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Media Law Prof Blog
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Regulating the Ratings Industry

By Media Law Prof Blog
Caleb M. Deats has published Talk that Isn’t Cheap: Does the First Amendment Protect Credit Rating Agencies’ Faulty Methodologies from Regulation?, forthcoming in the Columbia Law Review. Here is the abstract.

This Note argues that courts should reject the Southern District of New York’s distinction in Abu Dhabi Commercial Bank v. Morgan Stanley & Co. between publicly and privately disseminated ratings, instead analyzing ratings as commercial speech. Courts should do so not because precedent compels such analysis, but instead because the First Amendment values that the Supreme Court has previously identified render an analogy with commercial speech appropriate. Analyzing ratings as commercial speech best addresses the Supreme Court’s underlying concerns in Dun & Bradstreet. Moreover, it provides a standard for private liability that neither immunizes egregious conduct nor threatens the financial viability of the rating industry. Finally, it identifies the interests in pursuit of which the legislature may regulate rating agencies.

Download the note from SSRN at the link.