11-91-cv

23-34 94th St. Grocery v. N.Y.C. Bd. of Health UN I T E D S T A T E S C O U R T O F A P P E A L S F O R T H E S E C O N D C I R C U I T Augus t Term 201 1 (Argu ed: D ecemb er 1, 2011 Decid ed: July 1 0, 20 12) Docke t No. 11-9 1-cv

23-34 94 T H S T . G R O C E R Y C O R P ., K I S S E NA B L V D . C O NVE N I E N C E S T O RE , I N C ., N E W Y O R K A S S O C I A T I O N O F C O NVE N I E N C E S T O RE S , N E W Y O RK S T A T E A S S O C I A T I O N O F S E RV I C E S T A T I O N S AN D RE P A I R S H O P S , I N C ., L O R I L L AR D T O B A C C O C O M P AN Y , P H I L I P MO RR I S USA I N C ., R.J. RE Y N O L D S T O B A C C O C O ., I N C ., Plain tiffs -Appe llees ,

v. N E W Y O R K C I T Y B O AR D O F H E A L T H , N E W Y O RK C I T Y D E P AR T ME N T O F H E A L T H AN D ME N T A L H Y G I E N E , N E W Y O R K C I T Y D E P AR T ME N T O F C O N S UME R A F FA I R S , T H O MA S FAR L E Y , D R ., in hi s off icial capa city as Co mmiss ionerof t he New Y ork C ity D epart ment of He alth and M ental Hygi ene, and JO NA T H AN M I N T Z , in hi s off icial capa city as Co mmiss ionerof the N ew Yo rk Ci ty De partm ent o f Con sumerAffa irs, Defen dants -Appe llant s.

Befor e: HA L L , L Y N C H , andC H I N , Cir cuit Judge s.

Appea l fro m a j udgme nt ofthe Unite d Sta tes Distr ict C ourt for t he So uther n Dis trict of N ew Yo rk (Rako ff, J .) grant ing s ummar y jud gment for plain tiffs ,decla ring Artic le 18 1.19 of th e NewYorkCityHeal th Co de

null and v oid.

A F F I RME D . M I G U E L E S T RA DA (Mich ael J . Edn ey, on th e

brief ), Gi bson, Dunn& Cr utche r LLP , Washi ngton , D.C ., for Plaint iffAppel lee PhilipMorr is USA Inc . FloydAbrams, J oel K urtzb erg, Cahil l Gordo n & R einde l LLP , NewYork , New York, for Plaint iffs-Appel lees 23-34 94th St. Grocery Cor p., Kissen a Blvd. Convenien ce St ore, Inc., New York Assoc iatio n of Conve nienc e Store s, an d New

YorkStat e Assoc iatio n of Servi ce St ation s and Repai r Shops, Inc. Noel J. Fr ancis co, J ones Day, Washi ngton , D.C., for Plaint iff-A ppell ee R. J. Reyno lds Tobacc o Co. , Inc . Alan Mansf ield, Stev en L. Saxl , Gre enber g Traur ig, L LP, N ew Yo rk, N ew Yo rk, for Plaint iff-A

ppell ee Lo rilla rd Tobac co Co . D RA K E C O L L E Y (Nich olas R. Ci apett a, Edward F.X. Hart, on th e bri ef ), fo r Micha el A. Card ozo, Corpo ratio n Couns el ofthe City of Ne w Yor k, Ne w York, New York, for D efendantsAppel lants . Patri ck J. Caro me, P aul R .Q. W olfso n, Danie l P. Kearn ey, J r., J eremyS.

-2-Winer , Wil mer C utlerPick eringHale and D orr L LP, N ew Yo rk, N ew Yo rk, for AmicusCuri ae Am erica n Legacy Foundationet a l. RobinS. C onrad , Kat hryn Comer ford Todd, Natio nal C hambe r Lit igati on Ce nter, Gene C. Sc haerr , And rew C . Nic hols, Winst on & Straw n LLP , Was hingt on, D.C., for AmicusCuri ae Ch amber of Comme rce o f theUnit ed St ates of Ameri ca. Seth E. Me rmin, Thom as Be nnigs on, P ublic Good Law C enter , Ber keley , Calif ornia , for A micusCuri ae Lo s Angel es Co unty Depar tmentof P ublic Healt h et al. Danie l J. Popeo , Cor y L. Andre ws, R ichar d A. Samp, W ashin gton Legal Found ation , Was hingt on, D .C., for Amicu s Cur iae Washin gton Legal Foundationand Allie d Edu catio nal Foundation .

C H I N , Circu it Ju dge:

In 20 09, t he Bo ard o f Hea lth o f the Cityof N ew York adopt ed a resol utionrequ iringall tobac co re taile rs to displ ay si gns b earin g gra phic image s sho wing certa in adverse healt h eff ects of sm oking . Th e Cit y didso a s par t of its conti nuingcamp aign to di scour age c igare tte u se byeduc ating

-3-New Y orker s abo ut th e dan gers of sm oking . Th e dis trict

court heldbelo w tha t the reso lutio n is null and v oid becau se it is p reemp ted b y fed eral label ing l aws. We a gree, and t heref ore a ffirm . BACKG ROUND A. Federal Re gulat ion o f Cig arett es: The Labeli ng Ac t 1 . Purpo se In 19 65, C ongre ss en actedthe Feder al Ci garet te Label ing a nd Adverti sing Act ( the " Label ing A ct"). 15 1 U.S.C . §§ 1331- 41. The p urpos e of the L abeli ng Ac t is:

to es tabli sh a compr ehens ive F edera l progr am to deal withciga rette labe ling and a dvert ising. . . , w hereb y -- (1) t he pu blic may b e ade quate ly in forme d about any adver se he alth effec ts of cigar ette smoki ng byincl usionof w arnin g notic es oneachpack age o f cig arett es an d in ea ch adverti semen t of cigar ettes ; and

