Court Opinion

ID: 4210828
Source: CourtListenerOpinion
Date Created: 2017-10-11 17:01:01.616654+00
Date Added: 2024-06-11T14:40:54.937028
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

CTIA–THE WIRELESS                       No. 16-15141
ASSOCIATION,
           Plaintiff-Appellant,            D.C. No.
                                     3:15-cv-02529-EMC
              v.

CITY OF BERKELEY, California;               ORDER
CHRISTINE DANIEL, City
Manager of Berkeley,
California, in her official
capacity,
          Defendants-Appellees.

                   Filed October 11, 2017

   Before: William A. Fletcher, Morgan B. Christen,
      and Michelle T. Friedland, Circuit Judges.

                       Order;
   Concurrence by Judges W. Fletcher and Christen;
             Dissent by Judge Wardlaw
2                  CTIA V. CITY OF BERKELEY

                            SUMMARY*

                             Civil Rights

    The panel denied a petition for panel rehearing and denied
a petition for rehearing en banc on behalf of the court. Judge
Friedland voted to grant both.

     In its opinion filed on April 21, 2017, the panel affirmed
the district court’s order denying a request for a preliminary
injunction seeking to stay enforcement of a City of Berkeley
ordinance requiring cell phone retailers to inform prospective
cell phone purchasers that carrying a cell phone in certain
ways may cause them to exceed Federal Communications
Commission guidelines for exposure to radio-frequency
radiation. Applying Zauderer v. Office of Disciplinary
Counsel of the Supreme Court of Ohio, 471 U.S. 626 (1985),
the panel held that the City’s compelled disclosure of
commercial speech complied with the First Amendment
because the information in the disclosure was reasonably
related to a substantial governmental interest and was purely
factual. Accordingly, the panel concluded that plaintiff had
little likelihood of success on its First Amendment claim that
the disclosure compelled by the Berkeley ordinance was
unconstitutional.

   Concurring in the denial of the petition for rehearing en
banc, Judges W. Fletcher and Christen stated that their
majority opinion held that under Zauderer, the City of
Berkeley may compel “purely factual and controversial”

    *
      This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                 CTIA V. CITY OF BERKELEY                      3

speech by a retailer at the point of sale. The judges stated that
the majority joined four sister circuits when it held that
Zauderer permitted compelled commercial speech even in
the absence of consumer deception. The judges stated that
applying Zauderer to permit compelled commercial speech
only when it prevents consumer deception, as suggested by
the dissent, would result in a circuit split.

   Dissenting from the denial of rehearing en banc, Judge
Wardlaw stated that the court should have taken this case en
banc to clarify that Zauderer’s rational basis standard applies
only when the government compels speech to prevent
consumer deception.

                         COUNSEL

Theodore B. Olson (argued), Helgi C. Walker, Jacob T.
Spencer, and Samantha A. Daniels, Gibson Dunn & Crutcher
LLP, Washington, D.C.; Joshua S. Lipshutz and Joshua D.
Dick, Gibson Dunn & Crutcher LLP, San Francisco,
California; for Plaintiff-Appellant.

Lester Lawrence Lessig, III (argued), Cambridge,
Massachusetts; Amanda Shanor, New Haven, Connecticut;
Savith Iyengar, Deputy City Attorney; Zach Cowan, City
Attorney; Berkeley City Attorney’s Office, Berkeley,
California; for Defendants-Appellants.

Robert Corn-Revere and Ronald G. London, Davis Wright
Tremaine LLP, Washington, D.C., for Amicus Curiae The
Association of National Advertisers, Inc.
4               CTIA V. CITY OF BERKELEY

Claire Woods and Michael E. Wall, San Francisco,
California; as and for Amicus Curiae Natural Resources
Defense Council.

Pratik A. Shah, James E. Tysse, and Raymond P. Tolentino,
Akin Gump Strauss Hauer & Feld LLP, Washington, D.C.;
Kathryn Comerford Todd and Warren Postman, U.S.
Chamber Litigation Center Inc., Washington, D.C.; for
Amicus Curiae Chamber of Commerce of the United States.

Richard P. Bress, Melissa Arbus Sherry, Michael E. Bern,
and George C. Chipev, Latham & Watkins LLP, Washington,
D.C.; James K. Lynch and Marcy C. Priedeman, Latham &
Watkins LLP, San Francisco, California; for Amicus Curiae
American Beverage Association.

                          ORDER

    Judge W. Fletcher and Judge Christen have voted to deny
the Appellant’s petition for rehearing and petition for
rehearing en banc, filed May 5, 2017. Judge Friedland voted
to grant both.

    A judge of the court called for a vote on the petition for
rehearing en banc. A vote was taken, and a majority of the
non-recused active judges of the court failed to vote for en
banc rehearing. Fed. R. App. P. 35(f).

