A federal appellate court recently upheld a series of restrictions imposed in Massachusetts on billboards and other display advertisements of tobacco products within 1,000 feet of public schools, playgrounds, and parks. The case is the fifth such "child protection from tobacco" dispute to reach the appellate court level -- and the fourth in which commercial speech advocates have lost.

    The decision of the U.S. Court of Appeals for the First Circuit in Consolidated Cigar Corp. v. Reilly, 218 F.3d 30 (1st Cir. 2000), petitions for cert. granted sub nom. Lorillard Tobacco Co. v. Reilly, 121 S. Ct. 755 (2001) (Nos. 00-596 & 00-597), upheld regulations issued by the Massachusetts attorney general that essentially prohibit outdoor display advertisements of tobacco products within 1,000 feet of public schools, playgrounds, and parks. The restrictions apply to billboards, window signs, and certain stadium displays. The regulations also require establishments located within that same perimeter that sell tobacco products to keep any "point of sale" displays at a height of at least five feet from the floor. The First Circuit has stayed enforcement of the Consolidated Cigar decision pending the U.S. Supreme Court’s disposition of the case.

    The First Circuit’s opinion is a disturbing development for speech concerning tobacco and other controversial -- but legal -- products because the court has suggested that the government’s interest in protecting children may effectively trump adult consumers’ rights to truthful information about lawful products. In particular, the decision is disheartening because the appellate court accepted a low standard of proof for the causal connection between advertising and the purported harm. Moreover, the panel appeared to be untroubled by the effective ban on most tobacco advertising displays in the state’s three largest cities.

    The court first rejected the tobacco companies’ argument that the Massachusetts regulations were preempted by the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. Secs. 1331-41 (FCLAA). Relying on Greater New York Metropolitan Food Council v. Giuliani, 195 F.3d 100 (2d Cir. 1999), cert. denied, 120 S. Ct. 1671 (2000), and Federation of Advertising Industry Representatives, Inc. v. City of Chicago, 189 F.3d 633 (7th Cir. 1999), cert. denied, 120 S. Ct. 1671 (2000), the First Circuit ruled that Congress crafted FCLAA to support its tobacco labeling and advertising regime. The court concluded that preemption should not be applied so as to disable states from the customary use of their police power jurisdiction.

    After ruling on preemption, the court denied the tobacco companies’ First Amendment arguments. The court declined to review the regulations by any standard more demanding than intermediate scrutiny, even though it acknowledged that the regulations are content based. Applying the Supreme Court’s test for reviewing restrictions on commercial speech set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980), the First Circuit held that Massachusetts has a substantial interest in "addressing the incidence of tobacco use by children under legal age" -- both as a health matter and as a matter of enforcing state law against underage smoking or other tobacco uses.

    The court found that eliminating deceptive advertising was a substantial statutory goal even though it noted the state’s concession, for summary judgment purposes, that the tobacco advertising at issue involved truthful speech about a lawful activity. The appellate court rejected the argument that Supreme Court precedent barred the government from seeking to protect citizens from some harm by depriving them of truthful commercial speech. The distinction in this case, according to the appellate panel, is the age of the citizens at issue: The "admittedly paternalistic nature of the regulations" is no impediment when "the state acts to protect minors."

    As for the issue of harm, the court found that Massachusetts officials offered "sufficient product-specific evidence" that the use of cigarettes, smokeless tobacco, and cigars all posed a "real harm" to children. The First Circuit relied in large part on the factual material originally gathered by the U.S. Food and Drug Administration (FDA) in its now-overturned rulemaking effort to extensively restrict the marketing of tobacco products.

    The appellate court recognized that the Supreme Court ultimately struck down the FDA rules but noted that the case had turned on the agency’s legal authority, not on the reliability of the factual evidence the FDA had gathered. Consequently, the First Circuit held, "the risk of harm posed by tobacco use, and particularly by underage tobacco use in this country, is established beyond reasonable dispute." Certain evidence offered in rebuttal -- such as the smokeless tobacco producers’ showing that use of their products by Massachusetts youth had declined -- did not "rob the [state] of its authority to remedy what remains of the problem."

    Perhaps most troubling was the First Circuit’s ready acceptance of Massachusetts officials’ "common sense argument" for a nexus between children’s exposure to tobacco advertisements and their use of the products. According to the appellate panel, "[i]t would defy common sense to conclude that for-profit corporations ... would pour such tremendous resources into advertising without at least some calculation that their efforts would have a substantial effect on consumption of the product."

    With respect to a more direct link between the ads and children’s health, the court pointed once more to reports and surveys cited in the FDA’s rulemaking effort. Again, the appellate panel determined that the rebuttal evidence offered by the tobacco manufacturers -- this time in the form of studies showing no causal nexus between ads and underage tobacco use -- was not enough to "deprive" Massachusetts of the power to impose the restrictions.

    Finally, the First Circuit turned aside arguments that the Massachusetts regulations burdened more speech than necessary. Even though the court noted that the "1,000 feet" rule meant that the ban extended to 90 percent of the land within Boston and the next two largest cities in the state, the court held that "the sheer size [of the geographic restriction] cannot defeat the obvious connection to the state’s interest in protecting minors."

    The court also rejected the tobacco companies’ argument that the "self-service" display restrictions at retail outlets created an unreasonable burden on speech. Despite the communicative features of the self-service display, the court characterized the retail outlet restrictions as restrictions on the physical location of tobacco products. The court assumed that speech was implicated, but nonetheless determined that the restrictions passed muster under Central Hudson.

    The First Circuit further brushed aside the companies’ First Amendment complaints regarding Massachusetts’s warning scheme for cigar packages. The scheme requires disclaimers of a certain size stating that cigars are not a healthy alternative to cigarettes, and that they contain carbon monoxide and nicotine. The court noted that the Supreme Court and other courts have upheld such requirements. The court also cast aside arguments that the disclaimers are too large in size to survive constitutional scrutiny. The court rejected these arguments as factually unfounded and contrary to Supreme Court decisions indicating that a law should not be struck down merely because the state could hypothetically achieve its goals through less restrictive means.

    Consolidated Cigar is only the latest in a growing line of conflicting court decisions on the balance between state efforts to protect children and tobacco advertisers’ First Amendment rights. This expansion of differing appellate rulings could well increase the likelihood of Supreme Court review of the issue in the near future. The tobacco companies filed petitions for a writ of certiorari with the Supreme Court in October. The Supreme Court granted the tobacco companies’ petitions for review. Consolidated Cigar Corp. v. Reilly, 218 F.3d 30 (1st Cir. 2000), petitions for cert. granted sub nom. Lorillard Tobacco Co. v. Reilly, 121 S. Ct. 755 (2001) (Nos. 00-596 & 00-597). The First Circuit has stayed its decision pending disposition of the Supreme Court case.