23-34 94th St. Grocery Corp. v. New York City Board of Health

11-91-cv

23-34 94th St. Grocery v. N.Y.C. Bd. of Health

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

August Term 2011

(Argued: December 1, 2011 Decided: July 10, 2012)

Docket No. 11-91-cv

23-34 94TH ST. GROCERY CORP., KISSENA BLVD. CONVENIENCE STORE, INC.,

NEW YORK ASSOCIATION OF CONVENIENCE STORES, NEW YORK STATE ASSOCIATION

OF SERVICE STATIONS AND REPAIR SHOPS, INC., LORILLARD TOBACCO COMPANY,

PHILIP MORRIS USA INC., R.J. REYNOLDS TOBACCO CO., INC.,

Plaintiffs-Appellees,

v.

NEW YORK CITY BOARD OF HEALTH, NEW YORK CITY DEPARTMENT OF HEALTH AND

MENTAL HYGIENE, NEW YORK CITY DEPARTMENT OF CONSUMER AFFAIRS, THOMAS

FARLEY, DR., in his official capacity as Commissioner of the

New York City Department of Health and Mental Hygiene, and

JONATHAN MINTZ, in his official capacity as Commissioner of

the New York City Department of Consumer Affairs,

Defendants-Appellants.

Before:

HALL, LYNCH, and CHIN, Circuit Judges.

Appeal from a judgment of the United States

District Court for the Southern District of New York

(Rakoff, J.) granting summary judgment for plaintiffs,

declaring Article 181.19 of the New York City Health Code

null and void.

AFFIRMED.

MIGUEL ESTRADA (Michael J. Edney, on the

brief), Gibson, Dunn & Crutcher LLP,

Washington, D.C., for Plaintiff-

Appellee Philip Morris USA Inc.

Floyd Abrams, Joel Kurtzberg, Cahill

Gordon & Reindel LLP, New York, New

York, for Plaintiffs-Appellees 23-34

94th St. Grocery Corp., Kissena

Blvd. Convenience Store, Inc., New

York Association of Convenience

Stores, and New York State

Association of Service Stations and

Repair Shops, Inc.

Noel J. Francisco, Jones Day, Washington,

D.C., for Plaintiff-Appellee R.J.

Reynolds Tobacco Co., Inc.

Alan Mansfield, Steven L. Saxl, Greenberg

Traurig, LLP, New York, New York,

for Plaintiff-Appellee Lorillard

Tobacco Co.

DRAKE COLLEY (Nicholas R. Ciapetta, Edward

F.X. Hart, on the brief), for

Michael A. Cardozo, Corporation

Counsel of the City of New York, New

York, New York, for Defendants-

Appellants.

Patrick J. Carome, Paul R.Q. Wolfson,

Daniel P. Kearney, Jr., Jeremy S.

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Winer, Wilmer Cutler Pickering Hale

and Dorr LLP, New York, New York,

for Amicus Curiae American Legacy

Foundation et al.

Robin S. Conrad, Kathryn Comerford Todd,

National Chamber Litigation Center,

Gene C. Schaerr, Andrew C. Nichols,

Winston & Strawn LLP, Washington,

D.C., for Amicus Curiae Chamber of

Commerce of the United States of

America.

Seth E. Mermin, Thomas Bennigson, Public

Good Law Center, Berkeley,

California, for Amicus Curiae Los

Angeles County Department of Public

Health et al.

Daniel J. Popeo, Cory L. Andrews, Richard

A. Samp, Washington Legal

Foundation, Washington, D.C., for

Amicus Curiae Washington Legal

Foundation and Allied Educational

Foundation.

CHIN, Circuit Judge:

In 2009, the Board of Health of the City of New

York adopted a resolution requiring all tobacco retailers to

display signs bearing graphic images showing certain adverse

health effects of smoking. The City did so as part of its

continuing campaign to discourage cigarette use by educating

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New Yorkers about the dangers of smoking. The district

court held below that the resolution is null and void

because it is preempted by federal labeling laws. We agree,

and therefore affirm.

BACKGROUND

A. Federal Regulation of Cigarettes: The Labeling Act

1. Purpose

In 1965, Congress enacted the Federal Cigarette

Labeling and Advertising Act (the "Labeling Act").1 15

U.S.C. §§ 1331-41. The purpose of the Labeling Act is:

to establish a comprehensive Federal

program to deal with cigarette labeling

and advertising . . . , whereby --

(1) the public may be adequately informed

about any adverse health effects of

cigarette smoking by inclusion of warning

notices on each package of cigarettes and

in each advertisement of cigarettes; and

1

The Labeling Act has been amended several times,

most significantly in 1970, 1984, and 2009. See Public

Health Cigarette Smoking Act of 1969, Pub. L. No. 91-222, 84

Stat. 87 (1970); Comprehensive Smoking Education Act, Pub.

L. No. 98-474, 98 Stat. 2200 (1984); Family Smoking

Prevention and Tobacco Control Act (the "FSPTCA"), Pub. L.

No. 111-31, 123 Stat. 1776 (2009). The provisions quoted in

this section reflect the law as it currently stands.

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(2) commerce and the national economy may

be (A) protected to the maximum extent

consistent with this declared policy and

(B) not impeded by diverse, nonuniform,

and confusing cigarette labeling and

advertising regulations with respect to

any relationship between smoking and

health.

15 U.S.C. § 1331. The Labeling Act thus seeks to strike a

balance between informing the public about the dangers of

cigarette smoking and protecting commerce and the national

economy.

2. Labeling Requirements

The Labeling Act prescribes the content and format

of warnings that must appear on cigarette packages and in

cigarette advertisements. Id. § 1333. Specifically, all

cigarette packages and advertisements must contain the

phrase "Surgeon General's Warning" followed by one of the

following four cautions:

(1) Smoking Causes Lung Cancer, Heart

Disease, Emphysema, And May

Complicate Pregnancy.

(2) Quitting Smoking Now Greatly Reduces

Serious Risks to Your Health.

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(3) Smoking By Pregnant Women May Result

in Fetal Injury, Premature Birth,

And Low Birth Weight.

(4) Cigarette Smoke Contains Carbon Monoxide.

Id. § 1333(a)(1).2 The warnings must be "in conspicuous and

2

Until 1984, the required warning was much less

specific: "The Surgeon General Has Determined That

Cigarette Smoking Is Dangerous To Your Health." See Public

Health Cigarette Smoking Act of 1969, 84 Stat. at 88. The

current, more comprehensive warnings were mandated in

response to a 1983 FTC report indicating that many consumers

were unaware of the particular illnesses smoking could

cause. See S. Rep. No. 98-177, at 6-7 (1983) (50% of women

unaware that smoking increases the risk of stillbirth and

miscarriage, 30% of public unaware of relationship between

smoking and heart disease, 20% unaware that smoking causes

cancer).

The FSPTCA, which Congress passed in 2009,

prescribed a new set of textual warnings (with an emphasis

on the potentially fatal effect smoking can have) and

directed the FDA to issue regulations requiring graphic

labels to appear on all cigarette packaging. See FSPTCA

§ 201(a), 123 Stat. at 1842-45.

The new labeling requirements have not yet gone

into effect, however, because a district court recently

declared that the FDA's proposed regulations violated the

First Amendment. See R.J. Reynolds Tobacco Co. v.

U.S.F.D.A., No. 11-1482, -- F. Supp. 2d --, 2012 WL 653828

(D.D.C. Feb. 29, 2012). Specifically, the court held that

the proposed regulations were not "narrowly tailored to

achieve a compelling government interest." Id. at *6. It

suggested that the FDA could make the regulations less

restrictive by, inter alia, reducing the size of the graphic

image or selecting images "that conveyed only purely factual

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legible type in contrast by typography, layout, or color

with all other printed material on the package." Id. §

1333(b). Furthermore, the Labeling Act mandates that

manufacturers rotate these warnings "in alternating

sequence" on packages, and in advertisements, of each brand.

