Fed'n Adver. Indus. v. City of Chicago, s. 98-3191

• Decision Date: 01 September 1999
• Docket Number: 99-1115,Nos. 98-3191,s. 98-3191
• Parties: (7th Cir. 1999) FEDERATION OF ADVERTISING INDUSTRY REPRESENTATIVES, INC., an Illinois not-for-profit Corporation, Plaintiff-Appellee, v. CITY OF CHICAGO, THE CHICAGO CITY COUNCIL, RICHARD M. DALEY, in his official capacity as Mayor of the City of Chicago, and PAUL WOZNICKI, in his official capacity as Zoning Administrator of the City of Chicago, Defendants-Appellants. & 99-1516
• Court: U.S. Court of Appeals — Seventh Circuit

Page 633

189 F.3d 633 (7th Cir. 1999)

FEDERATION OF ADVERTISING INDUSTRY REPRESENTATIVES, INC., an Illinois not-for-profit Corporation, Plaintiff-Appellee, v. CITY OF CHICAGO, THE CHICAGO CITY COUNCIL, RICHARD M. DALEY, in his official capacity as Mayor of the City of Chicago, and PAUL WOZNICKI, in his official capacity as Zoning Administrator of the City of Chicago, Defendants-Appellants.

Nos. 98-3191, 99-1115 & 99-1516

United States Court of Appeals, Seventh Circuit

Argued June 10, 1999

Decided September 1, 1999

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 97 C 7619--Milton I. Shadur, Judge.

Before HARLINGTON WOOD, JR., RIPPLE and MANION, Circuit Judges.

RIPPLE, Circuit Judge.

The Federation of Advertising Industry Representatives ("the Federation") brought this action seeking declaratory and injunctive relief against a City of Chicago ordinance that restricts public advertisement of cigarette and alcohol products ("the Ordinance"). In its complaint, the Federation submitted that the Ordinance violated the First Amendment, the Contracts Clause and the Due Process Clause of the Constitution of the United States. It also alleged that the Ordinance was preempted by the Federal Cigarette Labeling and Advertising Act ("the FCLAA" or "the Act") and by state law. The district court held that the Ordinance is preempted by the FCLAA. For the reasons stated in this opinion, we affirm in part and reverse in part the judgment of the district court and remand for further proceedings consistent with this opinion.

I BACKGROUND

Chicago adopted an ordinance restricting public advertisement of cigarette products and alcohol. The Ordinance essentially bans all publicly visible advertising of such products, and then carves out certain exceptions. For example, the Ordinance exempts signs located near highways, in certain commercial and manufacturing zoning areas, at certain sports facilities and inside stores licensed to sell alcohol and cigarette products. The Ordinance permits signs on commercial vehicles transporting such products, and signs identifying the premises where such products are sold.¹

The Federation submits that the Ordinance is preempted by sec. 5(b) of the FCLAA:

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.

15 U.S.C. sec. 1334(b).

Congress enacted the initial version of the FCLAA in 1965. That version required conspicuous labels warning of smoking's health risks on every package of cigarettes sold in the United States. The original preemption provision of the Act stated:

No statement relating to smoking and health shall be required in the advertising of any cigarettes the packages of which are labeled in conformity with the provisions of this Act.

15 U.S.C. sec. 1334 (1965). The current version of sec. 5(b) was adopted in 1969. Congress then made substantial revisions to the FCLAA. In addition to amending the preemption provision, the 1969 Amendment strengthened the required warning label and banned cigarette advertising in any electronic medium subject to regulation by the Federal Communications Commission.

The district court held that the plain language of sec. 5(b) of the 1969 Act applied to preempt the Ordinance's cigarette advertising restrictions. See Federation of Adver. Indus. Representatives v. City of Chicago, 12 F. Supp.2d 844, 848 (N.D. Ill. 1998). The court also held that the regulation of alcohol advertising was not severable from the preempted regulation of cigarette advertising.

II DISCUSSION

A.

Our interpretation of sec. 5(b) must begin with the Supreme Court's interpretation of that provision in Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992). In Cipollone, the Court set out a general framework for addressing preemption involving sec. 5(b). Although a majority of the Court did not join all aspects of the lead opinion, a majority of the Court did agree that, in analyzing a preemption issue, we must "'start[ ] with the assumption that the historic police powers of the States [are] not to be superseded by . . . Federal Act unless that [is] the clear and manifest purpose of Congress.' Accordingly, '[t]he purpose of Congress is the ultimate touchstone' of pre-emption analysis." Id. at 516 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947) and Malone v. White Motor Corp., 435 U.S. 497, 504 (1978) (internal quotation marks omitted)). In Cipollone, the Court applied these principles in determining whether various common law claims against cigarette manufacturers had been preempted by the federal Act. Here, we are confronted with a different issue. We must determine whether the language applying preemption to those state laws that regulate "with respect to advertising and promotion" preempts the Ordinance. The holding of the Court in Cipollone does not, of course, resolve this precise issue. The Court's analysis, however, does provide valuable insight.

