (1997) (internal quotation L.Ed.2d 369 (“[I]t F.3d is not this Court’s omitted). marks and citations Like the guess role to second City’s plan urban majority, issue, I feel no need to decide the decisions.”) ning as I would conclude that even without deference, applying Turner Accordingly, in evaluating legislative meets its burden. I Because feel the ma- findings and conclusions the context of a burden, jority however, overstates that commercial speech regulation, we do not explain briefly what I prevail- consider the necessarily evidence, demand hard particu- ing standard to be. where, here, larly, yet the statute had take effect when first challenged, but in- note, appellants correctly

As Turner did government stead ask “whether the is able not address restriction on commercial support to its restriction on speech, speech by a context in which Supreme Court, adducing] empirical either Turner, support or at independent of has re reasoning least sound peatedly urged behalf of its legislative deference to (Li findings. Ayotte, measure.” 550 Ayotte, (Lipez, See F.3d 93 F.3d J., J., pez, concurring in concurring part and part dissenting dissenting and (“[T]he (internal in part) general part) quotation principle legisla marks and altera- omitted) added); tive deference” articulated in Turner tions (emphasis “also see also (“A compatible is with the Court’s id. at 55 state go beyond commercial need not speech precedent.”). Specifically, demands of common sense to show that a Court has found that promises directly commercial statute to advance an speech doctrine allows “some room for the government identified (citing interest.”

Central finding Hudson controls ground”). "no need in this case to break new Freeman, 191, 211, Channel, v. 504 U.S. 112 rect.’” Burson Clear 594 F.3d at 94 (1992))). 1846, 119 Ward, (quoting L.Ed.2d 5 S.Ct. U.S. at 109 S.Ct. 2746). review, Engaging in such I would declining The majority, while to deter- directly conclude that the statute advances appropri- mine what level of deference is each of the interests in asserted a material ate, contends that Channel should Clear be manner, and that it is “reasonably propor- to limited the context “commercial bill- tional” say which is that it does not Maj. Op. boards.” at 279-80. There is burden “substantially speech more than is nothing in language opinion that necessary government’s further le- much, indeed, suggest as the Clear gitimate Id. at interests.” opinion Channel cites Ward v. Rock Racism, Against 491 U.S. 109 c. 2746, 105 L.Ed.2d 661 case that —a First, I advertising did involve outdoor at all— would find on this record that section 17 proposition “directly for that deference to a advances” all three of government’s determination of Vermont’s reasonable- asserted substantial interests. appropriate. Channel, respect ness is With See Clear to cost containment and the Moreover, public health, 594 F.3d at 104. found, as noted the district court above, entirely Clear record supports finding that, Channel consistent sec- a much tion 17 body with broader of our materially case law advances both. The rec- making clear ord legislative that deference to establishes that com- findings panies spend the context to “detail” restrictions on billions new brand name speech and, particularly, prescription drugs commercial that are more — expensive, heavily regulated although not necessarily more effective, industry appropriate. generic than class equivalents —is potential whose effects and risks are Accordingly, proceed ask wheth- less well those known than associated with section 17 “directly er advances” at least generic Sorrell, equivalents. class government one of the three asserted in- F.Supp.2d at 451-54. record further terests and whether it “not more exten- detailing establishes that works—doctors necessary than serve sive inter- th[ose] who are more likely “detailed” are to pre- est[s],” I engage in de novo review of the scribe new drugs, despite brand name Corp. record. Bose Consumers Union fact generic equivalents class are U.S., Inc., more their cost-effective and risks are bet- (1984). 80 L.Ed.2d 502 But in so Finally, ter known. Id. the record estab- doing, I do my judgment not substitute for lishes that PI data is a critical tool for of the legislature and instead defer to increasing the effectiveness of detailing. body’s determinations where “reason- Health, example, IMS promises “big Channel, Clear 94; able.” 594 F.3d at see clients, returns” for its PI noting Ayotte, J., also at 93 (Lipez, F.3d a sample client its “increased market share in concurring part in dissenting part) and 86% with PI data.” Id. at 451. (“If government the requisite makes the showing, we legislative defer to the judg- Vermont the thus took reasonable measure.”). adopt ment to challenged the course of use of restricting that critical Moreover, I am cognizant By the context in tool. pharmaceutical preventing com- passed data, which the panies restriction was and ex- PI using section 17 amine section 17 “in ‘to the detailing effective, relation overall makes less which in turn, the problem government seeks to likely cor- makes it that less doctors will majority’s that the the conclusion cost-effective, potential- place, and less prescribe generic too indirect to survive Central drugs name over statute is riskier ly brand bewildering. nothing “sound reason- equivalents. That Hudson is short class by the amply supported ing,” which is doubt, ways No there are more direct including testimony expert witnesses— promote contain costs or Vermont could other witnesses—and appellants’ some note, health, them, more many of I far state, by is sufficient evidence adduced the First of detailers’ activities and restrictive the satisfy prong of Central to the second the regulation conduct than Amendment F.3d Ayotte, 550 at 93 Hudson standard. the But that is not what actually passed. concurring and J., part in dissent- (Lipez, test of the Central Hudson prong second ing part). in Instead, that de- requires. all standard otherwise, concluding in majority, the “harms” the state identi- mands is that evi- dispute of the state’s does and that restriction will [the] fies “are real court’s find- or contest the district dence to a material de- fact alleviate them Instead, argues ings. it the “route” Anderson, F.3d 462. gree.” 17 furthers the state’s inter- which section find, record, on this that would is to intermediate ests “too indirect survive The evidence devel- meets that standard. However, scrutiny.” Maj. Op. at 279. it is ma- oped unchallenged and below majority very that “route” that same jority here establishes that harms— travels in to find a First Amendment order i.e., and health care costs exorbitant apply implication thus a need to Cen- —and real, patient safety and threats —are place. the first As the tral Hudson —in 17, by restricting PI that access to section implicates majority argues, section 17 data, difficult and detailing makes more it re- First Amendment interests because turn, effective, which, less reduces PI stricts data which turn access pressure prescribe on more ex- doctors ability to [detail] “affects manufacturers’ Indeed, as pensive, proven drugs. less identify by making ... those harder above, majority agrees that discussed physicians message whom the will be likely section 17 is to be effective in this detailing and tailor the most relevant regard. messages physicians’ on based individual Moreover, I note I would find that also In prescribing Maj. Op. habits.” “directly that advances” the section words, First majority’s other Amend- i.e., “protecting third state’s interest — holding premised ment under- prescribing privacy prescribers standing that 17 not travels section question, information.” the law Without travels route route but success- private the flow of in- restricts otherwise fully purpose making achieves its —it prescribing habits formation about doctors’ effective, detailing difficult and less more they provide care to their patients. promotes which in turn the state’s assert- seriously party disputes Appel- No that. pro- costs controlling ed interests lants that the interest cannot be contend Sorrell, tecting public health. Cf. “directly deemed advanced” because sec- F.Supp.2d. (“strongest at 451 evidence” permits tion 17 still the sale use of advances state interests purposes. preliminary data for other As fact “if PI not help data did sell matter, supports I note that record companies new drugs, it.”) just that section 17 does not buy Having found section conclusion would not dramatically sufficiently reduce but reduces 17’s route direct establish PI the district court spread in first data. As the First Amendment violation

