Court Opinion

ID: 4127759
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:32:52.286961+00
Date Added: 2024-06-11T14:31:25.275524
License: Public Domain

ATTORNEY GENERAL OF TEXAS
                                          GREG       ABBOTT

                                               August 26, 2013

The Honorable Brandon Creighton                    Opinion No. GA-1020
Chair, Select Committee on Federalism
    and Fiscal Responsibility                      Re:    Whether Health & Safety Code section
Texas House ofRepresentatives                      161.123 is preempted by the Federal Cigarette
Post Office Box 2910                               Labeling and Advertising Act or is in violation of
Austin, Texas 78768-2910                           the First and Fourteenth Amendments to the United
                                                   States Constitution (RQ-1120-GA)

Dear Representative Creighton:

         Your request concerns section 161.123(a) of the Texas Health and Safety Code, the
"Advertising Fee Statute," which provides that "[a] purchaser of advertising is liable for and
shall remit to the comptroller a fee that is 10 percent of the gross sales price of any outdoor
advertising of cigarettes and tobacco products in this state." TEX. HEALTH & SAFETY CODE ANN.
§ 161.123(a) (West 2010). You ask (1) whether the Advertising Fee Statute is preempted as it
applies to cigarettes under the Federal Cigarette Labeling and Advertising Act (the "FCLAA'');
(2) if preempted, whether the provision of the Advertising Fee Statute applying to cigarettes is
severable from the rest of the statute; and (3) whether the Advertising Fee Statute violates free
speech protections under the United States and Texas Constitutions. 1 We address your questions
in turn.

        A preemption analysis begins "with a presumption that Congress did not preempt state
law." See Graber v. Fuqua, 279 S.W.3d 608, 611 (Tex. 2009). That is, a state regulation is
"'not to be superseded by [a] Federal Act unless that is the clear and manifest purpose of
Congress."' Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 542 (2001) (citation omitted). In
that vein, "State action may be foreclosed by express language in a congressional enactment."
!d. at 541.

        Section 1334 of the FCLAA contains express language preempting state regulation of
cigarette advertising: "No requirement or prohibition based on smoking and health shall be

          1
           Letter from Honorable Brandon Creighton, Chair, Select Comm. on Federalism & Fiscal Responsibility, to
Honorable Greg Abbott, Tex. Att'y Gen. at 1-2 (Apr. 8, 2013), http://www.texasattomeygeneral.gov/opin ("Request
Letter").
The Honorable Brandon Creighton - Page 2          (GA-l 020)

imposed under State law with respect to the advertising or promotion of any cigarettes the
packages ofwhich are labeled in conformity with the provisions of this chapter." 15 U.S.C.A. §
1334(b) (West 2009); see id § 1333 (West Supp. 2013) (cigarette package labeling
requirements). The United States Supreme Court addressed a question similar to yours
concerning the preemption of state cigarette advertising regulations in Lorillard Tobacco Co. v.
Reilly. 533 U.S. at 540-52. In analyzing the preemption claims, the Court considered three
distinct inquiries arising from the plain language of section 1334(b): whether the state
regulations were (1) a "requirement or prohibition," (2) "based on smoking and health," and (3)
"with respect to the advertising or promotion" of cigarettes. See id at 541; 15 U.S.C.A. §
1334(b) (West 2009).

