Filed: Jul. 10, 2012
Latest Update: Mar. 26, 2017
Summary: 11-91-cv 23-34 94th St. Grocery v. N.Y.C. Bd. of Health UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 2011 (Argued: December 1, 2011 Decided: July 10, 2012) Docket No. 11-91-cv 23-34 94TH ST. GROCERY CORP., KISSENA BLVD. CONVENIENCE STORE, INC., NEW YORK ASSOCIATION OF CONVENIENCE STORES, NEW YORK STATE ASSOCIATION OF SERVICE STATIONS AND REPAIR SHOPS, INC., LORILLARD TOBACCO COMPANY, PHILIP MORRIS USA INC., R.J. REYNOLDS TOBACCO CO., INC., Plaintiffs-Appellees, v. NEW YORK C
Summary: 11-91-cv 23-34 94th St. Grocery v. N.Y.C. Bd. of Health UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term 2011 (Argued: December 1, 2011 Decided: July 10, 2012) Docket No. 11-91-cv 23-34 94TH ST. GROCERY CORP., KISSENA BLVD. CONVENIENCE STORE, INC., NEW YORK ASSOCIATION OF CONVENIENCE STORES, NEW YORK STATE ASSOCIATION OF SERVICE STATIONS AND REPAIR SHOPS, INC., LORILLARD TOBACCO COMPANY, PHILIP MORRIS USA INC., R.J. REYNOLDS TOBACCO CO., INC., Plaintiffs-Appellees, v. NEW YORK CI..
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11-91-cv
23-34 94th St. Grocery v. N.Y.C. Bd. of Health
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
August Term 2011
(Argued: December 1, 2011 Decided: July 10, 2012)
Docket No. 11-91-cv
23-34 94TH ST. GROCERY CORP., KISSENA BLVD. CONVENIENCE STORE, INC.,
NEW YORK ASSOCIATION OF CONVENIENCE STORES, NEW YORK STATE ASSOCIATION
OF SERVICE STATIONS AND REPAIR SHOPS, INC., LORILLARD TOBACCO COMPANY,
PHILIP MORRIS USA INC., R.J. REYNOLDS TOBACCO CO., INC.,
Plaintiffs-Appellees,
v.
NEW YORK CITY BOARD OF HEALTH, NEW YORK CITY DEPARTMENT OF HEALTH AND
MENTAL HYGIENE, NEW YORK CITY DEPARTMENT OF CONSUMER AFFAIRS, THOMAS
FARLEY, DR., in his official capacity as Commissioner of the
New York City Department of Health and Mental Hygiene, and
JONATHAN MINTZ, in his official capacity as Commissioner of
the New York City Department of Consumer Affairs,
Defendants-Appellants.
Before:
HALL, LYNCH, and CHIN, Circuit Judges.
Appeal from a judgment of the United States
District Court for the Southern District of New York
(Rakoff, J.) granting summary judgment for plaintiffs,
declaring Article 181.19 of the New York City Health Code
null and void.
AFFIRMED.
MIGUEL ESTRADA (Michael J. Edney, on the
brief), Gibson, Dunn & Crutcher LLP,
Washington, D.C., for Plaintiff-
Appellee Philip Morris USA Inc.
Floyd Abrams, Joel Kurtzberg, Cahill
Gordon & Reindel LLP, New York, New
York, for Plaintiffs-Appellees 23-34
94th St. Grocery Corp., Kissena
Blvd. Convenience Store, Inc., New
York Association of Convenience
Stores, and New York State
Association of Service Stations and
Repair Shops, Inc.
Noel J. Francisco, Jones Day, Washington,
D.C., for Plaintiff-Appellee R.J.
Reynolds Tobacco Co., Inc.
Alan Mansfield, Steven L. Saxl, Greenberg
Traurig, LLP, New York, New York,
for Plaintiff-Appellee Lorillard
Tobacco Co.
DRAKE COLLEY (Nicholas R. Ciapetta, Edward
F.X. Hart, on the brief), for
Michael A. Cardozo, Corporation
Counsel of the City of New York, New
York, New York, for Defendants-
Appellants.
Patrick J. Carome, Paul R.Q. Wolfson,
Daniel P. Kearney, Jr., Jeremy S.
