How Corporations Force States to Stifle Local Rule

The American Beverage Association basically extorted California’s government into preempting the authority of cities and counties to impose soda taxes over the next 12 years. Unfortunately other large corporate interests are also using similar tactics to get what they want.

In July, California’s legislature and governor faced an elegant — and legal — extortion threat. The American Beverage Association, funded by Coke and Pepsi, demanded immediate passage of legislation that preempts any soda taxes imposed by county or local governments for the next 12 years. If Gov. Jerry Brown (D) and the Democratic-controlled legislature refused, Big Soda would go forward with a ballot initiative this November that would severely limit any future tax increases at local and county levels. Brown blinked and signed the preemption law, averting what he saw as a larger, long-term danger.

But the governor’s action opened the door to other extortion schemes cooked up by well-funded corporate interests; Silicon Valley tech firms successfully used similar tactics to press for the removal of an initiative to protect online privacy rights.

Our guest, Mark Pertschuk, is the founder and executive director of Grassrootschange.net, which advocates for healthier communities through grassroots action. He also manages Preemption Watch, which tracks legislation that prevents or invalidates local measures aimed at improving civil rights, health, and safety. As president and executive director of Americans for Nonsmokers’ Rights, he was instrumental in the passage of many laws regulating tobacco use.

Pertschuk explains how preemption works, and details the California soda tax case. We also discuss the 13 states that ban most or all regulation of factory farms and agribusiness, and a similar number of states that undermine smoking bans in public places.

“There’s a term for this — regulatory void — Mississippi passed a law that takes away all local authority on farming, food policy and nutrition, but doesn’t pass any protections at the state level. That’s a void.”

And we talk about “good preemption” that sets a floor for regulations, compared to “bad preemption” that puts a ceiling on local laws and regulations.

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Full Text Transcript:

