Jones v. Vilsack

Citation272 F.3d 1030
Decision Date01 November 2001
Docket NumberNo. 01-2312,01-2312
Parties(8th Cir. 2001) TERRY K. JONES, DOING BUSINESS AS FILLING STATION, INC.; WILLIAM H. MILLER, DOING BUSINESS AS BILLS WORLD, INC.; BRADLY ALAN JOSLIN, INC.; BECKS OIL COMPANY, OF ILLINOIS, APPELLEES, v. THOMAS J. VILSACK, IN HIS OFFICIAL CAPACITY AS GOVERNOR OF THE STATE OF IOWA; STEPHEN C. GLEASON, IN HIS OFFICIAL CAPACITY AS DIRECTOR OF THE IOWA DEPARTMENT OF PUBLIC HEALTH, APPELLANTS. Submitted:
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Appeal from the United States District Court for the Southern District of Iowa

[Copyrighted Material Omitted]

Before Bye, Beam, and Riley, Circuit Judges.

Bye, Circuit Judge.

Iowa's Tobacco Use Prevention and Control Act (Control Act) prohibits retailers from giving away tobacco products and from providing free goods and other concessions in exchange for the purchase of tobacco products. Iowa Code § 142A.6(6). Several retailers who sell tobacco products in Iowa filed this action contending that § 142A.6(6) is preempted by the Federal Cigarette Labeling and Advertising Act (FCLAA), which bars states from regulating the "advertising or promotion of any cigarettes." 15 U.S.C. § 1334(b). The district court accepted the retailers' arguments and held the pertinent provisions of the Control Act preempted. We affirm in part, reverse in part, and remand for further proceedings.

I.

The Governor of Iowa, Thomas Vilsack, signed the Control Act into law on May 15, 2000. The Control Act establishes "a comprehensive partnership among the general assembly, the executive branch, communities, and the people of Iowa in addressing the prevalence of tobacco use in the state." Iowa Code § 142A.1(1). The Control Act seeks to reduce tobacco use "by engaging all who are affected by the use of tobacco in the state, including smokers and nonsmokers, youth, and adults." Id. § 142A.1(3). Although the Control Act affects all citizens, portions of the Control Act "will specifically address reduction of tobacco use by youth and pregnant women, promotion of compliance by minors and retailers with tobacco sales laws and ordinances, and enhancement of the capacity of youth to make healthy choices." Id. § 142A.1(2).

The Control Act establishes an "initiative" to reduce the use of tobacco products by youth and pregnant women and to increase compliance by minors and retailers with tobacco sales laws and ordinances. Id. § 142A.6(1)-(2). The initiative will sponsor media, marketing, and communications programs. Id. § 142A.7(1). The Control Act also creates a "commission" to implement and monitor the initiative. Id. §§ 142A.3-142A.5. The commission will conduct surveys and studies, and will measure the progress of the initiative by collecting a variety of data from local, state, and federal monitors. Id. § 142A.7(1)(d).

Quite apart from developing a new tobacco prevention bureaucracy, the Control Act flatly prohibits the following retail sales practices designed to place tobacco products in the hands of consumers:

a. A manufacturer, distributor, wholesaler, retailer, or distributing agent or agent thereof shall not give away cigarettes or tobacco products.

b. A manufacturer, distributor, wholesaler, retailer, or distributing agent or agent thereof shall not provide free articles, products, commodities, gifts, or concessions in any exchange for the purchase of cigarettes or tobacco products.

Iowa Code § 142A.6(6)(a)-(b).

According to the retailers, these provisions of the Control Act hamper their businesses. The retailers contend that these provisions preclude them from participating in national sales promotions orchestrated by tobacco manufacturers that often involve redeeming cents-off coupons and proofs of purchase, distributing related merchandise with tobacco products (such as a free lighter with a pack of cigarettes), and offering two-for-one sales. The give-aways and concessions foreclosed by the Control Act attract customers and generate significant sales revenue for retailers. The retailers believe that such concessions are essential to their economic viability because federal and state regulations have severely curtailed advertising and other avenues of communicating with consumers. The Control Act particularly affects retailers situated near Iowa's borders, some of whom are plaintiffs in the present action. Border stores face stiff competition from nearby out-of-state retailers unaffected by § 142A.6(6) of the Control Act.

