By Connor Gallagher
Connor Gallagher is a sophomore at the University of Pennsylvania studying chemical engineering
On June 16, 2016, the Philadelphia City Council voted 13-4 in favor of a 1.5-cents-per-ounce tax on “sugar-sweetened beverages,” colloquially referred to as the “soda tax.”  It took effect on the first day of 2017, after surviving a legal challenge in the Philadelphia Court of Common Pleas, the state trial court for the city. 
Taxes on sugary drinks are recent phenomena. The first such measure in the United States was passed in late 2014 by Berkeley, California.  Former New York City Mayor Michael Bloomberg’s ban on large soft drinks received considerably more media attention, before being struck down by a local judge in early 2013.  As of January 30, Philadelphia’s soda tax finds itself in similar jeopardy.
The Pennsylvania Supreme Court has agreed to hear that same challenge to the tax that was dismissed in late 2016.  Since then, the Pennsylvania Commonwealth Court––the state’s intermediate appellate court for appeals related to public matters and state regulation––has upheld the tax again.
The seven-judge panel’s holding relies on the crucial observation that the tax is not a sales tax because it is imposed on a retailer’s supply of soda rather than on the sale from retailer to consumer.  In other words, the distributor, not the customer, officially pays the tax.  Consequently, it comports with, among others, the Sterling Act, which grants Philadelphia the power to levy taxes in addition to state assessments but precludes the city from taxing the same subject matter as the State, and the federal Food Stamp Act, which prohibits taxing purchases made with food stamps. 
Philadelphia Mayor Jim Kenney touts the tax’s benefits as being twofold. First, the tax serves a public health purpose by discouraging sugar consumption. A 2009 CDC study found that about 68 percent of adults in Philadelphia are overweight or obese, and that 70 percent of children in North Philadelphia are overweight or obese.  Second, and more important from the city administration’s perspective, revenues from the tax are planned to fund educational initiatives, specifically universal pre-kindergarten. [1, 2, 5]
Among the most vocal opponents, and one of the appellants in the pending action, is the American Beverage Association (ABA), a trade association dating back to 1919 that represents the non-alcoholic beverage industry. The ABA dedicates much of its online literature to public health concerns, boasts its own “Balance Calories Initiative” with Coca-Cola, Dr. Pepper, and Pepsi, and points to its “School Beverage Guidelines commitment,” which “cut calories shipped to schools by over 90 percent.”  On the matter of regulation, the ABA denounces taxes like Philadelphia’s as “discriminatory” and promotes itself as a protector of consumer choice.  Their attorneys contend that, though the Philadelphia tax is officially levied on distributors, the courts must not overlook the fact that the cost will be passed on to consumers. Taking this holistic view of the measure, they claim that the tax is preempted by the state sales tax. 
It is difficult to envision either side “winning” this dispute. On the one hand, it seems that the ABA and other objectors to the tax are unlikely to prevail on the legal merits. So long as the city mandates payment from either distributors or dealers––and not consumers––I expect courts at any level to uphold the validity of the measure.
On the other hand, the first year of implementation has not yielded the kind of success the Mayor’s administration had anticipated. City officials estimated that the first year for the tax would net $92 million in revenue but were disappointed to report that the tax only earned $78.8 million in the first twelve months.  Such a shortfall, if it continues, could imperil the Mayor’s educational initiatives. Moreover, the tax has generated criticism from progressives like Senator Bernie Sanders, who characterized the measure as “a regressive grocery tax that would disproportionately affect low-income and middle-class Americans,” the primary consumers of sugary beverages. 
Neither side, then, clearly has an advantage, as the tax appears to retain firm legal standing despite its suspect efficacy.
