Vermont Cert Petition Pet.10-779

8/3/2019 Vermont Cert Petition Pet.10-779

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No. -- --~i~.,.,~:; !5.i- ~ ~. _. :.,..IN THE

WILLIAM H. SORRELL, AS ATTORNEY GENERALOF THE STATE OF VERMO NT; JIM DOUGLA S, IN HIS

CAPACITY AS GOVERNOR OF THE STATE OF VERMONT;AND ROBERT HOFMANN, IN HIS CAPACITY AS

SECRETARY OF THE AGENCY OF HUMAN SERVICESOF THE STATE OF VERMONT,

Petitioners,V.

IMS HEALTH INC.; VERISPAN, LLC;SOURCE HEALTHCARE AN ALYTICS, INC., A SUBSIDIARY OFWOLTERS KLUWER HEALTH, INC.; AND PHARMACEUTICALRESEARCH AND MANUFACTURERS OF AMERICA,

Respondents.

On P etition for a Writ of Certiorarito the United States Court of Appealsfor the Second Circuit

PETITION FOR A WRIT OF CERTIORARIDAVID C. FREDERICKSCOTT H. ANGSTREICHKELLOGG, HUBER, HANSEN,TODD, EVANS & FIGEL,P.L.L.C.1615 M Street, N.W.Suite 400Washington, D.C. 20036(202) 326-7900

December 13, 2010

WILLIAM H. SORRELLATTORNEY GENERAL

BRIDGET C. ASAYCounsel of RecordSARAH E.B. LONDON

DAVID R. CASSETTYASSISTANT ATTORNEYS

GENERALOFFICE OF THE ATTORNEY

GENERAL109 State StreetMontpelier, Vermont 05609-1001(802) 828-5500([email protected])


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QUESTION PRESENTEDPrescription drug records, which contain informa-

tion about patients, doctors, and medical treatment,exist because of federal and state regulation in thishighly regulated field. This case is about informationfrom p rescription records know n as "prescriber-identifiable data." Such data identifies the doctoror other prescriber, links the doctor to a particularprescription, and reveals other details about thatprescription. Pharm acies sell this information to datamining com panies, and the data miners aggregateand package the d~ta for use as a m arketing toolby pharmaceutical manufacturers. The law at issuein this case, Vermonts Prescription ConfidentialityLaw, affords prescribers the right to consent beforeinformation linking them to prescriptions for particu-lar drugs can be sold or used for marketing. TheSecond C ircuit held that Vermonts law violates theFirst Amendment, a holding that conflicts with tworecent decisions of the First Circuit upholding simi-lar laws. The question presented is:

Whether a law that restricts access to informationin nonpublic prescription drug records and affordsprescribers the right to consent before their identify-ing information in prescription drug records is sold orused in marketing runs afoul of the First Amend-ment.


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iiPARTIES TO THE PROCEEDING

Petitioners Vermont Attorney General William H.Sorrell, Vermont Governor Jim Douglas, and Ver-mont Secretary of Human Services Robert Hofmannwere defendants in the district court and appellees inthe court of appeals.

Respondents IMS Health Inc.; Verispan, LLC (nowknown as SDI Health LLC); Source Healthcare Ana-lytics, Inc., a subsidiary of Wolters Kluwer Health,Inc. (now Source Healthcare Analytics, Inc., a subsid-iary of Wolters Kluw er Pharma Solutions, Inc.);and Pharmaceutical Research and Manufacturersof Am erica were plaintiffs in the district court andappellants in the court of appeals.


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iiiTABLE OF CONTENTS

PageQUESTION PRESENTED ..........................................iPARTIES TO THE PROCEEDING ...........................iTABLE OF AUTHORITIES ......................................viINTRODUCTION ....................................................... 1OPINIONS BELOW ...................................................2JURISDICTION .......................................................... 2CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED ...................................3STATEMENT ..............................................................3REASONS FOR GRANTING THE PETITION .......14

I . THE DEC ISION BELOW IS ERRONEOUSAND CONFLICTS WITH TWO RECENT FIRSTCIRCUIT DECISIONS UPHOLDING SUBSTAN-TIALLY SIMILAR STATE STATUTES ...................4A . The decision below ex plicitly re-

jected the First Circuits groundsfor upholding substantially similarstate statutes ..........................................15

B. The circuit conflict over drug datamining laws arises amidst an onJgoing, deep, and m ature conflict asto whether government may protectindividuals privacy rights consis-tent with the First Amendment .............6

C. The decision below is erroneousunder applicable First Am endmentdoctrine ...................................................18


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ivII. THE JUDGMENT BELOW CON FLICTS

WITH OTHER CIRCUITS DECISIONS ONWHETH ER, IF THE FIRST AMEND MENTAPPLIES, THE CENTRAL HUDSON TEST ISSA TISFIED ........................................................1A. The circuits conflict over the suffi-

ciency of the state interest .....................2B. The circuits conflict over the di-

rectness needed to effectuate thestate interest ...........................................23C. The circuits conflict over the suffi-

ciency of the S tates tailoring of itsrestriction ................................................25

III. THE ISSU ES RA ISED IN THIS PETITIONARE OF SURPASSING AND GROWINGIMPORTANCE ....................................................6A. Other States are considering legis-

lation to limit use of prescriptioninform ation in the same w ays asVermont, New Ham pshire, andMaine .......................................................26

B. Data m ining is an ever-expandingthreat to privacy, so clarifying theapplicable First Amendm ent prin-ciples in this area is critical ...................8

CONCLUSION .......................................................... 34APPENDIX:Opinion of the United States Court of Appealsfor the Second Circuit, IMS Health Inc., et al.v. Sorrell, et al., Nos. 09-1913-cv(L) & 09-2056-cv(Con) (Nov. 23, 2010) .............................................la


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V

M emorandum Opinion and Order of theUnited States District Court for the District ofVermont, IMS Health Inc., et al. v. Sorrell, etal., Nos. 1:07-CV-188 & 1:07-CV-220 (Apr. 23,2009) ........................................................................ 68aOrder of the United States Court of Appealsfor the Second Circuit, IMS Health Inc., et al.v. Sorre ll, et al., Nos. 09-1913-cv(L) & 09-2056-cv(Con) (June 26, 2009) ........................................119aRuling of the United States District Court forthe District of Vermont on M otion for Injunc-tion Pending Appeal, IMS Health Inc., et al. v.Sorrell, et al., Nos. 1:07-CV-188 & 1:07-CV-220(June 5, 2009) ........................................................ 121aStatutory Provisions Involved ..............................29a

Vt. Stat. Ann. tit. 18, 4631 ...........................129a2007 Vt. Acts & Resolves No. 80 (excerpt) .....134a


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viTABLE OF AUTHORITIES

PageCASES44 Liquormart, Inc. v. Rhode Island, 517 U.S.

484 (1996) .......................................................10, 30Bates v. State Bar of Ariz., 433 U.S. 350 (1977) ......31Bd. of Trs. of State Un iv. of NY v. Fox,492 U.S. 469 (1989) .............................................31Central Hudson Gas & Elec. Corp. v. Public

Serv. Commn, 447 U.S. 557 (1980) ............. passimCincinnati v. Discovery Network, Inc., 507 U.S.

410 (1993) ............................................................31Edenfield v. Fane, 507 U.S. 761 (1993) ....................30Florida Star v. B.J.F., 491 U.S. 524 (1989) ............. 19Greater New Orleans Broad. Assn, Inc. v.

