San Francisco Is Forcing Soda Drinkers to Swallow Misleading Info

by Timothy Sandefur
November 19, 2018

The First Amendment’s guarantee of free speech—which makes no distinctions between different kinds of speech or different kinds of speakers—protects the right to, say, wear a jacket with profane language, dance at a strip club, or make videos of abusing animals for fun. But does it really protect the right of businesses to advertise?

The reality is that all those things are given more legal protection than advertisements, thanks to the Supreme Court’s invention of the concept of “commercial speech.” That doctrine holds that government can restrict speech by businesses far more than it can limit other kinds of expression.

For example, the government can’t force you to say things you don’t believe in, or even—in most cases—subsidize speech you don’t support. But it can force businesses to say certain things. In a 1985 decision called Zauderer, the Supreme Court upheld the government’s authority to force businesses to “include in [their] advertising purely factual and uncontroversial information.” This was the basis on which the government required tobacco companies to post the Surgeon General’s warning on their billboards.

What qualifies as “purely factual and uncontroversial”? There’s the rub. In 2012, a federal court struck down a rule that forced cigarette makers to put grotesque photos of cancer-ravaged lungs on their packages, in hopes of dissuading people from smoking. Maybe that’s a good idea, but the court found it isn’t what the Zauderer rule allows. This was an effort to persuade, not to inform, and therefore violated the free speech rights of tobacco companies.

But what about situations where the government requires the disclosure of information which, while true, is still misleading—for instance, because it’s confusing, out of context, or only part of the story? That’s the question now before the Ninth Circuit in a case involving a San Francisco law that forces soda makers to include a box on their billboards, like the Surgeon General warning, that says drinking sugared sodas “contributes to obesity, diabetes, and tooth decay.”

Last year, a three-judge panel ruled that this was unconstitutional, in part because drinking sugared drinks does not always lead to these things—yet the warning contained no qualifying language. It was therefore literally false. “Because San Francisco’s warning does not state that overconsumption of sugar-sweetened beverages contributes to obesity, diabetes, and tooth decay, or that consumption of sugar-sweetened beverages may contribute to obesity, diabetes, and tooth decay, the accuracy of the warning is in reasonable dispute.”

Also, by applying the requirement only on sugar-sweetened beverages but not on other products containing sugar, the requirement conveys the impression that sugared drinks are especially dangerous, when they are not. “By focusing on a single product,” the court said, the requirement implies “that sugar-sweetened beverages are less healthy than other sources of added sugars and calories and are more likely to contribute to obesity, diabetes, and tooth decay than other foods. This message is deceptive in light of the current state of research on this issue.”

The court also found the disclosure requirement excessively burdensome on the companies, because it covers 20 percent of the entire advertisement. That’s a lot of space when you’re talking about a highway billboard.

But after that ruling, the court granted en banc rehearing, meaning that the case was reheard by a panel of eleven judges, back in September. You can watch the argument here.

What struck me most about the argument is the city’s extreme position when it comes to the “burden” question. The city’s lawyer argues that whatever size of warning the city chooses to adopt is automatically constitutional, if the city has some reason to think that size warning is worthwhile—basically a “rational basis” rule. But that’s obviously wrong, because the most effective warning would be for the city to confiscate 100 percent of the billboard space—and require just the warning and no advertisement. That would obviously be unduly burdensome. And as the businesses’ lawyer argues, analogizing this to the Surgeon General warning is troublesome, since we’re talking about a safe product that might contribute to long-run health problems if abused, along with other factors—unlike cigarettes, which are basically never healthy.

On the other hand, the question about accuracy—whether it’s misleading to consumers to say this about one product, but not about other products—isn’t an easy one. In a sense, all information is incomplete, and for that reason, potentially misleading. That includes the cigarette label, since there are some people who smoke and never get cancer.

The only workable answer, it seems, is to say that Zauderer is an extremely narrow rule that only allows statements that are and can be “purely factual and uncontroversial.” In other words, if a certain nutritional quality of food is too complicated a matter to be stated with an extremely high degree of precision, then the required warning label just cannot satisfy Zauderer. Requiring, for example, a lawyer to tell people that they may have to pay significant litigation costs if they want to sue (that’s what was required in the advertisement in Zauderer) satisfies the rule because that’s something that can be said with a low degree of ambiguity or potential confusion. But anything that raises the kinds of concerns about inaccuracy or misleading implications is simply too big a peg to fit into the Zauderer hole.

Interestingly, the validity of Zauderer is open to doubt. In the recent NIFLA v. Becerra decision, the Supreme Court refused to apply that rule to a requirement that pregnancy centers tell women about the availability of abortion. Later, it reversed a Ninth Circuit decision that had upheld a requirement that cellphone companies put warning labels on their products, and ordered the Ninth Circuit to reconsider the case on in light of the NIFLA ruling. What does that mean for the future of these kinds of disclosure requirements? It’s hard to say. The only thing that we can be sure of is that the question of compelled commercial speech is an important one that the Supreme Court alone can resolve.

Timothy Sandefur is the Vice President for Litigation at the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation.