Sugar-sweetened drinks & the First Amendment

From coast to coast, cities have responded to products raising public health concerns with laws that are intended to compel consumers to make different purchasing decisions. These cities' motives, however altruistic, often cannot be squared with the limits of their authority and the constitutional rights of others. New York's attempt to ban the sale of certain high-sugar beverages in excess of 16 ounces was struck down by the courts a few years ago. More recently, San Francisco's effort to require tobacco-style health warnings on billboards and other large-scale outdoor advertising for sugar-sweetened beverages was enjoined from taking effect.

As municipal and state authorities continue to search for ways to legislate and regulate a solution to persistent public health concerns, we can use the 9th U.S. Circuit Court of Appeals' recent review of the San Francisco ordinance as a case study against which future west coast initiatives will be measured.

In 2015, San Francisco sought to require all billboards and other large outdoor advertisements (e.g., those that appear on the sides of buses or the sides of buildings) for sugar-sweetened beverages to include the following disclosure: "WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco." Under the new ordinance, this message from the City and County of San Francisco would have to be presented in a rectangle outlined with a black border (often referred to as a "black box") comprising at least 20 percent of the total space for each billboard or other outdoor advertisement.

The American Beverage Association, California Retailers Association, and California State Outdoor Advertising Association filed litigation to block the new ordinance and, for the last two years, courts in California have been wrestling with whether the law violates the First Amendment of the U.S. Constitution. On Sept. 19 the 9th Circuit held that it likely did.

American Beverage Association v. City and County of San Francisco, 2017 DJDAR 9215, came to the 9th Circuit on appeal from an order of Judge Edward Chen in the Northern District of California denying plaintiffs' motion for preliminary injunction to prevent implementation of the ordinance. The district court held that plaintiffs were not likely to succeed on the merits of their First Amendment challenge because it found that San Francisco's warning message was not misleading, would not place an undue burden on commercial speech, and was rationally related to a government interest. The 9th Circuit disagreed and reversed the district court's ruling. In doing so, the 9th Circuit articulated a legal framework that will apply to similar First Amendment cases for years to come.

While San Francisco pressed for deference, the 9th Circuit held that the appropriate standard of review is de novo because the questions presented are "constitutional questions of fact." Specifically, the court explained that the relevant factual questions (e.g., whether and to what extent to which the ordinance's compelled disclosure burdens commercial speech, and whether the disclosure required by the ordinance is "purely factual and uncontroversial") were inextricably intermingled with the conclusion of law as to whether the commercial speaker's First Amendment rights are violated, thus requiring de novo review.

The parties devoted substantial briefing to the level of scrutiny the 9th Circuit should apply to the ordinance in its review. Plaintiffs argued that the intermediate scrutiny of Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n, 447 U.S. 557 (1980), should apply because the San Francisco ordinance is a limit on commercial speech and, as such, that San Francisco must show that the ordinance directly advances a substantial governmental interest and is no more extensive than is necessary to serve that interest. San Francisco argued that the court should apply the lesser level of scrutiny articulated in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626 (1985), because the ordinance "impose[d] a disclosure requirement rather than an affirmative limitation on speech." Under Zauderer, government-mandated disclosures aimed at preventing consumer deception need only be reasonably related to the government's interest in preventing consumer deception and not offend the commercial speaker's First Amendment rights.

Although Zauderer originally applied only to disclosures aimed at preventing consumer deception, the 9th Circuit held that the lower level of scrutiny should be applied when evaluating the constitutionality of any compelled disclosures, regardless of the promulgating government entity's purpose (e.g., public health rather than consumer direction). Thus, applying the Zauderer standard, the 9th Circuit observed that, so long as San Francisco's billboard ordinance compelled a "purely factual and uncontroversial" disclosure that was not unduly burdensome and was reasonably related to a substantial city interest, it would withstand First Amendment scrutiny.

Notwithstanding this lower level of scrutiny, the San Francisco ordinance failed the test. Understanding how and why San Francisco's ordinance failed the lower level of scrutiny is key to predicting the likelihood of success in future cases.

First, the 9th Circuit held that San Francisco's compelled disclosure was not purely factual and uncontroversial. By requiring an unqualified statement that "[d]rinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay," San Francisco would convey a direct correlation between consumption of the beverages in any quantity and these health conditions, regardless of other lifestyle choices. The 9th Circuit found that message to be false because it is contrary to statements by the Food and Drug Administration that added sugars are generally recognized as safe and can be consumed in moderation. Moreover, even if San Francisco amended its ordinance to incorporate the concept of "overconsumption" and to qualify the link between consumption of sugar sweetened beverages and negative health effects, the ordinance would still be misleading. The 9th Circuit held that a public health disclosure which focused on a single source of added sugars (beverages) to the exclusion of other sources would be deceptive to consumers in light of current scientific research. Ultimately, the 9th Circuit held that the message San Francisco wanted to compel was a policy statement not an uncontroversial statement of fact.

Second, the 9th Circuit held that the ordinance was an undue burden that chilled speech. It found that a black box warning comprising 20 percent of the advertising space was so large and prominent as to thwart the commercial speaker from being able to convey its message and would convert the advertisement into a debate in which the commercial speaker's message competes with San Francisco's policy statement. In formulating its opinion that the ordinance would chill free speech, the 9th Circuit also relied upon sworn representations by relevant commercial speakers that they would refrain from advertising in San Francisco if the ordinance took effect.

Although the 9h Circuit did not disagree that San Francisco has a substantial interest in the health of its residents, it found that plaintiffs had a likelihood of success on the merits of their claim that the ordinance was unconstitutional. The 9th Circuit then readily found that the remaining steps of the preliminary injunction test were met because a colorable First Amendment claim constitutes irreparable injury, tilts the balance of hardships in favor of the constitutional right holder, and is consistent with the public interest in protecting constitutional rights.

In reversing and remanding, the 9th Circuit did not lay out a blueprint by which San Francisco could easily amend its ordinance to avoid constitutional strife. To the contrary, under the legal framework articulated by the 9th Circuit, San Francisco and other governmental entities should head back to the drawing board and carefully consider the constitutional interests of everyone in its jurisdiction.

This article is not legal advice. The views reflected are solely those of the author.