Regulating Tobacco Retailers: Options For State And Local .

Regulatory Strategy:Limiting Sales to Face-to-FaceOnly TransactionsDefining and Describing a Face-To-Face Only Sales LawOne regulatory approach that states and localitiesmight consider is to restrict tobacco sales toface-to-face transactions only. With this strategy,vending machines and self-service displays would beprohibited. Tobacco products would only be accessibleto store personnel, thereby requiring customers toask for tobacco products, and ideally, to have theiridentification checked to ensure compliance with theminimum age sales law.Twenty-six states have adopted this face-to-face salesrequirement for cigarettes and some have enacted aface-to-face requirement for other tobacco products.19Massachusetts law, for example, states:[I]t shall be an unfair or deceptive act or practicefor any person who sells or distributes cigarettesor smokeless tobacco products through a retailoutlet located within Massachusetts to engage inany of the following retail outlet sales practices:Selling cigarettes or smokeless tobacco productsin any manner other than in a direct, face-to-faceexchange [;]Using self-service displays of cigarettes orsmokeless tobacco products [except in adultonly facilities; and]Failing to place cigarettes and smokeless tobaccoproducts out of the reach of all consumers, andin a location accessible only to outlet personnel.20While the new 2009 FDA law includes a face-to-facesales requirement by prohibiting the sale of certaintobacco products through vending machines andself-service displays except in adult-only facilities,21state and local governments should consider passingtheir own similar prohibition. With the passageof a state or local law, state or local enforcementofficials, who likely have a better knowledge of theirown jurisdiction’s laws than other agencies, will haveunquestionable authority to enforce these laws.22 Also,any monetary fines imposed by a state or local lawwould be revenue for the state or local government.Furthermore, state and local governments may alsoimpose stricter retail sales regulations. For example,the FDA ban on self-service displays and vendingmachines only applies to cigarettes and smokelesstobacco products and does not cover adult-onlyestablishments. State and local governments maywant to expand this ban and impose more restrictivecontrols. In Massachusetts, for instance, even in adultonly facilities, vending machines include a lock thatan employee needs to open for each tobacco productpurchase.23 Governments might consider limitingself-service or vending machine sales of all tobaccoproducts to adult-only facilities or prohibiting vendingmachines altogether, given that youth frequently gainentrance to adult-only facilities despite the proprietor’sefforts to impose stricter regulations.Drafting Tips: Drafters should consider writing faceto-face transaction requirements into their laws. Theyshould also consider ways to make their local lawsmore effective in reducing tobacco use within theirlocal community. For instance, in some communities,small cigars and other tobacco products are gainingpopularity with youth because such products arerelatively inexpensive. 24 It is unclear how manystates have adopted face-to-face sales requirementsfor cigars and other tobacco products. State andlocal governments could consider requiring thoseproducts to be included in any such law and couldalso consider requiring face-to-face transactions inadult-only facilities.Legal ConsiderationsFace-to-face sales laws have been tested and upheldin the federal courts, including the 2001 case LorillardTobacco Co. v. Reilly. This landmark case involved achallenge to a series of tobacco control regulationspromulgated by the Massachusetts Attorney General.25In Lorillard, the U.S. Supreme Court concluded thatprohibiting self-service displays and vending machinesis a legally appropriate means for preventing minorsfrom obtaining tobacco products.26 The Court upheldthose regulations that restricted access to tobaccoproducts by consumers by requiring face-to-face directcontact with a salesperson, finding that such salespractices regulated conduct rather than speech, andwere thus valid under the First Amendment.27 TheCourt found that even though the regulated conducthad a communicative component, the reason for theregulation was unrelated to the communication ofTobacco Control Legal Consortium3