United States, 527 U.S. 173 (1999) ................26, 30Houchins v. KQED, Inc., 438 U.S. 1 (1978) .............31IMS Health Inc. v. Ayotte:

550 F.3d 42 (1st Cir. 2008), cert. denied,129 S. Ct. 2864 (2009) .................................. passim129 S. Ct. 2864 (2009) ......................................... 34IMS Health Inc. v. Mills, 616 F.3d 7 (1st Cir.2010) .............................................................. passim

Lorillard Tobacco Co. v. Reilly, 533 U.S. 525(2001) ...................................................................30

Los Angeles Police Dept v. United ReportingPublg Corp., 528 U.S. 32 (1999) ......................... 111

Mainstream Mktg. Servs. v. FTC, 358 F.3d1228 (10th Cir. 2004) ...........................................20


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viiNatl Cable & Telecomms. Assn v. FCC,

555 F.3d 996 (D.C. Cir. 2009) ........................ 16, 17Reno v. Condon, 528 U.S. 141 (2000) ..................32, 33Rowan v. U.S. Post Office, 397 U.S. 728 (1970) .......20Rubin v. Coors Brewing Co., 514 U.S. 476

(1995) ................................................................... 30Seattle Times Co. v. Rhinehart, 467 U.S. 20

(1984) ................................................................... 19Sorenson Commcns, Inc. v. FCC, 567 F.3d

1215 (10th Cir. 2009) ...........................................17Thompson v. W. States Med. Ctr., 535 U.S. 357

(2002) .............................................................. I0, 30Trans Union Corp. v. FTC, 245 F.3d 809 (D.C.

Cir. 2001) .............................................................17Trans Union LLC v. FTC, 295 F.3d 42 (D.C.

Cir. 2002) .............................................................16U.S. West, Inc. v. FCC, 182 F.3d 1224 (10th

Cir. 1999) .............................................................17United States v. Miami Univ., 294 F.3d 797

(6th Cir. 2002) ......................................................32United States v. Stevens, 130 S. Ct. 1577(2010) .............................................................. 15, 16Va. State Bd. of Pharmacy v. Va. Citizens Con-

sumer Council, Inc., 425 U.S. 748 (1976) ......10, 31Zemel v. Rusk, 381 U.S. 1 (1965) ......................... 19, 31


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Vlll

CONSTITUTION, STATUTES, REGULATIONS,AND RULESFederal

U.S. Const.:Art. I, 8, C1. 3 (Commerce Clause) .......8, 9, 32Amend. I ...................................................passim

Drivers Privacy Protection A ct of 1994,18 U.S.C. 2721 et seq .................................. 3218 U.S.C. 2721(a) .........................................32

Fair Credit Reporting Act, 15 U.S.C. 1681et seq .............................................................. 17

Family Educational Rights and Privacy Actof 1974, 20 U.S.C. 1232g .............................3220 U.S.C. 1232g(b) .......................................32

Gramm-Leach-Bliley Act, Pub. L. No. 106-102, 113 Stat. 1338 (1999) ............................. 17

15 u.s.c. 18 u.s.c. 18 U.S.C. 21 U.S.C. 28 U.S.C. 42 U.S.C. 47 U.S.C. 21 C.F.R. 21 C.F.R.

6802(b) ..............................................322702(c) .............................................. 322710(lo) ..............................................32353(b)(1) .............................................. 41254(1) ................................................ 21320d-6 ............................................. 32551(c)(1) ............................................32310.200 ................................................ 41306.05 ................................................ 4


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Stateix

Cal. Fin. Code 4052.5 .......................................33Conn. Gen. Stat. 38a-988a(a) ...........................33N.J. Stat. Ann. 48:3-85(b)(1) ............................332007 Vt. Acts & Resolves No. 80 ...........................3Vt. Stat. Ann . tit.Vt. Stat. Ann . tit.Vt. Stat. Ann. tit.Vt. Stat. Ann. tit.Vt. Stat. Ann. tit.Vt. Stat. Ann. tit.Vt. Stat. Ann. tit.Fla. Admin. Code

18, 4631 ........................ passim18, 4631(c)(1) ......................... 818, 4631(d) ............................. 818, 4631(e)(1) ......................... 818, 4631(e)(7_) ....................... 826, 2022(14) ........................... 426, 2041(a) ............................. 4r. 61H1-23.001 ....................... 19

105 Mass. Code Regs. 970.005(2)(g) ...................27N.M. Code R. 13.1.3.12 .....................................33Vt. Bd. of Pharmacy Adm in. Rules 9.1

(eff. Oct. 2009) .................................................. 4Vt. Bd. of Pharmacy Admin. Rules 9.24

(eff. Oct. 2009) .................................................. 4Vt. Bd. of Pharmacy Admin. Rules 9.26

(eff. Oct. 2009) .................................................. 4

LEGISLATIVE MATERIALSS.B. 1234, 49th Leg. 2d Reg. Sess. (Ariz. 2010) ....... 7Assem. B. 2112, 2009-10 Reg. Sess. (Cal. 2010) ......27S.B. 1046, Gen. Assem. Jan. Sess. 2009 (Conn.

2009) ..................................................................... 27


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X

B17-364, 2007 Council (D.C. 2007) ..........................27S.B. 1402, 111th Reg. Sess. (Fla. 2009) ...................27H.B. 820, 115th Gen. Assem. 2009-2010 Reg.

Sess. (Ga. 2009) ...................................................27S.B. 449, 25th Leg., Reg. Sess. (Haw. 2009) ............27H.B. 1459, 95th Gen. Assem., 1st Reg. Sess.

(Ill. 2007) ...............................................................27H. File 622, 83rd Gen. Assem., 2009 Sess.

(Iowa 2009) ........................................................... 27S.B. 229, Sess. of 2009 (Kan. 2007) ..........................27S.B. 1040, 427th Sess.. (Md. 2010) ............................27S.B. 17, 186th Gen. Court, 2009 Reg. Sess.

(Mass. 2009) .......................................................... 27S. File 1044, 86th Legis. Sess. (Minn. 2009) ............7H.B. 794, 95th Gen. Assem. 1st Reg. Sess.

(Mo. 2009) .............................................................27H.B. 394, 61st Leg. 2009 Reg. Sess. (Mont.

2009) ..................................................................... 27S.B. 231, 72d Reg. Sess. (Nev. 2007) ........................ 27Assem. B. 3764, 213th Leg., 2d Ann. Sess.

(N.J. 2009) ............................................................ 27S.B. 4111, 231st Legis. Sess. (N.Y. 2009) ................27S.B. 159, 2007-2008 Sess. (N.C. 2007) ..................... 27S.B. 379, 52d Leg., Ist Reg. Sess. (Okla. 2009) .......27H.B. 2680, 75th Legis. Assem., 2009 Reg. Sess.

(Or. 2009) ............................................................. 27H.B. 5093, 2009 Legis. Sess. (R.I. 2009) ..................27S.B. 1620, 77th Leg., Reg. Sess. (Tex. 2007) ............ 7


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The Vermont Attorney General, for himself and theother petitioners, respectfully petitions for a writof certiorari to review the judgment of the UnitedStates Court of Appeals for the Second Circuit in thiscase.

INTRODUCTIONThis case raises an important First Amendm ent

question that has divided the lower courts: whetherlaws that restrict access to or commercial use of non-public drug prescriber information implicate FirstAmendm ent rights and, if so, what type of FirstAm endm ent review applies. The courts of appealshave reviewed several state laws that restrict accessto or use of prescribing data for commercial market-ing purposes, and have divided sharply on theseissues. In creating an acknowledged conflict with theFirst Circuit, which has u pheld similar laws, theSecond C ircuits decision invalidating Vermonts lawcalls into question the constitutionality of numerousfederal and state laws that protect information pri-vacy by restricting access to or use of private infor-mation.

This marked split in the lower courts has emergedagainst the backdrop of an ever-increasing practice ofcommercial data mining and concom itant legal ef-forts to protect information privacy through laws likeVermonts. Data m ining is a "burgeoning business,"App. 66a, and the practice makes it increasingly dif-ficult for any pe rson to limit the dissem ination ofpersonal information in an age in which such infor-m ation is routinely m aintained and transferredthrough electronic means. To cite just one pertinentexample, the use of electronic medical records is rap-idly expanding, and more and more Americans arerelying on private companies to maintain the privacy


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2of their personal health information. The co urt ofappeals, however, rejected Vermonts significant in-terest in protecting medical privacy, despite the factthat Vermonts law regulates access to and use ofnonpublic medical records that reveal the treatmentdecisions made by doctors for their patients.

