American Beverage Association; California Retailers Association, Plaintiffs-Appellants,
City and County of San Francisco, Defendant-Appellee. and California State Outdoor Advertising Association, Plaintiff, American Beverage Association; California Retailers Association, Plaintiffs, and California State Outdoor Advertising Association, Plaintiff-Appellant,
City and County of San Francisco, Defendant-Appellee.
and Submitted En Banc September 25, 2018 Pasadena, California
Appeals from the United States District Court No.
3:15-cv-03415-EMC for the Northern District of California
Edward M. Chen, District Judge, Presiding
Richard P. Bress (argued), George C. Chipev, Michael E. Bern,
and Melissa Arbus Sherry, Latham & Watkins LLP,
Washington, D.C.; Marcy C. Priedman, Latham & Watkins
LLP, San Francisco, California; for Plaintiffs-Appellants.
Michael Goldman (argued) and Wayne Snodgrass, Deputy City
Attorneys; Dennis J. Herrera, City Attorney; Office of the
City Attorney, San Francisco, California; for
Wencong Fa and Meriem L. Hubbard, Pacific Legal Foundation,
Sacramento, California, for Amicus Curiae Pacific Legal
Corn-Revere, Ronald G. London, Davis Wright Tremaine LLP,
Washington, D.C., for Amicus Curiae The Association of
National Advertisers, Inc.
Postman and Katheryn Comerford Todd, Litigation Center Inc.,
Washington, D.C.; Jeremy J. Broggi, Megan L. Brown, and Bert
W. Rein, Wiley Rein LLP, Washington, D.C., for Amicus Curiae
Chamber of Commerce of the United States of America.
S. Chenoweth, Cory L. Andrews, and Richard A. Samp,
Washington Legal Foundation, Washington, D.C., for Amicus
Curiae Washington Legal Foundation.
Allison M. Zieve, Julie A. Murray, and Scott L. Nelson,
Public Citizen Litigation Group, Washington, D.C., for Amicus
Curiae Public Citizens, Inc.
TonNu, Thomas Bennigson, and Seth E. Mermin, Public Good Law
Center, Berkeley, California; Sabrina Adler, Ian McLaughlin,
and Benjamin D. Wing, Changelab Solutions, Oakland,
California, for Amici Curiae American Heart Association,
American Academy of Pediatrics, California, California
Academy of Family Physicians, California Chapter of the
American Association of Clinical Endocrinologists, California
Endowment, California Medical Association, California
Pan-Ethnic Health Network, Changelab Solutions, Community
Health Partnership, Crossfit Foundation, Diabetes Coalition
of California, Healthy Food America, Latino Coalition for a
Healthy California, National Association of Chronic Disease
Directors, National Association of Local Boards of Health,
Network of Ethnic Physician Organizations, Nicos Chinese
Health Coalition, Prevention Institute, Public Health
Institute, Public Health Law Center, San Francisco Bay Area
Physicians for Social Responsibility, San Francisco Community
Clinic Consortium, San Francisco Medical Society, Southern
California Public Health Association, and Strategic Alliance.
Bloomekatz, Gupta Wessler PLLC, Washington, D.C., for Amici
Curiae American Cancer Society Cancer Action Network, Public
Health Law Center, Action on Smoking & Health, African
American Tobacco Control Leadership Council, American Lung
Association, American Thoracic Society, Americas for
Nonsmokers' Rights, Campaign for Tobacco-Free Kids,
NAATPN, and Truth Initiative Foundation.
C. Kats, Center for Science in the Public Interest,
Washington, D.C., for Amicus Curiae Center for Science in the
C. Tolsdorf and Linda E. Kelly, Manufacturers' Center for
Legal Action, Washington, D.C.; J. Michael Connolly, Thomas
R. McCarthy, and William S. Consovoy, Consovoy McCarthy Park
PLLC, Arlington, Virginia; for Amicus Curiae National
Association for Manufacturers.
Deborah R. White, Retail Litigation Center Inc., Arlington,
Virginia; Gabriel K. Gillett, Jenner & Block LLP,
Chicago, Illinois; Adam G. Unikowsky, Jenner & Block LLP,
Washington, D.C., for Amicus Curiae Retail Litigation Center.
Catherine E. Stetson, Hogan Lovells U.S. LLP, Washington,
D.C., for Amicus Curiae Grocery Manufacturers Association.
Before: Sidney R. Thomas, Chief Judge, and Dorothy W. Nelson,
Susan P. Graber, William A. Fletcher, Marsha S. Berzon,
Sandra S. Ikuta, Mary H. Murguia, Morgan Christen, Jacqueline
H. Nguyen, Andrew D. Hurwitz, and John B. Owens, Circuit
banc court reversed the district court's denial of a
preliminary injunction and remanded in an action challenging
the City and County of San Francisco's Sugar-Sweetened
Beverage Warning Ordinance, which requires health warnings on
advertisements for certain sugar-sweetened beverages.
the American Beverage Association, California Retailers
Association, and California State Outdoor Advertising
Association, argued that the Ordinance violated their First
Amendment right to freedom of speech. The en banc court,
relying on National Institute of Family & Life
Advocates v. Becerra (NIFLA), 138 S.Ct. 2361 (2018),
concluded that Plaintiffs will likely 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, 471 U.S. 626, 651 (1985). The en banc court
determined that the remaining preliminary injunction factors
also weighed in Plaintiffs' favor.
