An example of San Francisco’s warning label. Image credit: Behavioral Science and Policy. Used subject to license.

A San Francisco ordinance requiring health warnings on advertisements for some sugar-sweetened beverages has suffered an early defeat.  On January 31, the Ninth Circuit ruled, en banc, that the district court should have granted plaintiff American Beverage Association’s request for a preliminary injunction to prevent the ordinance’s enforcement.

At issue was the ordinance’s required rectangular warning label—similar to such labels for cigarettes—occupying 20% of any advertisement for many sugar-sweetened beverages.  The text of the warning was to read as follow: “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.”  Arguing that the ordinance impermissibly compelled commercial speech, the American Beverage Association sued and sought a preliminary injunction against its enforcement.

After the district court denied the requested preliminary injunction, the Ninth Circuit reversed.  The court concluded that, despite some recent uncertainty regarding the appropriate test, the Supreme Court’s decision in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985), required an inquiry into whether San Francisco’s warning label was (1) purely factual, (2) non-controversial, and (3) not unjustified or unduly burdensome.

In the court’s view, the ordinance was likely to fail the Zauderer test’s third prong because the warning label was unduly burdensome.  The record indicated that a warning label half the size (i.e., 10% of the advertising area) would adequately accomplish the city’s primary objectives of warning consumers about the harms of sugar-sweetened beverages and reducing their consumption.  Moreover, San Francisco failed to show that the sizeable, contrasting label would not “drown out” the rest of the advertisement and would not effectively rule out the possibility of having an advertisement in the first place.  The panel cautioned, however, that it did not intend to set a per se rule that 10% warning labels were acceptable while 20% labels were not.

Three judges concurred in the judgment but departed from the majority’s reason.  Judge Ikuta would have instead applied the framework from the Supreme Court’s 2018 decision in National Institute of Family & Life Advocates v. Becerra,  ___U.S. ___, 138 S.Ct. 2361 (2018).  Chief Judge Thomas would have concluded that the warning was not “purely factual.” And Judge Nguyen disagreed with the majority’s application of Zauderer to speech that was not false, deceptive, or misleading but still concluded that a preliminary injunction was appropriate.

Full opinion available here: https://law.justia.com/cases/federal/appellate-courts/ca9/16-16072/16-16072-2019-01-31.html

Early this month, the federal district court for the Southern District of New York ruled that a New York City law requiring food service industry employers to provide a payroll deduction system for their employees to make donations to non-profit organizations did not violate the First Amendment rights of such employers.

New York City’s law became effective in late 2017.  Fast food establishments are required to create and maintain deduction systems.  Upon request from an employee, the establishment must deduct a donation to a non-profit organization from the employee’s pay check and remit it to the designated organization.  Non-profit organizations that receive funds through the system are required to reimburse employers for the cost of maintaining the deduction system, if requested by the employers. Continue Reading Court Upholds New York City’s Fast-Food Payroll Deduction System For Donations

Jack Phillips of Masterpiece Cakeshop. Source: Reuters.

While the Rocky Mountain Sign Blog is geared toward issues that involve free speech and land use law, we geek out about any Supreme Court case that addresses First Amendment issues, even those outside of our weird little land use world.  Yesterday, our appetite for Supreme Court First Amendment law was only moderately satiated.  The U.S. Supreme Court issued its much-awaited ruling in the hot-button First Amendment case of Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission.

In the case, a gay couple sought relief when a baker refused to bake them a wedding cake on the grounds that his religious beliefs did not support same-sex marriage.  The Colorado Civil Rights Commission found that Colorado’s anti-discrimination laws, which prohibit discrimination on the basis of sexual orientation, prohibited the baker from denying service to the couple, and the Colorado Court of Appeals affirmed the Civil Rights Commission’s decision.

In a 7-2 decision, the Supreme Court reversed, finding that statements made by members of the Civil Rights Commission evinced hostility toward religion, and that the Commission’s action thus violated the Free Exercise Clause of the First Amendment.  During their deliberations, Commission members had commented on prior use of religion to condone discriminatory action, and made other statements that the Supreme Court interpreted as being hostile toward religion.  Justice Kennedy authored the majority opinion, and Justices Kagan, Gorsuch, and Thomas authored concurrences in the decision.  Justice Ginsburg, joined by Justice Sotomayor, dissented, on the grounds that they did not believe that any statements of the Commission evidenced discrimination.