The privacy interests at stake here are particularlykeen - and the lower courts First Amendment analy-sis is particularly troubling - because prescriptiondrug records are a product of government regulation.Neither doctors nor patients voluntarily provide in-formation to pharmacies; rather, they are required toprovide information to receive necessary health careservices. If governments cannot restrict the confi-dentiality of informar~ion in this con text, then it isdifficult to conceive how any data privacy law wouldsurvive constitutional scrutiny.

Petitioners urge the Court to grant the petitionboth to resolve the co~]flict in the lower courts and toprovide needed guidance on these important issues.

OPINIONS BELOWThe opinion of the court of appeals (App. la-67a)

is not yet reported ,(but is available at 2010 W L4723183). The mem orandum opinion and order ofthe district court (App. 68a-118a) is reported at 631F. Supp. 2d 429.

JURISDICTIONThe judgment of the court of appeals was entered

on November 23, 2010. The jurisdiction of this Courtis invoked under 28 U.S.C. 1254(1).


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CONSTITUTIONAL AND STATUTORYPROVISIONS INVOLVEDThe First Amendment to the United States Consti-tution provides in relevant part:Congress shall make no law ... abridging thefreedom of speech[.]

Vermonts Prescription Confidentiality Law, codifiedat Vt. Stat. Ann. tit. 18, 4631, and the legislativefindings set forth in 2007 Vt. Acts & Resolves No. 80,are reproduced at App. 129a-140a.

STATEMENTPharm acies are required by state and federal law

to collect information when dispensing prescriptiondrugs. These prescription drug records identify theprescribing physician, as well as details about thepatient. Doctors and patients have no choice but tosupply the information in order to obtain prescriptionmedications.

The rapid transition to electronically stored recordshas, in recent years, allowed pharm acies to obtainadditional profits by selling information from theirprescription drug records to data mining companies.The data m iners in turn sell the data to pharmaceu-tical manufacturers, and those com panies use thedata as a tool for the mark eting of prescriptiondrugs to doctors. The central question posed by thiscase is whether, consistent with the First Amend-ment, Vermont may require doctors consent beforethe doctors identifying information in prescriptiondrug records may be sold and used for marketingpurposes.

1. This case com es to this Court after a full evi-dentiary trial. The facts set forth in this Statementare drawn from the trial record, the legislative histo-


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ry, and the findings of the courts that have reviewedthese laws. Much of the evidence about the acquisi-tion and use of prescriber-identifiable data comesfrom industry documents and employees.

ao Pharm acies obtain information about doctorsand patients because the dispensing of prescriptiondrugs is extensively regulated by federal and statelaw. The federal Food and Drug Adm inistration ap-proves new drugs and decides whether and for howlong a prescription is necessary to dispense a particu-lar drug. See, e.g., 21 U.S.C. 353(b)(1) (requiringwritten prescription for certain drugs); 21 C .F.R. 310.200 (duration of prescription requirement).Only licensed pharmacies and practitioners may dis-pense prescription drugs. See, e.g., Vt. Stat. Ann. tit.26, 2041(a) (requiring license for practice of phar-macy), 2022(14) (defining practice of pharmacy). InVermont, as elsewhere, a pharmacy by law must col-lect and maintain detailed health and other identify-ing information from patients, including the name ofthe patients doctor. E.g., Vt. Bd. of Pharmacy A d-min. Rules 9.1, 9.2.4, 9.26 (eff. Oct. 2009); see also21 C.F.R. 1306.05 (same for controlled substances).Although doctors and patients have no choice but toprovide this information for the patient to receive aprescription drug, the sam e is not true for over-the-counter medications. If a doctor recom mends anover-the-counter medicine, a patient may pay cashfor the medicine at a pharmacy or grocery store, andleave without volunteering any information aboutherself or her doctor.

b. The prescribing data sold by pharm acies andpurchased by the respondent data miners is extra-ordinarily detailed and reveals substantial informa-tion about the doctor-patient relationship - including


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5the treatment of individual patients. Each prescrip-tion record sold by a pharm acy contains "the pre-scribers name and address, the nam e, dosage andquantity of the drug, the date and place the prescrip-tion is filled and the patients age and gender." App.70a. The patients name is redacted using an encryp-tion program that allows pa tient information to bemonitored. App. 37a n.4; C.A. App. A3820, A3822.Because the encryption results in a unique identifierfor each patient, data miners can compile informa-tion that "track[s] [a] person over time and deter-mine[s] behaviors" - including the various drugs pre-scribed to that patient and the different doctors whowrote the prescriptions. C.A. App. A101-102. One ofthe respondent data miners has "track[ed] the activi-ties of over two hundred million" patients, linkingpatients, products, prescribers, payers, and pharma-cies. Id. at A98, A100-101.

Put in real terms, then, the data miner purchasingVermont prescription records learns not only that Dr.Jones, in Montpelier, wrote 25 prescriptions for anti-depressants in the past month, 15 for a generic anti-depressant, 5 for one brand-name drug X, and 5 foranother brand-name drug Y. The data miner alsofinds out that Dr. Jones prescribed a specific anti-depressant to a 50-year-old female patient who liveswithin a particular region in Vermont, and is furtherable to track the other drugs p rescribed to thatpatient and the pharmacies where that patient fillsthe prescriptions.

c. The principal use pharmaceutical manufactur-ers make of such data - indeed, for some pharma-ceutical manufacturers, the only use - is to m arketprescription drugs directly to doc tors, a practiceknown as detailing. App. 72a; C.A. App. A217. Sales


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court below to describe the use of prescribing data as"covert[]," App. 94a, 124a.

2. The V ermont legislature, along w ith state leg-islatures in New Hampshire and Maine, reviewedthe practice of pharmaceutical data mining in re-sponse to media reports and complaints from doctors.The Vermont Medical Society, the professional orga-nization for Vermont doctors, passed a unanimousresolution stating that "the use of physician prescrip-tion information by sales representatives is an intru-sion into the way physicians practice medicine," andasked the legislature to end the practice. E.g., C.A.App. A4197; App. 91a. The legislature consideredevidence from doctors, industry representatives, for-mer sales representatives, and medical researchers,among others. C.A. App. A4020-4039. Based on asubstantial body of ev idence, the legislature foundthat restricting the availability of prescribing datafor use in marketing would protect medical privacy,help control health care costs, and protect publichealth and safety.

After several months of hearings, the Vermont leg-islature passed the Prescription Confidentiality Law,which allows the use of prescriber-identifiable datain marke ting only if the prescriber has consented.See Vt. Stat. A nn. tit. 18, 4631. The law (asamended in 2008) provides in relevant part:

A h ealth insurer, a self-insured em ployer, anelectronic transmission intermediary, a pharma-cy, or other similar entity shall not sell, license,or exchange for value regulated records contain-ing prescriber-identifiable information, nor per-m it the use of regulated records con tainingprescriber-identifiable information for marketingor prom oting a prescription drug, unless the


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prescriber consents as provided in subsection (c)of this section. Pharmaceu tical m anufacturersand p harmaceutical marketers shall not useprescriber-identifiable information for marketingor promoting a prescription drug unless the pre-scriber consents ....

Id. 4631(d). Prescribers indicate on their licensingapplications or renewal forms whether they consent.Id. 4631(c)(1). The law does not restrict variousnon-commercial uses of the data, such as for healthcare research. Id. 4631(e)(1). It further allows "thesale, license, exchange for value, or use of patientand prescriber data for marketing or promoting if thedata do not identify a prescriber." Id. 4631(e)(7).

3.a. The data-miner respondents, IM S H ealth,Verispan, and Source Healthcare, filed suit in August2007, before the law took effect, claiming it violatedthe First Amendm ent and the dormant Comm erceClause. PhRMA, a trade organization for pharma-ceutical manufacturers, filed its own lawsuit assert-ing a similar First Am endm ent claim. The districtcourt consolidated the cases and held a five-daybench trial in July 2008. The court heard testimonyfrom eighteen witnesses and adm itted "reams ofexhibits, including the entire legislative history" intoevidence. App. 78a. The court also allowed severalmonths of post-trial briefing, including briefs in re-sponse to the First Circuit decision upholding a simi-lar New Ham pshire law. See IMS H ealth Inc. v.Ayotte, 550 F.3d 42 (1st Cir. 2008), cert. denied, 129 S.Ct. 2864 (2009).

