Class Action and Product Insights for Your Business
September 29, 2017 - False Advertising, Product Liability, Consumer Products, Retail

Ninth Circuit Nixes San Francisco Soda Warning

Expiring Soon: Temporary BPA Warning Regs Under Prop. 65

Advertisers and purveyors of sugar-sweetened beverages can rest a little easier now.  The Ninth Circuit recently ordered a district court to issue a preliminary injunction to enjoin the 2015 San Francisco Ordinance requiring inclusion of a warning on all advertisements for sugar-sweetened beverages.[1]  The Ninth Circuit found that the required warning likely impinged on the beverage purveyors’ First Amendment rights and would impermissibly chill commercial speech.[2]

The Ordinance:

 In June 2015, San Francisco enacted a citywide ordinance requiring that advertisements for sugar-sweetened beverages within San Francisco include the following statement:

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.

S.F. Health Code § 4203(a).  Not only was the warning required on all advertisements, the ordinance also mandated it to take up 20% of the advertisement and be set out with a black rectangular border.  Id. § 4203.

The Holding:

As an initial matter, the Ninth Circuit found that framework set out in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626 (1985) extended beyond the consumer protection context and applied it to the challenged ordinance.[3]Zauderer’s general rule is that a purely factual and uncontroversial disclosure that is not unduly burdensome will withstand First Amendment scrutiny so long as it reasonably related to a substantial government interest.[4]

In applying the Zauderer framework, the Ninth Circuit found that:

  • The warning was at least controversial, because it conveyed that the beverages would necessarily contribute to the named health conditions regardless of quantity of consumption, which is contrary to statements by FDA that added sugars are generally recognized as safe;[5]
  • The warning was also misleading, because it focused on one product, suggesting that sugar-sweetened beverages were more likely to cause weight gain than other products with equal or greater amounts of added sugars and calories, which is not supported by the weight of evidence;[6] and
  • The warning was unduly burdensome, because the required warning would effectively take over the message of any advertisement.[7]

 What’s Next?

  • The Ninth Circuit’s ruling may open the door to challenges to other required disclosures.
  • The San Francisco City Attorney has vowed to fight on…

[1] Am. Beverage Ass’n v. City and Cnty of San Francisco, No. 16-16072 (9th Cir. Sept. 19, 2017)

[2] Id., Slip Op. at 24-25.

[3] Slip Op. at 14-15.

[4] Id. at 14 (citing Zauderer, 471 U.S. at 651.)

[5] Slip Op. at 20 (citing 21 C.F.R. § 184.1866; 81 Fed. Reg. 33, 742, 33,760 (May 27, 2016)

[6] Id. at 21-22.

[7] Id. at 23.