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Winer, Wilmer Cutler Pickering Hale
and Dorr LLP, New York, New York,
for Amicus Curiae American Legacy
Foundation et al.
Robin S. Conrad, Kathryn Comerford Todd,
National Chamber Litigation Center,
Gene C. Schaerr, Andrew C. Nichols,
Winston & Strawn LLP, Washington,
D.C., for Amicus Curiae Chamber of
Commerce of the United States of
America.
Seth E. Mermin, Thomas Bennigson, Public
Good Law Center, Berkeley,
California, for Amicus Curiae Los
Angeles County Department of Public
Health et al.
Daniel J. Popeo, Cory L. Andrews, Richard
A. Samp, Washington Legal
Foundation, Washington, D.C., for
Amicus Curiae Washington Legal
Foundation and Allied Educational
Foundation.
CHIN, Circuit Judge:
In 2009, the Board of Health of the City of New
York adopted a resolution requiring all tobacco retailers to
display signs bearing graphic images showing certain adverse
health effects of smoking. The City did so as part of its
continuing campaign to discourage cigarette use by educating
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New Yorkers about the dangers of smoking. The district
court held below that the resolution is null and void
because it is preempted by federal labeling laws. We agree,
and therefore affirm.
BACKGROUND
A. Federal Regulation of Cigarettes: The Labeling Act
1. Purpose
In 1965, Congress enacted the Federal Cigarette
Labeling and Advertising Act (the "Labeling Act").1 15
U.S.C. §§ 1331-41. The purpose of the Labeling Act is:
to establish a comprehensive Federal
program to deal with cigarette labeling
and advertising . . . , whereby --
(1) the public may be adequately informed
about any adverse health effects of
cigarette smoking by inclusion of warning
notices on each package of cigarettes and
in each advertisement of cigarettes; and
1
The Labeling Act has been amended several times,
most significantly in 1970, 1984, and 2009. See Public
Health Cigarette Smoking Act of 1969, Pub. L. No. 91-222, 84
Stat. 87 (1970); Comprehensive Smoking Education Act, Pub.
L. No. 98-474, 98 Stat. 2200 (1984); Family Smoking
Prevention and Tobacco Control Act (the "FSPTCA"), Pub. L.
No. 111-31, 123 Stat. 1776 (2009). The provisions quoted in
this section reflect the law as it currently stands.
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(2) commerce and the national economy may
be (A) protected to the maximum extent
consistent with this declared policy and
(B) not impeded by diverse, nonuniform,
and confusing cigarette labeling and
advertising regulations with respect to
any relationship between smoking and
health.
15 U.S.C. § 1331. The Labeling Act thus seeks to strike a
balance between informing the public about the dangers of
cigarette smoking and protecting commerce and the national
economy.
2. Labeling Requirements
The Labeling Act prescribes the content and format
of warnings that must appear on cigarette packages and in
cigarette advertisements. Id. § 1333. Specifically, all
cigarette packages and advertisements must contain the
phrase "Surgeon General's Warning" followed by one of the
following four cautions:
(1) Smoking Causes Lung Cancer, Heart
Disease, Emphysema, And May
Complicate Pregnancy.
(2) Quitting Smoking Now Greatly Reduces
Serious Risks to Your Health.
-5-
(3) Smoking By Pregnant Women May Result
in Fetal Injury, Premature Birth,
And Low Birth Weight.
(4) Cigarette Smoke Contains Carbon Monoxide.
Id. § 1333(a)(1).2 The warnings must be "in conspicuous and
2
Until 1984, the required warning was much less
specific: "The Surgeon General Has Determined That
Cigarette Smoking Is Dangerous To Your Health." See Public
Health Cigarette Smoking Act of 1969, 84 Stat. at 88. The
current, more comprehensive warnings were mandated in
response to a 1983 FTC report indicating that many consumers
were unaware of the particular illnesses smoking could
cause. See S. Rep. No. 98-177, at 6-7 (1983) (50% of women
unaware that smoking increases the risk of stillbirth and
miscarriage, 30% of public unaware of relationship between
smoking and heart disease, 20% unaware that smoking causes
cancer).
The FSPTCA, which Congress passed in 2009,
prescribed a new set of textual warnings (with an emphasis
on the potentially fatal effect smoking can have) and
directed the FDA to issue regulations requiring graphic
labels to appear on all cigarette packaging. See FSPTCA
§ 201(a), 123 Stat. at 1842-45.
The new labeling requirements have not yet gone
into effect, however, because a district court recently
declared that the FDA's proposed regulations violated the
First Amendment. See R.J. Reynolds Tobacco Co. v.
U.S.F.D.A., No. 11-1482, -- F. Supp. 2d --, 2012 WL 653828
(D.D.C. Feb. 29, 2012). Specifically, the court held that
the proposed regulations were not "narrowly tailored to
achieve a compelling government interest." Id. at *6. It
suggested that the FDA could make the regulations less
restrictive by, inter alia, reducing the size of the graphic
image or selecting images "that conveyed only purely factual
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legible type in contrast by typography, layout, or color
with all other printed material on the package." Id. §
1333(b). Furthermore, the Labeling Act mandates that
manufacturers rotate these warnings "in alternating
sequence" on packages, and in advertisements, of each brand.
Id. § 1333(c).
3. Preemption
Congress also included a preemption provision in
the Labeling Act, limiting the extent to which states may
regulate the labeling, advertising, and promotion of
cigarettes. Id. § 1334. First, the preemption provision
and uncontroversial information rather than gruesome images
designed to disgust the consumer." Id. at *7.
The Sixth Circuit has recently addressed the
constitutionality of the FSPTCA itself. It held that the
FSPTCA's "requirement that tobacco packaging and advertising
. . . include[] color graphic and non-graphic warning labels
satisfies the requirements of the First Amendment."
Discount Tobacco City & Lottery, Inc. v. United States, 674
F.3d 509, 531 (6th Cir. 2012). While the Sixth Circuit
upheld the constitutionality of the statute's graphic-image
requirement generally, it did not opine on the
constitutionality of the FDA's proposed regulations, as that
issue was not before it on appeal. Id. at 568-69 & n.17
(distinguishing its holding from that of the D.C. district
court).
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prohibits states from requiring any additional "statement
relating to smoking and health, other than the statement
required by [§ 1333(a),] on any cigarette package." Id.
§ 1334(a). Second, it provides that "[n]o requirement or
prohibition based on smoking and health shall be imposed
under State law with respect to the advertising or promotion
of any cigarettes" labeled in conformity with the Act. Id.
§ 1334(b).
Finally, subsection (c) states:
Notwithstanding subsection (b), a State
or locality may enact statutes and
promulgate regulations, based on smoking
and health, . . . imposing specific bans
or restrictions on the time, place, and
manner, but not content, of the
advertising or promotion of any
cigarettes.
Id. § 1334(c).
B. The Resolution
On September 22, 2009, the Board of Health (the
"Board")3 adopted a resolution amending Article 181.19 of
3
The Board, which operates under the umbrella of
the Department of Health, oversees the New York City Health
Code. See Meet the N.Y.C. Bd. of Health, N.Y.C. Dep't of
Health and Mental Hygiene, http://www.nyc.gov/html/doh/html/
-8-
the New York City Health Code. As amended, the Article
provides:
(a) Any person in the business of
selling tobacco products face-to-
face to consumers in New York City
shall prominently display tobacco
health warning and smoking cessation
signage produced by the Department
[of Health].
. . .
(c) Persons who engage in face-to-face
sales of tobacco products to
consumers in New York City shall
prominently display the signs
required by subdivision (a) of this
section by posting:
(1) one "small sign"4 on or within 3
inches of each cash register or
each place where payment may be
made so that the sign(s) are
unobstructed in their entirety
and can be read easily by each
consumer making a purchase; or
(2) one "large sign"5 at each
location where tobacco products
boh/boh.shtml (last visited July 9, 2012).
4
A "small sign" is one that does not exceed 144
square inches. See Resolution at (b)(2)(a).
5
A "large sign" is one that does not exceed 576
square inches. See Resolution at (b)(2)(b).
-9-
are displayed so that:
(a) the sign(s) are
unobstructed in their
entirety and can be read
easily by each person
considering a tobacco
product purchase; and
(b) in such a way that the
distance between the bottom
of the sign(s) and the
floor shall be no less than
four feet, and the distance
between the top of such
sign(s) and the floor shall
be no more than seven feet.