The L abeli ng Ac t has beenamen ded s evera l tim es, 1 most signi fican tly i n 197 0, 19 84, a nd 20 09. SeePubl ic Healt h Cig arett e Smo king Act o f 196 9, Pu b. L. No. 91-22 2, 84 Stat. 87 ( 1970) ; Comprehe nsive Smok ing E ducat ion A ct, P ub. L. No . 98- 474, 98 St at. 2 200 ( 1984) ; Fam ily S mokin g Preve ntionand Tobac co Co ntrol Act (the "FSPT CA"), Pub. L. No. 1 11-31 , 123 Stat . 177 6 (20 09). The provi sions quot ed in this secti on re flect the law a s it curre ntly stand s. -4-(2) c ommer ce an d the nati onal econo my ma y be (A ) pro tecte d to the m aximum ext ent consi stent withthis decl ared polic y and (B) n ot impededby d ivers e, no nunif orm, and c onfus ing c igare tte l abeli ng an d adver tisin g reg ulati ons w ith r espec t to any r elati onshi p bet ween smoki ng an d healt h. 15 U. S.C. § 133 1. T he La belin g Act thus seek s to strik e a balan ce be tweeninfo rmingthe publi c abo ut th e dan gers of cigar ette smoki ng an d pro tecti ng co mmerc e andthe natio nal

econo my. 2. Label ing Requirement s The L abeli ng Ac t pre scrib es th e con tent and f ormat of wa rning s tha t mus t app ear o n cig arett e pac kages and in cigar ette adver tisem ents. Id. § 13 33. Speci fical ly, a ll cigar ette packa ges a nd adverti semen ts mu st co ntainthe phras e "Su rgeonGene ral's Warn ing" follo wed b y one of t he follo wing four cauti ons:

(1) Smoki ng Ca uses Lung Cance r, He art Disea se, E mphys ema, And M ay Compl icate Preg nancy . (2) Quitt ing S mokin g NowGrea tly R educe s Serio us Ri sks t o You r Hea lth.

-5-(3) Smoki ng ByPreg nant WomenMay Resul t in Fe tal I njury , Pre matur e Bir th, And L ow Bi rth W eight . (4) Cigar ette Smoke Cont ains Carbo n Mon oxide . Id. § 1333( a)(1) . The w arnin gs mu st be "in consp icuou s and 2

Until 1984 , the requ ired warni ng wa s muc h les s 2 speci fic: "The Surg eon G enera l Has Dete rmine d Tha t Cigar ette Smoki ng Is Dang erous To Y our H ealth ." SeePubl ic Healt h Cig arett e Smo king Act o f 196 9, 84 Stat . at 88. The curre nt, m ore c ompre hensi ve wa rning s wer e man datedin respo nse t o a 1 983 F TC re port indic atingthat manycons umers were unawa re ofthe parti cularilln esses smok ing c ould cause . SeeS. Rep. N o. 98 -177, at 6 -7 (1 983) (50% of wo men unawa re th at sm okingincr eases the risk of st illbi rth a nd misca rriag e, 30 % of publi c una ware of re latio nshipbetw een smoki ng an d hea rt di sease , 20% unaw are t hat s mokin g cau ses cance r). The F SPTCA , whi ch Co ngres s pas sed i n 200 9, presc ribeda ne w set of t extua l war nings (wit h an empha sis on th e pot entia lly f atal effec t smo king can h ave) and direc ted t he FDA to issue regu latio ns re quiri ng gr aphic label s to appea r on all c igare tte p ackag ing. SeeFSPT CA § 201 (a), 123 S tat. at 18 42-45 .

The n ew la belin g requirem ents have not y et go ne into effec t, ho wever , bec ause a dis trict cour t rec ently decla red t hat t he FDA's p ropos ed re gulat ions viola ted t he First Amen dment . See R.J. Reyno lds Tobacc o Co. v. U.S.F .D.A . , No. 1 1-148 2, -- F. S upp. 2d -- , 201 2 WL 65382 8 (D.D. C. Fe b. 29 , 201 2). Speci fical ly, t he co urt h eld t hat the p ropos ed re gulat ions were not " narro wly t ailor ed to achie ve a compe llinggove rnmen t int erest ." Id. at * 6. I t sugge sted that the F DA co uld m ake t he re gulat ions less restr ictiv e by, inter alia , reducingthe size of th e gra phic image or s elect ing i mages "tha t con veyedonlypure ly fa ctual -6-legib le type incont rast by typogra phy, layou t, orcolo r

with all o ther print ed ma teria l on the p ackag e." Id. § 1333( b). Furth ermor e, th e Lab elingAct manda tes t hat manuf actur ers r otate thes e war nings "in alter natin g seque nce" on pa ckage s, an d in adver tisem ents, of e ach b rand. Id. § 133 3(c). 3. Preem

ption Congr ess a lso i nclud ed a preemptionprov isionin the L abeli ng Ac t, li mitin g the exte nt to whic h sta tes m ay regul ate t he la belin g, adverti sing, and promo tion of cigar ettes . Id. § 13 34. First , the pree mptio n pro visio n

and u ncont rover sial informatio n rat her t han g rueso me im ages desig ned t o dis gust the c onsum er." Id. at * 7.

