R.J. Reynolds Tobacco Company v. City of Edina ( 2023 )

United States Court of Appeals
For the Eighth Circuit
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No. 20-2852
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R. J. Reynolds Tobacco Company; R.J. Reynolds Vapor Company; American
Snuff Company, LLC; Santa Fe Natural Tobacco Company, Inc.; Cousins II, Inc.,
doing business as Vernon BP; Lang’s Automotive Service, Inc., doing business as
Lang’s One Stop Market
Plaintiffs - Appellants
v.
City of Edina; Edina City Council; Scott Neal, in his official capacity as City
Manager of the City of Edina
Defendants - Appellees
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Public Health Law Center; Action on Smoking and Health; African American
Tobacco Control Leadership Council; American Cancer Society Action Network;
American Heart Association; American Lung Association; American Medical
Association; American Public Health Association; American Thoracic Society;
Americans for Nonsmokers’ Rights; Asian Pacific Partners for Empowerment,
Advocacy and Leadership; Association for Nonsmokers-Minnesota; Blue Cross
and Blue Shield of Minnesota; Campaign for Tobacco-Free Kids; Center for Black
Health and Equity; ChangeLab Solutions; ClearWay; Massachusetts Association of
Health Boards; Minnesota Medical Association; National LGBT Cancer Network;
National Native Network; Parents Against Vaping e-cigarettes; Public Health
Advocacy Institute; Public Health and Tobacco Policy Center; Truth Initiative
Amici on Behalf of Appellee(s)
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Appeal from United States District Court
for the District of Minnesota
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Submitted: May 12, 2021
Filed: February 27, 2023
[Published]
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Before COLLOTON, WOLLMAN, and KOBES, Circuit Judges.
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PER CURIAM.
The City of Edina, Minnesota passed an ordinance banning the sale of
flavored tobacco products. R.J. Reynolds Tobacco Company sued the City, arguing
that the Ordinance is preempted by the Family Smoking Prevention and Tobacco
Control Act. The district court 1 granted the City’s motion to dismiss, and Reynolds
appealed. We conclude the Ordinance is not preempted and affirm the district court.
I.
In response to growing concerns about adolescent tobacco use, Congress
passed the TCA in June 2009. Pub. L. No. 111-31, § 2(6), 123 Stat. 1776, 1777
(2009). One of the primary goals was to authorize “the Food and Drug
Administration to set national standards controlling the manufacture of tobacco
products.” Id. § 3(3). To achieve national uniformity while still respecting States’
police power, the Act has three sections relating to preemption: the Preservation
Clause, the Preemption Clause, and the Savings Clause. Those three provisions are
at the heart of this litigation.
1
The Honorable Patrick Schiltz, now Chief Judge, United States District Court
for the District of Minnesota.
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First is the Preservation Clause: “[e]xcept as provided in [the Preemption
Clause], nothing in [the TCA] . . . shall be construed to limit the authority of . . . a
State or political subdivision of a State” to enact any law relating to tobacco “that is
in addition to, or more stringent than” the requirements of the TCA. 21 U.S.C.
§ 387p(a)(1). Essentially, the Preservation Clause tells us that there is no “field
preemption” for the TCA—states and cities are free to go above and beyond the
requirements of the TCA to curb tobacco use.
The Preemption Clause limits that general principle. It says that states and
cities cannot create any rule “which is different from, or in addition to” the TCA’s
requirements “relating to tobacco product standards” and tobacco “adulteration.” Id.
§ 387p(a)(2)(A). So if the Preservation Clause is a general rule that cities can
regulate beyond the TCA, the Preemption Clause carves out a few areas where they
cannot regulate beyond the TCA. Under the Preemption Clause, cities are not
allowed to have their own unique requirements for tobacco product standards.
The Savings Clause then qualifies the Preemption Clause’s scope:
“[s]ubparagraph (A) [the Preemption Clause] does not apply to requirements relating
to the sale, distribution, . . . or use of, tobacco products by individuals of any age.”
