New Lawsuit Challenges California Preemption Law

Law passed in 2018 prevents local governments from raising critical revenue and protecting the health of residents and communities affected by COVID-19

FOR IMMEDIATE RELEASE
August 10, 2020

Oakland, CA - A new lawsuit filed today challenges a California law that prevents local governments from raising critical revenues to fund a range of services for residents. The lawsuit — filed by Jarvis, Fay & Gibson, LLP, on behalf of Cultiva La Salud, an organization dedicated to creating health equity in the San Joaquin Valley, and Martine Watkins, a resident of Santa Cruz who serves on the Santa Cruz City Council — is supported by ChangeLab Solutions and the American Heart Association. If successful, the lawsuit could affect communities in California and across the country seeking to keep states from interfering with local governments’ ability to pass policies aimed at protecting the health, safety, and welfare of their residents, an action that has taken on new urgency amid the COVID-19 pandemic.

In 2018, the beverage industry pressured the California legislature into passing a law that prevents cities from enacting new sugary drink taxes until 2031. The legislature enacted the law under the threat of an industry-funded state ballot initiative that, if passed, would have drastically curtailed local governments’ ability to raise revenue for critical services like public health, education, and transportation.

The lawsuit contends that the state statute oversteps its bounds by unlawfully penalizing charter cities that exercise their constitutionally protected authority to manage their municipal affairs, including taxation. A provision in the statute penalizes a city that lawfully enacts a sugary drink tax by effectively taking away that city’s sales tax revenue. Such a draconian penalty could jeopardize millions of dollars for that community.

“It is imperative that local governments have decision-making power and all tools at their disposal to protect the health and safety of their residents, especially during this time of COVID-19. Abusive laws like this one harm families and communities, and they should have no place in California or anywhere else,” said Sarah de Guia, JD, chief executive officer of ChangeLab Solutions. “Two years ago, the beverage industry strong-armed the legislature to push through a measure that protects their profits but hurts public health. The court should strike down this blatantly illegal law.”

Communities in California that enacted sugary drink taxes prior to the statewide ban have greatly benefited. In San Francisco, revenue generated from the tax has helped provide food to families experiencing food insecurity during the COVID-19 pandemic; Oakland has used revenue from its tax to fund the installation of clean drinking water fountains in public schools and child care centers with lead-contaminated water.

“Sugary drink taxes have had a demonstrably positive impact in the communities that enacted them. Localities should be able to enact laws that promote health and equity while helping communities and local businesses thrive,” said John Maa, MD, a general surgeon at MarinHealth Medical Center and board member of the American Heart Association.

The issue of state interference extends well beyond sugary drink taxes. Unfortunately, across the nation, more state governments are interfering with local governments on a wide variety of issues that impact community health and well-being. The harms associated with this abuse of preemption are well documented, with particularly negative repercussions for communities of color, women, and families with low incomes. Some examples of the misuse of preemption include the following:

  • Paid sick leave: In 21 states, workers — many in low-wage, part-time, or “gig” jobs and who are disproportionately Black and Latinx — don’t have comprehensive paid sick time.
  • Broadband access: Preemption laws in 19 states restrict or ban communities from creating their own networks or otherwise expanding broadband competition, making it harder for families to pay for internet for work, distance learning, or telehealth.
  • Affordable housing: Laws in more than 30 states preempt local governments from adopting one or more equitable housing policies, such as rent control, source-of-income (eg, federal voucher) antidiscrimination protections, inclusionary zoning, and regulation of short-term rentals.

“Some of the most significant public health policies of the past few decades — from smoke-free air laws to sugary drink taxes — started in a single community and then spread across the country. And communities in California have been at the forefront of local innovation and equity-promoting policies,” said Genoveva “Veva” Islas, MPH, founder and executive director of Cultiva La Salud. “COVID-19 demonstrates just how critical it is for communities to be able to act quickly and decisively to take care of their residents. We cannot allow the profits of special interests to prevail over the health and well-being of California’s children and families.”

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For 24 years, ChangeLab Solutions has worked to advance equitable laws and policies that ensure healthy lives for all, prioritizing communities whose residents are at highest risk for poor health. For more information, visit www.changelabsolutions.org. Follow ChangeLab Solutions on Twitter and Facebook.

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Adam Zimmerman
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