Shortly after the Control Act took effect, several retailers filed a complaint against Governor Vilsack and Stephen Gleason, the Director of the Iowa Department of Public Health (together, "the State") in federal district court. The retailers contended that § 142A.6(6) of the Control Act is preempted by the FCLAA, 15 U.S.C. § 1334(b), that it violates their First Amendment commercial speech rights, and that it interferes with their liberty and property rights safeguarded by the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The parties generally agreed on the pertinent facts and presented the case to the district court on cross-motions for summary judgment. The district court determined that § 142A.6(6) of the Control Act was preempted by the FCLAA and granted the retailers' motion. The State now appeals the district court's preemption decision, a ruling we review de novo. See Bock v. St. Louis S.W. Ry. Co., 181 F.3d 920, 922 (8th Cir. 1999).

II.

Background preemption principles are familiar to all. The Supremacy Clause provides that federal law "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. Thus state law that conflicts with federal law has no effect. Maryland v. Louisiana, 451 U.S. 725, 746 (1981).

To determine whether federal law preempts state law, we must discern Congress's intentions, which the Supreme Court has described as the "ultimate touchstone" of preemption analysis. Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992) (quotation omitted). We do not lightly deem state law to be superseded by federal law due to our solicitude for the states' exercise of their traditional police powers. See id. Yet we may not shrink from recognizing that federal law supplants state law when Congress clearly manifests that intention.

The clearest indication that federal law supplants state law is a statutory preemption provision. When Congress expressly codifies its preemptive intent in statutory form, our analysis "begins with the language of the statute." Lorillard Tobacco Co. v. Reilly, 121 S. Ct. 2404, 2415 (2001). The federal law we consider in this case, the FCLAA, contains such a preemption provision, 15 U.S.C. § 1334(b). Because "the pre-emptive scope of the [FCLAA] is governed entirely by the express language in § [1334(b)]," Cipollone, 505 U.S. at 517, we devote our attention to its precise terms.

A.

In its initial form, the FCLAA preempted regulation of cigarette advertising only: "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." Pub. L. No. 89-92, § 5(b), 79 Stat. 282, 283 (1965). Congress revised the FCLAA in 1969 when new scientific evidence disclosed previously unforeseen risks associated with tobacco use. The Public Health Cigarette Smoking Act, Pub. L. No. 91-222, 84 Stat. 87, amended several aspects of the FCLAA, including its preemption provision. While the 1965 Act had preempted the regulation of advertising, the 1969 amendment preempted both advertising and promotion:

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. § 1334(b).

"Without question, 'the plain language of the pre-emption provision in the 1969 Act is much broader.'" Lorillard, 121 S. Ct. at 2416-17 (quoting Cipollone, 505 U.S. at 520 (plurality opinion)). We address the language of the 1969 Act in this case because Congress has not amended § 1334(b) in the intervening years.

The literal terms of § 1334(b) delineate five requirements for federal preemption of state regulatory efforts. The provision preempts (1) state regulations (2) based on smoking and health (3) concerning the advertising or promotion (4) of cigarettes (5) whose labels comply with the FCLAA.

Four of the five requirements are readily established in the present case. Iowa's Control Act is unquestionably a state regulation. The State has also conceded that its prohibition on give-aways and concessions stems from a concern for the public health. Compare Amended Complaint ¶ 33 ("The new tobacco control law... is clearly a public health measure."), with Answer ¶ 33 ("Defendants admit the allegations of paragraph 33."). The Control Act explicitly regulates tobacco products, which the Act defines to include cigarettes. Id. § 142A.2(12). Finally, the State agrees that cigarette packages sold by the retailers comport with the FCLAA's intricate labeling scheme, 15 U.S.C. § 1333.

The dispute in this case centers upon the third element, whether § 142A.6(6) of the Control Act concerns "advertising or promotion." By all accounts, the Control Act does not disturb retailers' opportunities to advertise cigarettes for sale; and neither the State nor the retailers have opined that § 142A.6(6) might be preempted as an impermissible regulation of "advertising." Thus the parties' dispute may be further winnowed to the following question: do the activities prohibited in § 142A.6(6) constitute the promotion of cigarettes? The FCLAA does not define the term "promotion," so both the State and the retailers have proposed their own preferred definitions.

The State contends that we must...

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