Lorillard Tobacco v. Consolidated Cigar

United States Court of Appeals
For the First Circuit
____________________

No. 00-1107

CONSOLIDATED CIGAR CORPORATION; GENERAL CIGAR CO., INC.;
HAVATAMPA, INC.; JOHN MIDDLETON, INC.;
L.J. PERETTI CO., INC.; SWISHER INTERNATIONAL, INC.;
TOBACCO EXPORTERS INTERNATIONAL (USA) LTD.;
SWEDISH MATCH NORTH AMERICA, INC.;
Plaintiffs, Appellants,

v.

THOMAS F. REILLY, ATTORNEY GENERAL OF THE
COMMONWEALTH OF MASSACHUSETTS,
Defendant, Appellee.

____________________

LORILLARD TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO CORPORATION;
R.J. REYNOLDS TOBACCO COMPANY;
PHILIP MORRIS, INC.; UNITED STATES TOBACCO COMPANY;
Plaintiffs.

____________________

UNITED STATES,
Interested Party.

____________________

No. 00-1117

LORILLARD TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO CORPORATION;
R.J. REYNOLDS TOBACCO COMPANY;
PHILIP MORRIS, INC.;
Plaintiffs, Appellants,

v.

THOMAS F. REILLY, ATTORNEY GENERAL OF THE
COMMONWEALTH OF MASSACHUSETTS,
Defendant, Appellee.

____________________

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 UNITED STATES TOBACCO COMPANY;
CONSOLIDATED CIGAR CORPORATION; GENERAL CIGAR CO., INC.;
HAVATAMPA, INC.; JOHN MIDDLETON, INC.;
L.J. PERETTI CO., INC.; SWEDISH MATCH NORTH AMERICA, INC.;
SWISHER INTERNATIONAL, INC.;
TOBACCO EXPORTERS INTERNATIONAL (USA) LTD.;
Plaintiffs.

____________________

UNITED STATES,
Interested Party.

____________________

No. 00-1118

UNITED STATES TOBACCO COMPANY,
Plaintiff, Appellant,

v.

THOMAS F. REILLY, ATTORNEY GENERAL OF THE
COMMONWEALTH OF MASSACHUSETTS,
Defendant, Appellee.

____________________

LORILLARD TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO CORPORATION;
R.J. REYNOLDS TOBACCO COMPANY;
PHILIP MORRIS, INC.; CONSOLIDATED CIGAR CORPORATION;
GENERAL CIGAR CO., INC.; HAVATAMPA, INC.;
JOHN MIDDLETON, INC.; L.J. PERETTI CO., INC.;
SWEDISH MATCH NORTH AMERICA, INC.;
SWISHER INTERNATIONAL, INC.;
TOBACCO EXPORTERS INTERNATIONAL (USA) LTD.;
Plaintiffs.

____________________

UNITED STATES,
Interested Party.

____________________

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No. 00-1270

LORILLARD TOBACCO COMPANY; PHILIP MORRIS, INC.;
R.J. REYNOLDS TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO CORPORATION;
UNITED STATES TOBACCO COMPANY;
CONSOLIDATED CIGAR CORPORATION; GENERAL CIGAR CO., INC.;
JOHN MIDDLETON, INC.; L.J. PERETTI CO., INC.;
SWEDISH MATCH NORTH AMERICA, INC.;
SWISHER INTERNATIONAL, INC.;
TOBACCO EXPORTERS INTERNATIONAL (USA) LTD.;
Plaintiffs, Appellees,

v.

THOMAS F. REILLY, ATTORNEY GENERAL OF THE
COMMONWEALTH OF MASSACHUSETTS,
Defendant, Appellant.

____________________

UNITED STATES,
Interested Party.

____________________

Nos. 00-1271
00-1272
00-1275

LORILLARD TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO CORPORATION;
R.J. REYNOLDS TOBACCO COMPANY;
PHILIP MORRIS, INC.; UNITED STATES TOBACCO COMPANY;
CONSOLIDATED CIGAR CORPORATION;
GENERAL CIGAR CO., INC.; HAVATAMPA, INC.;
JOHN MIDDLETON, INC.; L.J. PERETTI CO., INC.;
SWEDISH MATCH NORTH AMERICA, INC.;
SWISHER INTERNATIONAL, INC.;
TOBACCO EXPORTERS INTERNATIONAL (USA) LTD.;
Plaintiffs, Appellees,

v.

THOMAS F. REILLY, ATTORNEY GENERAL OF THE

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 COMMONWEALTH OF MASSACHUSETTS,
Defendant, Appellant.

____________________

UNITED STATES,
Interested Party.

____________________

No. 00-1273

LORILLARD TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO CORPORATION;
R.J. REYNOLDS TOBACCO COMPANY;
PHILIP MORRIS, INC.; UNITED STATES TOBACCO COMPANY;
CONSOLIDATED CIGAR CORPORATION;
HAVATAMPA, INC.; JOHN MIDDLETON, INC.;
L.J. PERETTI CO., INC.; SWEDISH MATCH NORTH AMERICA, INC.;
SWISHER INTERNATIONAL, INC.;
TOBACCO EXPORTERS INTERNATIONAL (USA) LTD.;
PHILIP MORRIS, INC.;
Plaintiffs, Appellees,

v.

THOMAS F. REILLY, ATTORNEY GENERAL OF THE
COMMONWEALTH OF MASSACHUSETTS,
Defendant, Appellant.

____________________

UNITED STATES,
Interested Party.

____________________

No. 00-1274

CONSOLIDATED CIGAR CORPORATION; GENERAL CIGAR CO., INC.;
HAVATAMPA, INC.; JOHN MIDDLETON, INC.;
L.J. PERETTI CO., INC.; SWISHER INTERNATIONAL, INC.;
TOBACCO EXPORTERS INTERNATIONAL (USA) LTD.;
SWEDISH MATCH NORTH AMERICA, INC.;
LORILLARD TOBACCO COMPANY; PHILIP MORRIS, INC.;

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 R.J. REYNOLDS TOBACCO COMPANY;
BROWN & WILLIAMSON TOBACCO CORPORATION;
UNITED STATES TOBACCO COMPANY;
Plaintiffs, Appellees,

v.

THOMAS F. REILLY, ATTORNEY GENERAL OF THE
COMMONWEALTH OF MASSACHUSETTS,
Defendant, Appellant.

____________________

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 UNITED STATES,
Interested Party.

____________________

APPEALS FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. William G. Young, U.S. District Judge]

____________________

Before

Torruella, Chief Judge,

Bownes, Senior Circuit Judge,

and Lipez, Circuit Judge.

_____________________

James V. Kearney, with whom Latham & Watkins, Peter G. Hermes,
Peter C. Netburn and Hermes, Netburn, O'Connor & Spearing, P.C. were on
brief, for appellants Consolidated Cigar Corp., General Cigar Co.,
Inc., Havatampa, Inc., John Middleton, Inc., L.J. Peretti Co., Inc.,
Swedish Match North America, Inc., Swisher International, Inc. and
Tobacco Exporters International (USA) Ltd.
Henry C. Dinger, P.C., with whom Cerise Lim-Epstein, Goodwin,
Procter & Hoar, LLP, Verne W. Vance, Jr., John H. Henn, Foley, Hoag &
Eliot, Andrew S. Krulwich, Thomas W. Kirby, Daniel E. Troy, William A.
McGrath, Wiley Rein & Fielding, Richard M. Zielinski, Robert D. Ryan,
Hill & Barlow, John B. Connarton, Jr. P.C., Carol-Lynn M. Bear,
Connarton, Wood & Callahan. Clausen Ely, Patricia A. Barald and
Covington & Burling were on brief, for appellants Philip Morris
Incorporated, Brown & Williamson Tobacco Corporation, Lorillard Tobacco
Company and R.J. Reynolds Tobacco Co.
George J. Skelly, with whom Michael D. Blanchard, Eric S. Sarner
and Skadden, Arps, Slate, Meagher & Flom LLP were on brief, for
appellant United States Tobacco Company.
Steven G. Brody, Cadwalader, Wickersham & Taft and Gilbert H. Weil
on brief, for Association of National Advertisers, Inc., amicus curiae.
Daniel J. Popeo, Richard A. Samp and Washington Legal Foundation
on brief, for Washington Legal Foundation, amicus curiae.

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 William W. Porter, CA, Assistant Attorney General, with whom Susan
Paulson, CA, Assistant Attorney General, was on brief, for appellee.

