The Soda Ban or the Portion Cap Rule? Litigation Over the Size of Sugary Drink Containers as an Exercise in Framing

Among the most controversial actions taken by a municipality in recent years was the attempt by New York City to restrict restaurants, movie theaters, and other food-service establishments from serving sugary drinks in sizes larger than sixteen ounces. The City adopted the rule to address rising rates of obesity. The measure received extensive news coverage, drew dueling newspaper editorials, and thus far has been blocked by litigation.

The rule in question has been referred to as the “Soda Ban.” In fact, it does not ban soda. It regulates only the size of the container in which soda or other sugary drinks may be served. The “Portion Cap Rule,” as it has been labeled by the City, was adopted by the New York City Board of Health (Board of Health) in September 2012 and was scheduled to go into effect in March 2013.

Before that could occur, however, the rule was challenged in court. In 2013, the New York County Supreme Court—as trial courts in New York State are known—held that the rule was not valid. Subsequently, the First Department of the Appellate Division affirmed the decision. Both courts essentially held that the Board of Health did not have the authority to adopt the rule and therefore violated separation of powers doctrine in doing so.

New York City appealed the appellate division’s judgment and on Wednesday, June 4, the New York Court of Appeals—the highest court in the State —will hear oral argument in the case. This column discusses the litigation over the City’s efforts to restrict the size of sugary drink containers.

It provides a brief history of the rule and then analyzes the dispute between the parties over how to frame the rule. Opponents of the rule, including the parties who filed suit to block the rule, characterize the measure as an unwarranted and unprecedented incursion of consumer choice and personal freedom. They decry the “Soda Ban.”

On the other hand, proponents of the “Portion Cap Rule,” including the City, view the rule as a modest measure intended to address obesity, a significant public health issue. As discussed below, these competing labels were only part of the dispute between the parties over how to frame the rule. I will use a more neutral term: the “soda container rule.”

Promulgation of the Rule

The soda container rule was developed by two City agencies: the Board of Health and the New York City Department of Health and Mental Hygiene (DOHMH). Essentially these two agencies are responsible, as the First Department summarized, for “regulating and supervising all matters affecting health in the city, including conditions hazardous to life and health” by “regulating the food and drug supply of the City, and enforcing provisions of the New York City Health Code.”

On May 30, 2012, then-Mayor Michael Bloomberg announced the soda container rule, which would have required food service establishments to cap at sixteen ounces the size of cups and containers used to serve sugary beverages. There were exceptions included in the rule; for example, a drink with more than 70 percent fruit juice was exempt from the regulation. The purpose of the rule was to address rising obesity rates in the City.

A day later, according to the First Department, “14 members of the New York City Council wrote to the Mayor opposing the [proposed soda container rule] and insisting that, at the very least, it should be put before the Council for a vote.” However, the proposed rule never was put before the City Council for a vote.

Instead, the DOHMH presented the proposed amendment to the Board of Health in June 2012 and a public hearing on the soda container rule was held in July 2012. Literally thousands of people commented on the rule.

The DOHMH made no changes to the initial proposal submitted to the public. Instead, as the First Department summarized, it provided the Board of Health with a memorandum summarizing and responding to the written comments. In the memorandum, the DOHMH stated that “the scientific evidence supporting associations between sugary drinks, obesity, and other negative health consequences is compelling” and that the proposed rule would have a “material impact” on consumption of sugary drinks because “patterns of human behavior indicate that consumers gravitate toward the default option.”

In September 2012, the Board of Health voted to adopt the rule, and the rule was scheduled to go into effect in March 2013.

Litigation in the Lower Courts

Before the rule went into effect, it was challenged by a number of groups, including several business trade associations, in a lawsuit filed in the Supreme Court of New York County. The petitioners claimed that the Board’s adoption of the Portion Cap Rule usurped the role of the City Council and imposed social policy by executive fiat.

The trial court agreed and declared the regulation invalid, primarily on the ground that the Board of Health exceeded its authority and violated the separation of powers doctrine as set out by the New York Court of Appeals in Boreali v. Axelrod. It also found that the rule was arbitrary and capricious. New York City appealed this decision to the First Department.

The principal issue on appeal was whether the Board of Health exceeded the bounds of its authority as an administrative agency when it promulgated the soda container rule. The First Department held that it did and therefore affirmed the trial court’s decision.

The court noted that the starting point for analyzing whether the rule violates the separation of powers doctrine is the New York State Court of Appeals’ decision in Boreali. Boreali depended upon and articulated a type of delegation doctrine. A state administrative agency is a creature of the legislature and may not, the First Department stated, “engage in broad-based policy determinations” absent authorization from the legislature. Admittedly, as the Court of Appeals stated in Boreali, the line between permissible agency rulemaking and impermissible legislative policy formulation is “difficult to demarcate.”