295 data, found, finding that, with stricts commercial respect pharmaceu- speech—a above, companies mining appel- the data as set forth I tical are doubt—the restriction Sorrell, “only imposed both paying lants’ customers.” is minimal indirect. At most, important, indirectly 17 F.Supp.2d 631 More section limits the mes- sage by convey preventing what amounts to an “underinclusiveness” detailers them availing “tailoring” in from message is not the context of their on a argument based Hudson, require particular not past which does doctor’s habits. prescribing Central de scrutiny. Posadas Puerto The law does not otherwise affect the mes- strict See Assocs., deliver, sage they directly Rico 478 106 S.Ct. nor does it re- U.S. (1986) (statute’s way. Indeed, strict detailing L.Ed.2d 266 “un- as notes, controlling majority not of de- section not ... derinclusive[ness]” “does “directly directly marketing termination as to whether it ad- restrict the practices interests); Channel, Maj. Op. state Clear detailers.” at 277. vances” (“[T]he Supreme at 110 Court Given that minimal and indirect burden clear has made that underinclusiveness on speech, section 17 inherently is distinct defeat a claim that necessarily will not “categorical” the sorts and direct materially stat interest been ad- has Supreme bans on commercial speech vanced.”). All that Central Hudson de- previously Court struck has down. See regulation materially is that a mands ad- Ayotte, (Lipez, J., 550 F.3d at 97 concur- harm, plainly real section 17 vance a which (“[T]he ring part dissenting in part) does. speech imposed on by restriction the Pre- Accordingly, I would find that section 17 scription significantly Act is more limited meets the second Central Hudson factor. than similar restrictions on commercial speech by that have been considered

