Opinion ID: 6324276
Heading Depth: 5
Heading Rank: 1

Heading: requires the disclosure of purely factual and

Text: uncontroversial information only, (2) is justified and not unduly burdensome, and (3) is reasonably related to a substantial government interest.” The district court’s first two factors combine the “three inquiries” that comprise “[t]he Zauderer test, as applied in [National Institute of Family & Life Advocates v. Becerra (“NIFLA”), 138 S. Ct. 2361 (2018)]”: “whether the notice is (1) purely factual, (2) noncontroversial, and (3) not unjustified or unduly burdensome.” Am. Beverage, 916 F.3d at 756. 8 In CTIAThe Wireless Ass’n v. City of Berkeley (“CTIA-II”), 928 F.3d 832 (9th Cir. 2019), we joined our sister circuits in holding that “the Zauderer exception for compelled speech applies even in circumstances where the disclosure does not protect against deceptive speech.” Id. at 843. We held that “the governmental interest in furthering public health and safety is sufficient under Zauderer so long as it is substantial.” Id. at 844. The third factor considered by the district court here aligns with our holding in CTIA-II. The district court thus initially used the correct framework for determining whether Prop. 65’s warning requirement was a constitutionally permissible compelled disclosure. The district court then found that the Prop. 65 acrylamide warning did not pass constitutional muster. “Courts asked to issue preliminary injunctions based on First Amendment grounds face an inherent tension: the moving party bears the burden of showing likely success on the merits . . . and yet within that merits determination the government bears the burden of justifying its speech-restrictive law.” Thalheimer v. City of San Diego, 645 F.3d 1109, 1115 (9th Cir. 2011), 8 The inquiries or criteria need not be addressed in any particular order. Am. Beverage, 916 F.3d at 756. CAL. CHAMBER OF COM. V. CERT 17 overruled on other grounds by Bd. of Trs. of Glazing Health & Welfare Tr. v. Chambers, 941 F.3d 1195, 1199 (9th Cir. 2019) (en banc). “Therefore, in the First Amendment context, the moving party bears the initial burden of making a colorable claim that its First Amendment rights have been infringed, or are threatened with infringement, at which point the burden shifts to the government to justify the restriction” on speech. Id. at 1116. CalChamber bore the initial burden to show a colorable claim. As the district court found, “[t]he parties agree[d] Proposition 65 compels commercial speech.” Thus, the court shifted its inquiry to assessing whether California could justify the compelled disclosure under Zauderer. The district court found that “[1] the State has not shown that the safe-harbor acrylamide warning is purely factual and uncontroversial, and [2] Proposition 65’s enforcement system can impose a heavy litigation burden on those who use alternative warnings.” 9 The court found that “the warning implies incorrectly that acrylamide is an additive or ingredient,” and “is likely misleading.” The court also referenced the consumer survey submitted by CalChamber that shows how those “who read the safe harbor warning will probably believe that eating the food increases their personal risk of cancer.” The court acknowledged that some studies would “support such an inference,” but also noted “dozens of epidemiological studies have failed to tie human cancer to a diet of food containing acrylamide.” Thus, it found “the safe harbor warning is controversial because it elevates one 9 As noted, the safe-harbor warning reads: “Consuming this product can expose you to [acrylamide], which is . . . known to the State of California to cause cancer. For more information go to www.P65Warnings.ca.gov/food.” Cal. Code Regs. tit. 27, § 25607.2(a)(2). 18 CAL. CHAMBER OF COM. V. CERT side of a legitimately unresolved scientific debate about whether eating foods and drinks containing acrylamide increases the risk of cancer.” The record supports the district court’s findings. First, the district court found that the safe harbor warning is controversial because of the scientific debate over whether acrylamide in food causes cancer in humans. In 2019, the American Cancer Society stated that “dietary acrylamide isn’t likely to be related to risk for most common types of cancer.” According to the National Cancer Institute, while “[s]tudies in rodent models have found that acrylamide exposure increases the risk for several types of cancer[,] . . . a large number of epidemiologic studies . . . in humans have found no consistent evidence that dietary acrylamide exposure is associated with the risk of any type of cancer.” One epidemiologist who reviewed 56 studies concluded that “there is no consistent or reliable evidence to support a finding that dietary exposure to acrylamide increases the risk of any type of cancer in humans.” In her publication, the researcher noted that the “epidemiologic studies . . . have failed to detect an increased risk of cancer, and they raise serious doubt regarding the validity of extrapolating from rodent studies suggestive of multiorgan effects to humans.” These opinions weigh against the conclusions of three organizations: the International Agency for Research on Cancer classifies acrylamide as “probably carcinogenic to humans,” the U.S. National Toxicology Program classifies acrylamide as “reasonably anticipated to be a human carcinogen,” and the EPA classifies acrylamide as “likely to be carcinogenic to humans.” Given this robust disagreement CAL. CHAMBER OF COM. V. CERT 19 by reputable scientific sources, the court did not abuse its discretion in concluding that the warning is controversial. 10 The court similarly did not abuse its discretion in finding the warning is misleading. Scientific debate aside, Prop. 65’s meaning of the word “known” is not conveyed in the warning. 