What's next in the legal fight between the PR industry and New York State

Legal experts say the next 10 days are critical if the industry wants to turn back efforts by the state Joint Commission on Public Ethics that would redefine some PR activities as lobbying.

Image via Terabass / Wikimedia Commons; used under the Creative Commons Attribution-Share Alike 3.0 Unported license
Image via Terabass / Wikimedia Commons; used under the Creative Commons Attribution-Share Alike 3.0 Unported license

Earlier this week, five agencies filed a lawsuit against New York’s Joint Commission on Public Ethics to block the body from enacting regulations that would require many PR professionals in the state to file with the government as lobbyists.

The agencies behind the suit – The November Team, Anat Gerstein, BerlinRosen Public Affairs, Risa Heller Communications, and Mercury – have the support of three industry bodies: the PR Council, the Arthur W. Page Society, and the Public Relations Society of America. The groups filed a separate third-party affidavit on the Commission’s advisory opinion.

"Because this issue is so important to the communications industry, we, along with the Arthur W. Page Society and PRSA have filed affidavits to explain the broad-reaching impact and perhaps unintended consequences on our members," says Renee Wilson, president of the PR Council.

Leaders from other industry groups add that the measure could have significant financial consequences for agencies. Mark McClennan, 2016 PRSA national board chair, stresses that the regulation goes too far.

"Many smaller firms whose focus may be on products or corporate reputation, but might be asked a question about pending legislation by a reporter, may need to hire a lawyer to register or decline to speak to the press about these issues," he explains.

As previously defined by the state’s Lobbying Act, the term "lobbyist" includes consultants who receive $5,000 or more in expenses per year for local lobbying activity. However, including the advisory opinion, lobbying could be defined as "any attempt to influence a government action," such as grassroots lobbying. Any time a consultant would speak to reporters or editorial writers about pending or contemplated regulation, executive orders, regulations, or government procurements on behalf of a client, they would be required to register with the Committee and disclose their policy goals and financial arrangements.

"[The committee] announced its interest in doing this in June 2015. On behalf of some of my PR firm clients, I wrote to them in July and December 2015, warning them that this was unconstitutional and a big mistake. They ignored the warnings and went ahead with the advisory opinion," says Andrew Celli, a lawyer from Emery Celli Brinckerhoff & Abady, representing the November Team. "My own view is that the advisory opinion is a misguided and unconstitutional reaction to criticism that the commission has not been aggressive enough. I personally think that that criticism is unfair, for several reasons, but it’s definitely out there."

The Joint Commission voted earlier this year in a landslide to approve the advisory opinion. Industry groups said the tally demonstrated the Commission does not understand the distinction between PR and lobbying and immediately opposed the measure. Media and civil liberties groups did the same.

Michael Lasky, partner at Davis & Gilbert, the firm representing the three PR organizations, calls the ruling unconstitutional and a violation of the First Amendment and the Due Process Clause of the Fourteenth Amendment.

"The lawsuit seeks to have the court enter emergency relief immediately to suspend or stay the enforcement of the law, as promulgated in the advisory opinion enacted on January 26, pending the court’s final decision in the case," he says. Though Lasky did not have a specific date, he suspects the judge will ask New York State to file its legal brief and its affidavits showing why the law is constitutional by early next week. He believes the court will hold oral arguments on the issue shortly thereafter on whether to grant an interim injunction.

However, Walter McClure, director of external affairs for the Joint Commission, contends the reasons the measure was voted on in the first place have not changed. The formal opinion was issued in January after eight months of outreach and consideration by the Commissioners. A draft was discussed at a public meeting last spring, then presented in the fall and revised several times due to issues raised by opposing parties.

The Commission stands firmly behind its interpretation of the Lobbying Act. Its advisory opinion lays out three examples of this categorization of lobbying: first, when a consultant contacts a public official on behalf of a client with the purpose of ultimately facilitating advocacy; second, any direct interaction with a public official in connection with an advocacy campaign, including initial communications; third, a consultant’s activity in a grassroots campaign if they had control of the delivery and input into the content of the message.

"We are opposed to the motion and look forward to our day in court," McClure says.

Yet why are state officials pushing the reforms now? It’s unclear, according to Lasky.

"Ethics reform has been a priority of Governor [Andrew] Cuomo’s administration, but there was no particular scandal involving PR firms, and no outcry for further regulation," he says. "The Joint Commission seems to have created a solution in search of a problem. In fact, even Cuomo’s office has noted that this law ‘raises some real questions.’"

The next steps are a court case in which the judge will decide whether to enjoin the advisory opinion and any enforcement based on it. Lasky expects this to happen in the next month.

Lasky and the organizations involved believe what they see as a clear violation of their First Amendment rights favors the PR bodies’ cause and that the vagueness of the opinion makes it difficult for PR pros to adhere to the law.

"Supreme Court precedent requires that restrictions on speech of matters of public interest be required by a legitimate government interest and be narrowly tailored," he says. "The plaintiffs in this lawsuit argue that [the opinion] doesn’t do either."

The next 10 days will be critical. A compromise may be an option if New York State can clarify or amend the advisory opinion to narrow the scope of who is regulated. Yet Lasky says it’s too early to tell if that will be the case.

If the opinion holds up, the law will require many PR firms to register as lobbyists and face annual reporting requirements. These reports include a disclosure of topics on which there has been lobbying, the terms of the client-agency agreements, and the fees paid to the agency. Failure to follow the law could lead to civil enforcement actions. However, to his knowledge, Lasky notes the measure has not been enforced since it went into effect five weeks ago.

On a practical level, the opinion could mean many PR firms have to hire someone to oversee compliance and manage the paperwork to follow the regulations.

"For smaller firms like mine, it’s a bigger problem and an added expense," says Anat Gerstein, founder and president of the eponymous agency, which is one of the five agencies behind the suit. "We didn’t want to be lobbyists; we wanted to be PR people. I don’t see how my conversations with an editorial board should be considered lobbying."

On a broader note, Gerstein echoes the sentiment that the advisory opinion is illegal. The firm deals mostly with nonprofits, many of which get money from the government to run their programs. They will not want dissenting opinions on the record, and it might paralyze the work they do on behalf of the public

"I have a First Amendment right to speak clearly to press without reporting it to government," Gerstein says. "Any regulations of conversations between anybody in the press is illegal, I don’t see where there’s compromise."

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