Friday, June 30, 2017

9th Circuit upholds SF ordinance targeting false advertising by pregnancy centers

First Resort, Inc. v. Herrera, 2017 WL 2766094, -- F.3d –, No. 15-15434 (9th Cir. Jun. 27, 2017)

First Resort, a nonprofit providing free pregnancy-related services, challenged San Francisco’s Pregnancy Information Disclosure and Protection Ordinance, which targeted false or misleading advertising by limited services pregnancy centers (LSPCs). The court of appeals affirmed the district court’s ruling that the Ordinance was constitutional and not preempted by state law.

First Resort’s target clients are “women who are unsure how to proceed with unplanned pregnancies, including women considering abortion.” It bought keywords such as “abortion” and “emergency contraception”; its advertising competes with abortion providers for viewers’ attention.  Online, it advertised itself “as an unbiased and neutral organization that provided ‘abortion information, resources, and compassionate support for women’ with ‘unintended pregnancies’ who are ‘considering abortion,’” promised to “equip [women] with the resources [they] need to make a well-informed decision about [their] options,” and offered information about abortion procedures and costs. “Notably, the website and advertising materials did not mention First Resort’s anti-abortion stance or that it did not provide referrals for abortions.”

Further background: false and misleading advertising by pregnancy clinics is a well-documented problem.  Some such clinics “frequently fail to provide medically accurate information” and “the vast majority of pregnancy centers” contacted during a federal investigation misrepresented the medical consequences of abortion.  San Francisco’s City Attorney sent First Resort a letter in 201 expressing his “serious concerns” about First Resort’s misleading advertisements and asking First Resort to “correct” its advertising “to clarify that the clinic does not offer or make referrals for abortion services.”

The city’s ordinance defined a “[p]regnancy services center” as “a facility, licenced or otherwise ... the primary purpose of which is to provide services to women who are or may be pregnant, that either (1) offers obstetric ultrasounds, obstetric sonograms or prenatal care to pregnant women, or (2) has the appearance of a medical facility.” A limited services pregnancy center (LSPC) is a pregnancy services center that doesn’t directly provide or provide referrals to clients for abortions or emergency contraception.”

Under the ordinance,

(a) It is unlawful for any [LSPC], with intent directly or indirectly to perform pregnancy-related services (professional or otherwise), to make or disseminate or cause to be made or disseminated before the public …, in any newspaper or other publication, or any advertising device or in any other manner or means whatever, … any statement, concerning those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, whether by statement or omission, that the [LSPC] knows or which by the exercise of reasonable care should know to be untrue or misleading.
(b) It is unlawful for any [LSPC], with intent directly or indirectly to perform pregnancy-related services (professional or otherwise), to make or disseminate or cause to be so made or disseminated any such statement identified in subsection (a) as part of a plan or scheme with the intent not to perform the services expressly or impliedly offered, as advertised.

Before filing an action, the City Attorney must provide the LSPC with written notice of the violation and indicate that the LSPC has ten days to cure the violation.  If it doesn’t, the City Attorney can sue, with penalties from $50-500 per violation.

First, the court of appeals found that the ordinance was facially valid; it had a constitutional application and it was not unconstitutionally overbroad or vague, but regulated only unprotected false or misleading commercial speech.  (I might have gone with “apparent professional speech” to bolster the commercial speech analysis; whether or not the centers provide medical services in the ordinary sense, they seem to be offering medical advice—at least in the limited way targeted by the ordinance.  The professional speech consideration is at least implicit in the discussion of the services and marketplace at issue.)

First Resort argued that the Ordinance regulated all advertising, not only false or misleading advertising, and also that it regulated only noncommercial speech. First, the Ordinance clearly limited itself to false or misleading speech.  As for commercial speech, “[w]here the facts present a close question, ‘strong support’ that the speech should be characterized as commercial speech is found where the speech is an advertisement, the speech refers to a particular product, and the speaker has an economic motivation.” These factors are not individually necessary, however.  In American Academy of Pain Management v. Joseph, 353 F.3d 1099 (9th Cir. 2004), the court of appeals held that advertisements for paid medical services constituted commercial speech, as to a California state law prohibiting doctors from advertising they were “board certified” in certain circumstances.  The advertising at issue related to a specific product, medical services, and the advertiser had an economic motive: to solicit a patient base.

Here, the ordinance’s purpose was similarly to regulate advertising related to medical services, and the LSPCs had  “at least one similar economic motive for engaging in false advertising: to solicit a patient base.”  However, in American Academy, the patients were paying clients, and here they were not. The court of appeals declined to limit American Academy to “circumstances where clients pay for services.”  In this case, soliciting patients “directly relates to an LSPC’s ability to fundraise and, in turn, to buy more advertisements.” The joint statement of undisputed facts included: “First Resort’s employees are encouraged to share client stories because they are useful in fundraising,” and “[a] majority of First Resort’s fundraising communications reference the benefit of its services to clients and often include client stories.” Furthermore, successful advertising directly affects First Resort’s employees’ compensation, as “[m]embers of First Resort’s senior management team are eligible to receive bonuses based on criteria which may include ... the number of new clients.” Thus, LSPCs had an economic motivation for advertising their services.