ideas or expression. Thus the Court did not applythe First Amendment test in United States v. O’Brienrelated to the restriction of expressive conduct.28(See the “Sample Tobacco Retailer Regulations andLegal Tests Applied by Court” chart at the end ofthis document.)Federal Law Does Not Preempt State andLocal Laws that Limit Tobacco Sales toFace-to-Face TransactionsThe 2009 FDA law does not in any way diminish thelegal validity of bans on self-service displays andvending machines addressed in the Lorillard case.29If anything, the FDA law affirms that no federal lawimpedes state and local governments from enactingsuch bans. The FDA law states:[n]othing in this [Act] or rules promulgatedunder this subchapter, shall be construed tolimit the authority of a State or politicalsubdivision of a State to enact, adopt,promulgate, and enforce any law, rule,regulation, or other measure with respect totobacco products that is in addition to, or morestringent than, requirements established underthis [Act], including a law, rule, regulation, orother measure relating to or prohibiting the sale,distribution, possession, exposure to, access to,advertising and promotion of, or use of tobaccoproducts . . . . 30 (Emphasis added.)The legality of this language was upheld in Commonwealth Brands Inc. v. FDA.31 In Commonwealth Brands,tobacco manufacturers claimed that the languagefrom the 2009 FDA law, quoted above, amounts toan unconstitutional delegation of authority to state andlocal governments.32 The Court rejected this argumentand concluded that the language instead articulates thevery limited preemptive scope of the 2009 FDA law.33In other words, the anti-preemption language withinthe 2009 FDA law instructs state and local governmentsthat they may continue to exercise their public healthlaw authority to enact and enforce laws regulating themanner in which tobacco products are sold.State and Local Laws that Limit Tobacco Salesto Face-to-Face Transactions Do Not ViolateCommercial Speech ProtectionsBans on self-service displays and vending machinescomport with commercial speech protections under the4First Amendment. In Lorillard, the Court concludedthat bans on self-service displays are “unrelated toexpression” of product information.34 To understandwhy the Court reached this conclusion, it is helpful tolook at a recent case from California that upheld theCity and County of San Francisco’s ban on the saleof tobacco products in pharmacies.35 In that case, thelargest domestic manufacturer of cigarettes, PhilipMorris, argued that the San Francisco law violated thecompany’s right to communicate product informationto customers.36 The Court disagreed and pointed outthat a cigarette manufacturer’s “advertising is protectedexpressive activity [but] . . . [s]elling cigarettes isn’tbecause it doesn’t involve conduct with a significantexpressive element.”37Drafting Tips: Keep in mind that state and localgovernments continue to have broad authority toregulate the manner in which tobacco products aresold. The new FDA oversight of tobacco products isintended to complement this authority. Regulation ofthe manner in which tobacco products are sold doesnot trigger commercial speech protections under theFirst Amendment.Drafters should consider writing face-to-facetransaction requirements into their laws. They shouldalso consider ways to make their local laws moreeffective in reducing tobacco use within their localcommunity. For instance, in some communities,small cigars and other tobacco products are gainingpopularity with youth because such products arerelatively inexpensive. 38 It is unclear how manystates have adopted face-to-face sales requirementsfor cigars and other tobacco products. State andlocal governments could consider requiring thoseproducts to be included in any such law and couldalso consider requiring face-to-face transactions inadult-only facilities.Regulatory Strategy: Keeping AllTobacco Products Out of SightDefining and Describing an Out-of-Sight Requirementfor Tobacco ProductsA regulatory strategy requiring retailers to keep alltobacco products out of sight means just that: allproducts must be kept out of the public view. It is welldocumented that tobacco manufacturers pay retailersto display promotional materials.39 One of the mostRegulating Tobacco Retailers: Options for State and Local Governments

