Ninth Circuit Issues an Important Commercial Speech Ruling

On January 31, an en banc panel of the U.S. Court of Appeals for the Ninth Circuit issued a unanimous ruling in a commercial speech case, American Beverage Assoc., et al., v. City and County of San Francisco. The Panel held that the lower court’s denial of a preliminary injunction requested by the plaintiffs must be reversed, and the matter remanded to the lower court because the plaintiffs were likely to succeed on the merits of their claim that a 2015 San Francisco city ordinance requiring specified health warnings on a host of sugar-sweetened drinks (“WARNING: Drinking beverages with added sugars(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.”) violated their First Amendment rights.

The ordinance also specified how the warning was to appear on each product label or advertisement, and requires that at least 20% of the label or advertisement be devoted to this warning, which is to be set off with a rectangular border.
A majority of the panel held that the Supreme Court’s 1985 ruling in an attorney advertising case, Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, provides the proper analytical framework, and compelled its finding that these are unduly burdensome disclosure requirements “that might offend the First Amendment by chilling protected commercial speech”.

In addition, the Panel majority did not believe it was necessary to determine whether the warning itself contained factually accurate information, a decision that was not embraced by all of the judges. They believe that the First Amendment analysis required by the Zauderer ruling has been superseded to some extent by the Supreme Court’s 2018 ruling in Nat’l Inst. of Family & Life Advocates v. Becerra.