Tobacco Product Sales Restriction

Independents Gas & Service Stations Associations, Inc., v. City of Chicago 2015 WL 4038743 (June 29, 2015)

A United States District Court has upheld Chicago’s sales restrictions on flavored tobacco products. Specifically, the law restricts the sale of any flavored tobacco product, including menthol flavored products, within 500 feet of a school.

In an effort to reduce smoking among youth and adults alike, the Chicago City Council in 2013 adopted a law restricting the sale of flavored tobacco products to retail tobacco stores (defined as retail stores which derive 80% of their gross revenue from the sale of tobacco products). In October 2014, an association of independent small business owners and operators of gas stations and a convenience store (plaintiffs) challenged the law alleging:

(1) The sales restriction was a “product manufacturing standard” in disguise and thus preempted by the Family Smoking Prevention and Tobacco Control Act (FSPTCA);

(2) The description of a “school” was too vague to permit retailers to understand whether they were prohibited from selling flavored tobacco products, in violation of the Fourteenth Amendment of the U.S. Constitution; and

(3) Because it applied “retroactively” to retailers who, at the time the law was enacted, possessed valid licenses to sell tobacco products, the sales restriction violated their “vested rights” and the Due Process clause of the U.S. Constitution.

Judge Matthew F. Kennelly was unpersuaded by plaintiffs’ arguments and dismissed all of their claims. First, he found that while the FSPTCA permits state and local tobacco sales regulations and preempts state or local product manufacturing standards, the law specifically “saves” from this preemption “requirements relating to the sale, distribution, possession, ….exposure to, access to, advertising and promotion of, or use of, tobacco products by individuals of any age.” Additionally, the court agreed with and cited the reasoning of the Second Circuit Court of Appeals in Smokeless Tobacco Manufacturing Co. LLC v. City of New York that even though sales regulations may affect the decisions of manufacturers, to be considered a manufacturing standard, the regulation must be “something more than an incentive or motivator.”

The judge swiftly dismissed plaintiffs remaining arguments and held that the failure of the ordinance to precisely define an easily understood term like “school” did not render it unconstitutionally vague. Judge Kennelly further held that a business license is not a “vested right,” which would necessarily mean that the terms of the license could not be altered. There is no vested right in “the mere continuance of a law,” nor does the sales restriction impose new legal consequences on those stores that sold flavored tobacco products within 500 feet of a school prior to its enactment.

The plaintiffs have a right to appeal the decision to the U.S. Court of Appeals for the Seventh Circuit.