The S ixth Circu it ha s rec entlyaddr essedthe const ituti onali ty ofthe FSPTC A its elf. It h eld t hat t he FSPTC A's " requi remen t tha t tob acco packa ging and a dvert ising

. . . incl ude[] colo r gra phic and n on-gr aphicwarn ing l abels satis fies the r equir ement s of the F irst Amendment. " Disco unt Tobacc o City & L ottery, In c. v. Unit ed St ates , 674 F.3d 509, 531 ( 6th C ir. 2 012). Whi le th e Six th Ci rcuit uphel d the cons titut ional ity o f the stat ute's grap hic-i mage requi remen t gen erall y, it did not o pine on th e const ituti onali ty ofthe FDA's prop osed regul ation s, as that issue was not b efore it o n app eal. Id. at 5 68-69 & n. 17 (dist ingui shingits holdi ng fr om th at ofthe D.C. distr ict court ). -7-prohi bits state s fro m requirin g anyaddi tiona l "st ateme nt

relat ing t o smo king and h ealth , oth er th an th e sta temen t requi red b y [§ 1333( a),] on an y cig arett e pac kage. " Id. § 133 4(a). Sec ond, it pr ovide s tha t "[n ]o re quire ment or prohi bitio n bas ed onsmok ing a nd he alth shall be i mpose d underStat e lawwithresp ect t o the adve rtisi ng orprom otion of an y cig arett es" l abele d in confo rmitywiththe Act. Id. § 133 4(b).

Final ly, s ubsec tion (c) s tates : Notwi thsta ndingsubs ectio n (b) , a S tate or lo calit y mayenac t sta tutes and promu lgate regu latio ns, b ased on sm oking and h ealth , . . . imposin g spe cificbans or re stric tions on t he ti me, p lace, and manne r, bu t not cont ent, of th e adver tisin g or promo tion of an y cigar ettes . Id. § 13 34(c) . B. The Resolu tion

On Se ptemb er 22 , 200 9, th e Boa rd ofHeal th (t he "Boar d") adop ted areso lutio n ame ndingArti cle 1 81.19 of

3

The B oard, whic h ope rates unde r the umbr ella of 3 the D epart ment of He alth, over sees the N ew Yo rk Ci ty He alth Code. See Meet the N .Y.C. Bd. of He alth , N.Y .C. D ep't of Healt h andMent al Hy giene , htt p://www.ny c.gov /html /doh/ html/ -8-the N ew Yo rk Ci ty He alth Code. As amend ed, t he Ar ticle

provi des: (a) Any p ersonin t he bu sines s of

selli ng to bacco products face- toface to co nsume rs inNew York City shall prom inent ly di splaytoba cco healt h war ning and s mokin g ces satio n signa ge pr oduce d by the D epart ment [of H ealth ].

. . . (c) Perso ns wh o eng age i n fac e-to- face sales of t obacc o pro ducts to consumers in Ne w Yor k Cit y sha ll promi nentl y dis play the s igns requi red b y sub divis ion ( a) ofthis secti on bypost ing: (1) one " small sign " on o r wit hin 3 4 inche s of each cash regis ter o r each place wher e payment may b e made so th at th e sig n(s) are unobs truct ed inthei r ent irety and c an be readeasi ly byeach consumer m akinga pu rchas e; or (2) one " large sign " at e ach 5 locat ion w here tobac co pr oduct s

boh/b oh.sh tml ( last visit ed Ju ly 9, 2012 ).

A "sm all s ign" is on e tha t doe s not exce ed 14 4 4 squar e inc hes. SeeReso lutio n at (b)(2 )(a).

A "la rge s ign" is on e tha t doe s not exce ed 57 6 5 squar e inc hes. SeeReso lutio n at (b)(2 )(b). -9-are d ispla yed s o tha t: (a) the s ign(s ) are unobs truct ed inthei r entir ety a nd ca n be read easil y by each perso n consi derin g a t obacc o produ ct pu rchas e; an d (b) in su ch a way t hat t he dista nce b etwee n the bott om of th e sig n(s) and t he floorshal l be no le ss th an four feet, and the d istan ce betwe en th e topof s uch sign( s) an d the floo r sha ll be no more thanseve n fee t. N.Y.C . Hea lth C ode, § 181 .19 ( the " Resol ution "), inval idate d by 23-3494thSt. Groce ry Co rp. v . N.Y .C. B d. of Heal th , 757 F. Su pp. 2 d 407 (S.D .N.Y. 2010 ).

The D epart ment produ ced t hree signs , anyone of whichreta ilers coul d dis play to co mply with the R esolu tion. One s hows an x- ray i mage of a cance rous lung over the warni ng "S mokin g Cau ses L ung C ancer ." Anoth er de picts a photo graphof adeca ying, extr actedtoot h ove r the warn ing "Smok ing C auses Toot h Dec ay." The t hird is anMRI of a brainwithdama ged t issue resu ltingfroma st roke, and state s, "S mokin g Cau ses S troke ." Each sign also reads , -10-"Quit Smok ing T oday. Cal l 311 or 1 -866- NYQUI TS."

Commi ssion er Fa rley decla res t hat e ach i mage is "t rue a nd medic ally accur ate." (Fa rley Decl. at 1 0).

The C ity p assedthe Resol utionto " promo te fu rther reduc tions in s mokin g pre valen ce inNew York City. " (N otice of Ad optio n at 2). The C ity a ttrib uted the c ontin ued wides preaduse of ci garet tes t o a " lack of aw arene ss an d compr ehens ion o f the nega tive healt h out comes asso ciate d with tobac co us e." ( Id. at 1 ). A ccord ingly , it sough t to reduc e smo king by br oaden ing i ts in forma tiona l campaign .

