Another Nail Hammered Into Sugary-Drink Ban

ALBANY, N.Y. (CN) - An attempt to limit the size of sugary, high-calorie drinks sold in the Big Apple marked a breach of regulatory authority, New York's highest court ruled.

Approved two years ago as a key part of former Mayor Michael Bloomberg's fight against obesity, the "Sugary Drinks Portion Cap Rule" adopted by the New York City Board of Health would have barred restaurants, movie theaters, delis, food carts and other venues from selling sweetened beverages in containers larger than 16 ounces.

Business, labor and civic groups challenged the new rule almost immediately. A judge in Manhattan found the regulation invalid and blocked the city from enforcing it in March 2013.

The Appellate Division's First Judicial Department unanimously affirmed the decision last summer, and the divided Court of Appeals put the final nail in the ban Thursday.

"By choosing among competing policy goals, without legislative delegation or guidance, the board engaged in law-making and thus infringed upon the legislative jurisdiction of the City Council of New York," Judge Eugene Pigott wrote for the majority.

While the city contended the board "is a unique body that has inherent legislative authority," Pigott noted that the city charter recognized the City Council as the sole legislative branch in New York City. "The charter contains no suggestion that the Board of Health has the authority to create laws," he wrote.

That charter limits the board, like any other administrative agency in the city, to promulgating rules to carry out its delegated duties. "A rule has the force of law, but it is not a law; rather, it 'implements or applies law or policy,'" Pigott said.

Echoing the finding of the lower courts, the Court of Appeals used the framework established in its 1987 decision in Boreali v. Axelrod to assess whether the Board of Health acted as regulator or legislator in adopting the portion-cap rule.

In Boreali, "we reasoned that 'to the extent that the agency has built a regulatory scheme on its own conclusions about the appropriate balance of trade-offs between health and cost to particular industries in the private sector, it was acting solely on its own ideas of sound public policy and was therefore operating outside of its proper sphere of authority,'" the ruling states.

With the portion-cap rule, the board was not fleshing out legislation passed by the state Legislature or City Council - since neither has done so, Pigott wrote. "Devising an entirely new rule that significantly changes the manner in which sugary beverages are provided to customers at eating establishments is not an auxiliary selection of means to an end; it reflects a new policy choice," he said.

Judges Victoria Graffeo, Robert Smith and Sheila Abdus-Salaam joined Smith's 20-page opinion. Abdus-Salaam wrote a separate concurring opinion "to emphasize the carefully circumscribed nature of the court's decision."

"No one should read today's decision too broadly," she wrote. "We simply conclude that, under the circumstances in this case, the board ran afoul of the separation of powers principles by creating the portion cap rule."

Chief Judge Jonathan Lippman joined a dissent by Judge Susan Read in which she found noting wrong with the failure by the City Council to authorize the portion-cap rule or otherwise regulate sugary drinks.

"There is no question that the portion cap rule falls comfortably within the broad delegation granted to the board by the Legislature," Read wrote.

"The majority fails to advance any persuasive argument why the judiciary should step into the middle of a debate over public health policy and prohibit the board from implementing a measure designed to reduce chronic health risks associated with sugary beverages just because the council has not chosen to act in this area," the 26-page dissent concludes.

Criticizing the court's application of the Boreali standard, Read said "the majority misapprehends, mischaracterizes and thereby curtails the powers of the New York City Board of Health to address the public health threats of the early 21st century," including obesity.

"Neither Boreali nor any other doctrine in our jurisprudence compels this unhappy result," she added.

Read reached back to 1796 to sketch out the history of public health regulation in New York City, saying that the Board of Health had a mandate from the state Legislature to "act independently."

"Its regulations have the force and effect of state law," Read wrote of the board.

Richard Dearing of the New York City Law Department argued for the city appellants, which included the Board of Health, the Department of Health and Mental Hygiene, and then-Health Commissioner Dr. Thomas Farley.

Richard Bress of Latham & Watkins in Washington, D.C., represented the plaintiffs, which included the New York Statewide Coalition of Hispanic Chambers of Commerce, the New York Korean-American Grocers Association, the Soft Drink and Brewery Workers Union, the National Restaurant Association and the American Beverage Association.

Amicus curiae briefs were submitted by many others: trade groups, professional associations, research and policy centers, and law professors. New York City's Public Advocate and 32 members of the City Council also weighed in, according to Pigott's opinion. He thanked them for the briefs, describing them as being "of considerable assistance to us in our deliberations."

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit