Discount Tobacco City & Lottery, Inc. v. United States

• Decision Date: 31 May 2012
• Docket Number: Nos. 10–5234,10–5235.,s. 10–5234
• Parties: DISCOUNT TOBACCO CITY & LOTTERY, INC.; Lorillard Tobacco Company; National Tobacco Company, L.P.; R.J. Reynolds Tobacco Company; Commonwealth Brands, Inc.; American Snuff Company, LLC, fka Conwood Company, LLC, Plaintiffs–Appellants/Cross–Appellees, v. UNITED STATES of America; United States Food & Drug Administration; Margaret Hamburg, Commissioner of the United States Food and Drug Administration; Kathleen Sebelius, Secretary of the United States Department of Health and Human Services, Defendants–Appellees/Cross–Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

674 F.3d 509

DISCOUNT TOBACCO CITY & LOTTERY, INC.; Lorillard Tobacco Company; National Tobacco Company, L.P.; R.J. Reynolds Tobacco Company; Commonwealth Brands, Inc.; American Snuff Company, LLC, fka Conwood Company, LLC, Plaintiffs–Appellants/Cross–Appellees,

v.UNITED STATES of America; United States Food & Drug Administration; Margaret Hamburg, Commissioner of the United States Food and Drug Administration; Kathleen Sebelius, Secretary of the United States Department of Health and Human Services, Defendants–Appellees/Cross–Appellants.

Nos. 10–5234

10–5235.

United States Court of Appeals, Sixth Circuit.

Argued: July 27, 2011.Decided and Filed: March 19, 2012.Rehearing and Rehearing En Banc Denied May 31, 2012.

Held Unconstitutional

21 C.F.R. §§ 1140.32(a), 1140.34 ARGUED: Noel J. Francisco, Jones Day, Washington, D.C., for Appellants. Mark B. Stern, United States Department of Justice, Washington, D.C., for Appellees. ON BRIEF: Noel J. Francisco, Robert F. McDermott, Jr., Hashim M. Mooppan, Jones Day, Washington, D.C., E. Kenly Ames, Charles E. English, English, Lucas, Priest & Owsley LLP, Bowling Green, Kentucky, Floyd Abrams, Joel Kurtzberg, Cahill Gordon & Reindel LLP, New York, New York, LeAnne Moore, National Tobacco Company, L.P., Louisville, Kentucky, for Appellants. Mark B. Stern, Alisa B. Klein, Mark R. Freeman, Sarang V. Damle, Samantha Chaifetz, Daniel Tenny, Benjamin S. Kingsley, United States Department of Justice, Washington, D.C., Karen E. Schifter, United States Department of Health & Human Services, Silver Spring, Maryland, for Appellees. Robert Corn–Revere, Ronald G. London, Davis Wright Tremaine, LLP, Washington, D.C., Allison M. Zieve, Gregory A. Beck, Public Citizen Litigation Group, Washington, D.C., Richard A. Samp, Washington Legal Foundation, Washington, D.C., Aaron J. Silletto, Goldberg Simpson, LLC, Louisville, Kentucky, Timothy L. Edelen, Tad T. Pardue, Bell, Orr, Ayers & Moore, PSC, Bowling Green, Kentucky, Seth E. Mermin, Thomas Bennigson, Public Good Law Center, Berkeley, California, for Amici Curiae.Before: CLAY and STRANCH, Circuit Judges; BARRETT, District Judge. ^*CLAY, J., announced the judgment of the court and delivered the lead opinion, which constitutes the unanimous opinion of the court on Sections I and IV–VI, and on parts of the analysis for Sections II and VII, but constitutes the dissent on Section III and on parts of the analysis for Sections II and VII. STRANCH, J. (pp. 551–69), delivered a separate opinion joined in full by BARRETT, D. J., which constitutes the majority opinion of the court on Section III and on parts of the analysis for Sections II and VII, as specified on pages 551 and 552 of the opinion.

OPINION

CLAY, Circuit Judge.

Plaintiffs Discount Tobacco City & Lottery, Inc., et al., comprised of manufacturers and sellers of tobacco products, appeal the decision of the district court granting partial summary judgment to Defendants United States of America, et al., and partial summary judgment on Plaintiffs' claim that certain provisions of the Family Smoking Prevention and Tobacco Control Act, Pub.L. No. 111–31, 123 Stat. 1776 (2009), violate their rights to free speech under the First Amendment. Defendants cross-appeal.

For the reasons discussed below, we AFFIRM the decision of the district court upholding the Family Smoking Prevention and Tobacco Control Act's restrictions on the marketing of modified-risk tobacco products; bans on event sponsorship, branding non-tobacco merchandise, and free sampling; and the requirement that tobacco manufacturers reserve significant packaging space for textual health warnings. We further AFFIRM the district court's grant of summary judgment to Plaintiffs on the Act's restriction of tobacco advertising to black and white text. We also AFFIRM the district court's decision to uphold the constitutionality of the color graphic and non-graphic warning label requirement, with Judge Clay dissenting on this issue.

We REVERSE the district court's determination that the Act's restriction on statements regarding the relative safety of tobacco products based on FDA regulation is unconstitutional and its determination that the Act's ban on tobacco continuity programs is permissible under the First Amendment.

