Item 6 Staff Report Request for Amicus Participation in Lorillard Tobacco Co., et al. v. Reilly, Appeal Pending in U.S. Supreme Court, at no Cost to the Town•
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MEETING DATE: 3/19/01
ITEM NO.
COUNCIL AGENDA REPORT
DATE: February 28, 2001
TO: MAYOR AND TOWN COUNCIL
FROM: ORRY P. KORB, TOWN ATTORNEY
SUBJECT: REQUEST FOR AMICUS PARTICIPATION IN LORILLARD TOBACCO CO.,
ET AL. v. REILLY, APPEAL PENDING IN U.S. SUPREME COURT, AT NO
COST TO THE TOWN
RECOMMENDATION:
Authorize the Town Attorney to include the Town of Los Gatos as an amicus curiae in the case of
Lorillard Tobacco Co., et al., v. Reilly, appeal pending, U.S. Supreme Court, at no cost to the Town.
DISCUSSION:
In January 1999, Massachusetts Attorney General enacted two regulations restricting the sale,
promotion and labeling of tobacco products in order to reduce the use of these products by minors.
These regulations restricted outdoor tobacco advertising within 1,000 feet of schools and
playgrounds. Additionally, they prohibited tobacco advertising from the ground up to five feet
inside stores that are within 1,000 feet of schools and playgrounds. Major tobacco companies
challenged the restrictions. The Massachusetts U.S. District Court rejected the tobacco companies
claims that the regulations were preempted by the Federal Cigarette Labeling and Advertising Act
and violated the First Amendment.
The Court of Appeals for the First Circuit affirmed, holding that the regulations are not preempted
by federal law. The Court also held that these restrictions, as well as certain restrictions on indoor
advertising in stores, do not violate the First Amendment. In addition, restrictions on the use of
"self-service" displays of smokeless tobacco and the requirement of specified warnings on cigar
packaging and advertising did not violate the First Amendment. The United States Supreme Court
has granted certiorari to review this decision.
PREPARED BY: ORRY P. KORB, TOWN ATTORNEY
Continued on page 9
OPK:LMBhvp N:1ATY\Lorillard.AMI.TCR.wpd
Reviewed by:
anager Finance Revised: 2/28/01 2:58 pm
Reformatted: 10/23/95 File# 301-05
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: REQUEST FOR AMICUS PARTICIPATION IN LORILLARD TOBACCO CO.,
ET AL. v. REILLY, APPEAL PENDING IN U.S. SUPREME COURT, AT NO
COST TO THE TOWN
February 28, 2001
The amicus brief will address both the preemption and the First Amendment issues. References to
local California ordinances will be included in the amicus brief.
This case is specifically relevant to the Town retaining its authority to enact ordinances regulating
tobacco advertising in order to reduce tobacco use by minors.
Attachments:
Distribution:
Letter from Public Health Institute, Technical Assistance Legal Center, dated
February 23, 2001.
Leslie Zellers, Legal Director, Public Health Institute, Technical Assistance Legal
Center, 505 14`'' Street, #810, Oakland, CA 94612
Legal Team
Stephen McG. Bundy
Boalt Hall School of Law
UC Berkeley
Michael G. Colantuono
Richards, Watson & Gershon, P.C.
Brion J. Fox
Center for Tobacco Research and
Intervention,
University of Wisconsin
Marc B. Mihaly/
Ellen J. Garber
Shute, Mihaly & Weinberger, LLP
Robert Post
Boalt Hall School of Law
UC Berkeley
Andrea J. Saltzman
Meyers, Nave, Riback, Silver & Wilson
Kirsten Spalding
Institute of Industrial Relations
UC Berkeley
Stephen D. Sugarman
Boalt Hall School of Law
UC Berkeley
Advisory Board
Janet Benner
Director
Tri-County Regional Team
Jean M. Benson
Councilmem ber
City of Palm Desert
Serena Chen
American Lung Association
ofAlameda County
Owen Clements
Chief of Special Litigation
City & Co. of San Francisco
Xavier Flores
Pueblo y Salud, inc.
Carrie L. Gleeson
Deputy City Attorney
San Diego CityAttorney's Office
Lin Glen
Humboldt County Public Health
Department
Lisa Hunter
Health & Education Communication
Consultants
Nora Manzanillo
Office of the City Attorney
City of Los Angeles
Tobacco Enforcement Project
Carol McGruder
San Francisco African American
Tobacco -Free Project
James F. Mosher
Trauma Foundation
Greg Oliva
Tobacco Control Section
California Department of Health
Services
Stephen D. Sugarman
Boalt Hall School of Law
UC Berkeley
Cynthia Hallett/Tim Filler
Americans for Nonsmokers 'Rights
' PUBLIC
HEALTH
I N STITUTE
Technical Assistance Legal Center
February 23, 2001
TO: California City Attorneys
NO
RECEIVED
FEB 2 6 2001
TOWN ATTNY
RE: Request to Cities to Join as Amicus in Lorillard Tobacco Co., et al., v.
Reilly, No. 00-596 (appeal pending, U.S. Supreme Court)
URGENT: Action Needed By March 22, 2001
I am writing to request your city's participation as amicus curiae in a brief being
prepared in the above -referenced matter on behalf of California municipalities. The
City of Los Angeles will be authoring the brief (through the firm of Sidley & Austin)
with consultation from the cities of San Francisco, San Diego, and Oakland.
Additionally, the City of Oakland will also submit a separate amicus brief that would
address only the First Amendment, building on its record in Eller Media Co. v. City
of Oakland.' The Executive Committee of the Legal Advocacy Committee of the
League has recommended that California cities sign onto the Los Angeles brief
which will be coordinated with and will cross-reference the Oakland brief.
The Technical Assistance Legal Center (TALC) is funded by the California
Department of Health Services to provide technical assistance to cities and counties
with legal questions relating to tobacco advertising and promotions regulations.
TALC is coordinating California cities' response to this request in conjunction with
city attorneys in Los Angeles, Oakland, San Francisco, and San Diego.
Issues
The U.S. Supreme Court granted certiorari in the case on two issues: (1) whether
Massachusetts Attorney General regulations limiting tobacco advertising are
preempted by federal law and (2) whether the regulations are a permissible
regulation of commercial speech under the First Amendment.
Facts
The Massachusetts Attorney General promulgated regulations in January 1999 to
restrict the sale, promotion and labeling of tobacco products in order to reduce the
use of these products by minors. In particular, the regulations restrict outdoor
tobacco advertising within 1,000 feet of schools and playgrounds (the regulations
apply to advertising in retail outlets that is visible from the outside). Additionally, the
regulations prohibit tobacco advertising from the ground up to five feet inside stores
that are within 1,000 feet of schools and playgrounds.
'Eller Media Co. v. City of Oakland, No. C98-02237WHA (N.D. Cal. Dec. 7,
2000)(order granting defendant's motion for summary judgment).
505 14th Street, Suite 810, Oakland, CA 94612 • Phone: (510) 444-8252 • Fax: (510) 444-8253 • talc@phi.org • www.phi.org/talc
California City Attorneys
February 23, 2001
Page 2
Procedural Background
The Massachusetts regulations were challenged by the major tobacco companies (Philip Morris, R.J.
Reynolds, Lonllard, Brown & Williamson, United States Tobacco Company). In separate opinions,
the U.S. District Court for Massachusetts rejected the tobacco companies claims that the regulations
were preempted by the Federal Cigarette Labeling and Advertising Act and violated the First
Amendment.'
The Court of Appeals for the First Circuit largely affirmed, holding that the regulations are not
preempted by federal law. Applying the Central Hudson test, the court also held that these restrictions,
as well as certain restrictions on indoor advertising in stores, do not violate the First Amendment. In
addition, the court held that restrictions on the use of "self-service" displays of smokeless tobacco and
the requirement of specified warnings on cigar packaging and advertising do not violate the First
Amendment, although it found that a part of the warning requirement violates the Commerce Clause.'
The United States Supreme Court has granted certiorari to review this decision.
Amicus Brief Issues
The amicus brief from the City of Los Angeles is expected to address both the preemption and First
Amendment issues. In general terms, the brief will argue:
(1) Local regulation of tobacco advertising is not preempted by federal law because such
regulation is not "based on smoking and health" and affects only the location and not the
content of such advertising.' This type of regulation is an exercise of local governments' police
power to enforce laws against underage use of tobacco products.
(2) Local regulation of tobacco advertising is permissible because it is reasonably designed to
suppress advertisement addressed to children and is intended not to diminish demand but to
prohibit the commercial solicitation of illegal transactions. Such regulations also pass the
Supreme Court test for commercial speech established in Central Hudson Gas & Elec. Co. v.
Pub. Serv. Comm 'n5 since they directly and materially advance a substantial government
interest and are narrowly tailored to achieve their purpose. The brief also may discourage the
Court from adopting a test other than Central Hudson to review commercial speech
regulations. However, if a new test is adopted, the brief will argue that local tobacco
advertising regulations survive scrutiny under that new test.
The amicus brief will reference the local ordinances regulating tobacco advertising that have been
enacted by California municipalities.
2 Lorillard Tobacco Co. v. Reilly, 76 F. Supp. 2d 124 (D.Mass. 1999) (preemption claims); Lorillard
Tobacco Co. v. Reilly, 84 F. Supp. 2d 180 (D.Mass. 2000) (First Amendment claims).
Consolidated Cigar Co. v. Reilly, 218 F. 3d 30 (1st Cir. 2000).
° 15 U.S.C.§§ 1331-1340.
447 U.S. 557, 561 (1980).
California City Attorneys
February 23, 2001
Page 3
The City of Oakland's amicus brief will address only the First Amendment arguments in the context of
the City's particular factual background in defending a local regulation of alcohol advertising in the
Eller Media case. Since Oakland has spent nearly two years in discovery prior to successful argument
at the District Court, their rich evidentiary record provides an excellent back -drop to the legal
arguments. Oakland is writing a separate brief to draw on this record and provide more extensive First
Amendment arguments than will be possible in the Los Angeles brief which must address federal
preemption issues in addition to the First Amendment. The Oakland and Los Angeles briefs will refer
to and cross-reference each other, therefore cities are asked to sign onto only the Los Angeles brief.
Why These Issues are of Major Significance to Cities
Currently, approximately 44 California cities and counties have ordinances regulating the location of
tobacco advertising. (See attached list from the American Nonsmokers' Rights Foundation.)
Numerous other cities are considering such regulation. A decision against Massachusetts could
significantly limit the authority of cities to locally regulate tobacco advertising in places where children
live and play.
What Amicus Support Can Add
An amicus brief from California cities will make the Court aware of the widespread effect of its
decision on ordinances outside of Massachusetts. The brief also will make the Court aware of the
range of rationales for adopting an ordinance regulating tobacco advertising. This distinction will be
crucial in ensuring that California municipalities retain the authority to enact ordinances regulating
tobacco advertising in order to reduce youth tobacco use.
Amicus Brief Authors
The amicus brief will be written pro bono by the firm of Sidley & Austin on behalf of the City of Los
Angeles. The lead authors are Mark Haddad and Paul Watford. The brief for the City of Oakland will
be authored by Stephen Berzon and Michael Wall of Altshuler, Berzon, Nussbaum, Rubin & Demain.
Briefing Schedule
The amicus brief is due on March 26th. Accordingly, we ask that cities wishing to join in the amicus
return the attached authorization by March 22, 2001. If you are unable to respond by that date you
may still be able join in the brief by returning the form to us after March 22', however the addition of
your city may not receive the same level of attention by the Court as it would if included with the brief.
Therefore, the March 22°d deadline is very important.
If you have any questions, please feel free to contact me at 510-444-8252.
16e-6t-xf
Leslie Zellers, J.D.
Legal Director, TALC
Enclosures: authorization form, list of ordinances
cc: JoAnne Speers, League of California Cities
Other interested cities
Town Council Minutes March 19, 2001
Redevelopment Agency Los Gatos, California
NEWSRACK COMMITTEE/APPOINTMENT (00.12)
Mayor Pirzynski announced that no applications had been received for the one
vacancy on the Newsrack Committee. This vacancy will be readvertised.
PARKING COMMISSION/APPOINTMENT/SHIRLEY HENDERSON (00.12)
Mayor Pirzynski announced that two applications from Bob Barrow and Shirley
Henderson had been received for the two vacancies on the Parking Commission.
Voting was held and Ms Henderson was appointed to a term expiring 01/01/05.-
PARKS COMMISSION/APPOINTMENT/SHERRIE RICHTER (00.12)
Mayor Pirzynski announced that one application had been received for two vacancies
on the Parks Commission from Sherrie Richter. Voting was held and Ms Richter,
was reappointed to term ending 01/31/06.
SCHEDULE OF PUBLIC HEARINGS (01.28)
Informational report regarding currently scheduled public hearings was received and
filed.
PLANNING COMMISSION/PLANNING DEPARTMENT MONTHLY STATUS REPORT (02.38)
Informational report regarding activity of Planning Commission and Department was
received and filed.
RATIFICATION OF PAYROLL/FEBRUARY-MARCH 2001 (03.V)
Motion by Mr. Blanton, seconded by Mrs. Decker, that Council ratify the check registers
for the payrolls of February 18 through March 3, 2001, paid on March 9, 2001, in the
amount of $477,711.92. Carried unanimously.
ACCOUNTS PAYABLE/RATIFICATION/MARCH 2001 (04.V)
Motion by Mr. Blanton, seconded by Mrs. Decker, that Council ratify the accompanying check
registers for accounts payable invoices paid on March 2, 2001 and March 9, 2001 in the amount of
$452,171.67. Carried unanimously.
AMICUS BRIEF/LORILLARD TOBACCO CO., ET AL VS. REILLY (06.28)
Motion by Mr. Blanton, seconded by Mrs. Decker, that Council authorize the Town
Attorney to include the Town of Los Gatos as an amicus curiae in the case of Lorilllard
Tobacco Co., et al., vs. Reilly, appeal pending, U.S. Supreme Court, at no cost to the
Town. Carried unanimously.
DEFERRED COMPENSATION PLAN/457 PLAN/RESOLUTION 2001-25 (08.29)
Motion by Mr. Blanton, seconded by Mrs. Decker, that Council adopt Resolution 2001-25
entitled, RESOLUTION OF THE TOWN OF LOS GATOS APPROVING A REVISED
TOWN OF LOS GATOS DEFERRED COMPENSATION PLAN AMENDING AND
RESTATING THE 457 PLAN AND TRUST CUSTODIAL DOCUMENT. Carried
unanimously.
2