Id. § 387p(a)(2)(B). The Savings Clause plainly operates to alter the meaning or
application of the other two clauses, but the parties dispute its exact effects.
In 2020, the City of Edina passed Ordinance No. 2020-08. The Ordinance
says that “[n]o person shall sell, offer for sale, or otherwise distribute any flavored
tobacco products.”2 Edina, Minn., Code of Ordinances § 12-257. Reynolds, a
2
“Flavored tobacco products” are defined as:
[A]ny tobacco, tobacco-related product, or tobacco-related device that
contains a taste or smell, other than the taste or smell of tobacco, that is
distinguishable by an ordinary consumer either prior to or during
consumption or use of the product or device, including, but not limited
to, any taste or smell relating to menthol, mint, wintergreen, chocolate,
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tobacco company that operates in Edina, sued for declaratory and injunctive relief.
It argued that the TCA expressly and impliedly preempted the Ordinance.
The district court held for the City, granting its motion to dismiss. While the
court agreed with Reynolds that the Ordinance fell within the Preemption Clause, it
concluded that it was still allowed under the Savings Clause. The Ordinance, the
court reasoned, relates to both a “tobacco product standard” and to a “requirement
relating to the sale” of tobacco products. So, while the Ordinance was preempted, it
was nevertheless rescued by the Savings Clause. Reynolds appealed.
II.
We review the grant of a motion to dismiss de novo. Grand River Enters. Six
Nations, Ltd. v. Beebe, 574 F.3d 929, 935 (8th Cir. 2009). Likewise, preemption
requires de novo review. Nat’l Bank of Com. v. Dow Chem. Co., 165 F.3d 602, 607
(8th Cir. 1999). “State action may be foreclosed by express language in a
congressional enactment, by implication from the depth and breadth of a
congressional scheme that occupies the legislative field, or by implication because
of a conflict with a congressional enactment,” i.e., express, field, or conflict
preemption. Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541 (2001) (internal
citations omitted). As the party asserting federal preemption of state law, Reynolds
bears the burden of showing that the TCA preempts the Ordinance. Williams v.
Nat’l Football League, 582 F.3d 863, 880 (8th Cir. 2009).
cocoa, vanilla, honey, fruit, or any candy, dessert, alcoholic beverage,
herb or spice. A public statement or claim, whether express or implied,
made or disseminated by a manufacturer of the product or device, or by
any person authorized or permitted by the manufacturer to make or
disseminate public statements concerning such products, that a product
has or produces a taste or smell other than tobacco will constitute
presumptive evidence that the product is a flavored tobacco product.
Edina, Minn., Code of Ordinances § 12-189.
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A.
First, we must decide whether the Ordinance triggers the Preemption Clause.
The City argues that it does not because the Ordinance is simply a ban on sales, not
a “tobacco product standard.” The Ordinance does not tell tobacco companies how
to manufacture tobacco or what additives they can include in tobacco. All it does,
the City argues, is ban the sale of flavored tobacco.
This argument has worked elsewhere, and we are similarly convinced. In U.S.
Smokeless Tobacco Manufacturing Co. v. City of New York, the Second Circuit
held that a similar ban was not a “tobacco product standard.” 708 F.3d 428, 435 (2d
Cir. 2013). The court reasoned that not “every sales ban—many of which would
likely have some effect on manufacturers’ production decisions—should be
regarded as a backdoor requirement relating to tobacco product standards that is
preempted.” Id. at 434 (citation omitted) (cleaned up). To be a “tobacco product
standard,” the court held, a “regulation must be something more than an incentive or
motivator; it must require manufacturers to alter the construction [or]
components . . . of their products.” Id. (citations omitted) (cleaned up). The First
Circuit has held similarly, see Nat’l Ass’n of Tobacco Outlets, Inc. v. City of
Providence, 731 F.3d 71, 82–83 & n.11 (1st Cir. 2013) (holding that sales regulations
were not tobacco product standards), and we agree.
