A San Francisco ordinance that would require sugar warnings in soda ads likely would violate the free speech rights of beverage and advertising groups, the Ninth Circuit said.

The groups will likely prevail on their argument that the ordinance would infringe their First Amendment rights by chilling protected commercial speech, the U.S. Court of Appeals for the Ninth Circuit said Jan 31.

The full court affirmed a panel decision that had blocked the warning last year.

Food and beverage makers are increasingly raising their free speech rights to challenge what regulators and consumers tell them they must, or can’t, say about their products.

The 2015 ordinance required advertisements for sugar-sweetened beverages within San Francisco to include the following statement: “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 ordinance required the warning to occupy at least 20 percent of the ad and be set off with a rectangular border.

The American Beverage Association, the California Retailers Association, and the California State Outdoor Advertising Association challenged the ordinance.

The government may compel speech if it’s purely factual, noncontroversial, and not unjustified or unduly burdensome.

The size and format of the warning make it unduly burdensome on the protected advertising message, Judge Susan P. Graber said for the majority.

The majority acknowledged that some tobacco and prescription warnings must occupy at least 20 percent of those products’ labels or ads. But the record here shows that a small warning--half the size--would accomplish the city’s public health goals, the majority said.

However, “We do not hold that a warning occupying 10 percent of product labels or advertisements necessarily is valid, nor do we hold that a warning occupying more than 10 percent of product labels or advertisements necessarily is invalid,” the majority said.

The majority didn’t decide whether the soda warning is factually accurate and noncontroversial.

Judges Sandra S. Ikuta, Morgan Christen, and Sidney R. Thomas concurred in part, but disagreed with the majority’s focus on whether the ordinance was unduly burdensome.

In addition, the San Francisco warning would violate the groups’ First Amendment rights because it wasn’t purely factual and wasn’t noncontroversial, they said.

Ikuta also said the warning fails because it isn’t narrowly tailored to the government’s public health goals.

Judge Jacqueline Nguyen concurred in the judgment.

Latham & Watkins LLP represented the The American Beverage Association, the California Retailers Association, and the California State Outdoor Advertising Association.

The San Francisco City Attorney represented San Francisco.

The case is American Beverage Assn. v. City and County of San Francisco, 9th Cir., No. 16-16072, 1/31/19