Holt's Cigar Co., Inc. v. Philadelphia (Pa. Commw. Ct. 2008)

• Decision Date: 23 June 2008
• Docket Number: No. 588 C.D. 2007.,588 C.D. 2007.
• Citation: 952 A.2d 1199
• Parties: HOLT'S CIGAR COMPANY, INC., Black Cat Cigar Company, Altadis USA, Inc., Swisher International, Inc., John Middleton, Inc., Cigar Association of America, Inc., and Pennsylvania Distributors Association, Inc. v. The CITY OF PHILADELPHIA and Robert D. Solvibile, in His Official Capacity As Acting Commissioner of the Department of Licenses and Inspections of the City of Philadelphia, Appeal of The City of Philadelphia and Robert D. Solvibile.
• Court: Pennsylvania Commonwealth Court

952 A.2d 1199

HOLT'S CIGAR COMPANY, INC., Black Cat Cigar Company, Altadis USA, Inc., Swisher International, Inc., John Middleton, Inc., Cigar Association of America, Inc., and Pennsylvania Distributors Association, Inc. v. The CITY OF PHILADELPHIA and Robert D. Solvibile, in His Official Capacity As Acting Commissioner of the Department of Licenses and Inspections of the City of Philadelphia,

Appeal of The City of Philadelphia and Robert D. Solvibile.

No. 588 C.D. 2007.

Commonwealth Court of Pennsylvania.

Argued October 31, 2007.

Decided June 23, 2008.

Reargument Denied August 15, 2008.

Jane Lovitch Istvan, Philadelphia, for appellants.

Mark A. Aronchick and John S. Stapleton, Philadelphia, for appellees.

BEFORE: LEADBETTER, President Judge, COLINS, Judge^*, McGINLEY, Judge, SMITH-RIBNER, Judge, FRIEDMAN, Judge, COHN JUBELIRER, Judge, and LEAVITT, Judge.

OPINION BY Judge LEAVITT.¹

The City of Philadelphia and Robert D. Solvibile, Acting Commissioner of the City's Department of Licenses and Inspections (collectively, the City), appeal an order of the Court of Common Pleas of Philadelphia County (trial court) invalidating a City ordinance that prohibits the sale of certain tobacco products that can be used as drug paraphernalia to ingest marijuana and other illegal drugs. The trial court found that the City's ordinance was preempted by the drug paraphernalia provisions of The Controlled Substance, Drug, Device and Cosmetic Act (Controlled Substance Act).² Accordingly, the trial court granted summary judgment to Holt's Cigar Company, Inc., Black Cat Cigar Company, Altadis USA, Inc., Swisher International, Inc., John Middleton, Inc., Cigar Association of America, Inc. and Pennsylvania Distributors Association, Inc. (collectively, Holt's Cigar). Concluding that the trial court erred in holding all provisions of the City's ordinance to be preempted, we affirm in part and reverse in part.

On January 23, 2007, Philadelphia City Council amended the Philadelphia Code with the enactment of Ordinance No. 060345-AAA (Ordinance). The Ordinance was passed in response to the practice of drug users to replace the tobacco in cigarettes and cigars with marijuana and other illegal drugs. The Ordinance consists of two provisions. The first provision, entitled "Cigarettes and Tobacco Products," makes it unlawful for a retail business to sell a tobacco product in a way that makes it likely the product will be used to inhale controlled substances,³ as, for example, the sale of a single cigarette. The second provision, entitled "Drug Paraphernalia, Blunt Cigars and Similar Items," prohibits retail businesses from selling certain tobacco drug paraphernalia,⁴ such as "blunts." A violation of either provision of the Ordinance is punishable by a civil penalty of $1,900, for each violation committed during calendar year 2008, and by a civil penalty of $2,000 for each violation committed thereafter. In addition, a retail business may also be sanctioned by a revocation of its business privilege license.⁵

On January 30, 2007, Holt's Cigar filed a complaint seeking declaratory and injunctive relief. Holt's Cigar asserted that because the Ordinance effected a per se ban on the sale of certain products, it was preempted by the Controlled Substance Act, which requires a finding of intent to use an item to ingest illegal drugs before that item can be found to be drug paraphernalia.⁶ Holt's Cigar challenged the entire Ordinance as preempted by the Controlled Substance Act.⁷

On March 9, 2007, the trial court held that the Ordinance was preempted and unenforceable.⁸ The trial court lauded the goal of the Ordinance but concluded that it could not be upheld because it

converts a specific intent offense into a strict liability one, subjecting legitimate businesses selling legal dual-use products to the arbitrary enforcement of the City of Philadelphia Department of Licenses and Inspections.