d. Supreme complete It neither Court. is advertising ban on of a The third Central Hudson factor re- product ... nor a prohibition blanket on quires consideration whether statute (internal solicitation.”) in-person citations necessary is “not more extensive than omitted). It is with that limited serve” the state interests. burden asserted Be- imposed mind, cause, noted, by section 17 I tailoring” this “narrow “proportion[ality]” consider the of the law. requirement is not “least restrictive test, fit “that means” we look for a I would find that the minimal and indi- necessarily not but perfect, reasonable” rect imposes burden section on and ask whether the restriction is one is not than necessary “more to further” scope proportion “whose is in inter- government’s three asserted interests. est served.” Greater New Orleans Broad. Channel, Clear at 104 (quoting F.3d Ass’n, 527 U.S. at 119 S.Ct. 1923. Fox, 3028). U.S. we look for “proportion[al- directly Because thus statute three advances substantial ity],” requires inquiry inherently ways, us state interests material and it simply to evaluate the extent which does so imposing exceedingly limited interests, such, speech. the statute furthers state but on commercial I burdens As quantify then also to balance the actu- find a “reasonable fit” between the bur- speech. al It imposed imposed burden is this dens and the interests furthered. inquiry majority wholly finding, many latter In so I note that would analysis sidesteps begin proposed appellants its but that the alternatives with, majority actually extent because to the re- are far more 296 majority the that Alternatively, contends activities. For appellants’

restrictive “narrowly not be- section 17 is tailored” sug- example, mining appellants the data “less cause failed to consider “limit Vermont the could instead advertis- gest state Maj. speech-restrictive means available.” were unnec- that it concluded ing drugs noted, among Op. at As those “less majority 280. essarily expensive,” while majority speech-restrictive” measures generic “mandatfing] the use suggests, generic the use of posits mandating are ... for drugs as a first course of treatment drugs. Alternatively, majority sug- Part receiving those Medicare patients all that, among things, gests other Maj. Op. The D funds.” at 280. state of a could await results “counter- regulation promotes a that adopted instead adopted by the speech” already measure directly regulat- all three interests without First, none of these “less restric- mes- state. ing speech or the content of detailers’ tive” would all three state means address sages, unduly interfering without such, further the As interests because none would prescribing habits of doctors. in protecting a state’s substantial interest regula- I find it to be “reasonable” would grounds alone is choice, privacy. that medical That tory one deserves deference Channel, not seri- accepting 594 state’s decision to from this Court. See Clear ously pursue those alternatives. F.3d 104. Cf. Ctr., Thompson v. Western States Med. 17 majority contends section 152 “narrowly cannot tailored” be- be deemed (2002) (“[I]f the Government L.Ed.2d cause it in several re- is overinclusive could achieve its interests a manner that First, spects. majority contends that speech does not restrict ... the Govern- ap- because it section 17 is over-inclusive so.”). ment must do regard plies “without to whether the second, above, as of the many But noted drug that pertains to a is effi- less ma- speecA-restrictive alternatives the However, Maj. Op. at cacious.” are, jority considers be “available” very harm is section seeks avoid fact, ap- far more on intrusive restrictions aggressive marketing drugs whose effi- pellants’ practices pre- or business doctors’ cacy drug is yet not known because scribing habits. And while Central Hud- subject not actual has been much use progeny son and its make clear that Alternatively, ma- patient experience. may state default restric- jority is over- contends section other, tions effective reme- equally where it inclusive even where no applies because available, body dies are I do not read that generic alternative exists or where a new require adopt more law to state far drug “unique.” majority’s analysis, is simply restrictive and intrusive measures however, overlooks the state’s third as- the less im- because restrictive measure in protecting serted interest —that medical speech. poses an incidental burden overlook that privacy. Because do not where, interest, here, reject Finally, leg- is I would overinclusive- state both heavily arguments already regulated on the within an ground islating ness field, protecting particular owe deference to the furthers state interest we by prohibiting specific regulatory medical choice the state makes. privacy transfer Anderson, Especially irre- See at 463. marketing purposes data for F.3d context, drug not the of this spective of whether the brand-name role being generic guess” legislature’s has a Court to “second de- detailed is effective or equivalent. regulatory approach cision as to which 297 Fox, (2008), S.Ct. 170 685 prohibits 492 109 L.Ed.2d best. U.S. See Channel, It 3028; regulating 594 F.3d at states from occur 105. “commerce Clear instead, ring wholly to is, [a] our role ensure that outside State’s borders.” Inst., 324, 332, “reasonably v. Beer 491 propor- Healy chosen is U.S. 109 restriction (1989). it the interests furthers. Section S.Ct. 105 L.Ed.2d 275 In tional” to Indeed, evaluating the ma- state 17 that standard. whether a law violates the meets Clause, Supreme to the significant argument no dormant Commerce jority offers engage propor- primary Court has articulated two con contrary does not —it first, analysis con- a concern about tionality at all—and instead cerns: “economic is, proportionality” protectionism regulatory verts “reasonable meas —that aggressive designed a far more form into ures to benefit in-state interests standard effect, form, by [interests],” if not inquiry burdening which out-of-state Davis, 337-38, 553 striking bears resemblance strict scruti- U.S. at 128 1801 S.Ct. (internal omitted); and, ny. quotation marks second, a leg concern about “inconsistent proceed unwilling I am down or incompatible regu islation” cross-state where, road, here, the law particularly regimes latory “arising from the projection the sale use of an informa restricts regulatory regime of one state into the does not di product tional data —and —PI State,” jurisdiction of Healy, another 491 speech. I rectly limit commercial Because 337, 109 U.S. at find that section constitutes would restriction satisfies Cen reasonable implicates Section 17 neither concern. Hudson, tral I would defer to the state’s against Section 17 does not discriminate particular that this method of conclusion out-of-state entities favor of in-state furthering its substantial interests best. competitors nor it imposing reg- does risk Channel, I F.3d at 105. See Clear ulatory obligations inconsistent with those would thus conclude the extent of other states. Instead it restricts the section 17 can be construed as a restriction sale of data within collected the state and speech, on commercial satisfies Central of that the use data within the That state. Hudson and should therefore be affirmed. mining appellants seek to take that compile data out state to it does not