The district court upheld the Prescription Confi-dentiality Law. Applying the Central Hudson test, itconcluded that the law directly advances the Statesinterests in protecting public health and reducing


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9health care costs. App. 82a, 95a, 97a (citing CentralHudson Gas & Elec. Corp. v. Public Serv. Commn,447 U.S. 557 (1980)). The district courts decisionexplains how the pharm aceutical industry usesprescriber-identifiable data to market brand-namedrugs directly to doctors. "Detailing leads to increasedprescriptions for new drugs over generic alternativeswhich are often more cost-effective," and the use ofthe data "amplifies the influence and effectiveness ofdetailing." App. 91a. The district court also found,based on expert testimony a t trial, that the use ofprescriber-identifiable data in m arketing threatenspatient safety. App. 95a. New drugs are not onlymore expensive, but also riskier, because their use,risks, and side effects are not yet fully understood.App. 97a. After recounting evidence about drugs likeBaycol and Vioxx, which were widely and unnecessa-rily overprescribed before being withdrawn from themarket for safety reasons, the court concluded that"[d]etailing encourages doctors to prescribe newer,mo re expensive, and potentially more dangerousdrugs instead of adhering to evidence-based treat-m ent guidelines." App. 95a. Turning to CentralHudsons narrow tailoring requirement, the courtfound that the laws "limited restraint," App. 87a, is"in reasonable p roportion to the States interests,"App . 99a. The law is "a targeted response to theharm of overprescription caused by detailers use of"prescriber-identifiable data. Id. The court also con-cluded that the law regulates Vermont transactionsand thus does not violate the dormant Com merceClause. App. 108a.

b. Following the district courts ruling, plaintiffssought an injunction to prevent the law from takingeffect pending appeal. The district court denied this


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10request, reiterating its findings that the law w ould"protect the health of Verm onters and contain healthcare costs." App. 127a . Plaintiffs renewed their re-quest for an injunction pending appeal with the courtof appeals. A three-judge panel denied the request,concluding that plaintiffs did not dem onstrate a clearor substantial likelihood of success on the merits.App . 120a. The Prescription Confidentiality Lawtook effect July 1, 2009.

c. In a sp lit decision, the court o f appeals invali-dated the law on F irst Amendment grounds. In con-flict with two recent decisions of the First Circuit, thepanel majority held that the law regulates comm er-cial speech, and further concluded that the State didnot m eet its burden of justifying the law unde rCentral Hudson. The court did not dispute any ofthe findings of the district court but instead con-cluded that the restriction on the use of prescriber-identifiable data did not serve the States interests ina sufficiently direct manner, because Verm ont hadneither "directly restrict[ed] the prescribing practicesof doctors" nor directly restricted detailing. App. 25a.The court analogized the restriction on the non -consensual use of prescriber-identifiable data toadvertising bans and to regulations that "entirelysuppress commercial speech." App. 25a-26a (quot-ing Central Hudson, 447 U .S. at 566 n.9; citingThompson v. W. States Med. Ctr., 535 U.S. 357(2002); 44 Liquormart, Inc. v. Rhode Island, 517 U.S.484 (1996); Va. State Bd. of Pharmacy v. Va. CitizensConsumer Council, Inc., 425 U.S. 748 (1976)). Thecourt also found that the law w as not narrowlytailored, reasoning that the law was a "categorical"restriction even though doctors are free to consent tothe use of their data for marketing. App. 32a. The


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11court suggested that the State had two other options:w aiting to assess the imp act of a new co unter-detailing program or "mandat[ing] the use of genericdrugs as a first course of treatment, absent a physi-cians determination otherwise, for all those patientsreceiving Medicare Part D funds." App. 30a-31a.

do Judge Livingston dissented, arguing that themajority op inion m isconstrued the statute, erred inapplying Central Hudson, and created "precedentlikely to have pernicious broader effects in a complexand evolving area of First Amendm ent law." App .35a.

First, Judg e Livingston sh arply criticized themajority for failing to recognize that "Vermonts lawoperates principally to prevent [plaintiffs] from ob-taining otherwise private [prescriber-identifiable]data, and as such, does no m ore than restrict theirunfettered access to information." App. 40a. JudgeLivingston relied on this C ourts ruling in Los An-geles Police Department v. United Reporting Publish-ing Corp., 528 U .S. 32 (1999), which held that astatute that restricted access to arrestee informationcollected by police departments did not violate theFirst Amendm ent. Judge L ivingston reasoned that,while prescriber data is in the hands of pharmaciesrather than the governm ent, pharmacies have thedata only "because the state has directed them to col-lect it." App. 41a. Thus, "Vermonts interest in con-trolling the further dissemination of that informationis not conceptually d ifferent" from Californias inter-est in United Reporting. Id. "Having mandated thecollection of... otherwise highly confidential infor-m ation, the state unquestionably has an interestin controlling its further dissemination." App. 40a.Because "pharmacies have access to and collect pre-


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12scription information only under the direction andauthority of state law," the statutes restriction onaccess to that information does not violate the FirstAmendment. Id.

Second, Judge Livingston observed that the major-ity opinion "overstate[d]" the States burden underCentral Hudson. App . 55a. No twithstanding herown de novo review of the record, Judge Livingstonnonetheless recognized that both Supreme Court andcircuit precedent called for "deference to legislativefindings in the context of restrictions on com mercialspeech - and, particularly, commercial speech in aheavily regulated industry." App. 56a.

Third, Judge Livingston concluded that the statutedirectly ad vances all three interests identified bythe State, and in so doing forcefully disagreed withher colleagues d isregard for the States interest inprotecting privacy. Judge Livingston noted that,"[w]ithout question, the law restricts the flow of oth-erwise private information about doctors prescribinghabits and the care they provide to their patients"and "dramatically reduces the spread of [prescriber-identifiable] data." App . 59a-60a. The law alsoadvances Verm onts interest in protecting patientsafety and reducing health care costs, because it"makes it less likely that doc tors will prescribe lesscost-effective, and po tentially riskier brand namedrugs over generic class equivalents." App. 58a.

Finally, Judge Livingston argued that, in applyingthe narrow-tailoring requirement of Central Hudson,the majority failed to take into account the "minimaland indirect" nature of the restriction. App. 61a.She agreed w ith Judge Lipez of the First Circuit thatVermonts law is "inherently distinct from the sortsof categorical and direct bans on commercial speech"


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13that this Court has invalidated. Id. Rather, the law,which does not directly restrict detailing, ban mar-keting, or prohibit in-person solicitation, "impose[s]exceedingly limited burdens on commercial speech."App. 62a . In finding the law to be a "reasonable fit"with the S tates interests, Judge L ivingston notedthat many of the proposed alternatives were "actual-ly far more restrictive" of plaintiffs activities. Id. Innoting her disagreement w ith the majoritys opinion,Judge L ivingston pointed out that the "transfer ofdata has become a burgeoning business" and ex-pressed her concern that the majoritys approach"will make it unduly and inappropriately difficult forstates to properly and constitutionally regulate infurtherance o f substantial interests, including astates very serious interest in the protection of pri-vate information." App. 66a.


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14REASONS FOR GRANTING THE PETITIONThis Court should grant review to resolve the splitof authority in the lower courts and to address press-

ing First Am endment issues that have emerged atthe intersection of information technology, inform-ation privacy, and commerce. The Second C ircuitsdecision in this case directly conflicts with decisionsof the First Circuit upholding similar laws. M ore-over, through its m istaken application of F irstAm endment principles, the decision calls into ques-tion other information privacy laws an d createsdoub t about the authority of states and the federalgovernment to protect information privacy. The gov-ernments interest in protecting privacy is strongestwhere, as here, the governm ent itself has requiredthe collection of otherwise nonpublic information. Byfailing to acknowledge that interest, the lower courtsdecision casts doubt on the authority of states andthe federal government to take meaningful steps toprotect information privacy.

