The Invisible Gag

[Free Speech]

by Lawrence Soley

Dollars and Sense magazine, May/June 2003


During the 1990-1991 Persian Gulf War, Margaret Gilleo of Ladue, Missouri, put up signs in her front yard reading, "Say 'No' to War in the Persian Gulf, Call Congress." When the signs were stolen and vandalized, she complained to the police, who informed her that she-not the thief-was violating the law. The police told Gilleo that Ladue had an ordinance against posting yard signs, and she had broken it. "I was very angry at this," says Gilleo. "I said 'this is the United States of America and we have free speech."'

Gilleo petitioned the Ladue City Council for a variance permitted under the ordinance. It refused. So she put a small sign inside her window reading, "For Peace in the Gulf."

The council responded by adopting another, stiffer ordinance prohibiting all but ten kinds of signs. "For sale," "residential identification," and commercial signs would be permitted under the new ordinance; most others (including window signs) were prohibited because they "create ugliness, visual blight and clutter, and tarnish the natural beauty of the landscape," according to the City Council.

In response, Gilleo filed suit against the city in the U.S. District Court, which quickly struck down the ordinance as an unconstitutional restriction on political speech. The city appealed this decision, but in 1994 the Supreme Court upheld the lower court, concluding that "a special respect for individual liberty in the home has long been part of our culture and our law; that principle has special resonance when the government seeks to constrain a person's ability to speak there."


Although courts have consistently struck down government bans that restrict speech such as the Ladue ordinance, they have consistently upheld similar bans imposed by private entities. For example, homeowners' associations-private corporations that govern planned developments and condominiums-are free to adopt restrictions on the speech and behavior of residents that, if adopted by government, would be unconstitutional.

Homeowners are not the only ones facing censorship in the private sector. Because the Supreme Court has taken the position that the First Amendment protects citizens against speech restrictions imposed by governments, not the private sector, corporations can impose an almost endless array of restrictions on speech. Corporations can restrict the release and distribution of internal documents, claiming that they are copyrighted or private property; restrict speech on corporate-owned property; terminate employees who speak out about corporate practices; pressure the mass media to kill or alter stories with threats of lawsuits or by withdrawing advertising dollars; or file lawsuits against critics and activists, claiming injury to their businesses as a result of speech.

Corporations' power to censor has increased at the very time that courts have struck down government-imposed limitations on speech, such as flag desecration laws. The increased power of corporations to censor arises from three closely-related factors: an increasingly conservative Supreme Court's deference to private sector property rights; the gigantism and power of modern corporations, brought about by the merger frenzy of the 1980s and 1990s; and the shrinking of the public sector, the arena where citizens can exercise constitutionally-protected speech rights. In fact, when government has withdrawn from a particular sector, private interests have entered the vacuum and exercised private property rights, reducing the public's freedom of speech. For example, the city of Milwaukee, like most cities, closed a public street to allow the construction of a shopping mall, the Grand Avenue Mall. The mall is considered private property, even though located on former government property, and even though government offices, including those of the University of Wisconsin, are located there. Free speech is not permitted in the mall.

Ironically, about the only limits on corporate censorship are those imposed by government, such as the National Labor Relations Act, which prohibits companies from restricting employees' speech about unions, and affirmative disclosure laws, such as those adopted by the Securities and Exchange Commission and the Environmental Protection Agency, which require corporations to disclose specific types of information such as executive stock sales. Because corporations have so many methods available to them for restricting speech, corporations represent a greater threat to free speech today than government.


In Murphy v Timber Trace Association (1989) and Linn Valley Lakes Property Owners u Brockway (1992), bans on signs imposed by homeowners associations were declared legal by courts. In Linn Valley Lakes, the court observed that "there is nothing constitutionally impermissible per se in a private agreement restricting signs in a residential neighborhood, and enforcement thereof does not constitute improper state action."

The rationale for allowing these bans is that the contracts and covenants governing planned developments and condominiums are considered by courts to be private agreements, rather than government or "state action." These contracts and covenants have been upheld by courts even though most residents are unaware of the content and binding nature of the restrictions when they move in, and even though many housing associations function like governments, collecting garbage, plowing streets, operating "community" pools, and assessing taxes in the form of maintenance fees.

As of 1999, 42 million Americans-about one in seven- were living in planned developments governed by associations. In Maryland, nearly one-third of residences are in planned developments. In some areas, including the Washington, D.C. area, Florida, Arizona and California, the majority of housing units built in the past five years have been in planned developments.

