Nat'l Ass'n of Tobacco Outlets, Inc. v. City of Providence

• Citation: 731 F.3d 71
• Decision Date: 30 September 2013
• Docket Number: No. 13–1053.,13–1053.
• Parties: NATIONAL ASSOCIATION OF TOBACCO OUTLETS, INC.; Cigar Association of America, Inc.; Lorillard Tobacco Company; R.J. Reynolds Tobacco Company; American Snuff Company; Philip Morris USA Inc.; U.S. Smokeless Tobacco Manufacturing Company LLC; U.S. Smokeless Tobacco Brands Inc.; and John Middleton Company, Plaintiffs–Appellants, v. CITY OF PROVIDENCE, RHODE ISLAND; Providence Board of Licenses; Providence Police Department; Michael A. Solomon, Providence City Council President, in his official capacity; Steven M. Paré, Commissioner of Public Safety for the City of Providence, in his official capacity; and Angel Taveras, Mayor of Providence, in his official capacity, Defendants–Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

731 F.3d 71

NATIONAL ASSOCIATION OF TOBACCO OUTLETS, INC.; Cigar Association of America, Inc.; Lorillard Tobacco Company; R.J. Reynolds Tobacco Company; American Snuff Company; Philip Morris USA Inc.; U.S. Smokeless Tobacco Manufacturing Company LLC; U.S. Smokeless Tobacco Brands Inc.; and John Middleton Company, Plaintiffs–Appellants,

v.CITY OF PROVIDENCE, RHODE ISLAND; Providence Board of Licenses; Providence Police Department; Michael A. Solomon, Providence City Council President, in his official capacity; Steven M. Paré, Commissioner of Public Safety for the City of Providence, in his official capacity; and Angel Taveras, Mayor of Providence, in his official capacity, Defendants–Appellees.

No. 13–1053.

United States Court of Appeals, First Circuit.

Sept. 30, 2013.

Michael J. Edney, with whom Miguel A. Estrada, Gibson Dunn & Crutcher LLP, Noel J. Francisco, Jones Day, Joel Kurtzberg, Floyd Abrams, Cahill Gordon & Reindel LLP, Kenneth J. Parsigian, Latham & Watkins LLP, James R. Oswald, Kyle Zambarano, Adler, Pollock & Sheehan P.C., Gerald J. Petros, Adam M. Ramos, and Hinckley, Allen & Snyder LLP, were on brief, for the appellants.

Anthony F. Cottone, with whom Jeffrey M. Padwa and Matthew T. Jerzyk were on brief, for appellees.

Donald A. Migliori, with whom Vincent I. Parrett and Motley Rice LLC were on brief, for amici curiae American Academy of Pediatrics–RI Chapters, et al.

Raymond A. Marcaccio, with whom Oliverio & Marcaccio, LLP, Seth Mermin, Thomas C. Bennigson, and Public Good Law Center were on brief, for amicus curiae Tobacco Control Legal Consortium.

Jacqueline G. Kelly, Administrator of Legal Services, Rhode Island Executive Office of Health and Human Services, with whom Thomas J. Corrigan, Jr., Senior Legal Counsel, Rhode Island Executive Office of Health and Human Services, was on brief, for amicus curiae Rhode Island Department of Health.

Before TORRUELLA, DYK^* and THOMPSON, Circuit Judges.

DYK, Circuit Judge.

This case involves two ordinances enacted by the City of Providence, Rhode Island, (the “City”) to reduce the incidence of tobacco use by young people. The ordinances (1) restrict the City's tobacco and cigarette retailers from reducing prices on tobacco products by means of coupons and certain multi-pack discounts (the “Price Ordinance”); and (2) restrict sales of certain flavored tobacco products other than cigarettes (the “Flavor Ordinance”). The National Association of Tobacco Outlets, et al. (collectively “National Association”), contends that the Price Ordinance violates the First Amendment and that both ordinances are preempted by federal and state law. The district court held that the ordinances were neither preempted nor otherwise invalid. We affirm.

I.

On January 5, 2012, the City of Providence adopted two ordinances concerning the sale of tobacco products. The Price Ordinance prohibits licensed retailers from “accept[ing] or redeem[ing], [or] offer[ing] to accept or redeem ... any coupon that provides any tobacco products without charge or for less than the listed or non-discounted price,” and from “sell[ing] tobacco products to consumers through any multi-pack discounts (e.g., ‘buy-two-get-one-free’ [offers] ).” Providence, R.I., Code of Ordinances § 14–303.¹ The Flavor Ordinance prohibits most retailers from selling flavored tobacco products (other than cigarettes), such as flavored “cigars, pipe tobacco, snuff, chewing tobacco, dipping tobacco,” and other flavored tobacco products. Id. § 14–309. It provides that “[i]t shall be unlawful for any person to sell or offer for sale any flavored tobacco product to a consumer, except in a smoking bar.” Id.²

The history of the Providence City Council's (the “Council's”) consideration of these ordinances demonstrates that they were designed to reduce youth tobacco use. The Councilperson who sponsored the ordinances urged that they would reduce the “unacceptably high rate of youth smoking in the City.” J.A. 492. The Council President stated that the ordinances reflected a “pro-active approach to try to protect our youth from the dangers of nicotine.” J.A. 525.

The council heard testimony that, despite prior efforts to curb teen smoking, 20% of high school students and 10% of middle school students in Providence had tried tobacco. During compliance checks conducted immediately before the ordinances were passed, roughly one in five Providence retailers sold cigarettes to minors (in violation of state and local laws), and 85% of Providence retailers were selling flavored tobacco products other than cigarettes. Over 90% of new smokers begin prior to the age of eighteen. The testimony and data submitted to the City Council showed that (1) youth are particularly sensitive to tobacco price increases; and (2) such youth are vulnerable to non-cigarette flavored tobacco products.³ The Council concluded that the ordinances would be effective measures to combat youth tobacco use.

On February 13, 2012, shortly after the Council passed the ordinances, National Association filed suit in district court alleging that the ordinances violated both federal and state law. Its complaint alleged, inter alia, that both ordinances violated the First Amendment because they were impermissible regulations of commercial speech; that the Price Ordinance was preempted by the Federal Cigarette Advertising and Labeling Act (the “Labeling Act”), 15 U.S.C. § 1334(b); that the Flavor Ordinance was preempted by the Family Smoking Prevention and Tobacco Control Act (“FSPTCA”), 21 U.S.C. § 387p(a)(2)(A); and that, under state law, the ordinances were also preempted and violated the licensing provisions of the Rhode Island Constitution. Both parties filed motions for summary judgment.

Along with its motion, the City submitted various affidavits, including a declaration from an economics expert concluding that “[e]xtensive economic research demonstrates that increases in cigarette and other tobacco product prices are highly effective in reducing cigarette smoking and the use of other tobacco products, particularly among young people,” J.A. 530, and another from a public health expert concluding that “the prohibition on the redemption of coupons and multi-pack discountsas contained in the Providence [Price Ordinance] ... would most likely have a real and measurable effect on smoking behavior,” particularly in decreasing smoking among young people. J.A. 663. The city also submitted a 2012 report of the Surgeon General confirming that “extensive use of price-reducing promotions has led to higher rates of tobacco use among young people than would have occurred in the absence of these promotions.” ⁴ As to the Flavor Ordinance, another declaration from a different public health expert concluded that the “[Flavor Ordinance] would substantially reduce the sale of flavored tobacco products to underage consumers and would reduce the attractiveness of these products to underage consumers.” J.A. 632.

On December 10, 2012, in a thorough and well-reasoned opinion, the district court denied National Association's motion and granted the City's motion, upholding the ordinances in all relevant respects.⁵See Nat'l Ass'n of Tobacco Outlets, Inc. v. City of Providence, No. 12–96–ML, 2012 WL 6128707 (D.R.I. Dec. 10, 2012). National Association appealed.

II.

A.

We first consider National Association's challenge to the validity of the Price Ordinance under the First Amendment. National Association argues that the ordinance violates the First Amendment because it bans protected commercial speech (or, at minimum, expressive conduct) and does not survive scrutiny under either Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980), or United States v. O'Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968). The City argues that the Price Ordinance merely regulates pricing and not speech and that such price regulation falls outside the ambit of the First Amendment.

The district court agreed with the City, concluding that National Association “fail[ed] ... to establish that the practice of reducing the price of cigarettes and tobacco products through coupons and multi-pack discounts is subject to constitutional protection.” Nat'l Ass'n, 2012 WL 6128707, at *5 (citing Wine & Spirits Retailers, Inc. v. Rhode Island, 418 F.3d 36, 49 (1st Cir.2005)). It concluded that Central Hudson is inapplicable because “Section 13–303 is a means to control the price of cigarettes and tobacco products in Providence ... without implicating ‘commercial speech,’ ” and that O'Brien is inapplicable because the regulated conduct is not “inherently expressive.” Id. We agree that the Price Ordinance does not violate the First Amendment.

Pricing information concerning lawful transactions has been held to be protected speech by the Supreme Court. See Va. State Pharmacy Bd. v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 761–64, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). But the ordinance here does not restrict the dissemination of pricing information generally. Nothing in the Price Ordinance restricts retailers or anyone else from communicating pricing information concerning the lawful sale price of cigarettes. Rather, the ordinance has more limited objectives. It (1) restricts the ability of retailers to engage in certain pricing practices, namely accepting or redeeming coupons for tobacco purchases, and selling tobacco products by way of multi-pack discounting, and (2) bars retailers from offering to engage in these prohibited pricing practices. SeeProvidence, R.I., Code of Ordinances § 14–303. Neither type of regulation is barred by the First Amendment.

In 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 116 S.Ct. 1495, 134 L.Ed.2d 711 (1996), a majority of the Justices, in striking down the categorical ban on liquor price advertising there, made clear that price regulations and other forms of direct economic regulation do not implicate First...