Opinion ID: 803964
Heading Depth: 3
Heading Rank: 1

Heading: The Language of Section 1334(b)

Text: 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; -18- 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.
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; -19- 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. -20-
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. -21- 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. -22- 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. -23- 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 -24- 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). -25- 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.