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Beverage Industry Challenge To SF Soda Warning Label Law Under Review

SAN FRANCISCO (CBS SF) -- The city of San Francisco was given a second chance Monday to try to revive its soda warning law.

The 9th U.S. Circuit Court of Appeals agreed to have a challenge to the law reconsidered by an expanded 11-judge panel.

San Francisco appealed for the rarely granted 11-judge review after a three-judge panel ruled last year that the city law burdened the First Amendment free-speech rights of soda advertisers.

The 2015 law would require billboard and poster advertisements for sodas and other sugary drinks to carry a health warning label.

It has never gone into effect because it was put on hold after the American Beverage Association, California Retailers Association and California State Outdoor Advertising Association sued to challenge it.

Both sides declared Monday that they expect to win the court's eventual ruling.

"San Francisco's law is on solid legal ground, and we welcome the opportunity to demonstrate that to the court," City Attorney Dennis Herrera said in a statement. "This is an important step forward for consumer protection."

Beverage association spokesman William Dermody said, "The (three-judge) panel correctly decided, based on settled First Amendment law, that the San Francisco ordinance likely violated the rights of the industry."

"We are confident that upon review the full 9th Circuit will agree with that decision," Dermody said.

The law requires a notice stating, "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."

The warning must cover 20 percent of the area of the ad. The requirement applies to ads on billboards, posters, walls, bus shelters and transit vehicles, but not to newspaper and magazine ads, beverage containers and menus.

Its purpose, according to the ordinance, is to promote an informed consumer choice that could result in a reduction of the illnesses to which sugary drinks contribute.

State Sen. Scott Wiener, D-San Francisco, who as a city supervisor sponsored the law, said Monday, "These drinks are driving up rates of diabetes and other diseases and people need to have accurate information about the health risks that come with drinking soda."

"I hope that the full court rejects the idea that corporations have the right to mislead the public about impacts of their products. Just as we require health warnings on tobacco ads, we should also have health warnings on soda ads," Wiener said.

The lawsuit challenging the law was filed in federal court in San Francisco in 2015. In earlier proceedings, U.S. District Judge Edward Chen refused in 2016 to block the measure with a preliminary injunction.

Chen ruled, "The warning required by the city ordinance is factual and accurate, and the city had a reasonable basis for requiring the warning given its interest in public health and safety."

While declining to grant an injunction, Chen said the law should not go into effect while the case was being resolved.

The beverage and advertising groups then appealed to the 9th Circuit. Last September, a three-judge panel ordered a preliminary injunction blocking the law.

The panel agreed unanimously that a warning covering 20 percent of an ad would overwhelm any messages the companies wanted to present.

Two of the three judges also said the warning was misleading because it didn't explain that soda is not the only source of sugar in Americans' diet and that research indicates that overconsumption of sugar, rather than moderate consumption, is harmful.

The 9th Circuit, which has jurisdiction over federal cases in nine western states, grants review by an expanded panel in only about 20 cases per year. The 11-judge panels are known as en banc panels.

San Francisco urged the court in its appeal to "ensure that the limited rights of commercial speakers do not prevent the government from protecting public health through disclosures."

No date has been set for arguments in the case.

The panel's eventual ruling can be appealed to the U.S. Supreme Court.

© Copyright 2018 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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