         With regard to the first element of the Supreme Court's analysis in Lorillard, by
providing that the fee "shall" be remitted, the Advertising Fee Statute imposes a "requirement"
upon purchasers of outdoor cigarette advertising. TEx. HEALTH & SAFETY CODE ANN. §
 161.123(a) (West 2010); TEX. Gov'T CODE ANN.§ 311.016(2) (West 2013). With regard to the
second element, whether the Advertising Fee Statute is "based on smoking and health," the
Supreme Court determined that Congress, in using the phrase "based on smoking and health,"
intended to prohibit "state cigarette advertising regulations motivated by concerns about smoking
and health." Lorillard, 533 U.S. at 548 (emphasis added). Like the regulations at issue in
Lorillard, the Advertising Fee Statute imposes a requirement specifically on purchasers of
outdoor cigarette advertising. The Supreme Court held that such regulations were "inevitably
motivated by concerns about smoking and health" because they "expressly target cigarette
advertising." Id at 547, 550. As for the third element, whether the state regulation is "with
respect to the advertising and promotion of cigarettes," the Supreme Court suggested that "with
respect to" means the state law must "relate to" or "expressly target" cigarette advertising. !d. at
547. The Advertising Fee Statute plainly relates to and expressly targets cigarette advertising.
Thus, a court considering a preemption claim against the Advertising Fee Statute could conclude
that it is preempted by section 1334(b) as a "requirement ... based on smoking and health ...
with respect to the advertising or promotion" of cigarettes. 15 U.S.C.A. § 1334(b) (West 2009);
Lorillard, 533 U.S. at 547-52.

       Nevertheless, in court, "the party urging preemption has the difficult burden of
overcoming the presumption against preemption." Great Dane Trailers, Inc. v. Estate of Wells,
52 S.W.3d 737, 743 (Tex. 2001) (citing Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 255
(1984)). Without the benefit of adversariallitigation and the opportunity for all sides to present
argument, it is impossible for this office to conclusively determine, for example, what motivated
the Legislature to adopt the Advertising Fee Statute. That determination, which is an important
part of preemption analysis, may require the resolution of factual questions, which is
The Honorable Brandon Creighton - Page 3                 (GA-l 020)

inappropriate for the opinion process. Therefore, we cannot conclusively determine whether
section 1334(b) preempts the Advertising Fee Statute as it applies to cigarettes. 2

        If a court were to conclude that the Advertising Fee Statute is preempted as it applies to
cigarettes, you ask if the entire Advertising Fee Statute is preempted. See Request Letter at 2.
Whether unconstitutional provisions of a state statute are severable is a matter of state law.
Virginia v. Hicks, 539 U.S. 113, 121 (2003). In Texas, an invalid provision is severable "[i]f,
when the unconstitutional portion is stricken out, that which remains is complete in itself, and
capable of being executed in accordance with the apparent legislative intent, wholly independent
ofthat which was rejected." Rose v. Doctors Hasp., 801 S.W.2d 841, 844 (Tex. 1990); see also
TEX. Gov'T CoDE ANN. § 311.032(c) (West 2013) (governing severability of statutes).

        Courts ascertain legislative intent by drawing from the plain language of the statute, using
any statutory definitions provided and presuming every word has been deliberately chosen. Tex.
Mut. Ins. Co. v. Ruttiger, 381 S.W.3d 430, 452 (Tex. 2012). The Advertising Fee Statute applies
to the purchase of outdoor advertising of both "cigarettes" and "tobacco products." TEX.
HEALTH & SAFETY CODE ANN. § 161.123 (West 2010). The terms have separate and distinct
meanings assigned by sections 154.001 and 155.001, respectively, of the Tax Code. /d. §
161.121(2), (5) (defining the terms pursuant to the Tax Code); TEX. TAx CODE ANN. §§
154.001(2) (West 2008), 155.001(15). By listing and defining the two terms separately, the
Legislature indicated an intent to distinguish "cigarettes" from all other "tobacco products." To
conclude that they are "essentially and inseparably connected in substance," thus precluding
severability, would ignore the Legislature's intent to the contrary. See Rose, 801 S.W.2d at 844.
Applied only to non-cigarette tobacco products, the Advertising Fee Statute appears capable of
being executed in accordance with legislative intent. Therefore, if a court concludes that the
Advertising Fee Statute ·is preempted with regard to cigarettes, it would likely find that the
remainder of the statute applicable to tobacco products remains enforceable. 3