11 The district court stated: “Statements are not necessarily factual and uncontroversial just because they are technically true.” See CTIA-II, 928 F.3d at 847 (“[A] statement may be literally true but nonetheless misleading and, in that sense, untrue.”). Under Prop. 65, a “known” carcinogen carries a complex legal meaning that consumers would not glean from the warning without context. 12 Thus, use of the word “known” is misleading—as the FDA acknowledged the warning might be. Even the State of California has stipulated that it “does not know that acrylamide causes cancer in humans, and is not required to make any finding to that effect in order to list the chemical under Proposition 65.” As the consumer survey showed, 10 We do not try to offer a general definition for “controversial” in the Zauderer context. However controversial is defined, the acrylamide Prop. 65 warning easily meets the definition because of the scientific debate. 11 As noted above, the word “known” has a specialized meaning under Prop. 65, see Cal. Health & Safety Code § 25249.8(b), and OEHHA added acrylamide to the Prop. 65 list in 1990 “because studies showed it produced cancer in laboratory rats and mice.” 12 This interpretation of the “factual” requirement can also be understood as a corollary of the threshold requirement stated in Zauderer. While the First Amendment allows states and the federal government to bar others from disseminating false, deceptive, or misleading commercial speech, 471 U.S. at 638, the First Amendment also bars the government from compelling others to disseminate false, deceptive, or misleading commercial disclosures. 20 CAL. CHAMBER OF COM. V. CERT when consumers read “known to the State of California to cause cancer” on the packaging of a food or beverage product, they would believe “that such products pose a risk of cancer in humans.” But acrylamide “must be listed [as known to the state to cause cancer] even [though] it is known to be carcinogenic . . . only in animals.” Am. Chemistry Council, 270 Cal. Rptr. 3d at 402. A reasonable person might think that they would consume a product that California knows will increase their risk for cancer. Such a consumer would be misled by the warning because the State of California does not know if acrylamide causes cancer in humans. The district court did not abuse its discretion when it concluded the warning is misleading. Finally, the record supports the district court’s finding that Prop. 65’s enforcement regime creates a heavy litigation burden on manufacturers who use alternative warnings. The district court agreed with CalChamber that “only the safe harbor warning is actually useable in practice.” The court found that Prop. 65 “does not permit businesses to add information to the required warning at their discretion, and thus prevents them from explaining their views on the true dangers of acrylamide in food.” Upon receipt of a notice of violation, CalChamber argues, a business must “communicate to consumers a disparaging health warning about food containing acrylamide that is unsupported by science, or face the significant risk of an enforcement action under Proposition 65.” The former damages their “reputation and goodwill” with misleading information, and the latter bears a risk of “civil penalties of up to $2,500 per violation per day.” If the business chooses to defend itself in the action, it bears the burden of proof to show the acrylamide levels in their products have a low enough risk of causing cancer that they do not need a warning. See Cal. Health & Safety Code § 25249.10(c) (requiring defendants CAL. CHAMBER OF COM. V. CERT 21 to prove that the exposure to acrylamide “poses no significant risk assuming lifetime exposure at the level in question”). Proving the acrylamide level is lower than the No Significant Risk Level requires expensive testing and costly expert testimony if the case proceeds to trial. “[S]maller businesses . . . often cannot afford” these costs and “have decided to provide a Proposition 65 cancer warning for their acrylamide-containing food products, even though they believe that such a warning is unfounded, to avoid the risk of Proposition 65 litigation.” Thus, in context, the compelled disclosure appears unduly burdensome, and the district court did not abuse its discretion in so finding. Our circuit has established a clear legal framework for analyzing the constitutionality of a compelled commercial disclosure requirement, which the district court dutifully followed. Because California and CERT did not meet their burden to show the warning requirement was lawful under Zauderer, the district court did not abuse its discretion when it concluded that CalChamber was likely to succeed on the merits of its First Amendment claim. The district court assumed without deciding that it was also necessary to apply the heightened standard of review under Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). 13 Theoretically, even if a compelled disclosure failed the Zauderer test because, for example, it was controversial, the government could get a “second bite at the apple” by showing that even if controversial, the compelled speech passed Central Hudson’s intermediate scrutiny hurdle. The State made this 13 At least one other district court has done the same, finding our precedent unclear on whether applying the heightened analysis was necessary. See Wheat Growers, 468 F. Supp. 3d at 1257, 1264. 22 CAL. CHAMBER OF COM. V. CERT argument below. But CERT has not made this argument on appeal, nor has CERT even cited Zauderer or Central Hudson in its briefs. Thus, we need not reach this argument. Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929– 30 (9th Cir. 2003). 14