Opinion ID: 4413296
Heading Depth: 5
Heading Rank: 2

Heading: The Zauderer Test

Text: CTIA contends that the Zauderer exception to the general rule of Central Hudson does not apply in this case because CTIA V. CITY OF BERKELEY 21 the speech compelled by the Berkeley ordinance does not prevent deception of consumers. This is the first time we have had occasion in this circuit to squarely address the question whether, in the absence of a prevention-of-deception rationale, the Zauderer compelled-disclosure test applies. Cf. Video Software Dealers Ass’n v. Schwarzenegger, 556 F.3d 950, 967 (9th Cir. 2009) (invalidating compelled disclosure on video game packaging, noting that the disclosure would “arguably now convey a false statement that certain conduct is illegal when it is not, and the State has no legitimate reason to force retailers to affix false information on their products”). Several of our sister circuits, however, have answered this question. They have unanimously concluded that the Zauderer exception for compelled speech applies even in circumstances where the disclosure does not protect against deceptive speech. In American Meat Institute v. U.S. Department of Agriculture, 760 F.3d 18 (D.C. Cir. 2014) (en banc), a Department of Agriculture regulation required identification of the country of origin on the packaging of meat and meat products. Id. at 20. The regulation implemented a federal statute requiring country-of-origin labeling. See 7 U.S.C. § 1638, 1638a. The D.C. Circuit held that Zauderer should not be read to apply only to cases where governmentcompelled speech prevents or corrects deceptive speech. It noted that on the facts of both Zauderer and Milavetz (in which the Court repeated Zauderer’s “preventing deception” language) there had been deceptive speech: “Given the subject of both cases, it was natural for the Court to express the rule in such terms. The language could have been simply descriptive of the circumstances to which the Court applied its new rule[.]” Am. Meat, 760 F.3d at 22. The D.C. Circuit concluded, “The language with which Zauderer justified its 22 CTIA V. CITY OF BERKELEY approach . . . sweeps far more broadly than the interest in remedying deception.” Id. In National Electrical Manufacturers Association v. Sorrell, 272 F.3d 104 (2d Cir. 2001), a Vermont statute required manufacturers of mercury-containing products to label their products and packaging to inform consumers that the products contained mercury and instructing them that the products should be disposed of or recycled as hazardous waste. Id. at 107. The Second Circuit held that the compelled disclosure was supported by a “substantial state interest in protecting human health and the environment.” Id. at 115 n. 6. Citing Zauderer, the court recognized that the compelled disclosure did not “prevent ‘consumer confusion or deception.’” Sorrell, 272. F.3d at 115. It nonetheless upheld the disclosure as not “inconsistent with the policies underlying First Amendment protection of commercial speech.” Id. “[M]andated disclosure of accurate, factual, commercial information does not offend the core First Amendment values of promoting efficient exchange of information or protecting individual liberty interests.” Id. at 114; see also N.Y. State Rest. Ass’n v. N.Y.C. Bd. of Health, 556 F.3d 114, 133 (2d Cir. 2009) (“Zauderer’s holding was broad enough to encompass nonmisleading disclosure requirements.”); Discount Tobacco City & Lottery, Inc. v. United States, 674 F.3d 509, 556–58 (6th Cir. 2012) (upholding federally required health warnings on cigarette packaging and in cigarette advertisements, relying on the Second Circuit’s opinion in Sorrell); Pharm. Care Mgmt. Ass’n v. Rowe, 429 F.3d 294, 310 n.8 (1st Cir. 2005) (noting that the court had found no cases limiting application of the Zauderer compelled speech test to prevention or correction of deceptive advertising); cf. Dwyer v. Cappell, 762 F.3d 275, CTIA V. CITY OF BERKELEY 23 281–82 (3d Cir. 2014) (describing but not relying on Zauderer’s preventing-deception criterion). Our sister circuits have thus held under Zauderer that the prevention of consumer deception is not the only governmental interest that may permissibly be furthered by compelled commercial speech. The Supreme Court also signaled its agreement with this reading of Zauderer. In NIFLA, the Court cited Zauderer and other cases to explain that its “precedents have applied more deferential review to some laws that require