The Mandatory Ad Disclosure Muddle

September 13, 2018

Over the last several decades, the Supreme Court has substantially increased the First Amendment protection for advertising in a long series of cases. ANA has been involved in many of the key cases. Unfortunately, one storm cloud on the horizon involves the question of when the government may compel marketers to add warnings or make other disclosures in their ads. The issue is center stage now in several different arenas. The issue is significant because it will determine what types of ad disclosures the federal government and the nation’s 30,000- plus local governments may require from marketers.

The landmark Supreme Court decision in this area is the Zauderer case from 1985. There the Court held that government-mandated disclosures are permissible under the First Amendment if there is a rational connection to a substantial governmental interest in preventing consumer deception and the required disclosure is “purely factual and uncontroversial” and not unduly burdensome.  

As courts across the country have applied the Zauderer test in a series of cases, the law in this area has unfortunately become rather muddled.

ANA has been actively involved in two pending lawsuits challenging local laws requiring mandatory ad disclosures. One involves a Berkeley, California ordinance that requires wireless producers and sellers to provide a point of sale notice regarding radio frequency safety. The other involves a San Francisco ordinance that mandates health warnings in ads for most sugar-sweetened beverages. We have filed multiple “friend of the court” briefs in both cases arguing that the disclosure requirements do not meet the Zauderer test and are unconstitutional.               

In June, the Supreme Court announced an important decision (National Institute of Family and Life Advocates v. Becerra) striking down a California law that mandated certain disclosures in all pregnancy centers. The Court described the limits the First Amendment imposes on the government’s authority to compel speech by private parties. The Court also vacated a lower court decision upholding the Berkeley ordinance and sent that case back for further review. The beverage ad disclosure case is also being reviewed by the Ninth Circuit.  We are very hopeful that the two ordinances will ultimately be struck down.

The mandatory ad disclosure issue is also being raised in two other areas. Some members of Congress and the Secretary of Health and Human Services are proposing a requirement that the price for pharmaceutical products appear in all DTC ads for those products. We are pushing back on this proposal, which raises serious First Amendment concerns. We were able to defeat an amendment to the Labor-HHS appropriations bill put forward by Senators Dick Durbin (D-IL) and Chuck Grassley (R-IA). Given the multitude of factors that impact drug prices, it is highly unlikely that these types of disclosures can be done in a way that is not misleading to consumers. Nevertheless, we expect these efforts to continue to be pushed.

Finally, a federal court recently ordered the Food and Drug Administration (FDA) to expeditiously issue a final rule requiring graphic health warnings on all tobacco products and advertising, as mandated by a 2009 federal law. ANA and other industry groups successfully challenged the FDA’s original “graphic warnings” proposal as unconstitutional.

We will continue our advocacy efforts in this area. Without strict application of the limiting principles of the Zauderer case, there is no stopping point for disclosure requirements on ads for any product that a government body may decide should include warnings. Advertisers must not be forced to become billboards or megaphones for any governmental group’s desire to impose mandated messages.

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