Courts diverge on commercial speech [MCLE]

Constitutional Law

June 2017

By Richard A. Samp

Recent U.S. Supreme Court decisions have granted ever-increasing First Amendment protection to commercial speakers. The 9th U.S. Circuit Court of Appeals, however, seems to be moving in the opposite direction. A case in point is its April decision in CTIA - The Wireless Assoc. v. City of Berkeley, 2017 DJDAR 3870 (April 21, 2017), in which a divided three-judge panel significantly cut back on the right of businesses to resist being compelled to utter speech they find objectionable. Applying a highly deferential standard of review to compelled speech that is not provably false, the CTIA decision upheld a Berkeley ordinance that requires cellphone retailers to post ominous health warnings regarding the alleged dangers of placing phones too close to one's body.

The one silver lining in the decision is that it authorizes district courts to examine whether the compelled speech, although "literally true," may nonetheless mislead consumers. That holding likely requires invalidation of another compelled-speech requirement currently under challenge in the 9th Circuit, San Francisco's mandated health warning on soda advertising. CTIA nonetheless is a serious blow to First Amendment rights and conflicts with decisions from numerous other federal appeals courts. It ought to be overturned, either by 9th Circuit en banc review or in the Supreme Court.

Meaning of Zauderer

Much of the federal appeals courts' current confusion regarding First Amendment protection for commercial speech stems from the Supreme Court's enigmatic 1985 decision in Zauderer v. Office of Disciplinary Counsel. Although commercial speech is generally afforded robust First Amendment protection (under what is known as the Central Hudson test), Zauderer indicates that there are some circumstances under which less-exacting scrutiny is applied to government efforts to compel businesses to provide "purely factual and uncontroversial information" about their products.

Zauderer does not, however, precisely spell out those circumstances. Federal appeals courts have widely disparate understandings of that decision. CTIA interprets Zauderer as adopting a highly deferential review of government rules requiring businesses to speak involuntarily about their products, without regard to the circumstances under which the speech is mandated: "[T]he government may compel truthful disclosure in commercial speech as long as the compelled disclosure is reasonably related to a substantial government interest." The panel majority held that virtually "any government interest" will qualify as "substantial" - the interest need only be "more than trivial."

Moreover, CTIA sharply conflicts with decisions from at least three other federal appeals courts regarding the meaning of Zauderer's "purely factual and uncontroversial information" requirement. Other appeals courts have indicated that "factual" and "uncontroversial" have distinct meanings and that the First Amendment may prohibit compelled commercial speech that is controversial even though it is purely factual. Under those decisions, label disclosure of a food's caloric content is "uncontroversial," and a compelled display of inflammatory pictures is "controversial," even if not factually untrue. CTIA disagreed, concluding that compelled speech satisfies Zauderer's "uncontroversial" requirement so long as it is "factually accurate."

The Berkeley Ordinance

CTIA held that the Berkeley ordinance passes constitutional muster under its highly relaxed standard of review. The ordinance requires cellphone retailers to prominently display a poster (at least 5 by 8 inches in size, using type of at least 18-point font) containing the following health warning: "To assure safety, the Federal Government requires that cell phones meet radio-frequency (RF) exposure guidelines. If you carry or use your phone in a pants or shirt pocket or tucked into a bra, when the phone is ON and connected to a wireless network, you may exceed federal guidelines for exposure to RF radiation. Refer to the instructions or user manual for information about how to use your phone safely."

The panel majority held that the mandated warning satisfies the "factually accurate" requirement, even though the federal government has stated that there is no evidence that carrying a cellphone in one's pocket is unsafe. In support of its holding, the panel noted that the Berkeley warning never explicitly states that it is unsafe to place a cellphone in one's pocket. But as the dissenting judge objected, that is the "clear" message of the compelled speech: "On its face, the disclosure begins and ends with references to safety, plainly conveying that the intervening language describes something unsafe."

Silver Lining

While there is much to criticize in both CTIA's standard of review and its conclusion that the Berkeley ordinance meets that standard, one passage in the opinion provides a glimmer of hope for First Amendment advocates. The panel held that "a statement may be literally true but nonetheless misleading and, in that sense, untrue." That holding likely requires invalidation of other ordinances mandating warnings that, although "literally true," may mislead a sizable number of consumers.

In particular, a pending 9th Circuit case - American Beverage Assn. v. San Francisco - raises a First Amendment challenge to a San Francisco ordinance that compels inclusion of health warnings in billboard advertisements. Advertisements for sugar-sweetened drinks must prominently display the following health warning: "Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay." Even if one could argue that the warning is "literally true," its omission of qualifying language renders the warning highly likely to mislead many consumers. For example, drinking sugar-sweetened beverages does not pose any health concerns for the great many consumers who balance their overall caloric intake and physical activity. Nor do its health implications differ from those associated with consuming other foods with the equivalent number of calories. Yet, it is likely that many consumers will incorrectly draw those false inferences based on their reading of San Francisco's mandated warning. Accordingly, the First Amendment standard adopted by CTIA is likely to require invalidation of the San Francisco ordinance.

Berkeley's Warning Is Unquestionably "Controversial"

There is serious reason to question CTIA's conclusion that Berkeley's mandated health warning is "factually accurate." But further review of the decision is particularly warranted on other grounds: The panel held, in conflict with other circuits, that Zauderer's less-exacting First Amendment review standard applies even to compelled speech that is "controversial." There can be little doubt that Berkeley's mandated warning is "controversial." While predicting future health risks is always an inexact science, the consensus among experts in the field (including federal government officials) is that carrying a cellphone in one's pocket does not pose a risk to one's health. The contrary, distinctly minority conclusion is properly classified as "controversial" under Zauderer.

The 9th Circuit has directed Berkeley to respond to the pending petition for rehearing en banc filed in CTIA. The court should grant that petition and issue a new decision making clear that if the government seeks to force businesses to make controversial statements that they do not wish to utter, its efforts should be subjected to exacting First Amendment review.

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