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Peter B. Collins:	Welcome to Radio WhoWhatWhy. In San Francisco, I’m Peter B. Collins. Thanks for joining me for this podcast today, where we’re going to talk about the prospect of state and federal preemption of local regulation. As soon as you hear some of the examples that we’re going to cite, you’ll understand what we’re talking about and why this is a serious issue worthy of your consideration.
	My guest today is Mark Pertschuk. He currently is the executive director of grassrootschange.net and he runs their Preemption Watch project. Previously he was the grassroots leader who, in my estimation, made the single-most personal impact on the dramatic shift in regulation of smoking in this country. Mark Pertschuk was the president and CEO, the executive director of Americans for Non-Smokers Rights up until 2007. Mark, I appreciate the work that you’ve been doing and the work you continue to do. Thanks for being with us today.
Mark Pertschuk:	Thank you Peter B.
Peter B. Collins:	Tell me what first alerted you to the issues related to legislation that preempts the regulation or law of lower ranked political entities?
Mark Pertschuk:	We … I was lucky in a sense in that I was working on tobacco in the late 1980s. That was the first serious work I did out of law school. We were tracking the tobacco industry, because needless to say the tobacco industry was horrified by the prospect of banning smoking in restaurants, in workplaces, ultimately in places like casinos and bars, because they felt it would damage their bottom line in a very serious way, and they were terrified, for example, of the airline smoking ban.
	So in our work to protect nonsmokers from secondhand smoke, we really spent a lot of time studying the tobacco industry. It was in 1986 that the tobacco industry initiated a program of 50 state preemption of local ordinances banning smoking or regulating smoking, and that was in Florida in 1986. So as soon as that happened, we woke up and started fighting preemption of local authority to ban smoking.
	Having succeeded in that to some degree, that is why today we have dramatically reduced the toll of not only secondhand smoke, but of addiction to cigarettes and other tobacco products.
Peter B. Collins:	And all of the catastrophes that were predicted, the parade of horribles presented by the tobacco industry, that restaurants would go out of business, that the airlines couldn’t function … I mean they painted a picture that there was going to be massive interstate bootlegging of cigarettes. And it’s fair, some of that does occur around the higher taxed states. But most of the predictions they made were … Well, they were bullshit.
Mark Pertschuk:	Yeah, and there’s no question about it, that whether it’s the tobacco industry or the oil and gas industry, or of course the National Rifle Association, when they promote a devastating policy like state or federal preemption in the worst case scenario, most of their arguments for that are complete and total garbage.
Peter B. Collins:	And, Mark Pertschuk, at your organization, Grassroots Change, your primary focus is on stimulating grassroots activity. One focus is around the health issues related to over-consumption of sugary soda products, and this has led to local taxes, including in Oakland, where you’re based, Berkeley, other communities, including San Francisco, it caused big soda to spend millions of dollars to try to kill these local measures, and when they failed they turned to the state legislature and government in in Sacramento.
	I’d like you to explain to our listeners how they engineered one of the most sophisticated extortion schemes, and I use that language advisedly, where they strong-armed our state government by threatening to pass an initiative that would sharply limit the ability of local governments to raise taxes for any reason and they traded that, they pulled it off the ballot, in exchange for a gross piece of legislation that preempts local soda taxes in California for the next 12 years.
Mark Pertschuk:	Yeah. So, Peter, first of all it’s important … We recognize that these various issues, for example gun violence and cigarette smoking or tobacco use in public places and over-consumption of soda and over-consumption of sugar are different issues. But what’s important to understand is that what was really important about the grassroots movement to ban smoking to protect nonsmokers in workplaces and then other places, transportation, was that as a political strategy it was almost identical to what’s happening today with local soda taxes.
	So that’s the starting point, that when Berkeley passed in 2014 a local soda tax, it wasn’t just a minor policy in one community. It marked the beginning of a battle with the multinational soda industry, Pepsi and Coke, and their trade association, the American Beverage Association, which is that they … When this happened, it sparked a number of things. Not only did it reduce consumption because it moderately increased the price of soda, but there was a significant reduction in consumption, and ultimately that will lead to a reduction in diabetes and other health related effects of the over-consumption of sugar, and soda being the primary vector of that disease.
	But it also pumped money into wonderful programs at the local level, first in Berkeley, Oakland, San Francisco, Albany, which did this, and it causes a social change very similar to what happened with smoking 25 years ago. That is to say a product that was accepted as a fine product, just a great product, like cigarettes were in 1910 in the United States, suddenly it’s under threat of being stigmatized because it’s killing people.
	The soda industry saw this and their response was to put … To threaten, but very seriously threaten, a ballot initiative in this year, 2018 in November, that would radically reduce the ability of cities and counties in California to raise taxes for very fundamental services, police, fire departments.