Because the rules and restrictions on behavior in planned communities are viewed by courts as voluntary, contractual agreements, corporations such as Disney, Mobil Oil and the American Nevada Corp. that build these communities can write covenants imposing a multitude of restrictions on residents' behavior. These restrictions often limit the colors of exterior paint residents can use on their dwellings, the types of grass they can plant, and the colors of drapes they can hang. In some cases clotheslines, birdbaths, and basketball hoops are prohibited; some covenants prohibit parking pickups and campers within the developments. Most regulate the posting of yard signs.

The Estrella housing development in Phoenix, built by convicted savings and loan embezzler Charles Keating, Jr., banned pornographic videos and magazines from the community-even from residents' bedrooms. The massive, city-like Columbia development in Maryland, built by the Rouse Co. with financing from Connecticut General Life Insurance Co., prohibited Green Party members from collecting signatures to place Ralph Nader on the presidential ballot at a waterfront arts festival held on Columbia property.

So many housing associations in Maryland banned the display of yard and window signs-including yard signs for candidates running for public office-that the state legislature finally passed a law allowing residents to post them. The law prohibited associations from banning signs supporting candidates and ballot measures for thirty days before, and seven days after, an election.

Although a self-serving act on the part of politicians because they were the primary beneficiaries of the law, the Maryland law nevertheless represents an example of how legislation can protect speech-and democracy-from being undermined by the private sector.


The power of corporations to censor speech has grown enormously during the past quarter century. Prior to the 1970s, it was the government that gagged speakers-albeit often at the urging of the private sector. For example, nearly all of the criminal anarchy laws passed by states during the World War I era, which prohibited the advocacy of political syndicalism, were adopted at the urging of those businesses and industries being organized by the Industrial Workers of the World (I.W.W.). Similarly, the speech bans adopted by cities targeting I.W.W. speakers during the 1920s were adopted at the urging of retailers, who feared that street corner orating interfered with their sales. And many book bans imposed by school and library boards, such as those targeting John Steinbeck's The Grapes of Wrath, were implemented at the urging of the affected industries.

During the 1960s and 1970s, when courts started overturning government-imposed restrictions on speech, the private sector sought ways to regulate speech without state action. To achieve this goal, corporations asserted that free speech interfered with their property rights, an argument that the Supreme Court had rejected in 1945 when it declared: "when we balance the Constitutional rights of property against those of the people to enjoy freedom of press and religion ... the latter occupy a preferred position." In that decision, Marsh u Alabama, the Supreme Court declared company-owned towns to be the functional equivalent of public places, observing that the "more an owner, for his own advantage, opens up his property for use by the public in general, the more do his rights become circumscribed by the statutory and constitutional rights of those who use it."

The Marsh decision was applied to shopping centers by the Supreme Court in 1967, when it ruled that union organizers have a right to picket on shopping center property during a labor dispute, noting that the "similarities between the business block in Marsh and the shopping center ... are striking." The Court found no reason why access to a business district in a company-owned town was constitutionally protected, but access to mall property functioning as a business district was not.

In 1972, the Supreme Court, now dominated by conservative justices appointed by President Nixon who were more inclined to protect property than speech rights, began reversing these earlier decisions. In Lloyd Corp. u Tanner (1972) and Hudgen v National Labor Relations Board (1976), the Court majority concluded that mall and shopping center owners had a right to ban speech on their property because "the First and Fourteenth Amendments safeguard the rights of free speech and assembly by limitations on state action, not on action by the owner of private property...". As a result of these decisions, shopping centers, malls and most other corporate-owned properties in all but three states are now closed to free speech. In California, Colorado and New Jersey, the state supreme courts ruled that their state constitutions protect speech in malls. Consequently, shoppers in the remaining 47 states, probably without even realizing it, leave their free speech rights at the curb when they enter a shopping center or mall parking lot.

The restrictions on speech in malls are often arbitrary, as recent events at Crossgates Mall near Albany, New York demonstrate. On March 3, 2003, 61-year-old Stephen Downs was arrested and taken away in handcuffs because he refused to obey mall security guards, who ordered him to dangers associated with drugs such as Fen-phen, Duract, Rezulin, and Propulsid, all of which have since been withdrawn.

The tobacco companies offer the perfect illustration of the ways that corporations can effectively curb discussions about their products. The tobacco companies have used a whole host of tactics to curtail discussion about their practices, including secrecy clauses in employment contracts, speech-restrictive lawsuits, gag orders, and pressures on the mass media. Most of these tactics are now widely employed by corporations in other industries to curb public debate about issues affecting their industries.

