9th Circuit must reconsider Berkeley commercial speech ordinance under new NIFLA precedent

Days after the U.S. Supreme Court limited the power of state governments to compel speech objectionable to certain business owners, the justices instructed an appeals court to reconsider a closely watched commercial speech dispute testing the same governmental power under the First Amendment.

On Thursday, the justices returned to the 9th U.S. Circuit Court of Appeals a case challenging the city of Berkeley's ordinance requiring cellphone retailers to notify buyers that keeping wireless devices in pockets or in other places in close contact to the body could lead to radio-frequency radiation exposure. The case should be reconsidered under the new precedent, the court said. CTIA-The Wireless Ass'n v. City of Berkeley, 854 F.3d 1105 (9th Cir. 2017).

CTIA, a trade organization representing wireless communication companies, sued the city in 2015 shortly after Berkeley passed the ordinance. And in 2017, a split panel of the 9th Circuit affirmed U.S. District Judge Edward M. Chen's decision to deny CTIA's request for a preliminary injunction blocking the ordinance.

Judge William A. Fletcher, who authored the majority opinion, wrote that the requirement complied with the First Amendment because it required the disclosure of factual information in which the government had an interest in disclosing.

Berkeley had an interest in alerting consumers about safety disclosures required by the Federal Communication Commission, Fletcher wrote.

Represented by Supreme Court bar heavyweight and Gibson, Dunn & Crutcher LLP partner Theodore B. Olson, CTIA requested in January that the high court review the case.

At the crux of the dispute is the 1985 decision the high court handed down in Zauderer v. Office of Disc. Counsel, 471 U.S. 626, the seminal case used for interpreting compelled commercial speech when challenged by First Amendment claims.

The Zauderer court upheld an Ohio requirement that an attorney articulate fully the details of his fee arrangements to clients. The decision has been interpreted by circuit courts to allow the government to compel certain types of commercial speech if the statements are factual and uncontroversial.

On Tuesday, a conservative five-justice majority of the Supreme Court said Zauderer could not be used to require pregnancy centers in California opposed to abortion to post in public spaces the fact that the state funds the procedure for eligible low-income women. National Institute of Family and Life Advocates v. Becerra, 2018 DJDAR 6224 (June 26, 2018).

Liberals on the Supreme Court who dissented from the NIFLA case, warned the new precedent would call into question even the mundane of governmental notice requirements, citing as an example the requirement that hospitals inform parents of newborns about the importance of having children use seat belts.

Now, the court wants the 9th Circuit to revisit its decision in CTIA under the new standard, a development that has "pleased" the wireless telecommunications corporate advocacy group.

"We will continue to assert our position that the First Amendment prohibits state and local governments from forcing retailers to convey the government's message, particularly where that message is misleading, contrary to science, and contrary to the retailers' own views," a company spokesperson said in an email Thursday.

When the CTIA case was at the 9th Circuit last year, it ruffled the feathers of some members of the bench. Judge Michelle T. Friedland authored a dissent from the majority decision, arguing Berkeley failed to adequately establish that carrying a cellphone in one's pocket is actually unsafe, despite its assertion of the fact.

And Judge Kim McLane Wardlaw wrote at length in dissent when the 9th Circuit declined to rehear the case en banc, saying the court should have reviewed the case to clarify that the rational basis review standard established in Zauderer should apply "only when the government compels speech to prevent consumer deception."

Attorneys involved in the CTIA dispute have debated whether the radiation warning is misleading.

"After this case, the City of Berkeley is permitted to require retailers to display a potentially misleading disclosure about the dangers of cell phones that is completely unnecessary in light of the carefully calibrated, FCC-approved disclosures in the user's manual accompanying each new cell phone," she wrote. "Meanwhile, across the bay, San Francisco may not require advertisers of soft drinks with added sugars to warn of the products' adverse health effects."

Wardlaw was referencing the 9th Circuit's decision in Am. Beverage Ass'n v. City & Cty. of S.F., Nos. 16- 16072 & 16-16073, (9th Cir. Sept. 19, 2017). There, Judge Sandra S. Ikuta had cited the Zauderer and CTIA decisions to strike down a San Francisco law requiring such disclosures. Like Fletcher in the CTIA decision, Ikuta concluded Zauderer applied beyond instances of preventing consumer deception.

Harvard Law School professor Lawrence Lessig, who represents Berkeley, did not respond to a request for comment by press time.