powerful pieces of promotional materials currentlyused by the tobacco industry is the so-called “powerwall.”40 A power wall consists of substantial productshelving located behind the retail sales counter.41Power walls can be very large, from ceiling to counterheight and several feet in width.42Legal ConsiderationsFederal Law Would Not Preempt a Requirementthat All Tobacco Products Be Kept Out of SightThe 2009 FDA law does not preempt or lessen theability of state or local governments to prohibit powerwalls.43 Rather, the FDA law clarifies that it will notpreempt any state or local law that regulates the“advertising and promotion of ” tobacco products.44The 2009 FDA law also states that “a State or localitymay enact statutes and promulgate regulations. . . [that impose] specific bans or restrictions onthe time, place and manner, but not content, of theadvertising or promotion of any cigarettes.”45 Thislanguage specifically instructs courts not to interpretthe 2009 FDA law in a way that preempts state or localgovernments from regulating the time and placementof tobacco advertising.A Requirement that All Tobacco ProductsBe Kept Out of Sight May Result in Claimsthat the Law Violates the First AmendmentAlthough federal law would not appear to preempta state or local requirement that retailers keeptobacco products out of sight, such a measure wouldlikely trigger legal claims reviewed under the FirstAmendment. The issue was discussed briefly by theU.S. Supreme Court in the Lorillard case, whichdealt with self-service displays along with a series oftobacco advertising and sales restrictions establishedby the Massachusetts Attorney General.46 The tobaccomanufacturers claimed that self-service displays wereprotected commercial speech.47 Although the Courtdisagreed, it stated that the ban on self-service displaysleft “open ample channels of communication” withinthe store.48 As an example of one such channel ofcommunication, the Court suggested that the displayof packaging itself had promotional value. The Courtstated:Moreover, retailers have other means ofexercising any cognizable speech interest in thepresentation of their products. We presume thatvendors may place empty tobacco packagingon open display, and display actual tobaccoproducts so long as that display is only accessibleto sales personnel.49The court reached a similar conclusion in the ongoingcase Commonwealth Brands, Inc. v. FDA regarding alegal challenge brought by tobacco manufacturersagainst numerous aspects of the 2009 FDA law.50 Thetrial court in the Commonwealth Brands case struckdown the FDA law’s ban on color and graphics intobacco advertising, based in part on the argumentthat the ban would prohibit manufacturers from“depicting their own packaging in their advertising.”51The court stated that tobacco manufacturers “areclearly right when they say that images of packagesof their products, simple brand symbols, and someuses of color communicate important commercialinformation about their products, i.e., what theproduct is and who makes it.”52 Whether the tobaccopackage appears in advertising or behind the storeclerk on a shelf, the court’s reasoning would seem toapply. Thus, a law that requires cigarette packages (orother tobacco product packages) to be stored wherecustomers cannot see them would be subject to aheightened level of judicial scrutiny.When analyzing an out-of-sight law challenged onFirst Amendment grounds, the courts would likelyapply a four part (prong) test first developed inCentral Hudson Gas & Electric Corp. v. Public ServiceCommission of New York:53 –1. Is the required statement false, deceptive orconcerning illegal activities?2. Is the law justified by a substantialgovernment interest?3. Does the law directly advance thegovernmental interest?4. Is there a reasonable fit between the goal andthe means chosen to accomplish the goal?Given the Lorillard Court’s application of this test,we can be relatively confident of the answer to at leastthe first two questions. The Lorillard Court found thatthe advertising of tobacco products in and aroundstores is not false, deceptive or illegal because tobaccois a legal product used by adults.54 The Court alsofound that governments have a substantial interestin reducing youth smoking rates.55Tobacco Control Legal Consortium5

However, the answers to the second two questionsare less apparent. The Lorillard Court, for example,concluded that a ban on advertising of tobaccoproducts within five feet of the floor did not directlyadvance a governmental interest.56 Massachusettsargued that the five-foot limit would reduce tobaccoadvertising directed at children.57 The Court disagreedand concluded that children could simply look up andthat some children were taller than five feet.58Nevertheless, research conducted since the Lorillarddecision in 2001 demonstrates the dramatic effect oftobacco advertising in stores on enticing children totry to buy or use tobacco products.59 These studiesmay “provide evidence that young people respond tocigarette marketing even when it is aimed at adults,showing that new restrictions are needed to curbillegal, as well as highly addictive and harmful, underage smoking.”60 This recent empirical evidence linkingyouth smoking to advertising targeting adults maybe pivotal to any future First Amendment legalchallenges to tobacco advertising regulations.61A court considering a First Amendment challenge toan out-of-sight regulation will also need to considerthe fourth and final prong in Central Hudson: whethera reasonable fit exists between the goal and the meanschosen to accomplish the goal. In Lorillard, theCourt evaluated the legality of a ban on billboardadvertising near schools as well as the five-footlimitation discussed above, and the Court held thatthe restriction on billboards failed this fourth prong.Although the ban was designed to prevent tobaccobillboard ads from being viewed by children, the banwas overly broad because it restricted too much speechthat was suitable for adults.62 The Court reached thisconclusion even though it agreed that the billboardban would directly advance the state’s interests inprotecting children.63 Opponents to an out-of-sightrequirement would likely argue that the Court’sreasoning in the Lorillard case applies to the displayof packages, because the display communicates therange of tobacco products available for sale in thestore. In response, proponents of the law would needto identify an alternative means for retailers (andmanufacturers) to communicate such information.Thus, a law that requires retailers to keep productsout of sight from customers will need to be draftedcarefully to withstand a legal challenge under theFirst Amendment.Drafting Tips: Lawmakers should proceed withcaution when considering direct restrictions of tobaccomarketing. One option would be to require healthwarnings of a type and size sufficient to compete withtobacco marketing in stores. For example, the NewYork City Department of Health and Mental Hygieneimplemented a requirement that retailers post pointof-sale health warnings that contain graphic imagesand strong language.64 Another regulatory optionwould be to prohibit tobacco retailers in certainlocations as discussed below, which would have aside effect of decreasing tobacco promotions in theselocations. Yet another option might be to require theproducts to be out of sight, but to respect the tobaccoindustry’s First Amendment rights, by allowing itemsto be advertised in a menu of products that adultscould view upon request or to allow limited signageto communicate the existence of tobacco productsin the stores.As mentioned earlier, a law that restricts commercialspeech should restrict the least amount of speechpossible, while still accomplishing the law’s goal.Drafters should document the extent of the problemthe law is intended to solve, why the law’s approachmust be taken, and why other approaches to solvingthe problem that have a lesser impact on commercial6Regulating Tobacco Retailers: Options for State and Local Governments

