Flavored Tobacco Regulation

U.S. Smokeless Tobacco Mfg. Co. v. City of New York, 703 F. Supp. 2d 329 (S.D.N.Y. 2010)

New York City prevailed in its efforts to restrict the widespread sale of flavored tobacco products. On February 26, 2013, the Second Circuit Court of Appeals ruled that a New York City (City) ordinance restricting the sale of flavored tobacco products to tobacco bars is not preempted or prohibited by the Family Smoking Prevention and Tobacco Control Act (FSPTCA, 21 USC §387 et. seq.). The City law prohibits the sale of any non-cigarette tobacco product with a “characterizing flavor” (other than tobacco menthol, mint or wintergreen) outside of tobacco bars (NYC Admin. Code §17-715). Tobacco bars are a narrow class of eight food retailers that have registered with the City since 2002, and there are no new retailers permitted in this category. Prohibited flavors include: any fruit, chocolate, vanilla, honey, alcoholic beverages, clove, licorice, and coffee. Flavored tobacco products entice youth through appealing descriptors and by masking naturally harsh tobacco flavors and aromas. The law does not apply to cigarettes; FSPTCA already prohibits the manufacturing and sale of flavored cigarettes. (21 U.S.C. §387g(a)(1)(A)).

The plaintiffs, who were manufacturers and wholesalers of flavored smokeless tobacco, appealed a 2011 District Court summary judgment ruling that held the FSPTCA preserves the rights of states and municipalities to enact more restrictive laws and regulations concerning the sale of tobacco products than those in the federal law.

The Second Circuit reviewed the grant of summary judgment “de novo,” meaning the Court did not rely on the lower court’s findings and instead reviewed the case as if it were a new trial. In determining whether NYC’s ordinance was preempted (prohibited) by FSPTCA, the Court first examined the FSPTCA and its recognition of state and local authority to enact a law or other measure that is “in addition to, or more stringent than, requirements” under the FSPTCA, “including a law, rule, regulation, or other measure relating to or prohibiting the sale, distribution, possession, exposure to, access to, advertising and promotion of, or use of tobacco products by individuals of any age.” (21 USC §387p(a)(1), emphasis added). This recognition of state rulemaking authority is referred to as the “preservation clause.”

The Court then moved to the FSPTCA’s exceptions to this broad preservation of state authority to regulate tobacco, noting the FSPTCA specifically preempts state or local regulation of “tobacco product standards, premarket review, adulteration, misbranding, labeling, registration, good manufacturing standards, or modified risk tobacco products.” (21 USC §387p(a)(2)(A)). Finally, the court reviewed what it characterized as “an exception to an exception,” or the “savings clause”: A state law which is authorized under the preservation clause, but which falls into the category of preempted regulations, may still be permissible under the FSPTCA.  The FSPTCA “saves” from preemption (permits) state or local “requirements relating to the sale, distribution, possession, information reporting to the State, exposure to, access to, the advertising and promotion of, or use of, tobacco products by individuals of any age.” (21 USC §387p(a)(2)(B)).

The plaintiffs argued, unsuccessfully, that the FSPTCA preempted the City ordinance.  Plaintiffs argued that local governments could not make it impossible for adults to purchase tobacco products that comply with federal standards. The Court disagreed, stating that while the FDA cannot ban entire categories of tobacco products under the FSPTCA, state and local governments were not similarly limited. Instead, the Court noted, the FSPTCA expressly allows local sales prohibitions for tobacco products.

Plaintiffs further argued that the City ordinance was an impermissible product standard regulation in disguise. The Court again disagreed. The Court noted that while localities cannot regulate tobacco product standards (this is left to the federal government) state and local governments may regulate the sales of finished tobacco products and other consumer-related aspects of the industry (so long as they do not conflict with federal regulations). The City ordinance does not relate to the ingredients of tobacco products, but simply requires that finished tobacco products that are characterized or marketed as flavored not be sold outside of tobacco bars in the City.

The Court further noted that even if the ordinance was a regulation of product standards preempted by the FSPTCA, the savings clause of the federal law permits local laws relating to the sale of tobacco products. Plaintiffs attempted to argue that the savings clause does not allow a total ban on particular products. The Court did not reach the question of whether a ban would be permissible under the savings clause, finding that the City ordinance allows limited sale of flavored tobacco products at tobacco bars, and is therefore not a complete ban.

In summary, the Second Circuit Court of Appeals found that Congress intended to preserve state and local authority to regulate the sale of tobacco products. The Court found the ordinance to advance the goals of the FSPTCA—in particular, the reduction of tobacco use among youth—and affirmed the award of summary judgment by the District Court.