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DUFFY LAW OFFICE, PLC
20118 N 67TH AVE• SUITE 300 -453
GLENDALE, AZ 85308
PHONE: 623 -547 -7310 • FAX: 623 -561 -7744
STEVEN J. DUFFY
steve@duffyplc.com
May 1, 2017
VIA email
Hon. Marico Sayoc, Mayor
Hon. Rob Rennie, Vice Mayor
Hon. Marcia Jensen, Council Member
Hon. Steven Leonardis, Council Member
Hon. Barbara Spector, Council Member
Los Gatos Town Council
Los Gatos Town Hall
110 E. Main Street
Los Gatos, CA 95030
Re: Tobacco Retail Licensing ordinance
Dear Mayor Savoc, Vice Mayor Rennie, and Council Members Jensen, Leonardis and Spector:
As legal counsel for the National Association of Tobacco Outlets, Inc. (NATO), a national retail
tobacco trade association with its principal office in the State of Minnesota (for more
information, please see www.natocentral.org), I am providing these comments on behalf of the
association and its retail store members located in Los Gatos. These comments address issues
raised by the draft ordinance accompanying the staff memoranda dated April 24, 2017.
NATO and its members share the Town’s concern with minors’ access to tobacco products.
These are adult-only products, and retailers do a remarkably good job of avoiding sales to
minors. The U.S. Food and Drug Administration website provides the results of tobacco
compliance inspections throughout the country.1 Inspections typically consist of a minor decoy
attempting to buy tobacco products from retailers. According to the FDA, between March 2013
and February 2017, 36 attempts were made to induce retailers in Los Gatos to sell to minors. On
only one occasion did the retailer fail, a 97% success rate, and the location that failed has passed
two subsequent inspections. A spreadsheet of these results is attached.
The FDA Center for Tobacco Control’s preliminary results of its survey of high school tobacco
users found that 86% of underage persons usually obtained tobacco products from someone other
than a retailer, primarily friends and family members.2 If the Town is serious about further
reducing underage tobacco use, it would better spend its resources on these social sources by
adopting significant penalties for anyone who knowingly supplies tobacco to underage persons.
Additionally, underage persons should be dissuaded from obtaining, having and using tobacco
1 The website may be accessed here: http://www.accessdata.fda.gov/scripts/oce/inspections/oce_insp_searching.cfm
2 An FDA presentation slide, “Where Do Youth Get Tobacco?” is attached.
Los Gatos Town Council
May 1, 2017
Page 2
products. When the Legislature in 2016 changed the minimum legal sales age to 21, it did away
with the law that prohibited the purchase, use or possession of tobacco products by underage
persons.3 By providing no consequences for getting, having or using tobacco products, the
Legislature has made it more imperative for local jurisdictions to focus on the most common
sources of tobacco products, enabling adults, and to provide consequences to underage persons
who know they are obtaining products that should not be sold or given to them.
We respectfully suggest that if the Town is sincerely interested in addressing youth and tobacco,
its resources are better directed at these social sources of tobacco, mostly friends and relatives,
who account for almost all of the problem.
We would now like to address the specifics of the proposed ordinances.
Flavoring Limitation is Unsupportable
Given the State’s recent adoption of age 21 for the sale of tobacco products, the Town should
consider whether there is any need for the flavored product restrictions in subsection (c)(9),
which limits flavors other than tobacco to stores that primarily deal in tobacco only stores.4 If the
premise for adopting any flavor restriction is the protection of those under 21 from exposure to
these products, the State’s ban on sales to those under 21 effectively negates that premise. By
having a flavor restriction at all, the Town would only impact the ability of adults to purchase
these products in Los Gatos; those consumers will take their business elsewhere, along with it
their purchases of other items that they buy when they purchase tobacco products. These
supplementary purchases of gasoline, snacks and beverages are very important revenue sources
for a retail store to remain profitable. The loss of these tobacco and other sales would result in a
financial hardship for Los Gatos retailers.
