Legal Alerts Jul 10, 2017

Ninth Circuit Panel Rejects Challenges to a California City’s Misleading Commercial Speech Ordinance

Local Governments’ Authority to Regulate for False Advertising Affirmed

Ninth Circuit Panel Rejects Challenges to a California City’s Misleading Commercial Speech Ordinance

Recently, the U.S. Ninth Circuit Court of Appeals affirmed local governments’ authority to adopt regulations that prevent the use of false or misleading statements in the solicitation or provision of services.
In 2011, the San Francisco Board of Supervisors passed an ordinance aimed at preventing deceptive advertising related to the scope and nature of services provided by limited services pregnancy service centers. LSPCs provide many pregnancy-related services, including counseling and prenatal care, but do not provide abortion services. The Board’s concern was that LSPCs were purporting to provide a full range of pregnancy counseling and services, including abortions, or otherwise seeking out patients who were interested in learning more about abortions.
In its findings, the Board clarified that it did not intend to interfere with any LSPCs’ anti-abortion advocacy efforts, but rather sought to require that LSPCs accurately advertise the scope and limitation of the services provided. The ordinance prohibited untrue or misleading advertisements — whether express or by omission — about services provided by LSPCs.
First Resort, an LSPC, challenged the ordinance in the U.S. District Court for the Northern District of California alleging, among other things, First Amendment violations and preemption by state law.
At the close of discovery, both the plaintiff and City filed motions for summary judgment. The District Court granted summary judgment in favor of the City and held that the ordinance only regulated false and misleading commercial speech and did not violate the First Amendment. The District Court further held that state law did not preempt the ordinance.
A Ninth Circuit panel affirmed the lower court’s decision in First Resort v. Herrera.
As to the First Amendment challenge, the appeals court rejected the plaintiff’s assertion that the ordinance regulated all advertising and therefore should be subject to strict scrutiny.
The appeals court found that, while the First Amendment extends some protection to commercial speech and requires that regulations pertaining to commercial speech be subject to intermediate scrutiny, there is no such First Amendment protection for false or misleading commercial speech.
The appeals court determined that the regulated speech was commercial in nature because it was designed to attract patients and ultimately permit the LSPCs to provide services to those patients. It also found that the ordinance only targeted false or misleading speech and therefore did not implicate First Amendment concerns. The court clarified that the ordinance was directed at advertisements related to the provision of services and not the exchange of ideas or LSPCs’ anti-abortion advocacy efforts.
As to the preemption challenge, the appeals court rejected the plaintiff’s assertion that the City could not regulate false or misleading advertisements about services available at LSPCs because the State already regulated false advertising. In particular, the appeals court provided that the ordinance did not conflict with state law or impose duplicative criminal sanctions because it only included civil penalties.
This decision affirms local governments’ authority to pass consumer protection regulations to curb false or misleading advertisements.
If you have any questions about this decision or how it may impact your agency, please contact the author of this Legal Alert listed to the right in the firm’s Municipal Law practice group, or your BB&K attorney.
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