National Association of Tobacco Outlets v. City of New York
Tobacco companies and retailers sued New York City challenging an ordinance that prohibits the sale of tobacco below the stated price, such as through coupons or two-for-one offers. The court upheld the ordinance, ruling that it does not violate the tobacco companies’ or retailers’ free speech rights under the First Amendment and that it is not preempted by state or federal law. The court found that ordinance does not violate the First Amendment because it regulates an economic transaction – the sale of tobacco products below the listed price – not speech. Additionally, the ordinance is not preempted by the Federal Cigarette Labeling and Advertising Act because it is a lawful restriction on the manner in which tobacco manufacturers and retailers advertise and promote their products and it does not regulate the content of cigarette advertising related to health warnings. Finally, the New York City ordinance is not preempted by state law because the state law relates only to the distribution of free tobacco products, not partially discounted tobacco products.
Nat'l Ass'n of Tobacco Outlets, Inc. v. City of N.Y., 14 Civ. 00577 (S.D.N.Y., 2014)
United States
Jun 18, 2014
United States District Court for the Southern District of New York
New York State Public Health Law, Article-F-Regulation of Tobacco Products, Herbal Cigarettes and Smoking Paraphernalia; Distribution to Minors, section 1399-bb
Tobacco companies or front groups may challenge any legislative or regulatory measure that affects their business interests. Unlike public interest litigation, these cases seek to weaken health measures. These cases frequently involve the industry proceeding against the government. For example, a group of restaurant owners challenging a smoke free law as unconstitutional.
A violation of the right to expression, free speech or similar right to express oneself without limitation or censorship. The industry may claim that a regulation infringes on their right to communicate with customers and the public. Similarly, they may claim that mandated warnings infringe on their freedom to communicate as they desire.
The subject matter of the case should be dealt with at a state level or national level.
Type of Tobacco Product
None
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"However, plaintiffs’ argument misses the mark. While both the ordinance and § 1399-bb [the state law] address tobacco regulation, the court finds that § 1399-bb does not preempt the ordinance because ultimately, § 1399-bb and the ordinance regulate two different subjects. § 1399-bb only addresses the sampling or the distribution of free tobacco products; it does not, as plaintiffs’ contend, address partially discounted tobacco products. Similarly, the ordinance only addresses the sale of partially discounted cigarettes and tobacco products (i.e. sales below the listed price); it does not, as plaintiffs’ contend, address the distribution of free cigarettes and tobacco products. Thus, there is no conflict between the ordinance and § 1399-bb, and the court finds that the ordinance is not preempted."
"However, in its argument, plaintiffs mistakenly rely upon the assumption that the content prohibition of § 1334(c) concerns the regulation of pricing. Instead, this court finds, as the First Circuit did in National Association of Tobacco Outlets, 731 F.3d at 79-81, and as the Second Circuit did in 23-34 94th Street Grocery, 685 F.3d at 184-185, that the content prohibition of § 1334(c) concerns content relating to the inclusion of health information on cigarette packages. As the First Circuit explained, this understanding “is consistent with the overall purpose of the Labeling Act’s preemption provision, which is to ensure that federal regulation in this respect is not ‘impeded by diverse, nonuniform, and confusing cigarette labeling and advertising regulations with respect to any relationship between smoking and health.’” National Association of Tobacco Outlets, 731 F.3d 80-81 (quoting 15 U.S.C. § 1331). Similarly, this court’s summary of the different sections of the Labeling Act, see supra at 16-18, demonstrates that the Act is singularly focused on the content of health warnings on cigarette packages and advertisements."
"... [P]rice regulations designed to discourage consumption of a potentially harmful product do not violate the First Amendment so long as they do not preclude the effected retailers’ ability to provide truthful, nonmisleading information about the regulated product to consumers. In National Association of Tobacco Outlets, the First Circuit applied this general principle to tobacco regulation and found that the prohibition of discounting practices, such as coupon redemption and multi-pack discounts, did not violate the First Amendment.
This court agrees. Under the ordinance, retailers may continue to communicate the listed price “for cigarettes or tobacco products on their packages or on any related shelving, posting, advertising or display at the place where the cigarettes or tobacco products are sold or offered for sale.” N.Y.C. Admin. Code § 17-176.1(a). The ordinance only regulates an economic transaction—the sale of tobacco products below the listed price. It does not restrict the dissemination of pricing information and thus, it does not violate the First Amendment."
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
Tobacco companies and retailers sued New York City challenging an ordinance that prohibits the sale of tobacco below the stated price, such as through coupons or two-for-one offers. The court upheld the ordinance, ruling that it does not violate the tobacco companies’ or retailers’ free speech rights under the First Amendment and that it is not preempted by state or federal law. The court found that ordinance does not violate the First Amendment because it regulates an economic transaction – the sale of tobacco products below the listed price – not speech. Additionally, the ordinance is not preempted by the Federal Cigarette Labeling and Advertising Act because it is a lawful restriction on the manner in which tobacco manufacturers and retailers advertise and promote their products and it does not regulate the content of cigarette advertising related to health warnings. Finally, the New York City ordinance is not preempted by state law because the state law relates only to the distribution of free tobacco products, not partially discounted tobacco products.