3 Stats. 2016, 2nd Ex. Sess., Ch. 8. We note that the recitals in the proposed ordinance includes this language:
State law prohibits the sale or furnishing of cigarettes, tobacco products, and smoking paraphernalia to
anyone under the age of 21, as well as the purchase, receipt, or possession of tobacco products by anyone
under the age of 21 (Cal. Pen. Code § 308);)
However, the 2016 session law (and companion legislation) not only prohibited the sale to both minors and young
adults under 21, but also did away with the provision making it a violation for a minor (or any other underage
person) to purchase, use or possess the product. The legislative analysis for the 2016 bill states:
Existing law makes it a crime, punishable by a fine of $75 or 30 hours of community service work, for a
person under 18 years of age to purchase, receive, or possess certain tobacco products. Existing law
requires 25% of certain fines to be paid to the Town or county for the administration and cost of that
community service work component. Existing law immunizes a person under 18 years of age from
prosecution for those actions when they were taken while participating in specified enforcement activities.
This bill would delete those provisions.
A review of current Penal Code Section 308 confirms that former subparagraph (b), which contained this language,
has been replaced, and nowhere in Section 308, or elsewhere in California law, is there a prohibition on underage
persons purchasing, using or possessing the products. Consequently, this stated premise for the ordinance is false.
4 Note is made that the exception in subsection (c)(9)(a) references “paragraph (3)” of the subsection. There is no
paragraph (3). The reference should be to paragraph (c). Similarly, the references in paragraphs (b) and (c) to
“paragraph (1)” should reference “paragraph (a).”
Los Gatos Town Council
May 1, 2017
Page 3
The Ban on Menthol Cigarette Sales by Most Retailers is Pre-Empted by Federal Law
Banning the sale of menthol flavored cigarettes by most retailers is pre-empted by Federal law.
Recognizing that consistent, uniform Federal regulation in the regulation of cigarettes is far
superior to a patchwork of inconsistent state and local regulations across the country, Congress
inserted into the landmark Family Smoking Prevention and Tobacco Control Act (the “Tobacco
Control Act”), which authorized the U.S. Food and Drug Administration (FDA) to regulate
tobacco products, express language preempting state or local cigarette menthol flavoring
restrictions.5
Specifically, the Tobacco Control Act preempts any local or state government from adopting a
product standard that is “different from or in addition to” federal product standards relating to
“the construction, components, ingredients, additives, constituents, including smoke constituents,
and properties of the tobacco product.”6
As the U.S. Supreme Court has held, only Congress can prohibit the sale of cigarettes.7
Exercising this authority in 2009, Congress banned cigarettes with certain characterizing flavors
in the Tobacco Control Act but allowed the sale of cigarettes with the flavors of tobacco or
menthol. 8 Thus, Congress enacted the first product standard for tobacco products. Rather than
ban menthol flavored cigarettes, Congress directed the FDA to carefully study the issue. 9 Indeed,
the FDA has initiated a rulemaking on this topic. 10 Should FDA decide to ban or otherwise
regulate menthol in cigarettes, it will use its exclusive regulatory authority to promulgate a
tobacco product standard, consistent with the requirements of the Tobacco Control Act.
Congress recognized that a ban on menthol cigarettes could lead to unintended consequences,
such as the potential creation of a black market for such products. These Congressional concerns
provide a serious, compelling policy rationale for rejecting a ban of menthol products. If virtually
all retailers in Los Gatos are prohibited from selling menthol cigarettes, purchasers will go to
other retailers; in addition, the conditions will be ripe for the sale of menthol cigarettes on a
black market. This will result in significant lost cigarette sales by law-abiding retailers in Los
Gatos and require law enforcement to devote more resources to respond to this illegal activity.
5The Tobacco Control Act states:
“No State or political subdivision of a State may establish or continue in effect with respect to a tobacco
product any requirement which is different from, or in addition to, any requirement under t he provisions of
this subchapter relating to tobacco product standards, premarket review, adulteration, misbranding,
labeling, registration, good manufacturing standards, or modified risk tobacco products.” 21 U.S.C. §
387p(a)(2)(A) (2013).
6Id.; see also 21 U.S.C. § 387g(a)(4)(B)(i) (2013).
7 See FDA v. Brown & Williamson Tobacco Corp ., 529 U.S. 120, 137 (2000).
8 See 21 U.S.C. § 387g(a)(1)(A) (2013).
9 See 21 U.S.C. § 387p(e) (2013).
10 See 78 Fed. Reg. 44484, 44485 (July 24, 2013) (soliciting comments on whether FDA should “establish[ ] a tobacco
product standard for menthol in menthol cigarettes”).
