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"DIRECTLY apply" is a nice way of saying that even though the law doesn't say you can't get a bigger sized diet drink, it does say that an establishment can't stock any cup larger than 16 oz. size. So maybe it's not directly telling people they can't get a 85 oz. diet soda, but it is indirectly prohibiting them from getting a cup that large, so it's a de facto ban on a larger sized diet soda although not a de jure one.