Institute for Justice Defends Small-Business Owners’ Speech

Supreme Court Brief Explains Compelled Disclaimer Confusion

Washington, D.C.—Today, the Institute for Justice asked the U.S. Supreme Court to protect small-business owners from being forced to mislead their customers. This request was made in an amicus brief filed by the Institute in support of the petition for writ of certiorari in the case of CTIA–The Wireless Association v. City of Berkeley, California. The Institute’s brief was joined by the National Federation of Independent Business.

“The U.S. Supreme Court has repeatedly held that the First Amendment protects commercial speech,” said Institute for Justice Senior Attorney Justin Pearson, the primary author of the Institute’s brief. “Importantly, the Court has recognized that a key part of that protection includes the speaker’s ‘choice of what not to say.’”

“Regulators consistently understate consumers’ need for clear, plain language,” Pearson said. “When the government forces small-business owners to include jargon on their labels or signs, it confuses customers and often destroys the businesses.”

The brief explains that compelled disclaimers are even more harmful to small-business owners than to their larger counterparts. Without the substantial advertising budgets possessed by giant companies, small-business owners, as stated in the brief, “overwhelmingly rely on the most cost-efficient forms of marketing, such as storefront signage and product labels. When government mandates undermine these limited forms of speech, the small business owners are often left with no other option but to go out of business. And many of them do.”

The Institute has seen firsthand the harm that can be done to a business by this kind of government-forced speech. A recent example was a lawsuit it litigated on behalf of a small Florida creamery in federal appellate court. Ocheesee Creamery was ordered by the state of Florida to label its pure pasteurized skim milk as “imitation milk product,” simply because the creamery refused, under government pressure, to inject the skim milk with vitamin additives. What the creamery was doing was perfectly legal, but they could not tell consumers they were selling skim milk; the government, instead, wanted them to lie and call what they were selling “imitation milk product.” The creamery had no advertising budget, and the mandated label confused customers, so the creamery was forced to stop selling its lawful product while the litigation progressed. Rather than bow to inaccurate government-forced speech, they had no choice but to take a product they could have sold to help fund their business and literally pour it down a drain.

“Government-mandated gibberish almost killed this wonderful, honest, lawful business,” said Pearson. “Thankfully, after our court victory, Ocheesee Creamery has resumed selling its skim milk, and the business is starting to rebound. If the court had ruled the other way, these amazing people would almost certainly have had to close down. The U.S. Supreme Court now needs to send that message nationwide in the CTIA case.”

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