BACKGROUND

I. Brief History of Tobacco Legislation

Congress began regulating tobacco products in 1965 and has since passed major legislation regarding tobacco industry practices on at least six occasions. See Federal Cigarette Labeling and Advertising Act of 1965, Pub.L. 89–92, 79 Stat. 282 (introducing tobacco warning labels); Public Health Cigarette Smoking Act of 1969, Pub.L. 91–222, 84 Stat. 87 (banning television and radio advertisement of tobacco products); Alcohol and Drug Abuse Amendments of 1983, Pub.L. 98–24, 97 Stat. 175 (requiring the Department of Health and Human Services to research and report on tobacco); Comprehensive Smoking Education Act of 1984, Pub.L. 98–474, 98 Stat. 2200 (modifying warning labels); Comprehensive Smokeless Tobacco Health Education Act of 1986, Pub.L. 99–252, 100 Stat. 30 (extending restrictions to smokeless tobacco); Alcohol, Drug Abuse, and Mental Health Administration Reorganization Act of 1992, Pub.L. 102–321, § 202, 106 Stat. 394 (creating incentives for states to enforce tobacco sales restrictions). In 1996, the United States Food and Drug Administration (“FDA”) attempted to assert its jurisdiction to further regulate the tobacco industry, but the Supreme Court found that the attempted regulation exceeded the FDA's agency authority. See Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000).

As part of the FDA's 1996 rulemaking process, the FDA made several significant findings regarding tobacco use among juveniles. At that time, the FDA found that, “approximately 3 million American adolescents currently smoke and an additional 1 million adolescent males use smokeless tobacco. Eighty-two percent of adults who ever smoked had their first cigarette before the age of 18, and more than half of them had already become regular smokers by that age.” 61 Fed.Reg. 44396–01, 44398 (Aug. 28, 1996). Relying on United States Surgeon General reports and studies from various medical journals, the FDA concluded that, “[a]n adolescent whose cigarette use continues into adulthood increases his or her risk of dying from cancer, cardiovascular disease, or lung disease. Moreover, the earlier a young person's smoking habit begins, the more likely he or she will become a heavy smoker and therefore suffer a greater risk of diseases caused by smoking.” Id. at 44399. The FDA found that one-third of young people who become smokers “will die prematurely as a result,” id. (internal citations omitted), becoming part of the approximately “440,000 people [who] die of diseases caused by smoking or other form of tobacco use[, constituting] ... about 20 percent of all deaths in our nation.” Family Smoking Prevention and Tobacco Control Act: Hearing on H.R. 1256 Before the Subcomm. on Commerce, Trade, and Consumer Protection, Comm. on Energy and Commerce, 111th Cong. 1 (2004) (statement of Vice Admiral Richard H. Carmona, United States Surgeon General).

More recently, the President's Cancer Panel reported that, “[e]very day, approximately 4,000 children under age 18 experiment with cigarettes for the first time; another 1,500 become regular smokers. Of those who become regular smokers, about half eventually will die from a disease caused by tobacco use.” The President's Cancer Panel, Promoting Healthy Lifestyles: Policy, Program, and Personal Recommendations for Reducing Cancer Risk, 64 (2007).

This brief overview barely begins to scratch the surface of the problem of juvenile tobacco use and the government's repeated interventions into the practices of the tobacco industry. The government, in this case, has filed thousands of pages of medical studies and governmental reports supporting the conclusion that the use of tobacco, especially by juveniles, poses an enormous threat to the nation's health, and imposes grave costs on the government. The government has supplemented this information with copious documentation of the practices used by the industry, oftentimes directly aimed at juveniles and other times seriously effecting them, to maintain and increase tobacco use and dependency.

There can be no doubt that the government has a significant interest in preventing juvenile smoking and in warning the general public about the harms associated with the use of tobacco products. ( See, e.g., U.S. Dep't of Health and Human Serv., Preventing Tobacco Use Among Young People; A Report of the Surgeon General, 5 (1994) (concluding that “[n]early all first use of tobacco occurs before high school graduation; this finding suggests that if adolescents can be kept tobacco-free, most will never start using tobacco”).) The Supreme Court made clear that for these reasons, “[t]he State's interest in preventing underage tobacco use is substantial, and even compelling.” ¹ Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 564, 121 S.Ct. 2404, 150 L.Ed.2d 532 (2001).

Nonetheless, as the Supreme Court has recognized, “the sale and use of tobacco products by adults is a legal activity. [The courts] must consider that tobacco retailers and manufacturers have an interest in conveying truthful information about their products to adults, and adults have a corresponding interest in receiving truthful information about tobacco products.” Id.

II. The Family Smoking Prevention and Tobacco Control Act

On June 22, 2009, the President signed into law the Family Smoking Prevention and Tobacco Control Act (“FSPTCA” or the “Act”), Pub.L. No. 111–31, 123 Stat. 1776 (2009). The stated purpose of the Act is to provide authority to the FDA to regulate tobacco products, in order to “address issues of particular concern to public health officials, including the use of tobacco by young p...