Am. Beverage Ass'n v. City & Cnty. of S.F.

187 F.Supp.3d 1123

American Beverage Association, et al., Plaintiffs,

v.City and County of San Francisco, Defendant.

Case No. 15-cv-03415-EMC

United States District Court, N.D. California.

Signed May 17, 2016

John S. Cooper, Michael E. Bern, Richard P. Bress, Latham and Watkins LLP, Washington, DC, Marcy Christina Priedeman, James K. Lynch, Latham & Watkins LLP, Joshua David Dick, Andrew Santo Tulumello, Charles Joseph Stevens, Gibson, Dunn Crutcher LLP, San Francisco, CA, Thomas S. Knox, Knox, Lemmon & Anapolsky, LLP, Sacramento, CA, Helgi C. Walker, Theodore B. Olson, Jacob T. Spencer, Gibson, Dunn and Crutcher LLP, Washington, DC, for Plaintiffs.

Christine Van Aken, Jeremy Michael Goldman, San Francisco City Attorney's Office, San Francisco, CA, for Defendant.

ORDER DENYING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

EDWARD M. CHEN, United States District Judge

Plaintiffs are the American Beverage Association ("ABA"), California Retailers Association ("CRA"), and California State Outdoor Advertising Association ("CSOAA"). They have filed suit against Defendant the City and County of San Francisco ("City" or "San Francisco"), challenging two ordinances enacted in 2015, which modified the San Francisco Administrative and Health Codes. Plaintiffs contend these ordinances violate their and their members' constitutional rights.

Currently pending before the Court is Plaintiffs' motion for a preliminary injunction in which they focus on only one of those ordinances—i.e. , that which modified the City Health Code. The ordinance, though passed in 2015, does not become operative until July 25, 2016.¹ See Compl. ¶ 20. In essence, the ordinance requires certain kinds of advertisements related to sugar-sweetened beverages ("SSBs") to display a warning from the City that says: " 'WARNING: Drinking beverages with added sugar(s)² 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 pending motion focuses on Plaintiffs' First Amendment challenge to the ordinance. According to Plaintiffs, the ordinance violates their and/or their members' free speech rights by forcing them to include a warning that they would not otherwise give. In essence, Plaintiffs contend the ordinance compels speech unconstitutionally. Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby DENIES Plaintiffs' motion for a preliminary injunction.

I. FACTUAL & PROCEDURAL BACKGROUND

A. Parties

Plaintiffs are three organizations: ABA, CRA, and CSOAA.³

• "ABA is a national trade organization representing the non-alcoholic beverage industry, including beverage producers, distributors, franchise companies, and support industries. ABA members bring to market beverages including carbonated soft drinks, bottled water..., sports drinks, energy drinks, 100% juices, juice drinks, and ready-to-drink teas." Keane Decl. ¶ 3. Products sold by ABA members throughout California, including the City, include Coke, Pepsi, and Dr. Pepper. See Keane Decl. ¶ 4.

• "CRA is a statewide trade association representing all segments of the retail industry including general merchandise, department stores, mass merchandisers, restaurants, convenience stores, supermarkets and grocery stores, chain drug, and specialty retail....CRA members sell beverages including carbonated soft drinks, [etc.]" Williams Decl. ¶ 3. Beverages sold by CRA members throughout California, including the City, include Coke, Pepsi, and Dr. Pepper. See Williams Decl. ¶ 4.

• "CSOAA is a statewide trade association representing the interests of outdoor advertisers in the California Legislature and in local governments across the state. CSOAA's membership includes 14 outdoor companies and 22 associate members." Loper Decl. ¶ 3. "CSOAA members offer advertising space throughout the State of California, including in San Francisco. This advertising space includes billboards...; advertising in airports, malls, stadiums, transit shelters, and other venues; advertising in and on buses [etc.]." Loper Decl. ¶ 5.

Defendant is the City of San Francisco.

Both Plaintiffs and the City have support from third-party organizations. More specifically, the Association of National Advertisers, Inc. ("ANA") has filed an amicus brief in support of Plaintiffs. In turn, various public interest organizations, including but not limited to the American Heart Association and the American Academy of Pediatrics (California), have submitted an amicus brief in support of the City.

B. Ordinance

The ordinance being challenged by Plaintiffs is City Ordinance No. 100-15. It has been codified in the San Francisco Health Code at §§ 4200-06.