Alternatively, if we assume for the sake of analysis that the Ordinance does
constitute a tobacco product standard, then we must consider whether the Ordinance
is rescued by the Savings Clause. To answer that, we must decide what role the
Savings Clause plays in the TCA’s preservation and preemption scheme. The
Savings Clause begins, “[s]ubparagraph (A) [the Preemption Clause] does not apply
to requirements relating to the sale” of tobacco. 21 U.S.C. § 387p(a)(2)(B). The
central issue in this case is figuring out what effect “does not apply” has on the scope
of the Preemption Clause.
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There are two theories on this issue. The first is that “does not apply” means
that if something falls under the Savings Clause, it cannot also fall under the
Preemption Clause. This would act as a clarification to the Preemption Clause,
rather than as a freestanding shield to preemption. A state rule either goes into the
Preemption “bucket” or the Savings “bucket”—but not both. In this approach our
task would be to determine where the Ordinance fits better: the Preemption Clause
or the Savings Clause. In other words, is the Ordinance more of a requirement
“relating to tobacco product standards,” or is it better characterized as “a requirement
relating to the sale” of tobacco? Because the Ordinance mostly operates to regulate
the presence of flavoring in tobacco products, it is better characterized as “relating
to tobacco product standards.” The Ordinance would then fall into the Preemption
“bucket” and be preempted by the TCA’s rule governing tobacco flavor.
The second theory is that “does not apply” means the Savings Clause voids
the effect of the Preemption Clause. That is, if a rule falls into the Preemption Clause
“bucket” but also relates to sales, it is essentially scooped out of the Preemption
Clause bucket and placed into the Savings Clause bucket. This would act as an
exception to the Preemption Clause, working to rescue a subset of state rules the
TCA otherwise preempts. Under this approach the Ordinance escapes preemption
because, as a sales restriction, it is a requirement “relating to the sale” of tobacco.
We are presented with two plausible readings of the Savings Clause that
compel two different outcomes. Applying the descriptive canons does not provide
further clarity. Both readings risk rendering other terms of the statute superfluous.
As the Supreme Court noted in Engine Manufacturers Ass’n v. South Coast Air
Quality Management District, a manufacturer’s ability to sell a product is
meaningless in the absence of a purchaser’s ability to buy it. 541 U.S. 246, 255
(2004). Reading the Savings Clause as an exception to the Preemption Clause risks
making the TCA’s preemption of tobacco manufacturing standards meaningless,
because States could effectively regulate manufacturing so long as they couch it in
terms of sales. Similarly, reading the Savings Clause as a clarification to the
Preemption Clause results in stripping any independent effect it might have on a
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preemption analysis, because the Savings Clause would not apply to any rules not
already preserved by merit of falling outside the Preemption Clause’s purview. This
risks rendering the Savings and Preservation Clauses synonymous and collapsing
any distinction between them.
Further, both readings promote the TCA’s purposes. The TCA’s “stated
purposes include, on the one hand, reducing the use of, dependence on, and social
costs associated with tobacco products and, on the other, allowing the continued sale
of such products to adults ‘in conjunction with measures to ensure that they are not
sold or accessible to underage purchasers.’” Smokeless Tobacco, 708 F.3d at 433(quoting TCA § 3(7), codified at 21 U.S.C. § 387). Reading the Savings Clause as
a clarification would limit state regulatory authority but serve the TCA’s purpose of
ensuring reliable access to tobacco products for adult tobacco users. Likewise,
reading the Savings Clause as an exception gives States more expansive authority to
tailor effective regulations for their communities, serving the purpose of reducing
tobacco use, dependence, and social costs.
Our traditional understanding of federalism resolves this issue. When
addressing express or implied preemption we begin “with the assumption that the
historic police powers of the States are not to be superseded by the Federal Act unless
that was the clear and manifest purpose of Congress.” Altria Grp., Inc. v. Good, 555
U.S. 70, 77 (2008) (cleaned up) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S.
