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Businesses Need Free Speech Too
Political Censorship Comes in Many Guises, Beats Up on Energy Producers
The Chick-fil-A “buycott” of August 2012 in response to mayors planning to block franchise locations was a moment of unity for the normally silent majority. Americans en masse enjoyed chicken sandwiches on "Appreciation Day," organized by former Arkansas Governor Mike Huckabee, and told politicians to stop targeting businesses for their political and cultural positions.
Since then, however, the problem of political retribution against businesses has worsened, along with a broader decline in respect for the rule of law. The growing urge to use censorship to promote or quash a particular viewpoint has enticed members of both parties to wield the levers of power, requiring both electoral accountability from the public as well as judicial oversight. As more businesses feel compelled to adopt political initiatives and positions, epitomized by ESG ratings, politicians and regulators are attempting to exert more influence over them.
Florida Governor Ron DeSantis, for example, has punished the Walt Disney Company for opposing his state’s so-called Don’t Say Gay law. On February 27, he revoked Disney World's self-governing status after more than 50 years. Rather than hand 25,000 acres to a local municipality with elected representation, DeSantis put Reedy Creek under state-level management. With his handpicked board already throwing its weight around, one can see why the Walt Disney Company quieted down and replaced the CEO that tussled with DeSantis.
For the First Amendment to be meaningful, it must protect speech that offends or causes discomfort. Unfortunately, that tends to be forgotten when it contravenes populist and interventionist sentiments, especially when the speech in question comes from businesses through advertisements or executive statements.
Commercial speech that contravenes the sensibilities of some environmentalists has become the latest target of lawsuits around the country. Energy companies that advertise investments in renewable energy and technology that lowers carbon emissions now find state attorneys general jumping down their throats. Progressive attorneys general contend that reductions cannot be touted while these companies are still producing significant carbon emissions. Apparently, the threat to the environment overrides free speech.
The goal of these lawsuits at the municipal and state levels is to use every legal trick available to get energy companies to pay for their alleged responsibility for global warming. Some suits, for example, are asking courts to decide whether to expand the scope of public-nuisance torts. This would essentially allow states to legislate climate policies from the bench.
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One might think that federal dismissals of state-based cases would be the end of the story on the grounds that federal law takes priority on environmental policy. Whether those rulings are correct or not, from the New York Supreme Court and a US District Court in San Francisco, they have failed to dissuade the activists in attorneys-general clothing.
Their new strategy to circumvent the federalism question is to sue energy producers under state securities and consumer protection laws. Even if company statements are true, new lawsuits allege that energy companies touting their environmental bona fides is greenwashing.
In its lawsuit against ExxonMobil, Massachusetts admits it is “technically true” that the company’s newer gasoline and motor oil products reduce emissions compared to standard oil and gas products. However, the state claims that placing this in an advertisement—without mentioning that fossil-fuel consumption is a threat to humanity—misleads consumers.
Similarly, a lawsuit filed in New Jersey in late 2022 claims that a Shell campaign in the Washington Post promoting its investments in lower carbon fuels and alternative energy misleads consumers. It does not matter that the company is investing in alternative energy and lower carbon fuels; the contention is that the claims could imply a magnitude beyond the reality.
These legal actions are thinly veiled excuses for punishing companies for promoting their activities that rub some environmentalists the wrong way. Shell and ExxonMobil are not primarily in the renewable-energy business, nor are the two companies trying to trick anyone. By any measure, fossil fuels will remain crucial economic inputs for decades to come.
Especially in low-profile cases, lawfare is a tactic that harms political targets without alerting the electorate. Lawfare, which works through litigation, forgoes laws passed in a transparent manner. It favors motivated environmentalists because the electorate needs fossil fuels and will resist impediments to their supply. In other words, arrogant political insiders are bending other policy instruments to their own narrow ends.
The situation is precarious because, should some of these cases prevail, they will undermine decades of First Amendment jurisprudence on commercial speech. This would have far-reaching constitutional implications for companies in other sectors and open the floodgates for more overt regulation of what companies can and cannot say.
At present, commercial speech does not receive precisely the same First Amendment protection as pure political speech. However, the Supreme Court has recognized, particularly in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc (1976), the importance of free-flowing commercial speech in communicating information to consumers. The notable exception is the Central Hudson test, from a 1980 case, which allows the prohibition of “communication more likely to deceive the public than to inform it” or “commercial speech relating to illegal activity.”
Environmental protection, when it respects property rights, is a legitimate role of government. However, it must be subject to the rule of law and constituent accountability. Lawfare and censorship of commercial speech fall into the illiberal trap of the ends justifying the means.
Commercial speech needs to be protected precisely when it involves controversial political issues. That includes when energy companies and their shareholders petition the government or address consumers on global warming and other environmental concerns. Open debate fosters a prudent outcome that balances conflicting interests and respects the needs of consumers. The censors among us want their way or the highway, and they are weaponizing governmental power against those who disagree.