People ex rel. Lockyer v. R.J. Reynolds

• Decision Date: 22 December 2005
• Docket Number: No. S121009.,S121009.
• Citation: 36 Cal.Rptr.3d 814,37 Cal.4th 707,124 P.3d 408
• Court: California Supreme Court
• Parties: The PEOPLE ex rel. Bill LOCKYER, as Attorney General, etc., Plaintiff and Respondent, v. R.J. REYNOLDS TOBACCO COMPANY, Defendant and Appellant.

36 Cal.Rptr.3d 814

37 Cal.4th 707

124 P.3d 408

The PEOPLE ex rel. Bill LOCKYER, as Attorney General, etc., Plaintiff and Respondent, v. R.J. REYNOLDS TOBACCO COMPANY, Defendant and Appellant.

No. S121009.

Supreme Court of California.

December 22, 2005.

Howard Rice Nemerovski Canady Falk & Rabin, Marc Haber, Chandra Miller Fienen, San Francisco; Dechert LLP and H. Joseph Escher III, San Francisco, for Defendant and Appellant.

Fred J. Hiestand, Sacramento, for The Civil Justice Association of California as Amicus Curiae on behalf of Defendant and Appellant.

Mayer, Brown, Rowe & Maw, Kenneth S. Geller and Donald M. Falk, Palo Alto, for The Product Liability Advisory Council as Amicus Curiae on behalf of Defendant and Appellant.

Bill Lockyer, Attorney General, Manuel M. Medeiros, State Solicitor General, Richard M. Frank and Tom Greene, Chief Assistant Attorneys General, Dennis Eckhart, Assistant Attorney General, Peter M. Williams and Michelle Fogliani, Deputy Attorneys General, for Plaintiff and Respondent.

David C. Vladek; Law Offices of Marvin E. Krakow, Marvin E. Krakow, Los Angeles; Alan B. Morrison; Donald W. Garner; Speir & Whitney and Richard J. Whitney, for Public Citizen, Inc., as Amicus Curiae on behalf of Plaintiff and Respondent.

John Cary Sims; David C. Vladeck, Richard McKewen; and Brian Wolfman, for Public Citizen, Inc., and National Center for Tobacco-Free Kids as Amici Curiae on behalf of Plaintiff and Respondent.

Catherine I. Hanson, San Francisco, and Hans P. Lee, for California Medical Association, American Academy of Pediatrics, American Cancer Society, American Heart Association, American Lung Association and American Medical Association as Amici Curiae on behalf of Plaintiff and Respondent.

Colantuono & Levin, Michael G. Colantuono, Los Angeles, and Hannah Bentley, for League of California Cities, California State Association of Counties and Tobacco Control Legal Consortium as Amici Curiae on behalf of Plaintiff and Respondent.

Prior report: Cal.App., 6 Cal.Rptr.3d 58.

KENNARD, J.

Declaring smoking to be "the single most important source of preventable disease and premature death in California," the Legislature in 1991 enacted a statute prohibiting cigarette companies from distributing cigarettes as free samples, as they might fall into the hands of children and lead them to become addicted to tobacco, and encouraging "all persons to quit tobacco use." (Stats.1991, ch. 829, § 1, p. 3676, enacting former Health & Saf.Code, § 25967, subd. (a)(11), repealed by Stats.1995, ch. 415, § 163, p. 3335 and reenacted in 1995 as Health & Saf.Code, § 118950, subd. (a)(11).)¹ This statute prohibits the "nonsale distribution" of cigarettes on public property² (id., subd. (b)), except for public property leased for a private function to which minors are "denied access" (id., subd. (f)). "Each distribution of a single package ... to an individual member of the general public" constitutes a violation and is punished by a civil penalty of not less than $200 for one act, $500 for two acts, and $1000 for each succeeding act. (Id., subd. (d).)

The trial court found that defendant tobacco company had violated section 118950 at six events in 1999 and assessed it a fine of $14,826,200. The Court of Appeal affirmed, and we granted defendant's petition for review.

This appeal presents three issues. The first is whether defendant's distribution of free cigarettes at a street fair and other events did not violate section 118950 because it occurred on property leased for a private function to which minors were denied access. The second is whether section 118950 is preempted by a federal statute that bars states from regulating the "advertising or promotion" of cigarettes. (15 U.S.C. § 1334(b).) The third is whether the $14,826,200 fine assessed against defendant violates state or federal constitutional provisions barring excessive fines. (U.S. Const., 8th Amend.; Cal. Const., art. I, § 17.) Each issue is a close and difficult one.