Los Gatos Town Council
May 1, 2017
Page 4
Minimum Age for Persons Selling Tobacco
Section (c)(6) makes it unlawful for persons “younger than the minimum age established by state
law for the purchase or possession of tobacco products or electronic smoking devices” to engage
in the sale of tobacco. This section has two significant problems. First, as noted above, the
Legislature has done away with that part of state law that formerly made it illegal for minors to
“purchase, use or possess” tobacco products. Consequently, there is no minimum age established
by state law for purchase or possession of tobacco products. The ordinance should allow retail
clerks to be under the minimum state lawful sales age. To do otherwise would be both
inconsistent with the State approach, which has no minimum legal age for retail clerks,11 and
would make it even more difficult for young adults to find employment and for retailers to fill
cashier positions (especially mom-and-pop operations, where children of the owners frequently
obtain employment.)
Limiting Sales Within 1000 Feet of Schools is Unsupported by Evidence and Will
Negatively Impact Commercial Real Estate Valuations
Section (d)(4) prohibits retailers from locating within 1000 feet of a public or private elementary,
middle, junior high or high school. A recent study12 demonstrates there is no basis for such a
restriction. The abstract of the study states that “neither the presence of a tobacco outlet within
1000 ft of a high school nor the distance to the nearest tobacco outlet from school was associated
with smoking prevalence.” The City has no scientific basis for imposing such a restriction on
property rights.
A 1000-foot radius encompasses over 3.1 million square feet of real estate per school.13 Given
zoning codes, it is frequently difficult to find suitably zoned locations for any business, but
adding a restriction that prohibits locations because of other uses makes suitable locations that
much harder to find. This may be a prohibition in the guise of a restriction, and reduces the
value of those properties inside the prohibited area without compensation to the property owners.
If such a restriction were to be included in your regulations, a proper “grandfathering” provision
must be included so that existing retailers within the prohibited area could continue indefinitely
as legal, nonconforming uses. However, the grandfathering provision in paragraph (d)(6) of this
section only allows the existing owner to continue to operate; the business is not grandfathered if
“a new person obtains ownership in the business.” This effectively deprives retailers of the value
of their businesses. Many mom-and-pop retailers have a good portion of their life savings, net
worth and retirement plan caught up in the value of their business, whether they intend to sell the
business in their lifetime or leave it to their children. The grandfathering provision must be
11 “California state law does not have a minimum age requirement for a clerk to sell tobacco products.” California
Department of Public Health, available here:
https://archive.cdph.ca.gov/programs/tobacco/Documents/Tobacco21Law/Mini mum%20Clerk%20Age%20Jurisdict
ions.pdf
12 “Is Adolescent Smoking Related to The Density and Proximity of Tobacco Outlets and Retail Cigarette
Advertising Near Schools?” Preventive Medicine Vol 47(2):210 -214.
13 Calculated as 𝐴=𝜋𝑟2 = 3.14 x 1000 x 1000 = 3.14 million square feet. The actual figure would be much larger as
this assumes a school or other area has neither length nor width.
Los Gatos Town Council
May 1, 2017
Page 5
substantially revised so that people are not deprived of the value of their entirely lawful
businesses without compensation, a taking that may subject the City to liability.
Density Restrictions are Not Supported and Similarly Run the Risk of Exposing the City to
Liability
The proposal in subsection (d)(5) to prevent retailers from being within 500 feet of one another is
similarly flawed. The same report that found no association between smoking prevalence and
distance of tobacco retailers to schools found that the “prevalence of current smoking was 3.2
percentage points higher at schools in neighborhoods with the highest tobacco outlet density (>5
outlets) than in neighborhoods without any tobacco outlets.” In other words, there is a
surpassingly weak association (not causation) between density and smoking prevalence, as there
is only a 3.2% difference in smoking rates between neighborhoods with the most tobacco stores
and those with no tobacco stores at all.
The density restriction, although smaller than the school restriction at 785,000 square feet per
retailer,14 creates similar grandfathering provision issues as subsection (d)(4) regarding schools.
Given the weak support for such a provision, and the possible liability to the City, we would
suggest removing this restriction.
Again, we respectfully suggest that the Town consider focusing its resources on the larger
problem, that of the social sources of tobacco from whom kids usually obtain tobacco products,
rather than pass punitive measures aimed at retailers who are not a significant source of the
problem but would like to be part of the solution.
Thank you for your consideration of these comments.
Sincerely,
Steven J. Duffy
For National Association of Tobacco Outlets, Inc.
