The Journal takes a look today at the credit-ratings firms and their assertion that the First Amendment protects them from lawsuits on their ratings.

Moody’s, Standard & Poor’s, and Fitch say that their catastrophically wrong ratings of mortgage-backed securities are immune from suits because they’re just exercising their right to free speech, though it’s free speech that helped burn the whole country down.

The Journal has some good stuff in here putting the issue into historical context. Here’s the precedents:

Courts in the past have held that rating firms are protected against claims that they issued ratings that either were too high or to low. To get around the Constitution, judges have ruled, a plaintiff would have to show that a rating firm not only made false statements, but also did so with “actual malice” — a high legal hurdle. A Houston federal judge in 2005, for example, dismissed claims that rating firms misstated Enron Corp.’s financial condition partly because the plaintiff didn’t allege the firms acted with malice.

It’s mostly a nice story, but I have a couple of questions about the issue.

For one, the Journal doesn’t mention that commercial speech is less protected than non-commercial speech. Now, my whole experience with the law begins and ends with a Mass Communications Law class in college (big shout out to Dr. Loving!), but isn’t the commercial-speech thing relevant to the raters’ defense prospects? After all, they’re being paid to write these opinions by the people they’re writing about. Seems pretty commercial to me. Help me out here.

Second, and more important, the Journal doesn’t mention that the credit raters aren’t just some random outfits out there pontificating and getting paid for it. They’re quasi-regulatory agencies, granted their huge role by the SEC itself, which also gave them monopoly status (and monopoly profits—Warren Buffett just loved Moody’s 50-plus percent profit margins) as National Recognized Statistical Rating Organizations.

When you know that, the free-speech issue looks a little different, no?

Still, the Journal is good to note that these mortgage ratings might be a little different than the bond ratings of yore:

Still, the extent to which a rating firm deserves free-speech protection depends heavily on the facts of a particular rating transaction. And no court, lawyers say, has addressed whether the First Amendment applies specifically to the ratings of mortgage-backed securities, which tend to be rated as discrete issuances for investors as opposed to more general ratings of corporate bonds.

This will be an interesting story to watch, though it will probably take years to unfold, because the credit raters were critical to the functioning of the Wall Street machine that created the crisis. That they were also paid by the operators of that machine seems to me a critical chink in the free-speech armor.

I’m glad the Journal spotlighted the issue.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.