        Finally, you ask whether the Advertising Fee Statute violates free speech protections
under the United States and Texas Constitutions. Request Letter at 1-2. The First Amendment
to the United States Constitution, made applicable to state governments through operation of the
Fourteenth Amendment, provides in relevant part that "Congress shall make no law . . .
abridging the freedom of speech .... " U.S. CONST. amend. I; see Gitlow v. New York, 268 U.S.
2
         The Texas Comptroller of Public Accounts is charged with administering and collecting the advertising
fee. See TEX. HEALTH & SAFETY CODE ANN. § 161.123 (West 2010). We have not received briefing from the
Comptroller regarding its position on the issues presented in your request.
        3
          No product listed under the definition of "tobacco product," including "cigar," falls within the FCLAA's
definition of"cigarette." Compare TEX. TAX CODE ANN. § 155 .001(2) (West 2008) (defining "cigar"), (15) (listing
"cigar" under definition of "tobacco product"), with 15 U.S.C.A. § 1332(1) (West 2009) (defining "cigarette"), (7)
(defining "little cigar" for purposes of the FCLAA).
The Honorable Brandon Creighton - Page 4        (GA-1020)

652, 666 (1925). Article I, section 8 of the Texas Constitution provides that "no law shall ever
be passed curtailing the liberty of speech." TEX. CONST. art. I, § 8. Generally, a court applying
Texas law will limit its analysis "to the First Amendment and simply assume that its concerns are
congruent with those of article I, section 8" of the Texas Constitution. Bentley v. Bunton, 94
S.W.3d 561, 579 (Tex. 2002).

         In Lorillard, the Supreme Court used the test described in Central Hudson Gas v. Public
Service Commission, 447 U.S. 557, 562-63 (1980), to analyze the constitutionality of
commercial speech regulations related to cigarette advertising. See Lorillard, 533 U.S. at 554-
56. To satisfy the Central Hudson test, a commercial speech regulation must (1) not be
misleading and concern a lawful activity, (2) further a substantial governmental interest, (3)
directly advance that interest, and (4) not be more extensive than is necessary to serve that
interest. Cent. Hudson, 447 U.S. at 566.

        In court, the state would have the burden of justifying its commercial speech regulation
by demonstrating that it satisfies the Central Hudson test. See Sorrell v. IMS Health, Inc., 131 S.
Ct. 2653, 2667 (2011). In that process, the Advertising Fee Statute should be afforded a
presumption of constitutionality. TEX. Gov'T CODE ANN. § 311.021(1) (West 2013) (providing
that it is presumed the Legislature intended to comply with state and federal constitutions in
enacting a statute). Ultimately, whether the Advertising Fee Statute furthers a substantial
government interest, directly advances that interest, and is no more extensive than necessary are
issues that can only be resolved by a court of law upon consideration of the arguments and facts
presented by the parties to a First Amendment claim. See Lorillard, 533 U.S. at 563 ("The -
degree to which speech is suppressed ... under a particular regulatory scheme tends to be case
specific."). Thus, this office .cannot resolve your question regarding the constitutionality of the
Advertising Fee Statute.
The Honorable Brandon Creighton - Page 5        (GA-1020)

                                     SUMMARY

                      This office cannot conclusively determine whether section
              1334(b) of the Federal Cigarette Labeling and Advertising Act
              preempts the Advertising Fee Statute as it applies to cigarettes. If
              a court concludes that the Advertising Fee Statute is preempted
              with regard to cigarettes, it would likely find that the remainder of
              the statute applicable to tobacco products remains enforceable.

                      Whether the Advertising Fee Statute violates free speech
              protections under the United States and Texas Constitutions is a
              fact-intensive question that can only be resolved by a court of law
              upon consideration of the arguments and facts presented by the
              parties to a First Amendment claim.

                                            Very truly yours,

DANIEL T. HODGE
First Assistant Attorney General

JAMES D. BLACKLOCK
Deputy Attorney General for Legal Counsel

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

Stephen L. Tatum, Jr.
Assistant Attorney General, Opinion Committee