Speci fical ly, t he Ci ty ob serve d tha t cig arett e adver tisin g was part icula rly " promi nent" in r etail locat ions, but the " retai l env ironm ent l ack[e d] in forma tion about toba cco h ealthrisk s." (N.Y. C. De p't o f Hea lth a nd Menta l Hyg iene, Prop osal to Re quire Heal th Wa rning s and Smoki ng Ce ssati on In forma tion Where Toba cco i s Sol d (th e "Prop osal" ) at 3 (Ju ne 24 , 200 9)). It a lso n oted resea rch indic atingthat "pic toria l war nings " wer e "mo re ef fecti ve and e ngagi ng th an te xt-on ly wa rning s," e speci ally among youth s. ( Notic e of Adopt ion a t 3). The Cityconc ludedthat

-11-requi ring graph ic im ages at re tail locat ions would

"[c]o unter act t obacc o adv ertis ing" and " furth er de -norm alize smoki ng." (Pro posal at 9 ; Not ice o f Ado ptionat 4 ). C. ProceduralHist ory

On Ju ne 2, 2010 , pla intif fs-ap pelle es -- two cigar ette retai lers, two trade asso ciati ons, and t hree of the n ation 's la rgest ciga rette manu factu rers -- in itiat ed the a ctionbelo w aga inst the B oard, the Depar tment of Healt h, th e Dep artme nt ofCons umer Affai rs, a nd th eir respe ctive comm issio ners, seek ing adecl arati on th at th e Resol utionwas preempted by fe deral labe ling laws and viola ted t heir First Amen dment righ ts. On Ju ne 25 , 201 0, plain tiffs move d to enjoi n pre limin arilythe enfor cemen t of the R esolu tion. On June 28, 2 010, the p artie s sti pulat ed that enfor cemen t of the r esolu tion wouldbe s tayedunti l the earli er of(a) fourt een d ays a fter the d istri ct co urt's rulin g on the p relim inaryinju nctio n or (b) J anuar y 1, 2011. Defen dants move d forsumm ary j udgme nt onAugu st 13 , 201 0.

On De cembe r 29, 2010 , the dist rict court gran ted

summa ry ju dgmen t forthe plain tiffs , dec larin g Art icle

-12-181.1 9 nul l andvoidon t he gr ound that it wa s pre empte d by

feder al la belin g law s. The dist rict court did not r each 3 the F irst Amendment issue . Ju dgmen t was ente red a ccord ingly on De cembe r 31, 2010 . Th is ap peal follo wed. DISCU SSION A. Appli cableLaw 1. Standard o f Rev iew "We r eview de no voa di stric t cou rt's appli catio n of pr eempt ion p rinci ples. " N.Y. SMSA Ltd. P'shi p v. Town of Clark stown , 612 F.3d97, 103 ( 2d Ci r. 20 10) ( per c uriam ); see G oodsp eed A irpor t LLC v. E . Had dam Inland Wetl ands & Water cours es Comm'n , 634 F.3d206, 209 n.3 ( 2d Ci r. 20 11); Pac. Capit al Ba nk, N .A. v . Con necti cut , 542 F.3d341, 351 (2d C ir. 2 008) ("A d istri ct co urt's dete rmina tion as to

Altho ugh t he di stric t cou rt re fers to "p laint iffs' 3 motio n forsumm ary j udgme nt," the d ocket does not indic ate that plain tiffs everform ally movedfor summa ry ju dgmen t. In an y eve nt, adist rict court has the a bilit y to grant summa ry ju dgmen t in favorof apart y tha t has not movedfor summa ry ju dgmen t, see FirstFin. Ins. Co. v. Al lstat e Inter ior D emoli tion Corp. , 193 F.3d109, 114- 15 (2 d Cir . 1999) ; CoachLeat herwa re Co . v. AnnTaylor, Inc. , 933 F.2d 162, 167 ( 2d Ci r. 19 91), and d efend ants have not o bject ed to this proce dural aspe ct ofthe distr ict c ourt' s rul ing. -13-preemptionis aconc lusio n of law, whichwe r eview de

novo ."). 2. Preem

ption Generally To de termi ne wh ethera st ate o r loc al la w is preempted by fe deral law, we l ook t o Con gress 's in tent. Cipol lone v. Li ggettGrp. , Inc . , 505 U.S. 504, 516 (1992 ) (cong ressi onal inten t is "the ultim ate t ouchs tone" of preemptionanal ysis) (int ernal quot ationmark s omi tted) . "WhenCong ress expre ssly codif ies i ts pr eempt ive i ntent in statu tory form, our analy sis ' begin s wit h the lang uage of the s tatut e.'" Jonesv. V ilsac k , 272 F.3d1030 , 103 4 (8t h Cir. 2001) (quo ting Loril lard Tobac co Co . v. Reill y , 533 U.S. 525, 536 ( 2001) ); see a lso CSX Tr ansp. , Inc . v. Easte rwood , 507 U.S. 658, 664 (1993 ). W e ass ume " that the ordin ary m eanin g of that langu age a ccura tely expre sses the legis lativ e pur pose. " Cipol lone , 505 U.S. at 5 32 (B lackmun, J., c oncur ring) (int ernal quot ationmark s omi tted) ; see a lso Park 'N Fl y, In c. v. Doll ar Pa rk an d Fly , Inc . , 469 U.S. 189, 194 ( 1985) .

