American Beverage Association v. San Francisco: When the First Amendment Jeopardizes Public Health

Crossposted from the Public Health Law Watch blog

By Micah BermanWendy E. Parmet, and Jason A. Smith

Last week, while the health law world focused on the Republicans’ renewed attempt to repeal and replace the ACA, the Ninth Circuit struck an ominous blow to public health. As we have noted previously, federal courts in recent years have relied on an increasingly expansive interpretation of the First Amendment to prioritize the rights of commercial speakers over the health and safety of the public.  This new-found appreciation for commercial speech has resulted in decisions striking down a wide-range of public health regulations and has led food and beverage companies to make “ever-bolder arguments aimed at limiting longstanding government authority to protect the public’s health.” In American Beverage Association v. City and County of San Francisco, those bolder arguments were accepted by the court, putting public health regulations in greater peril.

American Beverage Association concerned a challenge to a 2015 San Francisco ordinance requiring certain advertisements of sugar-sweetened beverages (SSBs) to display over at least 20% of the area of the advertisement a warning stating: “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.”

Mock up SF soda warning label.jpg

In support of the mandate, the city cited recommendations by the World Health Organization, the American Dental Association, and the American Heart Association that people limit their intake of added sugar, and noted that “sugar-sweetened sodas and fruit drinks containing less than 100% juice by volume, are major sources of added sugars in American diets…” The city further noted that the USDA had concluded in 2015 that consumption of added sugars was associated with obesity, type 2 diabetes, cardiovascular disease and dental caries.

Before the ordinance could take effect, the American Beverage Association (ABA), the California Retailers Association and the California State Outdoor Advertising Association, brought a First Amendment challenge in federal court. In May 2016, Judge Edward Chen rejected the plaintiffs’ request for a preliminary injunction, finding that they were not likely to succeed on the merits. As the district court noted, under the Supreme Court’s decision Zauderer v. Office of Disciplinary Counsel of Supreme Court, laws that compel commercial speakers to disclose factually accurate information are subject only to rational basis review. Responding to the plaintiff’s argument that Zauderer as well as Ninth Circuit precedent permitted rational basis review only when regulations were not controversial, the district court explained that “the ‘uncontroversial’ requirement should not be read expansively to mean something beyond accuracy. …” The court then went on to review the extensive evidence establishing the health dangers of SSBs, and determined that the warning was factually accurate and rationally related to protecting public health.

On appeal, the plaintiffs argued that the district court misinterpreted the Zauderer test and that under the correct approach, the court must consider whether warnings are controversialnon-factual, and unduly burdensome. Plaintiffs further argued that the lower court read the requirement that warnings not be controversial too narrowly. The Ninth Circuit agreed with the ABA on all three points – all of which are deeply problematic for public health.  To briefly summarize:

Controversial:  At the outset, the court (correctly) recognized that “‘uncontroversial’ in this context ‘refers to the factual accuracy of the disclosure…’”—i.e., whether or not the facts are reasonably in dispute.  There is no real scientifically valid dispute that sugary beverages do indeed “contribute to obesity, diabetes, and tooth decay.”  Thus, this issue should have been easily resolved in the City’s favor.  But, the court instead concluded that the City’s message was “controversial” because added sugars do not contribute to obesity or diabetes in all cases.  It accepted the ABA’s argument that only “overconsumption” is problematic.  Such nitpicking is perhaps explained by a failure to understand basic epidemiology (what “contributes to” means).  More broadly, though, the decision seems to accept the argument that the warning was “controversial” merely because beverage companies objected to having to carry it.  Thus the “uncontroversial” requirement is no longer limited to inaccurate statements, but rather applies as long as there is any objection to a warning. If this were the standard, of course, every warning or disclosure that a manufacturer did not want to convey would be “controversial.”