Tobacco companies Philip Morris (now renamed Altria, Inc.) and Brown & Williamson used secrecy clauses embedded in employment contracts to silence in-house scientists, including Victor DeNoble and Jeffrey Wigand. When hired, DeNoble and Wigand signed secrecy agreements prohibiting them from talking about their employers, even after their employment ended. Both men were aware of company research showing nicotine to be highly addictive. DeNoble conducted research showing that nicotine altered brain chemistry and tried to publish his results in the journal Psychopharmacology, but Philip Morris withdrew the article. Both DeNoble and Wigand were eventually discharged and warned that if they disclosed what they knew about tobacco research, they would be sued.

Many other corporations require new employees to sign secrecy agreements as a condition of hire or threaten to fire employees to limit the disclosure of damning evidence about industry practices. To curtail the use of these tactics in the nuclear power and financial securities industries that are regulated by the federal government, Congress passed "whistleblower protection" laws to keep corporations in these industries from gagging their employees. But in most industries, in the absence of whistleblower laws, companies can easily silence employees.

Even with whistleblower laws in place, companies still attempt to gag employees. For example, Commonwealth Edison punished employees who complained about safety problems at its Zion nuclear power plant in Illinois. The company demoted six employees who complained and transferred them to menial jobs. The company lowered its evaluation of another employee, and discharged yet another who reported 60 problems with the plant. The latter employee could not find another job after being dismissed.


Beyond silencing employees, corporations have lots of tricks up their sleeves to prevent the public from finding out about corporate practices. One of the most common is to file a lawsuit, or to threaten to file a lawsuit, against critics, charging that some imaginary harm has been done to the company by their speech. The most common harms asserted in lawsuits are defamation, business interference, copyright violation, patent infringement, and civil rights violations.

For example, toy manufacturer Mattel, Inc., maker of the Barbie doll, filed a trademark infringement suit in 1999 against Seal Press, publisher of Adios, Barbie, a book of essays criticizing Barbie's "tall, thin and white" body image. Mattel asserted that the book's use of the Barbie image on the front cover caused trademark confusion. Lacking the financial resources to defend itself in court, the Seal Press settled the suit, agreeing to retitle the book and redesign the cover of subsequent editions.

Similarly, when former Brown & Williamson executive Jeffrey Wigand revealed what he knew to CBS' "60 Minutes," the tobacco company threatened to sue the CBS television network for "tortious liability" if it aired the interview. Fearing that a lawsuit would impede the sale of the network, CBS executives ordered "60 Minutes" to cancel the broadcast.

In an apparent effort to undermine its competitor, ABC network owner Disney Corp. released a feature film, The Insider, in 1999 about CBS' decision to kill the Wigand interview. Brown & Williamson then threatened to sue Disney for distributing the film. Lawsuits such as this one, filed against those who participate in debates about public issues, are known as strategic lawsuits against public participation or SLAPPs.

The term "SLAPP" was coined by University of Denver professors George W. Pring and Penelope Canan to describe lawsuits brought against private citizens and groups because they petitioned some branch of government, but the term is now widely used to describe lawsuits filed to punish or inhibit speech. SLAPPs or threats of SLAPPs have been used to curb debates about pollution and global warming by oil and coal firms, about land use by developers and builders, and by a host of other industries.

Some of the most widely publicized SLAPPs include suits filed against North Kingstown, Rhode Island resident Nancy Hsu Fleming by Hometown Properties, Inc., the operator of a nearby landfill that Hsu contended was producing groundwater contamination; a suit filed by the head of the Florida Petroleum Marketers Association against an environmental magazine for declaring the association and its leader to be "Public Enemy Number One"; and a suit filed against the National Catholic Reporter by Briggs & Stratton Corp. alleging that an article critical of the company's decision to move jobs to the South and Mexico was libelous. Although there are few statistics available on SLAPPs, a study by Florida's Attorney General concluded that at least 21 SLAPPs had been filed in that state between 1985 and 1993.

Realizing that SLAPPs are designed to punish speakers rather than rectify wrongdoing, a number of states, including Rhode Island, California, Minnesota and Nebraska, have passed laws making it easy to dismiss SLAPPs. The Rhode Island legislation was motivated by the publicity surrounding the Hometown Properties, Inc. suit against Fleming, one that dragged on for years.


Although Disney disclosed how CBS buckled under to tobacco company pressures in The Insider, it did not disclose that the ABC network had done so as well. A segment of the ABC program "Day One," broadcast in 199S, alleged that the tobacco companies "spiked" the nicotine in cigarettes. Philip Morris and R.J. Reynolds SLAPPed ABC, alleging the program was libelous.