-14-The e xiste nce o f an expre ss pr eempt ion c lause ,

howev er, " does not i mmedi atelyend the i nquir y bec ause the quest ion o f the subs tance and scope of C ongre ss'[s ] displ aceme nt ofstat e lawstil l rem ains. " Altri a Grp ., Inc. v. Go od , 555 U.S. 70, 76 (2 008). Acc ordin gly, court s may look to th e sta tute as a whole to d eterm ine t he ex tent to which"Con gress inte nded feder al la w to occup y the legis lativ e fie ld." Id. ; accor d In reWTC Disas ter S ite , 414 F .3d 3 52, 3 72 (2 d Cir . 200 5) (" If th e tex t of the statu te is ambi guous . . . as to th e ext ent o f an inten ded preemption , the mean ing o f the stat ute m ay be glea ned f rom its c ontex t andfromthe statu tory schem e as a who le, o r by

resor t to the n ormal cano ns ofcons truct ion a nd le gisla tive histo ry.") ; see a lso R eilly , 533 U.S. at 5 41 (" State acti on may b e for eclos ed . . . b y imp licat ion f rom t he de pth a nd bread th ofa co ngres siona l sch eme t hat o ccupi es th e legis lativ e fie ld . . . . "); Shaw v. De lta A ir Li nes, Inc. , 463 U .S. 8 5, 10 0 (19 83) ( consi derin g "th e pla in la nguag e

. . . , th e str uctur e of the A ct, a nd it s leg islat ive histo ry").

-15-"We a ssume that a fe deral stat ute h as no t

suppl antedstat e lawunle ss Co ngres s has made suchan inten tion clearand manif est." Batesv. D ow Agrosci ences LLC , 544 U.S. 431, 449 (2005 ) (in terna l quo tatio n mar ks omitt ed); accor d N.Y. StateRest auran t Ass 'n v. N. Y.C. Bd. of He alth , 556 F.3d114, 123 (2d C ir. 2 009) ("[W] here the text of a preemptionclau se is ambi guous or o pen t o mor e than one p lausi ble r eadin g, co urts have a dut y to accep t the readi ng th at di sfavo rs pr eempt ion." ) (in terna l quo tatio n marks omit ted). 3. Preem

ptionof S tate-Manda ted Cigare tte W arnin gs The l abeli ng re quire ment and p reemp tion provi sion of th e Lab elingAct expre ss Co ngres s's d eterm inati on th at "the presc ribedfede ral w arnin gs ar e bot h nec essar y and suffi cient to a chiev e its purp ose o f inf ormin g the publ ic of the h ealthcons equen ces o f smo king. " Altri a , 555 U.S. at 79. Accor dingl y, st ates may n ot re quire that addi tiona l warni ngs b e dis playe d by the m anufa cture r. See i d. "[B ]oth of th e Act 's pu rpose s are furt heredby p rohib itingStat es

-16-from suppl ement ing t he fe deral ly pr escri bed w arnin g . . . ."

Id. In VangoMedi a, In c. v. City of New Yo rk , thi s Court inva lidat ed on e suc h eff ort t o sup pleme nt fe deral warni ngs. 34 F .3d 6 8 (2dCir. 1994 ). T here, a Ci ty ordin ance requi red t hat o ne pu blic healt h mes sage perta ining to th e dan gers of sm okingbe d ispla yed f or ev ery f our tobac co adverti semen ts di splay ed ontop of ta xi ca bs. Id. at 70 . We heldthat this was a requirem ent " with respe ct to" a dvert ising , andther efore pree mptedby t he La belin g Act. Id. at 7 3-75. Alt houghthe ordin ance did n ot impact the a ppear ance of th e adv ertis ement s the mselv es, i t "impo se[d] cond ition s on [the] disp lay o f cig arett e adver tisem ents. " Id. at 74 -75. We h eld t hat C ongre ss inten ded t o pre empt any l ocal law t hat " tread s on the a rea of to bacco adve rtisi ng, e ven i f it does so on ly at the edges ." Id. at 74 . B. Appli cation

We co nclud e tha t the Reso lutio n is preempted by the L abeli ng Ac t bec ause it is a re quire ment "withresp ect

-17-to th e adv ertis ing o r pro motio n" ofciga rette s, un der

§ 133 4(b). We recog nize our duty t o ass ume t hat aloca l regul ationis n ot pr eempt ed "u nless Cong ress has m ade s uch an in tenti on cl ear a nd ma nifes t." Bates , 544 U.S. at 4 49. We fi nd, h oweve r, th at Co ngres s has clea rly m anife sted its inten t to preempt th e Res oluti on th rough(1) the l angua ge of the p reemp tion provi sion and ( 2) th e ove rall statu tory schem e. 1. The Langua ge of Sect ion 1 334(b ) The L abeli ng Ac t pro hibit s sta tes f rom i mposi ng any " requi remen t or prohi bitio n bas ed onsmok ing a nd he alth

. . . withresp ect t o the adve rtisi ng orprom otionof . . . cigar ettes ." 1 5 U.S .C. § 1334 (b). The parti es ag ree t hat the R esolu tion is a "requ ireme nt orproh ibiti on ba sed o n smoki ng an d hea lth." (Ap pella nts' Br. a t 26; Appe llees ' Br. at 20 ). T hey d isput e, ho wever , whe ther the R esolu tion is "withresp ect t o the adve rtisi ng orprom otionof" cigar ettes . Pl ainti ffs a rgue that it is a re quire ment with respe ct to prom otion ; def endan ts ar gue t hat i t is only a requi remen t wit h res pect to sa le. (Appe llees ' Br. at 2 0-21;

-18-Appel lants ' Br. at 2 4-25) . We agre e wit h pla intif fs th at

the R esolu tion is a requi remen t wit h res pect to th e promo tion of ci garet tes.