The Courts guidance is warranted here, and thiscase presents an ideal opportunity to address howthe Courts precedents apply to restrictions on accessto and comm ercial use of personal information.I. THE DECISION BELOW IS ERRONEOUS AND

CONFLICTS WITH TWO RECENT FIRST CIRCUITDECISIONS UPHOLDING SUBSTANTIALLY SIMILARSTATE STATUTES.The States of Vermont, New Hampshire and Maine

enacted similar statutes, all designed to limit accessto prescriber-identifiable data for use in marketingprescription drugs to doctors. App. 7a-lla; IM SHealth Inc. v. M ills, 616 F.3d 7, 16 (1st Cir. 2010).Respondents IMS, Verispan, and Source HealthcareAnalytics challenged each of these laws, raising the


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15same First Am endm ent claims in each case. TheFirst Circuit has upheld the laws of New H ampshireand Maine. IMS H ealth Inc. v. Ayotte, 550 F.3d 42,45 (1st Cir. 2008), cert. denied, 129 S. Ct. 2864(2009); Mills, 616 F.3d at 13. In the decision below,the court of appeals expressly rejected the reasoningof the First Circuit, see, e.g., Ap p. 15a-16a, and in-validated Vermonts law.

A. The decision below explicitly rejected theFirst Circuits grounds for upholding sub-stantially similar state statutes.

The first point of disagreement between the F irstand Second Circuits in evaluating these substantiallysimilar state laws is whether the restriction on ob-taining information for marketing purposes restrictsspeech, and thus implicates the First Am endm ent.In its first ruling, the First Circu it held that NewHampshires restriction on obtaining prescriber-identifiable data for marke ting purposes regulatescommercial conduct, not speech. Ayotte, 550 F.3d at51-54. More recently, a different panel of the FirstCircuit adhered to the reasoning in Ayotte and heldthat M aines restriction on access to prescriber-identifiable data is a regulation of commercial con-duct. Mills, 616 F.3d at 19-20. The Mills court fur-ther held that this Courts recent decision in UnitedStates v. Stevens, 130 S. Ct. 1577, 1585-87 (2010), didnot undermine the holding in Ayotte. 616 F.3d at 20.

In deciding this case, the Second Circuit expresslyrejected the First Circuits approach. The court rea-soned that the acquisition, aggregation, and transferof data by data m iners is speech, and concluded thatVermonts law "restricts protected speech." App. 17a.Indeed, as the dissenting opinion observes, the ma-jority opinion even suggests that the aggregating and


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16selling of this data m ight be appropriately viewed asnoncommercial (that is, fully protected) speech. App.19a. A nd, unlike the First Circuit in Mills, themajority below saw a conflict between Ayotte and thisCourts reasoning in Stevens. App. 16a.Although the statutes vary slightly - New H amp-shire bans the use of prescriber-identifiable data formarketing, Vermont requires the doctors consent tothat use, and Maine allows doctors to prevent suchuse - those differences do not explain the outcomesor m inimize the conflict in the cou rt of appealsjudgments. The First Circuit found that New Hamp-shires outright prohibition on the use of the data formarketing restricted commercial conduct, not speech,whereas the court below reached the opposite conclu-sion for Vermonts less restrictive, consent-based law.As a result, the courts of appeals directly conflict overwhether the statutory restriction on access to datafor marketing purposes restricts protected speech.B. The circuit conflict over drug data mining

laws arises amidst an ongoing, deep, andmature conflict as to whether governmentm ay protect individuals privacy rightsconsistent with the First Amendm ent.

In addition to reaching a judgment directly con-trary to the First Circuit, the decision below extendsan existing conflict about the constitutionality of pri-vacy protections. The D.C. Circuit has issued severaldecisions upholding such laws. See Natl Cable &Telecomms. Assn v. FCC, 555 F.3d 996, 1003 (D.C.Cir. 2009) (denying review of FC C rule requiringaffirmative consent before consumers calling historycan be disclosed to certain third parties for market-ing purposes); Trans Union LLC v. FTC, 295 F.3d 42,53 (D.C. Cir. 2002) (upholding, against First Amend-


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17ment challenge, Gramm-Leach-Bliley Act privacyrules, including restriction on disclosure of consumeraccount numbers); Trans Union Corp. v. FTC, 245F.3d 809, 818 (D .C. Cir. 2001) (upholding, againstFirst Amendment challenge, restriction on sale oftargeted marketing lists under Fair Credit ReportingA ct). In National Cable, the most recent of theserulings, the D.C. Circuit acknowledged that its line ofholdings, and specifically its understanding of theprivacy interests at stake, conflicts with Tenth Cir-cuit precedent: "we do not agree that the interest inprotecting customer privacy is confined to preventingembarrassmen t as the Ten th Circuit thought .... Itis widely accepted that privacy deals with determin-ing for oneself when, how and to whom personalinformation will be disclosed to others." 555 F.3d at1001. Accordingly, notwithstanding that the TenthCircuit had previously invalidated an FCC rule re-quiring consumer consent for disclosures of telephonecalling information, see U.S. West, Inc. v. FCC, 18 2F.3d 1224 (10th Cir. 1999), the D.C. Circuit declinedjudicial review of a similar FCC rule implementing anew federal statute, National Cable, 555 F.3d at1003.1

In this case, the Second Circuit declined to acceptthe States privacy interest as substan tial for pur-poses of the Central Hudson standard. Its rulingthus aligns the Second Circuit with the Tenth C ir-cuit. The D.C. Circuit, in contrast, expressly recog-nizes that privacy encompasses the determination ofhow, when, and with whom personal information is

1 In a subsequent ruling addressing FCC privacy rules, theTenth Circuit adhered to U.S. West. See Sorenson Commcns,Inc. v. FCC, 567 F.3d 12 15, 1225 (10th C ir. 2009) (followingU.S. West in striking FCC rule restricting use of customerstelecommunications relay services data).


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18shared. The First Circuit in Mills likew ise recog-nized a sub stantial state interest in privacy. 616F.3d at 20. Granting certiorari in this case w ill allowthe Court to provide necessary guidance that will in-form how those issues should be decided as well.

C. The decision below is erroneous un derapplicable First Amendment doctrine.

The decision below stands as a seriously flawedapplication of First Amendment jurisprudence. Thecourts determination that Vermonts law restrictsprotected speech misconstrues the statute and mis-takenly analogizes this limited regulation on accessto and commercial use of data to broad restrictionson public information, conveyed through advertising.The Prescription Confidentiality Law does not limitthe information that pharmaceutical manufacturersmay provide about the products they sell. It insteadimposes a restriction on access to and commercial useof private medical information without consent. And,as Judge L ivingston correctly observed in her dis-senting opinion, the restriction applies to informationthat traditionally has not been publicly available andthat pharmacies obtain in the first place only b e-cause of government regulation.

The court below refused to view Vermonts law asa restriction on access to information because theprescribing data at issue is maintained by privateentities (typically, pharm acies) that are willing tosell it to data miners. In fact, restrictions onthe dissemination of nonpublic information held byprivate persons have long coex isted with the FirstAmendment. Many regulated professions have con-fidentiality rules; these rules, for example, preventlawyers and accountants from disclosing client infor-mation without consent. See, e.g., Model Rules of


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19Profl Conduct R. 1.6 (attorneys); Fla. Admin. Code r.61H1-23.001 (CPAs). Insurance companies, financialinstitutions, and even utility com panies hold non -public information that cannot be disclosed withoutconsent under state and federal law. See infra pp.32-33 (collecting statutes).

This Court has recognized that the "right to speakand publish does no t carry with it the unrestrainedright to gather information." Zemel v. Rusk, 381 U.S.1, 17 (1965); see also Seattle Times Co. v. Rhinehart,467 U.S. 20, 32 (1984). This Courts decisions do notstand for the proposition that the governm ent mayrestrict access to or use of nonpublic information onlywhen the information is in governm ent hands. InSeattle Times, the Court held that a newspaper didnot have a First Amendm ent right to disclose infor-mation obtained by the new spaper through pretrialdiscovery, where the trial court had entered a protec-tive order restricting disclosure. See id. at 32-37.And in Florida Star v. B.J.F., 491 U .S. 524, 534(1989), the Court acknowledged that, "[t]o the extentsensitive information rests in private hands, the gov-ernment may under some circumstances forbid itsnonconsensual acquisition."