-8-
 Douglas N. Letter, Appellate Litigation Counsel, Civil Division,
U.S. Department of Justice, with whom David W. Ogden, Acting Assistant
Attorney General, and Donald K. Stern, United States Attorney, were on
brief, for the United States, amicus curiae.
Brian Wolfman, David C. Vladeck, Richard J. Whitney, Speir &
Whitney, George A. Hacker, Donald W. Garner, Michael L. Ile, Anne M.
Murphy and Leonard A. Nelson on brief, for American Medical
Association, American Heart Association, American Lung Association,
American Cancer Society, Center for Science in the Public Interest,
Public Citizen, Inc. and the Massachusetts Medical Society, amici
curiae.
____________________

July 17, 2000
____________________

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 TORRUELLA, Chief Judge. Before the Court is a challenge to

regulations promulgated by the Attorney General of Massachusetts which

restrict the sale, promotion, and labeling of tobacco products in an

effort to reduce the use of such products by minors. Three groups of

tobacco companies1 have sued the Attorney General, claiming that the

Massachusetts regulations are partially preempted by federal law, that

the regulations violate their First Amendment right to free speech, and

that the regulations violate the Commerce Clause of the Constitution.

After due consideration of the arguments pressed by all parties and by

amici curiae, and with full appreciation of the importance of the

public health issue underlying this case, we conclude (1) that the

regulations are not preempted by federal law, (2) that the regulations

do not violate the First Amendment, and (3) that parts of the

regulations unconstitutionally burden interstate commerce.

Accordingly, we affirm in part and reverse in part the decision of the

district court.

I. Factual and Procedural Background

On January 22, 1999, the Attorney General of Massachusetts

promulgated regulations now codified at title 940, sections 21.00

through 21.07 (cigarettes and smokeless tobacco) and title 940,

sections 22.00 through 22.09 (cigars) of the Massachusetts Code of

1 The appellants in these consolidated appeals include manufacturers
of cigarettes, smokeless tobacco products, and cigars.

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Regulations. The regulations declare certain types of conduct by

manufacturers, distributors, and sellers of tobacco products to be per

se "unfair or deceptive acts or practices" prohibited under chapter

93A, § 2(a) of the Massachusetts General Laws. For example, the

regulations prohibit a number of retail practices including promotional

give-aways and mail ordering without age verification, see 940 C.M.R.

§§ 21.04(1), 22.06(1), as well as measures aimed specifically at outlet

sales practices, see id. §§ 21.04(2)-(3), 22.06(2)-(3). Of particular

concern to the tobacco companies, the Massachusetts regulations also

prohibit the following advertising practices:

(a) Outdoor advertising, including advertising in
enclosed stadiums and advertising from within a
retail establishment that is directed toward or
visible from the outside of the establishment, in
any location that is within a 1,000 foot radius
of any public playground, playground area in a
public park, elementary school or secondary
school;

(b) Point-of-sale advertising . . . any portion
of which is placed lower than five feet from the
floor of any retail establishment accessible to
persons younger than 18 years old, which is
located within a 1,000 foot radius of any public
playground, playground area in a public park,
elementary school or secondary school.

Id. §§ 21.04(5), 22.06(5). A single exception to the advertising ban

permitted the display of a so-called "tombstone" sign stating "Tobacco

products sold here," see id. §§ 21.04(6), 22.06(6), but this provision

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was struck down by the district court on preemption grounds.2 Finally,

the regulations also prescribe mandatory warning statements to be

included on all cigar labeling and advertising. See id. §§ 22.04,

22.05.

In response to the promulgation of the regulations, three

separate suits were filed in federal district court by the appellants

in this consolidated appeal, who are makers and sellers of cigarettes,

smokeless tobacco products, and cigars. The cigarette and smokeless

tobacco companies claimed that the Massachusetts regulations were

preempted by the Federal Cigarette Labeling and Advertising Act

(FCLAA), codified as amended at 15 U.S.C. §§ 1331-41, and that the

regulations violated their commercial speech rights under the First

Amendment.3 The cigar companies also challenged the regulations on

First Amendment grounds, as well as claiming that the regulations

imposed an undue burden on interstate commerce in violation of the

Commerce Clause. In an opinion issued December 2, 1999, the district

court rejected the preemption arguments of the cigarette and smokeless

tobacco producers. See Lorillard Tobacco Co. v. Reilly, 76 F. Supp. 2d

2 This aspect of the district court's decision has not been appealed
and therefore is not before us.
3 Although the FCLAA applies only to cigarettes, the smokeless tobacco
companies join the cigarette makers' challenge because they contend
that the regulations may not be severed to preserve the smokeless
tobacco provisions if the cigarette provisions are declared invalid.
We do not reach this aspect of the companies argument because we hold
that the regulations are not preempted by the FCLAA.

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124 (D. Mass. 1999) ( Lorillard I ). In a January 24, 2000 opinion, the

district court likewise rejected the tobacco companies' First Amendment

claims, as well as the cigar makers' Commerce Clause challenge. See

Lorillard Tobacco Co. v. Reilly, 84 F. Supp. 2d 180 (D. Mass. 2000)

(Lorillard II).4 Judgment was entered on January 25, 2000 in favor of

the Attorney General, and this appeal followed.

On appeal, the tobacco companies raise the following issues:

(1) whether the Massachusetts regulations are preempted by federal law,

(2) whether the regulations' advertising restrictions violate the First

Amendment, (3) whether certain restrictions imposed on retail practices

violate the First Amendment, (4) and whether the regulations' cigar

warnings requirements violate the First Amendment and the Commerce

Clause. The Attorney General cross-appeals one issue -- whether the

regulations' indoor advertising restrictions violate the First

Amendment.

II. Law and Application

A. Preemption

1. Introduction

4 The district court did invalidate one aspect of the regulations under
the First Amendment, finding that the Attorney General had failed to
demonstrate that the point-of-sale provisions requiring indoor
advertisements to be at least five feet from the floor were
sufficiently tailored to serve the government's interests. See
Lorillard II, 84 F. Supp. 2d at 192-93.

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 The Supreme Court has explained the analysis for determining

when a state regulation is preempted by a federal law that contains

specific preemption language. In Medtronic, Inc. v. Lohr, 518 U.S.

470, 484-86 (1996), the Court stated that, to identify the domain

expressly preempted by the federal statute, two presumptions about the

nature of preemption must be considered. First, particularly when

Congress has "'legislated . . . in a field which the States have

traditionally occupied,' we 'start with the assumption that the

historic police powers of the States were not to be superseded by the

Federal Act unless that was the clear and manifest purpose of

Congress.'" Id. at 485. Second, in determining the scope of the

federal preemption, the "ultimate touchstone" is Congress's purpose as

"discerned from the language of the pre-emption statute and the

'statutory framework' surrounding it." Id. at 486. In this respect,

it is relevant to consider the "'structure and purpose of the statute

as a whole,' as revealed not only in the text, but through the

reviewing court's reasoned understanding of the way in which Congress

intended the statute and its surrounding regulatory scheme to affect

business, consumers, and the law." Id.

The tobacco companies argue, rather weakly we might say, that

the "presumption against preemption" should not be applied in this case

because the presumption "is not triggered when the State regulates in

an area where there has been a history of significant federal

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presence." United States v. Locke, 120 S. Ct. 1135, 1147 (2000).

However, as the Court noted in Locke, the area at issue there --

maritime commerce -- is one in which "Congress has legislated from the

earliest days of the Republic, creating an extensive federal statutory

and regulatory scheme." Id. at 1148. We have little difficulty

distinguishing the historically pervasive federal regulation of fields

such as maritime commerce, see, e.g., Kelly v. Washington, 302 U.S. 1,

4 (1937) ("The federal acts and regulations with respect to vessels on

the navigable waters of the United States are elaborate. They were

well described in the argument of the Assistant Solicitor General as a

maze of regulation."), from Congress's relatively recent entry into the

regulation of the tobacco industry. The thirty-five years that have

passed since passage of the FCLAA, with its limited scope when compared

to federal regulation of fields such as maritime commerce, can hardly

serve as a basis for supplanting the traditional state authority in

matters of public health, particularly that of minors. See Medtronic,

518 U.S. at 475 ("Throughout our history the several States have

exercised their police powers to protect the health and safety of their

citizens. Because these are 'primarily, and historically, . . .

matters of local concern,' the 'States traditionally have had great

latitude under their police powers to legislate as to the protection of

the lives, limbs, health, comfort, and quiet of all persons.'"

-15-
(citations omitted)). The "presumption against preemption" applies

with full force to this case.

We turn, therefore, to our task of identifying "the domain

expressly preempted" by § 1334(b), id. at 484, keeping in mind (1) the

presumption that Congress does not intend to supplant state regulation

in the area of public health and the health of minors without a clear

and manifest indication of such preemptory purpose, see id. at 485, and

(2) that our decision must "rest primarily on a 'fair understanding of

congressional purpose,'" as informed by the text, the statutory

framework, and the purpose of the FCLAA as a whole, id. at 486.

2. The Preemptive Scope of § 1334(b)

Section 1334(b) of the FCLAA states that "No requirement or

prohibition based on smoking and health shall be imposed under State

law with respect to the advertising or promotion of any cigarettes the

packages of which are labeled in conformity with the provisions of this

chapter." 15 U.S.C. § 1334(b). To date, four other federal courts of

appeals have addressed the preemptive scope of this provision. See

Lindsey v. Tacoma-Pierce County Health Dep't, 195 F.3d 1065 (9th Cir.

