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One Way to Overcome States’ Pre-emption of What Localities Want: Litigation

A California case involving local sugary-drink taxes demonstrates the value of taking to the courts to push against industry-backed laws that block city and county policies that promote health and equity.

A person drinking from a to-go cup through a straw.
Local voters and policymakers around the country have been at the forefront of policy innovations in recent years, enacting taxes on sugary drinks, increases in the minimum wage, worker benefits like paid sick leave and other protections that promote health and opportunity for their communities. Such interventions are particularly valuable for addressing inequities affecting communities of color that face systemic discrimination. Yet in many places, powerful industry groups whose profits are threatened by the new laws have thwarted local democracy.

A primary tactic employed by industry groups to stop cities and counties from passing progressive policies exploits a legal concept known as pre-emption. Pre-emption means that laws passed by higher levels of government can override or limit laws and policies enacted by lower levels of government. The doctrine of pre-emption has existed since the formation of the United States and isn’t inherently good or bad for society. In recent times, however, industry groups have weaponized pre-emption to protect their business interests at the expense of health and opportunity for millions of American workers and residents.

At least a dozen cities and counties have adopted local minimum-wage ordinances that were subsequently pre-empted by state-level laws. Twenty-seven states pre-empt local governments from passing ordinances requiring employers to provide worker benefits like paid sick leave, and 30 states pre-empt localities from enacting rent-control requirements that protect low-income occupants from being priced out of their homes. Taken as a whole, pre-emption is one of the most damaging tools used by corporate interests to stifle policy innovations favored by both voters and local elected representatives.

A notable example is California’s deceptively named Keep Groceries Affordable Act of 2018, which banned both new local taxes on sugary drinks and increases in existing ones until 2031. Sugary-drink taxes are a policy intervention with proven results in improving health and generating revenues for community investments. But, backed by well-funded beverage-industry political operatives, the 2018 law was enacted using tactics described by some state legislators as “blackmail” and “extortion.” It dictated that charter cities (those that have extensive home-rule authority) would forfeit sales tax revenues if they enacted a sugary-drink tax. Since most California cities derive about a third of their revenue from sales taxes, the penalty acted as a strong deterrent.

Outraged by the beverage industry’s brazen disregard for the health of local communities, ChangeLab Solutions partnered with the American Heart Association and two plaintiffs to challenge that penalty provision. The plaintiffs were Cultiva La Salud, a health-equity nonprofit in the San Joaquin Valley with deep ties to the local Latino community, and Martine Watkins, a Santa Cruz city council member who joined the lawsuit as a private citizen.

Our legal research identified constitutional infirmities in the penalty provision, providing a strong basis for a court challenge. Last fall, the Sacramento County Superior Court agreed, declaring the penalty provision in violation of the California Constitution’s home-rule guarantees. The case is now on appeal, but if the state’s higher courts uphold the decision it will mean that voters and political leaders in charter cities throughout California will once again be able to consider passing new sugary-drink taxes without the risk of forfeiting vitally needed sales tax revenues.

This victory for local democracy and community health in California can inspire community advocates across the country to scrutinize industry-backed state pre-emption laws. Just as that California law contains what we believe to be an unconstitutional defect in its penalty provision, other states’ pre-emption laws may also include flawed elements that could be defeated in court. Our challenge to California’s 2018 ban on sugary-drink taxes demonstrates that litigation can be a tool to restore the right of localities to regulate issues that directly affect their residents’ health.

Anti-pre-emption litigation requires significant resources, expertise and patience. It takes a coalition of complementary partners with different strengths and perspectives to discern the best strategy for challenging industry-backed pre-emption laws. But the end result can be gains for equity in health, wealth and opportunity.

Sabrina Adler, an attorney, is vice president of law at ChangeLab Solutions. Meryl Chertoff, an attorney, is executive director of the Georgetown Project on State and Local Government Policy and Law, an adjunct professor at Georgetown Law and a ChangeLab Solutions board member.

Governing’s opinion columns reflect the views of their authors and not necessarily those of Governing’s editors or management.
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