In Boreali, the court relied on four factors to determine whether an agency acted beyond the bounds of its delegated authority and engaged in impermissible legislative policymaking: (1) Whether the agency carved out exceptions based “solely” (and impermissibly) on economic and social considerations; (2) whether the agency created “its own comprehensive set of rules without the benefit of legislative guidance[;]” (3) whether the legislature had attempted—and failed—to enact as a law the regulation promulgated by the agency; and (4) whether the agency had special expertise in the area it sought to regulate.

In making this determination, the courts engage in something akin to a gestalt judgment. Not only is the application of the Boreali factors discretionary, but some require nothing more than an exercise of classification or judgment. Thus far, the petitioners have been more successful than the City in persuading the courts that their view of the soda container rule—and of the governing separation of powers principles—is correct.

The First Department noted that the Board of Health, like any administrative agency, has been delegated a broad range of rulemaking powers that are essentially legislative in nature but nonetheless does not have inherent legislative power.

The court then went on to apply the factors enunciated in Boreali to the soda container rule. It found that all four Boreali factors indicated that the Board had usurped legitimate legislative functions. Having invalidated the soda container rule on separation of powers grounds, the court did not review the trial court’s determination that the regulation was arbitrary and capricious.

Framing the Dispute Before the Court of Appeals

The litigation over the soda container rule has involved a number of disputes over how to frame the controversy. As an initial matter, as noted earlier, the petitioners referred to the rule in their brief before the Court of Appeals as “the Ban”—a term that suggests an authoritarian edict that deprives consumers of certain beverages. This term frames the dispute as a zero-sum contest in which the Board of Health undeniably denies consumers the opportunity to purchase soda.

The City, by contrast, defends what it calls “the Portion Cap Rule”—a phrase that is meant to be neutral and scientific and indicates an effort to clothe the rule in the garb of scientific expertise. In determining whether the Board has engaged in the broader, impermissible task of legislative policymaking or the more limited, authorized act of agency rulemaking, it surely makes a difference in how the Board’s rule is defined and described. The Soda Ban suggests the former while the Portion Cap Rule connotes the latter.

In their briefs before the Court of Appeals, the parties also engaged in a framing dispute over the extent to which the case involved an abstract question of law or a practical matter of policymaking. The petitioners adopted a formalistic approach, insisting that there should be no discussion of science or policy unless the Board of Health, as a threshold matter, possesses the authority to adopt the soda container rule.

The preliminary statement of the petitioners’ brief begins: “This case has never been about obesity or soft drinks. It is about whether the Mayor and his unelected Board of Health can usurp the authority of the City Council and decide for themselves what the law will be.” Either the Board of Health had the legal authority to promulgate the soda container rule or—as petitioners urge—it did not.

The City, by contrast, sought to persuade the court that obesity is a crisis that demands governmental action. In its brief before the Court of Appeals, the City’s first substantive argument, one that takes up nearly half of its preliminary statement, consists of laying out the reasoning and scientific support for the soda container rule.

According to the City, “[r]ates of obesity and diabetes are rising at alarming rates nationwide and in New York City. Faced with this problem, the Board adopted the Portion Cap Rule, which is a narrow, science-based intervention designed to help consumers make healthier choices.”

The Critical Dispute Over the Board of Health’s Authority

The last framing dispute has been, thus far, the most consequential. And that dispute is over the authority invested in the Board of Health. Is the Board wrongly claiming, as the petitioners insist, that it is “unique among all State and City agencies” and therefore “not bound by constitutional limitations imposed by the separation of powers”?

Or is the City correct in asserting that the Board’s “authority to issue substantive rules and standards in public health” extends to measures such as the soda container rule and therefore that the promulgation of the rule was lawful?

The First Department acknowledged that the New York City Charter “explicitly grants” the Board of Health “the power to supervise and regulate the safety of the water and food supplies” in order to address “inherently harmful matters,” but found that mere “soda consumption” did not constitute such a “health hazard.”

Rather, the court stated, “the hazard arises from the consumption of sugary soda in ‘excess quantity.’” Therefore, the First Department, reasoned, the Board’s “action in curtailing its consumption was not the kind of “interstitial rulemaking” permitted under Boreali. This discussion accords with how the petitioners have framed the dispute.

However, if it is accepted that obesity is a crisis that results, in large part, from the consumption of sugary soda in excess quantities—that is, if excessive soda consumption is found to be a “health hazard”—and it is accepted that the soda container rule does not ban the consumption of soda but only regulates how it may be sold to consumers, then isn’t the soda container rule the sort of interstitial rulemaking allowed under Boreali?

Oral argument before the Court of Appeals should provide a sense of how New York’s high court is framing the dispute and whether it will affirm the First Department and invalidate the rule or reverse and thereby sustain the rule.

Rodger D. Citron is a Professor of Law at Touro Law Center. His wife, Andrea Cohen, was Director of Health Services in the New York City Office of the Deputy Mayor for Health and Human Services and was involved in the City’s efforts to defend the portion cap rule. This column draws on an article Professor Citron co-wrote with Paige Bartholomew, a Touro law student, for The Municipal Lawyer, a New York State Bar Association publication.