Philip Morris, Inc. v. Reilly c/w United States Tobacco Co. v. Reilly
Tobacco manufacturers challenged the constitutionality of a state law requiring tobacco companies to provide the state with ingredient lists, organized by relative amounts, for all cigarettes, snuffs, and chewing tobaccos sold within the state, which would then be subject to public disclosure if the disclosure could potentially reduce risks to public health. The Court held that the law constituted an unconstitutional taking of property, finding that public disclosure of ingredients lists of the kind contemplated would expose the tobacco companies' trade secrets, compromising the reasonable investment-backed expectations of tobacco manufacturers in a manner likely to have severe economic consequences for the companies. The Court noted that, though the state's stated purpose of protecting public health may have been compelling, the law was not sufficiently tailored to promote this goal and any speculative gains were outweighed by the enormous costs that accompany loss of trade secrets. Additionally, the Court held that, because Massachusetts offered no substantial benefit to tobacco companies in exchange for voluntary disclosure of the lists, the state could not require an unconstitutional disclosure of trade secrets as a precondition to selling a legal product within the state.
Philip Morris, Inc., et al. v. Reilly, et al. c/w United States Tobacco Co., et al. v. Reilly, et al., 312 F.3d 24 (1st Cir. 2002).
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 procedural fairness. For example, a party may claim that a government agency did not consult with public or stakeholders when issuing regulations.
A violation of property rights, sometimes in the form of an expropriation or a taking by the government. The tobacco industry may argue that regulations amount to a taking of property rights because they prevent the use of intellectual property such as trademarks.
Regulations may infringe on intellectual property rights, which may be protected by international treaties. The industry may argue that bans on "deceptive" packaging that eliminate the use of colors, numbers or trademarks threaten intellectual property rights.
A discussion on whether the regulations impose an undue burden on the tobacco industry. This argument may involve the costs of implementing regulatory measures.
Type of Tobacco Product
None
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.
"In sum, I disagree with Judge Torruella's conclusion that the Disclosure Act is facially unconstitutional because it requires tobacco companies to submit their trade secrets to the state without any guarantees of confidentiality. The implementing regulations contain an unambiguous promise of confidentiality. Therefore, the initial act of submission to the state is not enough to destroy the value of the trade secrets. It is only when those secrets actually are made available to the public that the tobacco companies' property interest dissolves. That, of course, brings us back to where we began: the relevant event for purposes of the Takings Clause is the actual (or imminent) disclosure of the tobacco companies' trade secrets. As I explained above -- and as Judge Torruella appears to recognize -- the constitutionality of any given disclosure depends on how much, and what sort of, information Massachusetts proposes to make public. Accordingly, the Act is not unconstitutional in every application, and the tobacco companies' facial challenge should fail."
"Appellants argue that this holding governs here. I disagree. They claim that Massachusetts has a "legitimate Government interest" in protecting the health and safety of its citizens. I agree that this is indeed a legitimate state interest. My disagreement lies, rather, with the other side of the equation. The state must offer a valuable government benefit. Id. The right offered here is the right to sell tobacco products in Massachusetts. In Nollan, the Supreme Court considered what constitutes such a benefit with regard to land. The Court held that the right to build upon one's land is not such a benefit that would allow a state to require a landowner to grant a public easement across his property. Id. at 833 n.2. In contrast, in Monsanto, the government granted a license, created a de jure data licensing scheme, and established a period of exclusive use for new ingredients in exchange for the right to disclose some trade secrets. 467 U.S. at 994. Applying these two precedents to our case, I conclude that allowing a manufacturer to simply sell its legal product is more similar to building on one's land than to the complex regulatory scheme in Monsanto. Therefore, Massachusetts cannot condition the right to sell tobacco on the forfeiture of any constitutional protections the appellees have to their trade secrets. As a result, the Disclosure Act is invalid because it creates an unconstitutional taking of the tobacco companies' products."
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 manufacturers challenged the constitutionality of a state law requiring tobacco companies to provide the state with ingredient lists, organized by relative amounts, for all cigarettes, snuffs, and chewing tobaccos sold within the state, which would then be subject to public disclosure if the disclosure could potentially reduce risks to public health. The Court held that the law constituted an unconstitutional taking of property, finding that public disclosure of ingredients lists of the kind contemplated would expose the tobacco companies' trade secrets, compromising the reasonable investment-backed expectations of tobacco manufacturers in a manner likely to have severe economic consequences for the companies. The Court noted that, though the state's stated purpose of protecting public health may have been compelling, the law was not sufficiently tailored to promote this goal and any speculative gains were outweighed by the enormous costs that accompany loss of trade secrets. Additionally, the Court held that, because Massachusetts offered no substantial benefit to tobacco companies in exchange for voluntary disclosure of the lists, the state could not require an unconstitutional disclosure of trade secrets as a precondition to selling a legal product within the state.