R.J. Reynolds Tobacco Co. v. Shewry

• Decision Date: 28 September 2004
• Docket Number: No. 03-16535.,03-16535.
• Citation: 423 F.3d 906
• Parties: R.J. REYNOLDS TOBACCO COMPANY; Lorillard Tobacco Company; R.J. Reynolds Smoke Shop, Inc., Plaintiffs-Appellants, v. Sandra SHEWRY, Director of the California Department of Health Services; Dileep G. Bal, Acting Chief of the Tobacco Control Section of the California Department of Health Services; State of California, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 906

423 F.3d 906

R.J. REYNOLDS TOBACCO COMPANY; Lorillard Tobacco Company; R.J. Reynolds Smoke Shop, Inc., Plaintiffs-Appellants, v. Sandra SHEWRY, Director of the California Department of Health Services; Dileep G. Bal, Acting Chief of the Tobacco Control Section of the California Department of Health Services; State of California, Defendants-Appellees.

No. 03-16535.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 10, 2004.

Filed September 28, 2004.

Amended September 9, 2005.

H. Joseph Escher III, Howard Rice Nemerovski Canady Falk & Rabkin, San Francisco, CA, for plaintiffs-appellants.

R.J. Reynolds Tobacco Company and R.J. Reynolds Smoke Shop, Inc., and Shannon L. Spangler and M. Kevin Underhill, Shook, Hardy & Bacon, San Francisco, CA, for plaintiff-appellant Lorillard Tobacco Company.

Robert M. O'Neil and J. Joshua Wheeler, Charlottesville, VA, for amici curiae Thomas Jefferson Center for the Protection of Free Expression and the Media Institute, in support of the plaintiffs-appellants.

Daniel J. Popeo and Richard A. Samp, Washington, D.C., for amici curiae Washington Legal Foundation, in support of the plaintiffs-appellants.

Karen Leaf, Deputy Attorney General, Sacramento, CA, for the defendants-appellees.

Deborah B. Caplan and Robert S. McWhorter, Olson, Hagel & Fishburn, LLP, Sacramento, CA, for amici curiae American Cancer Society, California Division, Inc., American Heart Association, Western States Affiliates, and American Lung Association of California, in support of the defendants-appellees.

Appeal from the United States District Court for the Eastern District of California; Lawrence K. Karlton, Senior Judge, Presiding. D.C. No. CV-03-00659-LKK.

Before B. FLETCHER, TROTT and FISHER, Circuit Judges.

ORDER

In light of the Supreme Court's decision in Johanns v. Livestock Marketing Ass'n, ___ U.S. ___, 125 S.Ct. 2055, 161 L.Ed.2d 896 (2005), the opinion and dissent filed on September 28, 2004, and appearing at slip op. 14,067, 384 F.3d 1126 (9th Cir.2004), and slip op. 14,096, 384 F.3d 1126, 1142, respectively, are amended as follows:

At slip op. 14,095, line 31, insert the following postscript after "we affirm the judgment of the district court." and before "AFFIRMED.":

POSTSCRIPT

After we filed our opinion, the Supreme Court decided Johanns v. Livestock Marketing Ass'n, ___ U.S. ___, 125 S.Ct. 2055, 161 L.Ed.2d 896 (2005), holding that the Beef Promotion and Research Act of 1985 did not violate the First Amendment by imposing an assessment on all sales and importation of cattle to fund beef promotional campaigns with which many of the assessed parties disagreed. The Court reasoned, as we do here, that the Act was not susceptible to a First Amendment compelled-subsidy challenge because the assessments funded government speech. Although the Johanns opinion affirms our reasoning, Judge Trott remains in dissent. He would now remand to the district court pursuant to the Court's statement in Johanns that an as-applied challenge might lie "if it were established . . . that individual beef advertisements were attributed to respondents." Id. at 2065.

Appellants have never, before us or the district court, claimed that the ads at issue in this litigation could be or were attributed to them; nor does the record reveal a material question of fact on the issue. A reasonable viewer could not believe that these anti-industry ads, expressly identified as "Sponsored by the California Department of Health Services," were created, produced or approved by the appellants. The ad singled out by the dissent as "put[ting][words] directly into the mouth of the tobacco industry," for example, is unmistakable satire. In that ad, children play in a schoolyard while cigarettes fall like rain from the sky and a voiceover states "[w]e have to sell cigarettes to your kids. We need half a million new smokers a year . . . so we advertise near schools, at candy counters." No reasonable viewer could overlook the satirical tenor of this ad and attribute the voiceover text to actual tobacco executives.