Id. § 1333(c).

3. Preemption

Congress also included a preemption provision in

the Labeling Act, limiting the extent to which states may

regulate the labeling, advertising, and promotion of

cigarettes. Id. § 1334. First, the preemption provision

and uncontroversial information rather than gruesome images

designed to disgust the consumer." Id. at *7.

The Sixth Circuit has recently addressed the

constitutionality of the FSPTCA itself. It held that the

FSPTCA's "requirement that tobacco packaging and advertising

. . . include[] color graphic and non-graphic warning labels

satisfies the requirements of the First Amendment."

Discount Tobacco City & Lottery, Inc. v. United States, 674

F.3d 509, 531 (6th Cir. 2012). While the Sixth Circuit

upheld the constitutionality of the statute's graphic-image

requirement generally, it did not opine on the

constitutionality of the FDA's proposed regulations, as that

issue was not before it on appeal. Id. at 568-69 & n.17

(distinguishing its holding from that of the D.C. district

court).

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prohibits states from requiring any additional "statement

relating to smoking and health, other than the statement

required by [§ 1333(a),] on any cigarette package." Id.

§ 1334(a). Second, it provides that "[n]o requirement or

prohibition based on smoking and health shall be imposed

under State law with respect to the advertising or promotion

of any cigarettes" labeled in conformity with the Act. Id.

§ 1334(b).

Finally, subsection (c) states:

Notwithstanding subsection (b), a State

or locality may enact statutes and

promulgate regulations, based on smoking

and health, . . . imposing specific bans

or restrictions on the time, place, and

manner, but not content, of the

advertising or promotion of any

cigarettes.

Id. § 1334(c).

B. The Resolution

On September 22, 2009, the Board of Health (the

"Board")3 adopted a resolution amending Article 181.19 of

3

The Board, which operates under the umbrella of

the Department of Health, oversees the New York City Health

Code. See Meet the N.Y.C. Bd. of Health, N.Y.C. Dep't of

Health and Mental Hygiene, http://www.nyc.gov/html/doh/html/

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the New York City Health Code. As amended, the Article

provides:

(a) Any person in the business of

selling tobacco products face-to-

face to consumers in New York City

shall prominently display tobacco

health warning and smoking cessation

signage produced by the Department

[of Health].

. . .

(c) Persons who engage in face-to-face

sales of tobacco products to

consumers in New York City shall

prominently display the signs

required by subdivision (a) of this

section by posting:

(1) one "small sign"4 on or within 3

inches of each cash register or

each place where payment may be

made so that the sign(s) are

unobstructed in their entirety

and can be read easily by each

consumer making a purchase; or

(2) one "large sign"5 at each

location where tobacco products

boh/boh.shtml (last visited July 9, 2012).

4

A "small sign" is one that does not exceed 144

square inches. See Resolution at (b)(2)(a).

5

A "large sign" is one that does not exceed 576

square inches. See Resolution at (b)(2)(b).

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are displayed so that:

(a) the sign(s) are

unobstructed in their

entirety and can be read

easily by each person

considering a tobacco

product purchase; and

(b) in such a way that the

distance between the bottom

of the sign(s) and the

floor shall be no less than

four feet, and the distance

between the top of such

sign(s) and the floor shall

be no more than seven feet.

N.Y.C. Health Code, § 181.19 (the "Resolution"), invalidated

by 23-34 94th St. Grocery Corp. v. N.Y.C. Bd. of Health, 757

F. Supp. 2d 407 (S.D.N.Y. 2010).

The Department produced three signs, any one of

which retailers could display to comply with the Resolution.

One shows an x-ray image of a cancerous lung over the

warning "Smoking Causes Lung Cancer." Another depicts a

photograph of a decaying, extracted tooth over the warning

"Smoking Causes Tooth Decay." The third is an MRI of a

brain with damaged tissue resulting from a stroke, and

states, "Smoking Causes Stroke." Each sign also reads,

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"Quit Smoking Today. Call 311 or 1-866-NYQUITS."

Commissioner Farley declares that each image is "true and

medically accurate." (Farley Decl. at 10).

The City passed the Resolution to "promote further

reductions in smoking prevalence in New York City." (Notice

of Adoption at 2). The City attributed the continued

widespread use of cigarettes to a "lack of awareness and

comprehension of the negative health outcomes associated

with tobacco use." (Id. at 1). Accordingly, it sought to

reduce smoking by broadening its informational campaign.

Specifically, the City observed that cigarette

advertising was particularly "prominent" in retail

locations, but the "retail environment lack[ed] information

about tobacco health risks." (N.Y.C. Dep't of Health and

Mental Hygiene, Proposal to Require Health Warnings and

Smoking Cessation Information Where Tobacco is Sold (the

"Proposal") at 3 (June 24, 2009)). It also noted research

indicating that "pictorial warnings" were "more effective

and engaging than text-only warnings," especially among

youths. (Notice of Adoption at 3). The City concluded that

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requiring graphic images at retail locations would

"[c]ounteract tobacco advertising" and "further de-normalize

smoking." (Proposal at 9; Notice of Adoption at 4).

C. Procedural History

On June 2, 2010, plaintiffs-appellees -- two

cigarette retailers, two trade associations, and three of

the nation's largest cigarette manufacturers -- initiated

the action below against the Board, the Department of

Health, the Department of Consumer Affairs, and their

respective commissioners, seeking a declaration that the

Resolution was preempted by federal labeling laws and

violated their First Amendment rights. On June 25, 2010,

plaintiffs moved to enjoin preliminarily the enforcement of

the Resolution. On June 28, 2010, the parties stipulated

that enforcement of the resolution would be stayed until the

earlier of (a) fourteen days after the district court's

ruling on the preliminary injunction or (b) January 1, 2011.

Defendants moved for summary judgment on August 13, 2010.

On December 29, 2010, the district court granted

summary judgment for the plaintiffs, declaring Article

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181.19 null and void on the ground that it was preempted by

federal labeling laws.3 The district court did not reach

the First Amendment issue. Judgment was entered accordingly

on December 31, 2010. This appeal followed.

DISCUSSION

A. Applicable Law

1. Standard of Review

"We review de novo a district court's application

of preemption principles." N.Y. SMSA Ltd. P'ship v. Town of

Clarkstown, 612 F.3d 97, 103 (2d Cir. 2010) (per curiam);

see Goodspeed Airport LLC v. E. Haddam Inland Wetlands &

Watercourses Comm'n, 634 F.3d 206, 209 n.3 (2d Cir. 2011);

Pac. Capital Bank, N.A. v. Connecticut, 542 F.3d 341, 351

(2d Cir. 2008) ("A district court's determination as to

3

Although the district court refers to "plaintiffs'

motion for summary judgment," the docket does not indicate

that plaintiffs ever formally moved for summary judgment.

In any event, a district court has the ability to grant

summary judgment in favor of a party that has not moved for

summary judgment, see First Fin. Ins. Co. v. Allstate

Interior Demolition Corp., 193 F.3d 109, 114-15 (2d Cir.

1999); Coach Leatherware Co. v. AnnTaylor, Inc., 933 F.2d

162, 167 (2d Cir. 1991), and defendants have not objected to

this procedural aspect of the district court's ruling.

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preemption is a conclusion of law, which we review de

novo.").

2. Preemption Generally

To determine whether a state or local law is

preempted by federal law, we look to Congress's intent.

Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516 (1992)

(congressional intent is "the ultimate touchstone" of

preemption analysis) (internal quotation marks omitted).

"When Congress expressly codifies its preemptive intent in

statutory form, our analysis 'begins with the language of

the statute.'" Jones v. Vilsack, 272 F.3d 1030, 1034 (8th

Cir. 2001) (quoting Lorillard Tobacco Co. v. Reilly, 533

U.S. 525, 536 (2001)); see also CSX Transp., Inc. v.

Easterwood, 507 U.S. 658, 664 (1993). We assume "that the

ordinary meaning of that language accurately expresses the

legislative purpose." Cipollone, 505 U.S. at 532 (Blackmun,

J., concurring) (internal quotation marks omitted); see also

Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S.

189, 194 (1985).

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The existence of an express preemption clause,

however, "does not immediately end the inquiry because the

question of the substance and scope of Congress'[s]

displacement of state law still remains." Altria Grp., Inc.

v. Good, 555 U.S. 70, 76 (2008). Accordingly, courts may

look to the statute as a whole to determine the extent to

which "Congress intended federal law to occupy the

legislative field." Id.; accord In re WTC Disaster Site,

414 F.3d 352, 372 (2d Cir. 2005) ("If the text of the

statute is ambiguous . . . as to the extent of an intended

preemption, the meaning of the statute may be gleaned from

its context and from the statutory scheme as a whole, or by

resort to the normal canons of construction and legislative

history."); see also Reilly, 533 U.S. at 541 ("State action

may be foreclosed . . . by implication from the depth and

breadth of a congressional scheme that occupies the

legislative field . . . ."); Shaw v. Delta Air Lines, Inc.,

463 U.S. 85, 100 (1983) (considering "the plain language

. . . , the structure of the Act, and its legislative

history").

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"We assume that a federal statute has not

supplanted state law unless Congress has made such an

intention clear and manifest." Bates v. Dow Agrosciences

LLC, 544 U.S. 431, 449 (2005) (internal quotation marks

omitted); accord N.Y. State Restaurant Ass'n v. N.Y.C. Bd.

of Health, 556 F.3d 114, 123 (2d Cir. 2009) ("[W]here the

text of a preemption clause is ambiguous or open to more

than one plausible reading, courts have a duty to accept the

reading that disfavors preemption.") (internal quotation

marks omitted).

3. Preemption of State-Mandated Cigarette Warnings

The labeling requirement and preemption provision

of the Labeling Act express Congress's determination that

"the prescribed federal warnings are both necessary and

sufficient to achieve its purpose of informing the public of

the health consequences of smoking." Altria, 555 U.S. at

79. Accordingly, states may not require that additional

warnings be displayed by the manufacturer. See id. "[B]oth

of the Act's purposes are furthered by prohibiting States

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from supplementing the federally prescribed warning . . . ."

Id.

In Vango Media, Inc. v. City of New York, this

Court invalidated one such effort to supplement federal

warnings. 34 F.3d 68 (2d Cir. 1994). There, a City

ordinance required that one public health message pertaining

to the dangers of smoking be displayed for every four

tobacco advertisements displayed on top of taxi cabs. Id.

at 70. We held that this was a requirement "with respect

to" advertising, and therefore preempted by the Labeling

Act. Id. at 73-75. Although the ordinance did not impact

the appearance of the advertisements themselves, it

"impose[d] conditions on [the] display of cigarette

advertisements." Id. at 74-75. We held that Congress

intended to preempt any local law that "treads on the area

of tobacco advertising, even if it does so only at the

edges." Id. at 74.

B. Application

We conclude that the Resolution is preempted by

the Labeling Act because it is a requirement "with respect

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to the advertising or promotion" of cigarettes, under

§ 1334(b). We recognize our duty to assume that a local

regulation is not preempted "unless Congress has made such

an intention clear and manifest." Bates, 544 U.S. at 449.

We find, however, that Congress has clearly manifested its

intent to preempt the Resolution through (1) the language of

the preemption provision and (2) the overall statutory

scheme.

1. The Language of Section 1334(b)

The Labeling Act prohibits states from imposing

any "requirement or prohibition based on smoking and health

. . . with respect to the advertising or promotion of . . .

cigarettes." 15 U.S.C. § 1334(b). The parties agree that

the Resolution is a "requirement or prohibition based on

smoking and health." (Appellants' Br. at 26; Appellees' Br.

at 20). They dispute, however, whether the Resolution is

"with respect to the advertising or promotion of"

cigarettes. Plaintiffs argue that it is a requirement with

respect to promotion; defendants argue that it is only a

requirement with respect to sale. (Appellees' Br. at 20-21;

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Appellants' Br. at 24-25). We agree with plaintiffs that

the Resolution is a requirement with respect to the

promotion of cigarettes.

