You have a freedom of silence, too

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Nearly every company with products sold in California—whether automobiles, appliances, tools, supplements, etc.—has discovered California’s Proposition 65 even when there is no evidence whatsoever of a risk. And now a federal court has ruled that the State cannot mandate the warning for non-disease causing chemicals without violating the First Amendment. The decision could have impacts far beyond the sandy beaches of California.

Beyond Proposition 65 too, if the nation’s consumer protection laws have a theme, it might be “disclosure for me, but not for thee,” with regulators imposing evermore controversial and counterproductive disclosure rules each year while opposing modest transparency proposals for themselves or well-connected industries. Thanks to a recent decision in the Eastern District of California, National Association of Wheat Growers et al. v. Zeise et al. (“Zeise”)[1] which involved whether California could ignore the conclusion of the dozens of reputable scientific bodies and require a Proposition 65 cancer warning for a proven-safe pesticide, businesses have been given the green light to push back against overzealous bureaucrats that want private industry to push their biased agendas, masquerading as “warnings” or “disclosures,” for them. In short, theZeisedecision joins another recent 9thCircuit panel[2] in holding that the government cannot, without running afoul of the First Amendment, compel speech from businesses, to consumers or anyone else, which is not purely factual and uncontroversial.

The decision comes at a time when, at every level of government in America and in California particularly, cumbersome and costly disclosures are being made mandatory ostensibly to “inform” about that which is actually immaterial or incomprehensible to most, if not all, consumers. All the while, regulators and officials demur to public information requests and operate largely in the shadows, to say nothing of their failure to police real (and recent) consumer abuses. Though we proclaim our generation to be “eco-conscious,” whole forests are felled to disclose useless “facts” such “GMOs” that have been consumed safely for decades, basic arithmetic in financial transactions, affiliations presenting no real conflicts, and every other conceivable triviality obvious to anyone outside the plaintiff’s bar. Indeed, if it’s a surprise to you to learn that soda contains sugar, you can stop reading now.

The Plaintiffs in Zeise were several farm and agribusiness groups, a handful of Midwestern Attorneys General, and the Monsanto Company, among others, illustrating the national and international reach of a one-of-a-kind and much maligned warning statute governing one of the largest consumer markets on Earth. The Plaintiffs brought the suit against the State to immediately enjoin enforcement of the requirement to provide a cancer warning for products that contain the chemical glyphosate, the pesticide ingredient used in Monsanto’s popular Round-Up products, a request the Court granted in a February 26, 2018 order entering a preliminary injunction against the warning requirement.[3]

Before the Court could suspend the warning requirement, it had to determine whether the warning for glyphosate would have conveyed controversial or subjective information by conducting an evidentiary hearing, at which both sides presented their scientific cases. OEHHA, for its part, listed glyphosate under Proposition 65 as “known” to cause cancer on the basis of a classification of the substance by the International Agency for Research of Cancer (IARC) as “probably carcinogenic,”[4] even though OEHHA knew that “the EPA and other agencies within the World Health Organization have concluded that there is no evidence that glyphosate causes cancer.”[5] The Plaintiffs presented a parade of independent scientific experts that uniformly testified that glyphosate was not a cancer threat to anyone, even at exposure levels far above average.

In the end, despite the State’s pitiless argument that the Plaintiffs should have to wait to be sued by one of the dozens of Proposition 65 “bounty hunters” in California before it could have clarity on the law, the ZeiseCourt ruled that the First Amendment would not permit the State to mandate a potentially false statement and highly misleading warning to consumers.

The Court drew upon and extended the reasoning of Supreme Court precedent going back over 30 years,[6] in addition to a recent 9thCircuit opinion, now on appeal en banc before the full circuit, that held that San Francisco’s soda labeling law requiring statements “contrary to statements by the FDA ... rather than being ‘purely factual and uncontroversial,’ requires the Associations to convey San Francisco's disputed policy views.”[7] Fortunately, the court in Zeiseignored the recent but contrary precedent from the Ninth Circuit upholding the City of Berkeley’s preposterous requirement that cellular companies disclose the risk of cancer from cell signals.[8]

Finally, the Court did not touch on a separate, but related and equally controversial dispute in the courts regarding whether commercial speech of any kind can be compelled for any purpose other than to avoid consumer confusion, mandatory PSAs or information pamphlets for example.[9] The Supreme Court will have to weigh in before those issues – perhaps the ruling in Zeise, too – are finally decided, but no progress will be made unless businesses take advantage of the favorable winds.

These developments teach that even if regulators are unconstrained by sensible policy and economics, they are still bound by the Constitution, though it may take a lawsuit to remind them. Challenges based on the First Amendment are likely to be a strong approach for businesses going forward – indeed, they may be the ONLY practical approach for some regulations given the enormous authority regulators have claimed for themselves and the courts’ consistent deference to it – but only if used appropriately, as Monsantoet al.has done in Zeise.

From acupuncturists to zymologists,[10] any business subject to such onerous requirements should take stock of what new legal options this precedent affords. After all, when it comes to your rights under the First Amendment, you can no longer claim a failure of disclosure.

[1] 2018 WL 1071168, No. 2:17-2401 (E.D. Cal. 2018).

[2] Am. Beverage Ass'n v. City & Cty. of San Francisco, 871 F.3d 884 (9th Cir. 2017), reh'g en banc granted, 880 F.3d 1019 (9th Cir. 2018).

[3] For technical reasons, the court did not enter an injunction against the listing itself.

[4] Earlier appellate decisions unfortunately allowed OEHHA to list chemicals merely suspected of being carcinogenic. See, e.g., AFL-CIO v. Deukmejian, 212 Cal.App.3d 425 (1989).

[5] 2018 WL 1071168 at *2, slip op. at 4.

[6] See, e.g., Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985).

[7] inAm. Beverage Ass'n v. City & Cty. of San Francisco, 871 F.3d 884, 896 (9th Cir. 2017), reh'g en banc granted, 880 F.3d 1019 (9th Cir. 2018).

[8] CTIA-The Wireless Ass'n v. City of Berkeley, California, 854 F.3d 1105 (9th Cir. 2017). The case was the subject of a powerful dissent from denial of rehearing en banc by Judge Wardlaw at 873 F.3d 774.

[9] See CTIA, 854 F.3d at 1117 (“We agree with our sister circuits that under Zauderer the prevention of consumer deception is not the only governmental interest that may permissibly be furthered by compelled commercial speech.”).

[10] Defined by Wikipedia as “[o]ne who is skilled in zymology, or in the fermentation of liquors.”