07/11/2011 12:40 pm ET Updated Sep 10, 2011

Mandatory Voluntary Guidelines

As we have learned through experience, voluntary guidelines promulgated by government regulators are indistinguishable from government mandates that should be constrained by the United States Constitution. The regulatory weapons that may be employed covertly as retaliation against the recalcitrant make industry compliance with guidelines no more voluntary than yielding a wallet to a highwayman.

Take the food industry and the Interagency Working Group (IWG) on Food Marketed to Children, Preliminary Proposed Nutrition Principles to Guide Industry Self-Regulatory Efforts. The IWG -- comprised from the Federal Trade Commission, the Food and Drug Administration, the U.S. Department of Agriculture, and the Centers for Disease Control and Prevention -- has decreed "voluntary" nutritional guidelines for food marketed to tiny tots or teenagers. Among other things, the interagency group decreed that: "By the year 2016, all food products within the categories most heavily marketed to children should meet two basic nutrition principles. Such foods should be formulated to... make a meaningful contribution to a healthy diet and minimize the content of nutrients that could have a negative impact on health and weight." The food categories in the government's crosshairs include "breakfast cereals, snack foods, candy, dairy products, baked goods, carbonated beverages, fruit juice and non-carbonated beverages, prepared foods and meals, frozen and chilled deserts, and restaurant foods."

In substance, the IWG has delivered an ultimatum to the food industry: either reformulate recipes to diminish sugar, sodium, and fats; or, cease ads or promotions on TV, radio, websites, in print, in movies, sponsorship of events, in-store marketing tools, etc. The goal is to manipulate the advertising marketplace in favor of more nutritionally healthy foods because of the government's distrust of parents or children to make enlightened nutritional decisions. The interagency group asserts: "The proposed recommendations are... designed to encourage children, through advertising and marketing, to choose foods that make a meaningful contribution to a healthful diet... and minimize consumption of foods with significant amounts of nutrients that could have a negative impact on health."

These guidelines are as much constitutional folly as they are economically ill-advised. It is estimated that these mandatory-voluntary guidelines would plunge related advertising expenditures by 20% and slash over 75,000 jobs -- leaving a $30 billion crater in our nation's already sagging economy. The constitutional ramifications are equally alarming.

The First Amendment prohibits the government from suppressing non-deceptive commercial speech from fear it will prove persuasive to the audience. The United States Supreme Court recently explained in Sorrell v. IMS Health Inc. (June 23, 2011): "The State may not burden the speech of others in order to tilt public debate in a preferred direction...[T]he fear that speech might persuade is no lawful basis for quieting it."

The government's voluntariness defense is unconvincing. The FTC regulates food industry advertising or mergers. The FDA regulates food safety. The U.S. Department of Agriculture decides the nutritional quality of school breakfasts and lunches. The food industry would be risking an onslaught of regulatory harassment or discrimination by resisting the "voluntary guidelines" of the interagency group. In the past year, the FTC demanded records from forty (40) food companies disclosing marketing expenses to persons younger than 18. Scott Faber, Vice President of Federal Affairs for the Grocery Manufacturers Association, acknowledges: "When regulators strongly suggest a course of action, it's treated as a rule, not a suggestion."

As the federal government has grown from a tiny acorn into a mighty oak, informal jawboning has proven as effective as official edicts in dictating industry behavior. During the Kennedy administration, United States Steel and sister industry members hiked steel prices over the objection of President John F. Kennedy. In swift response, the Defense Department announced plans to review steel contracts and switch to lower-cost suppliers. The Justice Department initiated an antitrust investigation into price fixing. The president commanded air time to denounce the price increase as detrimental to the public interest. The steel companies capitulated three days later.

In 1974, the Chairman of the Federal Communications Commission, Richard Wiley, embarked on "jawboning," to cajole the networks to reduce the amount of sex and violence in television programming without the need for any "formal" Commission action. The FCC licenses the broadcast industry, and enjoys a chokehold over its financial destiny. The Chairman's campaign involved: (1) five meetings between himself or members of the Commission staff and industry representatives at which various proposals for dealing with the problem of televised sex and violence were discussed; (2) three public speeches by Chairman Wiley in which he exhorted the industry to undertake its own action to avoid direct government involvement; (3) several telephone conversations between Chairman Wiley and various network executives; and (4) suggestions by Chairman Wiley that the National Association of Broadcasters expedite its consideration of an indistry Code amendment incorporating the family viewing policy. The code amendment was soon adopted in April 1975.

In Bantam Books v. Sullivan (1963), the Supreme Court condemned informal censorship effectuated by veiled threats of adverse government action as prohibited by the First Amendment.

The proper remedy for speech the government believes is misconceived, the High Court has lectured, is more speech, not enforced silence. Nothing in the Constitution prevents the Interagency Working Group from promoting more nutritional food choices by parents or youth through its own educational campaign. But it may not achieve that goal by holding a Sword of Damocles over food industry members to extort compliance with the government's nutritional principles.