American Beverage Association; California Retailers Association, Plaintiffs-Appellants,
City and County of SanFrancisco, Defendant-Appellee. and California State Outdoor Advertising Association, Plaintiff,
and Submitted April 17, 2017 San Francisco, California
from the United States District Court for the Northern
District of California D.C. No. 3:15-cv-03415-EMC Edward M.
Chen, District Judge, Presiding
Richard P. Bress (argued), Melissa Arbus Sherry, and Michael
E. Bern, Latham & Watkins LLP, Washington, D.C.; James K.
Lynch and Marcy C. Priedeman, Latham & Watkins LLP, San
Francisco, California; for Plaintiff-Appellant American
S. Knox, Knox Lemmon & Anappolsky LLP, Sacramento,
California; for Plaintiff-Appellant California Retailers
Theodore B. Olson, Andrew S. Tulumello, and Helgi C. Walker,
Gibson Dunn & Crutcher LLP, Washington, D.C.; Charles J.
Stevens and Joshua D. Dick, Gibson Dunn & Crutcher LLP,
San Francisco, California; for Plaintiff-Appellant California
State Outdoor Advertising Association.
Christine Van Aken (argued), Jeremy M. Goldman, and Wayne
Snodgrass, Deputy City Attorneys; Dennis J. Herrera, City
Attorney; Office of the City Attorney, San Francisco,
California; for Defendant-Appellee.
Amendment / Preliminary Injunction
panel reversed the district court's denial of the
plaintiff Associations' motion for a preliminary
injunction, seeking to enjoin the implementation of the City
and County of San Francisco's ordinance that would
require warnings about the health effects of certain
sugar-sweetened beverages on specific types of fixed
advertising within San Francisco.
plaintiffs - the American Beverage Association, the
California Retailers Association, and the California State
Outdoor Advertising Association - alleged that the ordinance
violated their First Amendment right to freedom of speech.
panel held that the plaintiffs were likely to succeed on the
merits of their claim that the ordinance was an
"unjustified or unduly burdensome disclosure
requirement [that] might offend the First Amendment by
chilling protected commercial speech." Zauderer v.
Office of Disciplinary Counsel of Supreme Court of Ohio,
471 U.S. 626, 651 (1985). Specifically, the panel joined
other circuits in holding that the Zauderer
framework applied beyond the context of preventing consumer
deception. The panel held that because the required warning
was not purely factual and uncontroversial, San Francisco had
not established that the plaintiffs' constitutionally
protected interest in not providing the warning was minimal
under Zauderer. The panel agreed with the plaintiffs
that the warning requirements - a black box warning that
overwhelmed other visual elements of the ads - unduly
burdened and chilled protected speech.
panel held that the remaining preliminary injunction factors
also weighed in the plaintiffs' favor. The panel
concluded that the district court abused its discretion in
denying the plaintiffs' motion for a preliminary
injunction, and reversed and remanded.
Nelson concurred in the judgment because she believed that
the ordinance, in its current form, likely violated the First
Amendment by mandating a warning requirement so large that it
would probably chill protected commercial speech. Judge
Nelson would reverse and remand without also making the
conclusion that the warning's language was controversial
Before: Dorothy W. Nelson and Sandra S. Ikuta, Circuit
Judges, and J. Michael Seabright, [*] Chief District Judge.
Beverage Association, California Retailers Association, and
the California State Outdoor Advertising Association (we
refer to these organizations and their members collectively
as "the Associations"), filed suit against the City
and County of San Francisco challenging a city ordinance that
would require warnings about the health effects of certain
sugar-sweetened beverages on specific types of fixed
advertising within San Francisco. The Associations argue that
the ordinance violates their First Amendment right to freedom
of speech. After the district court denied the
Associations' motion for a preliminary injunction, the
Associations filed this interlocutory appeal. We conclude
that the Associations are likely to succeed on the merits of
their claim that the ordinance is an "unjustified or
unduly burdensome disclosure requirement [that] might
offend the First Amendment by chilling protected commercial
speech." Zauderer v. Office of Disciplinary Counsel
of Supreme Court of Ohio, 471 U.S. 626, 651 (1985). The
remaining preliminary injunction factors also weigh in the
Associations' favor. We hold that the district court
abused its discretion in denying the Associations' motion
for a preliminary injunction, and we reverse and remand.
