Critical Juncture on Compelled Disclosures

The Ninth Circuit Court of Appeals last month rendered a very important decision. This decision threatens to allow states and localities far more leeway to impose government mandated disclosures in advertising with potentially extremely adverse impacts. The Court upheld the denial of a preliminary injunction for municipal cell phone radiation warning requirements in CTIA – The Wireless Association v. City of Berkeley. The case revolves around a Berkeley, California ordinance that would force wireless producers and sellers to provide a point of sale public notice regarding radio frequency safety. The Federal Communications Commission (FCC) requires safety notices to be included in cellphone sales collateral material, and Berkeley’s required notice contradicts federal findings that cell phones are safe.

This decision brings the advertising industry to a critical juncture regarding the law on the constitutionality of compelled disclosures. The CTIA decision, coupled with the potential for a similar ruling in the presently pending case of American Beverage Association (ABA) v. City and County of San Francisco which revolves around an ordinance mandating health warnings on ads for certain pre-sweetened beverages, would be the clearest signal yet that there may be virtually no limit to similar efforts to impose mandatory disclosures targeting other products and services throughout the country. Every food disfavored by the science of the moment, and every other product or service regulators view as creating “risk,” could be susceptible to having a significant portion of their ads turned into placards for government messages.

As ANA noted in the friend of the court brief we filed last year in support of CTIA, numerous court rulings hold that it is “incompatible with the First Amendment” to burden speech based on fear that people will make bad decisions, or to promote “what the government perceives to be their own good.” ANA believes Berkeley’s mandate certainly exceeds that limitation.

The Ninth Circuit Court in CTIA now holds that all a government has to demonstrate is that its proposed mandatory disclosure is factual and furthers a substantial interest to force companies to promote their messages. Nothing is stopping the city from buying air time or online banner ads for public service announcements to carry its ‘notice’ about cell phones, or from plastering city buses or rail cars with posters conveying the notice’s message, or even from buying outdoor signage rights within sight of cell phone stores to proclaim its warnings. The city merely wants to add its commentary on a safe and lawful product – one that already comes with all the information that the city says consumers need. With over 30,000 cities and counties in the U.S., the threat of this type of government intrusion into a vast number of ads should be of extreme concern to the ad community.

ANA is actively involved in trying to combat these and other similar types of efforts to unreasonably restrict the legitimate First Amendment rights of advertisers. Ideally, CTIA will seek rehearing en banc by the Ninth Circuit, and/or petition for review by the Supreme Court. If and when those steps are taken, they will offer a key opportunity for the advertising community to attempt to turn this tide of giving regulators – down to the municipal level – freedom to require that advertisements carry whatever warning they believe may be beneficial to consumers.



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