Antitrust Law Daily Supreme Court vacates and remands Ninth Circuit ruling in cell phone advertising disclosure case
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Thursday, June 28, 2018

Supreme Court vacates and remands Ninth Circuit ruling in cell phone advertising disclosure case

By Jody Coultas, J.D.

Commercial speech. The Supreme Court vacated a decision by the U.S. Court of Appeals in San Francisco affirming a denial of a preliminary injunction staying enforcement of the City of Berkeley, California’s "right to know" ordinance that requires cell phone retailers to inform prospective cell phone purchasers that carrying a cell phone in certain ways may cause them to exceed Federal Communications Commission guidelines for exposure to radio-frequency radiation. The case was remanded to the Ninth Circuit for further consideration in light of this week’s holding in National Institute of Family and Life Advocates v. Becerra, a ruling concerning the legality of a law requiring certain disclosures in light of the First Amendment (CTIA-The Wireless Association v. City of BerkeleyDkt. 17-976).

The Ninth Circuit affirmed a district court’s order denying a request for a preliminary injunction seeking to stay enforcement of the ordinance. Applying Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985), the panel held that the City’s compelled disclosure of commercial speech complied with the First Amendment because the information in the disclosure was reasonably related to a substantial governmental interest and was purely factual. Therefore, the plaintiff had little likelihood of success on its First Amendment claim that the disclosure compelled by the Berkeley ordinance was unconstitutional.

The petition asked: (1) whether Zauderer’s reduced scrutiny of compelled commercial speech applies beyond the need to prevent consumer deception; and (2) when Zauderer applies, whether it is sufficient that the compelled speech be: (a) factually accurate—even if controversial and, when read as a whole, potentially misleading; and (b) merely reasonably related to any non-"trivial" governmental interest.

In National Institute, the Court ruled in favor of nonprofit groups that oppose abortion in their challenge to a California law that required the centers to make specific disclosures to patients and in advertisements. The Court concluded that the centers could show that the law, which was passed based on the legislature’s concern that the pregnancy centers were holding themselves out as full-service reproductive health clinics and providing pregnant women with inaccurate or incomplete information about their options, violates the First Amendment.

Advertising disclosures. The Court will not hear an appeal of a Fourth Circuit ruling that a Baltimore City ordinance requiring pregnancy clinics that do not offer or refer for abortions to disclose that fact through signs posted in their waiting rooms violated the First Amendment. The case presented similar issues to those in CTIA, but the appellate court had ruled in favor of the clinics rather than the State (Mayor and City Council of Baltimore v. Greater Baltimore Center for Pregnancy Concerns, Inc.Dkt. 17-1369).

The U.S. Court of Appeals in Richmond, Virginia held that the City of Baltimore could not require the Baltimore Center to post a sign in its waiting room stating that it does not provide contraceptives or abortions, and that the ordinance violated the First Amendment. The court concluded that Baltimore’s ordinance was "too loose a fit" with the City’s need to regulate public health and deceptive advertising, and compelled a politically and religiously motivated group to convey a message fundamentally at odds with its core beliefs and mission.

The petition asks: Whether the Free Speech Clause of the First Amendment prohibits the City of Baltimore from requiring an unlicensed entity to make truthful disclosures via a posted sign about the scope of medical services it offers when the entity holds itself out to the public as a medical practice and engages in "purposely vague" advertising.

Advertising restrictions. The Supreme Court declined to overturn a Ninth Circuit decision holding that San Francisco’s Pregnancy Information Disclosure and Protection Ordinance was constitutional and not preempted by state law (First Resort, Inc. v. HerreraDkt. 17-1087).

Advertising from limited services pregnancy centers (LSPCs) like First Resort, Inc. has been identified as a national problem because it denied users health information and prevented an informed decision under time-sensitive circumstances. San Francisco passed the ordinance in question as a response to such concerns. It prohibited LSPCs from making false or misleading statements to the public about pregnancy-related services the centers offer or perform.

A California district court held, and the Ninth Circuit affirmed, that the ordinance was facially valid because it regulated only unprotected false or misleading commercial speech and was not unconstitutionally vague as drafted. The ordinance does not burden speech or create an impermissible classification based on the identity of the speaker because it applies only to unprotected commercial speech and not to the fundamental right to free speech. The ordinance also furthers various legitimate government ends, including preventing consumer deception, protecting women’s health, and advancing city fiscal goals. Finally, there was no preemption because the case was a civil matter, and there was no showing the ordinance would interfere with enforcing state law, the court held.

The petition asked: (1) Whether a speech regulation applying only to speech concerning pregnancy services by pregnancy centers that do not refer for abortion, and enacted to target speakers with pro-life views, is subject to strict scrutiny, and (2) Whether this Court’s "commercial speech" doctrine can be applied to the speech of non-profit pregnancy centers who provide free and often religiously motivated assistance to pregnant women.

For details about these and other petitions and cases pending before the Supreme Court, please consult the chart.

Attorneys: Theodore B. Olson (Gibson Dunn & Crutcher LLP) for CTIA - The Wireless Association. Lawrence Lessig for City of Berkeley. Suzanne Sangree, Baltimore City Department of Law. Mark Leonard Rienzi (The Becket Fund For Religious Liberty) for First Resort, Inc.

Companies: CTIA – The Wireless Assn.; Greater Baltimore Center for Pregnancy Concerns, Inc.; First Resort, Inc.

MainStory: TopStory Advertising

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