IV. them of in- relieve restrictions on their I appellants’ Because would find that state of that data and re- purchase in-state fails, challenge briefly Amendment I First Mills, sale of that data. Cf. mining appellants’ the data addi- address (finding “implicates similar Maine statute tional Commerce Clause chal- dormant none” the “concerns central to the [] lenge. reject challenge I would as way Supreme Court has framed the well, substantially the reasons cogently dormant Clause in recent Commerce its Sorrell, set forth the district court. See opinions”). F.Supp.2d at 457-59. Accordingly, I would find no basis so-called “dormant Commerce jurisprudence dormant Commerce Clause Clause,” im- “negative which refers to the statute. disturb Vermont’s

plication” Supreme long Court has against interference in Con- drawn state V. authority gress’ regulate constitutional commerce, Dep’t striking majority interstate Revenue In down Davis, Ky. statutory 128 S.Ct. not ban on U.S. misconstrues Accordingly, sponse its statute effects. as a private information access to respectfully dissent. restriction, from the law but it then breaks Court, first, labeling data miners’ in this protected First “dry information” sale second, and, in activity, apply-

Amendment of Central Hudson

ing aggressive an form legis- insufficient deference

that affords findings As

lative and determinations.

result, sign not on either I cannot and do JENKINS, Petitioner-Appellant, or manner majority’s outcome Taiwu it thereto.

by which arrives above, transfer of has noted As Gary GREENE, Respondent-Appellee. business, with those burgeoning become 09-3623-pr. No. Docket frequently in hav- engaged such transfers engaging expressive no intention of ing Appeals, United States Court For the rea- communicative conduct. Circuit. Second above, am unwilling forth I sons set April 2010. Argued: majority’s conclusion that such accept the Dec. Decided: right operations have an inherent business as a shield invoke the First Amendment regulation simply be- against reasonable “dry informa-

cause their business deals Moreover, I dry goods. rather

tion” than majority’s that the

express serious concern First of the Amend-

discussion interests here but also of the

ment at issue imposed by Central Hudson will

standard unduly inappropriately diffi-

make properly

cult for states to and constitution-

ally regulate furtherance substantial

interests, very including a state’s serious private in the infor- protection

interest

mation. 17 as legiti-

I thus section would affirm

mate restriction on access information few, any, commercial conduct with if on First Amendment ac-

attenuated effects

tivity. Alternatively, even were I to con- First

clude restricts activity, applying

Amendment Central

Hudson, greater far would afford defer- eminently legisla- to the reasonable

ence judgments

tive the state has made here in- substantial state

furtherance several reasonably proportional re-

terests and

Case Details

Case Name: IMS Health Inc. v. Sorrell

Court Name: Court of Appeals for the Second Circuit

Date Published: Nov 23, 2010

Citation: 630 F.3d 263

Docket Number: Docket 09-1913-cv(L), 09-2056-cv(CON)

Court Abbreviation: 2d Cir.