	So to answer your question, that threat was so real that the American Beverage Association and Pepsi and Coke took it to the governor and the legislature. They said: “Look, we will take this off the ballot, we will drop this ballot measure, if you preempt the authority of cities and counties in California over the next 12 years, which is a very long time in political terms … If you will preempt the ability of cities and counties in California to replicate the wonderful work that happened in Berkeley and that was on the way in places like Richmond and Stockton.”
Peter B. Collins:	And talk a little bit about the muscle that they brought to bear, because this exposes one of the weaknesses of the citizen initiative process here in California, because a well-funded advocacy group, a corporate entity, can pay signature gatherers to sit outside supermarkets until they can get enough signatures to qualify an initiative.
	The purpose of it, the intent, the clear lack of public support for this … This was not driven by grassroots. This was an AstroTurf effort that gave the big soda people the leverage to essentially force the hand of the governor and the legislature.
Mark Pertschuk:	Right. So in retrospect it’s very clear that the American Beverage Association and other business organizations threatened this devastating initiative regarding local authority to raise fees and taxes for local people as a mechanism to force the legislature to do something which they did not want to do. It highlights something which we’ve known for probably 15 or 20 years, which is that there’s a tendency to romanticize the initiative process.
	There have been some very significant successes for progressive advocates in going directly to the voters at the state level in California and places like Colorado and elsewhere, or even local voters with a city or county initiative. But the truth is that the initiative system today — and this is probably a result of the general corruption that you can find across our political system and the campaign finance system — is dominated by those who have not just $10 million, but $100 million to spend on gathering signatures and then running what is often a deceptive campaign in the media and using social media to support an initiative which has nothing to do with grassroots support in California.
Peter B. Collins:	So, Mark, is there redress? Because as I look at this, it’s a sealed deal and it has set a very dangerous precedent, because almost any other well-funded special interest can see the tactics that were used here and come up with even more extreme blackmail schemes to force the legislature and the governor to do their bidding.
Mark Pertschuk:	Yes. I have to agree. I mean I think it was … Knowing this issue very, very well, I think it was a strategic mistake on behalf of the legislature and the governor, who is retiring, to succumb to this pressure, because it is just exactly as you say. It’s an invitation to other wealthy vested interests to come in and just use money to essentially force the legislature to do something that they absolutely should not have done.
	I think that having given in to the pressure from the out-of-state and the multinational soda industry, that they made a mistake that is going to cause problems for them and for the other supporters. As it turned out, some of the unions that represent public employees at the local level naturally were very concerned about the proposed November initiative and they supported the short-term measure of preempting soda taxes in order to gain an assurance that this would not be put on the ballot this year, November in 2018.
	But I think that unfortunately that showed weakness on the part of some of those unions and I think it invites trouble in the future. My personal belief is that if the legislature and the governor in particular had said no, that we, the people in California, could have beaten the American Beverage Association initiative in November, and that would have been a much more powerful precedent for grass roots engagement in the future on many issues.
Peter B. Collins:	And, Mark, in the same timeframe, just ahead of the deadline to withdraw a qualified initiative from the November ballot, there was a similar play around internet privacy. The tech companies from Silicon Valley used their muscle and the political contributions that they give to legislators to ram through a watered down version of the personal privacy measure that had qualified for the ballot.
	Now that took the approval of the man who had funded the signature gathering and who had written the ballot measure, but it was a very similar play, and once again the deepest pockets prevailed.
Mark Pertschuk:	Absolutely. And you know this is why the initiative process, and particularly of course voting rights, fundamental voting rights across the country, and preemption, federal and state preemption … These are why these are not just issues … These are not just concerns that affect one issue like public health, but they affect the whole question of the legitimacy of democracy and the health of American democracy and the engagement of all of us in making decisions for ourselves.
	Each of these, the money, the campaign financing and the initiatives, and in other elections, taking away local authority or state authority in the form of preemption and destroying voter rights by simply attacking mythical abuses of voting, these all undermine not just democracy on a day-to-day basis, but our comfort and engagement with our own leadership as presumably parts of a democracy.
Peter B. Collins:	Mark, I want to refer our listeners to your website, grassrootschange.net. If you click on the preemption watch tab at the top of the page, it takes you to a kind of landing page with a national map and a list of eight different issues that you focused preemption watch on.
