Today a state appeals court panel unanimously ruled that the New York Board of Health exceeded its regulatory authority when it enacted Mayor Michael Bloomberg's big beverage ban. The decision upholds a March 11 ruling by a state judge, Martin Tingling, who blocked the widely derided soda serving ceiling before it took effect after finding that it violated the separation of powers. At the time, Bloomberg declared Tingling's decision "totally in error" and expressed confidence that he would prevail on appeal.

In agreeing with Tingling that the Bloomberg-appointed board of health did not have the authority to regulate servings of sugar-sweetened beverages, the appeals court emphasized that such drinks, unlike communicable diseases, tainted food, and unsanitary water, are not inherently hazardous. "Although the legislature intended to rely on the Board of Health's expertise in identifying and determining how to regulate inherently harmful matters affecting the health of the City," the court said, it did not empower the board to enforce moderation in the consumption of products that are dangerous only when consumed to excess. "Since soda consumption cannot be classified as a health hazard per se," the court said, "the Board of Health's action in curtailing its consumption was not the kind of interstitial rule making intended by the legislature."

As further evidence that the board had usurped the city council's legislative function, the court highlighted the policy judgments reflected in the board's drink dictates. The regulations applied to restaurants, food carts, and snack stands, for example, but not supermarkets or convenience stores. They imposed a 16-ounce limit on servings of sugar-sweetened soda, lemonade, and iced tea, but not alcoholic beverages, fruit juices, fruit smoothies, milk shakes, or coffee drinks consisting mostly of milk. Those exceptions, the court said, "evince a compromise of social and economic concerns, as well as private interests"—the sort of balancing that is supposed to be done by a legislative body, not an administrative agency.

More fundamentally, a policy of tackling obesity by interfering with people's drink orders entails a value-laden weighing of competing concerns:

In essence, [the drink rule] prescribes a mechanism to discourage New Yorkers from consuming those targeted sugary drinks by dictating a maximum single portion size that can be made available in certain food service establishments. Such mechanism necessarily looks beyond health concerns, in that it manipulates choices to try to change consumer norms. Indeed, since a basic premise of the ban is that New Yorkers consume excessive quantities of sugary drinks, the Board's decision to regulate only these drinks requires that any health concerns be weighed against consumer preferences for such drinks. Instead of offering information and letting the consumer decide, the Board's decision effectively relies upon the behavioral economics concept that consumers are pushed into better behavior when certain choices are made less convenient. For instance, the regulation makes the choice to drink soda more expensive, as it costs more to buy two 16-ounce drinks than to buy one 32-ounce drink. As a result, the Board necessarily concluded, as a threshold matter, that health concerns outweigh the cost of infringing on individual rights to purchase a product that the Board has never categorized as inherently dangerous. As the intense public debate on the ban bears out, this threshold decision to regulate a particular food is inherently a policy decision. Such decision necessarily reflects a balance between health concerns, an individual consumer’s choice of diet, and business financial interests in providing the targeted sugarydrinks. In this context, the "Soda Ban" is one especially suited for legislative determination as it involves "difficult social problems," which must be resolved by "making choices among competing ends."

Unlike Tingling, the appeals court did not address the issue of whether the beverage regulations are "arbitrary and capricious" under state law, although the argument for that conclusion is based on much the same evidence.

Bloomberg, who leaves office at the end of the year, says he will ask the New York Court of Appeals, the state's highest court, to overturn today's decision. Although the ruling would not prevent the city council from enacting similar drink limits, Bloomberg does not seem inclined to humble himself by seeking legislation. Asked about the possibility, a Bloomberg spokeswoman replied, "The route that we have gone is through the Board of Health."

Reuters says "it remains unclear whether [Bloomberg's] successor will take up the sugary soda issue." City Council President Christine Quinn, a leading contender, opposed the soda ban, while one of her rivals for the Democratic nomination, Public Advocate Bill de Blasio, supported it. 

You can read the appeals court's decision here.

Reason TV asked New Yorkers about Bloomberg's pint-sized prescription the day it was announced: