PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit has affirmed a lower federal court’s ruling, which found that Pennsylvania state law and a related injunction bars the City of Philadelphia from enforcing its ban on sales of flavored cigars.
A Nov. 13, 2020 ruling by the U.S. District Court for the Eastern District of Pennsylvania and Judge Gene E.K. Pratter granted an injunction requested by the Cigar Association of America and fellow plaintiffs ITG, Swedish Match and Swisher International.
The case began as an ordinance sponsored by Philadelphia City Councilman Curtis Jones Jr., which sought to prevent kids and teens, especially those in low-income and minority neighborhoods, from being able to purchase flavored cigars – limiting their sale to stores where only adults could purchase them, as non-flavored products can be sold anywhere, and further banned the sale of flavored e-cigarettes to minors.
The companies vigorously opposed the action, initially filing suit in the Philadelphia County Court of Common Pleas before the case was removed to the U.S. District Court for the Eastern District of Pennsylvania.
The cigar companies argued a Pennsylvania state law pre-empted the City of Philadelphia’s ordinance.
“Pointing to 18 Pa.C.S. Section 6305’s repeated reference to minors, plaintiffs argue that its subject is ‘youth access to tobacco.’ The City responds that its subject matter is just the five narrow areas it expressly regulates, namely, selling tobacco to a minor, giving tobacco to a minor, selling tobacco in vending machines accessible to minors, selling loose cigarettes, and allowing customers to handle tobacco before purchase,” Pratter stated.
“The City argues that ‘case law demands that the Court construe any ambiguities in favor of municipal power and against pre-emption, thus calling for the narrowest reading of preemption that the statutory language allows.’ This is incorrect. The City confuses the standards for implied pre-emption and express pre-emption.”
The case, Pratter said, was instead one of express pre-emption in favor of the Commonwealth.
“In determining the scope of pre-emption, the Court must examine the range of plausible interpretations and choose the one that is most probable, not the reading most favorable to the municipality that just crosses the threshold of plausibility,” Pratter said.
“While both parties focus exclusively on subsection (a), that is only a small part of Section 6305. The Court must look to the entirety of Section 6305 to ascertain its subject. A complete examination of the provision confirms that its subject matter is ‘youth access to tobacco.”
Pratter admitted that “weighing the plaintiffs’ interest in conducting their lawful business against the City’s interest in combatting the negative health outcomes associated with smoking tobacco would be difficult indeed”, but deferred to the legislature’s intent.
“Courts will not second-guess the legislature’s determination that compliance with a valid statute is in the public interest…the General Assembly has determined that it is in the public interest to pre-empt enactments like the ordinance at issue in this case. This Court will not second-guess that judgment,” Pratter said.
UPDATE
On Dec. 11, 2020, the City filed an interlocutory appeal with the Third Circuit, seeking to overturn the injunction.
After oral arguments took place in June, Third Circuit judges Michael A. Chagares, David J. Porter and Jane R. Roth collectively issued a federal appellate court ruling on Nov. 24, affirming Pratter’s. Porter authored the Court’s ruling.
“Whereas flavored tobacco products would otherwise be available for purchase in stores where minors could lawfully purchase products like gum, candy and soda (and could seek illicit access to tobacco), the ordinance ensures that such products will be available only in places where minors may not enter. Philadelphia’s acknowledgment in its opening brief ‘that one purpose of the ordinance was to deter youth smoking,’ combined with the fact that what the ordinance actually does is restrict the ability of minors to access tobacco, fatally undermines its claim that the ordinance does not so much as ‘concern’ youth access to tobacco,” Porter said.
“Philadelphia concedes that the plaintiffs ‘would be unable to later obtain damages specifically for a violation of Section 301.’ Philadelphia maintains that the reason for the plaintiffs’ inability to recover damages is that the Pennsylvania Tort Claims Act, does not permit a damages action, not that Philadelphia has Eleventh Amendment immunity from suit. This makes sense because Philadelphia, in this case, is not operating as an arm of the Commonwealth and thus lacks Eleventh Amendment immunity. Regardless, both sides agree that Philadelphia is immune from having to pay damages if success is established on this claim. But Philadelphia urges us to overturn the District Court’s irreparable-harm finding because the threat of damages in the form of lost sales is too speculative to warrant preliminary injunctive relief. We disagree. The District Court’s finding that the plaintiffs would suffer significant, unrecoverable monetary loss is not clearly erroneous.”
Porter concluded that the District Court’s analysis “does not leave a definite and firm conviction that a mistake has been committed”, and the Third Circuit then upheld its determination that irreparable harm would result absent an injunction.
U.S. Court of Appeals for the Third Circuit case 20-3519
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-03220
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com