California Bill Targets Lawyers’ Scary, Misleading Drug Ads

Attorneys who engage in “materially misleading” advertising of legal services involving approved medical devices and prescription drugs would violate California consumer law under a bill in the state Legislature.

The California bill is the latest in a U.S. Chamber of Commerce-backed effort to target ads about damages allegedly caused by Food and Drug Administration-approved drugs and devices. House Judiciary Committee Chairman Rep. Bob Goodlatte (R-Va.) in March 2017 sent letters asking every state bar association to adopt self-imposed limits on drug ads. Those ads, Goodlatte said, should include disclaimers warning patients not to stop taking medications without consulting their doctors.

Assembly Bill 3217 targets plaintiffs’ lawyer ads that speak of the deadly consequences of drugs and medical devices. The ads are used to find plaintiffs for class actions against drug and device manufacturers.

Proponents of regulation say the ads can scare patients into halting needed medications without first consulting their doctors. A 2016 study commissioned by blood thinner drug manufacturer Janssen Pharmaceutical said two people died and 28 others suffered serious medical problems after they saw the lawsuit ads and stopped taking the bloodthinner Xarelto.

A.B. 3217 extends the California Consumer Legal Remedies Act to include legal advertisements that either materially understates the benefits or overstates the risks associated with approved drugs and devices.

“My hope is that the bill will lead those putting forth these advertisements to more carefully consider how they characterize both the upside and downside of drugs and medical devices,” sponsor Assemblymember Marc Berman (D) told the committee, which unanimously passed A.B. 3217 to the Assembly floor for second reading.

“An advertisement may be considered materially misleading if it materially understates the benefits of a drug or device, or materially overstates the risk associated with the drug or device,” the bill said.

Protection Proposed

The bill as amended is an “important step in helping to protect the public health without limiting the ability for consumer to learn about dangerous or defective products through advertising,” John Doherty, president of the Civil Justice Association of California, told the committee. The CJA is tort reform-minded group whose members include GlaxoSmithKline, Pfizer Inc., AT&T Inc., Ford Motor Co., and Intel Corp.

“The bill focuses on advertising for legal services because of the continuing explosion in expenditures and numbers of commercials that the public is being hit with,” with spending on such ads swelled to $1 billion in 2017, Doherty said.

The ads often designed to shock and scare consumers into action are “having an impact that goes beyond signing up people for lawsuits,” he said.

California Medical Association likewise backs the bill as “sensible policy to make ads more fairly balanced and ensure patient safety,” lobbyist Stuart Thompson told the committee. Consumer Attorneys of California has no position on the bill as amended, and no opposition was registered.

The bill was amended to drop language prohibiting a person to use, obtain, sell, transfer or disclose, without written authorization, protected health information for the purposes of soliciting an individual for legal services.

Advertising v. Speech

The proposed bill may run into free speech issues, University of California Hastings Law Professor Richard Zitrin told Bloomberg Law.

Zitrin said he understands why Berman “wants to regulate this, but when we’re talking about advertising that is not misleading, the question is whether it might run afoul of commercial free speech,” which is protected.

“It doesn’t seem to me on this face that it’s attacking ‘materially misleading’ advertising because it seems more that it is prescribing something that the advertising has to say. And that’s a question of commercial free speech,” Zitrin said.

He added, “You can regulate solicitation much more closely than you can regulate advertising.”

Zitrin suggested adding “something here to say you might be subject to state bar discipline. And that would be a much stronger statute.”

The bill passed two days before the California Supreme Court adopted the Rules of Professional Conduct, including Rule 7.2, which specifically prohibits disseminating false or misleading advertisements.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editor responsible for this story: S. Ethan Bowers at sbowers@bloomberglaw.com