As this conflict rages behind the scenes of a city celebrating a Super Bowl victory, one man will be curiously absent. Pennsylvania Supreme Court Justice Kevin Dougherty has recused himself from reviewing the case.  At the personal level, Dougherty’s brother is the business manager for the International Brotherhood of Electrical Workers Local Union 98, a supporter of the soda tax.  Nevertheless, Dougherty has political motivations to lean the opposite way; during his 2015 campaign for a Supreme Court seat, he received more than $50,000 in contributions from tax opponent and Philadelphia bottling giant Harold Honickman. 
Dougherty’s recusal leaves an even-numbered, six-member Supreme Court to decide the fate of the soda tax, risking affirmance by an equally divided court, a familiar sight for U.S. Supreme Court watchers after the 2016 vacancy in the late Justice Antonin Scalia’s former seat.
Such a situation seriously calls into question Pennsylvania’s methods for selecting judges. Over 1 million Pennsylvania voters (myself included) went to the polls in November 2015 and consciously said they want Kevin Dougherty on their state supreme court.  Yet he remains on the sidelines in an important case that will affect many Pennsylvanians, all because securing his consequential position necessitates raising money from individuals whose disputes he may one day adjudicate.
Dougherty is right to sit this one out, but he never should have had to make that call to begin with; if the process by which a public official obtains office inhibits him or her from performing the duties of that office, then that process requires modification. It may be time to stop electing judges in Pennsylvania. The act of campaigning directly contravenes the requirements of honest jurisprudence.
From a lawsuit without legs to an underperforming policy measure to a campaign contribution interfering with a supposedly independent judiciary, I take solace only in my choice not to drink soda anyway.
 Merrit Kennedy, “Philadelphia Becomes 1st Major U.S. City to Pass a Tax on Soda,” National Public Radio, June 16, 2016. https://www.npr.org/sections/thetwo-way/2016/06/16/482359140/philadelphia-becomes-1st-major-u-s-city-to-pass-a-tax-on-soda.
 Claudia Vargas and Tricia L. Nadolny, “Soda Tax Lawsuit Dismissed,” Philly.com, December 20, 2016.
 Rong-Gong Lin II, “Tax on Sugary Drinks Approved in Berkeley; S.F. Measure Falls Short,” Los Angeles Times, November 5, 2014.
 Rachel Weiner, “The New York City Soda Ban Explained,” The Washington Post, March 11, 2013.
 Laura McCrystal, “Pa. Supreme Court to Hear Soda Tax Case,” Philly.com, January 30, 2018.
 Williams, et al. v. City of Philadelphia, et al., Nos. 2077, 2078 CD 2016 (Pa. Cmwlth 2017), at 17.
 Technically, store “dealers” must buy the sugary drinks from a registered “distributor,” who pays the tax, or buy from an unregistered distributor and pay the tax themselves. Ibid., at 4.
 Ibid., at 15-30.
 Community Profile: Philadelphia, Pennsylvania, Centers for Disease Control and Prevention, Communities Putting Prevention to Work (CPPW) initiative, 2009.
 American Beverage Association website, “Initiatives and Advocacy.” http://www.ameribev.org/initiatives-advocacy/.
 American Beverage Association website, “Protecting Consumer Choice.”
 Allison Burdo, “First Full Year of Soda Tax Revenue Puts Philadelphia $13M+ Short of Goal,” Philadelphia Business Journal, January 26, 2018. https://www.bizjournals.com/philadelphia/news/2018/01/26/philly-beverage-tax-soda-tax-pbt-2017-year-revenue.html.
 Bernie Sanders, “A Soda Tax Would Hurt Philly’s Low-Income Families,” Philadelphia, April 24, 2016.
 Tricia L. Nadolny, “Bottling King in the Thick of Soda-Tax Fight,” Philly.com, April 3, 2016.
 Pennsylvania Department of State, 2015 Municipal Election Results, November 3, 2015.
Photo Credit: Flickr user Tharrin
The opinions and views expressed through this publication are the opinions of the designated authors and do not reflect the opinions or views of the Penn Undergraduate Law Journal, our staff, or our clients.