California may not undermine local home rule by imposing penalties on charter cities for taxing sugar-sweetened beverages.

The Issue: Under heavy-handed pressure from the beverage industry, California passed the “Keep Groceries Affordable Act of 2018,” which prohibited local governments from imposing taxes on sugar-sweetened beverages, and imposed a severe penalty on charter cities that sought to impose such taxes by denying them all revenues from sales and use taxes. A non-profit health advocacy organization challenged the penalty provision of the Act on the ground that it would violate the constitutional rights of charter cities under California’s home rule doctrine, which guarantees charter cities and counties wide latitude to govern themselves concerning municipal affairs.

Why It Matters: There is strong evidence that sugar-sweetened beverages significantly increase the risks of cardiovascular disease, type 2 diabetes, liver disease, hypertension, obesity, and dental disease, among other debilitating and often deadly conditions. And there is likewise strong evidence that taxes – in addition to helping fund needed public health programs – reduce purchases of sugary drinks. But if local governments are prevented from instituting this common-sense health measure, it will likely be difficult to enact soda taxes at all, because the influence of the soda industry is often sufficient to block such measures at higher levels of government.

More generally, the Act is just one instance of a troubling, anti-democratic trend in recent years of powerful business interests pressuring states to not only preempt local innovation, but impose heavy penalties on local governments and officials who choose policies that do not accord businesses’ preferences. Such penalty preemption anti-democratically undermines local autonomy to respond to local concerns, makes local government officials afraid to exercise their full authority, and shuts down policy innovation.

Public Good’s Contribution: After a California state court found that the penalty provision was unlawful, because it impeded charter cities’ exercise of their constitutional home rule rights, Public Good authored a brief in the Court of Appeal, on behalf of a broad coalition of public health non-profit organizations, defending the decision. Public Good explained the importance for public health of local freedom to innovate. From smoking to poor nutrition, from home fires to firearms, local innovations have proven highly effective, often catalyzing widespread adoption of similar measures, with far-reaching benefits in reducing illness and deaths. Penalty preemption poses a serious threat to these benefits.

Amici represented by Public Good: Public Good’s brief was filed on behalf of the American Heart Association, the California Dental Association, the Center for Public Health Law Research, the Center for Science in the Public Interest, Changelab Solutions, the Georgetown Project on State & Local Government Policy & Law, Healthy Food America, the National Alliance for Hispanic Health, the Network for Public Health Law, the Praxis Project, Public Health Advocates, the Public Health Institute, the Public Health Law Center, and Public Health Law Watch.

Outcome: The California Court of Appeal affirmed the trial court’s decision to strike down the penalty provision for improperly using the threat of crippling penalties to chill charter cities from exercising their constitutional rights. (The underlying issue of whether the state may prohibit local soda taxes was not addressed in the litigation, which challenged only the penalty provision.)

306 Cal.Rptr.3d 627 (Cal. App., 3d Dist., March 27, 2023).

Download our brief filed in Cultiva La Salud v. State of California.