187 F. Supp. 3d 1123
N.D. Cal.2016Background
- Plaintiffs (American Beverage Ass'n, California Retailers Ass'n, California State Outdoor Advertising Ass'n) challenge San Francisco Ord. No. 100-15 (codified at S.F. Health Code §§4200–06) requiring certain ads for sugar-sweetened beverages (SSBs) to include a City-prescribed warning occupying at least 20% of the ad: "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."
- Ordinance applies to many physical/formatted ads (billboards, transit shelters, vehicle ads, posters) but excludes newspapers, magazines, internet, TV, packaging, menus, small logos, and certain grandfathered signs.
- Plaintiffs seek a preliminary injunction on First Amendment grounds, arguing the requirement compels speech, is misleading, and will chill or cause withdrawal from covered advertising.
- The City defends under Zauderer as a compelled commercial-disclosure regulation reasonably related to public-health interests (obesity, diabetes, tooth decay); City provided expert evidence linking SSBs to the stated harms.
- Court evaluated likelihood of success, irreparable harm, balance of equities, and public interest and denied the preliminary injunction, applying Zauderer (rational-basis-like review for factual, accurate disclosures) and finding Plaintiffs unlikely to prevail.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ordinance targets noncommercial or mixed speech (requiring strict scrutiny) | Plaintiffs: Ads sometimes carry noncommercial messages intertwined with logos; ordinance reaches noncommercial speech so strict scrutiny applies | City: Ordinance regulates commercial advertising for products; facial overbreadth requires showing substantial noncommercial speech will be affected | Court: Facial noncommercial-speech challenge fails; Plaintiffs did not show substantial protected noncommercial speech is covered |
| Appropriate standard for compelled disclosures of commercial speech | Plaintiffs: Zauderer limited; Retail Digital/ Sorrell suggest heightened scrutiny for content/speaker-based restrictions | City: Zauderer governs compelled disclosures (not content ban); Zauderer applies to public-health interests | Court: Zauderer applies; heightened scrutiny not required |
| Whether the warning is factual/accurate (Zauderer predicate) | Plaintiffs: Warning misleading ascribing causal or unique contribution to obesity/diabetes; underinclusive and overbroad | City: Evidence shows SSBs contribute to tooth decay, excess calories, and thus to obesity/diabetes; reasonable basis to single out SSBs | Court: Warning deemed factual and accurate (tooth decay undisputed; "contribute" for obesity/diabetes supported); reasonably related to public-health interest |
| Whether 20% size and burden chill speech and render ordinance unconstitutional | Plaintiffs: 20% is unduly burdensome, will dominate ads, prevent counterspeech, and cause withdrawal from covered media | City: 20% is modest (compared to tobacco precedents), text-only warning less salient than pictorials; advertisers can adapt or counter-speak; Zauderer subsumes chilling inquiry into reasonable-relation test | Court: Size makes case close but not dispositive; Plaintiffs’ withdrawal claims not credible; burden not likely to render ordinance unconstitutional at preliminary stage |
Key Cases Cited
- Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985) (compelled commercial disclosures upheld so long as factual/accurate and reasonably related to government interest)
- Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S. 229 (2010) (discussion of compelled disclosures in commercial context)
- Sorrell v. IMS Health Inc., 564 U.S. 552 (2011) (heightened scrutiny for content- and speaker-based restrictions on commercial speech)
- Retail Digital Network, LLC v. Appelsmith, 810 F.3d 638 (9th Cir. 2016) (addressing interplay of Sorrell and commercial-speech restrictions)
- Video Software Dealers Ass'n v. Schwarzenegger, 556 F.3d 950 (9th Cir. 2009) (Zauderer factuality discussion)
- Discount Tobacco City & Lottery, Inc. v. United States, 674 F.3d 509 (6th Cir. 2012) (tobacco-warning precedent assessing Zauderer review)
- Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008) (preliminary injunction standard)
- Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (serious-questions test survives Winter)