CEAC GMO Subcommittee - July 1, 2014 Item IV (c)

If the communication is neither misleading nor related to unlawful activity, the government’s power is more circumscribed. The State must assert a substantial interest to be achieved by restrictions on commercial speech. Moreover, the regulatory technique must be in proportion to that interest… First, the restriction must directly advance the state interest involved; the regulation may not be sustained if it provides only ineffective or remote support for the government's purpose. Second, if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restrictions cannot survive.

(Central Hudson Gas & Elec. Corp. v. Public Service Commission of New York (1980) 447 U.S. 557, 563-64 [100 S.Ct. 2343, 2350, 65 L.Ed.2d 341], citations and footnote omitted.) The second relevant doctrine is that prohibiting compelled speech. “[T]he right of freedom of thought protected by the First Amendment against state action includes both the right to speak freely and the right to refrain from speaking at all.” (Wooley v. Maynard (1977) 430 U.S. 705, 714 [97 S.Ct. 1428, 1435, 51 L.Ed.2d 752].) The right not to speak inheres in political and commercial speech alike. (International Dairy Foods Ass'n v. Amestoy (2nd Cir. 1996) 92 F.3d 67, 71.) And even compelled disclosure of factual information violates the First Amendment under certain circumstances. (Riley v. National Federation of the Blind (1988) 487 U.S. 781, 797–98 [108 S.Ct. 2667, 2677–78, 101 L.Ed.2d 669].) Under Central Hudson, as an alternative to prohibiting misleading or deceptive speech, the government may require that such speech be accompanied by additional information that prevents it from being misleading or deceptive, as long as the additional information is reasonably related to the State’s interest in preventing deception of consumers. (Zauderer v. Office of Disciplinary Counsel of the Sup. Ct. of Ohio (1985) 471 U.S. 626, 651 [105 S.Ct. 2265, 85 L.Ed.2d 652].) In so holding, the Supreme Court relied on the distinction between a fact and a personal or political opinion to distinguish factual, commercial-speech disclosure requirements, to which courts apply a rational-basis rule, from the type of compelled speech on matters of opinion that is “as violative of the First Amendment as prohibitions on speech.” (Id. at 650, citation omitted.) In distinguishing the regulation at issue in Zauderer from those involving compelled speech, the Supreme Court stated, “Ohio has not attempted to ‘prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion or force citizens to confess by word or act their faith therein.’ The State has attempted only to prescribe what shall be orthodox in commercial advertising, and its prescription has taken the form of a requirement that appellant include in his advertising purely factual and uncontroversial information about the terms under which his services will be available.” (Id. at 651.) Since Zauderer was decided in 1985, lower courts have held that protection of the environment from pollutants (National Elec. Mfrs. Ass’n v. Sorrell (2nd Cir.2001) 272

CEAC GMO Subcommittee - July 1, 2014 Item IV (c)

F.3d 104, 113–14) and protection of public health and safety (Discount Tobacco City & Lottery, Inc. v. U.S. (6th Cir. 2012) 674 F.3d 509, 554 cert. denied, (U.S. 2013) [133 S.Ct. 1996, 185 L.Ed.2d 865]), were additional grounds for mandating disclosure of factual information in the context of commercial speech.1 As the U.S. District Court in San Francisco recently stated:

In the commercial marketplace, the First Amendment permits a government to require businesses to disclose accurate and uncontroversial facts as long as the disclosures are reasonably related to a governmental interest in preventing deception or in protecting public health and safety,

(CTIA — The Wireless Association v. City and County of San Francisco (N.D. CA 2011) 827 F.Supp.2d 1054, 1059, aff’d. (9th Cir. 2012) 494 Fed.Appx. 752 In sum, to “fit within the framework of Zauderer” a mandated disclosure or warning must be: (1) factual; and (2) reasonably related to a state interest that is recognized under Zauderer and its progeny. “If a commercial-speech disclosure requirement fits within the framework of Zauderer and its progeny, then we apply a rational-basis standard. If it does not, then we treat the disclosure as compelled speech under Wooley v. Maynard, 430 U.S. 705, 97 S.Ct. 1428, 51 L.Ed.2d 752 (1977), and its ilk and apply strict scrutiny.” (Discount Tobacco City & Lottery, Inc., supra, 674 F.3d at 554.)

To survive strict scrutiny, [a regulation] “must be narrowly tailored to promote a compelling Government interest.” Generally, “a statute is narrowly tailored only if it targets and eliminates no more than the exact source of the ‘evil’ it seeks to remedy.” Put another way, a statute is not narrowly tailored if “a less restrictive alternative would serve the Government's purpose.”

(Entertainment Software Ass'n v. Blagojevich (7th Cir. 2006) 469 F.3d 641, 646, citations omitted.)2

1 At present the FDA takes the position that there is no material difference between bio-engineered foods and their non-bio-engineered counterparts. Thus it is unlikely that a court would find Zauderer applicable. 2 Strict scrutiny under the First Amendment is an exacting standard that generally results in a determination that a regulation violates the First Amendment.

CEAC GMO Subcommittee - July 1, 2014 Item IV (c)

2. Requirements for GMO Labeling Program In this case, the proposed GMO3 labeling ordinance would have to satisfy both criteria for the applicability of Zaudere, to survive judicial scrutiny. We discuss each below.

a. Factual Information

In order to fall under Zauderer, the proposed labeling program would have to be limited to requiring factual, or possibly “accurate and uncontroversial”, disclosures. However, as the Council item makes clear, there is considerable controversy as to the safety and environmental impacts of GMOs, and no scientific consensus. Currently, the FDA appears to have taken the position that GMO products are not harmful. Thus, pending further scientific research that results in a consensus (or at least a majority opinion) that GMOs are harmful, or a science-based determination to that effect by a government agency charged with regulating food safety or the environment (such as the FDA or the EPA), an ordinance requiring labeling of GMOs would have difficulty satisfying the first precondition for the applicability of Zauderer.

b. Government Interest

The second criterion for the applicability of Zauderer is that the disclosure be reasonably related to the government interest in preventing deceptive or misleading speech, or protecting health and safety or the environment. While the proposed labeling program is in part based on these interests, it appears (from the September 10, 2013, Council report) to be primarily, or at least substantially, based on the right of consumer to be informed. This government interest does not satisfy Zauderer. (International Dairy Foods Ass'n v. Amestoy (2nd Cir. 1996) 92 F.3d 67, 73.) The Commission would need to articulate a government interest that is permissible under the applicable case law, and a labeling program that is reasonably related to serving that interest.

cc: Mayor and City Council

City Manager City Clerk

Index: V.F.1

3 The FDA’s most current guidelines regarding the voluntary labeling of GMO foods (2001) distinguishes between the term “GM” and “bio-engineered,” preferring the latter as scientifically more accurate and thus less confusing to the consumer. The term “GM” would include plants or animals that have been naturally bred (as in Mendel’s peas) and thus is inherently misleading. Also, the FDA states it is misleading to label a food as “free of bio-engineering” or “GMO-free” because of the implication there is something unsafe in the bio-engineered or GM counterpart.

CEAC GMO Subcommittee - July 1, 2014 Item IV (c)