WASHINGTON, D.C. - A team of litigation lawyers from the Washington, D.C. office of McDermott Will & Emery recently won a significant victory vindicating the rights of a client to market its product in Colorado, demonstrating that a Colorado statute is unconstitutional under the First Amendment and Commerce Clause and preempted by a federal statute. Partners, M. Miller Baker and Christopher M. Lahiff, and associates, Richard B. Rogers and Michael S. Nadel, secured a permanent injunction from a federal court in Denver prohibiting the State of Colorado from preventing Bioganic Safety Brands, Inc., from selling its ShooBug insect repellant with a label reading "Safe for Kids." The court invited Bioganic to seek its costs from the State.
Prior to the entry of the injunction, Colorado enforced a unique law. No other state in the Union prohibited Bioganic from selling ShooBug with the "Safe for Kids" claim. In order to sell ShooBug in Colorado, however, Bioganic was required to relabel individual bottles of ShooBug destined for Colorado stores so as to omit the "Safe for Kids" language. Bioganic was also forced to rework its advertising campaign to ensure that ads from outside Colorado—where "Safe for Kids" was legal—did not appear anywhere within Colorado.
The McDermott Will & Emery lawyers told Chief U.S. District Judge Lewis T. Babcock that the Colorado statute was preempted by a federal statute and EPA regulations that allow true safety claims to appear on insect repellant packages. They also argued that Colorado’s ban placed impermissible restrictions on Bioganic’s First Amendment right to engage in commercial speech and unduly interfered with interstate commerce under the Constitution’s Dormant Commerce Clause. Chief Judge Babcock agreed on all points, noting that Colorado’s law irreparably harmed Bioganic because it required Bioganic and its distributors to segregate ShooBug bound for Colorado—which lacked the "Safe for Kids" claim—from ShooBug bound for other markets where the "Safe for Kids" label was permitted. This procedure raised the cost of making ShooBug and disrupted interstate distribution networks. Chief Judge Babcock also noted that requiring Bioganic to maintain separate labels and separate advertising could lead to confusion, and possible loss of sales, when customers saw different ShooBug packages in Colorado than in other states.
Chief Judge Babcock also found that ShooBug’s safety claim was not inherently misleading, and that Colorado had not carried its burden of justifying its restriction on Bioganic’s commercial speech. Chief Judge Babcock’s decision represents the first reported case in which a state’s regulation of safety claims has been struck down on First Amendment grounds.