Moreover, an economic motive for speech is not absolutely required to make the speech commercial. The court of appeals pointed to Fargo Women’s Health Org., Inc. v. Larson, 381 N.W.2d 176 (N.D. 1986), which upheld a preliminary injunction preventing a “pro-life” pregnancy clinic from engaging in “false and deceptive advertising and related activity [that] misleads persons into believing that abortions are conducted at the clinic with the intent of deceptively luring those persons to the clinic to unwittingly receive anti-abortion propaganda.” Even though clients didn’t pay for services, the court explained that, “[m]ore importantly, the Help Clinic’s advertisements are placed in a commercial context and are directed at the providing of services rather than toward an exchange of ideas.”  

So too here: the ordinance is limited to “the pregnancy-related services an LSPC offers in a marketplace for those services.” Indeed, the record indicated that First Resort viewed itself as “advertising and participating in a competitive marketplace for commercially valuable services.” The undisputed facts included First Resort’s admission that it “views its online advertising as competing with that of abortion providers for the attention of online viewers,” and that “[t]he medical services offered by First Resort, such as pregnancy testing, ultrasounds, and nursing consultations have monetary value.”

Nor was the Ordinance void for vagueness.  (If it had been, how could general prohibitions on false or misleading ads have survived?)  The Ordinance specified that its purpose was to prevent false or misleading ads about the nature of the counseling and services provided by LSPCs. A person of ordinary intelligence could understand what’s prohibited.

For basically the same reasons, the Ordinance was valid as applied to First Resort.  First Resort’s regulated speech wasn’t inextricably intertwined with its fully protected speech. First Resort’s commercial speech about the limited medical services it provides can easily be separated from its fully protected speech, that containing truthful information about pregnancy, on its website.  As the City Attorney’s letter explained, the clinic’s website included “detailed information about abortion procedures offered at outpatient medical clinics” and “implie[d] on its ‘Abortion Procedures’ page that First Resort perform[ed] pregnancy tests and ultrasounds as a prelude to offering abortion as an outpatient procedure, or referring clients to a provider who performs abortions.” The Ordinance regulated only misleading aspects of the website, which could easily be separated from other portions of the website, such as: “If you have missed at least one period, you may be pregnant .... The only sure way to know is by having a pregnancy test or pelvic exam.”

Nor did the Ordinance discriminate based on viewpoint. Whether the Ordinance applies depends on the services offered, not on the particular views espoused or held by a clinic. Even if an LSPC chooses not to offer abortions or abortion referrals for reasons that have nothing to do with their views on abortion, such as financial or logistical reasons, it’s covered.  Further, the Ordinance regulates LSPCs “because they engage in false or misleading speech, irrespective of their viewpoints.”  Applying only to the service providers that presented this “grave threat to women’s health” wasn’t viewpoint-based and didn’t restrict them from expressing their views.  The motivation for LSPCs’ false or misleading advertising might be anti-abortion views, but the Ordinance didn’t target the motivation, only the threat to women’s health.  Similarly, there was no equal protection problem based on the Ordinance’s use of a classification based on the speaker’s identity; rational basis review applied and was satisfied.

Separately, the Ordinance wasn’t preempted by California’s FAL (a matter that one of the judges, concurring, would have certified to the California Supreme Court).  “[A]bsent a clear indication of preemptive intent from the Legislature,” California courts presume that a local law in an area of traditional local concern “is not preempted by state statute.” However, preemption applies “if the local law ‘duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication.’ ” “Local legislation is ‘duplicative’ of general law when it is coextensive therewith.”  But California courts have mostly confined duplication preemption to penal ordinances, because when local and state offenses are duplicative, “a conviction under the [local] ordinance will operate to bar prosecution under state law for the same offense.”

The Ordinance here was civil and created no double-jeopardy bar to a state criminal prosecution for the same false advertising, and First Resort failed to show that the Ordinance would interfere with the enforcement of state law.  At least, the lack of a penal component weighed against finding preemption.  Also, the laws didn’t bar “precisely the same acts.” The Ordinance, which only applies to LSPCs and to statements about pregnancy-related services, was narrower in scope than the FAL in both covered parties and topics.  But First Resort didn’t show that the FAL covered all acts barred by the Ordinance—the Ordinance barred untrue or misleading statements whether through affirmative statements or by omission, while the FAL’s text didn’t mention omissions.  The Ordinance also regulated services “expressly or impliedly offered,” while the FAL didn’t mention implied offers. In addition, the Ordinance barred LSPCs from makng untrue or misleading statements about pregnancy-related services with the “intent not to perform” those services “as advertised.” By contrast, the FAL barred untrue or misleading statements about property or services with “the intent not to sell” them as advertised. Thus, the Ordinance covered false advertising concerning the performance of services, regardless of whether those services were  offered for sale.  The enforcement schemes were also entirely different, with the Ordinance lacking a criminal component that the FAL has.

Judge Tashima’s concurrence pointed out that many of the things the majority opinion said about the FAL weren’t really true—for example, the FAL covers omissions where affirmative statements become misleading because of the omission, which is pretty obviously the situation targeted by the Ordinance.

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