00-596 & 00-597 Lorillard Tobacco Co. v. Reilly

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“[W]e fail to see how the FCLAA and its pre-emption provision permit a distinction between the specific concern about minors and cigarette advertising and the more general concern about smoking and health in cigarette advertising, especially in light of the fact that Congress crafted a legislative solution for those very concerns. We also conclude that a distinction between state regulation of the location as opposed to the content of cigarette advertising has no foundation in the text of the pre-emption provision. Congress pre-empted state cigarette advertising regulations like the Attorney General’s because they would upset federal legislative choices to require specific warnings and to impose the ban on cigarette advertising in electronic media in order to address concerns about smoking and health. Accordingly, we hold that the Attorney General’s outdoor and point-of-sale advertising regulations targeting cigarettes are pre-empted by the FCLAA.”

“We conclude that the Attorney General has failed to show that the outdoor advertising regulations for smokeless tobacco and cigars are not more extensive than necessary to advance the State’s substantial interest in preventing underage tobacco use… A careful calculation of the costs of a speech regulation does not mean that a State must demonstrate that there is no incursion on legitimate speech interests, but a speech regulation cannot unduly impinge on the speaker’s ability to propose a commercial transaction and the adult listener’s opportunity to obtain information about products. After reviewing the outdoor advertising regulations, we find the calculation in this case insufficient for purposes of the First Amendment.”

“Petitioners devoted little of their briefing to the sales practices regulations, and our understanding of the regulations is accordingly limited by the parties’ submissions. As we read the regulations, they basically require tobacco retailers to place tobacco products behind counters and require customers to have contact with a salesperson before they are able to handle a tobacco product.”

“Unattended displays of tobacco products present an opportunity for access without the proper age verification required by law. Thus, the State prohibits self-service and other displays that would allow an individual to obtain tobacco products without direct contact with a salesperson. It is clear that the regulations leave open ample channels of communication. The regulations do not significantly impede adult access to tobacco products. Moreover, retailers have other means of exercising any cognizable speech interest in the presentation of their products. We presume that vendors may place empty tobacco packaging on open display, and display actual tobacco products so long as that display is only accessible to sales personnel. As for cigars, there is no indication in the regulations that a customer is unable to examine a cigar prior to purchase, so long as that examination takes place through a salesperson.”

Affirmed in part, Reversed in part, and Remanded.

Local Effect:

The decision overturns governing Seventh Circuit law, holding that local regulation of the location of tobacco advertising is not preempted: Federation of Advertising Industry Representatives, Inc. v. Chicago, 189 F.3d 633, 636-640 (C.A.7 1999).

O’Connor, J.; Kennedy, J., concurring in part and concurring in the judgment; Thomas, J., concurring in part and concurring in the judgment; Souter, J., concurring in part and dissenting in part; Stevens, J., concurring in part, concurring in the judgment in part, and dissenting in part.

Certiorari to the United States Court of Appeals for the First Circuit, 218 F.3d 30.