First, we discuss the meaning of the word

"promotion" and the types of activities that constitute

promotion. Second, we discuss why the requirements of the

Resolution affect promotion in a way that causes them to

fall within section 1334(b)'s preemptive scope.

a. "Promotion"

The word "promotion" is not defined in the

Labeling Act. Hence, we look to the word's plain meaning.

Specifically, we consider the "the ordinary, common-sense

meaning of the word[]." United States v. Dauray, 215 F.3d

257, 260 (2d Cir. 2000); see Harris v. Sullivan, 968 F.2d

263, 265 (2d Cir. 1992) ("A fundamental canon of statutory

construction is that, unless otherwise defined, words will

be interpreted as taking their ordinary, contemporary,

common meaning.") (internal quotation marks omitted).

Merriam-Webster defines "promotion" as "the act of

furthering the growth or development of something;

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especially: the furtherance of the acceptance and sale of

merchandise through advertising, publicity, or discounting."

Merriam Webster's Collegiate Dictionary 931 (10th ed. 2000).

A broad array of activities may fall under this umbrella.

See U.S. Dep't of Health & Human Servs., Preventing Tobacco

Use Among Young People: A Report of the Surgeon General

159-60 (1994). Distribution of coupons and free samples,

for example, would obviously be classified as promotional

activity as they further the sale of merchandise.

Promotional activity may also include the "place[ment] and

display [of] products in ways that will maximize the

opportunity for purchase." Id. Indeed, many companies pay

additional fees to have their product displayed in a

desirable location at a retail outlet. See generally

Benjamin Klein & Joshua D. Wright, The Economics of Slotting

Contracts, 50 J.L. & Econ. 421 (2007) (referring to

"promotional shelf space"). Therefore, to the extent a

product display furthers the sale of merchandise, it is a

type of promotion.

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b. The Requirements of the Resolution Are "With

Respect To" Promotion.

The Resolution requires that every tobacco

retailer place signage either (1) next to the register or

(2) next to each tobacco product display. Option (2)

directly affects the promotion of cigarettes. By its terms,

it affects the display of cigarettes, which is a type of

promotion. Specifically, a display is a form of publicity

that can further the sale of merchandise. It is an

opportunity for the manufacturer to present the consumer

with its trade dress, product pricing, and any deals -- or

sales -- that the manufacturer may be offering. Placing a

graphic warning adjacent to a product display necessarily

affects -- or "treads on," Vango Media, 34 F.3d at 74 -- the

content of the image projected and the message conveyed to

the consumer by that display.

Whether option (1) affects promotion is a closer

call, as it does not explicitly reference the display of

tobacco products. Indirectly, however, it is likely to

affect product display, and therefore, product promotion.

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New York law requires retailers to place cigarettes either

"behind a counter . . . accessible only to [store]

personnel" or "in a locked container." See N.Y. Pub. Health

Law § 1399-cc(7) (McKinney 2012). As a result, the vast

majority of retailers choose to place cigarettes behind the

counter, where the registers are located, prominently

displayed in plain view but accessible only to store

personnel. In such circumstances, placing signage at the

register is practically the same as placing it at the point

of display. Furthermore, the Resolution may very well

prompt retailers to choose not to place cigarettes near the

register -- a decision that would affect promotion.4

4 We take judicial notice of a poster recently

published on TobaccoFreeNYS.org. See United States v.

Akinrosotu, 637 F.3d 165, 168 (2d Cir. 2011) (taking

judicial notice of a website). The poster contains a photo

of three children at a convenience store counter behind

which there is a large wall display of cigarettes. The wall

display includes signs showing cigarette brand names,

advertisements, and "special" pricing information. Above

the photo appears the caption, "This is tobacco marketing.