We also find inapposite the dissent's analogy to our recent order in Charter v. United States Department of Agriculture, 412 F.3d 1017 (9th Cir.2005). We remanded on the question of attribution in that case because the record indicated that the National Cattlemen's Beef Association "routinely, before Congress, and in other public ways and in press announcements, states that it is the trade organization and marketing organization of America's one million cattle producers." Id. at 1019. The record in this case contains no evidence that the state ever attributed its ads to the appellants or that a reasonable viewer could have done so; accordingly, we reject the analogy to Charter and decline Judge Trott's invitation to remand.

At slip op. 14,108, line 8, insert the following postscript after "is without merit.":

POSTSCRIPT

Shortly after I circulated this dissent, the Supreme Court decided Johanns v. Livestock Marketing Ass'n, 544 U.S. ___, 125 S.Ct. 2055, 161 L.Ed.2d 896 (2005). For the majority of the Court, Justice Scalia wrote:

The compelled-subsidy analysis is altogether unaffected by whether the funds for the promotions are raised by general taxes or through a targeted assessment. Citizens may challenge compelled support of private speech, but have no First Amendment right not to fund government speech. And that is no less true when the funding is achieved through targeted assessments devoted exclusively to the program to which the assessed citizens object. The First Amendment does not confer a right to pay one's taxes into the general fund, because the injury of compelled funding (as opposed to the injury of compelled speech) does not stem from the Government's mode of accounting.

Id. at ___, 125 S.Ct. 2055 (second emphasis added) (citations omitted).

Not surprisingly, California's Attorney General suggests that this ruling "eliminates all possible doubt about the correctness" of the majority's decision. I do not agree.

The Johanns Court suggests, while "express[ing] no view on the point," that if it were to be shown that the challenged speech would "convince a reasonable factfinder" that "all . . . producers[ ] would be tarred with the content of each trademarked ad," an "as applied" First Amendment challenge might lie. Id. at ___, 125 S.Ct. 2055. (emphasis added).

Writing separately, Justice Thomas advanced the same suggestion:

Still, if the advertisements associated their generic pro-beef message with either the individual or organization respondents, then respondents would have a valid as-applied First Amendment challenge. The government may not, consistent with the First Amendment, associate individuals or organizations involuntarily with speech by attributing an unwanted message to them, whether or not those individuals fund the speech, and whether or not the message is under the government's control. This principle follows not only from our cases establishing that the government may not compel individuals to convey messages with which they disagree, . . . but also from our expressive-associate cases, which prohibit the government from coercively associating individuals or groups with unwanted messages.

Id. at ___, 125 S.Ct. 2055. (emphasis added) (citations omitted).

Here, one challenged government television ad — described by my colleagues as "particularly striking" — uses a voice-over technique to speak to the public on behalf of the tobacco industry. The words put directly into the mouths of the tobacco industry disparagingly associate the appellants and the industry with the unwanted message about which they now complain:

We have to sell cigarettes to your kids. We need half a million new smokers a year just to stay in business so we advertise near schools, at candy counters. We lower our prices. We have to. It's nothing personal. You understand.

The "we" is the appellants.

If this language, albeit couched in a literary device, does not "tar all in the industry" required to pay for the ad, and if this language does not "coercively associate" and intentionally smear the appellants — all of them — with an "unwanted message" to which they object, it is hard to know what does. I respectfully disagree with the district court's preemption of this issue as a matter of law. The facts are such as to survive summary judgment and should be submitted — as suggested by the Supreme Court — to a factfinder.

At the very least, we should take our lead from our recent decision in Charter v. United States Department of Agriculture, 412 F.3d 1017, ___ (9th Cir.2005), recognizing the difference between that case and Johanns with respect to a possible attribution/association "as applied" challenge:

In light of the Supreme Court's recognition [in Johanns] (without expressing a view on the issue) that an attribution claim might form the basis for an as-applied First Amendment challenge to the Act, the district court's decision must be vacated and the case remanded for further proceedings to determine, among other things, whether speech was attributed to appellants and, if so, whether such attribution can and does support a claim that the Act is unconstitutional as applied. Id.; see also id. at 2066 n. * (Thomas, J., concurring) (noting that, pursuant to Federal Rule of Civil Procedure 15, "on remand respondents may be able to amend their complaint to assert an attribution claim").

There is a world of difference between what was at issue and at stake in Johanns and what is on our docket here. In Johanns, the question was whether, consistent with the First Amendment, the government could compel beef producers to fund by way of mandatory assessments a generic advertising program promoting the sale of beef. 7 U.S.C. § 2901(b). In our case, however, the purpose of the coerced speech is deliberately destructive of those forced to pay for it — not so in Johanns. Does this difference matter...