1999); Greater New York Metro. Food Council v. Giuliani, 195 F.3d 100

(2d Cir. 1999); Federation of Advertising Indus. Representatives, Inc.

v. City of Chicago, 189 F.3d 633 (7th Cir. 1999) ("FAIR"); Penn

Advertising of Baltimore, Inc. v. Mayor & City Council of Baltimore, 63

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F.3d 1318 (4th Cir. 1995). We find the Second and Seventh Circuits'

decisions in Giuliani and FAIR to be particularly helpful.

In Giuliani, the United States Court of Appeals for the

Second Circuit focused on the ambiguity in the phrase "with respect to"

advertising and promotion. See Giuliani, 195 F.3d at 105. As the

court noted, a "hyper-literal" reading of that phrase would preempt a

range of state regulation which Congress surely did not intend to

affect. Id. For example, "it could divest states and municipalities

of authority to prevent tobacco advertisers from posting their ads in

public buildings even though smoking is legally prohibited there. Or

. . . it could lead to the conclusion that 'states [are] without power

to prohibit a cigarette company from handing out free cigarettes in an

elementary school yard.'" Id. (citing FAIR, 189 F.3d at 633).

Given the ambiguity of the preemption provision, the Second

Circuit endeavored to discern Congress's intent in enacting § 1334(b).

Relying on the FCLAA's statement of purpose at 15 U.S.C. § 1331, the

court reached two conclusions regarding the intended scope of §

1334(b): first, that Congress sought to inform the public of the

health risks associated with smoking, and second, that while so

informing the public Congress also sought to protect the national

economy from the burdens that would result from a multitude of

"'diverse, nonuniform, and confusing' advertising standards." See

Giuliani, 195 F.3d at 106. The court logically concluded that §

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1334(b)'s preemption provision was intended to further that

congressional balance by preempting state regulations that would

frustrate federal law by creating a "'multiplicity of conflicting

regulations.'" Id.

Applying this reading of § 1334(b) to a 1000-foot rule

essentially identical to that imposed by the Massachusetts regulations,

the court found that the regulation was not preempted by the FCLAA

because it "[did] not impose obligations 'with respect to' advertising

as that phrase is used in § 1334(b)." Id. at 109. The court found

that the 1000-foot restriction "do[es] not touch upon Congress's

'comprehensive Federal program' to control cigarette advertising

information. The restrictions do not, for example, burden advertisers

with a duty to warn. Nor do they impose content and format

requirements on advertising information." Id. Although the court did

recognize that different states and municipalities might impose

differing regulations with regard to the location of tobacco

advertising, "[d]ivergent local zoning restrictions on the location of

sign advertising are a commonplace feature of the national landscape

and cigarette advertisers have always been bound to observe them." Id.

Finally, the court in Giuliani also emphasized that "the

presumption against preemption is particularly strong here, as these

provisions are the sort thought to lie within the heartland of the

states' historic powers." Id. (citing Medtronic, 518 U.S. at 485).

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Both zoning regulations and regulations directed at the safety and

welfare of minors, the court said, "lie peculiarly within the states'

historic police powers." Id. (citing Packer Corp. v. Utah, 285 U.S.

105, 111 (1932) (zoning restrictions on cigarette advertising), and Toy

Mfrs. of America, Inc. v. Blumenthal, 986 F.2d 615, 620 (2d Cir.

1992)). Far from the clear and manifest intent required to preempt

state regulation in such areas, the court noted that the legislative

history of § 1334(b) suggests that Congress specifically intended to

give such traditional state laws "wide berth." Id. at 10 (citing S.

Rep. No. 91-566, reprinted in 1970 U.S.C.C.A.N. at 2663). Based on the

foregoing, the Second Circuit held that the 1000-foot restriction was

not preempted by the FCLAA.

The United States Court of Appeals for the Seventh Circuit

used a similar analysis to find that § 1334(b) did not preempt Chicago

regulations restricting the advertising of cigarettes and alcoholic

beverages. Relying largely on the Supreme Court's decision in New York

State Conference of Blue Cross & Blue Shield Plans v. Travelers

Insurance, 514 U.S. 645 (1995), in which the court considered the

similar preemption provision of the Employee Retirement Income Security

Act (ERISA), the Seventh Circuit concluded that "[i]f the FCLAA

language ('with respect to advertising and promotion') were viewed with

an 'uncritical literalism,' the effect would be to 'read Congress's

words of limitation as mere sham, and to read the presumption against

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pre-emption out of the law whenever Congress speaks to the matter with

generality.'" FAIR, 189 F.3d at 637 (quoting Travelers Ins., 514 U.S.

at 656).

As in Giuliani, the FAIR court then turned to an examination

of the legislative history and overall scheme of the FCLAA and §

1334(b) to discern the intended scope of the preemption provision. See

id. (relying on Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992),

and Medtronic, 518 U.S. at 484-85). After examining the statement of

purpose found in § 1331 and the legislative history of § 1334(b), the

court concluded:

We therefore must read the language of the FCLAA
preemption provision in light of Congress's
desire not only to ensure uniformity of
regulation with respect to matters of labeling
and advertising, but also in light of the
manifest congressional concern in preserving for
the states the remainder of their traditional
police powers.

FAIR, 189 F.3d at 638. Noting that the placement and manner of outdoor

advertising is a matter of traditional local concern, the court

declined to imply preemption of a regulation of such local interest and

importance. Id. at 639. The court further concluded that the

restrictions posed no danger of interfering with the FCLAA's

advertising and labeling scheme, and held that they were not preempted

by § 1334(b).5

5 Both the FAIR and the Giuliani courts found that "tombstone"
provisions similar to that invalidated by the district court were

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 We are persuaded by the reasoning of our sister circuits that

Congress did not intend § 1334(b) to preempt the kind of tobacco

advertising restrictions imposed by the Massachusetts regulations. The

regulations do not interfere with the cigarette and smokeless tobacco

labeling and advertising scheme established by Congress, and to the

extent that they may create differing restrictions on the location of

advertising in various states and municipalities, such divergent

restrictions are indistinguishable from the existing zoning regulations

in place throughout the country.6 We do not consider such location

restrictions to present the kind of "diverse, nonuniform, and

confusing" advertising standards with which Congress was concerned when

it enacted the FCLAA. See Giuliani, 195 F.3d at 106-07; see also 15

preempted by § 1334(b). See FAIR, 189 F.3d at 640; Giuliani, 195 F.3d
at 108.
6 The Fourth Circuit, in Penn Advertising, 63 F.3d at 1324, found that
Baltimore's restrictions on outdoor cigarette advertisements were not
preempted by § 1334(b). Although we do not adopt that court's apparent
conclusion that location restrictions do not constitute a "'prohibition
based on smoking and health,'" id., we do agree with the general
conclusion that Congress did not intend § 1334(b) to preempt
restrictions of the kind at issue there and in this case.

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U.S.C. § 1331.7 Thus, we hold that the Massachusetts regulations are

not preempted by the FCLAA.

B. First Amendment Challenge to Advertising Restrictions

The next claim, urged by all three groups of tobacco

companies, is that the advertising restrictions imposed by the

Massachusetts regulations violate the companies' First Amendment right

to freedom of speech. We find this contention unpersausive.

1. Level of Review

The tobacco companies first argue that the advertising and

promotion restrictions at issue here should be subject to a more

searching review than the "intermediate" scrutiny traditionally applied

in commercial speech cases. See generally Central Hudson Gas & Elec.

Corp. v. Public Serv. Comm'n of New York, 447 U.S. 557, 561-66 (1980).

According to the companies, the regulations target tobacco advertising

7 We also note that the Ninth Circuit, in Lindsey, 195 F.3d at 1073,
concluded that a county ordinance banning all outdoor tobacco
advertising was preempted by § 1334(b). That court determined that
"[d]espite the holdings of Penn Advertising, FAIR, and Giuliani, the
text of the FCLAA's preemption provision clearly preempts a ban on
outdoor advertising because such a ban constitutes a 'requirement or
prohibition based on smoking and health . . . with respect to the
advertising or promotion of any cigarettes.'" Id. (quoting 15 U.S.C.
§ 1331). With all due respect, we conclude that the court's analysis
fails to avoid the "uncritical literalism" that the Supreme Court has
cautioned us against, Travelers Ins., 514 U.S. at 656, and we disagree
that "'[t]here is no good reason to believe that Congress meant less
than what it said,'" Lindsey, 195 F.3d at 1073, in the phrase "with
respect to advertising." We find the decisions of the Second and
Seventh Circuits more in line with our reading of Congress's purpose,
and more in line with our understanding of the Supreme Court's
instructions in the area of federal preemption.

-22-
because of its content and therefore should be subject to a more

demanding First Amendment analysis. The Attorney General, in contrast,

characterizes the regulations as content-neutral and urges us to

deferentially apply the Central Hudson test for commercial speech

restrictions.