N.Y.C. Health Code, § 181.19 (the "Resolution"), invalidated
by 23-34 94th St. Grocery Corp. v. N.Y.C. Bd. of Health, 757
F. Supp. 2d 407 (S.D.N.Y. 2010).
The Department produced three signs, any one of
which retailers could display to comply with the Resolution.
One shows an x-ray image of a cancerous lung over the
warning "Smoking Causes Lung Cancer." Another depicts a
photograph of a decaying, extracted tooth over the warning
"Smoking Causes Tooth Decay." The third is an MRI of a
brain with damaged tissue resulting from a stroke, and
states, "Smoking Causes Stroke." Each sign also reads,
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"Quit Smoking Today. Call 311 or 1-866-NYQUITS."
Commissioner Farley declares that each image is "true and
medically accurate." (Farley Decl. at 10).
The City passed the Resolution to "promote further
reductions in smoking prevalence in New York City." (Notice
of Adoption at 2). The City attributed the continued
widespread use of cigarettes to a "lack of awareness and
comprehension of the negative health outcomes associated
with tobacco use." (Id. at 1). Accordingly, it sought to
reduce smoking by broadening its informational campaign.
Specifically, the City observed that cigarette
advertising was particularly "prominent" in retail
locations, but the "retail environment lack[ed] information
about tobacco health risks." (N.Y.C. Dep't of Health and
Mental Hygiene, Proposal to Require Health Warnings and
Smoking Cessation Information Where Tobacco is Sold (the
"Proposal") at 3 (June 24, 2009)). It also noted research
indicating that "pictorial warnings" were "more effective
and engaging than text-only warnings," especially among
youths. (Notice of Adoption at 3). The City concluded that
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requiring graphic images at retail locations would
"[c]ounteract tobacco advertising" and "further de-normalize
smoking." (Proposal at 9; Notice of Adoption at 4).
C. Procedural History
On June 2, 2010, plaintiffs-appellees -- two
cigarette retailers, two trade associations, and three of
the nation's largest cigarette manufacturers -- initiated
the action below against the Board, the Department of
Health, the Department of Consumer Affairs, and their
respective commissioners, seeking a declaration that the
Resolution was preempted by federal labeling laws and
violated their First Amendment rights. On June 25, 2010,
plaintiffs moved to enjoin preliminarily the enforcement of
the Resolution. On June 28, 2010, the parties stipulated
that enforcement of the resolution would be stayed until the
earlier of (a) fourteen days after the district court's
ruling on the preliminary injunction or (b) January 1, 2011.
Defendants moved for summary judgment on August 13, 2010.
On December 29, 2010, the district court granted
summary judgment for the plaintiffs, declaring Article
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181.19 null and void on the ground that it was preempted by
federal labeling laws.3 The district court did not reach
the First Amendment issue. Judgment was entered accordingly
on December 31, 2010. This appeal followed.
DISCUSSION
A. Applicable Law
1. Standard of Review
"We review de novo a district court's application
of preemption principles." N.Y. SMSA Ltd. P'ship v. Town of
Clarkstown, 612 F.3d 97, 103 (2d Cir. 2010) (per curiam);
see Goodspeed Airport LLC v. E. Haddam Inland Wetlands &
Watercourses Comm'n,
634 F.3d 206, 209 n.3 (2d Cir. 2011);
Pac. Capital Bank, N.A. v. Connecticut,
542 F.3d 341, 351
(2d Cir. 2008) ("A district court's determination as to
3
Although the district court refers to "plaintiffs'
motion for summary judgment," the docket does not indicate
that plaintiffs ever formally moved for summary judgment.
In any event, a district court has the ability to grant
summary judgment in favor of a party that has not moved for
summary judgment, see First Fin. Ins. Co. v. Allstate
Interior Demolition Corp., 193 F.3d 109, 114-15 (2d Cir.
1999); Coach Leatherware Co. v. AnnTaylor, Inc.,
933 F.2d
162, 167 (2d Cir. 1991), and defendants have not objected to
this procedural aspect of the district court's ruling.
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preemption is a conclusion of law, which we review de
novo.").
2. Preemption Generally
To determine whether a state or local law is
preempted by federal law, we look to Congress's intent.
Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992)
(congressional intent is "the ultimate touchstone" of
preemption analysis) (internal quotation marks omitted).
"When Congress expressly codifies its preemptive intent in
statutory form, our analysis 'begins with the language of
the statute.'" Jones v. Vilsack,
272 F.3d 1030, 1034 (8th
Cir. 2001) (quoting Lorillard Tobacco Co. v. Reilly,
533
U.S. 525, 536 (2001)); see also CSX Transp., Inc. v.
Easterwood,
507 U.S. 658, 664 (1993). We assume "that the
ordinary meaning of that language accurately expresses the
legislative purpose." Cipollone, 505 U.S. at 532 (Blackmun,
J., concurring) (internal quotation marks omitted); see also
Park 'N Fly, Inc. v. Dollar Park and Fly, Inc.,
469 U.S.
189, 194 (1985).
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The existence of an express preemption clause,
however, "does not immediately end the inquiry because the
question of the substance and scope of Congress'[s]
displacement of state law still remains." Altria Grp., Inc.
v. Good, 555 U.S. 70, 76 (2008). Accordingly, courts may
look to the statute as a whole to determine the extent to
which "Congress intended federal law to occupy the
legislative field." Id.; accord In re WTC Disaster Site,
414 F.3d 352, 372 (2d Cir. 2005) ("If the text of the
statute is ambiguous . . . as to the extent of an intended
preemption, the meaning of the statute may be gleaned from
its context and from the statutory scheme as a whole, or by
resort to the normal canons of construction and legislative
history."); see also Reilly, 533 U.S. at 541 ("State action
may be foreclosed . . . by implication from the depth and
breadth of a congressional scheme that occupies the
legislative field . . . ."); Shaw v. Delta Air Lines, Inc.,
463 U.S. 85, 100 (1983) (considering "the plain language
. . . , the structure of the Act, and its legislative
history").
-15-
"We assume that a federal statute has not
supplanted state law unless Congress has made such an
intention clear and manifest." Bates v. Dow Agrosciences
LLC, 544 U.S. 431, 449 (2005) (internal quotation marks
omitted); accord N.Y. State Restaurant Ass'n v. N.Y.C. Bd.
of Health,
556 F.3d 114, 123 (2d Cir. 2009) ("[W]here the
text of a preemption clause is ambiguous or open to more
than one plausible reading, courts have a duty to accept the
reading that disfavors preemption.") (internal quotation
marks omitted).
3. Preemption of State-Mandated Cigarette Warnings
The labeling requirement and preemption provision
of the Labeling Act express Congress's determination that
"the prescribed federal warnings are both necessary and
sufficient to achieve its purpose of informing the public of
the health consequences of smoking." Altria, 555 U.S. at
79. Accordingly, states may not require that additional
warnings be displayed by the manufacturer. See id. "[B]oth
of the Act's purposes are furthered by prohibiting States
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from supplementing the federally prescribed warning . . . ."
Id.
In Vango Media, Inc. v. City of New York, this
Court invalidated one such effort to supplement federal
warnings. 34 F.3d 68 (2d Cir. 1994). There, a City
ordinance required that one public health message pertaining
to the dangers of smoking be displayed for every four
tobacco advertisements displayed on top of taxi cabs. Id.
at 70. We held that this was a requirement "with respect
to" advertising, and therefore preempted by the Labeling
Act. Id. at 73-75. Although the ordinance did not impact
the appearance of the advertisements themselves, it
"impose[d] conditions on [the] display of cigarette
advertisements." Id. at 74-75. We held that Congress
intended to preempt any local law that "treads on the area
of tobacco advertising, even if it does so only at the
edges." Id. at 74.
B. Application
We conclude that the Resolution is preempted by
the Labeling Act because it is a requirement "with respect
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to the advertising or promotion" of cigarettes, under
§ 1334(b). We recognize our duty to assume that a local
regulation is not preempted "unless Congress has made such
an intention clear and manifest." Bates, 544 U.S. at 449.
We find, however, that Congress has clearly manifested its
intent to preempt the Resolution through (1) the language of
the preemption provision and (2) the overall statutory
scheme.