speech would not work (or why they did not work inthe past). This documentation can be included in thelaw’s findings (often included as “whereas” clauses atthe beginning of the law’s text).Regulatory Strategy: Prohibitingthe Sale of Tobacco ProductsWithin 1,000 Feet of Playgroundsand SchoolsDefining and Describing the 1,000-Foot Buffer ZoneAround Schools and PlaygroundsThe regulatory strategy of creating tobacco-freezones around schools and playgrounds was alsoaddressed, to some extent, in the Lorillard case, whenthe U.S. Supreme Court struck down a Massachusettsregulation that prohibited most tobacco advertisingwithin 1,000 feet of schools and playgrounds. 65The Lorillard Court made two important findingsregarding the 1,000-foot buffer zone. The Courtconcluded that tobacco advertising is protectedcommercial speech and that Massachusetts’ interestsin protecting minors from tobacco advertising wasnot sufficient to justify the 1,000 foot buffer zones.66The Lorillard decision, however, does not forecloseall options for creating buffer zones around schools.The ruling applies to the advertising and promotionof tobacco products. It does not include the actualsale of tobacco. In an effort to create tobacco-freezones for children, state and local governments couldconsider prohibiting the sale of tobacco products nearschools, playgrounds and other similar areas. Thebuffer zones could extend even further than 1,000 feetif doing so was adequately supported by the findingsincluded within the law.This strategy of tobacco-free zones has support withinthe public health community. For example, the Centersfor Disease Control and Prevention recommends “theuse of regulatory authority (e.g., through licensingand zoning) to limit alcohol outlet density on the basisof sufficient evidence of a positive association betweenoutlet density and excessive alcohol consumption andrelated harms.”67 According to research reported inthe American Journal of Public Health, experimentalsmoking among high school-aged minors increaseswhen tobacco retailers are closer to schools anddensely populate those locations.68As a practical matter, state or local governments canestablish tobacco-free buffer zones in at least twoways. The first option is to require tobacco retailersto obtain a tobacco retailer license, and make theissuance of licenses conditional on the retailers notoperating within a certain distance, such as 1,000Tobacco Control Legal Consortium7

feet, of schools or playgrounds. A second option isto amend the local zoning code to prohibit the saleof tobacco products within a certain distance, such as1,000 feet, of schools and playgrounds. Under eitheroption, the law should clearly and comprehensivelydefine what constitutes a school or playground.The law should also define whether the 1,000 feet ismeasured by the distance pedestrians travel or theshortest straight line.69 For example, the law mightread as follows:No Tobacco Retailer shall be located within onethousand (1,000) feet, as measured by a straightline, of the boundary of a property occupied by(i) a public or private kindergarten, elementary,middle, junior high or high school; (ii) a licensedchild-care facility or preschool; (iii) playground;(iv) youth center; (v) recreational facility; (vi)arcade; (vi) park; or (vii) library.70Legal ConsiderationsCourts would likely eval

only facilities, vending machines include a lock that an employee needs to open for each tobacco product purchase.23 Governments might consider limiting self-service or vending machine sales of all tobacco products to adult-only facilities or prohibiting vending