Section 4201 states the findings and purpose underlying the ordinance. It provides as follows:

Human consumption of Sugar-Sweetened Beverages (SSBs) is linked to a myriad of serious health problems including, but not limited to: weight gain, obesity, coronary heart disease, diabetes, tooth decay, and other health problems. Scientific evidence shows that underlying these chronic health problems is metabolic syndrome (MetS). MetS is characterized by changes in a body's normal biochemistry that can lead to obesity, insulin resistance, hypertension, dyslipidemia (high cholesterol), and visceral fat. SSBs are linked to excess weight and obesity, which are putting more Americans on the path to MetS. Heavy added sugar consumption may itself be a direct cause of MetS by increasing the risk for hypertension, dyslipidemia, and visceral fat. While most people with MetS are obese, normal-weight individuals can acquire the syndrome as well, given poor dietary habits. Heavy consumption of sugary drinks has been linked to MetS through a variety of biological pathways, and is therefore a risk factor in chronic disease.

The consumption of soft drinks, according to the American Dental Association, has displaced nutritious beverages and foods from the diet. According to the American Heart Association, for the American diet, soft drinks and other sugar-sweetened beverages are the primary source of added sugar. According to the first print (February 2015) of the United States Department of Agriculture's Scientific Report of the 2015 Dietary Guidelines Advisory Committee (the "2015 USDA Report"),⁴ although added sugars provide calories, they do not provide other nutrients.

Sugar-sweetened sodas, and fruit drinks containing less than 100% juice by volume, are major sources of added sugars in American diets, contributing an average of 10.58 teaspoons of added sugars each day. The American Heart Association recommends that adult women consume no more than six teaspoons of added sugars daily, that adult men consume no more than nine teaspoons daily, and that children ages 4-8 years old consume no more than three teaspoons daily. However, most Americans consume more than 19.6 teaspoons of added sugars per day. Even regular, moderate consumption of sugary drinks (one 12-ounce can a day) increases the risk of cardiovascular disease mortality by nearly one-third.

The American Heart Association reports that about one in three teen or younger children in the United States are overweight or obese and that childhood obesity is now the number one health concern among American parents, ahead of drug abuse and smoking. Obese children suffer more often from sleep apnea, asthma, joint problems, fatty liver disease, gallstones, and acid reflux (heartburn).

Obese children are more likely to become obese adults, further increasing their risks for higher rates of type 2 diabetes, heart disease, and some cancers later in life. Profound mental health and quality of life impacts are seen in children with severe obesity. Obese children are more prone to low self-esteem, negative body image, and depression. As of 2010, nearly one-third of children and adolescents in San Francisco were either obese or overweight. Among adults, consumption of SSBs is associated with a risk of weight gain and obesity, cardiovascular disease, a significantly higher risk of stroke, high blood pressure, type 2 diabetes, dental erosion, and the risk of pancreatic cancer. The 2015 USDA Report concludes that the consumption of added sugars negatively impacts obesity, type 2 diabetes, cardiovascular diseases and dental caries, and "strong evidence supports reducing added sugar intake to reduce health risks." (See also, USDA, Report of the Dietary Guidelines Advisory Committee on Dietary Guidelines for Americans , 2010.) In 2011-2012, 41.8% of adults in San Francisco were either obese or overweight.

The World Health Organization recommends that not more than 10% of calories be from added sugars, and the Institute of Medicine (U.S.) recommends not more than 25%. Medical research has shown that for over 70% of adults, 10% or more of calories is from added sugars, and for approximately 10% of adults, 25% or more of calories is from added sugars, and that the risk of mortality from cardiovascular disease increased exponentially with an increase in the percentage of calories from added sugars. The 2015 USDA Report concludes that even though an appropriate pattern of consumption of added sugars for most people is 4% to 6% of total calories, the mean intake of total calories from the consumption of added sugars in the U.S. population is 13%, and from 15% to 17% for children 9 years of age and older, adolescents, and young adults, and the evidence shows that when added sugars in foods exceed 3% to 9% of total calories, a healthful food pattern may be difficult to achieve.

Low-income families are more likely to be affected by obesity and diabetes. For example, the Bayview–Hunters Point neighborhood had more per capita emergency room visits due to diabetes between 2009 and 2011 than any other neighborhood in San Francisco. Eighteen percent of three–to four–year–olds enrolled in San Francisco Head Start were obese, with an additional 13% being overweight.

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