23–34 94th St. Grocery Corp.. v. N.Y. City Bd. of Health

• Citation: 757 F.Supp.2d 407
• Decision Date: 29 December 2010
• Docket Number: No. 10 Civ. 4392 (JSR).,10 Civ. 4392 (JSR).
• Parties: 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., and R.J. Reynolds Tobacco Co., Inc., Plaintiffs,v.NEW YORK CITY BOARD OF HEALTH, New York City Department of Health and Mental Hygiene, New York City Department of Consumer Affairs, Dr. Thomas Farley, 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.
• Court: U.S. District Court — Southern District of New York

757 F.Supp.2d 407

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., and R.J. Reynolds Tobacco Co., Inc., Plaintiffs,

v.NEW YORK CITY BOARD OF HEALTH, New York City Department of Health and Mental Hygiene, New York City Department of Consumer Affairs, Dr. Thomas Farley, 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.

No. 10 Civ. 4392 (JSR).

United States District Court, S.D. New York.

Dec. 29, 2010.

Floyd Abrams, Joel Laurence Kurtzberg, Kayvan Betteridge Sadeghi, Cahill Gordon & Reindel LLP, Alan Mansfield, Stephen L. Saxl, Greenberg Traurig, LLP, Jennifer H. Rearden, Gibson, Dunn & Crutcher, LLP, New York, NY, Brian D. Boone, Michael J. Edney, Miguel Angel Estrada, Gibson, Dunn & Crutcher, LLP, Noel J. Francisco, Jones Day, Washington, DC, for Plaintiffs.Nicholas Robert Ciappetta, New York City Law Department, Office of the Corporation Counsel, Jeremy S. Winer, Cravath, Swaine & Moore LLP, New York, NY, Daniel P. Kearney, Patrick J. Carome, Paul R.Q. Wolfson, Wilmer Cutler Pickering Hale & Dorr L.L.P., Washington, DC, for Defendants.

OPINION AND ORDER

JED S. RAKOFF, District Judge.

Even merchants of morbidity are entitled to the full protection of the law, for our sake as well as theirs. Here, as a result, an otherwise laudable New York City health regulation designed to alert cigarette purchasers, at the very point of purchase, to the grave dangers of tobacco use must be declared invalid because it imposes burdens on the promotion of cigarettes that only the federal government may prescribe.

The plaintiffs here are the nation's three largest tobacco manufacturers, joined by two New York City retailers who sell tobacco products and two trade associations representing New York City tobacco retailers. They bring this action to challenge Article 181.19 of the New York City Health Code, issued in the fall of 2009 by the New York City Board of Health, which requires the display of certain “smoking cessation signs” at all places within New York City where tobacco products are sold. Defendants are the New York City Board of Health and various other New York City administrative agencies, as well as their respective Commissioners sued in their official capacities (collectively, the “City”).

Shortly after the commencement of this lawsuit, the parties voluntarily agreed to stay enforcement of Article 181.19 until January 1, 2011. Both sides then moved for summary judgment. The Court received extensive written submissions in connection with these motions, including an amici curiae brief submitted by a large number of non-profit health organizations.¹ The Court heard oral argument on October 20, 2010, followed by still further briefing. Having carefully considered these submissions, the Court hereby grants plaintiffs' motion for summary judgment, denies defendants' cross-motion, and declares Article 181.19 null and void.

The facts pertinent to plaintiffs' motion, taken most favorably to the defendants, are as follows:

Smoking is the leading cause of preventable death in both the United States and New York City. Declaration of Thomas A. Farley, dated August 13, 2010, ¶ 4. Approximately one-third of smokers die of tobacco-related diseases and about 440,000 people in the United States die prematurely from smoking every year. Id. Within New York City, roughly 7,500 people die from smoking annually—more than from AIDS, homicide, and suicide combined. Id. at ¶¶ 4–5. An additional 8.6 million people across the nation live with a serious smoking-related illness. Id. at ¶ 5, Despite these facts, an estimated 46 million Americans and nearly 1 million residents of New York City smoke. See id. at ¶ 7. In part this reflects the addictive quality of nicotine, but it also reflects choices made in response to competing information.

Responding to the public health threat posed by smoking, the Department of Health launched a multi-faceted program to reduce and prevent smoking in New York City, of which Article 181.9 is one part. See Farley Decl. at ¶ 2–3. Other initiatives included the City's smoking ban in indoor workplaces, increased cigarette taxes, educational campaigns, and promotion of smoking cessation programs. Id. at ¶ 2. These other initiatives appear to have somewhat lowered smoking rates, but hardly to the point of eliminating the threat to public health. Id.

On September 22, 2009, the Board of Health adopted Article 181.9, which requires all “persons who engage in face-to-face sales of tobacco products to consumers in New York City ... [to] prominently display” either “one ‘small sign’ on or within 3 inches of each cash register” or “one ‘large sign’ at each location where tobacco products are displayed.” Article 181.19(a)-(b). Each sign must include: (1) “information about tobacco products and the adverse health effects of tobacco use,” (2) “a pictorial image illustrating the effects of tobacco use,” and (3) “information about how to get help to quit using tobacco.” Id. at § 181.19(b)(1). Implementing this mandate, the Department of Health designed three signs for tobacco retailers to display. These signs contain graphic, even gruesome images of a brain damaged by a stroke, a decaying tooth and gums, and a diseased lung, accompanied by corresponding information about the dangers of smoking ( e.g., “Smoking Causes Lung Cancer”) and the phrase “Quit Smoking Today—For Help, Call 311 Or. 1–866–NYQUITS.” See Declaration of Jennifer H. Rearden, dated June 25, 2010, Ex. B. The signs also include the seal of the City of New York and the phrase “NYC Health.” Id.

Based on the foregoing, plaintiffs seek summary judgment invalidating Article 181.19 on the grounds that it (1) is preempted by the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. §§ 1331–1341 (the “Labeling Act”); (2) violates the free speech provisions of the Federal and New York State Constitutions; and (3) exceeds the authority of the Board of Health under the New York State Constitution's separation of powers doctrine. Concluding that Article 181.19 is preempted by the Labeling Act, the Court does not reach the other grounds.

On its face, the Labeling Act, first enacted in 1965 and amended several times since, seeks to balance public and commercial interests by “establish[ing] a comprehensive Federal program to deal with cigarette labeling and advertising,” not only so that “the public may be adequately informed about any adverse health effects of cigarette smoking,” but also so that “commerce and the national economy may be (A) protected to the maximum extent ... and (B) not impeded by diverse, nonuniform, and confusing cigarette labeling and advertising regulations.” 15 U.S.C. § 1331. With regard to the latter goal, the Labeling Act includes a preemption provision, 15 U.S.C. § 1334, that in Subsection (b) provides that “No requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any cigarettes the packages of which are labeled in conformity with the provisions of this chapter.”

The City concedes that Article 181.19 is a “requirement ... based on smoking and health.” It disputes, however, that it imposes requirements “with respect to the advertising or promotion” of cigarettes. It notes that both the Supreme Court and the Second Circuit have cautioned that reading the words “with respect to” too broadly could lead to absurd results, such as preempting state laws designed to curb fraud in the advertising or promotion of cigarettes. See Altria Group, Inc. v. Good, 555 U.S. 70, 129 S.Ct. 538, 172 L.Ed.2d 398 (2008) (holding that state law fraud claims against tobacco manufacturers are not preempted by the Labeling Act); Greater N.Y. Metro. Food Council, Inc. v. Giuliani, 195 F.3d 100, 105–06 (2d Cir.1999) (noting that, “[r]ead literally, these words could be misunderstood to pre-empt every conceivable obligation having a relationship—however evanescent—to the advertising and promotion of cigarettes”).

But this does not mean that the words “with respect to” may be read out of the statute altogether, thereby rendering nugatory the entire preemptive policy of Section 1334 of the Labeling Act. Indeed, whereas the original preemption section of the Labeling Act was quite narrow and only forbade states from requiring the addition of other words to cigarette packaging where the packaging clearly conformed to the federal requirements, the 1969 amendments to the Act, by proscribing generally any state requirements “with respect to” both “advertising” and “promotion” of cigarettes, was plainly intended to vastly broaden the scope of the preemption. Vango Media, Inc. v. City of New York, 34 F.3d 68, 73–75 (2d Cir.1994). Here, plaintiffs contend that Article 181.19, by imposing substantial conditions on the advertising and promotion of cigarettes at the very point of sale, strikes at the heart of that proscription.

Most of the case law on preemption under the Labeling Act relates to cigarette advertising, see, e.g., Lorillard Tobacco v. Reilly, 533 U.S. 525, 121 S.Ct. 2404, 150 L.Ed.2d 532 (2001); Vango Media, supra, and raises interesting issues about the definition of “advertising” as to which the parties here are in sharp disagreement. But the Court need not reach these issues because it concludes that Article 181.19 imposes requirements “with respect to ... the promotion of ... cigarettes” and is therefore preempted.

“Promotion,” when used in the commercial sense, encompasses any act, including “publicity or discounting,” that “further[s] the ... sale of merchandise.” Jones v. Vilsack, 272 F.3d 1030, 1036 (...