Philip Morris USA Inc. v. City & County of San Francisco et al, No. 4:2008cv04482 - Document 32 (N.D. Cal. 2008)

Court Description: ORDER DENYING PRELIMINARY INJUNCTION. Signed by Judge Claudia Wilken on 12/5/08. (scc, COURT STAFF) (Filed on 12/5/2008)
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Philip Morris USA Inc. v. City & County of San Francisco et al Doc. 32 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 No. C 08-04482 CW 9 PHILIP MORRIS USA, United States District Court For the Northern District of California 10 11 12 ORDER DENYING PRELIMINARY INJUNCTION Plaintiff, v. CITY AND COUNTY OF SAN FRANCISCO, et al., 13 Defendants. 14 / 15 Plaintiff moves for a preliminary injunction enjoining 16 Defendants from enforcing City Ordinance No. 194-08 (Ordinance). 17 Defendants oppose the motion. The motion was heard on November 6, 18 2008. Having considered all of the papers filed by the parties and 19 oral argument on the motion, the Court DENIES Plaintiff's motion 20 for a preliminary injunction. 21 BACKGROUND 22 Plaintiff Phillip Morris USA is a Virginia corporation that 23 manufactures cigarettes that are marketed and sold in San 24 Francisco. Defendants are City and County of San Francisco, Board 25 of Supervisors of the City and County of San Francisco and Gavin 26 Newsom, Mayor of the City and County of San Francisco. On August 27 5, 2008, the Board of Supervisors passed and, on August 7, 2008, 28 1 the Mayor signed and approved Ordinance 194-08. 2 prohibits the sale of tobacco products in stores containing 3 pharmacies except for general grocery stores and “big box” stores. United States District Court For the Northern District of California 4 The Ordinance In the Ordinance, the Board made several findings describing 5 the need for the law. 6 tobacco products, pharmacies convey tacit approval of the purchase 7 and use of tobacco products. 8 to consumers who generally patronize pharmacies for health care 9 services." The Board found, "Through the sale of This approval sends a mixed message San Francisco Ordinance No. 194-08 § 1(7). The Board 10 also cited a 2003 study that found that eighty-four percent of San 11 Francisco pharmacies selling cigarettes displayed tobacco 12 advertising. 13 Id. On September 24, 2008, Plaintiff sought an emergency temporary 14 restraining order to prevent the ordinance from going into effect 15 as scheduled on October 1, 2008. 16 The Court ordered Defendants to show cause why a preliminary 17 injunction should not issue. 18 1, 2008. The Court denied the application. The law went into effect on October 19 LEGAL STANDARD 20 To obtain a preliminary injunction, the moving party must 21 establish either: (1) a combination of probable success on the 22 merits and the possibility of irreparable harm, or (2) that serious 23 questions regarding the merits exist and the balance of hardships 24 tips sharply in the moving party's favor. 25 v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987). 26 Rodeo Collection, Ltd. The test is a “‘continuum in which the required showing of 27 harm varies inversely with the required showing of 28 meritoriousness.’” Id. (quoting San Diego Comm. Against 2 1 Registration & the Draft v. Governing Bd. of Grossmont Union High 2 Sch. Dist., 790 F.2d 1471, 1473 n.3 (9th Cir. 1986)). 3 party ordinarily must show "a significant threat of irreparable 4 injury," although there is "a sliding scale in which the required 5 degree of irreparable harm increases as the probability of success 6 decreases," United States v. Odessa Union Warehouse Co-op, 833 F.2d 7 172, 174, 175 (9th Cir. 1987), and vice versa. 8 showing of merit, a plaintiff seeking a preliminary injunction must 9 make a very strong showing that the balance of hardships is in its United States District Court For the Northern District of California 10 favor. 13 To overcome a weak Rodeo Collection, 812 F.2d at 1217. 11 12 The moving DISCUSSION I. Probability of Success on the Merits Philip Morris argues that there is a sufficient likelihood 14 that it will succeed on the merits of its First Amendment and 15 federal preemption claims to support the grant of a preliminary 16 injunction. 17 A. 18 Philip Morris argues that the Ordinance unconstitutionally First Amendment 19 restricts its “protected interest in communicating information 20 about its products.” 21 525, 571 (2001). 22 pharmacies suppresses its speech because the product itself is a 23 form of advertisement. 24 Ordinance has the practical effect of removing all point of sale 25 advertising because stores affected by the Ordinance participated 26 in Philip Morris’s “Retail Leaders” program, which provides 27 retailers with advertising and promotional materials. 28 Ordinance went into effect, Philip Morris terminated the Retail See Lorillard Tobacco Co. v. Reilly, 533 U.S. Philip Morris asserts that removing products from Philip Morris also argues that the 3 Once the 1 Leaders agreements with all affected stores. 2 Dec. ¶ 4. 3 Nothing in the Ordinance restricts Philip Morris’s ability to 4 advertise its products in pharmacies. 5 states, “No person shall sell tobacco products in a pharmacy except 6 [in grocery stores or big box stores].” 7 the ordinance would not prevent Philip Morris from continuing to 8 pay Walgreens and Rite Aid to display actual Philip Morris products 9 in prominent parts of the store. 10 United States District Court For the Northern District of California Paoli Supplemental 11 Rather, the Ordinance As Defendants point out, Therefore, the Ordinance prohibits conduct, tobacco sales, not speech about tobacco. The Supreme Court has “extended First Amendment protection 12 only to conduct that is inherently expressive.” 13 for Academic and Institutional Rights, Inc., 547 U.S. 47, 66 (2006) 14 (FAIR) (explaining that in Texas v. Johnson, 491 U.S. 397, 406 15 (1989), the Court “held that burning the American flag was 16 sufficiently expressive to warrant First Amendment protection.”). 17 However, the Court has “rejected the view that conduct can be 18 labeled speech whenever the person engaging in the conduct intends 19 thereby to express an idea.” 20 citation omitted). 21 Rumsfeld v. Forum Id. at 65-66 (internal quotation and To determine whether particular conduct possesses sufficient 22 communicative elements to bring the First Amendment into play, the 23 Supreme Court asks whether “‘[a]n intent to convey a particularized 24 message was present, and [whether] the likelihood was great that 25 the message would be understood by those who viewed it.’” 26 Johnson, 491 U.S. at 404 (quoting Spence v. Washington, 418 U.S. 27 405, 410-411 (1974)). Texas v. To give some examples, the Supreme Court has 28 4 1 2 3 4 5 6 7 recognized the expressive nature of students’ wearing of black armbands to protest American military involvement in Vietnam, Tinker v. Des Moines Independent Community School Dist., 393 U.S. 503, 505 (1969); of a sit-in by blacks in a “whites only” area to protest segregation, Brown v. Louisiana, 383 U.S. 131, 141-142 (1966); of the wearing of American military uniforms in a dramatic presentation criticizing American involvement in Vietnam, Schacht v. United States, 398 U.S. 58 (1970); and of picketing about a wide variety of causes, see, e.g., Food Employees v. Logan Valley Plaza, Inc., 391 U.S. 308, 313-314 (1968); United States v. Grace, 461 U.S. 171, 176 (1983). 8 Here, there is nothing inherently expressive about selling tobacco 9 products in pharmacies that would warrant First Amendment United States District Court For the Northern District of California 10 protection. Rather, the expression implicated is the speech 11 accompanying the Ordinance, not the conduct prohibited. See FAIR, 12 547 U.S. at 66. For instance, the Ordinance states one purpose of 13 the law is to counter the “mixed message” that might arise from 14 selling tobacco in stores that are known for selling health care 15 products. The term “mixed message” here is used colloquially to 16 mean that allowing the continued sale of tobacco products alongside 17 health care products in pharmacies might create confusion among 18 consumers. The fact that Philip Morris relies so heavily on this 19 explanatory colloquialism in the Ordinance “is strong evidence that 20 the conduct at issue here is not so inherently expressive that it 21 warrants protection under” the First Amendment. Id. 22 Phillip Morris also asserts that the Ordinance is 23 unconstitutional because it was passed based on an “improper 24 censorial motive,” namely Defendants’ “antipathy to the advertising 25 that accompanies the offering of tobacco for sale.” Application 26 for TRO at 11 and 9. The Court disagrees. As noted above, the 27 Ordinance regulates tobacco sales, not advertising. 28 5 The record 1 contains no evidence of an ulterior legislative motive. 2 Defendants expressed displeasure about the health effects of 3 smoking and the need to ban tobacco sales at pharmacies, they did 4 not imply that their true intent with the Ordinance was to limit 5 advertising in any way. 6 down an otherwise constitutional statute on the basis of an alleged 7 illicit legislative motive.” 8 367, 383 (1968). United States District Court For the Northern District of California 9 While In any event, the court may “not strike United States v. O’Brien, 391 U.S. Philip Morris also argues that the Ordinance is subject to 10 First Amendment scrutiny because it is “based on a nonexpressive 11 activity [that] has the inevitable effect of singling out those 12 engaged in expressive activity.” 13 U.S. 697, 706-07 (1986). 14 Minnesota Comm’r of Revenue, 460 U.S. 575, 592-93 (1983) (holding 15 that First Amendment scrutiny applied to a special use tax on large 16 quantities of newsprint and ink because the tax imposed a 17 disproportionate and inevitable burden on a small number of 18 newspapers exercising their constitutional protected freedom of the 19 press). 20 advertising because after the Ordinance went into effect Philip 21 Morris withdrew all of its advertising in pharmacies. 22 nothing in the Ordinance prohibited Philip Morris from continuing 23 to advertise in pharmacies. 24 business decision to remove its advertising from a location that no 25 longer sold its product. 26 Morris by Defendants’ actions. 27 Morris’s First Amendment claim is not likely to succeed on the 28 merits. Arcara v. Cloud Books, Inc., 478 See Minneapolis Star & Tribune Co. v. Philip Morris asserts that the Ordinance “singled out” its However, Philip Morris made a voluntary This decision was not forced upon Philip For the foregoing reasons, Philip 6 United States District Court For the Northern District of California 1 B. 2 The Federal Cigarette Labeling and Advertising Act (FCLAA) Federal Preemption 3 preempts state and local laws “with respect to the advertising or 4 promotion of any cigarettes.” 5 argues that the FCLAA preempts the Ordinance because the 6 Ordinance’s intended effect is to remove tobacco advertising and 7 promotion in pharmacies. 8 regulate advertising, it only regulates sales. 9 does not regulate tobacco sales, Philip Morris’s preemption claim 15 U.S.C. § 1334. Philip Morris As noted above, the Ordinance does not Because the FCLAA 10 is not likely to succeed on the merits. 11 550, 552 (“We hold only that the FCLAA pre-empts state regulations 12 targeting cigarette advertising. 13 generally applicable zoning regulations, and to regulate conduct 14 with respect to cigarette use and sales”). 15 II. 16 See Lorillard, 533 U.S. at States remain free to enact Likelihood of Irreparable Injury Philip Morris argues that it has demonstrated a likelihood of 17 irreparable injury because the Ordinance threatens its First 18 Amendment rights and important channels of business and 19 communication. 20 Philip Morris’s First Amendment rights in any way. 21 Morris might suffer economic losses as a result of not being able 22 to sell tobacco products in pharmacies, “[t]he severity of this 23 burden is dubious at best, and is mitigated by the fact that [it] 24 remain[s] free to sell the same material at another location.” 25 Arcada v. Cloud Books, Inc., 478 U.S. 697, 705 (1986). 26 finds that Philip Morris is not likely to suffer an irreparable 27 injury. As noted above, the Ordinance does not infringe on 28 7 Although Philip The Court 1 2 3 4 CONCLUSION For the foregoing reasons, the Court DENIES Plaintiff's motion for a preliminary injunction (Docket No. 6). IT IS SO ORDERED. 5 6 Dated: 12/5/08 CLAUDIA WILKEN United States District Judge 7 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8