RICHMOND -- A federal judge in San Francisco on Friday blocked the city's attempt to force a beverage industry-funded campaign group to comply with campaign-disclosure rules on its political mailers.
The Community Coalition Against Beverage Taxes, which is funded by the American Beverage Association, has spent more than $350,000 in an effort to defeat Measure N, a November ballot measure that could force local businesses to pay a penny-per-ounce tax on sales of sugar-sweetened beverages. A companion measure advises the city to spend the estimated $3 million in annual revenues on recreation and anti-obesity programs.
The coalition sued in U.S. District Court in San Francisco on Aug. 30, arguing that the city's campaign-disclosure ordinance violates the First Amendment.
The ordinance, passed by the council in June, requires all mass mailings be accompanied by the words "Major funding by," followed by the five largest contributors, with the information on the "front page" of all distributed material.
"Complete victory for our side," said coalition spokesman Chuck Finnie. "(Judge Charles Breyer) indicated he doesn't think (the ordinance) applies to us because we are not engaged in independent expenditures. (Breyer) indicated a city can't require a campaign to publish political arguments under the guise of claiming it is a disclosure."
The city's attorney, Randy Riddle of Renne, Sloan, Holtzman & Sakai, said Friday that "the court appreciated the objectives the city had in mind" in terms of ensuring campaign-funding disclosure but "had an issue with the way in which the city is going about it."
"We're disappointed," Riddle said.
Riddle added that he will discuss how to proceed when he meets with the City Council in closed session Tuesday.
Riddle said Breyer issued a temporary restraining order for 14 days, exempting the coalition from the city's ordinance. The court will reconvene Sept. 18, Riddle said.
The coalition released a statement minutes after Friday's ruling: "Richmond's campaign mailer law was being enforced against our campaign in a manner intended to interfere with our ability to communicate with voters about the so-called soda tax appearing on the city's ballot this November as Measure N. Judge Charles Breyer's ruling means that interference comes to an end."
The anti-tax mailers will still follow state-mandated disclosure rules indicating major funding sources, including the American Beverage Association, Finnie said.
The City Council voted 5-2 in May to put the tax on the November ballot. Richmond could become the first city in the nation to impose such a tax on sugar-sweetened drinks, which tax proponents say is a public health menace similar to cigarettes, especially for children. The Los Angeles County city of El Monte has an identical measure on its November ballot.
Councilman Tom Butt said he was disappointed. Butt wrote on his e-newsletter earlier this week that the disclosure requirement was crucial because "Big Soda will spend over a million dollars in Richmond while trying to make it look like a down-home campaign."
Councilman Corky Booze, an opponent of the tax, said the city overreached and should drop its legal defense.
"I'm disgusted that we waste taxpayer money on this," Booze said.