	For example, under the nutrition tab you have a good writeup of the California soda tax preemption law along with information about other preemptive laws in Alabama, Arizona, Florida, Georgia, Kansas, Michigan, Mississippi, North Carolina, Ohio, Utah, and Wisconsin. If one of those states is where you reside, I encourage you to take a look at how your government has prohibited local regulations that might be in your best interest.
	Mark, I want to jump over to the tab here called factory farms, because this is a critical issue in many states, where corporate farming and these large-scale operations put the environment at great risk. We know about the waste ponds at these pig farms, and there are many other ill effects that occur from the unregulated large-scale agricultural enterprise.
	You note here that there are 13 states that ban most regulation of agriculture say by a city or a county, and in many cases the states then don’t have any statewide regulation and they leave it up to the industries to police themselves.
Mark Pertschuk:	Right. So there’s a term for this, which is regulatory void. It’s when the federal government passes preemption, which they’ve done in a few cases, but it’s mostly states that pass a preemptive law. Mississippi is a good example of this. Mississippi passed a law that takes away all local authority over farming, food policy, and nutrition, but doesn’t pass any protections at the state level. That’s a void.
	It eliminates the ability of cities, counties, zoning boards even, to do something to protect the health and safety of their own people, and it’s a terrible problem with factory farms. There are laws that protect the practice of farming when it’s really family farms, local farms, farms that are trying to serve their own communities or even their own states.
	The laws that we’re tracking eliminate all authority that cities and counties and other local agencies might have to mitigate the severe threats that some industrial farming, factory farms, concentrated animal feeding operations, can wreak on the environment, and also on the people in the community. I mean we have … You know, there’s a tragedy going on in and around the Great Lakes because of the runoff of … I mean it’s essentially shit. It’s manure from these absurdly concentrated operations that I think most people in the communities would like to regulate or limit or move or eliminate.
Peter B. Collins:	Now Mark, moving on to another topic that you cover at Preemption Watch, the one that you have devoted most of your adult life to, is the rights of nonsmokers and the sensible regulations about the use of tobacco products. There are 13 states listed here that have preemption. Michigan preempts local regulation of smoking in restaurants, as does New Hampshire.
	But the one that really I found astounding is Tennessee. Tennessee preempts local authority to adopt smoke-free ordinances. “The General Assembly intends by this part and other provisions of the code to occupy and preempt the entire field of legislation concerning the regulation of tobacco products. Any law or regulation of tobacco products enacted or promulgated after 1994 by any agency is void.” Now that is one of the most sweeping quotes from legislation that I’ve ever seen.
Mark Pertschuk:	Yeah. This has nothing to do with the people of Tennessee, I can tell you that, or even for that matter the business community in Tennessee, which would for the most part, like most businesses, support healthy policies like banning smoking in all workplaces. This came from the tobacco industry. It came from the tobacco industry in the early 1990s and it’s kind of a legacy, because in the tobacco control field and in the issue of nonsmokers’ rights, banning smoking to protect nonsmokers on public transportation and workplaces, in public places like bars and restaurants, we’ve generally been very, very successful.
	But it also illustrates … Tennessee illustrates how pervasive the powers that be, specifically the corporate powers that be, have promoted preemption to eliminate real people in communities, grassroots advocates, but also just everyday voters and folks who are involved in their communities, from being involved in the decision.
	I think Tennessee preempts in five of the eight areas that we track, and I think that makes them one of the most preemptive states out there, and it’s absurd, because the people who live there are people like all of us, who would prefer to have their families protected from unnecessary death, injury, and chronic disease, but they don’t have that opportunity anymore.
Peter B. Collins:	Mark, I want to float a question here about the positive use of preemption. As we are talking, it’s just been a day since the Trump administration announced that they are revoking the rules that were going to go into effect, that were signed off on by President Obama to reduce the carbon emissions from coal-fired power plants. Just recently I was on the border of Maine and New Hampshire, where I saw a four stack coal-fired power plant. I grew up in Cincinnati, where there’s a big coal plant right on the Ohio River, and we used to watch as much of that smoke blew over into Kentucky.
	I raise that point because smokestack emissions do cross political boundaries and it is sensible to me to use federal preemption in this case to achieve a greater good. What’s your thought about that?
Mark Pertschuk:	Well it’s exactly the way that the system is supposed to work, and it also highlights how this system is broken down today. So the way that our system was designed and planned was very, very smart, which was that the federal government and also state governments were intended to pass minimum protections for civil rights, for public health, for safety, for example in the realm of guns, minimum protections that would apply to all of us in the United States, all 50 states, but that those minimum standards that states and cities and counties could pass stronger protections, but not weaker protections.
