Vango Media, Inc. v. City of New York

• Decision Date: 26 August 1994
• Docket Number: No. 790,D,790
• Parties: , 1994-2 Trade Cases P 70,701 VANGO MEDIA, INC., Plaintiff-Appellee, v. The CITY OF NEW YORK; The New York City Department of Health; and The New York City Taxi and Limousine Commission, Defendants-Appellants. ocket 93-7607.
• Court: U.S. Court of Appeals — Second Circuit

Page 68

34 F.3d 68

63 USLW 2159, 1994-2 Trade Cases P 70,701

VANGO MEDIA, INC., Plaintiff-Appellee, v. The CITY OF NEW YORK; The New York City Department of

Health; and The New York City Taxi and Limousine

Commission, Defendants-Appellants.

No. 790, Docket 93-7607.

United States Court of Appeals, Second Circuit.

Argued Dec. 10, 1993.

Decided Aug. 26, 1994.

Elizabeth S. Natrella, New York City (Leonard J. Koerner, Pamela Seider Dolgow, Lisa S.J. Yee, O. Peter Sherwood, Corp. Counsel of the City of New York, of counsel), for defendants-appellants.

Nicholas E. Poser, New York City (Michael Krinsky, Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C., of counsel), for plaintiff-appellee.

Arthur N. Eisenberg, New York City, submitted a brief on behalf of the New York Civil Liberties Union Foundation, as amicus curiae.

Melvin L. Wulf, New York City (Abner S. Greene, Beldock Levine & Hoffman, of counsel), submitted a brief on behalf of Albert Einstein Cancer Center/Montefiore Hosp. Alliance for Smoke-Free Air, American Cancer Soc., NYC Div., American Cancer Soc., Queens Div., American Council on Science and Health, American Heart Ass'n, New York City Affiliate, American Lung Ass'n of Before: NEWMAN, Chief Judge, OAKES and CARDAMONE, Circuit Judges.

New York State, American Lung Ass'n of Queens, Bedford-Stuyvesant Healthy Heart Program, Cancer Prevention Research Institute, Health Watch Information & Promotion Service, New Jersey Group Against Smoking Pollution, New York County Medical Soc., New York Lung Ass'n, Smokefree Educational Services, St. Luke's Roosevelt Hosp. Center, Stop Teenage Addiction To Tobacco, Tri-State Coalition for Responsible Inv., Washington Heights-Inwood Healthy Heart, Women's Medical Ass'n of New York, as amicus curiae.

CARDAMONE, Circuit Judge:

On this appeal we must decide whether federal law preempts a New York City ordinance. The ordinance was enacted for the laudable purpose of calling the public's attention, through the medium of advertising, to the health dangers of smoking. However praiseworthy such purpose, it may not be accomplished by means that are in derogation of a federal statute that, in an effort to avoid the chaos of multiple diverse regulations, bars States and their political subdivisions from enacting advertising regulations respecting the relationship between smoking and health. The ends may not justify the means when the means are unlawful. Defendants, the City of New York, et al., appeal from a judgment entered July 1, 1993 in the Southern District of New York (McKenna, J.) granting plaintiff Vango Media, Inc.'s motion for summary judgment in its action seeking a declaration that federal law preempts the local ordinance. We affirm.

BACKGROUND

Vango Media, Inc. (Vango) is a New York company in the business of displaying advertising signs on the exterior of New York City taxicabs. It contracts with taxicab companies for the right to install and maintain its own advertising frames on the top of the taxis. In February 1993 Vango brought the instant action against the City of New York, the New York City Department of Health and the New York City Taxi and Limousine Commission (collectively, the City) challenging Local Law No. 83 of 1992, the "Tobacco Product Regulation Act," codified as Title 17, Chapter 7 of the New York City Administrative Code, Secs. 17-616 to 17-626 (Local Law).

The challenged portion of the Local Law requires a minimum of one public health message--defined by Sec. 17-617 j as pertaining to the health dangers of smoking or the health benefits of not smoking--to be displayed for every four tobacco advertisements displayed on certain property and facilities licensed by the City of New York. Twenty-five percent of the messages must be "directed to the youth population" of New York. See id. Sec. 17-621 a(1). Advertising space on taxis, for which the Taxi and Limousine Commission issues one-year permits at a cost of $50 per cab to Vango and other companies in the same business pursuant to New York City Admin. Code Sec. 19-525, is subject to the requirements of the Local Law. See id. Sec. 17-617 u(ii).

