The Regulation of The Regulation of Tobacco Advertising After Tobacco Advertising After

Lorillard v. ReillyLorillard v. Reilly

Michael F. Strande, J.D.Michael F. Strande, J.D.Legal Resource Center for Tobacco Legal Resource Center for Tobacco

Regulation, Litigation & AdvocacyRegulation, Litigation & AdvocacyUniversity of Maryland School of LawUniversity of Maryland School of Law

Aren’t Tobacco Ads Already Regulated?Aren’t Tobacco Ads Already Regulated?

The Master Settlement Agreement (MSA) The Master Settlement Agreement (MSA) aimed to prevent youth smoking by limiting aimed to prevent youth smoking by limiting tobacco sponsorships and promotions.tobacco sponsorships and promotions.

MSA contains 2 retail advertising MSA contains 2 retail advertising provisions:provisions:

1.1. Size limit on exterior signs (max 14 sqft)Size limit on exterior signs (max 14 sqft)2.2. Ban on the use of cartoonsBan on the use of cartoons

MSA does not bind NPMs, cigars, or MSA does not bind NPMs, cigars, or smokeless tobaccosmokeless tobacco

Why Regulate Tobacco Advertising?Why Regulate Tobacco Advertising?

POP ads and displays boost tobacco sales POP ads and displays boost tobacco sales by 12 % - 28 % by 12 % - 28 %

Children found 3 times more sensitive to Children found 3 times more sensitive to tobacco ads than adultstobacco ads than adults

Entice children to begin smokingEntice children to begin smoking

POP often found in candy aisle and at eye POP often found in candy aisle and at eye level of young childrenlevel of young children

Lorillard v. ReillyLorillard v. Reilly

Massachusetts passes tobacco sales and Massachusetts passes tobacco sales and advertising restrictions:advertising restrictions:

– Tobacco ads which can be seen from outside Tobacco ads which can be seen from outside any store within a 1000 ft radius of any public any store within a 1000 ft radius of any public playground, elementary or secondary schoolplayground, elementary or secondary school

– POP lower than 5 ft from the floor of any non-POP lower than 5 ft from the floor of any non-age-restricted store within the 1000 ft radiusage-restricted store within the 1000 ft radius

– Prohibition on promotional give aways of cigarsProhibition on promotional give aways of cigars

– Ban on tobacco self service displaysBan on tobacco self service displays

Lorillard v. ReillyLorillard v. Reilly

Supremes strike down law on two grounds:Supremes strike down law on two grounds:

1.1. Find preemption with regard to Federal Cigarette Find preemption with regard to Federal Cigarette Labeling and Advertising Act (FCLAA)Labeling and Advertising Act (FCLAA)

2.2. Find bill an unconstitutional restriction on First Find bill an unconstitutional restriction on First Amendment right to free speechAmendment right to free speech

Uphold bill’s self-service display ban Uphold bill’s self-service display ban

What Is Preemption?What Is Preemption?

Higher levels of Higher levels of government can government can displace lower levels displace lower levels from regulating on the from regulating on the same topicsame topic

Higher level Higher level regulations take regulations take precedence and fully precedence and fully regulate the fieldregulate the field

Preemption by the FCLAAPreemption by the FCLAA

Applies only to cigarette advertisingApplies only to cigarette advertising

– State regulations on cigars and smokeless State regulations on cigars and smokeless tobacco fair gametobacco fair game

Express preemption clause:Express preemption clause:

– ““No requirement or prohibition No requirement or prohibition based on based on smoking and healthsmoking and health shall be imposed under shall be imposed under state law with respect to the state law with respect to the advertising or advertising or promotionpromotion of any cigarettes the packages of of any cigarettes the packages of which are labeled in uniformity with provision of which are labeled in uniformity with provision of this Act.” this Act.” 15 U.S.C. 1334(b).15 U.S.C. 1334(b).

Lorillard v. ReillyLorillard v. Reilly

1.1. Imposed a “requirement” with respect to Imposed a “requirement” with respect to the advertising of cigarettes the advertising of cigarettes

2.2. Requirement was based on “smoking and Requirement was based on “smoking and health” because it sought to address the health” because it sought to address the incidence of underage smokingincidence of underage smoking

- ““the concern about youth exposure to cigarette the concern about youth exposure to cigarette advertising is intertwined with the concern advertising is intertwined with the concern about cigarette smoking and health.”about cigarette smoking and health.”

3.3. Dealt with advertising of cigarettesDealt with advertising of cigarettes

Conflict with First AmendmentConflict with First Amendment

Commercial speech Commercial speech notnot afforded unlimited afforded unlimited First Amendment protectionsFirst Amendment protections

– Gov’t retains right to regulate time, place and Gov’t retains right to regulate time, place and manner without regard to contentmanner without regard to content

– Gov’t retains right to restrict speech which is Gov’t retains right to restrict speech which is deceptive or proposes an illegal transactiondeceptive or proposes an illegal transaction

Conflict with First AmendmentConflict with First Amendment

Regulation must meet Regulation must meet Central HudsonCentral Hudson test: test:

1. concerns lawful activity and not misleading1. concerns lawful activity and not misleading

2. there is a substantial gov’t interest2. there is a substantial gov’t interest

3. regulation directly advances gov’t interest3. regulation directly advances gov’t interest

4. not more excessive than necessary to 4. not more excessive than necessary to serve that interestserve that interest

Lorillard v. ReillyLorillard v. Reilly

Advertising regs with respect to cigars and Advertising regs with respect to cigars and smokeless tobacco fail fourth prong of testsmokeless tobacco fail fourth prong of test

Substantial breadth of regs determined to be Substantial breadth of regs determined to be overly restrictiveoverly restrictive

– Eliminated advertising in approximately 89 % of Eliminated advertising in approximately 89 % of Boston, Worcester and Springfield.Boston, Worcester and Springfield.

Concern about complete ban on truthful Concern about complete ban on truthful information about a legal product for adults in information about a legal product for adults in order to “protect children”order to “protect children”

Does Does LorillardLorillard Leave Room for Regulation? Leave Room for Regulation?

Zoning OrdinancesZoning Ordinances

– Court specifically recognizes ability to regulate Court specifically recognizes ability to regulate size and location of tobacco ads through zoningsize and location of tobacco ads through zoning

– Content neutralContent neutral (restrictions apply to all ads evenly - not just tobacco) (restrictions apply to all ads evenly - not just tobacco)

Aesthetics Aesthetics SafetySafety

– Ironic : Court specifically notes ability to regulate Ironic : Court specifically notes ability to regulate based on aesthetics but not on health concerns, based on aesthetics but not on health concerns, despite finding tobacco to be a significant threat.despite finding tobacco to be a significant threat.

Regulate for Aesthetics and Public Safety

Regulate for Aesthetics and Traffic Safety

Does Does LorillardLorillard Leave Room for Regulation? Leave Room for Regulation?

Restriction on False or Misleading AdsRestriction on False or Misleading Ads

– Based on consumer protection – not smoking Based on consumer protection – not smoking and healthand health

– Not afforded First Amendment protectionNot afforded First Amendment protection

Reduced Risk Cigarettes?Reduced Risk Cigarettes?– Eclipse, etc. Eclipse, etc. – ““inherently misleading” ads intended to overreach inherently misleading” ads intended to overreach

or confuse? or confuse? – Claims such as “reduced carcinogens” and “less Claims such as “reduced carcinogens” and “less

of the toxins” imply much but convey little actual of the toxins” imply much but convey little actual information about health risks; what proof?information about health risks; what proof?

* Eclipse is not perfect. For instance, we do not claim that Eclipse presents smokers with less risk of cardiovascular disease or complications with pregnancy. As everyone knows, all cigarettes present some health risk, including Eclipse.

Does Does LorillardLorillard Leave Room for Regulation? Leave Room for Regulation?

Cigar and Smokeless AdvertisingCigar and Smokeless Advertising

– Regulations on a smaller scale than Lorillard are Regulations on a smaller scale than Lorillard are likely to meet likely to meet Central HudsonCentral Hudson test test

Court noted these regulations were close to the lineCourt noted these regulations were close to the line

Something less than a 90% prohibition of Something less than a 90% prohibition of geographical area (no magic number) geographical area (no magic number)

Leaving open industrial, commercially zoned, or other Leaving open industrial, commercially zoned, or other high traffic areas likely to leave enough alternate high traffic areas likely to leave enough alternate avenuesavenues

Does Does LorillardLorillard Leave Room for Regulation? Leave Room for Regulation?

Self Service Display BansSelf Service Display Bans– Specifically upheldSpecifically upheld

Court found this is not a promotion or advertisement Court found this is not a promotion or advertisement but a sales practice. Thus no preemption.but a sales practice. Thus no preemption.

Court found this was not a violation of the First Court found this was not a violation of the First Amendment because it was narrowly tailored and Amendment because it was narrowly tailored and ample display avenues remained open ample display avenues remained open

– Requires tobacco products be inaccessible to the Requires tobacco products be inaccessible to the consumer without employee assistance.consumer without employee assistance.

– Gov’t has a substantial interest in keeping age Gov’t has a substantial interest in keeping age restricted products out of children’s handsrestricted products out of children’s hands

Self Service Displays Self Service Displays

Does Does LorillardLorillard Leave Room for Regulation? Leave Room for Regulation?

Eliminate promotional give aways of all Eliminate promotional give aways of all tobacco products?tobacco products?

– Not decided by CourtNot decided by Court

– Split in lower courts on whether this is preempted Split in lower courts on whether this is preempted by FCLAAby FCLAA

Issue : is this a regulation on promotion or advertising Issue : is this a regulation on promotion or advertising (preempted) or on distribution (traditional police power)(preempted) or on distribution (traditional police power)

– Passed in 2 Maryland jurisdictions without Passed in 2 Maryland jurisdictions without challengechallenge

Contact InformationContact Information

Michael F. Strande, J.D.Michael F. Strande, J.D.

Legal Resource Center for Tobacco Legal Resource Center for Tobacco Regulation, Litigation & AdvocacyRegulation, Litigation & Advocacy

500 West Baltimore Street500 West Baltimore Street

Baltimore, Maryland 21201Baltimore, Maryland 21201

410-706-1129 (phone)410-706-1129 (phone)

410-706-1128 (fax)410-706-1128 (fax)

mstrande@law.umaryland.edumstrande@law.umaryland.edu