First , we discu ss th e mea ning of th e wor d "prom otion " andthe types of a ctivi ties that const itute promo tion. Sec ond, we di scuss why the r equir ement s of the Resol utionaffe ct pr omoti on ina wa y tha t cau ses t hem t o fall withi n sec tion 1334( b)'s preemptive scop e.

a. "Promotion " The w ord " promo tion" is n ot de finedin t he Label ing A ct. Hence , we look to th e wor d's p lain meani ng. Speci fical ly, w e con siderthe "the ordin ary, commo n-sen se meani ng ofthe word[ ]." Unite d Sta tes v . Dau ray , 215 F.3d 257, 260 ( 2d Ci r. 20 00); see Harrisv. S ullivan , 968 F.2d 263, 265 ( 2d Ci r. 19 92) ( "A fu ndame ntal canonof s tatut ory const ructi on is that , unl ess o therw ise d efine d, wo rds w ill be in terpr eted as ta king theirordi nary, cont empor ary,

commo n mea ning. ") (i ntern al qu otati on ma rks o mitte d).

Merri am-Webster

defi nes " promo tion" as " the a ct of furth eringthe growt h or devel opmen t of somet hing;

-19-espec ially : th e fur thera nce o f the acce ptanc e andsale of

merch andis e thr ough adver tisin g, pu blici ty, o r dis count ing." Merri am We bster 's Co llegi ate D ictio nary 931 ( 10th ed. 2 000). A bro ad ar ray o f act iviti es ma y fal l und er th is umbrell a. See U.S. Dep't of H ealth& Human S ervs. , Pre venti ng To bacco Use Among YoungPeop le: A Rep ort o f the Surg eon G enera l 159-6 0 (19 94). Dist ribut ion o f cou pons and f ree s ample s, for e xampl e, wo uld o bviou sly b e cla ssifi ed as prom otion al activ ity a s the y fur ther the s ale o f mer chand ise. Promo tiona l act ivitymay also inclu de th e "pl ace[m ent] and displ ay [o f] pr oduct s in ways that will maxim ize t he oppor tunit y forpurc hase. " Id. Ind eed, many compa nies pay addit ional fees to h ave t heir produ ct di splay ed ina desir able locat ion a t a r etail outl et. See genera lly Benjamin K lein & Jos hua D . Wri ght, The E conom ics o f Slo tting Contr acts , 50 J.L. & Eco n. 42 1 (20 07) ( refer ring to "prom otion al sh elf s pace" ). T heref ore, to th e ext ent a produ ct di splayfurt hers the s ale o f mer chand ise, it is a type of pr omoti on.

-20-b. The Requirement s of the Resolu tion Are " With Respe ct To " Pro

motion. The R esolu tion requi res t hat e very tobac co retai ler p lace signa ge ei ther (1) n ext t o the regi ster or (2) n ext t o eac h tob acco produ ct di splay . Op tion (2) direc tly a ffect s the prom otionof c igare ttes. By its t erms, it af fects the displ ay ofciga rette s, wh ich i s a t ype o f promo tion. Spe cific ally, a di splayis aformof p ublic ity that can f urthe r the sale of m ercha ndise . It is a n oppor tunit y forthe manuf actur er to pres ent t he co nsume r with its t rade dress , pro duct prici ng, a nd an y dea ls -- or sales -- t hat t he ma nufac turermay be of ferin g. P lacin g a graph ic wa rningadja cent to a produ ct di splaynece ssari ly affec ts -- or " tread s on, " VangoMedi a , 34 F.3d at 74 -- t he conte nt ofthe image proj ectedand the m essag e con veyedto the c onsum er bythat disp lay.

Wheth er op tion (1) a ffect s pro motio n is a clo ser call, as i t doe s not expl icitl y ref erenc e the disp lay o f tobac co pr oduct s. I ndire ctly, howe ver, it is like ly to affec t pro duct displ ay, a nd th erefo re, p roduc t pro motio n.

-21-New Y ork l aw re quire s ret ailer s to place ciga rette s eit her

"behi nd a count er . . . a ccess ible only to [s tore] perso nnel" or " in a locke d con taine r." SeeN.Y. Pub. Heal th Law § 1399 -cc(7 ) (Mc Kinne y 201 2). As a resul t, th e vas t major ity o f ret ailer s cho ose t o pla ce ci garet tes b ehindthe count er, w here the r egist ers a re lo cated , pro minen tly displ ayed in pl ain v iew b ut ac cessi ble o nly t o sto re perso nnel. In such circumstan ces, placi ng si gnage at t he regis ter i s pra ctica lly t he same as plac ing i t at the p oint of di splay . Fu rthermore, the Resol utionmay very well promp t ret ailer s to choos e notto p lace cigar ettes nearthe regis ter - - a d ecisi on th at wo uld a ffect prom otion . 4

We ta ke ju dicia l not ice o f a p osterrece ntly 4 publi shed on To bacco FreeN YS.or g. See U nited Stat es v. Akinr osotu , 637 F.3d165, 168 (2d C ir. 2 011) (taki ng judic ial n otice of awebs ite). The post er co ntain s a p hoto of th ree c hildr en at a co nveni ence store coun ter b ehind whichther e is a lar ge wa ll di splayof c igare ttes. The wall displ ay in clude s sig ns sh owingciga rette bran d nam es, adver tisem ents, and "spec ial" prici ng in forma tion. Abo ve the p hoto appea rs th e cap tion, "Thi s is tobac co ma rketi ng. Kids who s ee it are more likel y to smoke ." Seewww. tobac cof reeny s.org /Our- Kids- Have- Seen- Enoug h-Campaign .html (las t visit ed Ju ly 9, 2012 ). T he po int, of co urse, is t hat displ ays o f a c onsum er pr oduct , acc ompan ied b y bra nd po sters and p ricin g inf ormat ion, incre ase a waren ess o f tha t pro duct, and m ake i t mor e lik ely t hat acons umer will purch ase i t. -22-The C ity's prim ary a rgume nt is that the Resol ution

is a not arequ ireme nt wi th re spect to t he promo tionof cigar ettes , but rath er, arequ ireme nt wi th re spect to t he saleof c igare ttes. Spe cific ally, it a rgues that it i s not regul atingor r estri ctinga ma nufac turer 's ab ilityto adver tise or pr omote ; it is si mply requi ring any estab lishm ent t hat s ells cigar ettes to p ost w arnin g sig ns, regar dless of w hethe r anyadve rtisi ng orprom otionoccu rs at the p artic ular retai l est ablis hment . (Appell ants' Br. at 24). While it i s tru e tha t the Reso lutio n onl y expli citlyrequ ires actio n on the p art o f the sell er, n ot the m anufa cture r, th e Cit y ign ores the p racti cal e ffect the Resol utionhas on th e man ufact urer' s pro motio nal a ctivi ty at the r etail loca tion. Spe cific ally, requ iringa wa rningsign in cl ose p roxim ity t o a c igare tte d ispla y has prac tical ly the s ame e ffect as r equir ing awarn ing o n the disp lay itsel f, th erebydire ctly affec ting the c onten t of the promo tiona l mes sage conve yed t o con sumer s at the p oint of

The d ispla y is there fore a form of promo tion. -23-displ ay. Indee d, bythe City' s ownadmi ssion , one of t he

reaso ns it chos e to regul ate t he po int o f sal e was to "deli ver[] a di ffere nt me ssage " fro m tha t del ivere d by the cigar ette manuf actur ers a nd to "cou ntera ct to bacco adver tisin g." ( Id. at 2 7; Pr oposa l at 9). Requi ring that the m anufa cture rs' m essag e be count ered at th e poi nt of purch ase i s sur ely aformof r egula ting promo tion. Cf. VangoMedi a , 34 F.3d 68 (o rdina nce d id no t imp ose d irect burde n on manuf actur er, b ut wa s non ethel ess p reemp ted becau se adverti sing was c ondit ionedon p ublicheal th

messa ge). 5

At or al ar gumen t, a quest ion a rose as to whet her 5 the R esolu tion couldsurv ive p reemp tion if se ction(c)( 2) of the R esolu tion were sever ed. (Tr. at 18 -21, 25). We d o not decid e tha t que stionhere .

The C ity a lso p oints out (esse ntial ly inpass ing) that the R esolu tion appli es to all tobac co pr oduct s, wh ereas the L abeli ng Ac t onl y app lies to ci garet tes. (App ellan t Br. at 12 ). T he Ci ty th us implies that the Resol utionshou ld survi ve at leas t to the e xtent it a pplie s to non-c igare tte tobac co pr oduct s. W e rej ect t hat a rgume nt. First , it is not c lear how a ny pa rt ofthe Resol utioncoul d be sever ed such that it wo uld a pply only to no n-cig arett e tob acco produ cts. Seco nd, t his a rgume nt wa s not suff icien tly prese rved in th e dis trict cour t or on ap peal, and is there fore waive d. See C uoco v. Mo ritsu gu , 222 F.3d99, 112 n.4 ( 2d Ci r. 20 00) ( "sing le, c onclu sory, one- sente nce -24-To be clea r, we do n ot ho ld th at ev ery s tate or

local regu latio n aff ectin g pro motio n vio lates the Label ing Act's pree mptio n cla use. Sect ion 1 334(c ) pro vides a sa fe harbo r forlaws regu latin g the time , pla ce, o r man ner o f promo tiona l act ivity . Forexample, the C ity's requ ireme nt 6 that retai lers displ ay ci garet tes o nly b ehindthe count er or in a locke d con taine r, see N.Y. Pub. Healt h L. § 139 9-cc( 7),

argum ent i s ins uffic ient to pr eserv e anyissu e forappe llate revie w"); Unite d Sta tes v . Bra uning , 553 F.2d777, 780 (2d Cir. 1977) (whe re pa rty h as ha d amp le op portu nity to ma ke an argum ent t o the tria l cou rt, b ut ha s fai led t o do so, "waiv er wi ll ba r rai sing the i ssue on ap peal" ).

The C ity d id no t arg ue inits brief s tha t the 6 Resol utionis atime , pla ce, o r man ner r estri ctionunde r § 1334( c). At or al ar gumen t, co unsel for the C ity b riefl y addre ssed the i ssue in re spons e to a que stionfromthe Court . He stat ed, " If th e dis trict cour t was actu ally corre ct th at [d ispla y is] a pr omoti onal activ ity, well, then the r equir ement aime d at the l ocati on ofthe displ ay wo uld be a requi remen t on the p lace of th e act ivityand that

-- and f or th at re ason it wo uld f all w ithinthe savin g cla use of 13 34(c) ." ( Tr. a t 8).

The R esolu tion, howe ver, is no t "ai med a t the locat ion o f the disp lay." In otherword s, it does not limit the p laces in w hich manuf actur ers o r ret ailer s maydisp lay cigar ettes . Ra ther, it r equir es th at a sign be pl aced at the r egist er orwher ever cigar ettes are displ ayed at th e retai l loc ation . Th erefo re, t he Re solut ion i s not a "p lace" restr ictio n wit hin t he me aningof 1 334(c ). -25-clear ly af fects prom otion al di splay , but woul d fal l wit hin

this excep tion, as i t onl y aff ects the p lace and m annerof the d ispla y. O nly r equir ement s or prohi bitio ns di rectl y affec ting the conte ntof t he ma nufac turer s' pr omoti onal

messa ge to cons umers are preempted. 2. The Overal l Sta tutor y Sch eme To th e ext ent t he la nguag e of the p reemp tion provi sion itsel f is or ma y be ambig uous, our concl usionis suppo rted by th e ove rall statu tory schem e.