Under the terms of the Local Law, interested individuals, groups or entities are invited to submit proposed health messages that are then screened by the Department of Health, which selects those "it deems to communicate most effectively the health risks of tobacco product use or the health benefits of not using tobacco products." See id. Secs. 17-621 c, -621 e(1). The Taxi and Limousine Commission reviews the messages to ensure that they conform with the Commission's standards of form, appearance, and appropriateness. Several messages are then submitted to the permit holder for display. See id. Sec. 17-621 e(2). The Local Law requires, in addition, that the permit holder keep daily records and submit a quarterly report to the Commission reflecting the number and locations of its tobacco advertisements and the public health messages. See id. Sec. 17-621 b(1). The cost of displaying such messages is imposed on the permit holder, see id. Sec. 17-621 d, and the public health messages must be displayed employing the same methods and materials used for tobacco advertisements, see id. Sec. 17-621 a(2).

Vango currently displays advertisements on approximately 1,600 taxicabs pursuant to contracts with four taxicab companies. It On March 24, 1993 Vango moved for partial summary judgment on three of the causes of action alleged in its complaint, which sought declaratory and injunctive relief against the City. In support of its motion, Vango made the following arguments. First, the Local Law as applied to permit holders is preempted by the Federal Cigarette Labeling and Advertising Act of 1965, Pub.L. No. 89-92, 79 Stat. 282, as amended by the Public Health Cigarette Smoking Act of 1969, Pub.L. No. 91-222, 84 Stat. 87 (codified, as amended, at 15 U.S.C. Secs. 1331-1340 (1988)) (Act). Second, the Local Law violates Vango's First Amendment rights because the law requires it to pay for and display messages written by third parties and selected by officials employed by the City. Third, under its current contract, Vango qualifies for an exemption from the Local Law. No challenge to the application of the Local Law to property owned or operated by the City was made.

purchases a commensurate number of permits from the Taxi and Limousine Commission at a total cost of $80,000 per year. Vango avers that 82 percent of its current paid advertisements are for cigarettes, and that historically 75 percent of its advertising revenue has come from cigarette advertisers. Its contract with the Leo Burnett U.S.A. agency of Chicago, Illinois, representing the advertisers, is set forth in the record.

The next day, March 25, the City moved to dismiss Vango's complaint for failure to state a claim upon which relief can be granted pursuant to Fed.R.Civ.P. 12(b)(6). The district court granted plaintiff's motion in a published opinion. See 829 F.Supp. 572 (S.D.N.Y.1993). It concluded that the Local Law as it applied to privately-owned taxicabs for whose advertising space the City issues permits, was preempted by the Act, and enjoined the City from enforcing the Local Law solely as against Vango and those similarly situated. As a result of this legal conclusion, the trial court did not reach or address Vango's other arguments. The City's motion to dismiss Vango's complaint was denied as moot. See id. at 583. From the July 1, 1993 judgment entered in accordance with the foregoing, the City appeals.

DISCUSSION

I Preemption

Notwithstanding the patent First Amendment problems with the Local Law, the sole question to be addressed is whether Sec. 1334(b) of the Act preempts the Local Law as applied to Vango and those similarly situated. We address the Local Law only as it applies to advertising space on privately-owned property because no challenge has been made to the Local Law in its application to property owned or operated by the City.

A. In General

In The Federalist, Alexander Hamilton sets forth how political power is to be divided in a Republic. He states that the laws of the larger political entity--into which smaller political societies agree to join--are to be the supreme law of the land. Were it otherwise, Hamilton continues, the agreement would be merely a treaty dependent on the good faith of the parties, and not a government. As a corollary, the acts of the larger society or the government must be pursuant to its constitutional powers, because if not, he concludes, such acts, which would invade the residuary authority of the smaller societies, would constitute a usurpation of power. The Federalist No. 33, at 204 (Alexander Hamilton) (Clinton Rossiter ed., 1961). Beginning with McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 424, 4 L.Ed. 579 (1819) (Marshall, Ch.J.), federal courts have attempted to comply with the spirit of Hamilton's view.

The Supremacy Clause states: "This Constitution, and the Laws of the United States ... made in Pursuance thereof; ... shall be the supreme Law of the Land; ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. Const. art VI, cl. 2. Under the doctrine of preemption, which gives force to the Supremacy Clause, it is held that, " 'any state law, however clearly within a State's acknowledged power, which interferes with or is contrary to federal law, must yield.' " Felder v. Casey, 487 U.S. 131, 138, 108 S.Ct. 2302, 2306, 101 L.Ed.2d 123 (1988) (quoting Free v. Bland, 369 U.S. 663, 666, 82 S.Ct. 1089, 1092, 8 L.Ed.2d 180 (1962)).

Federal law may preempt state law explicitly, by stating that fact in the statute; impliedly, where the comprehensiveness of federal legislation in a given field leaves no room for a state to act; and where state law actually conflicts with federal law so that compliance with both is impossible. See, e.g., Pacific Gas & Elec. Co. v. State Energy Resources...