I. FACTUAL AND PROCEDURAL BACKGROUND

The following facts are undisputed. At six different events held on public property between February and October of 1999, defendant tobacco company gave away cartons and packages containing a total of 108,155 cigarettes to 14,834 people. One event was the Sunset Junction Street Fair in Los Angeles; the others were a motorcycle race at the Del Mar Fairgrounds, an auto race at the Los Angeles County Fairgrounds, a car show at Verdugo Park in Los Angeles, the San Jose International Beer Festival, and the Long Beach Jazz Festival. On each occasion, defendant contracted with the event promoter to set up a booth or a tent. Defendant posted security guards to bar minors from entering the booth or the tent. Inside, defendant distributed cigarettes only to people who could prove that they were current smokers (recipients had to show that they already had a pack of cigarettes) and who presented identification showing that they were at least 21 years old. Defendant asked recipients to fill out a survey card on which the recipient agreed to be added to defendant's mailing list and to receive promotional offers.

The state Attorney General sued defendant in 2001, charging it with violating section 118950 at the six 1999 events. The parties stipulated to the pertinent facts relating to defendant's practices at the six 1999 events, and filed cross-motions for summary judgment. The trial court found that federal law did not preempt section 118950 and that defendant violated that statute by distributing cigarettes on public property. It entered a judgment fining defendant $14,826,200.³ The Court of Appeal affirmed the judgment in a two-to-one decision. We granted defendant's petition for review.

II. THE "SAFE HARBOR" PROVISION OF HEALTH AND SAFETY CODE SECTION 118950, SUBDIVISION (f)

Section 118950, subdivision (b), provides: "It is unlawful for any person, agent, or employee of a person in the business of selling or distributing smokeless tobacco or cigarettes from engaging in the nonsale distribution of any smokeless tobacco or cigarettes to any person in any public building, park or playground, or on any public sidewalk, street, or other public grounds...." (Italics added.) A "`[p]ublic building, park, playground, sidewalk, street, or other public grounds'" is defined as "any structure or outdoor area that is owned, operated, or maintained by any public entity, including," among other things, "streets and sidewalks, parade grounds, fair grounds, ... [and] public recreational facilities." (Id., subd. (c)(3).)

Section 118950, subdivision (f), the so-called safe harbor provision, operates as an exception to the prohibition of section 118950, subdivision (b). Subdivision (f) states that the prohibition on nonsale distribution of tobacco products does not apply to any public property "leased for private functions where minors are denied access by a peace officer or licensed security guard on the premises."

The Attorney General first contends that notwithstanding defendant's posting of security guards to exclude minors and nonsmokers from its tents and booths, the safe harbor provision does not protect defendant's conduct because defendant did not "lease" the sites where it distributed cigarettes; instead, according to the Attorney General, defendant's occupancy right to those sites is more properly described as a license or permit. Defendant, however, points out that the law relating to leases of public property, the General Leasing Law (Pub. Resources Code, § 6500 et seq.), states: "As used in this chapter [Public Resources Code, division 6, part 2, chapter 1], `lease' includes a permit, easement, or license." (Id., § 6501.) Because Health and Safety Code section 118950, the statute at issue here, is not part of the chapter containing the General Leasing Law, it is not governed by the definitions set forth in the General Leasing Law. We agree with defendant, however, that it is unlikely that the Legislature intended that a cigarette company's right to distribute free cigarettes would depend on the technical character of the cigarette distributor's occupancy — whether it falls into the category of a lease, a license, or a permit — because that has no bearing on the harm caused by the free distribution of cigarettes, an express concern of the Legislature.

The Attorney General's primary contention, however, is that defendant did not exclude minors from the property within which cigarettes were distributed. As we noted earlier, the safe harbor provision (§ 118950, subd. (f)) allows distribution within any public property "leased for private functions where minors are denied access...." Adopting the Court of Appeal's construction of that statutory language, the Attorney General argues that in the context of this case the safe harbor provision would apply only if minors were excluded from the event within which defendant was distributing free cigarettes, not merely from defendant's booth or tent where cigarettes were distributed. Defendant disagrees, contending that the statutory phrase pertaining to public property "leased for private functions" (ibid.) refers only to the specific site it leased and from which it distributed cigarettes.

When, as here, the statutory language "`"is susceptible of more than one reasonable interpretation ..., we look to a variety of extrinsic aids, including the ostensible objects to be achieved, the evils to be remedied, the legislative history, public policy, contemporaneous administrative construction, and the statutory scheme of which the statute is a part."'" (People v. Jefferson (1999) 21 Cal.4th 86, 94, 86 Cal.Rptr.2d 893, 980 P.2d 441, quoting Granberry v. Islay Investments (1995) 9 Cal.4th 738, 744, 38 Cal.Rptr.2d 650, 889 P.2d 970.)

Both parties argue that the legislative history of section 118950 supports their position. The Attorney General notes that in 1991, State Senator Doris Allen suggested to State...