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The owners of New Mexico-based Native Essence Herb Company asked the chief U.S. district judge in Santa Fe for a preliminary injunction this week that would allow the company to restore information to its website that was taken down after Federal Trade Commission official Erika Wodinsky threatened to confiscate the company’s earnings. Richard Jaffe and Judith A. Rosenstein, Native Essence’s attorneys, previously filed a complaint seeking a permanent injunction against FTC rules that censor truthful speech about herbal products. The FTC has yet to respond to these filings.
According to the preliminary injunction motion, Native Essence’s website previously contained information about herbal products that was produced by numerous third-party sources. “We did not create any of the information contained on the website,” said Mark Hershiser, Native Essence’s co-owner, said in a declaration accompanying the motion. “We took it all from industry respected reference books . . . as well as from federal government websites and private not-for-profit websites which are recognized as having fair and accurate information about herbal products.”
Erika Wodinsky, in a demand letter to Hershiser, said the information posted was “false, misleading [and] unsubstantiated,” and that the Federal Trade Commission Act prevented consumers from receiving any herbal information without the FTC’s prior approval. Wodinsky demanded Hershiser and his wife surrender all revenues from Native Essence, despite the fact that Wodinsky cited no consumer complaint or injury, nor was there any evidence that Wodinsky had ever spoken with any Native Essence customer.
While Hershiser refused to sign a confession accompanying Wodinsky’s demand letter, “[i]n an abundance of caution . . . we removed all substantive information concerning all of our products (not only the few products mentioned in [Wodinsky’s] communication. . . we could not take the risk of having any content on our site, for fear that the FTC would try to take away all of our revenues.”
Hershiser gave several examples of information censored by Wodinsky’s demand letter, such as an entry on burdock root that noted, “this root is well-known for blood cleansing properties and is used in herbal medicines and blood remedies.” Another censored entry on watercress stated, “American Indians used this herb for liver and kidney trouble and to dissolve kidney stones.”
Hershiser said his website contained a clear legal disclaimer that this information was provided for educational purposes only “and has been based solely on the traditional and historic use of a given herb,” and not according to any FDA or government-controlled scientific protocols.
In an accompanying legal brief supporting the preliminary injunction motion, attorneys Jaffe and Rosenstein said “the FTC takes the position that is never permissible for a company to truthfully advertise consumers that an herb has a documented historical use for a serious disease like cancer.” This would prohibit a company from even presenting information from other government-sponsored websites, as Native Essence did. “The ironic and counterintuitive result is that while a branch of the federal government can make claims about these products, an herb seller cannot make the exact same claims,” according to FTC rules.
Jaffe and Rosenstein said the Hershiser and Native Essence were entitled to a preliminary injunction because they could demonstrate the FTC’s actions violated the First Amendment. “To decide this case, the Court must look to the commercial speech doctrine contained in First Amendment jurisprudence.” The key Supreme Court decision on this issue, a 1980 case called Central Hudson v. Public Service Commission of New York, established a four-part test for determining whether a government restriction on a “commercial” speaker violated the First Amendment.
The first test looks at “whether the speech concerns a lawful activity.” Obviously it’s legal to sell herbs and herbal remedies. But this test also looks at whether the speech is “misleading.” Speech that is not “inherently” misleading is subject to the remaining three Central Hudson tests. Jaffe and Rosenstein argued that the censored information from Native Essence’s website could not be inherently misleading, because it contained the legal disclaimer noted above, “and the First Amendment prohibits treating consumers as if they are incapable of such elementary understanding about the world around them.”
The second Central Hudson test requires a “substantial government interest.” Jaffe and Rosenstein said the issue here was “whether or not the FTC has a substantial interest in protecting consumers from information about the historical use of herbs,” which doesn’t satisfy the test, because the Supreme Court “strongly prefers speech over prohibition.”
Under the third test, the FTC must show that its censorship directly and consistently advances the government’s “substantial” interest. Jaffe and Rosenstein said that to satisfy this test, the FTC must present actual evidence that speech restrictions will “alleviate” the alleged harms – it’s not enough to simply guess that censorship will work. Given the plethora of information about the historical use of herbs, it would be impossible for the FTC to sustain its burden, the attorneys said. “There are dozens or hundreds of other websites and books and periodicals which contain the information which [Native Essence] wish[es] to post. There is no way the FTC can prohibit the dissemination of this information.”
The final Central Hudson test requires that government censorship “is not more extensive than necessary to advance the interest asserted.” As the Supreme Court’s most recent statement of this test, in a 2002 case against the FDA, explained, “regulating speech must be a last – not first – resort.” Jaffe and Rosenstein reiterated that the disclaimer on the Native Essence website achieved whatever narrow governmental interest existed, and thus the FTC’s ban could not satisfy this fourth and final test.
The motion for a preliminary injunction, along with the underlying complaint, will be heard by Chief U.S. District Judge Martha Vázquez. No timetable has been set for further proceedings. You can download the motion for a preliminary injunction at this link and the memorandum of law (legal brief) at this link. * * * |
S.M. Oliva, president of the Voluntary Trade Council, authored an article for the Ludwig von Mises Institute on Mark and Marianne Hershiser's landmark First Amendment lawsuit against the Federal Trade Commission. You can read the article, "Consumer Protection or Legal Extortion?" at this link. 
You can download the FTC's original demand letter to Native Essence and the Hershisers at this link. You can download the Hershisers' complaint against the FTC at this link. For the most recent list of relevant documents in this case, please follow this link. 
Richard Jaffe, the Houston attorney representing the Hershiers and Native Essence Herb Company, has published a book, Galileo's Lawyer, that provides "an insider's view of the alternative health care field as told from the perspective of the legal battles involving the most popular and controversial complementary and alternative health care practitioners." You can learn more about the book at this link. 