1. The Language of Section 1334(b)
The Labeling Act prohibits states from imposing
any "requirement or prohibition based on smoking and health
. . . with respect to the advertising or promotion of . . .
cigarettes." 15 U.S.C. § 1334(b). The parties agree that
the Resolution is a "requirement or prohibition based on
smoking and health." (Appellants' Br. at 26; Appellees' Br.
at 20). They dispute, however, whether the Resolution is
"with respect to the advertising or promotion of"
cigarettes. Plaintiffs argue that it is a requirement with
respect to promotion; defendants argue that it is only a
requirement with respect to sale. (Appellees' Br. at 20-21;
-18-
Appellants' Br. at 24-25). We agree with plaintiffs that
the Resolution is a requirement with respect to the
promotion of cigarettes.
First, we discuss the meaning of the word
"promotion" and the types of activities that constitute
promotion. Second, we discuss why the requirements of the
Resolution affect promotion in a way that causes them to
fall within section 1334(b)'s preemptive scope.
a. "Promotion"
The word "promotion" is not defined in the
Labeling Act. Hence, we look to the word's plain meaning.
Specifically, we consider the "the ordinary, common-sense
meaning of the word[]." United States v. Dauray, 215 F.3d
257, 260 (2d Cir. 2000); see Harris v. Sullivan,
968 F.2d
263, 265 (2d Cir. 1992) ("A fundamental canon of statutory
construction is that, unless otherwise defined, words will
be interpreted as taking their ordinary, contemporary,
common meaning.") (internal quotation marks omitted).
Merriam-Webster defines "promotion" as "the act of
furthering the growth or development of something;
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especially: the furtherance of the acceptance and sale of
merchandise through advertising, publicity, or discounting."
Merriam Webster's Collegiate Dictionary 931 (10th ed. 2000).
A broad array of activities may fall under this umbrella.
See U.S. Dep't of Health & Human Servs., Preventing Tobacco
Use Among Young People: A Report of the Surgeon General
159-60 (1994). Distribution of coupons and free samples,
for example, would obviously be classified as promotional
activity as they further the sale of merchandise.
Promotional activity may also include the "place[ment] and
display [of] products in ways that will maximize the
opportunity for purchase." Id. Indeed, many companies pay
additional fees to have their product displayed in a
desirable location at a retail outlet. See generally
Benjamin Klein & Joshua D. Wright, The Economics of Slotting
Contracts, 50 J.L. & Econ. 421 (2007) (referring to
"promotional shelf space"). Therefore, to the extent a
product display furthers the sale of merchandise, it is a
type of promotion.
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b. The Requirements of the Resolution Are "With
Respect To" Promotion.
The Resolution requires that every tobacco
retailer place signage either (1) next to the register or
(2) next to each tobacco product display. Option (2)
directly affects the promotion of cigarettes. By its terms,
it affects the display of cigarettes, which is a type of
promotion. Specifically, a display is a form of publicity
that can further the sale of merchandise. It is an
opportunity for the manufacturer to present the consumer
with its trade dress, product pricing, and any deals -- or
sales -- that the manufacturer may be offering. Placing a
graphic warning adjacent to a product display necessarily
affects -- or "treads on," Vango Media, 34 F.3d at 74 -- the
content of the image projected and the message conveyed to
the consumer by that display.
Whether option (1) affects promotion is a closer
call, as it does not explicitly reference the display of
tobacco products. Indirectly, however, it is likely to
affect product display, and therefore, product promotion.
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New York law requires retailers to place cigarettes either
"behind a counter . . . accessible only to [store]
personnel" or "in a locked container." See N.Y. Pub. Health
Law § 1399-cc(7) (McKinney 2012). As a result, the vast
majority of retailers choose to place cigarettes behind the
counter, where the registers are located, prominently
displayed in plain view but accessible only to store
personnel. In such circumstances, placing signage at the
register is practically the same as placing it at the point
of display. Furthermore, the Resolution may very well
prompt retailers to choose not to place cigarettes near the
register -- a decision that would affect promotion.4
4 We take judicial notice of a poster recently
published on TobaccoFreeNYS.org. See United States v.