Kids who see it are more likely to smoke." See www.tobaccof

reenys.org/Our-Kids-Have-Seen-Enough-Campaign.html (last

visited July 9, 2012). The point, of course, is that

displays of a consumer product, accompanied by brand posters

and pricing information, increase awareness of that product,

and make it more likely that a consumer will purchase it.

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The City's primary argument is that the Resolution

is a not a requirement with respect to the promotion of

cigarettes, but rather, a requirement with respect to the

sale of cigarettes. Specifically, it argues that it is not

regulating or restricting a manufacturer's ability to

advertise or promote; it is simply requiring any

establishment that sells cigarettes to post warning signs,

regardless of whether any advertising or promotion occurs at

the particular retail establishment. (Appellants' Br. at

24).

While it is true that the Resolution only

explicitly requires action on the part of the seller, not

the manufacturer, the City ignores the practical effect the

Resolution has on the manufacturer's promotional activity at

the retail location. Specifically, requiring a warning sign

in close proximity to a cigarette display has practically

the same effect as requiring a warning on the display

itself, thereby directly affecting the content of the

promotional message conveyed to consumers at the point of

The display is therefore a form of promotion.

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display. Indeed, by the City's own admission, one of the

reasons it chose to regulate the point of sale was to

"deliver[] a different message" from that delivered by the

cigarette manufacturers and to "counteract tobacco

advertising." (Id. at 27; Proposal at 9). Requiring that

the manufacturers' message be countered at the point of

purchase is surely a form of regulating promotion. Cf.

Vango Media, 34 F.3d 68 (ordinance did not impose direct

burden on manufacturer, but was nonetheless preempted

because advertising was conditioned on public health

message).5

5

At oral argument, a question arose as to whether

the Resolution could survive preemption if section (c)(2) of

the Resolution were severed. (Tr. at 18-21, 25). We do not

decide that question here.

The City also points out (essentially in passing)

that the Resolution applies to all tobacco products, whereas

the Labeling Act only applies to cigarettes. (Appellant Br.

at 12). The City thus implies that the Resolution should

survive at least to the extent it applies to non-cigarette

tobacco products. We reject that argument. First, it is

not clear how any part of the Resolution could be severed

such that it would apply only to non-cigarette tobacco

products. Second, this argument was not sufficiently

preserved in the district court or on appeal, and is

therefore waived. See Cuoco v. Moritsugu, 222 F.3d 99, 112

n.4 (2d Cir. 2000) ("single, conclusory, one-sentence

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To be clear, we do not hold that every state or

local regulation affecting promotion violates the Labeling

Act's preemption clause. Section 1334(c) provides a safe

harbor for laws regulating the time, place, or manner of

promotional activity.6 For example, the City's requirement

that retailers display cigarettes only behind the counter or

in a locked container, see N.Y. Pub. Health L. § 1399-cc(7),

argument is insufficient to preserve any issue for appellate

review"); United States v. Brauning, 553 F.2d 777, 780 (2d

Cir. 1977) (where party has had ample opportunity to make an

argument to the trial court, but has failed to do so,

"waiver will bar raising the issue on appeal").

6

The City did not argue in its briefs that the

Resolution is a time, place, or manner restriction under §

1334(c). At oral argument, counsel for the City briefly

addressed the issue in response to a question from the

Court. He stated, "If the district court was actually

correct that [display is] a promotional activity, well, then

the requirement aimed at the location of the display would

be a requirement on the place of the activity and that --

and for that reason it would fall within the saving clause

of 1334(c)." (Tr. at 8).

The Resolution, however, is not "aimed at the

location of the display." In other words, it does not limit

the places in which manufacturers or retailers may display

cigarettes. Rather, it requires that a sign be placed at

the register or wherever cigarettes are displayed at the

retail location. Therefore, the Resolution is not a "place"

restriction within the meaning of 1334(c).

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clearly affects promotional display, but would fall within

this exception, as it only affects the place and manner of

the display. Only requirements or prohibitions directly

affecting the content of the manufacturers' promotional

message to consumers are preempted.

