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Court Decision Affirms States’ Role in Regulating and Banning Flavored Tobacco Product Sales
Patricia Molteni, NAAG Tobacco Counsel
You can still get a 32-ounce cherry soda in New York City
On June 22, 2009, President Obama signed the Tobacco Control Act into law. The Act gives the Food and Drug Administration (FDA) the authority to regulate the manufacture, distribution, and marketing of tobacco products to protect the public health. See 21 U.S.C. § 387 et seq. Tobacco products include cigarettes, cigars, roll-your-own, smokeless tobacco, and the like. Id. at 387a(b). The Act recognizes that nearly all new smokers will start using before they are 18 years old (the minimum legal age to buy tobacco products in most states), that they will become addicted before they have the maturity to understand the risks, and that a significant percentage of them will ultimately die prematurely from tobacco-related illnesses. Pub. L. No. 111-31, Div. A, § 2. At the same time, the Act recognizes that tobacco products, though inherently harmful, are legal for use by adults and that users are addicted to them. Id.
In balancing these conflicting considerations, the Act seeks to protect public health by, among other things, banning “characterizing” flavors
Despite the additional restrictions imposed on tobacco manufacturers by the Act and other public health laws, cigar smoking rates have increased significantly over the past 13 years even while cigarette rates have declined.
Acknowledging the public health risks of flavored cigars and flavored smokeless products, the New York City Council passed an ordinance in 2009 banning the sale of nearly all flavored tobacco products within the city, except in tobacco bars (of which there are only eight). 17 N.Y.C. Admin. Code § 17-701. The ban does not apply to menthol, mint, or wintergreen flavoring but bans the sale of all other flavored, non-cigarette, tobacco products such as cigars, little cigars, and chewing tobacco and other smokeless products. Id. 17-713(b).
In response, U.S. Smokeless Tobacco Manufacturing Co. and U.S. Smokeless Tobacco Brands, Inc., who make chewing tobacco under brand names like Copenhagen, Skoal and Husky, sued New York City to enjoin the ordinance insofar as it applies to smokeless tobacco products. The plaintiff companies are owned by Altria Group, parent of Philip Morris USA, the largest cigarette manufacturer in the United States.
On Dec. 28, 2009, plaintiffs filed suit in U.S. District Court for the Southern District of New York. In their complaint, they argued that the Tobacco Control Act preempts New York City’s authority to enact a flavoring ban. Plaintiffs’ position starts with the premise that the Act gives the federal government exclusive authority to set manufacturing standards for tobacco products. They assert that banning flavorings is a de facto manufacturing standard because it prohibits the sale of tobacco products made in certain way—i.e., with flavorings. They further reason that the Act allows for flavorings in non-cigarette products; therefore, the ordinance sets a manufacturing standard stricter than federal law and is, for that reason, preempted.
On March 23, 2010, Federal District Court Judge Colleen McMahon denied Plaintiffs’ motion for a preliminary injunction
The Second Circuit affirmed, adopting the same overall interpretation of the Act as the lower court. Like Judge McMahon, the Second Circuit, in making its decision, relied primarily on three provisions in the Act—the “Preservation Clause” § 387p(a)(1)), “the Preemption Clause” § 387p(a)(2)(A)), and the “Saving Clause” § 387p(a)(2)(B)). Reading these sections together, the court interpreted them as follows: (1) the Preservation Clause sets forth a broad preservation of authority for the states to set more stringent standards than the FDA under the Act “relating to or prohibiting the sale, distribution, possession, exposure to, access to, advertising and promotion of, or use of tobacco products by individuals of any age . . .”; (2) the Preemption Clause establishes an exception to this general rule by preempting the states from establishing different or additional standards than the FDA under the Act “relating to tobacco product standards, premarket review, adulteration, misbranding, labeling, registration, good manufacturing standards, or modified risk tobacco products”; and (3) the Saving Clause establishes an exception to the exception, explaining that the Preemption Clause “does not apply to requirements relating to the sale, distribution, possession, information reporting to the State, exposure to, access to, the advertising and promotion of, or use of, tobacco products by individuals of any age.”
Moreover, like the lower court, the Second Circuit had no difficulty distinguishing between the manufacturing process and the sale of finished goods, holding that the Act “reserves regulation at the manufacturing stage exclusively to the federal government, but allows states and localities to continue to regulate sales and other consumer-related aspects of the industry in the absence of conflicting federal regulation.”
With respect to Plaintiffs’ position that the flavoring ban is a backdoor manufacturing standard, the Second Circuit declined to read the manufacturing standard language in the Preemption Clause so broadly. The court characterized Plaintiffs’ position as “collap[sing] the distinction between sales and product regulations” and refused to adopt such an interpretation because it would make the language of the Preservation Clause, allowing states to “enact . . . and enforce any . . . measure . . . prohibiting the sale . . . of tobacco products,” superfluous.
The court concluded that New York City’s flavor ban was not preempted under the Tobacco Control Act and, equally important, interpreted the Act as preserving “for the states a robust role in regulating, and even banning, sales of tobacco products” through a broad reading of the Saving Clause and a narrow reading of the Preemption Clause.
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