Immediately after a New York court determined that the New York City Department of Health and Mental Hygiene lacked the authority and a rational basis to adopt a prohibition on the sale of sugary beverages in containers larger than 16 ounces, the city filed a notice of appeal, which will reportedly be heard during the first week of June 2013. N.Y. Statewide Coal. of Hispanic Chambers of Commerce v. NYC Dept. of Health & Mental Hygiene, No. 653584/12 (N.Y. App. Div., filed March 12, 2013). Declaring the rule invalid, the state’s supreme court—New York’s trial court—enjoined and permanently restrained the city from implementing or enforcing it.

The “Portion Cap Rule” was set to take effect on March 12, but New York Supreme Court Judge Milton Tingling, after exploring at length the scope of the Department of Health’s authority as reflected in city charters dating back to the 1600s, found that it lacked “the authority to limit or ban a legal item under the guise of ‘controlling chronic disease,’ as the Board attempts to do herein.” According to the court, while the health department “may supervise and regulate the food supply of the city when it affects public health, . . . the Charter’s history clearly illustrates when such steps may be taken, i.e., when the City is facing eminent [sic] danger due to disease. That has not been demonstrated herein.”

As for the rational-basis prong of the challenge mounted by organizations representing minority, restaurant and beverage interests, the court found the rule “fraught with arbitrary and capricious consequences,” citing “uneven enforcement even within a particular City block” and “loopholes,” such as application to some but not all food establishments, exclusion of beverages with “significantly higher concentrations of sugar sweeteners and/or calories on suspect grounds” and no limitations on refills. In the court’s view, “The Portion Cap Rule, if upheld, would create an administrative Leviathan and violate the separation of powers doctrine. The Rule would not only violate the separation of powers doctrine, it would eviscerate it. Such an evisceration has the potential to be more troubling than sugar sweetened beverages.”

In a statement, Mayor Michael Bloomberg claimed that “in the end, the courts will recognize the Board of Health’s authority to regulate the sale of beverages that have virtually no nutritional value, and which—consumed in large quantities—are leading to disease and death for thousands of people every year. There are many instances where a lower court decision has gone against us and then been reversed. If lower court rulings had always stood, Grand Central Terminal would have been knocked down forty years ago.” Center for Science in the Public Interest Executive Director Michael Jacobson agreed, stating, “We are confident that the city will prevail here. Many years hence, people will look back and think it was crazy for sugar drinks to ever be served in 32- and 64-ounce pails.”

The American Beverage Association responded in a statement, “The court ruling provides a sigh of relief to New Yorkers and thousands of small businesses in New York City that would have been harmed by this arbitrary and unpopular ban. With this ruling behind us, we look forward to collaborating with city leaders on solutions that will have a meaningful and lasting impact on the people of New York City.” Cato Institute Senior Fellow Walter Olson opined that the court “struck down the soda ban in a sweeping opinion that does everything but hand Mayor Poppins his umbrella and carpetbag,” and noted that the court, “struck down the ban permanently both on the merits and as overstepping the rightful legal powers of the New York City Department of Health—meaning that the board cannot go back and reissue the regulations on its own authority even if it should develop a better factual basis for them.”

The day after the court issued its ruling, The New York Times published an article titled “Minority Groups and Bottlers Team Up in Battles Over Soda” to discuss the funding that the beverage industry has apparently provided to its “steadfast” allies, that is, “advocacy groups representing the very communities hit hardest by the obesity epidemic.” Writer Nicholas Confessore spoke with representatives of some of the organizations that brought the successful legal challenge to the mayor’s soft-drink initiative and found that most echoed the industry in calling for a focus on education, calorie labeling and exercise to address obesity in the United States. He also discusses how companies, such as PepsiCo, have sponsored these organizations’ events and provided grants as part of their diversity and inclusion campaigns. A PepsiCo spokesman said, “We never ask our foundation or community relations partners to engage in public policy issues on our behalf.”

In a Slate commentary, Emily Bazelon suggests that the court engaged in “conservative judicial activism” to invalidate the rule, “substituting his judgment” for that of the Department of Health. According to Bazelon, “[w]hen it comes to other sorts of laws like this one, which need only be justified by some reasonable basis, courts are generally supposed to let the democratic process play out. If the voters don’t like Bloomberg’s limit on sugar-drink sales, they can replace them with a mayor who will repeal it. . . . Judge Tingling walked on by all of that in striking down the Department of Health order. And of course he’s not the first conservative judge to find that activism from the bench is awfully appealing when it allows you to sweep away laws you don’t like.” See Mayor Michael Bloomberg Press Release, The Daily Caller and CSPI Statement, March 11, 2013; The New York Times, March 12, 2013; Reuters and Slate, March 13, 2013.

About The Author

For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.