The 1969 Amendment broadened the scope of the FCLAA's preemption and, in certain cases, the broader language indicates greater preemption under the 1969 Act than under the 1965 Act. See Cipollone, 505 U.S. at 520. Nevertheless, as a unanimous Supreme Court has cautioned in a similar preemption context, see New York State Conference of Blue Cross & Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645, 656 (1995), we must be careful not to adopt an "uncritical literalism" in approaching this difficult issue. Instead, we must follow the instruction of the Supreme Court that "any understanding of a pre- emption statute must rest primarily on 'a fair understanding of congressional purpose.'" Medtronic, Inc. v. Lohr, 518 U.S. 470, 485-86 (1996) (quoting Cipollone, 505 U.S. at 530 n.27) (emphasis in original).² In Travelers Insurance, the Court considered sec. 514 of the Employee Retirement Income Security Act ("ERISA"). A unanimous opinion of the Court stated:

The governing text of ERISA is clearly expansive. Section 514(a) marks for pre-emption "all state laws insofar as they . . . relate to any employee benefit plan" covered by ERISA, and one might be excused for wondering, at first blush, whether the words of limitation ("insofar as they . . . relate") do much limiting. If "relate to" were taken to extend to the furthest stretch of its indeterminacy, then for all practical purposes pre-emption would never run its course, for "[r]eally, universally, relations stop nowhere," H. James, Roderick Hudson xli (New York ed., World's Classics 1980). But that, of course, would be to read Congress's words of limitation as mere sham, and to read the presumption against pre-emption out of the law whenever Congress speaks to the matter with generality. . . . We simply must go beyond the unhelpful text and the frustrating difficulty of defining its key term, and look instead to the objectives of the ERISA statute as a guide to the scope of the state law that Congress understood would survive.

Travelers Ins., 514 U.S. at 655-56.

The limiting language of the FCLAA at issue here ("with respect to advertising and promotion") is similar in its breadth to the language of ERISA sec. 514 ("relate to any employee benefits plan"). See Vango Media, Inc. v. City of New York, 34 F.3d 68, 74 (2d Cir. 1994). Despite the obvious difference in the statutes, the methodology set out in Travelers Insurance is helpful in interpreting the language of the FCLAA at issue here. If the FCLAA language ("with respect to advertising and promotion") were viewed with an "uncritical literalism," the effect would be to "read Congress's words of limitation as mere sham, and to read the presumption against pre-emption out of the law whenever Congress speaks to the matter with generality." Travelers Ins., 514 U.S. at 656.

Following the Supreme Court's mandate in Travelers Insurance and in Medtronic, we must examine the congressional scheme and legislative history of sec. 5(b) in order to determine what Congress meant by this broad language. See id. (interpreting "relate to" under ERISA sec. 514 in accordance with the congressional goal of uniformity under ERISA); Medtronic, 518 U.S. at 484-85. In Cipollone, the Court stated that "the pre-preemptive scope of the 1965 Act and the 1969 Act is governed entirely by the express language in sec. 5 of each Act." 505 U.S. at 517. Notably, however, every opinion in Cipollone nevertheless relied on legislative history, historical context, legislative purpose, or analysis of the statutory provisions as a whole in interpreting the scope of the preemption mandated by the language of sec. 5(b) of the 1969 Act. See id. at 513-15, 519-20, 529 (plurality opinion); id. at 534-35, 539-42 (Blackmun, J., concurring in part and dissenting in part); id. at 553 (Scalia, J., concurring in part and dissenting in part). Indeed, in Medtronic, a majority of the Court took pains to clarify what it meant in Cipollone:

As in Cipollone, we are presented with the task of interpreting a statutory provision that expressly pre-empts state law. While the pre-emptive language of [the statute at issue in Medtronic] means that we need not go beyond that language to determine whether Congress intended the [statute] to pre-empt at least some state law, we must nonetheless "identify the domain expressly pre-empted" by that language. Although our analysis of the scope of the pre-emption statute must begin with its text, our interpretation of that language does not occur in a contextual vacuum. Rather, that interpretation is informed by two presumptions about the nature of pre-emption.

Medtronic, 518 U.S. at 484-85 (quoting Cipollone, 505 U.S. at 517) (citations omitted). The Court went on to discuss those two presumptions. First, it noted that, "because the States are independent sovereigns in our...