Akinrosotu, 637 F.3d 165, 168 (2d Cir. 2011) (taking
judicial notice of a website). The poster contains a photo
of three children at a convenience store counter behind
which there is a large wall display of cigarettes. The wall
display includes signs showing cigarette brand names,
advertisements, and "special" pricing information. Above
the photo appears the caption, "This is tobacco marketing.
Kids who see it are more likely to smoke." See www.tobaccof
reenys.org/Our-Kids-Have-Seen-Enough-Campaign.html (last
visited July 9, 2012). The point, of course, is that
displays of a consumer product, accompanied by brand posters
and pricing information, increase awareness of that product,
and make it more likely that a consumer will purchase it.
-22-
The City's primary argument is that the Resolution
is a not a requirement with respect to the promotion of
cigarettes, but rather, a requirement with respect to the
sale of cigarettes. Specifically, it argues that it is not
regulating or restricting a manufacturer's ability to
advertise or promote; it is simply requiring any
establishment that sells cigarettes to post warning signs,
regardless of whether any advertising or promotion occurs at
the particular retail establishment. (Appellants' Br. at
24).
While it is true that the Resolution only
explicitly requires action on the part of the seller, not
the manufacturer, the City ignores the practical effect the
Resolution has on the manufacturer's promotional activity at
the retail location. Specifically, requiring a warning sign
in close proximity to a cigarette display has practically
the same effect as requiring a warning on the display
itself, thereby directly affecting the content of the
promotional message conveyed to consumers at the point of
The display is therefore a form of promotion.
-23-
display. Indeed, by the City's own admission, one of the
reasons it chose to regulate the point of sale was to
"deliver[] a different message" from that delivered by the
cigarette manufacturers and to "counteract tobacco
advertising." (Id. at 27; Proposal at 9). Requiring that
the manufacturers' message be countered at the point of
purchase is surely a form of regulating promotion. Cf.
Vango Media, 34 F.3d 68 (ordinance did not impose direct
burden on manufacturer, but was nonetheless preempted
because advertising was conditioned on public health
message).5
5
At oral argument, a question arose as to whether
the Resolution could survive preemption if section (c)(2) of
the Resolution were severed. (Tr. at 18-21, 25). We do not
decide that question here.
The City also points out (essentially in passing)
that the Resolution applies to all tobacco products, whereas
the Labeling Act only applies to cigarettes. (Appellant Br.
at 12). The City thus implies that the Resolution should
survive at least to the extent it applies to non-cigarette
tobacco products. We reject that argument. First, it is
not clear how any part of the Resolution could be severed
such that it would apply only to non-cigarette tobacco
products. Second, this argument was not sufficiently
preserved in the district court or on appeal, and is
therefore waived. See Cuoco v. Moritsugu, 222 F.3d 99, 112
n.4 (2d Cir. 2000) ("single, conclusory, one-sentence
-24-
To be clear, we do not hold that every state or
local regulation affecting promotion violates the Labeling
Act's preemption clause. Section 1334(c) provides a safe
harbor for laws regulating the time, place, or manner of
promotional activity.6 For example, the City's requirement
that retailers display cigarettes only behind the counter or
in a locked container, see N.Y. Pub. Health L. § 1399-cc(7),
argument is insufficient to preserve any issue for appellate
review"); United States v. Brauning, 553 F.2d 777, 780 (2d
Cir. 1977) (where party has had ample opportunity to make an
argument to the trial court, but has failed to do so,
"waiver will bar raising the issue on appeal").
6
The City did not argue in its briefs that the
Resolution is a time, place, or manner restriction under §
1334(c). At oral argument, counsel for the City briefly
addressed the issue in response to a question from the
Court. He stated, "If the district court was actually
correct that [display is] a promotional activity, well, then
the requirement aimed at the location of the display would
be a requirement on the place of the activity and that --
and for that reason it would fall within the saving clause
of 1334(c)." (Tr. at 8).
The Resolution, however, is not "aimed at the
location of the display." In other words, it does not limit
the places in which manufacturers or retailers may display
cigarettes. Rather, it requires that a sign be placed at
the register or wherever cigarettes are displayed at the
retail location. Therefore, the Resolution is not a "place"
restriction within the meaning of 1334(c).