First, we repeat our conclusion (reached in the preemption

analysis) that the regulations are content-based. The regulations

apply only to advertising "the purpose or effect of which is to promote

the use or sale of the [tobacco] product." 940 C.M.R. §§ 21.03, 22.03

(defining "advertisement"). Advertising of other products is not

restricted by the regulations, nor is tobacco-related speech that has

a purpose or effect other than promotion, such as public health

campaigns. Contrary to the Attorney General's suggestion, this type of

focus is plainly content-based.

Such conclusion does not, however, require a greater level

of scrutiny than the standard Central Hudson analysis. The tobacco

companies argue that the regulations amount to inherently suspect

"viewpoint discrimination" because they ban only speech that invites

the purchase of tobacco products. However, the Supreme Court has made

clear that even regulations which single out the promotional speech of

a particular industry are analyzed under the Central Hudson test. See

Greater New Orleans Broadcasting Ass'n v. United States, 527 U.S. 173,

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184 (1999) (applying Central Hudson to regulations restricting

advertisements for casino gambling).

The tobacco companies nevertheless argue that our decision

in AIDS Action Committee v. MBTA, 42 F.3d 1, 11 (1st Cir. 1994),

supports the application of a higher level of scrutiny. In that case,

Boston's transportation authority refused to display public service

advertisements for the AIDS Action Committee on the purported basis

that the ads "describe[d] sexual content in a patently offensive way,"

id. at 5, but agreed to carry ads with similar or more explicit content

by other speakers. We held that this disparity gave rise to an

appearance that the suppression of speech was based on the identity or

perceived viewpoint of the speaker, particularly because the

transportation authority did not even attempt to articulate a neutral

justification for the disparate treatment. See id. at 11. In

contrast, the Attorney General here has not distinguished among

speakers by disparately applying a facially neutral provision. On

their face, the regulations restrict the promotion of tobacco products,

regardless of brand or manufacturer, and permit nonpromotional speech

relating to tobacco products by any speaker, tobacco manufacturers and

sellers included. The companies make no allegation that the Attorney

General has disparately, much less discriminatorily, applied these

provisions. Under these circumstances, we do not see the danger of

-24-
viewpoint discrimination that was present in AIDS Action Committee,8 and

we decline to impose a higher level of review on such basis.

In declining to impose a more searching review than that

mandated by Central Hudson, we are aware of the recent rumblings from

members of the Supreme Court and others suggesting that the Central

Hudson test may be in need of minor or major modification. See, e.g.,

Greater New Orleans Broad. Ass'n, 527 U.S. at 184 ("[C]ertain judges,

scholars, and amici curiae have advocated repudiation of the Central

Hudson standard and implementation of a more straightforward and

stringent test for assessing the validity of governmental restrictions

on commercial speech."). Nevertheless, it is not our role to

anticipate changes in well-established constitutional doctrines.

See Buzynski v. Oliver, 538 F.2d 6, 7 (1st Cir. 1976) ("Although there

are circumstances in which it is appropriate for a court of appeals to

8 Notwithstanding the tobacco companies' cries of mistreatment, the
context in which the Massachusetts regulations were promulgated simply
does not compare to that surrounding the suppression of speech in AIDS
Action Committee. In that case, the suppression was directed at a
group advocating sexual health practices, particularly with regard to
AIDS -- an issue that evokes deep feelings and often prejudices in our
society. Furthermore, the suppression of speech in AIDS Action
Committee, which was done with no contemporaneous explanation of
reasons or basis, also came after a previous ad campaign had provoked
public complaints which included a substantial display of homophobia.
See AIDS Action Committee, 42 F.3d at 3. We found those particular
circumstances to give rise to a presumption of viewpoint
discrimination, but we did not suggest that ordinary commercial speech
regulations, such as those at issue in this case, would give rise to a
similar presumption absent comparable circumstances, which are simply
not present here.

-25-
disregard the teachings of earlier Supreme Court decisions, generally

the Supreme Court has the exclusive authority to overrule its

decisions." (citation omitted)). We are therefore bound to apply the

Central Hudson test, as is, to this case.

2. The Central Hudson Test

In Central Hudson Gas & Electric Corp. v. Public Service

Commission of New York, 447 U.S. 557, 566 (1980), the Supreme Court

summarized the four-part analysis used to determine the

constitutionality of governmental restrictions on commercial speech:

At the outset, we must determine whether the
expression is protected by the First Amendment.
For commercial speech to come within that
provision, it at least must [1] concern lawful
activity and not be misleading. Next, we ask [2]
whether the asserted governmental interest is
substantial. If both inquiries yield positive
answers, we must determine [3] whether the
regulation directly advances the governmental
interest asserted, and [4] whether it is not more
extensive than is necessary to serve that
interest.

Under this analysis, the government bears the burden of identifying a

substantial interest and justifying the challenged restriction. See

Greater New Orleans Broad. Ass'n, 527 U.S. at 183. Mindful that the

four prongs of the analysis are "to a certain extent, interrelated,"

id., we will consider them seriatim.

a. Nonmisleading Speech Concerning Lawful Activity

-26-
 Although the Attorney General is unwilling to entirely

concede that the tobacco advertisements at issue here are truthful,

nonmisleading speech about a lawful activity, he was willing to assume

that much for the purposes of summary judgment. We therefore need not

explore this prong of the analysis.

b. Substantial Interest

The second prong of the Central Hudson test requires that the

state identify a substantial state interest underlying the challenged

regulations. Several such interests have been identified by the

Attorney General.

The first state interest proffered by the Attorney General

is the Commonwealth's desire "to eliminate deception and unfairness in

the way [tobacco products] are marketed, sold and distributed in

Massachusetts." 940 C.M.R. §§ 21.01, 22.01. Leaving aside for now

whether such interest is served by the regulations, we have no doubt

that it is a substantial state interest. Indeed, the state interest in

protecting consumers from false and misleading commercial information

was the original justification for a more permissive First Amendment

analysis in the commercial speech area. See, e.g., Central Hudson, 447

U.S. at 563-64.

The next state interest identified by the Attorney General

is the Commonwealth's aim "to address the incidence of [tobacco] use by

children under legal age." 940 C.M.R. § 21.01; see also id. § 22.01.

-27-
This general state interest is subdivided in the briefs into two

distinct, but related, interests. First, the Attorney General asserts

a state interest in ensuring compliance with state law, which prohibits

the sale of tobacco products to minors, and we consider that interest

substantial. Second, the Attorney General relies on the state's

interest in protecting the health of children from the negative effects

associated with the use and abuse of tobacco products, which is also

substantial.

The tobacco companies argue that Massachusetts cannot have

a substantial interest in depriving consumers of truthful information

in a paternalistic effort to protect them by "keeping them in the

dark." We certainly agree with this proposition insofar as it relates

to adult consumers, in which circumstance the First Amendment mandates

that the consumer, rather than the government, judge the value of the

information being communicated. See, e.g., 44 Liquormart, Inc. v.

Rhode Island, 517 U.S. 484, 503-04 (1996). However, the courts have

consistently recognized that the government may act more protectively

where children are concerned. See Erzoznick v. City of Jacksonville,

422 U.S. 205, 212 (1975) ("It is well settled that a State or

municipality can adopt more stringent controls on communicative

materials available to youths than on those available to adults.");

Anheuser-Busch, Inc. v. Schmoke, 101 F.3d 325, 329-30 (4th Cir. 1996)

(citing cases in support of the proposition that "children deserve

-28-
special solicitude in the First Amendment balance because they lack the

ability to assess and analyze fully the information presented through

commercial media"). Where, as here, the state acts to protect minors,

its substantial interest is not vitiated by the admittedly

paternalistic nature of its regulation.

-29-
 c. Whether the Regulations "Directly Advance" the
State's Interests

A great deal of the written and oral argument submitted in

this case has concerned the third prong of our Central Hudson analysis

-- whether the Massachusetts regulations "directly advance" the

Commonwealth's interests. After a careful review of the record, we

hold that the regulations satisfy this prong of our inquiry.

The Supreme Court has recently emphasized that the

government's burden regarding this third prong of the Central Hudson

analysis

"is not satisfied by mere speculation or
conjecture; rather, a governmental body seeking
to sustain a restriction on commercial speech
must demonstrate that the harms it recites are
real and that its restriction will in fact
alleviate them to a material degree."
Consequently, "the regulation may not be
sustained if it provides only ineffective or
remote support for the government's purpose."

Greater New Orleans Broad. Ass'n, 527 U.S. at 188 (quoting Edenfield v.

Fane, 507 U.S. 761, 770-71 (1993), and Central Hudson, 447 U.S. at

564). The companies and the Attorney General dispute both whether the

harms recited by the Commonwealth are real and whether the regulations

will alleviate them to a material degree. Although the two aspects of

the inquiry are closely interrelated in this case, we address them

separately for the sake of convenience and, hopefully, clarity.

-30-
 i. Real Harms

Like so many contentious issues in the law, the dispute over

whether the harms cited by the Attorney General are "real" is in part

a dispute over the level of generality at which the inquiry itself

should be made. The Attorney General, adopting a broader perspective,

urges that the record and common sense amply support his contention

that there is a problem with underage tobacco use, in the United States

generally and in Massachusetts in particular. The Attorney General

further asserts that this problem of underage tobacco use is

substantially related to, and thus may be materially alleviated by

restrictions upon, advertising. The tobacco companies, on the other

hand, urge a more narrow perspective. They argue that the Attorney

General has failed to demonstrate a teen cigarette smoking problem in

Massachusetts, and that he certainly has shown no problem with underage

consumption of smokeless tobacco or cigars. Furthermore, the companies

charge, to the extent that there may be a problem with tobacco use by

minors, the record does not establish any connection between such

underage use and the types of indoor and outdoor advertising and

promotion restricted by the regulations. The Attorney General's

principal response to the companies' emphasis on product-specific

analysis, which response was accepted in large part by the district

court, is that the three types of tobacco products subject to the

regulations pose similar health concerns and similar dangers in the way

-31-
they are promoted, and thus may and should be regulated pursuant to one

common scheme.

First of all, we have some difficulty accepting the Attorney

General's suggestion that "what is good for cigarettes is good for

cigars," at least in the First Amendment context. To accept such a

proposition could conceivably open the door to unforeseen and

unjustified speech regulation on the mere theory that products are

related or share ingredients. On the other hand, of course, the

Attorney General need not offer separate justifications for regulation

of green and red M & M's, to give an exaggerated example, and our

commercial speech doctrine must allow the legislative and executive

branches to make reasonable economies in their regulation of comparable

products. However, we need not decide today whether, and under what

circumstances, a "regulation by association" scheme might be acceptable

in the commercial speech context, because we find that the Attorney

General has offered sufficient product-specific evidence regarding

cigarettes, smokeless tobacco, and cigars to demonstrate that the

dangers posed by underage use of each is a "real harm" and that the

regulations can be reasonably expected to alleviate those harms to a

material degree.

Before addressing the product-specific information presented

by the Attorney General, however, we do note that he is not the first

to recognize that "tobacco use, particularly among children and

-32-
adolescents, poses perhaps the single most significant threat to public

health in the United States." FDA v. Brown & Williamson Tobacco Corp.,

120 S. Ct. 1291, 1315 (2000). After conducting the most extensive

rulemaking procedure in history, the Food and Drug Administration

promulgated regulations not unlike those issued by the Attorney

General. See 61 Fed. Reg. 44619-45318. Although the Supreme Court

recently struck down the FDA regulations because it found that the

agency did not have authority to regulate tobacco products, the Court

explicitly emphasized "the seriousness of the problem that the FDA has

sought to address" and stated that the agency had "amply demonstrated"

its significance. Brown & Willamson, 120 S. Ct. at 1315. At this

level of generality, we feel that the risk of harm posed by tobacco

use, and particularly by underage tobacco use in this country, is

established beyond reasonable dispute. Again, we need not decide

whether this alone satisfies the "real harm" aspect of the "directly

advances" prong, however, because the Attorney General has provided us

with additional information to support his view that underage use of

cigarettes, smokeless tobacco products, and cigars poses a real danger

to the Commonwealth of Massachusetts.

i(A). Cigarettes

The Attorney General's case is strongest against cigarettes,

which have become emblematic of the health risks associated with

tobacco use in this country. In his summary judgment papers and in his

-33-
submissions to this Court, the Attorney General refers at length to

precisely the kinds of studies and summaries of statistical and

anecdotal evidence accepted by the Supreme Court to justify commercial

speech restrictions. See Florida Bar v. Went For It, Inc., 515 U.S.

618, 626-28 (1995) ("[W]e have permitted litigants to justify speech

restrictions by reference to studies and anecdotes pertaining to

different locales altogether, or even, in a case applying strict

scrutiny, to justify restrictions based solely on history, consensus,

and 'simple common sense.'" (citations omitted)); Affidavit of Michael

G. Hering and exhibits thereto, Joint Appendix at 1184-3087. These

submissions are replete with evidence that smoking, particularly by

minors, poses a significant risk to the public health and is a

widespread practice. See, e.g., U.S. Dep't of Health & Human Servs.,

Preventing Tobacco Use Among Young People: A Report of the Surgeon

General (1994), Joint Appendix at 1203, 1223 ("Cigarette smoking during

childhood and adolescence produces significant health problems among

young people, including cough and phlegm production, an increased

number and severity of respiratory illnesses, decreased physical

fitness, and unfavorable lipid profile, and potential retardation in

the rate of lung growth and the level of maximum lung function.");

Massachusetts Dep't of Pub. Health, Adolescent Tobacco Use in

Massachusetts: Trends Among Public Schools Students 1984-1996 (1997),

Joint Appendix at 2272, 2281. As such, they are more than sufficient

-34-
to demonstrate that the harm cited by the Attorney General is a real

one.

i(B). Smokeless Tobacco

The makers of smokeless tobacco products present two

principal arguments for why, even assuming that Massachusetts could

justify its regulation of cigarettes, the use of smokeless tobacco

products does not present a comparable problem. First, the smokeless

tobacco producers argue that the vast majority of the information

relied upon by the Attorney General to justify the regulations concerns

cigarettes specifically and not smokeless tobacco. Second, they point

to studies indicating that, whatever national trends may exist,

smokeless tobacco consumption by minors has actually decreased in

Massachusetts during recent years. We address these arguments in turn.

The smokeless tobacco producers are correct that the Attorney

General has been able to garner more information on the use and

negative effects of cigarettes than of other tobacco products.

However, the Attorney General does point to various sources specific to

smokeless tobacco, including the relevant parts of the FDA regulations

struck down but factually accepted by the Supreme Court in Brown &

Williamson, as well as independent published studies. See, e.g., Choi

et al., Does advertising promote smokeless tobacco use among adolescent

boys? Evidence from California, Joint Appendix at 2516. Furthermore,

the state's brief sets forth substantial anecdotal evidence detailing

-35-
the highly successful marketing of smokeless tobacco to young consumers

beginning in the late 1960s and early 1970s. Of course, the companies

object that this data is dated and that it does not specifically

evaluate the impact of outdoor advertising such as that principally

targeted by the Massachusetts regulations, but we think that such

objections demand more than Central Hudson requires. The Attorney

General has adequately demonstrated that smokeless tobacco consumption

by underage users poses a real danger.

The companies' second point is that the Massachusetts

Department of Health study upon which the Attorney General largely

relies actually shows a sharp decline in the use of smokeless tobacco

by young people in Massachusetts between 1993 and 1996, in which time

such use fell from 8.0 percent to 4.5 percent. See Mass. Dep't of Pub.

Health, Independent Evaluation of the Massachusetts Tobacco Control

Program, Joint Appendix at 3752. Although we understand the companies'

frustration at increased regulation while current efforts seem to be

bearing fruit, we do not think that partial successes in fighting

underage smokeless tobacco use robs the Commonwealth of its authority

to remedy what remains of the problem. Even according to the study

emphasized by the smokeless tobacco makers, a not-insignificant number

of minors continues to use smokeless tobacco products in Massachusetts,

and nothing submitted by the companies contradicts the Attorney

General's evidence that this remaining use poses a significant health

-36-
risk to those users, now and as they age. We therefore conclude that

the Attorney General has satisfied this aspect of his burden with

regard to smokeless tobacco products.

i(C). Cigars

The cigar makers largely echo the first argument pressed by

the smokeless tobacco makers above -- that the Attorney General

impermissibly relies on studies and anecdotal evidence concerning

cigarette smoking to justify regulation of cigars. Again, we find that

the state has presented sufficient evidence to support its conclusion

that underage cigar smoking constitutes a real harm.

The Attorney General relies heavily on a monograph published

by the National Cancer Institute in 1998. See National Cancer Inst.,

Monograph 9, Cigars: Effects and Trends (1998), Joint Appendix at 2572.

As that study sets forth in more detail, cigar smoking presents a

serious risk of disease, comparable in type and severity to that

attributed to cigarette smoking. See id. at 2588. The study also

concludes that the "data on cigar use among adolescents is also

alarming," referring specifically to Massachusetts for evidence of "a

substantial level of cigar use, even prior to high school." Id. at

2598. We think that this evidence weighs very heavily in the Attorney

General's favor.9

9 The study also sheds light on the FDA's decision to not regulate
cigars when it regulated cigarettes and smokeless tobacco in 1996,
abstention much touted by the cigar companies in their briefs.