Francisco enacted an ordinance in June 2015 requiring
advertisers who post advertisements for sugar-sweetened
beverages within San Francisco to include the following
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). The ordinance applies to a
certain type of advertisement for sugar-sweetened beverages,
termed an "SSB Ad." Id. As defined, an
"SSB Ad" includes any advertisement or logo that
"identifies, promotes, or markets a Sugar-Sweetened
Beverage for sale or use" that is posted on billboards,
structures, or vehicles, among other things. Id.
§ 4202. The term "Sugar-Sweetened
Beverage" is defined to include soda and other
non-alcoholic beverages that contain one or more added
sweeteners and more than twenty-five calories per twelve
fluid ounces of beverage. Id. The ordinance provides
detailed instructions regarding the form, content, and
placement of the warning on SSB Ads, including the
requirement that it occupy 20 percent of the advertisement
and be set off with a rectangular border. Id. §
4203. Failure to comply with the ordinance's warning
requirement results in administrative penalties imposed by
San Francisco's Director of Health. Id. §
4204. According to the ordinance, San Francisco's purpose
in requiring the warning for certain sugar-sweetened
beverages is, among other things, to "inform the public
of the presence of added sugars and thus promote informed
consumer choice that may result in reduced caloric intake and
improved diet and health, thereby reducing illnesses to which
[sugar-sweetened beverages] contribute and associated
economic burdens." Id. § 4201.
Associations sued San Francisco in July 2015, seeking
injunctive relief to prevent the implementation of the
ordinance, which was set to go into effect on July 25, 2016.
S.F. Health Code § 4203(a). The district court denied
the Associations' motion for a preliminary injunction in
May 2016. In concluding that the Associations were not likely
to succeed on the merits of their First Amendment challenge,
the district court held that the warning was not misleading,
would not place an undue burden on the Associations'
commercial speech, and was rationally related to a government
interest. Nevertheless, the court granted the
Associations' motion for an injunction pending appeal.
The Associations filed a timely interlocutory appeal.
jurisdiction pursuant to 28 U.S.C. § 1292(a)(1). We
review the district court's denial of a preliminary
injunction for an abuse of discretion. Inst. of Cetacean
Research v. Sea Shepherd Conservation Soc., 725 F.3d
940, 944 (9th Cir. 2013). "A district court would
necessarily abuse its discretion if it based its ruling on an
erroneous view of the law or on a clearly erroneous
assessment of the evidence." Id. (citation and
internal quotation marks omitted). When we consider First
Amendment claims, "[h]istorical questions of fact (such
as credibility determinations or ordinary weighing of
conflicting evidence) are reviewed for clear error, while
constitutional questions of fact (such as whether certain
restrictions create a severe burden on an individual's
First Amendment rights) are reviewed de novo."
Prete v. Bradbury, 438 F.3d 949, 960 (9th Cir. 2006)
(internal quotation marks omitted). This "requirement of
independent appellate review . . . is a rule of federal
constitutional law, which does not limit our deference to a
trial court on matters of witness credibility, but which
generally requires us to review the finding of facts by a
[trial court] . . . where a conclusion of law as to a Federal
right and a finding of fact are so intermingled as to make it
necessary, in order to pass upon the Federal question, to
analyze the facts." Hurley v. Irish-Am. Gay, Lesbian
& Bisexual Grp. of Boston, 515 U.S. 557, 567 (1995)
(citations and internal quotation marks omitted). "This
obligation rests upon us simply because the reaches of the
First Amendment are ultimately defined by the facts it is
held to embrace, and we must thus decide for ourselves
whether a given course of conduct falls on the near or far
side of the line of constitutional protection."
Id. Because the questions whether a compelled
disclosure is purely factual and uncontroversial and whether
it unduly burdens commercial speech are "so
intermingled" with the ...