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Tobacco Companies Appeal Unsuccessful Challenge to Local Ordinances

Several tobacco companies have recently appealed a federal trial court’s decision to uphold two local ordinances that ban certain promotional discounts and severely restrict flavored tobacco products.

In February 2012, the National Association of Tobacco Outlets, the Cigar Association of America, Lorillard Tobacco Company, R.J. Reynolds Tobacco Company, American Snuff Company, Philip Morris USA, U.S. Smokeless Tobacco Manufacturing Company, U.S. Smokeless Tobacco Brands, and John Middleton Company filed a lawsuit against the City of Providence in the United States District Court for the District of Rhode Island. The lawsuit sought to overturn two Providence, Rhode Island ordinances.

One ordinance prohibits any tobacco license holder from accepting discount coupons for the purchase of tobacco products. Additionally, the ordinance prohibits any tobacco license holder from offering bulk discounts or charging less than the non-discounted price. The other ordinance makes it unlawful to sell any “flavored tobacco product” to any consumer, except in a smoking bar. The ordinance defines “flavored tobacco product” as “any tobacco product or any component part thereof that contains a constituent that imparts a characterizing flavor.”

The twelve-count complaint challenged the validity of the ordinances as violating the United States and Rhode Island Constitutions, as well as various federal and state laws based on preemption. Specifically, the tobacco companies alleged that the ordinances violate their First Amendment right of free speech by restricting communication with adult tobacco consumers and by limiting public statements concerning tobacco products with characterizing flavor. The tobacco companies also alleged that the Federal Labeling Act as well as Rhode Island state laws preempt the promotion ordinance and that the Family Smoking Prevention and Tobacco Control Act preempts the flavor ordinance.

After a pre-trial hearing, the District Court concluded that neither ordinance infringed upon the tobacco companies’ First Amendment protection for commercial speech. Rather, the District Court concluded that the ordinances banned the sale and distribution of certain tobacco products, which only limited the tobacco companies’ commercial activities, not their commercial speech. The District Court also concluded that the promotional ordinance did not conflict with the purpose of the Federal Labeling Act or Rhode Island state law because the legislature did not intend to preempt the regulation of tobacco product sales. Additionally, the District Court concluded that the flavor ordinance did not conflict with the Tobacco Control Act’s ban on flavored cigarettes. Based on these conclusions, the District Court dismissed the tobacco companies’ complaint prior to trial.

The Tobacco Companies recently appealed the matter to the United States Court of Appeals for the First Circuit. The case has not yet been scheduled for oral argument. We will report back as the case develops on appeal.

For questions and/or comments, please contact Bryan Haynes, at 804.697.1420 or by email.