A U.S. Supreme Court ruling from last summer may have changed the trajectory of a high-profile pending commercial speech case. In National Institute of Family and Life Advocates v. Becerra, the Court modified the traditional commercial speech tests, perhaps placing a greater burden on the government when it seeks to regulate commercial speech. Becerra could influence the D.C. Circuit Court’s decision in Cigar Association of America v. U.S. Food and Drug Administration as to whether FDA-mandated cigar health warnings violate the First Amendment. If cigar regulations are found to violate the First Amendment, it could lead to a new wave of litigation.

Background

In May 2018, the D.C. District Court held that an FDA rule requiring that cigar manufacturers increase the size of health warnings on their products did not violate the First Amendment. The regulation-at-issue requires that health warnings comprise 30 percent of all cigar display packages and 20 percent of all cigar advertisements. The FDA required cigar products to have health warnings in 2001. The decision to subject cigars to the same health warning standards as cigarettes represented a sea change.[1]

First Amendment Treatment of Commercial Speech

The cigar manufacturers’ First Amendment case falls squarely within the scope of the commercial speech doctrine. Commercial speech is “expression related solely to the economic interests of the speaker and its audience.”[2] In general, commercial speech receives less First Amendment protection than other forms of expression.

Courts assess commercial speech regulations using one of two standards. They analyze regulations where the government compels speech that is “purely factual” and “uncontroversial” using the Zauderer test, which the Supreme Court outlined in 1985. Restrictions under Zauderer do not violate the First Amendment as long as they are “reasonably related” to the government’s interest and are not “unjustified or unduly burdensome.”[3] Courts have almost uniformly held that rules requiring health and safety warnings meet these requirements. Because the Zauderer test is not terribly stringent, generally once a regulation is deemed “purely factual” and “uncontroversial,” it will likely be deemed constitutional.

Commercial regulations that do not meet Zauderer’s requirements – those that are not “purely factual” and “uncontroversial” – must pass the Supreme Court’s Central Hudson intermediate scrutiny test to be constitutional. That test provides that government regulation is permitted by the First Amendment only when it “directly advance[s] a substantial government interest” and is “no more extensive than is necessary to serve that interest.”[4]

In Cigar Association of America v. FDA, the D.C. District held that the FDA cigar regulations were factual, uncontroversial disclosures meant to disseminate information about the risks of smoking cigars.[5] For that reason, Zauderer applied. But the opinion did not closely analyze whether the regulations were “unjustified or unduly burdensome,” the last part of the Zauderer test.

Becerra (Maybe) Changes the Analysis

In Becerra, the Supreme Court struck down a California law that compelled pro-life pregnancy clinics to notify women that the state offered subsidized abortion services and that also required unlicensed clinics to disclose their unlicensed status in all of their advertising. Applying the Zauderer test after stating that it would have reached the same result under any commercial speech test, the Becerra Court determined that the California law was “unjustified and unduly burdensome” in violation of Zauderer.[6] The Court articulated that to satisfy the Zauderer test, regulations meet the “not unjustified or unduly burdensome” element only if they extend “no broader than is reasonably necessary” to achieve the government’s interest.

It is unclear what impact Becerra will have because the Court did not specifically analyze whether Zauderer applied and instead emphasized that the regulations were justified by a “purely hypothetical” harm and were too restrictive to pass any commercial speech test.

In response to Becerra, the D.C. District Court stayed its decision until sixty days after the D.C. Circuit decides the cigar manufacturers’ appeal of the First Amendment issue.[7] The court noted that the Supreme Court had applied the “no broader than is reasonably necessary” language to Zauderer.”[8] There is a possibility that the district court will now apply a more rigorous standard to the cigar regulations.

The Becerra decision has impacted commercial speech litigation in other circuits as well. In January, the Ninth Circuit cited it to enjoin a San Francisco city ordinance requiring that advertisements for sugar-sweetened beverages include a prescribed health warning occupying at least 20 percent of the advertisement space. The Ninth Circuit held that the regulation was unduly burdensome and issued a preliminary injunction, stating that “the Supreme Court made clear in Becerra that a government-compelled disclosure that imposes an undue burden fails for that reason alone.”[9]

Implications

If the D.C. Circuit finds that cigar regulations violate the First Amendment, the FDA may be required to look harder at certain regulations, like it was required to do by a federal court in connection with health warnings for cigarettes that were struck down as a violation of the First Amendment.

Until now, courts had largely held that government regulations requiring health warnings were constitutional because courts considered them factual and uncontroversial. However, if there is now a “no broader than reasonably necessary” analysis for the “not unjustified or unduly burdensome” Zauderer standard, courts may take a harder look at this type of regulation.


[1] Cigar Association of America v. U.S. Food and Drug Administration, No. 1:16-CV-01460, 2018 WL 2223653, at *2 (D.D.C. May 15, 2018);

[2] Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Com’n of New York, 447 U.S. 557, 561 (1980).

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

[4] Milavetz, Gallop & Milavetz, P.A. v. United States, 559 U.S. 229, 249 (2010) (articulating Central Hudson test).

[5] Cigar Association of America v. U.S. Food and Drug Administration, No. 1:16-CV-01460, 2018 WL 2223653 (D.D.C. May 15, 2018).

[6] National Institute of Family and Life Advocates v. Becerra, 138 S. Ct. 2361, 2378 (2018).

[7] Cigar Association of America v. U.S. Food and Drug Administration, No. 1:16-CV-01460, 2018 WL 3304627, at *5 (D.D.C. July 5, 2018).

[8] Cigar Association of America v. U.S. Food and Drug Administration, No. 1:16-CV-01460, 2018 WL 3304627, at *4 (D.D.C. July 5, 2018).

[9] American Beverage Ass’n v. City & Cty. Of S.F., Case No. 16-16072, slip op. at 15-16 (9th Cir. Jan. 31, 2019) (en banc).