On September 19, a federal appeals court in California halted the implementation of a San Francisco ordinance requiring “sugar-sweetened beverage” purveyors to display a health warning on certain advertisements. In American Beverage Association et al v. City and County of San Francisco, the Ninth Circuit Court of Appeals issued a preliminary injunction stating that the city had probably violated the First Amendment by compelling private businesses to make controversial and burdensome disclosures about their products. No 3:15-cv-03415-EMC (9th Cir. Sept. 19, 2017). This recognition of constitutional protections against corporate “compelled speech” suggests an avenue for a First Amendment challenge against the mandatory warning requirements under California’s Proposition 65 (Prop 65).
In June 2015, San Francisco adopted an ordinance that required warnings about the health effects of certain sugar-sweetened beverages on fixed advertising within the city. The ordinance required, among other things, that the language of the following warning occupy at least 20 percent of the advertisement for certain beverages: “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.” The affected businesses quickly sued San Francisco, and appealed to the Ninth Circuit after the district court declined to issue a preliminary injunction that would have stopped the ordinance from taking effect.
A three-judge panel of the Ninth Circuit applied the framework set out in the Supreme Court’s 1985 Zauderer opinion, under which “unjustified or unduly burdensome disclosure requirements” that might “chill protected commercial speech” violate the First Amendment. Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985). This is a standard that other courts have employed to affirm most compelled disclosure requirements. In Zauderer, however, the court found that San Francisco’s required sugar warning was not only controversial, but also misleading – and thus not likely to survive First Amendment scrutiny. American Beverage Association, at 20-21. The court pointed out that the other national authorities, including the FDA and various medical associations, have determined that sugar-sweetened beverages are safe in moderation, but that the required disclosure “conveys the message that sugar-sweetened beverages contribute to [poor] health conditions regardless of the quantity consumed or other lifestyle choices.” Id. Although governments may have considerable leeway in implementing disclosure requirements, the court concluded that under existing case law, San Francisco may not “require corporations to provide one-sided or misleading messages or to use their own property to convey an antagonistic ideological message.” Id. at 23. The court went on to find that the ordinance also imposed an “undue burden that may chill protected speech,” as the required “black box,” bold warning renders the fixed advertisements “so ineffective as to make it impractical to advertise” in this way. Id.
Prop 65 shares certain characteristics with the voided San Francisco ordinance: Just as the sugar-sweetened beverage rule mandates disclosure language that lacks important contextual information, Prop 65 requires the same warning regardless of the potential exposure level to chemicals or the existence of a verifiable health risk from those exposure levels. The San Francisco ordinance applies to beverages that major scientific authorities regard to be innocuous in moderation, just as Prop 65 mandates disclosures for numerous chemicals that the FDA, EPA, or other authoritative bodies have not identified as harmful. Finally, the language and placement of certain Prop 65 warnings can overwhelm a product to the same degree as the “black box” warnings on sweetened drinks rejected by the court here.
We will continue to keep you apprised of developments in ABA v. San Francisco. If you have questions or would like more information about chemical regulation and the applicability of this decision to required statements more broadly, please contact Seth Goldberg at +1 202 429 6213, Chris Amantea at +1 213 439 9424, Shannen Coffin at +1 202 429 6255, Jason Levin at +1 213 439 9455, or Sara Beth Watson at +1 202 429 6460.