professionals to disclose factual, noncontroversial information in their ‘commercial speech,’” 138 S. Ct. at 2372, and that it was “not question[ing] the legality of health and safety warnings, long considered permissible, or purely factual and uncontroversial disclosures about commercial products.” Id. at 2376. We therefore hold that the governmental interest in furthering public health and safety is sufficient under Zauderer so long as it is substantial. In so holding, we do not foreclose that other substantial interests in other cases may suffice as well. In American Meat, the D.C. Circuit declined to decide whether the governmental interest must be substantial, leaving open the question whether a less-thansubstantial interest might suffice. See Am. Meat, 760 F.3d at 23 (“Because the interest motivating the 2013 [country-oforigin] rule is a substantial one, we need not decide whether a lesser interest could suffice under Zauderer.”). We answer the question avoided in American Meat, holding that Zauderer requires that the compelled disclosure further some substantial—that is, more than trivial—governmental interest. Central Hudson explicitly requires that a substantial interest be furthered by a challenged regulation prohibiting or restricting commercial speech, and we see nothing in 24 CTIA V. CITY OF BERKELEY Zauderer that would allow a lesser interest to justify compelled commercial speech. To use the words of the Second Circuit in Sorrell, the interest at stake must be more than the satisfaction of mere “consumer curiosity.” Sorrell, 272 F.3d at 115 n.6; see also Am. Meat, 760 F.3d at 23 (“Country-of-origin information has an historical pedigree that lifts it well beyond ‘idle curiosity.’”). To use the words of the Supreme Court, “Disclosures must remedy a harm that is ‘potentially real not purely hypothetical[.]’” NIFLA, 138 S. Ct. at 2367 (quoting Ibanez v. Fla. Dep’t of Bus. & Prof’l. Regulation, 512 U.S. 136, 146 (1994)). ii. Purely Factual and Uncontroversial Information The Court in Zauderer noted that the compelled disclosure in that case was of “purely factual and uncontroversial information.” Zauderer, 471 U.S. at 651. But the Court did not explicitly require in its constitutional test that the disclosed information be “purely factual and uncontroversial.” In NIFLA, however, the Court held that the Zauderer standard did not apply to one of two governmentmandated notices at issue in that case because it was “not limited to ‘purely factual and uncontroversial information about the terms under which . . . services will be available.’” 138 S. Ct. at 2372 (quoting Zauderer, 471 U.S. at 651) (omission in original). NIFLA thus stands for the proposition that the Zauderer standard applies only if the compelled disclosure involves “purely factual and uncontroversial” information. NIFLA elaborated on Zauderer’s “purely factual and uncontroversial” criteria in two respects. CTIA V. CITY OF BERKELEY 25 First, the Court held in NIFLA that the required information about state-provided abortion services was controversial. The question in NIFLA was whether California could require clinics that did not provide abortion services to post a notice giving factual information about state-provided services, including abortion, offered elsewhere. The Court wrote, “[The State] requires these clinics to disclose information about state-sponsored services—including abortion, anything but an ‘uncontroversial’ topic.” Id. at 2372 (emphasis in original). We do not read the Court as saying broadly that any purely factual statement that can be tied in some way to a controversial issue is, for that reason alone, controversial. The dispute in NIFLA was whether the state could require a clinic whose primary purpose was to oppose abortion to provide information about “statesponsored services,” including abortion. While factual, the compelled statement took sides in a heated political controversy, forcing the clinic to convey a message fundamentally at odds with its mission. Under these circumstances, the compelled notice was deemed controversial within the meaning of Zauderer and NIFLA. Second, the Court in NIFLA required that the compelled speech relate to the product or service that is provided by an entity subject to the requirement. Thus, in addition to holding that clinics could not be required to post the notice because it was controversial, the Court struck down the requirement that clinics post information about services they did not provide. Id.