218, 230 (1947)). This assumption is especially important when Congress legislates
in a field traditionally occupied by the States. Id. As a result, “when the text of a
pre-emption clause is susceptible of more than one plausible reading,” we must
“accept the reading that disfavors pre-emption.” Id. (quoting Bates v. Dow
Agrosciences LLC, 544 U.S. 431, 449 (2005)).
The TCA involves the States’ traditional police powers. State governments
historically possess police power to protect public health and safety. See U.S. Const.
amend. X. States traditionally used this power to enact bans on selling tobacco
products “for the preservation of the public health or safety.” Austin v. Tennessee,
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179 U.S. 343, 349 (1900). Since the early 1900s, state and local authorities have
enacted public health measures directed at the dangers of tobacco use. See Graham
v. R.J. Reynolds Tobacco Co., 857 F.3d 1169, 1190–91 (11th Cir. 2017); Paul A.
Diller, Why Do Cities Innovate in Public Health? Implications of Scale and
Structure, 91 Wash. U. L. Rev. 1219, 1234–35 (2014) (discussing state and local
bans of flavored cigarettes passed before the Tobacco Control Act banned cigarette
flavorings). And here the record shows that the City’s public health officials
proposed this ordinance specifically to combat the health crisis of its youth using
flavored vaping products.
Because the TCA is ambiguous and implicates traditional state police powers,
we must accept the reading of the Savings Clause that disfavors preemption. See
Altria Grp., 555 U.S. at 77. Of the two plausible interpretations outlined above, the
City’s reading best limits preemption and preserves traditional state authority.
Absent clearer intent from Congress, we must accept the City’s interpretation. See
id. And, when read as an exception, the Savings Clause allows the Ordinance
because it relates to the sale of tobacco products.
Even accepting this reading, Reynolds argues that the TCA preempts this
“blanket prohibition” on the sale of a tobacco product. Reynolds argues that an
outright ban on tobacco sales is not a “requirement[] relating to the sale” because it
simply forbids sales rather than imposing regulatory rules or guidelines. Reynolds
distinguishes the text of the Preservation Clause, which encompasses requirements
“related to or prohibiting the sale,” from the language of the Savings Clause, which
only applies to requirements “relating to the sale.” Reynolds argues that the
inclusion of “prohibiting” into the Preservation Clause but not the Savings Clause
means that blanket prohibitions of a product are not allowed.
But Reynolds identifies no basis in the text of the TCA to distinguish between
a “blanket” prohibition and some prohibition relating to sale, like restrictions on sale
to a certain age group or time, place, and manner restrictions. Further, as the district
court noted, the argument
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ignores the fact that the preemption clause, like the saving clause, uses
the term “requirement” and does not explicitly refer to prohibitions.
“Requirement” must mean the same thing in the two clauses. If a
prohibition is a “requirement”—and if the Ordinance is a prohibition—
then the Ordinance is preempted under the preemption clause (because,
as the [Supreme] Court has held, the Ordinance relates to tobacco-
product standards), but it is saved by the saving clause (because it
relates to the sale of tobacco products). If a prohibition is not a
“requirement”—and if the Ordinance is a prohibition—then the
Ordinance is not preempted under the preemption clause and the saving
clause is irrelevant. Either way, the Ordinance is not expressly
preempted.
R.J. Reynolds Tobacco Co. v. City of Edina, 482 F. Supp. 3d 875, 882 (D. Minn.
2020). And even if Reynolds’s reading is plausible, we are still required to accept
the one that disfavors preemption. See Altria Grp., 555 U.S. at 77.
No matter how Reynolds tries to frame this case, the end result is the same.
A plausible reading of the TCA allows state prohibitions, even “blanket”
prohibitions, on the sale of flavored tobacco products. And because the TCA
implicates state police powers, we must accept the interpretation that disfavors
preemption. If Congress wants to preempt these types of state rules, it should do so
more clearly. We conclude that the TCA does not expressly preempt the Ordinance.
B.
