07.31.13

NYC's Super-size Soda Ban declared Unconstitutional

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NYC-soda-banThis post was written by Alberto Alemanno, O’Neill Institute Scholar .  It was originally published at http://albertoalemanno.eu/articles/nycs-super-size-soda-ban-declared-unconstitutional. Any questions or comments about this post can be directed to alemanno@hec.frNote: The O’Neill Institute’s discussion of the appellate court’s decision can be found here.

In Spring 2012, New York City’s Mayor unveiled plans to limit the serving size of non-diet soft drinks, such as sweetened teas, sweetened black coffee, hot chocolate, energy drinks, sports drinks as well as sweetened juices, sold in fast-food franchises, movie theatres and arenas. This has been dubbed the ‘Soda ban’. The Mayor’s stated purpose of the rule was to address rising obesity rates in the City. Following the imposition of the pioneering bans on both indoor and outdoor smoking, this move immediately earned the NYC Mayor the nickname of ‘Nanny Bloomberg’.
 
After a first victory of its opponents, the super-size soda ban has been held unconstitutional today by a unanimous opinion from the state appellate court in New York Statewide Coalition of Hispanic Chambers of Commerce v. NYC Department of Health and Mental Hygiene. For an analysis and reaction to this opinion, see Prof. Larry Gostin’s Op-Ed on CNN.
 
The court upheld a state trial court’s decision that the NYC regulation prohibiting sugary drinks in restaurants, movie theaters and arenas that exceed 16 ounces was an unconstitutional exercise of power by a city agency, and that, as such, violated the principle of separation of powers.
 
Among the plaintiffs there are not only beverage associations, but – amid some donations from companies like Coke and Pepsi – there appear also a Korean grocers group and the New York Statewide Coalition of Hispanic Chambers of Commerce, representing those who are statistically most hit by the obesity epidemic.
 
These organizations developed an intriguing, yet inherently inconsistent, line of reasoning, which today succeeded. They argued that on the one hand the ban went too far, by limiting consumer control over portion size, and on the other hand that it did not go far enough, by leaving out the markets and convenience stores.
 
Essentially, the issue was whether NYC Health Code §81.53, known as the “portion cap rule” is within the power of the Department of Health.  The short answer by the judicial branch: no. 
 
The text of the decision is available here.
 
In essence, the (NY state law) question revolved around whether “the difficult-to-demarcate line” between administrative rulemaking and legislative policymaking had been transgressed.”
 
The Appellate Court found several illustrations of such a breach of legislative authority by the NY Department of Health.
 
Thus, the Court recognizes (correctly) that “in essence, the ‘Soda ban’ prescribes a mechanism to discourage New Yorkers from consuming those targeted sugary drinks by dictating a maximum single portion size that can be made available in certain food service establishments. Such mechanism necessarily looks beyond health concerns, in that it manipulates choices to try to change consumer norms.”
 
The argument follows: “Indeed, since a basic premise of the ban is that New Yorkers consume excessive quantities of sugary drinks, the Board’s decision to regulate only these drinks requires that any health concerns be weighed against consumer preferences for such drinks. Instead of offering information and letting the consumer decide, the Board’s decision effectively relies upon the behavioral economics concept that consumers are pushed into better behavior when certain choices are made less convenient. For instance, the regulation makes the choice to drink soda more expensive, as it costs more to buy two 16-ounce drinks than to buy one 32-ounce drink. As a result, the Board necessarily concluded, as a threshold matter, that health concerns outweigh the cost of infringing on individual rights to purchase a product that the Board has never categorized as inherently dangerous. As the intense public debate on the ban bears out, this threshold decision to regulate a particular food is inherently a policy decision. Such decision necessarily reflects a balance between health concerns, an individual consumer’s choice of diet, and business financial interests in providing the targeted sugary drinks. In this context, the “Soda Ban” is one especially suited for legislative determination as it involves “difficult social problems,” which must be resolved by “making choices among competing ends.”
 
In other words, the concern of the Board vis-à-vis the obesity epidemic is legitimate, but its preferred policy option, being the product of ‘a political choice’, does not fall under its competence (but that of the City Council). In any event, since the target of this measure (non-diet soft drinks) have not been previously recognized as harmful, the Board couldn’t act against them.
 
While the Court concluded – on the basis of the arguments above – that the contested Soda ban violated the state principle of separation of powers, it clearly did not:
                   circumscribe the legitimate powers of the Department of Health
               express an opinion on the wisdom of the soda consumption restrictions, provided that they are enacted by the government body with the authority to do so.
Therefore it cannot be ruled out that the NY City Council or the same Board may re-establish this measure. This is an important point that deserves to be highighted. Indeed, similarly to what occurred with the withdrawal of the Danish ‘fat tax’, there is a risk that this decision will be instrumentalised by the relevant industry that are set to claim that this experimental policy measure ‘did not work’. As our brief post tried to illustrate, the reason why the soda ban has been withdrawn is – as in the case of the Danish fiscal measure – purely contingent (interpretation of competence issues at the local/state level) and – as expressly stated by the same NY Appellate Court – this judgment did no “express an opinion on the wisdom of the soda consumption restrictions.”
While this judgment is a setback for Mayor Bloomberg, the policy appeal of this behavioral informed public health measures remains intact and there is clearly a case for more experimentation than ever.

A good discussion of the trial court’s decision which has been affirmed today can be found here.

 

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