-37-
 The Attorney General also relies on anecdotal evidence of the

successful advertising campaign waged by smokeless tobacco in the 1960s

and 1970s (mentioned above) and a similar successful campaign by

cigarette manufacturers in the 1940s and 1950s. He argues that these

advertising campaigns have demonstrated a willingness and an

effectiveness on the part of tobacco producers in the use of "image-

related" advertisements to stimulate tobacco markets, and that minors

are particularly susceptible to this type of advertising. The

companies argue that this anecdotal evidence is dated and cannot

establish a link between youth cigar smoking and advertising,

particularly not the kind of advertising at issue here. Once again, we

think that the standard urged by the tobacco companies demands more

than is required by Central Hudson and its progeny. The Attorney

General has sufficiently demonstrated that cigar use among minors poses

a real danger in Massachusetts.

ii. Whether the Restrictions Will Alleviate the
Cited Harms to a Material Degree

The second aspect of the third prong of the Central Hudson

analysis is also hotly disputed by the parties. The tobacco companies

argue that the Attorney General has failed entirely to demonstrate that

advertising causes underage smoking or that advertising restrictions of

According to the monologue, data on youth cigar usage was largely
unavailable until recently. See Cigars: Effects and Trends, Joint
Appendix at 2598.

-38-
the type at issue here will have any effect on underage tobacco use,

much less result in a material reduction. The companies pointedly

attack the studies submitted by the Attorney General and assert that

several of those very studies decline to assert a cause-effect

relationship between advertising and smoking. The Attorney General

responds with a common sense argument on the causal relationship

between advertising and product use, supported by a number of studies

and anecdotal evidence demonstrating at least a correlation between

advertising and tobacco use in general and among children in

particular. We think that the Attorney General has carried his burden.

The "common sense" argument asserted by the Attorney General

-- that advertising has some cause-effect relationship with consumption

-- is not a novel one. Indeed, the Supreme Court recognized in Central

Hudson itself that "[t]here is an immediate connection between

advertising and demand." 447 U.S. at 569. More recently, in Rubin v.

Coors Brewing Co., 514 U.S. 476, 487 (1995), the Court found it

"assuredly a matter of 'common sense' that a restriction on advertising

of a product characteristic will decrease the extent to which consumers

select a product on the basis of that trait." But see Greater New

Orleans Broad. Ass'n, 527 U.S. at 189 ("While it is no doubt fair to

assume that more advertising would have some impact on overall demand

for gambling, it is also reasonable to assume that much of that

advertising would merely channel gamblers to one casino rather than

-39-
another."). After all, the five leading cigarette manufacturers spent

approximately $5.66 billion on advertising and promotion in 1997, and

nearly $300 million on outdoor advertising alone. See Federal Trade

Comm'n, Report to Congress for 1997, Joint Appendix at 2544. It would

defy common sense to conclude that for-profit corporations which have

demonstrated their ability to survive and flourish in the market would

pour such tremendous resources into advertising without at least some

calculation that their efforts would have a substantial effect on

consumption of their product. As a general proposition, we think that

common sense does support the Attorney General's position.

The Attorney General, however, does not rest on common sense

arguments alone. He cites myriad sources to support his proposition

that tobacco advertising and tobacco use are causally related,

including notably a Surgeon's General's report concluding that

"cigarette advertising appears to increase young people's risk of

smoking," see U.S. Dep't of Health & Human Servs., Preventing Tobacco

Use Among Young People: A Report of the Surgeon General (1994), Joint

Appendix at 1203, and the FDA's extensive investigation and finding

that "advertising plays a material role in the decision by those under

18 to use tobacco products," see 60 Fed Reg. 44466 (1996), Joint

Appendix at 1513. Nearly two thousand pages of the joint appendix in

this case consist of reports and surveys by governmental, scientific,

and academic entities submitted by the Attorney General in support of

-40-
his dual proposition that tobacco use by minors poses a real risk and

that tobacco advertising contributed materially to this problem.10

Although we decline to summarize that material here, we have no

difficulty concluding that it is sufficient to satisfy the Attorney

General's burden of demonstrating that the restrictions will alleviate

the harm caused by underage smoking to a material degree.

The smokeless tobacco and cigar manufacturers also repeat the

argument that the majority of the materials submitted by the Attorney

General concern primarily or exclusively cigarettes, and that such

materials cannot justify restrictions on smokeless tobacco and cigar

advertisements. We agree that the cigarette regulations are the

supported most abundantly, in terms of the sheer size of record

submitted by the Attorney General. That, however, is not

determinative. The product-specific information submitted by the

Attorney General, taken in conjunction with the other statistical and

anecdotal information presented, is sufficient to carry his burden.

See Florida Bar, 515 U.S. at 626-28.

10 To be sure, the companies have presented studies in which no
correlation or causal relationship was found between advertising and
tobacco use. They also are critical of several of the studies cited by
the Attorney General. However, the fact that there may exist
differences of opinion on this issue is insufficient to deprive
Massachusetts of its ability to enact regulations based on a well-
founded conclusion that advertising restrictions will reduce tobacco
use among young people.

-41-
 Finally, the cigar manufacturers argue that the Massachusetts

regulations cannot reasonably be expected to reduce cigar consumption

in Massachusetts, because the advertising of cigars is nearly

nonexistent in comparison with the pervasive promotion of cigarettes.

For instance, the cigar makers do not use any billboards in

Massachusetts, and they spent only $50,500 on outdoor advertising in

the entire United States during 1997, compared to the nearly $300

million spent by the leading cigarette manufacturers in that year.

While this argument is a forceful one, it fails to persuade us that the

regulations are unjustified. Although the regulations will necessarily

have a small impact on the amount of existing advertising (because

relatively little exists), they will remove any outdoor advertising

that does currently fall within 1000 feet of a school or playground,

thus protecting those particular children. As the Attorney General has

demonstrated, children exposed to tobacco advertising near their

schools and play areas are likely to be affected by its message.

Although fewer children will be affected by cigar advertising, simply

because there is much less of it, the relative lack of current cigar

advertising also means that the burden imposed on cigar advertisers is

correspondingly small. We cannot conclude that, under these particular

circumstances, the First Amendment bars the Attorney General from

regulating cigar advertising of the type targeted here, especially when

-42-
we consider that he has done so as part of a rational and well-founded

comprehensive tobacco regulatory scheme.

In sum, we conclude that the Attorney General has carried his

burden of demonstrating that the regulations will "directly advance"

his goals of reducing both underage tobacco use and tobacco sales to

minors.11 Less advertising may reasonably be expected to reduce the

consumption of tobacco products by current users, insofar as there will

be fewer reminders to stop at the store to pick up a pack of

cigarettes, a can of smokeless tobacco, or a cigar (at least on the way

to and from schools and playgrounds, where Massachusetts has focused

its efforts). Moreover, the restrictions on advertising should reduce

the number of new or future users by reducing the visibility of tobacco

products to minors, by dispelling the advertising-encouraged notion

that tobacco products are pervasive and form part of the "good life,"

and by eliminating the psychological incentives to tobacco use

presented by things as simple as attractive ad color and design

(aspects of advertising which we agree may reasonably be assumed to

have greater effect on young people). Because the Attorney General has

submitted sufficient data to demonstrate the harms posed by underage

tobacco use and to support his view that the regulations will diminish

11 We are not persuaded that the regulations further the state's
interest in prohibiting the dispersion of false and misleading
information to consumers. However, because the other interests
identified by the Attorney General are directly advanced, this failure
does not require invalidation of the regulations.

-43-
underage tobacco consumption in both of these ways, we conclude that he

has satisfied his burden under prong three of the Central Hudson

analysis.

d. The Regulations Do Not Restrict More Speech than
Necessary

The fourth and final prong of the Central Hudson analysis

requires that the government not restrict more speech than necessary to

achieve its purposes. In Board of Trustees of the State University of

New York v. Fox, 492 U.S. 469, 477 (1989), the Supreme Court explained

that this is not a "least restrictive means" standard. Summarizing its

holding, the Court stated:

What our decisions require is a "'fit' between
the legislature's ends and the means chosen to
accomplish those ends"--a fit that is not
necessarily perfect, but reasonable; that
represents not necessarily the single best
disposition but one whose scope is "in proportion
to the interest served;" that employs not
necessarily the least restrictive means but . .
. a means narrowly tailored to achieve the
desired objective. Within those bounds we leave
it to governmental decisionmakers to judge what
manner of regulation may best be employed.

Id. at 480. We hold that the Massachusetts advertising regulations

satisfy this requirement.

The companies' first argument that the Massachusetts

regulations are not sufficiently tailored to satisfy the First

Amendment is that, although the regulations facially apply only to

areas within 1000 feet of a school or playground, the actual effect of

-44-
the regulations is to prohibit virtually all advertising in as much as

ninety percent of the land area of Massachusetts' three largest

metropolitan areas, Boston, Worcester, and Springfield. Although this

is certainly a valid point (even the Attorney General concedes that the

reach of the regulations is substantial), it does not vitiate the

tailoring of the speech restrictions in this case. While the amount of

land within 1000 feet of a school or playground may be substantial, its

sheer size cannot defeat the obvious connection to the state's interest

in protecting minors, which is served directly by limiting application

of the regulations to areas near schools and playgrounds -- areas where

children are more likely to be. We also find no indication that the

Attorney General adopted the 1000-foot rule as a proxy or pretext for

a more general ban on tobacco advertising, in the Commonwealth's

largest metropolitan areas or elsewhere in the state. Under the

circumstances, we do not think that the substantial geographical reach

of the regulations violates the First Amendment.