2. The Overall Statutory Scheme

To the extent the language of the preemption

provision itself is or may be ambiguous, our conclusion is

supported by the overall statutory scheme.

The Labeling Act seeks to strike a balance between

two competing interests: (1) ensuring that Americans are

adequately warned about the health consequences of smoking;

and (2) protecting free commerce. See 15 U.S.C. § 1331.

The Resolution affects this balance by seeking to advance

the first interest at the expense of the second. The

requirement that retailers post graphic images might serve

to further educate consumers, but it does so by imposing a

direct burden on cigarette retailers.

The Resolution was born of the assumption that the

federally mandated warnings did not adequately or

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effectively inform consumers of the health risks of smoking.

(Notice of Adoption at 1-3; Proposal at 3). Specifically,

the City apparently believed that "there remain[ed]

significant gaps in smokers' understanding of these risks."

(Notice of Adoption at 2). It also observed that the

"retail environment lacks information about tobacco health

risks" (Proposal at 3), and highlighted research indicating

textual warnings (such as the ones currently mandated by

Congress) were not as effective as pictorial warnings

(Notice of Adoption at 3). In other words, the City was not

satisfied with the balance struck by Congress, and it sought

to shift the balance further in favor of discouraging

smoking, at the expense of free commerce.

The City's desire to tilt the balance more in

favor of educating consumers is understandable. Indeed, the

City may seek to tilt the balance further by imposing time,

place, or manner restrictions, and by launching its own

anti-smoking campaigns. But what the City cannot do is seek

to affect the balance by requiring a manufacturer or

retailer to display supplemental content at the point of

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purchase. Specifically, it cannot require retailers to post

warning signs adjacent to cigarette displays, because doing

so would affect the content of the retailers and

manufacturers' promotional efforts. The legislative scheme

contemplates that Congress, and only Congress, will amend

the content of warnings required of manufacturers to educate

consumers, see S. Rep. No. 98-177, at 6-7; FSPTCA § 201(a),

without interference or supplementary efforts by state or

local authorities.

Allowing state or local authorities to mandate

supplementary warnings on or near cigarette displays risks

the creation of "diverse, nonuniform, and confusing"

regulations. See 15 U.S.C. 1331(2)(B). Indeed, there is a

risk of such nonuniform regulation here. Congress has

directed the FDA to prescribe graphic warnings for cigarette

packages. FSPTCA § 201(a) ("the Secretary shall issue

regulations that require color graphics depicting the

negative health consequences of smoking"). While new FDA

regulations have not yet gone into effect, Congress intends

for some form of graphic image to appear on packages in the

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near future.7 The Resolution would require additional

graphic warnings to be placed in close proximity to the

federally mandated ones. Such competing, and potentially

duplicative, warnings are not contemplated by the federal

statutory scheme.

To be sure, we do not hold that supplementary

warnings are, in and of themselves, preempted by the

Labeling Act. We hold only that requiring retailers to post

graphic supplementary warnings adjacent to cigarette

displays is preempted. Of course, states and localities

remain free to impose time, place, and manner restrictions

on the advertising and promotion of cigarettes, and to

engage in anti-smoking campaigns using their own resources.

Our holding today should not be read to curtail in any way

7 Notably, some of the images proposed by the FDA

were similar in nature to the ones proposed by the City

(e.g., a cancerous lung; a decaying tooth); others were very

different (e.g., a drawing of crying baby; a picture of a

corpse). See New Cigarette Labels Feature Graphic Images,

USA Today (June 21, 2011), http://mediagallery.usatoday.com/

New-cigarette-lables-feature-graphic-images/G2394 (last

visited July 9, 2012).

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state and locally funded efforts to further educate

consumers and counter cigarette advertising and promotion.

CONCLUSION

For the foregoing reasons, we hold that the

Resolution, Article 181.19 of the New York City Health Code,

is preempted by the Labeling Act. Accordingly, we affirm

the judgment of the district court declaring the Resolution

null and void. In light of this determination, we do not

decide whether the Resolution violates the First Amendment.

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