    The petition for rehearing and the petition for rehearing
en banc, filed May 5, 2017, are DENIED.
                CTIA V. CITY OF BERKELEY                   5

W. FLETCHER and CHRISTEN, Circuit Judges, concurring
in the denial of the petition for rehearing en banc:

   Our opinion largely speaks for itself. We held under
Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626
(1985), that the City of Berkeley may compel “purely factual
and controversial” speech by a retailer at the point of sale.
Our dissenting colleague would read Zauderer narrowly to
permit compelled commercial speech only when it prevents
consumer deception.

    Four of our sister circuits have read Zauderer broadly to
permit compelled commercial speech when it conveys purely
factual and uncontroversial information, even in the absence
of consumer deception. See Nat’l Ass’n of Mfrs.v. SEC,
800 F.3d 518, 522 (D.C. Cir. 2015) (upholding compelled
“point of sale disclosures”); Am. Meat Inst. v. U.S. Dep’t of
Agric., 760 F.3d 18, 22 (D.C. Cir. 2014) (en banc); Pharm.
Care Mgmt. Ass’n v. Rowe, 429 F.3d 294, 310 n.8 (1st Cir.
2005); Safelite Group v. Jepsen, 764 F.3d 258 (2d Cir. 2014)
(declining to extend Zauderer to compelled speech describing
the goods or services of another company, but leaving intact
earlier Second Circuit cases upholding compelled commercial
speech about a company’s own goods or services); N.Y. State
Rest. Ass’n v. N.Y. City Bd. of Health, 556 F.3d 114, 133 (2d
Cir. 2009); Nat’l Elec. Mfrs. Ass’n v. Sorrell, 272 F.3d 104,
114 (2d Cir. 2001); Discount Tobacco City & Lottery, Inc. v.
United States, 674 F.3d 509, 566 (6th Cir. 2012). We joined
these circuits. See CTIA–The Wireless Ass’n v. City of
Berkeley, 854 F.3d 1105 (9th Cir. 2017); see also Am.
Beverage Ass’n v. City & Cty. of San Francisco, Nos. 16-
16072 & 16-16073 (9th Cir. Sept. 19, 2017).
6               CTIA V. CITY OF BERKELEY

    Two of our sister circuits have sustained compelled
commercial speech that prevented consumer deception.
Because there was such deception, they did not need to reach
the question whether “purely factual and uncontroversial”
commercial speech may be compelled in the absence of
deception. See Pub. Citizen, Inc. v. La. Attorney Disciplinary
Bd., 632 F.3d 212 (5th Cir. 2011); 1-800-411-Pain Referral
Serv.v. Otto, 744 F.3d 1045 (8th Cir. 2014). We do not know
how, if the facts had presented the question, these circuits
would have decided it.

    Our colleague would have us create a circuit split with the
D.C., First, Second and Sixth Circuits. We decline to do so
on two grounds. First, circuit splits are generally to be
avoided. Second, and more important, we believe that our
four sister circuits got it right.

WARDLAW, Circuit Judge, dissenting from denial of
rehearing en banc:

    Ordinarily, I do not file “dissentals,” particularly where
there is an existing dissent. I am compelled to write here,
however, because Judge Friedland’s dissent, which I agree
with entirely, rests principally on the ground that the required
disclosure is itself misleading, whereas I believe the panel
majority applied the wrong legal standard. We should have
taken this case en banc to clarify that Zauderer’s rational
basis standard applies only when the government compels
speech to prevent consumer deception. See Zauderer v.
Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985)
(“[B]ecause disclosure requirements trench much more
narrowly on an advertiser’s interests than do flat prohibitions
                   CTIA V. CITY OF BERKELEY                             7

on speech, ‘warnings or disclaimers might be appropriately
required . . . in order to dissipate the possibility of consumer
confusion or deception.’”). The majority extended Zauderer
beyond the context of preventing consumer deception to
instances where the government compels speech for its own
purposes.1 See CTIA–The Wireless Ass’n v. City of Berkeley,
854 F.3d 1105, 1117 (9th Cir. 2017). Moreover, it expanded
Zauderer to retailers who sell, and not necessarily advertise,
the consumer products at issue. See id. at 1110. By allowing
the opinion to stand, we have condoned the panel majority’s
deference to the City of Berkeley’s well-intentioned, but
unconstitutional, incursion into First Amendment rights.