The companies also challenge the 1000-foot rule itself,

arguing that it is both arbitrary and overly extensive. However, the

Supreme Court in Fox explicitly noted "the difficulty of establishing

with precision the point at which restrictions become more extensive

than their objective requires, and provide[d] the Legislative and

Executive Branches needed leeway" in fashioning effective but

proportionate commercial speech regulations. See Fox, 492 U.S. at 480.

-45-
The Attorney General based his 1000-foot determination primarily on the

FDA's implementation of a comparable rule in its 1996 regulations,

which, as noted, followed an extensive rulemaking procedure. Such

reliance on the conclusions of a lengthy federal investigation should

hardly be called arbitrary. Furthermore, it is worth noting that the

industry has voluntarily refrained from billboard advertising within

500 feet of schools since 1990, which suggests that they recognize the

value of such restrictions in principle. The contention that 500 feet

is acceptable but that 1000 feet is somehow arbitrary strikes us as

splitting hairs, particularly because this type of determination is

generally better suited for legislative and executive decisionmakers

than for the courts; in any event, it is a greater judicial second-

guessing than is appropriate under the Central Hudson analysis for

commercial speech restrictions. In the end, one thousand feet -- a

mere three city blocks -- does not strike us as an unreasonable

distance in which to assume that minors present at or on their way to

or from schools and playgrounds would be most affected by outdoor

advertising. Whether or not it is a perfect "fit," it is a reasonable

one, and that is what is required by Central Hudson and Fox.

Oddly enough, the district court struck down the 1000-foot

boundary in the context of indoor advertising, concluding that the

Attorney General had offered no basis for it other than the FDA

regulations, which themselves did not restrict indoor ads. The

-46-
Attorney General has appealed this aspect of the district court's

decision, and we reverse, largely for reasons mentioned in the previous

paragraph. It is hardly unreasonable for the Attorney General to

determine that stores within 1000 feet of schools and playgrounds --

that area where children are most likely to be present -- will also be

more likely to receive minors as customers. In fact, we do not doubt

that the companies would have challenged the rationality of the

Attorney General's regulatory scheme if it did not include restrictions

on advertisements at the point of sale. We do have some misgivings

about the effectiveness of a restriction that is based on the

assumption that minors under five feet tall will not, or will less

frequently, raise their view above eye-level, but we find that such

determination falls within that range of reasonableness in which the

Attorney General is best suited to pass judgment. In any event, the

burden on speech imposed by the provision is very limited (there are no

restrictions whatsoever on advertising above the five-foot level, so

long as it is not visible from the street), and we find the compromise

to be narrowly tailored and a reasonable "fit." Fox, 492 U. S. at 480.

The tobacco companies' next argument is that the Attorney

General may not regulate commercial speech when there exist several

reasonable alternatives that would restrict no or less speech. In

particular, the companies argue that Massachusetts should be required

to more stringently enforce current laws prohibiting tobacco sales to

-47-
minors, and perhaps make tobacco use itself illegal for minors, before

restricting tobacco advertising and promotion. We are not persuaded by

this line of argument in this case. First, Massachusetts has not

chosen speech restrictions as its first or only punch in its fight

against underage tobacco use. To the contrary, the Commonwealth is

widely considered a leader in many aspects of tobacco regulation. See,

e.g., Center for Disease Control, Best Practices for Comprehensive

Tobacco Control Programs (Aug. 1999), Joint Appendix at 684 (referring

throughout to Massachusetts as a leader in tobacco control). Although

the companies question this characterization, they offer no evidence to

the contrary, nor do they offer any persuasive evidence that the state

is neglecting to conscientiously and vigorously enforce its current

laws. Second, in light of Fox, we do not think that Massachusetts

should be required to criminalize underage tobacco use before it can

regulate tobacco advertising around its schools and playgrounds. There

are legitimate reasons why the state may not want to make underage

tobacco use a crime; after all, the state's motivation is to protect

children, not to institutionalize them. Third, the principal function

of advertising is to propose a commercial transaction, in this case the

sale of tobacco products -- which, where minors are concerned, is

already illegal in Massachusetts. And finally, while criminalization

of underage tobacco use or possession (or stricter enforcement of

existing laws, for that matter) might reduce the amount of current

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tobacco use, it is unlikely to serve the government's interest in

reducing the demand for tobacco products among young people. The

advertising regulations, in contrast, can reasonably be expected to

reduce demand. For all of these reasons, we conclude that

Massachusetts need not exhaust yet more alternatives in its ongoing

efforts to curb underage tobacco use before restricting commercial

speech in the targeted way that it does with the regulations.

The next area of dispute between the parties concerns the

alternative modes of communication left open to tobacco manufacturers

and retailers. The Attorney General emphasizes that the regulations do

not restrict advertising and promotion in print media, such as

newspapers and magazines. The tobacco companies, in response, note

that tobacco advertising is already prohibited from television and

radio.12 They also point out that, while newspaper and magazine

advertising may be a viable alternative for major manufacturers and

some large retailers (as evidenced in part by the prevalence of

cigarette and cigar ads in magazines), such media are cost-prohibitive

for many vendors of tobacco products such as small groceries and

convenience stores. These smaller vendors of tobacco products, the

companies argue, are left without any reasonable alternative means for

communicating with the public.

12Congress prohibited such advertising of cigarettes and little cigars
in 1971, see 15 U.S.C. § 1335, and of smokeless tobacco products in
1986, see 15 U.S.C. § 4402(f).

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 Although we find this argument quite a strong one, it does

not require invalidation of the regulations because it does not vitiate

the narrow tailoring of the restrictions on speech. After all, only

businesses within 1000 feet of a school or playground -- the area

reasonably determined by the Attorney General to present the greatest

exposure to minors -- will be affected by the regulations. And even

within those areas, the regulations as written explicitly permitted

retailers to display so-called "tombstone" signs. See 940 C.M.R. §

21.04(6). These signs would have allowed retailers to communicate to

legitimate consumers the availability of tobacco products, albeit less

forcefully than larger, more colorful advertising. Unfortunately (for

tobacco sellers), the district court found this aspect of the

regulations preempted by the FCLAA, and the Commonwealth has not

appealed that ruling. We nevertheless are of the view that this

compromise established by the regulations, as written, is indicative of

the kind of "calculation" by the Attorney General that the First

Amendment requires of government when it seeks to restrict commercial

speech. See Fox, 492 U.S. at 480. And, although the striking of the

tombstone exception measurably increases the burden on tobacco sellers

(or rather removes an alleviating factor),13 we cannot conclude that

13 We do note that, even under the district court's decision, which was
premised on the content-based nature of the tombstone provision, the
Commonwealth remains able to promulgate a new exception provision that
does not dictate the content of a small information sign communicating
to legitimate customers the availability of tobacco products, if the

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this vitiates the reasonable fit otherwise established by the

regulations.

Finally, the tobacco companies suggest that the regulations

are not sufficiently tailored because they deny communication to a

large number of adults for the sake of protecting children. However,

the cases referred to by the companies, such as United States v.

Playboy Entertainment Group, Inc., No. 98-1682, 2000 WL 646196 (U.S.

May 22, 2000), Reno v. ACLU, 521 U.S. 844 (1997), and Erznoznik v. City

of Jacksonville, 422 U.S. 205 (1975), do not support their position.

First, each of those cases dealt with expressive speech, rather than

commercial speech, and therefore applied a "strict scrutiny" standard

to invalidate the laws, rather than the intermediate scrutiny

applicable to commercial speech cases. Furthermore, even in that

context, the Court held that "the objective of sheltering children does

not suffice to support a blanket ban if the protection can be

accomplished by a less restrictive alternative." Playboy Entertainment

Group, 2000 WL 646196, at *7 (emphasis added); see also Reno, 521 U.S.

at 874 ("[The law's] burden on adult speech is unacceptable if less

restrictive alternatives would be at least as effective in achieving

the legitimate purpose that the statute was enacted to serve."). Here,

although the geographical scope of the advertising restrictions is

substantial, we do not find the restrictions equivalent to a "blanket

Commonwealth so desires.

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ban" on speech. Furthermore, it is difficult to imagine how

Massachusetts might effectively shield children from tobacco

advertising near schools and playgrounds without incidentally burdening

adult communication in that area as it does. The regulations

themselves address this problem by providing an exception for indoor

advertising in any establishment that excludes minors, see C.M.R. §

21.04(5)(b), as well by the very fact that the advertising restrictions

are focused on areas where children are most likely to be present.

Consequently, we think that the burden imposed on adult commercial

communication within the 1000-foot perimeter is not so great as to

render the regulations invalid under Central Hudson.

