Academic journal article Duke Law Journal

The Problems of Pouring-Rights Contracts

Academic journal article Duke Law Journal

The Problems of Pouring-Rights Contracts

Article excerpt

INTRODUCTION

Commercial activities abound in public schools. These activities range from direct advertisements to product sales, from instructional materials to market research. (1) This Note examines one type of commercial activity: soft-drink sales through pouring-rights contracts in public schools. Pouring-rights contracts refer to "large payments from soft-drink companies to [schools or] school districts in return for the right to sell that company's products--and only those products." (2) The legal response to these contracts is a tattered patchwork of local, state, and federal regulations. (3)

This Note argues that pouring-rights contracts cause several problems, and that these problems demand a legal solution. Principally, they harm students by encouraging the frequent consumption of soft drinks, which increases obesity. These contracts also undermine the integrity of public education by using compulsory education laws to expose children to unhealthy soft drinks, they dilute the curriculum by discouraging soft-drink consumption in nutrition classes while encouraging soft-drink consumption the rest of the day, and they disproportionately affect poor communities that need funding from these contracts to provide basic educational services.

To solve these problems, and to mend the patchwork of regulation, this Note suggests a three-part solution: (1) federal action to remove the local incentive to sign pouring-rights contracts and to establish uniform standards; (2) fundamental changes in the current laws to restrict the sale of soft drinks in schools beyond current prohibitions; and (3) comprehensive action to address the underlying problem of the sale of soft drinks. Combining these elements, Part III suggests federal legislation that requires the U.S. Department of Agriculture (USDA) to eliminate current regulations and replace them with regulations that ban the sale of soft drinks and pouring-rights contracts in public schools. Before Part III advances this solution, Part I of this Note describes the milieu and details the problems of pouring-rights contracts, and Part II outlines the legal authority over these contracts.

I. MILIEU AND PROBLEMS

A. Milieu of Pouring-Rights Contracts

Commercial activities in public schools are not new. Schools used corporate-sponsored materials as early as 1890 when "a paint company developed a handout on primary and secondary colors for schools to distribute in their art classes." (4) In another example, the Coca-Cola Company sent booklets of its history and products to elementary schools in the 1970s, despite its then-stated policy that it would not advertise directly to children under twelve. (5) At present, commercial activities are ubiquitous. (6) Thus, while commercial activities in public schools are not new, "[w]hat is new today is the popularity of these practices and the wide range of businesses involved." (7)

Three factors explain the recent popularity and increasing breadth of commercial activities in public schools. First, schools face severe budget shortfalls. (8) These shortfalls force schools to accept commercial activities to meet essential educational needs. (9) Second, children influence a large amount of money; for example, in 1999, children aged six through nineteen influenced $485 billion in spending. (10) These numbers are too big for companies to resist. Third, schools provide a unique commercial opportunity. Companies view schools, which confine children and restrict advertising, as one of few places where their activities can transcend the din of commercial advertising. (11) Moreover, companies can target children in schools more effectively than with more diffuse methods, such as television. (12) Thus, declining school budgets and significant youth spending combine with corporate strategy to explain the increase in commercial activities in public schools.

The best-known example of a commercial activity in public schools is Channel One. …

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