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clearly affects promotional display, but would fall within
this exception, as it only affects the place and manner of
the display. Only requirements or prohibitions directly
affecting the content of the manufacturers' promotional
message to consumers are preempted.
2. The Overall Statutory Scheme
To the extent the language of the preemption
provision itself is or may be ambiguous, our conclusion is
supported by the overall statutory scheme.
The Labeling Act seeks to strike a balance between
two competing interests: (1) ensuring that Americans are
adequately warned about the health consequences of smoking;
and (2) protecting free commerce. See 15 U.S.C. § 1331.
The Resolution affects this balance by seeking to advance
the first interest at the expense of the second. The
requirement that retailers post graphic images might serve
to further educate consumers, but it does so by imposing a
direct burden on cigarette retailers.
The Resolution was born of the assumption that the
federally mandated warnings did not adequately or
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effectively inform consumers of the health risks of smoking.
(Notice of Adoption at 1-3; Proposal at 3). Specifically,
the City apparently believed that "there remain[ed]
significant gaps in smokers' understanding of these risks."
(Notice of Adoption at 2). It also observed that the
"retail environment lacks information about tobacco health
risks" (Proposal at 3), and highlighted research indicating
textual warnings (such as the ones currently mandated by
Congress) were not as effective as pictorial warnings
(Notice of Adoption at 3). In other words, the City was not
satisfied with the balance struck by Congress, and it sought
to shift the balance further in favor of discouraging
smoking, at the expense of free commerce.
The City's desire to tilt the balance more in
favor of educating consumers is understandable. Indeed, the
City may seek to tilt the balance further by imposing time,
place, or manner restrictions, and by launching its own
anti-smoking campaigns. But what the City cannot do is seek
to affect the balance by requiring a manufacturer or
retailer to display supplemental content at the point of
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purchase. Specifically, it cannot require retailers to post
warning signs adjacent to cigarette displays, because doing
so would affect the content of the retailers and
manufacturers' promotional efforts. The legislative scheme
contemplates that Congress, and only Congress, will amend
the content of warnings required of manufacturers to educate
consumers, see S. Rep. No. 98-177, at 6-7; FSPTCA § 201(a),
without interference or supplementary efforts by state or
local authorities.
Allowing state or local authorities to mandate
supplementary warnings on or near cigarette displays risks
the creation of "diverse, nonuniform, and confusing"
regulations. See 15 U.S.C. 1331(2)(B). Indeed, there is a
risk of such nonuniform regulation here. Congress has
directed the FDA to prescribe graphic warnings for cigarette
packages. FSPTCA § 201(a) ("the Secretary shall issue
regulations that require color graphics depicting the
negative health consequences of smoking"). While new FDA
regulations have not yet gone into effect, Congress intends
for some form of graphic image to appear on packages in the
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near future.7 The Resolution would require additional
graphic warnings to be placed in close proximity to the
federally mandated ones. Such competing, and potentially
duplicative, warnings are not contemplated by the federal
statutory scheme.
To be sure, we do not hold that supplementary
warnings are, in and of themselves, preempted by the
Labeling Act. We hold only that requiring retailers to post
graphic supplementary warnings adjacent to cigarette
displays is preempted. Of course, states and localities
remain free to impose time, place, and manner restrictions
on the advertising and promotion of cigarettes, and to
engage in anti-smoking campaigns using their own resources.
Our holding today should not be read to curtail in any way
7 Notably, some of the images proposed by the FDA
were similar in nature to the ones proposed by the City
(e.g., a cancerous lung; a decaying tooth); others were very
different (e.g., a drawing of crying baby; a picture of a
corpse). See New Cigarette Labels Feature Graphic Images,
USA Today (June 21, 2011), http://mediagallery.usatoday.com/
New-cigarette-lables-feature-graphic-images/G2394 (last
visited July 9, 2012).
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state and locally funded efforts to further educate
consumers and counter cigarette advertising and promotion.
CONCLUSION
For the foregoing reasons, we hold that the
Resolution, Article 181.19 of the New York City Health Code,
is preempted by the Labeling Act. Accordingly, we affirm
the judgment of the district court declaring the Resolution
null and void. In light of this determination, we do not
decide whether the Resolution violates the First Amendment.
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