Trial Court Opinion, dated March 9, 2007, at 9. The trial court concluded that strict liability was inconsistent with the scienter requirement of the Controlled Substance Act and, thus, preempted. The present appeal followed.⁹

Before this Court, the City argues that the trial court erred. It asserts that the Ordinance was the result of an appropriate exercise of the City's police power that is not prohibited by the Controlled Substance Act. The City also argues that, even assuming that a showing of scienter is required, part of the Ordinance does contain a scienter requirement and, therefore, should not have been invalidated.

We begin with a review of the standards for determining whether a local ordinance is preempted by a state statute. This Court applies the following five-part test to determine whether an ordinance has been preempted:

(1) Does the ordinance conflict with the state law, either because of conflicting policies or operational effect, that is, does the ordinance forbid what the legislature has permitted?

(2) Was the state law intended expressly or impliedly to be exclusive in the field?

(3) Does the subject matter reflect a need for uniformity?

(4) Is the state scheme so pervasive or comprehensive that it precludes co-existence of municipal regulation?

(5) Does the ordinance stand as an obstacle to the accomplishment and execution of the full purposes and objectives of the legislature?

Liverpool Township v. Stephens, 900 A.2d 1030, 1033 (Pa.Cmwlth.2006). If the answer to one of these questions is in the affirmative, then the local ordinance will be found preempted by the state statute. Id. As reflected in this five-part test, state preemption takes on three forms, which are commonly known as "express preemption," "field preemption," and "conflict preemption." See Nutter v. Dougherty, 595 Pa. 340, 938 A.2d 401, 404 (2007).

The preemption analysis with respect to a home rule municipality, such as the City of Philadelphia, is somewhat modified. In Nutter, our Supreme Court explained that a home rule municipality's exercise of authority should not be lightly intruded upon. Id. at ___, 938 A.2d at 414. Accordingly, ambiguities about the scope of the municipality's authority should be resolved in the municipality's favor. Id. at ___, 938 A.2d at 411. However, the Pennsylvania Supreme Court also observed that a home rule municipality's authority can be limited by its own home rule charter, by the Pennsylvania Constitution, and by the General Assembly.¹⁰ Id. Stated otherwise, home rule municipalities do not enjoy a general power to legislate in a way that contradicts a state statute.

In this case, the City argues that the Ordinance does not conflict with the Controlled Substance Act but, rather, is consistent with Section 41.1 of the Controlled Substance Act, which expressly authorizes local regulation. It states, in relevant part, as follows:

Nothing in this act relating to drug paraphernalia shall be deemed to supersede or invalidate any consistent local ordinance, including zoning and nuisance ordinances, relating to the possession, sale or use of drug paraphernalia.

35 P.S. § 780-141.1 (emphasis added). The City argues that the Ordinance simply expands the protections of the Controlled Substance Act without conflicting with it, and this expansion is permissible.¹¹ In short, the City believes that the Ordinance is not preempted under the Liverpool Township criteria.

We consider, first, the provisions of the Controlled Substance Act that were found by the trial court to supersede the Ordinance. Section 13(a)(33) prohibits the knowing manufacture or delivery of drug paraphernalia items; it states as follows:

(a) The following acts and the causing thereof within the Commonwealth are hereby prohibited:

* * *

(33) The delivery of, possession with intent to deliver, or manufacture with intent to deliver, drug paraphernalia, knowing, or under circumstances where one reasonably should know, that it would be used to plant, propagate, cultivate, grow, harvest, manufacture, compound, convert, produce, process, prepare, test, analyze, pack, repack, store, contain, conceal, inject, ingest, inhale or otherwise introduce into the human body a controlled substance in violation of this act.

35 P.S. § 780-113(a)(33) (emphasis added). The Act generally defines "drug paraphernalia," to mean "products and materials ... which are used ... [in] manufacturing, ... ingesting, inhaling or otherwise introducing into the human body a controlled substance in violation of this act." Section 2 of the Controlled Substance Act, 35 P.S. § 780-102. Contained in the Section 2 definition of "drug paraphernalia" is a long list of items ranging from scales and balances to cocaine spoons, roach clips and bongs that constitute drug paraphernalia because they are intended for use in ingesting drugs.¹²

Because the list of items that can be used to manufacture or ingest illegal drugs is as long as the reach of human imagination, the list of drug paraphernalia items in Section 2 is not intended to be complete. Any item can be determined to be "drug paraphernalia," and Section 2 explains how this determination should be made. It states:

In determining whether an object is drug paraphernalia, a court or other authority should consider, in addition to all other logically relevant factors, [1] statements by an owner or by anyone in control of the object concerning its use, [2] prior convictions, if any, of an owner, or of anyone in control of the object, under any State or Federal law relating to any controlled substance, [3] the proximity of the object, in time and space, to a direct violation of this act, [4] the proximity of the object to controlled substances, [5] the existence of any residue of controlled substances on the object, [6] direct or circumstantial evidence of the intent of an owner, or of anyone in control of the object, to deliver it to persons who he knows, or should reasonably know, intend to use the object to facilitate a violation of this act, [7...