Petitioners do not contend that restrictions onaccess to or acquisition of information from privateparties can never trigger First Amendment review.The lower court, however, plainly erred when it heldthat restricting access to information in health carerecords - records created for a government purpose -necessarily restricts protected speech merely becausethe records are not in the governments possession.2

2 Under the lower courts reasoning, state and federal lawsthat restrict private health care providers from disclosing


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20The Second Circuit likewise erred in disregardingthe role of the prescriber under Vermonts law. Thecourts opinion rests on its stated view that Verm ontacted improperly by restricting the use of prescriber

data in "an attempt to influence the prescribing con-duct of doctors." App. 28a. The court reasoned that"courts must be very skeptical of government effortsto prevent the dissemination of information in orderto affect conduct." App . 26a. But, in taking thatapproach, the court mistakenly minimized the impor-tance of a key feature of Vermonts law: the law isa consent-based restriction, such that doctors them-selves, not the government, control the comm ercialuse of their prescribing data and decide what kindof m arketing they will accept. Requiring consentfor the use of a persons data in targeted marketingdoes not restrict any commercial speech to a willingaudience. Cf. Mainstream M ktg. Servs. v. FTC, 358F.3d 1228, 1238 (10th Cir. 2004) (upholding "Do NotCall" registry against First Am endm ent challenge,and noting registry "does not inhibit any speech di-rected at the hom e of a w illing listener"); Rowan v.U.S. Post Office, 397 U.S. 728, 737 (1970) ("[n]othingin the Constitution compels us to listen to or v iewany unwanted com munication, whatever its merit").3

patient information also are necessarily viewed as restrictionson protected speech.

3 This discussion of the merits necessarily is truncated. Forthe additional reasons set forth in Parts I! and III, includingthe Second Circuits erroneous application of Central Hudson tothis facial challenge, and to be deve loped further in meritsbriefing, the Vermont statute should be held constitutional.


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22statutes were all designed to address the same prob-lems, see M ills, 616 F .3d at 16-17, the opinionsdiverge considerably in analysis of each of CentralHudsons three prongs.

A. The circuits conflict over the sufficiencyof the state interest.The First Circuit accepted both privacy and cost

containment as substantial state interests for pur-poses of Central Hudson. See Ayotte, 550 F.3d at 55(addressing cost containment); Mills, 616 F.3d at 20(finding substantial state interest in shielding pre-scribers who object to "invasive use" of their informa-tion). Although Vermonts law allows providers todecide whether their data may be used for marketingpurposes, the Second. Circuit flatly rejected privacyas even a valid state interest under Central Hudson.App. 23a. Accordingly, the decision below directlyconflicts with the Mills opinion on the existence of astate interest in prescriber privacy.

In her dissenting opinion below, Judge Livingstonreadily accep ted the S tates substantial interest inprivacy "in an era of increasing and well-foundedconcern about m edical privacy and the rampantdissemination of confidential information." App.52a. As she observed, Vermonts law "restricts theflow of otherwise private information about doctorsprescribing habits and the care they provide to theirpatients." A pp. 59a-60a. The m ajority opinionfocused on the fact that the law does not address theuse of the data for purposes other than marketing.App. 22a. Judge L ivingston, however, correctlyemphasized that the law "dramatically reduces thespread of [prescriber--identifiable] data." App. 60a.The record provides strong support for this conclu-sion, because Vermont doctors repeatedly told state


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23legislators of their strong objection to the use of pre-scribing data by pharmaceutical marketers. See, e.g.,C.A. App. Al183, A1304, A1433, A1435, A4197,A4262, A4323 (testimony from doctors and MedicalSociety; resolution of Medical Society). By disregard-ing this evidence and rejecting the position taken bythe dissent, the Second Circuits decision directlyconflicts with Mills. See 616 F.3d at 15 (finding thatmajority of Maine prescribers "did not want pharma-ceutical manufacturers to be ab le to use their indi-vidual prescribing histories for m arketing purposes";citing doctor objections to invasion of privacy).

Moreover, as the Mills court correctly recognized,the privacy interest "is not solely about protectingprescribers expectation that their identifying da tawill remain categorically private." 616 F.3d at 20 .The First Circuit concluded that prescribers "have aprivacy interest in avoiding unwanted solicitationsfrom d etailers w ho h ave used their individualprescribing data to identify and target them." Id.Vermont advanced this concern as well, showing thatthe use of prescribing data in marketing intrudes onthe doctor-patient relationship, but the Second Cir-cuit, in contrast to the First, rejected this argum ent.See App. 22a-23a.

B. The circuits conflict over the directnessneeded to effectuate the state interest.The opinions also conflict on whether the statutes

directly advance the States interests. The Ayottecourt held that New H ampshires law was "reason-ably calculated to advance its substantial interest inreducing overall health care costs." 550 F.3d a t 59.The courts holding rests on the "causal chain" ofevidence advanced by New Hampshire: that detail-ing substantially increases prescriptions for more


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24expensive brand-nam e drugs; that detailing usingprescriber-identifiable data is "more adversarial" andless focused on clinical information, and furtherincreases sales of brand-name drugs; and that this"dramatic[]" increase in prescriptions of brand-namedrugs does no t "confer[] any corresponding publichealth be nefit." Id. at 56-57. The Second Circuitrejected the same chain of reasoning accepted by theFirst Circuit, finding that Ve rmo nts law did notadvance the States interests "directly." App. 22a.4

The low er courts conflicting conclusions on the"directly advance" prong of Central Hudson do notreflect mere disagreement about the proper evalua-tion of the evidence. Rather, the lower courts appliedthe test in markedly different ways. Adhering to thisCourts precedent, the First Circuit asked whetherthe harms cited by the S tate are real and w hetherthe statute would alleviate them to a m aterial de-gree. Ayotte, 550 F.3d at 55-58; id. at 88-93 (Lipez,J., concurring); Mills, 616 F.3d at 22-23. In the deci-sion below, the majority did not conduct that analysisand, in fact, did not dispute Verm onts position (asaccepted by the district court and the dissentingjudge) that limiting access to prescriber-identifiabledata would benefit patients and reduce health carecosts. Instead, the court of appeals simply concludedthat the First Amendment does not permit Vermontto achieve its stated interests by restricting access toor use of prescribing data. See App. 24a-28a.

4 In Mills, the First Circuit held, as a separate ground forrejecting plaintiffs First Amendment claim, that Maines lawdirectly advanced the States substantial interest in protectingprivacy. 616 F.3d at 22.


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25C. The circuits conflict over the sufficiency

of the S tates tailoring of its restriction.Finally, the lower courts take contrasting approaches

to applying Central Hudsons narrow-tailoring prong.The decision below faulted Vermont for not imposingdirect requirements on doctors prescribing practices- that is, for not simply mandating generic prescrip-tions. App. 30a-31a. The First Circuit, however, likethe dissent below, recognized that such an approachburdens doctors by "[i]nserting one more laboriousstep" into the prescribing process. Ayotte, 550 F.3d at60; see also App. 62a. The First Circuit also rejectedthe notion that governm ent-sponsored efforts toeducate doctors would accomplish the statutes goals,noting that as a matter of "simple economics" NewHam pshire could not m atch the billions of dollarsspent marketing prescription drugs. Ayotte, 550 F.3dat 60; see id. at 98-100 (Lipez, J., concurring). TheSecond Circuit contradicted the First Circuit on thispoint, not only by identifying counter-detailing asan alternative but also by holding that Vermont wasrequired to "wait" and see w hat effect a counter-detailing program m ight have. App. 30a.

