Appeals court grants injunction against San Francisco's sugary drinks ad requirements

By Sara McCleary | Sep 22, 2017

SAN FRANCISCO – A California appellate court has found that advertising requirements set out by the city of San Francisco concerning sugar-sweetened beverages is unconstitutional, and has granted a preliminary injunction to the ordinance’s opponents.

The American Beverage Association, the California Retailers Association, and the California State Outdoor Advertising Association (“the Associations”) had brought their appeal to the U.S. Court of Appeals for the Ninth Circuit after a district judge denied their motion for an injunction. 

The associations had been challenging San Francisco’s ordinance, which was supposed to go into effect in July, 2016, requiring advertisers of sugar-sweetened drinks to include on all advertisements a white box with a black border containing the warning, “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 ordinance, the warning was required to cover a full 20 percent of the ad’s surface area.

The appellate court’s opinion, written by Judge Sandra Segal Ikuta with Judge Dorothy W. Nelson and Chief District Judge J. Michael Seabright concurring, was filed Sept. 19.

In reversing the circuit court’s dismissal, the appellate court primarily turned to the Supreme Court ruling in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio to answer whether the requirement is constitutional or if it chills commercial speech. 

“Despite the lesser First Amendment interest in compelled commercial speech, the [Supreme] Court recognized that ‘unjustified or unduly burdensome disclosure requirements might offend the First Amendment by chilling protected commercial speech,’” Ikuta wrote, citing the Zauderer decision. “Nevertheless, disclosure requirements that are ‘reasonably related to the state’s interest in preventing deception of consumers’ generally do not offend a commercial speaker’s First Amendment rights.”

Therefore, the court determined the Zauderer case was applicable to the associations’ appeal by applying the case’s “general rule that a purely factual and uncontroversial disclosure that is not unduly burdensome will withstand First Amendment scrutiny so long as it is reasonably related to a substantial government interest.,” Ikuta wrote. 

Under the court’s examination, San Francisco’s advertisement ordinance did not hold up to the first criterion, with the court determining that the required statement that sugar-sweetened beverages contribute to the listed health problems cannot be considered factual and uncontroversial. To the contrary, the court considered statements from the FDA that have stated that added sugars are generally viewed as safe so long as they are consumed as part of a healthy diet that doesn’t include excessive calorie intake.

“Because San Francisco’s warning does not state that over-consumption of sugar-sweetened beverages contributes to obesity, diabetes, and tooth decay, or that consumption of sugar-sweetened beverages may contribute to obesity, diabetes, and tooth decay the accuracy of the warning is in reasonable dispute,” Ikuta wrote.

Considering the rest of the precedent set in Zauderer, the court then examined whether the requirements are “unduly burdensome,” ultimately determining that because the warning overwhelms the rest of the advertisements, many companies might cease using the affected forms of advertising, while others might feel they need to engage with the warning, ultimately turning those advertisements into debates about the health effects of the products. Therefore, the court concluded, the ordinance does impose an undue burden, and as such it imposes on the associations’ First Amendment rights.

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