       Although commercial speech is afforded “lesser
protection” than “other constitutionally guaranteed speech,”
commercial speech is nonetheless protected speech. See
Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n,
447 U.S. 557, 562–63 (1980). Supreme Court precedent is
clear that if the government is to compel commercial speech
that is “neither misleading nor related to unlawful activity,
. . . [t]he State must assert a substantial interest to be achieved

    1
       Despite the panel majority’s insistence to the contrary, there is
discord among our sister circuits about whether Zauderer applies broadly
to allow the government to compel commercial speech to serve its own
purposes. Compare, e.g., Am. Meat Inst. v. U.S. Dep’t of Agric., 760 F.3d
18, 22 (D.C. Cir. 2014) (en banc) (applying Zauderer to a Department of
Agriculture labeling requirement), with Nat’l Ass’n of Mfrs. v. SEC, 800
F.3d 518, 522 (D.C. Cir. 2015) (confining Zauderer to advertising only),
and Nat’l Elec. Mfrs. Ass’n v. Sorrell, 272 F.3d 104, 114 (2d Cir. 2011)
(applying Zauderer to a Vermont labeling law), with Safelite Grp., Inc. v.
Jepsen, 764 F.3d 258, 263–64 (2d Cir. 2014) (applying intermediate
scrutiny to a Connecticut disclosure law that required automobile insurers
to notify car owners of their repair shop options). Rather than advocate
a circuit split, my reading of our sister circuits’ opinions simply
acknowledges that the law remains unsettled.
8               CTIA V. CITY OF BERKELEY

by [the] restrictions . . . [and] the restriction must directly
advance the state interest involved.” Id. at 564. The panel
majority opinion applies minimal constitutional scrutiny to
Berkeley’s potentially misleading radiation disclosure,
merely because it is not technically false. CTIA, 854 F.3d at
1120. The Supreme Court has never been so deferential to
government-compelled speech. See Sorrell v. IMS Health,
Inc., 564 U.S. 552, 570 (2011) (“Facts, after all, are the
beginning point for much of the speech that is most essential
to advance human knowledge and to conduct human
affairs.”); Wooley v. Maynard, 430 U.S. 705, 714 (1977)
(“The right to speak and the right to refrain from speaking are
complementary components of the broader concept of
‘individual freedom of mind.’”). The government is not
allowed to compel disclosures to shape consumer behavior to
its own design, particularly when governments have other
powerful means, such as taxation, market regulation, and
education efforts, to advance their interests.             See
44 Liquormart v. Rhode Island, 517 U.S. 484, 507 (1996).

    I share Judge Friedland’s concerns that a proliferation of
warnings and disclosures compelled by local municipal
authorities could detract from the attention consumers should
pay to warnings that really matter. See CTIA, 854 F.3d at
1126 (Friedland, J., dissenting in part). Time which a
prospective purchaser must spend puzzling over the City of
Berkeley’s warning is time not spent acquiring more pertinent
product information. In this era where accurate, unbiased
information is an increasingly rare commodity, the panel
majority’s holding that the government can compel a private
entity to disclose “factual” and “uncontroversial” information
with only a tenuous link to a “more than trivial” government
interest is quite troubling.
                CTIA V. CITY OF BERKELEY                     9

    The loosening of long-held traditional speech principles
governing compelled disclosures and commercial speech only
muddies the waters. After this case, the City of Berkeley is
permitted to require retailers to display a potentially
misleading disclosure about the dangers of cell phones that is
completely unnecessary in light of the carefully calibrated,
FCC-approved disclosures in the user’s manual
accompanying each new cell phone. Meanwhile, across the
bay, San Francisco may not require advertisers of soft drinks
with added sugars to warn of the products’ adverse health
effects. Am. Beverage Ass’n v. City & Cty. of S.F., Nos. 16-
16072 & 16-16073, slip op. at 5–6 (9th Cir. Sept. 19, 2017)
(purporting to rely on CTIA and Zauderer). These opinions,
which require district judges to make essentially factual
judgments about a disclosure’s veracity and its burden on a
business even before the parties have developed an
evidentiary record, are bound to frustrate any court that
attempts to reconcile them. And, more importantly, what’s
next? Is each state or local government in our Circuit going
to rely on the misplaced analysis of Zauderer in CTIA and
American Beverage Association to pass ordinances
compelling disclosures by their citizens on any issue the city
council votes to promote, without any regard to Central
Hudson?

    If the multitudinous governing bodies in our Circuit desire
to compel speech from their citizens, they should show a
substantial state interest and use narrowly tailored means to
achieve it. Judge Nelson’s concurrence in American
Beverage Association, slip op. at 28, adds to the confusion by
evoking the Central Hudson standard, and concluding that
San Francisco’s means were not narrowly tailored to the
interest it sought to promote. We should have taken the
opportunity that CTIA provided us to clarify our conflicting
10              CTIA V. CITY OF BERKELEY

law on compelled disclosures and explain when Zauderer’s
rational basis standard applies, as opposed to the Central
Hudson standard generally applicable to commercial speech.

    I respectfully dissent from the denial of rehearing en banc,
and am looking forward to our next compelled disclosure
case.