Judge Ikuta stated that because the Associations had shown a
likelihood of prevailing on the merits and because the other
factors for granting a preliminary injunction weighed in the
Associations' favor, she agreed with the majority's
conclusion that the district court abused its discretion by
denying the Associations' motion for a preliminary
injunction. But Judge Ikuta stated that because the majority
failed to apply NIFLA's framework for analyzing
when government-compelled speech violates the First
Amendment, she dissented from the majority's reasoning.
in part and concurring in the judgment, Judge Christen,
joined by Chief Judge Thomas, agreed with the majority that
Zauderer's framework applied to the
government-compelled speech at issue in this case. Judge
Christen also agreed that the district court's decision
must be reversed, but she would not reach the issue the
majority relied upon. Judge Christen would reverse because
the City and County of San Francisco could not show that the
speech it sought to compel was purely factual.
in the judgment, Judge Nguyen disagreed with the
majority's expansion of Zauderer's rational
basis review to commercial speech that is not false,
deceptive, or misleading. Judge Nguyen stated that because
the majority reached the right result under the wrong legal
standard, she respectfully concurred only in the judgment.
GRABER, Circuit Judge
American Beverage Association, California Retailers
Association, and California State Outdoor Advertising
Association challenge Defendant City and County of San
Francisco's Sugar-Sweetened Beverage Warning Ordinance,
City & Cty. of S.F., Cal., Bd. of Supervisors Ordinance
No. 100-15, § 1 (June 16, 2015). The Ordinance requires
health warnings on advertisements for certain sugar-sweetened
beverages ("SSBs"). Plaintiffs argue that the
Ordinance violates their First Amendment right to freedom of
speech. Relying on the United States Supreme Court's
decision in National Institute of Family & Life
Advocates v. Becerra ("NIFLA"), 138
S.Ct. 2361 (2018), we conclude that Plaintiffs will likely
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, 471 U.S. 626, 651
(1985). The remaining preliminary injunction factors also
weigh in Plaintiffs' favor. We therefore hold that the
district court abused its discretion by denying
Plaintiffs' motion for a preliminary injunction, and we
reverse and remand.
AND PROCEDURAL BACKGROUND
2015, Defendant enacted the Ordinance, which requires that
certain SSB advertisements ("SSB Ads") include the
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.
& Cty. of S.F., Cal., Health Code art. 42, div. I, §
4203(a) (2015). An "SSB Ad" covers
any advertisement, including, without limitation, any logo,
that identifies, promotes, or markets a Sugar-Sweetened
Beverage for sale or use that is any of the following: (a) on
paper, poster, or a billboard; (b) in or on a stadium, arena,
transit shelter, or any other structure; (c) in or on a bus,
car, train, pedicab, or any other vehicle; or (d) on a wall,
or any other surface or material.
Id. § 4202. Under section 4202, though, an
"SSB Ad" does not include advertising in or on:
periodicals; television; electronic media; SSB containers or
packaging; menus; shelf tags; vehicles used by those in the
business of manufacturing, selling, or distributing SSBs; or
logos that occupy an area of less than 36 square inches.
Id. The Ordinance defines "SSB" as
"any Nonalcoholic Beverage sold for human consumption,
including, without limitation, beverages produced from
Concentrate, that has one or more added Caloric Sweeteners
and contains more than 25 calories per 12 ounces of
beverage." Id. But "SSB" does not
include drinks such as milk, plant-based milk alternatives,
natural fruit and vegetable juices, infant formulas, and
supplements. Id. The Ordinance provides detailed
instructions regarding the form, content, and placement of
the warning on SSB Ads, including a requirement that the
warning occupy at least 20% of the advertisement and be set
off with a rectangular border. Id. § 4203(b).
stated purpose in requiring the warning is, among other
reasons, 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 SSBs contribute
and associated economic burdens." Id. §
4201. Failure to comply with the warning requirement can
result in administrative penalties imposed by San
Francisco's Director of Health. Id. §
sued to prevent implementation of the Ordinance. The district
court denied Plaintiffs' motion for a preliminary
injunction. Concluding that Plaintiffs likely would not
succeed on the merits of their First Amendment challenge, the
district court held that the warning is not misleading, does
not place an undue burden on Plaintiffs' commercial
speech, and is rationally related to a substantial
governmental interest. But the court stayed implementation of
the Ordinance pending this timely interlocutory appeal.
three-judge panel of this court reversed the district
court's denial of a preliminary injunction, Am.
Beverage Ass'n v. City & County of San
Francisco, 871 F.3d 884 (9th Cir. 2017). We then ordered
that the case be reheard en banc, 880 F.3d 1019 (9th Cir.
AND STANDARDS OF REVIEW
jurisdiction under 28 U.S.C. § 1292.
review the denial of a preliminary injunction for abuse of
discretion. Harris v. Bd. of Supervisors, 366 F.3d
754, 760 (9th Cir. 2004). A district court abuses its
discretion if it rests its decision "on an erroneous
legal standard or on clearly erroneous factual
findings." United States v. Schiff, 379 F.3d
621, 625 (9th Cir. 2004) (internal quotation marks omitted).
"We review conclusions of law de novo and findings of
fact for clear error." All. ...