And, again, the conflict between the two decisionsreflects divergent app roaches to Central Hudson.The First Circuit carefully considered the degree towh ich proposed alternatives wo uld achieve theStates goals, and in so doing focused on the specificproblem of the use of prescriber-identifiable data inmarketing. Ayotte, 550 F.3d at 59-60. The SecondCircuit, to the contrary, rejected out of hand the no-tion that Vermonts law is narrowly tailored becauseit targets only the use of prescriber-identifiable datain marketing, saying the argument was "not respon-sive to the inquiry under Central Hudson." App. 33a;


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26cf. App. 60a-61a (Livingston, J., dissenting) (arguingthat the majority failed to balance the state interestagainst the burden imposed on speech, as requiredto determine if the imposition is "in propo rtion tothe interest served") (quoting Greater New OrleansBroad. Assn, Inc. v. United States, 527 U.S. 173, 188(1999)); Ayotte, 550 F.3d at 97-98, 100 (Lipez, J.,concurring) (emphasizing laws "limited scope," asdistinguished from broad bans on commercial speech).

The conflict here could not be sharper. Close intime, and responding to concerns from the public andfrom the medical profession, Vermont, New Hamp-shire, and M aine enacted similar laws with similarpurposes. All three laws have been tested in courtproceedings, and the lower courts have arrived atinconsistent results, based on several incompatibleconclusions of law. The issues raised in these caseshave been fully developed not only in the three ma-jority opinions from the circuits, but in the separateconcurring and disse~ting opinions of Judge Living-ston and Judge Lipez. The Court should accordinglygrant Vermonts petition to resolve these conflicts.III. THE ISSUES RAISED IN THIS PETITION ARE O F

SURPASSING AND GROWING IMPORTANCE.A. Other States are considering legislation to

lim it use of prescription inform ation inthe same ways as Vermont, New Hamp-shire, and Maine.

The same concerns that led Vermont, New Hamp-shire, and Maine to enact restrictions on the com-m ercial use of prescriber-identifiable data hav eprompted state legislators across the country to con-sider similar measures. In the last three years, billsbanning or restricting access and commercial useof prescriber-identifiable data have been proposed


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27in Arizona, California, Connecticut, the District ofColumbia, Florida, Georgia, Hawaii, Illinois, Iowa,Kansas, Maryland, Massachusetts, Minnesota, Mis-souri, Montana, Nevada, New Jersey, New York,North Carolina, Oklahoma, Oregon, Rhode Island,Texas, Virginia, Washington, and West Virginia.~See also 105 Mass. Code Regs. 970.005(2)(g) (manu-facturer must provide prescriber opportunity to pro-hibit use of prescribers data for marketing purpos-es). Given likely state legislation on this subject andthe resulting litigation over its constitutionality, thisCourts guidance is urgently needed.

5 See S.B. 1234, 49th Leg., 2d Reg. Sess. (Ariz. 2010); Assem.B. 2112, 2009-10 Reg. Sess. (Cal. 2010); S.B. 1046, Gem Assem.Jan. Sess. 2009 (Conn. 2009); B17-364, 2007 Council (D.C.2007); S.B. 1402, 111th Reg. Sess. (Fla. 2009); H.B. 820, 115thGen. Assem. 2009-2010 Reg. Sess. (Ga. 2009); S.B. 449, 25thLeg., Reg. Sess. (Haw. 2009); H.B. 1459, 95th Gen. Assem., 1stReg. Sess. (Ill. 2007); H. File 622, 83rd Gen. Assem., 2009 Sess.(Iowa 2009); S.B. 229, Sess. of 2009 (Kan. 2007); S.B. 1040,427th Sess. (Md. 2010); S.B. 17, 186th Gen. Court, 2009 Reg.Sess. (Mass. 2009); S. File 1044, 86th Legis. Sess. (Minn. 2009);H.B. 794, 95th Gen. Assem. 1st Reg. Sess. (Mo. 2009); H.B. 394,61st Leg. 2009 Reg. Sess. (Mont. 2009); S.B. 231, 72d Reg. Sess.(Nev. 2007); Assem. B. 3764, 213th Leg., 2d A nn. Sess. (N.J.2009); S.B. 4111, 231st Legis. Sess. (N.Y. 2009); S.B. 159, 2007-2008 Sess. (N.C. 2007); S.B. 379, 52d Leg., 1st Reg. Sess. (Okla.2009); H.B. 2680, 75th Legis. Assem., 2009 Reg. Sess. (Or.2009); H.B. 5093 , 2009 Legis. Sess. (R.I. 2009); S.B. 1620, 77thLeg., Reg. Sess. (Tex. 2007); H.B. 2452, 2009 Reg. Sess. (Va.2009); H.B. 1850, 60th Leg., 2007 Reg. Sess. (Wash. 2007); S.B.434, 2007 Sess. (W. Va. 2007).


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28B. Data m ining is an ever-expanding threat

to privacy, so clarifying the ap plicableFirst Amendment principles in this area iscritical.

The importance of the issues raised in this case isperhaps best illustrated by the concurring opinion ofFirst Circuit Judge Lipez in Mills and the dissentingopinion of Second C ircuit Judge Livingston below.While disagreeing in some respects about the appro-priate legal analysis, both judges expressly recognizethe importance of the precedent set by the panelopinions and the w idespread, significant impact ofthe rulings. Judge L ivingston expressed "seriousconcern" that the majoritys decision "will make itunduly and inappropriately difficult for states toproperly and constitutionally regulate in furtheranceof sub stantial interests, including a states veryserious interest in the protection of private informa-tion." Ap p. 66a. Judge Livingston accordinglywarned that the majoritys ruling created "precedentlikely to have pernicious broader effects in a complexand evolving area of First Amendm ent law." App.35a. Judge L ipez, responding to a very differentmajority opinion, likewise deemed the issues "serious"and described these laws as "present[ing] a challengeto the Supreme Courts commercial speech jurispru-dence that warrants the Courts attention and guid-ance." Mills, 616 F.3d at 49 (Lipez, J., concurring).Indeed, Judge Lipez did no t m erely ask for thisCourts guidance but opined that the Courts consid-eration of the issues was "inevitabl[e]." Id . at 33.

The concerns of both judges are well-founded andjustify the Courts review. Information technologyhas created new and unprecedented opportunities fordata mining companies to obtain, monitor, transfer,


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29and use personal information. Indeed, one of thedefining traits of the so-called "Information Age" isthis ability to am ass information about individuals.Com puters have made the flow of data concerningeverything from personal purchasing habits to realestate records easier to collect than ever before.6Com pilations of this data provide marketers withdetailed information about potential customers. The"burgeoning business," App. 66a, of data mining is amulti-billion dollar industry in the United States.7

The increased ability to gather, aggregate, and sellpotential customer information also applies to healthcare records and is likely to grow as more medicalrecords becom e electronic,s Commentators haveargued that, w ithout proper protection, electronicmedical systems cou ld become "the most valuablem otherlode of information for data mining on[E]arth9 and that, "[o]f all the threats posed to

6 As the executive of a major data mining company, AcxiomCorp., stated: "Today its almost unbounded, our ability to gath-er, sort and make sense of the vast quantities of information."Robert OHarrow Jr., Are Data Firms Getting Too Personal?,Wash. Post, Mar. 8, 1998, at A1.

7 Sales of prescriber-identifiable data by respondent IMSHealth alone produced $1.75 billion in revenue in 2005. Mills,616 F.3d at 44-45 (Lipez, J., concurring).

s It is estimated that approximately 50% of healthcareproviders will use electronic health records by 2020 . Peter G.Goldschmidt, HIT and MIS: Implications of Health InformationTechnology and Medical Information Systems, Communicationsof the AC M, O ct. 2005, at 73, http://www .worlddg.com/documents/622.pdf.

9 Judy Foreman, Privacy Issues Loom in Push for ElectronicMedical Records, Boston Globe, June 12, 2006, at C1 (quotingDr. Deborah Peel, founder of the Patient Privacy Rights Foun-dation).


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30personal privacy by new information technologies,the threat to the privacy of m edical records is by farthe most urgent.1 At the sam e time that healthcare providers are expanding their use of electronicmedical records to improve the quality of care, mediareports continue to document inappropriate disclo-sures of health information, including the use of pre-scription information for marketing purposes.11

The court of appeals found that Verm onts lawallowing doctors to decide w hether their prescribingpractices should be sold and used for com mercialpurposes violates the comm ercial speech rights ofdata miners and drug marketers. The decision thusreviews asserted commercial speech rights in one ofthe most sensitive and regulated spheres of informa-tion - medical records. And it invalidates a law thatallows individual doctors - not the government - tocontrol the use of their prescribing information formarketing. While this Courts review of commercialspeech regulations has becom e somew hat morestringent over time, these cases address governmentrestrictions on the commercial messages provided toconsumers about products or services.12 The applica-

lo Editorial, Medical Files, or Fishbowls?, Wash. Post, Sept.23, 1997, at A16.11 Milt Freudenheim, And You Thought a Prescription WasPrivate?, N.Y. Times, Aug. 9, 2009, at BU1.