Factual:  The court next concluded that the required warning was not “factual” because it implicitly suggested that “sugar-sweetened beverages are less healthy that other sources of added sugars … and are more likely to contribute to obesity, diabetes, and tooth decay than other foods.”  Thus, it concluded that the required warning was “misleading, and, in that sense, untrue.”  It used this example, supplied by the ABA:

If car dealers were required to post a warning only on Toyota vehicles that said: “WARNING: Toyotas contribute to roll-over crashes,” the common-sense conclusion would be that Toyotas are more likely to cause rollovers than other vehicles.

Putting aside the issue that added sugars in beverages may well be less healthy than other sources of added sugars, this is an inapposite example.  The City’s warning does not apply to a particular brand; it applies to all sugar-sweetened beverages.  A better analogy would have been a warning on cars that says “WARNING: Operating the audio system while driving increases the risk of an accident.”  Such a warning would not suggest that doing other things—like texting while driving—do not also pose a risk of distraction, or that engaging in other dangerous actions while driving would not also increase the risk of an accident. The First Amendment certainly surely does not require that compelled warnings be carefully contextualized and compared to all other hazards.

Undue Burden:  Finally, the court ruled that the ordinance was “unduly burdensome” because the warnings would “overwhelm[] other visual elements in the advertisement.”  This decision is troublesome for public health, since other required warnings—such as those on smokeless tobacco products—are even larger.  The court went on to note that some beverage companies had suggested that they would stop advertising in San Francisco if the warnings went into effect, and that this “supports the [plaintiffs’] position that position that the disclosure requirement is unduly burdensome because it effectively rules out advertising in a particular medium.”  But the cases cited by the Ninth Circuit involved instances where it would have been literally impossible to comply with a warning required and still advertise in a particular medium.  Choosing not to advertise because one would rather not carry a warning is something entirely different, and—like the court’s reading of “controversial”—such a rule would effectively give regulated entities a veto over warning requirements.

We have argued elsewhere that courts must consider the health impact of laws that regulate commercial speech in the name of public health. In making that assessment, professional expertise and scientific evidence should play an important role. Experts are often uniquely positioned to identify whether or not a law regulating speech may benefit or protect public health. As result, as the Third Circuit explained in a professional speech cases, legislatures “are entitled to rely on the empirical judgments of independent professional organizations that possess specialized knowledge and experience concerning the professional practice under review”.

American Beverage Association underscores the importance of allowing legislatures to rely on expert opinion, as well as the need for a more robust approach by courts for handling expert opinions.  Courts must be able to distinguish between scientific debate and established consensus. In finding that San Francisco’s proposed warning was controversial and factually misleading, the Ninth Circuit relied on statements by the FDA that added sugars are “generally safe” and “no more likely to cause weight gain in adults than any other source of energy.” The court also cited technical comments issued by the American Dental Association which stated in part “the evidence is not yet sufficient to single out any one food or beverage product as a key driver of dental caries.”

In relying on these comments to conclude that the warning was misleading and controversial, the Ninth Circuit failed to give respect to the city’s own health officials. The court also failed to appreciate he broad scientific consensus that SSBs contribute to the diseases cited in the warning, as well as the function of evidence within the regulatory process.  Equally troubling is the role that the food industry has in influencing both scientific evidence and regulatory systems. The food and beverage industries have been working consistently to fund scientific research that shifts blame from their products and have also been tireless in their efforts to hinder the FDA.  Given the Ninth Circuit’s conclusion that mandated warnings are unconstitutional as long as they are controversial, industry has yet more reason to fund and produce evidence that exonerates their products. In effect, the mere production of such evidence, no matter how scientifically questionable, may now restrict the state’s right to compel warning labels.

Although the court in American Beverage Association recognized that the protection of public health is a substantial state interest that may warrant restricting commercial speech in appropriate cases, its analysis placed new and possibly insurmountable obstacles on the regulation of commercial speech. By describing well-established scientific facts as “disputed policy views” or as “one-sided [and] misleading messages”—the court offered industry a blueprint for producing false controversy and striking down public health laws that are based on the weight of the evidence. The decision may yet be reviewed and reversed by the full Ninth Circuit en banc. The state’s ability to regulate commercial speech to protect public health may depend on what the full court does.

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