Association of National Advertisers, Inc. v. Lungren

44 F.3d 726
Court of Appeals for the Ninth Circuit·Decided November 18, 1994·No. No. 93-15644·Published·Cited by 2 cases

Opinions

Opinion by Judge CHOY; Dissent by Judge NOONAN.

CHOY, Circuit Judge:

Appellants, the Association of National Advertisers, Inc., et al. (Trade Associations), appeal the district court’s grant of summary judgment upholding the constitutionality of California Business and Professions Code § 17508.5. Having jurisdiction under 28 U.S.C. § 1291, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

Section 17508.5 makes it unlawful for a manufacturer or distributor of consumer goods to represent that its products are “ozone friendly”, “biodegradable”, “photode-gradable”, “recyclable” or “recycled” unless their goods meet the statute’s definitions of those terms. See Appendix. In 1990, the California Legislature enacted this statute in the wake of a report on environmental advertising issued by a ten-state task force of state attorneys general (the Task Force). This report summarized the findings of the Task Force from a public meeting it convened in March 1990 to address the potential for abuse raised by the increasing popularity of what the attorneys general characterized as “[gjreen marketing ... the marketing craze of the 1990’s.”

The Task Force found disparities in the usage of these terms by different firms and noted the assertions of environmental groups and business representatives that there was “growing confusion surrounding many environmental marketing claims” creating a “fertile ground for abusive business practices.” [728]*728Ass’n of Nat’l Advertisers, Inc. v. Lungren, 809 F.Supp. 747, 750 (N.D.Cal.1992). The Task Force further discerned a “wide degree of consensus among business and environmental groups” on the need for “development of national standards, guidelines or definitions to guide business in making environmental claims and to help consumers understand the claims made.” Section 17508.5 is an attempt to implement these findings at the state level.

In February 1992, the Trade Associations responded to the passage of section 17508.5 by bringing suit in the Northern District of California against the attorney general of California, Appellee Daniel Lungren (Lun-gren or California). The Trade Associations sought a declaration that section 17508.5 im-permissibly restricts both commercial and non-commercial speech and is unconstitutionally vague. They also pursued a permanent injunction against the statute’s enforcement. Appellees, the Californians Against Waste and the Environmental Defense Fund (collectively referred to as “CAW”), intervened.

The district court held that the statute was adequately tailored to further substantial state interests in consumer and environmental protection and, accordingly, complied with the First Amendment. The Trade Associations appeal this ruling here on the basis that (1) the district court erred in concluding that section 17508.5 regulates only commercial speech; (2) the district court erroneously analyzed the statute under an intermediate standard of scrutiny inapplicable to non-commercial speech, or to commercial speech inextricably intertwined with more privileged expression; and (3) the district court misapplied intermediate scrutiny by ignoring far less restrictive alternatives to section 17508.5 and mistakenly finding that the statute directly advances a substantial governmental interest.1

II. DISCUSSION

A. Intermediate scrutiny governs section 17508.5.

The Trade Associations contend that the district court erred in holding that section 17508.5 regulates only commercial speech. They further assert that as a result the district court applied to the statute an unduly deferential standard of review, the intermediate scrutiny governing commercial speech. We disagree.

A district court’s interpretation of a statute presents a question of law reviewed de novo. United States v. Freeman, 6 F.3d 586, 592 (9th Cir.1993).

We agree with the district court that “the messages regulated by section 17508.5 possess the three characteristics recognized by the Court as constitutive of commercial speech” in Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 103 S.Ct. 2875, 77 L.Ed.2d 469 (1983). Lungren, 809 F.Supp. at 754. In Bolger, the Court struck down a federal statute prohibiting the mailing of unsolicited advertisements for contraceptives under the First Amendment. In doing so, the Court set out three characteristics which, in combination, supported its conclusion that the informational pamphlets at issue constituted commercial speech, including (i) their advertising format, (ii) their reference to a specific product, and (iii) the underlying economic motive of the speaker. Bolger, 463 U.S. at 67, 103 S.Ct. at 2880.

Here, the district court reasonably found all three of these factors present. Judge Patel observed:

First, by its explicit terms, the statute regulates representations concerning a specific consumer good which take the form of advertisements or product labels. Second, section 17508.5 specifically requires that the representation be made about a specific consumer good which a firm manufactures or distributes. Third, there is little doubt that by touting the environmental benefits of consumer products, plaintiffs’ association members hope to capture a portion of the “green market”.

Lungren, 809 F.Supp. at 754.

Accordingly, the district court correctly settled on the “more relaxed inquiry” [729]*729applicable to restrictions on commercial speech. Id. at 751, citing Bd. of Trustees of State Univ. of N.Y. v. Fox, 492 U.S. 469, 477, 109 S.Ct. 3028, 3033, 106 L.Ed.2d 388 (1989). Under this intermediate scrutiny, the asserted governmental interest must be “substantial”, rather than “compelling”, and the regulation adopted must “directly advance” this interest, rather than be “precisely drawn”. See Central Hudson Gas v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557, 566, 100 S.Ct. 2343, 2351, 65 L.Ed.2d 341 (1980); Consolidated Edison Co. v. Public Service Comm’n of N.Y., 447 U.S. 530, 540, 100 S.Ct. 2326, 2334-35, 65 L.Ed.2d 319 (1980).

We are not persuaded that the district court “basically redrafted the statutory language” in order to avoid strict scrutiny. In the Trade Associations’ view, section 17508.5 applies on its face to any “‘representation’ about certain environmental characteristics of consumer goods made by any ‘person’ who manufactures or distributes those goods.” In support of this interpretation, the Trade Associations first point to the statute’s supposed title, “environmental representations relating to consumer goods.” Insofar as this “title” was added by the editors of West’s Publishing Co., it affords scant insight into the statute’s intended ambit.

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Association of National Advertisers, Inc. v. Lungren, 44 F.3d 726 (9th Cir. 1994).

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