12 See, e.g., Thompson vo W. States Med. Ctr., 535 U.S. 357(2002) (ban on advertisements for particular drugs); LorillardTobacco Co. v. Reilly, 533 U.S. 525 (2001) (effective ban ontobacco product advertisements); Greater New Orleans Broad.Assn, 527 U.S. 173 (ban on advertising lawful casino gambling);44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996) (banon advertising liquor prices); Rubin v. Coors Brewing Co., 514U.S. 476 (1995) (ban on labels containing alcohol content);Edenfield v. Fane, 507 U.S. 761 (1993) (ban on in-person CPA


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31tion of the Central Hudson test to V ermonts lawimports this jurisprudence into a new and d istinctfield - restrictions on comm ercial access to or use ofinformation about individuals.

Moreover, Vermonts law is not a blanket ban ondata mining but rather affords individuals the rightto control access to or use of personal information formarketing. While advertising is something that con-sumers can usually mute, throw out, or click-throughif they so choose, data mining without consent is acovert practice over which the persons m ost directlyaffected - here, doctors and their patients - lack con-trol. The lower courts recognition of a First Amend-ment right to mine data without the customers con-sent appears at odds with the long-standing principlethat "[t]he right to speak and publish does not carrywith it the unrestrained right to gather information."Zemel, 381 U.S. at 17; see also Houchins v. KQED,Inc., 438 U .S. 1, 11 (1978) (although "[t]here is anundoubted right to gather news from any source bymeans w ithin the law , ... that affords no basis forthe claim that the First Am endment com pels others- private persons or governments - to supply infor~mation") (internal quotations and citation omitted)).This case presents an excellent opportunity to resolvethese apparently conflicting lines of First Amend-ment principles.

solicitations); Cincinnati v. Discovery Network, Inc., 507 U.S. 410(1993) (ban on distribution of commercial handbills); Bd. of Trs.of State Univ. of NY v. Fox, 492 U.S. 469 (1989) (ban on "Tup-perware parties"); Central Hudson, 447 U.S. 557 (ban on utilityadvertising); Bates v. State Bar of Ariz., 433 U.S. 350 (1977)(ban on lawyer advertising); Va. State Bd. of Pharmacy v. Va.Citizens Consumer Council, Inc., 425 U.S. 748 (1976) (ban onprescription drug price advertisements).


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32Th e legal issues presen ted in this case thusextend beyond the constitutionality of restrictions on

prescriber-identifiable data.13 The federal govern-ment, for example, has enacted numerous laws thatrestrict the sale and use of information without con-sent. See, e.g., 15 [_[.S.C. 6802(b) (customer rightto opt-out of disclosure of personal information byfinancial institution); 18 U.S.C. 2702(c) (restrictinguse of Internet subscriber information without con-sent); 18 U.S.C. 2710(b) (prohibiting disclosure of"personally identifiable information concerning" con-sumer of video rental establishment without consent);20 U .S.C. 1232g(b) (prohibiting release of educa-tional records without consent); 42 U.S.C. 1320d-6(prohibiting use and disclosure of "individually iden-tifiable health information" without authorization);47 U.S.C. 551(c)(1) (prohibiting disclosure of "per-sonally identifiable information" concerning cab lesubscriber without consent). See also United Statesv. Miami Univ., 294 F.3d 797, 823 (6th Cir. 2002)(rejecting F irst Am endm ent challenge to F am ilyEducational Rights and Privacy Act of 1974, becausethere is no "First Amendment right of access" tostudent disciplinary records).

13 Of note, this Court previously upheld a privacy law in acase that did not address First Amendment issues. In Reno v.Condon, 528 U.S. 141 (2000), the Court reviewed the D riversPrivacy Protection Act of 1974 ("DPPA") against a federalismchallenge by the State of South Carolina. The DPPA restrictsthe disclosure, without consent, of personal information obtainedfrom a motor vehicle record. 18 U.S.C. 2721(a). Chief JusticeRehnquist, writing for a unanimous court, determined that theDPPA is a valid exercise of Congresss authority to regulate in-terstate commerce under the Commerce Clause, because motorvehicle records are "a thin[g] in interstate commerce." 528 U.S.at 148 (internal quotatiom, l omitted).


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33A sm all sampling indicates similar enactments byStates. See, e.g., Cal. Fin. Code 4052.5 (restricting

sale, transfer, and disclosure of nonpublic personalinformation by financial institutions, absent explicitconsent of consumer); Conn. Gen. Stat. 38a-988a(a)(barring sale and disclosure of individually identifi-able medical record information for marketing pur-poses absent prior written consent); N.J. Stat. Ann. 48:3-85(b)(1) (barring utility providers from sellingor disclosing customer information without consent,including customers name, address, paym ent his-tory, and energy usage); N.M. Code R. 13 .1.3.12(requiring affirmative consent before licensed insurermay disclose nonpublic personal financial informa-tion).

Notably, nearly all these laws address the use ofinformation that is held by private entities, such asinsurers and telecommunications providers, not bythe government. Cf. App. 17a (refusing to treatVermonts law as restriction on access to informationbecause pharmacies, not the government, have pre-scription information). Without clarification as tothe scope of any First Amendment right to collectand use data w ithout consent, each of these lawsmay be constitutionally suspect.

This Courts resolution of the merits of this casewould provide timely guidance as States and otherregulators seek to respond to rapidly developingtechnologies that make the collection of information,including medical inform ation, more widespreadthan ever before. The co llecting, aggregating, andselling of data has becom e a multi-billion dollar in-dustry since the Court last addressed informationitself as "an article of com merce." Reno, 528 U .S. at148. As the ability to amass volumes of information


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34about prospective customers - including health careproviders - grows, States and other regulators needguidance as to the scope of their ability to allow indi-vidual Americans to control access to and use of theirinformation.

Not only are the issues pressing and importa,lt,but this case provides an excellent vehicle for theirreview. Unlike at the time this Court denied a peti-tion for ce rtiorari in Ayotte,14 the circuits are nowin stark conflict on the issues presented by statestatutes that seek to limit the com mercial disclosureof private information regarding doctors prescriptionof drugs to their patients. M oreov er, unlike inAyotte, where the First Circuit had expressed somedoubts about the standing of data miners to raisedrug manufacturers First Amendment rights in chal-lenging these state laws, see 550 F .3d at 48-50, inthis case the plaintiffs also include PhRMA, the tradeorganization for pharmaceutical manufacturers. Inaddition, the district court here held a five-day trial,in which it amassed an evidentiary record that in-cludes the extensive legislative record as well thetestimony of trial witnesses and numerous exhibits.Ayotte did not provide the Court with such a com -plete record on which to base its review of challengesto the constitutionality of the state law.CONCLUSION

Th e petition for a writ of certiorari should begranted.

14 IMS Health Inc. v. Ayotte, 129 S. Ct. 2864 (2009).


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35Respectfully submitted,

DAVID C. FREDERICKSCOTT H. ANGSTREICHKELLOGG, HUBER, HANSEN,

TODD, EVANS & FIGEL,P.L.L.C.1615 M Street, N.W.Suite 400Washington, D.C. 20036(202) 326-7900

December 13, 2010

WILLIAM H. SORRELLATTORNEY GENERAL

BRIDGET C. ASAYCounsel of RecordSARAH E.B. LONDON

DAVID R. CASSETTYASSISTANT ATTORNEYS

GENERALOFFICE OF THE ATTORNEY

GENERAL109 State StreetMontpelier, Vermont 05609-1001(802) 828-5500(basay@atg. state.vt.us)


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Vermont Cert Petition Pet.10-779