On the eve of the sale of the ABC network to Disney, the tobacco company lawsuits were quickly settled. ABC agreed to publicly apologize for airing the segment and agreed to pay the tobacco companies' legal expenses. The settlement included a non-disclosure agreement prohibiting ABC and tobacco company executives from publicly commenting on the case.

Despite the non-disclosure agreement, USA Today obtained a copy of the settlement and other documents, which showed the evidence to be "at odds with both the tobacco company's public statements and the network's apology." The newspaper concluded that ABC actually had documents showing that the tobacco companies "spiked" cigarettes.

Non-disclosure agreements such as these are commonly used today by corporations and other institutions to limit the release of publicly-damning information. They were used by Ford and Firestone to hide the dangers posed by the ATX tire on Ford Explorers, and by the Catholic Church to hide the sexual abuse of children by priests.

In addition to secrecy agreements, SLAPP suits and gag orders, the tobacco companies also successfully pressured the mass media into killing articles about the hazards of smoking with threats to withdraw, or by actually withdrawing, advertising. That pressure was applied for decades. In the early 1950s, the tobacco companies prohibited the showing of "no smoking" signs and all references to cancer on the television shows they sponsored. During the 1960s and 1970s, they withdrew advertising from such magazines as Reader's Digest and Mother Jones that carried stories about the hazards of smoking. By the 1980s and 1990s, most magazines carrying tobacco advertisements stopped carrying stories about the dangers of smoking. Statistical studies published in such journals as the New England Journal of Medicine, Women's Health, and Journalism Quarterly showed that the more tobacco advertising found in a magazine, the less likely it was to provide coverage about the hazards of smoking.

The effectiveness of this advertiser pressure was not lost on other corporations, which have similarly pressured the news media to stop carrying negative stories about their industries. Studies published in American Journalism Review and Journal of Advertising found that the real estate, automotive, airline, and retailing industries routinely influence news coverage.


Although there is little that ordinary citizens can do to stop advertising censorship, except perhaps to boycott advertising- and corporate-dominated media, there are many things that can be done to limit other types of corporate censorship. Legislation can be passed making it difficult to file SLAPPs. In several states, including California, a coalition of media, unions and activist groups effectively lobbied for anti-SLAPP statutes. California and Minnesota have very broad anti-SLAPP statutes that make it difficult for frivolous suits to pass judicial scrutiny. In states such as Pennsylvania, however, where corporations rather than coalitions of free speech advocates were the primary lobbyists, anti-SLAPP legislation was eviscerated.

Victims of SLAPPs can also file counter lawsuits, called SLAPPback suits. In cases where this has been done, SLAPP victims have sometimes been awarded large verdicts by juries. Shell Oil was hit with a $5.1 million jury verdict for suing a consumer advocate who complained to a state health agency about a Shell home plumbing product. In July 1998, a New Jersey jury awarded Jo Ann Baglini and her husband $1.5 million for being maliciously prosecuted by a developer whose zoning changes the Baglinis had opposed.

Citizens can also push for laws opening malls up to free speech. In New York, where Stephen Downs was arrested for trespassing because he refused to remove his anti-war T-shirt, representative Steve Englebright (D-Suffolk) introduced an assembly bill (A.B.4163) amending the state civil rights law to require malls of at least twenty stores to permit some form of public expression in common areas. Similar bills can be introduced in other states.

Activists and legislators can also demand that any corporation receiving indirect or direct public subsidies open its property to free speech. Currently, many malls, manufacturers and even professional sports teams are heavily subsidized by taxes, but nevertheless claim that the property on which they operate is private. For example, the Milwaukee Brewers baseball corporation plays in a stadium built by taxpayers, yet claims that the stadium is private property-and has had activists arrested for protesting the team's sales of merchandise made in Central American sweatshops on stadium property. Activists can challenge these private property claims by passing out leaflets, unfurling banners, holding up placards, and engaging in other forms of speech.

Residents of planned developments and condominiums can organize for change within their developments, demanding that residents be allowed to post signs and distribute leaflets door-to-door. In addition, residents can demand that legislators adopt laws such as the Illinois Condominium Property Act, which prohibits housing associations from adopting rules that "impair any rights guaranteed by the First Amendment to the Constitution. "


Lawrence Soley is the author of Censorship, Inc. (Monthly Review Press) and a professor at Marquette University in Milwaukee.

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