In a noteworthy victory for commercial speech, the U.S. Supreme Court reversed the U.S. Court of Appeals for the First Circuit and partially invalidated, on First Amendment and preemption grounds, Massachusetts regulations restricting the sale and promotion of cigarettes, smokeless tobacco, and cigars.  Lorillard Tobacco Co. v. Reilly, 121 S. Ct. 2404 (2001).  The decision marks a significant development for commercial speech because it counters recent federal appellate court rulings, which had suggested that the government’s interest in protecting children could effectively trump adult consumers’ rights to information about lawful -- albeit controversial -- products. 

     The Court first held that the Federal Cigarette Labeling and Advertising Act (FCLAA), 15 U.S.C. Sec. 1331 et seq., preempted regulation of outdoor and point-of-sale cigarette advertising.  It next ruled that the First Amendment was violated by regulations prohibiting outdoor advertising of smokeless tobacco and cigars within 1,000 feet of schools or playgrounds, and by regulations limiting certain indoor, point-of-sale advertising of those products.  Finally, the Court determined that regulations barring the use of self-service displays for cigarettes, smokeless tobacco, and cigars did not violate the First Amendment.

     The Court held that FCLAA preempted state regulations governing outdoor and point-of-sale advertising for cigarettes.  FCLAA prohibits states from enacting regulations based on smoking and health that are related to the advertising and promotion of cigarettes.  In ruling that FCLAA applied, the Court rejected the Massachusetts attorney general’s argument that the challenged regulations were not based on smoking and health because they did not involve health-related content but instead sought to limit young people’s exposure to cigarette advertising.  The Court reasoned that the concern about young people’s exposure to cigarette advertising was sufficiently related to smoking and health to be preempted by FCLAA. 

     Next, the Court rejected the state attorney general’s argument that the regulations were not preempted because they governed the location, not the content, of the advertising, holding that FCLAA does not support such a distinction.  The Court concluded: “Congress pre-empted state cigarette advertising regulations like the Attorney General’s because they would upset federal legislative choices to require specific warnings and to impose the ban on cigarette advertising in electronic media in order to address concerns about smoking and health.”  Lorillard, 121 S. Ct. at 2419.

     The Court next ruled that the First Amendment prohibits regulations banning outdoor advertising of smokeless tobacco and cigars located within 1,000 feet of schools and playgrounds.  In so holding, the Court applied its familiar four-part test for reviewing commercial speech established in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980).  The Court noted that the tobacco advertisements were protected by the First Amendment because they concerned a lawful product and were not misleading.  The Court agreed that the government’s interest in preventing tobacco use by minors was substantial.

     The Court then found that the outdoor advertising regulations satisfied Central Hudson’s third prong because they materially advanced the government’s amply documented interest in preventing underage tobacco use.  However, the regulations violated Central Hudson’s fourth prong because the restrictions they imposed on speech were more extensive than necessary to serve the interests that supported them.  Thus, there was not a reasonable fit between the Massachusetts legislature’s ends and the means it chose to accomplish those ends.      

     The Court explained that the regulations had a substantial geographic reach:  They almost completely banned truthful communications regarding smokeless tobacco products and cigars in some cities.  In addition, the range of restricted communication was broad, prohibiting oral communications and signs of any size about the regulated products.  Because the attorney general failed to demonstrate that the reach of the regulations was not more extensive than necessary to serve Massachusetts’s interest in curbing underage tobacco use, the regulations failed to satisfy Central Hudson’s fourth prong.

     Next, the Court found unconstitutional the regulations prohibiting indoor, point-of-sale advertising of smokeless tobacco and cigars lower than five feet from the floor of any retail establishment located within 1,000 feet of a school or playground.  These regulations failed to pass muster under Central Hudson’s third and fourth prongs.  The Court explained that the state’s goal of preventing minors from using tobacco products was not furthered by the blanket height restriction because not all children are less than five feet tall; moreover, children less than five feet in height are able to look up at the advertisements. 

     The Court then held that the height restriction did not reasonably fit the state’s goal of preventing underage use of smokeless tobacco and cigars.  The Court acknowledged that while the regulations may impose only a limited burden on speech, they nonetheless were insufficiently tailored to the state’s purpose of limiting underage use of tobacco.  Thus, the regulations were invalid under the First Amendment.

     Finally, the Court upheld the portion of the regulations barring the use of self-service displays and requiring all cigarette, smokeless tobacco, and cigar products to be placed out of consumers’ reach so that consumers are required to ask a salesperson before handling such products.  The Court explained that these provisions withstand First Amendment scrutiny because they merely regulate the placement of tobacco products, and such regulation is unrelated to the communication of ideas.