While the entire Court declined to address the appellant’s free speech claim, the conservative duo of Justices Thomas and Gorsuch wrote separately to address that issue.  Justice Thomas began his concurrence by noting that the Court has previously held anti-discrimination laws unconstitutional as applied when the discriminatory conduct at issue is expressive, citing Hurley v. Irish-American Gay, Lesbian and Bisexual Group of Boston and Boy Scouts of America v. Dale.  The two justices, applying a long line of cases that have held various forms of artistic expression to be First Amendment-protected, found that Masterpiece Cakeshop’s baker, Jack Phillips, engages in expressive activity when he creates wedding cakes.  Once they found that Phillips’s cake-making was expressive, Justices Thomas and Gorsuch would have applied strict scrutiny review.  They expressed concern with the fact that Colorado law would apparently command someone engaged in expressive activity to express particular views, whereas prior Supreme Court case law makes clear that offensive speech cannot constitutionally be prohibited.

While the majority opinion in Masterpiece Cakeshop gives us little with respect to the Court’s direction on free speech issues, the concurrence of Justice Thomas at least hints at the direction that two of the justices would lean.  We’ll have to wait for the next major religion-free speech battle to see how this one plays out.

Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n, ___ S. Ct. ____, 2018 WL 2465172 (U.S. Jun. 4, 2018).

The City of Oakland, California, evidently hoping that new multifamily residential and commercial developments will contribute to public art displayed around the city, last year enacted an ordinance requiring art purchases as a condition of development approval.  For new multifamily developments, the city requires art purchases (or an in lieu payment to the city’s public art fund) equivalent to .5 percent of a proposed building’s development costs.  New commercial developments incur purchase requirements or fee payments equal to 1 percent of those costs.  And for developers choosing to purchase art, the city requires that they display it on the property where the development will occur.

The Building Industry Association-Bay Area (“BIA”) challenged the ordinance’s validity, arguing Continue Reading U.S. District Court Dismisses Claims that Oakland Art-Purchase Development Condition Violates Constitution

An advertisement for the organization Keep Chicago Livable states that home sharing is a “fundamental right,” yet the district court disagreed that home sharing implicated First Amendment rights.

Two weeks ago, a federal court in Illinois denied a request for a preliminary injunction against the City of Chicago’s recently-enacted short-term rental ordinance.  In its order, the court determined that the ordinance, which seeks to regulate individuals’ rental of units on Internet-based services such as Airbnb, VRBO, or HomeAway, did not affect the plaintiffs’ First Amendment rights to free speech.  The decision marks an interesting constitutional development in continued efforts by local governments to regulate short-term rentals.

In summer 2016, Chicago enacted what it calls the “shared housing ordinance,” or SHO.  The SHO requires hosts of units available for short-term rent to register their housing units with the city prior to listing their units on any Internet-based services.  Airbnb, VRBO, HomeAway and other services are also required to register with the city.  As applied to individuals, the SHO imposes requirements on the services provided by the short-term rental, and also requires individuals to maintain guest registries, and post their licensing information at the unit. Continue Reading Chicago Short-Term Rental Ordinance Does Not Implicate First Amendment: Federal District Court

The court ruled that signs like the one shown above are forced speech in contradiction of First Amendment rights of utility companies. Source: Newsday.

In a decision that could have far-reaching consequences, earlier this year, a federal court in New York found a town law requiring the placement of warning signs on utility posts violated the First Amendment as a content based restriction on noncommercial speech.

In 2014, the Town of North Hempstead, New York adopted a local law requiring warning signs on utility posts in the town.  The law came about following local opposition to the erection of a new overheard electricity transmission line through the town.  As part of the project, the Long Island Power Authority (LIPA) and PSEG Long Island LLC (PSEG) placed new utility poles Continue Reading Court:  Utility Pole Warning Signs are Forced Speech in Violation of First Amendment