This post updates our prior post, dated March 12, 2013, which detailed the New York Supreme Court’s decision that struck down New York City’s Portion Cap Rule (or Soda Ban) as arbitrary and capricious and unconstitutional because it violated the separation of powers doctrine articulated in Boreali v. Axelrod, 71 N.Y.2d (1987). Recall that the Portion Cap Rule sought to limit the container size of sugary drinks in New York City to 16 ounces.

In a July 20, 2013 opinion, the First Department of the Supreme Court’s Appellate Division unanimously upheld the lower court’s decision. Relying exclusively on the separation of powers doctrine, the appellate court held that “under the principles set forth in Boreali, the Board of Health overstepped the boundaries of its lawfully delegated authority when it promulgated the Portion Cap Rule to curtail the consumption of soda drinks. It therefore violated the state principle of separation of powers.” (slip op. at 28). Like the lower court, the appellate court walked through the Boreali factors to determine whether the separation of powers doctrine had in fact been violated. These factors are:

  1. Whether the challenged regulation is based upon concerns not related to the stated purpose of the regulation, i.e., is the regulation based on other factors such as economic, political or social concerns?
  2. Was the regulation created on a clean slate thereby creating its own comprehensive set of rules without the benefit of legislative guidelines?
  3. Did the regulation intrude upon ongoing legislative debate? In other words, did the regulation address a matter the legislation has discussed, debated or tried to address prior to this regulation?
  4. Did the regulation require the exercise of expertise or technical competence on behalf of the body passing the legislation?

Interestingly, the appellate court held that the Portion Cap Rule violated all four factors whereas the lower court had opined that the Soda Ban had only violated the first three. Regarding the first factor, the appellate court determined that concern for New Yorkers’ health was not the sole purpose for the regulation as it should have been because “[i]f it were, the ‘Soda Ban’ would apply to all public and private enterprises in New York City.” (slip op. at 21). The court also found that the legislation was created on a “clean slate” because the Board of Health did not “fill a gap in an existing regulatory scheme.” (slip op. at 22). In evaluating the third factor, the court held that the rule “pursue[d] the same end, and thus address[ed] the same policy areas as [prior] proposals rejected by the State and City legislatures. This is a strong indication that the legislature remains unsure of how best to approach the issue of excessive sugary beverage consumption.” (slip op. at 27). Finally, the court opined that “we do not believe that the Board of Health exercised any special expertise or technical competence in developing the Portion Cap Rule. The deleterious effects (e.g. obesity) associated with excessive soda consumption are well-known.” (slip op. at 28)

Mayor Bloomberg has already stated that the appellate court’s decision is only a “temporary setback.” The City likely will petition New York’s highest court, the Court of Appeals, for certiorari in another effort to save the Soda Ban. The petitioners likely will argue that this case involves a substantial constitutional issue, entitling it to automatic review by New York’s highest court. This, however, is good news for food and beverage manufacturers, retailers, industry trade organizations and, of course, the Big Gulp.