Finally, Reynolds argues that the TCA impliedly preempts the Ordinance
because it “actually conflicts with federal law” and “stands as an obstacle to the
accomplishment and execution of the full purposes and objectives of Congress,” i.e.,
conflict preemption. Conflict preemption doctrine preempts a state law if it “stands
as an obstacle to the accomplishment and execution of the full purposes and
objectives of Congress.” Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995)
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(citation omitted). Whether conflict preemption applies “is a matter of judgment, to
be informed by examining the federal statute as a whole and identifying its purpose
and intended effects.” Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 373
(2000). But the “[i]mplied preemption analysis does not justify a freewheeling
judicial inquiry into whether a state statute is in tension with federal objectives; such
an endeavor would undercut the principle that it is Congress rather than the courts
that pre-empts state law.” Chamber of Com. of U.S. v. Whiting, 563 U.S. 582, 607
(2011) (citation omitted). Reynolds bears the burden to show that conflict
preemption applies. See Paris Limousine of Okla., LLC v. Exec. Coach Builders,
Inc., 867 F.3d 871, 874 (8th Cir. 2017). And because the TCA implicates the States’
traditional use of its police power, we must assume that the TCA does not preempt
that authority unless it was the “clear and manifest purpose of Congress.” See Altria
Grp., 555 U.S. at 77.
Specifically, Reynolds suggests that the Ordinance would “prevent [the] FDA
from executing its statutorily prescribed functions and upend the TCA’s carefully
calibrated regulatory scheme.” In support, it points to a host of instances where the
FDA refrained from banning the manufacture of all flavored tobacco products. But
this argument is fundamentally flawed. First, conflict preemption requires the state
law to stand in the way of the objectives of Congress, not the FDA. As the district
court noted, “the decision of a federal agency not to issue a nationwide regulation is
not the same thing as a decision by Congress (or even by that agency) that state and
local governments should not be able to regulate.” R.J. Reynolds, 482 F. Supp. 3d
at 884 (emphasis omitted). No decision of the FDA indicates a decision of Congress
that flavored tobacco products must remain on the market nationwide. Although the
FDA certainly has the authority to remove tobacco products from the national
market, Reynolds does not identify what “statutorily prescribed function” of the
FDA allows it to determine which products must be sold.
Further, the Ordinance does not destroy Congress’s regulatory scheme.
Although the TCA does grant the FDA exclusive authority to promulgate tobacco
manufacturing standards, Section 387p can be plausibly interpreted as preserving
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state laws that relate to manufacturing, so long as they also relate to the sale of
tobacco. See discussion supra Part II.A. Under that reading of the statute, the
Ordinance does not “upend the TCA’s carefully calibrated regulatory scheme”—it
operates within it.
Contrary to Reynolds’s belief, it is not clear that Congress’s objective was to
give tobacco companies an unqualified right to sell each and every tobacco product
not banned on a federal level. Nothing in the text of the statute supports that claim.
And while Congress intended to “continue to permit the sale of tobacco products to
adults,” TCA § 3(7), the findings section of the Act is replete with Congress’s
concerns about tobacco use, TCA § 2. According to Congress, “[t]obacco use is the
foremost preventable cause of premature death in America,” “inherently dangerous,”
and “Federal and State governments have lacked the . . . resources to
comprehensively address public health and societal problems caused by the use of
tobacco products.” TCA §§ 2(13) (first quotation), 2(2) (second quotation), 2(7)
(third quotation). In other words, Congress thought smoking kills. Against this
backdrop, it enacted § 387p, expressly preserving state authority to regulate sales of
tobacco products. This cuts heavily against the notion that Congress wanted to
require states to allow the sale of certain tobacco products. On the record before us,
we cannot conclude that the Ordinance conflicts with or imposes an obstacle to
Congress’s purpose and objectives in enacting the TCA. Therefore, it is not
impliedly preempted.
III.
The Tobacco Control Act does not expressly or impliedly preempt Edina’s
prohibitions on selling flavored tobacco. Because the Ordinance is not preempted,
we affirm.
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