The L abeli ng Ac t see ks to stri ke a balan ce be tween two c ompet ing i ntere sts: (1) ensur ing t hat Americ ans a re adequ atelywarn ed ab out t he he alth conse quenc es ofsmok ing; and ( 2) pr otect ing f ree c ommer ce. See15 U .S.C. § 13 31. The R esolu tion affec ts th is ba lance by s eekin g to advan ce the f irst inter est a t the expe nse o f the seco nd. The requi remen t tha t ret ailer s pos t gra phic image s mig ht se rve to fu rthereduc ate c onsum ers, but i t doe s so by imposin g a direc t bur den o n cig arett e ret ailer s.

The R esolu tion was b orn o f the assumptio n tha t the feder ally manda ted w arnin gs di d not adequatel y or

-26-effec tivel y inf orm c onsum ers o f the heal th ri sks o f smo king.

(Noti ce ofAdop tion at 1- 3; Pr oposa l at 3). Speci fical ly, the C ity a ppare ntly belie ved t hat " there rema in[ed ] signi fican t gap s in smoke rs' u nders tandi ng ofthes e ris ks." (Noti ce ofAdop tion at 2) . It also obse rved that the "reta il en vironment lacks info rmati on ab out t obacc o hea lth risks " (Pr oposa l at 3), a nd hi ghlig hted resea rch i ndica ting textu al wa rning s (su ch as the ones curre ntly manda ted b y Congr ess) were not a s eff ectiv e as picto rial warni ngs (Noti ce ofAdop tion at 3) . Inothe r wor ds, t he Ci ty wa s not satis fied with the b alanc e str uck b y Con gress , andit s ought to sh ift t he ba lance furt her i n fav or ofdisc ourag ing smoki ng, a t the expe nse o f fre e commerce .

The C ity's desi re to tilt the balan ce mo re in favorof e ducat ing c onsum ers i s und ersta ndabl e. I ndeed , the City may s eek t o til t the bala nce f urthe r by impos ing t ime, place , or manne r res trict ions, and by la unchi ng it s own anti- smoki ng campaig ns. But w hat t he Ci ty ca nnot do is seek to af fect the b alanc e by requi ring a man ufact urer or retai ler t o dis play suppl ement al co ntent at t he po int o f

-27-purch ase. Spec ifica lly, it ca nnot requi re re taile rs to post

warni ng si gns a djace nt to ciga rette disp lays, beca use d oing

so wo uld a ffect the conte nt ofthe retai lers and manuf actur ers' promo tiona l eff orts. The legi slati ve sc heme conte mplat es th at Co ngres s, an d onl y Con gress , wil l ame nd the c onten t of warni ngs r equir ed ofmanu factu rers to educate

consumers, seeS. R ep. N o. 98 -177, at 6 -7; F SPTCA§ 20 1(a), witho ut in terfe rence or s upple menta ry ef forts by s tate or local auth oriti es.

Allow ing s tate or lo cal a uthor ities to m andat e suppl ement ary w arnin gs onor n ear c igare tte d ispla ys ri sks the c reati on of"div erse, nonu niform, an d con fusin g" regul ation s. See15 U .S.C. 1331 (2)(B ). I ndeed , the re is a risk of su ch no nunif orm r egula tion here. Con gress has direc ted t he FDA to presc ribe graph ic wa rning s forciga rette packa ges. FSPT CA § 201(a ) ("t he Se creta ry sh all i ssue regul ation s tha t require colorgrap hics depic ting the negat ive h ealthcons equen ces o f smo king" ). While new F DA regul ation s hav e not yet gone into effec t, Co ngres s int ends for s ome f orm o f gra phic image to a ppearon p ackag es inthe

-28-near futur e. The Reso lutio n wou ld re quire addi tiona l 7 graph ic wa rning s to be pl aced in cl ose p roxim ity t o the feder ally manda ted o nes. Suchcomp eting , andpote ntial ly dupli cativ e, wa rning s are not conte mplat ed bythe feder al statu tory schem e.

To be sure , we do no t hol d tha t sup pleme ntary warni ngs a re, i n andof t hemse lves, pree mptedby t he Label ing A ct. We ho ld on ly th at re quiri ng re taile rs to post graph ic su pplem entar y war nings adja cent to ci garet te displ ays i s pre empte d. O f cou rse, state s andloca litie s remai n fre e to impos e tim e, pl ace, and m annerrest ricti ons on th e adv ertis ing a nd pr omoti on ofciga rette s, an d to engag e in anti- smoki ng campaig ns us ing t heir own r esour ces. Our h oldin g tod ay sh ould not b e rea d to curta il inany way

Notab ly, s ome o f the imag es pr opose d by the F DA 7 were simil ar innatu re to the ones propo sed b y the City (e.g. , a c ancer ous l ung; a dec ayingtoot h); o thers were very diffe rent (e.g. , a d rawin g of cryin g bab y; a pictu re ofa corps e). See New Cigare tte L abelsFeat ure Graphi c Ima ges , USA T oday (June 21, 2011) , htt p://m ediag aller y.usa today .com/ New-c igare tte-l ables -feat ure-g raphi c-ima ges/G 2394 (last visit ed Ju ly 9, 2012 ). -29-state and local ly fu nded effor ts to furt her e ducat e

consumers and c ounte r cig arett e adv ertis ing a nd pr omoti on. CONCL USION For t he fo regoi ng re asons , we hold that the Resol ution , Art icle 181.1 9 of the N ew Yo rk Ci ty He alth Code, is pr eempt ed bythe Label ing A ct. Accor dingl y, we affi rm the j udgme nt ofthe distr ict c ourt decla ring the R esolu tion null and v oid. In l ight of th is de termi natio n, we do n ot decid e whe ther the R esolu tion viola tes t he Fi rst Amendm ent.

-30-