En Banc Ninth Circuit Blocks San Francisco Warning on Soda Ads

SAN FRANCISCO (CN) – An en banc Ninth Circuit on Thursday ordered a trial court to take a second look at blocking a San Francisco ordinance requiring warning labels on billboard ads for sugary drinks.

The 11-judge panel found beverage makers will likely succeed with their claims the warning labels infringe their free-speech rights, and the trial court had an obligation to preliminary block the ordinance as a result.

“Because plaintiffs have a colorable First Amendment claim, they have demonstrated that they likely will suffer irreparable harm if the ordinance takes effect,” U.S. Circuit Judge Susan Graber wrote for the majority.

A year ago, a three-judge Ninth Circuit panel sided with the American Beverage Association, the California Retailers Association and the California State Outdoor Advertising Association, finding San Francisco’s 2015 ordinance requiring warning labels on outdoor soda ads “unduly burdened and chilled protected speech.”

The ordinance would have required a black-box warning label saying “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 label would have to cover at least 20 percent of the ad space.

The en banc ruling does not mean the soda makers prevail in the case, but instead merely blocks San Francisco from implementing the ordinance until the case has been decided.

Legal analysts are watching the case closely due to potential impacts on public health, warning labels and the extent to which governments can regulate private industry by forcing disclosure of potential health impacts of products.

“It was a great bad opinion,” said Jennifer Pomeranz, a professor at the New York University College of Global Public Health, meaning because the majority focused on the undue burden aspect of the ordinance – warnings must cover 20 percent of the label – San Francisco and other cities may still have room to maneuver by devising less burdensome requirements.

“They picked the issue of least concern, meaning another government could pick a smaller warning label and try again,” Pomeranz said.

Not all of the judges on the panel felt that way, though, showing the legality of government-compelled factual speech in a commercial context remains unsettled.

U.S. Circuit Judge Morgan Christen sided with the majority on the issue of granting a preliminary injunction, but for a different reason: She said the warning labels would not contain strictly factual information.

Government can’t force private companies to put warning labels on their products that aren’t factual.

Christen says the ordinance in question fails the purely factual test because it requires warning labels to say sugary beverages contribute to diabetes, something she says “is devoid of scientific support.”

Pomeranz disagreed, but said the city’s lawyers will have to get their scientific facts in order for the next round of disputes.

The other aspect of this case lies in the recent U.S. Supreme Court ruling in National Institute of Family & Life Advocates v. Becerra with broad implications on the government’s ability to regulate commercial speech. 

While that decision, decided 5-4 on ideological lines with an opinion written by Justice Clarence Thomas, found content-based restrictions on commercial speech must adhere to strict scrutiny, the majority in the Ninth Circuit en banc panel found Thomas’ opinion carved out exception for “health and safety warnings.”

But U.S. Circuit Judge Sandra Ikuta wrote the majority shouldn’t have cited that exception, saying it only applied to health and safety warnings with a long tradition.

Pomeranz said the majority deftly sidestepped the implications of the Supreme Court ruling, but also said these types of legal interpretations that take a dim view of the government’s ability to regulate private industry are why Supreme Court Justice Elena Kagan accused her conservative peers of “weaponizing the First Amendment.”

The warning label case goes back to the trial court, which must preliminarily block the ordinance while the case is decided.

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