	That’s referred to technically as ‘floor preemption’. For example, civil rights laws that passed in the ’60s said you can’t discriminate against people because of race, but those federal laws permit states and cities and counties to pass stronger protections. So cities and counties could, for example, add LGBTQ individuals and couples to the protected classes.
	But the federal government did not set a ceiling. A ceiling preemption is, if you will, the bad preemption. It’s when a state or the federal government says you can’t protect your people any farther than we’ve done. That’s the kind of preemption we’re talking about that is really having devastating impacts in places like Tennessee, where the real people, people who live in communities, regardless of their political leanings or what they consider their political associations … These are very … Everything we’re talking about, all eight of those issues, even guns, these are issues where when people come down to their own families and themselves and their cities and counties, they actually want strong laws.
	The stuff that the National Rifle Association has been preempting, or attempting to preempt, is extremely modest and common sense and it’s supported by almost everyone, regardless of whether or not they’re an Independent, a Republican, or a Democrat.
Peter B. Collins:	Mark, here in California Governor Jerry Brown has garnered a lot of positive attention for his rhetoric about climate change and he, in a very dramatic way, extended the cap and trade system that had been established by his predecessor, Governor Schwarzenegger. But the news accounts didn’t properly convey that his extension of cap and trade included serious preemption, and explicitly it prevented the existing regional air quality boards established under California law from enforcing tighter regulations than those adopted at the state level. And in particular this caused the Bay Area Regional Air Quality Board to have to withdraw regulations it was about to impose on Chevron’s huge oil refinery in Richmond. I consider this to be a sneaky move on the part of the governor, and the media cooperated by really not pointing it out.
Mark Pertschuk:	Yeah, and I think that’s a failure on the part of the media as well as the governor, the current governor. I think it’s essential that communities, regions, cities, counties, school boards, retain the authority to pass stronger laws than the state, and certainly stronger laws than the federal government, because those should be minimum standards.
	In all of the issues we’re dealing with, and climate change is one of them … But looking back at tobacco, the progress and success in tobacco, which in spite of challenges, there’s been phenomenal documented success in reducing addiction to cigarettes and other tobacco products. That holds true for climate change, for soda taxes, food and nutrition, for factory farms, all the issues we’ve talked about.
	It is not going to be the state and it is certainly not going to be the federal government that leads on these health, safety, and civil rights issues and other social justice issues, so we need to retain … Within reason, we need to retain the authority of the Bay Area, of Los Angeles, of other areas, cities, and counties, to go above and beyond, because they’re democratic institutions. They are much more responsive to their voters than are even the legislators in Sacramento, and of course much more responsive than our representatives in Congress.
Peter B. Collins:	Mark, I want to thank you for this survey of preemption policies across the country. I really appreciate the work you’re doing on it. As we wrap up here, what advice do you have to our listeners who want to try to preempt future efforts at preemption?
Mark Pertschuk:	Yes. Good. The bottom line is that the essence of our survival as a democracy is that we are able to vote people in and vote directly, in the case of California or Colorado or other states with the initiative process, to get the things that we want and believe in. This is democracy at its best. Preemption is very much like a tax on the rights of voters in the southern United States. It is potentially going to destroy our ability to engage in our democracy, and that ultimately will lead to cynicism and disengagement.
	My advice is to pay attention to media sources like you who are paying attention to this. The media has been okay about this, but we need to pay more attention to this. There’s important issues going on internationally and nationally. This is an issue that may impact all of us and our children and grandchildren for decades to come.
Peter B. Collins:	Mark Pertschuk, thanks for joining me today. Again, he’s the executive director of Grassroots Change and is also managing their Preemption Watch project. Thanks for being with us today.
Mark Pertschuk:	Thanks Peter B. Keep up the good work.
Peter B. Collins:	Thanks for listening to this Radio WhoWhatWhy podcast. I welcome your comments and feedback. Email peter@peterbCollins.com. And do what you can to help support the work of independent journalism here at WhoWhatWhy.org

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Correction notice, 8/28/2018, 5:38 p.m.: An earlier version of this article attributed the book When the Senate Worked for Us: The Invisible Role of Staffers in Countering Corporate Lobbies to guest Mark Pertschuk. It is in fact written by his father, Michael Pertschuk. We regret the error.

Related front page panorama photo credit: Adapted by WhoWhatWhy from bottle (The Library of Congress / Flickr) and capitol (Lev Lazinskiy / Flickr – CC BY-SA 2.0).

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