Court Stops City’s Enforcement of Disclosure Law in Soft Drink Tax Fight
A federal court in San Francisco has issued a temporary injunction against the city of Richmond, California, to block enforcement of a law requiring campaign mailers to include information about “major funding from large out-of-city contributors.” Cmty. Coal. Against Beverage Taxes v. City of Richmond, No. 12-4545 (N.D. Cal., order entered September 7, 2012). The ordinance calls for committees that spend at least $2,500 on a local ballot proposal campaign to list their top five contributors on each mailer.
According to news sources, the city adopted the ordinance in June in the
midst of a heated political dispute over a November ballot measure that
would, if approved by voters, require local businesses to pay a 1-cent-per-ounce
tax on the sales of sugar-sweetened beverages. The Community
Coalition Against Beverage Taxes, purportedly funded by the American
Beverage Association, has apparently spent in excess of $350,000 to defeat
the measure, outspending the proposal’s supporters by at least 50-1,
according to campaign disclosure statements. It sued the city in late August,
challenging the finance disclosure law on First Amendment grounds
Adopting the temporary restraining order, the court stated, “This case directly
involves Plaintiffs’ fundamental rights of political speech during an election
campaign. Defendants’ unequivocal written assertion that the City will strictly
enforce Richmond Municipal Code 2.42.075 against Plaintiffs has a chilling
effect on Plaintiffs’ exercise of rights protected by the First Amendment.
Plaintiffs have established that they are likely to succeed on the merits, that
they are likely to suffer irreparable harm in the absence of preliminary relief,
that the balance of equities tips in their favor, and that an injunction is in
the public interest.” On September 11, the court extended the order until
September 28, after the parties requested that the court delay by one week a
hearing on the preliminary injunction.
In a written statement, the coalition applauded the court’s action and claimed that the city had not wanted voters to know that it would not be using the revenue to address obesity, the measure would impose a general tax on businesses and raise grocery prices for all shoppers, and local business would suffer “when shoppers and diners go elsewhere to avoid higher prices.” Commenting on the soda-tax dispute, New York University Nutrition Professor Marion Nestle reported that “‘Big Soda’ is expected to spend more than a million dollars in Richmond to make its efforts look like a local campaign.” See Contra Costa Times, September 6, 2012; SFGate.com and Community Coalition Against Beverage Taxes Press Release, September 7, 2012; FoodPolitics.com, September 10, 2012.