Attachments: Spreadsheet
Graphic Regarding Usual Source of Tobacco
14 Again, calculated as 𝐴=𝜋𝑟2 = 3.14 x 500 x 500 = 785,000 square feet. The actual figure again would be h larger
as this assumes retailers have neither length nor width.
Compliance Check Inspections of Tobacco Product Retailers Through 3/31/17 - Search Results
You searched for:
City contains: Los Gatos
State is CA
Retailer Na Street AddrCity State Zip Decision Ty Minor Invo Sale to Min Decision Da
CHEVRON 200 LOS GA LOS GATOS CA 95030 No Violatio Yes No 2/1/2017
CHEVRON 200 LOS GA LOS GATOS CA 95030 No Violatio Yes No 7/8/2016
JIFFY MARK15665 LOS LOS GATOS CA 95032 No Violatio Yes No ########
LOS GATOS 16498 LOS LOS GATOS CA 95032 No Violatio Yes No ########
LOS GATOS 15380 LOS LOS GATOS CA 95032 No Violatio Yes No ########
ROTTEN RO 15299 LOS LOS GATOS CA 95032 No Violatio Yes No ########
LARK AVE 715171 LOS LOS GATOS CA 95032 No Violatio Yes No ########
SAFEWAY S 15549 UNIO LOS GATOS CA 95032 No Violatio Yes No ########
ERNIES WIN 14140 BLOS LOS GATOS CA 95032 No Violatio Yes No ########
LOS GATOS 441 LEIGH ALOS GATOS CA 95032 No Violatio Yes No ########
BLOSSOM V 14000 BLOS LOS GATOS CA 95032 No Violatio Yes No ########
WALGREEN 14100 BLOS LOS GATOS CA 95032 No Violatio Yes No ########
MARSH FU 200 LOS GA LOS GATOS CA 95030 Warning Le Yes Yes ########
RITE AID #515920 LOS LOS GATOS CA 95032 No Violatio Yes No ########
LOS GATOS 700 BLOSSO LOS GATOS CA 95032 No Violatio Yes No ########
LOS GATOS 16500 LOS LOS GATOS CA 95032 No Violatio Yes No ########
LUNARDIS 720 BLOSSO LOS GATOS CA 95032 No Violatio Yes No ########
RINCONAD 1480 POLLA LOS GATOS CA 95032 No Violatio Yes No ########
SAFEWAY S 1500 POLLA LOS GATOS CA 95032 No Violatio Yes No ########
7-11 FOOD 657 N SANT LOS GATOS CA 95030 No Violatio Yes No ########
MAPLE LEA 540 N SANT LOS GATOS CA 95030 No Violatio Yes No ########
SAFEWAY S 470 N SANT LOS GATOS CA 95030 No Violatio Yes No ########
WALGREEN 423 N SANT LOS GATOS CA 95030 No Violatio Yes No ########
SHELL OF L 255 LOS GA LOS GATOS CA 95030 No Violatio Yes No ########
VILLAGE LIQ211 LOS GA LOS GATOS CA 95030 No Violatio Yes No ########
7-ELEVEN 2 280 E MAIN LOS GATOS CA 95030 No Violatio Yes No ########
LOS GATOS 666 N SANT LOS GATOS CA 95030 No Violatio Yes No ########
7-11 FOOD 657 N SANT LOS GATOS CA 95030 No Violatio No No 4/5/2013
LOS GATOS 666 N SANT LOS GATOS CA 95030 No Violatio No No 4/5/2013
MAPLE LEA 540 N SANT LOS GATOS CA 95030 No Violatio No No 4/5/2013
WALGREEN 423 N SANT LOS GATOS CA 95030 No Violatio No No 4/5/2013
SAFEWAY S 470 N SANT LOS GATOS CA 95030 No Violatio No No 4/5/2013
NOB HILL G 15710 LOS LOS GATOS CA 95032 No Violatio No No 3/7/2013
RITE AID #515920 LOS LOS GATOS CA 95032 No Violatio No No 3/7/2013
LOS GATOS 16498 LOS LOS GATOS CA 95032 No Violatio No No 3/7/2013
LOS GATOS 16500 LOS LOS GATOS CA 95032 No Violatio No No 3/6/2013
Link
http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/tobacco/ucm509942.htm
April 21, 2016 | NATO
YOUTH ACCESS TO TOBACCO PRODUCTS AMONG PAST
30-DAY USERS: WHERE DO YOUTH GET TOBACCO?
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