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 3. Conclusion

In conclusion, we hold that the advertising restrictions

imposed by the Massachusetts regulations do not violate the First

Amendment. The regulations directly advance the substantial interests

identified by the Attorney General, and their restrictions on

commercial speech are proportionate to the state's purposes. As the

Supreme Court has stated, "[w]ithin those bounds we leave it to

governmental decisionmakers to judge what manner of regulation may best

be employed." Fox, 492 U.S. at 480.

C. First Amendment Challenge to Restrictions on Retail
Practices

The manufacturers of smokeless tobacco and cigars also

challenge the restrictions imposed by the Massachusetts regulations on

the use of "self-service" displays as a retail outlet practice. See

940 C.M.R. § 22.06. The district court held that this practice is not

protected by the First Amendment because it does not constitute speech.

Although the issue is by no means an easy one, we agree and affirm.

On appeal, the tobacco companies argue that self-service

displays are "a specialized mode of speech" that communicates

information to the consumer and proposes a commercial transaction in

much the same way as does advertising. Although we accept the tobacco

companies' proposition that self-service displays often do have some

communicative commercial function (covered as they often are in logos

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and other advertising mechanisms), the actual restriction imposed by

the regulations is not on speech, but rather on the physical location

of actual tobacco products. A familiar analogy illustrates this point.

If sellers are so inclined, we see nothing in the regulations

prohibiting them from displaying empty tobacco product containers in

display cases, so long as no actual tobacco product is so displayed.

In that circumstance, just like at the local video store, the consumer

can peruse the relevant commercial information at his or her leisure

before approaching the sales counter to make an actual purchase. For

the vast majority of tobacco products, nearly all of which are

distributed in sealed packaging which the consumer may not open and

inspect before purchase, we think that this type of regulation poses no

cognizable burden on speech, and any secondary imposition is surely so

narrow as to be justified by the significant interests served by the

regulations.

We do recognize that the sale of higher-end cigars poses a

somewhat different circumstance. According to the cigar manufacturers,

cigar retailers traditionally allow consumers pre-purchase access to

cigars so that the consumer may make his or her selection on the basis

of a number of objective and subjective factors including the aroma and

feel of the cigar. Unlike the distribution of packaged cigars and

little cigars, this specialized retail practice would in fact be

burdened by prohibitions on self-service displays, and would implicate

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Central Hudson scrutiny if the First Amendment applies to such a retail

practice.

However, we need not decide whether this particular form of

self-service retail practice constitutes commercial speech protected by

the First Amendment, because the regulations pass muster under Central

Hudson even assuming arguendo that the commercial speech analysis

applies. For the reasons set forth at length above, we conclude that

the Attorney General has adequately demonstrated the substantial nature

of the state's interests, as well as the general proposition that

restrictions on advertising and promotion may reasonably be expected to

directly advance those interests. It is apparent that limiting self-

service displays and placing tobacco products behind the sales counter

will aid in the Commonwealth's efforts to curb the sale of tobacco

products to underage consumers and directly advance the state's goals.

Finally, the regulations are more than sufficiently tailored to the

goals of the regulation, not only because they leave open retail

schemes such as those used by video stores, but also because the

prohibition on self-service displays does not apply to "[s]elf-service

displays that are located within adult-only retail facilities." 940

C.M.R. § 22.06(3)(c). A tobacco specialty store can therefore avoid

any burden presented by the regulation by simply closing the store to

children, who cannot lawfully purchase tobacco products in any event.

We find the fit between ends and means to be very reasonable, and we

-55-
therefore conclude that the restrictions on self-service displays are

constitutional.

D. Challenges to the Cigar Warnings Requirements

In addition to their challenges to the restrictions on

advertising, promotion, and self-service displays, the cigar companies

also challenge the warning scheme created by the Massachusetts

regulations. Under that scheme, all packages and advertising of cigars

must include a warning stating (1) that cigar smoke contains carbon

monoxide and nicotine or (2) that cigars are not a safe alterative to

cigarettes. See 940 C.M.R. §§ 22.04-22.05. The warnings must occupy

twenty-five percent of the front or top panel of the package (whichever

is larger) and twenty percent of any advertisement, see id. §§

22.04(2), 22.05(2), although that area may be used for any federal,

state, or local warning so long as the Massachusetts warning remains

clear and conspicuous, see id. § 22.04(2)(c). The use of a pre-printed

sticker affixed to the package or advertisement constitutes compliance.

See id. § 22.04(2)(b).

1. First Amendment Claim

The cigar companies' first argument posits that the warnings

requirements violate the First Amendment. The district court rejected

this argument, and we affirm for substantially the reasons set forth in

the lower court's opinion. See Lorillard II, 84 F. Supp. 2d at 197-98.

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 At the outset, we note that warnings schemes similar to that

imposed by the Massachusetts regulations have been repeatedly sustained

by the courts. See, e.g., Zauderer v. Office of Disciplinary Counsel

of the Supreme Court of Ohio, 471 U.S. 626, 650-53 (1985).

Furthermore, the cigar warnings were specifically designed to "fill the

gap" in federal law, which requires similar warnings for cigarettes and

smokeless tobacco products but not for cigars; this federal scheme has

been in place since 1965 and its validity is well established.

As the Supreme Court made clear in Zauderer, there are

"material differences between disclosure requirements and outright

prohibitions on speech," 471 U.S. at 650, such that "the First

Amendment interests implicated by disclosure requirements are

substantially weaker than those at stake when speech is actually

suppressed," id. at 651 n.14. Therefore, although the commercial

speech analysis applies, the Supreme Court has held that "an

advertiser's rights are adequately protected as long as disclosure

requirements are reasonably related to the State's interest in

preventing deception of consumers." Id. at 651.

On appeal, the cigar companies do not challenge the

substantiality of the state's interest in informing consumers of the

health risks associated with cigar smoking. Nor do they dispute that

the regulations are reasonably related to that interest. Rather, the

companies assert that the regulations are nevertheless unconstitutional

-57-
because the very size of the required warnings (twenty-five percent of

the main panel of packaging or twenty percent of advertising) "unduly

burdens" speech. Cf. id. at 651 ("We recognize that unjustified or

unduly burdensome disclosure requirements might offend the First

Amendment by chilling protected commercial speech.").

With respect to the packaging requirements, the companies

argue that the warnings are unconstitutional because the Attorney

General failed to prove that the Commonwealth's purposes could not be

equally well served by warnings covering only, for example, ten percent

of the front of top panel of the package. This argument, however, was

explicitly rejected by the Supreme Court in Zauderer, where the Court

declined to apply a "'least restrictive means' analysis" to disclosure

requirements and stated: "[W]e do not think it appropriate to strike

down such requirements merely because other possible means by which the

State might achieve its purposes can be hypothesized." Id. at 651

n.14. Because the packaging requirements are reasonably related to a

substantial state interest and do not unduly burden interstate

commerce, they are valid.

With regard to the advertisement warning requirements, the

companies argue that the twenty-percent coverage of the warnings will

so burden cigar manufacturers that they will cease advertising

altogether. The companies offer precious little to support this

difficult-to-believe proposition, and we find it unpersuasive. Other

-58-
industries, including the manufacturers of cigarettes and smokeless

tobacco products, have successfully incorporated warning schemes into

their advertising practices, and cigars present no special

considerations that lead us to believe a different result will ensue

here. Similar to the restrictions upheld in Zauderer, Massachusetts

"has not attempted to prevent [cigar makers] from conveying information

to the public; it has only required them to provide somewhat more

information than they might otherwise be inclined to present." Id. at

650. As such, the advertising restrictions do not violate the First

Amendment.

-59-
 2. Commerce Clause Claim

Finally, the cigar companies claim that the cigar warning

requirements imposed by the regulations unduly burden interstate

commerce in violation of the Commerce Clause. We agree in part.

a. Advertising Requirements

Section 22.05 of the regulations makes it unlawful "for any

persons to advertise or cause to be advertised within Massachusetts any

cigar or little cigar unless the advertising bears one of the warning

statements . . . and the warning statement . . . comprises 20% of the

area of the advertisement and is in the format required." As the

district court, appellants, and the Attorney General all apparently

agree, this language applies, on its face, to advertisements in

national magazines sold in Massachusetts as well as to advertising on

the Internet if viewed from an Internet terminal in Massachusetts. The

district court, although recognizing the burden on interstate commerce

that would result from a plain reading of the regulation, adopted a

narrow interpretation under which § 22.05 did not apply to national

magazines and Internet advertising, and upheld the regulation. While

we agree with the district court's evaluation of the burden that would

result from a facial application of the regulation, we think that the

provision is not fairly susceptible to the narrowing construction, and

we find that it unduly burdens interstate commerce.

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 The Supreme Court summarized the standard for evaluating

nondiscriminatory state regulations on commerce in Pike v. Bruce

Church, Inc., 397 U.S. 137, 142 (1970): "Where the statute regulates

even-handedly to effectuate a legitimate local public interest, and its

effects on interstate commerce are only incidental, it will be upheld

unless the burden imposed on such commerce is clearly excessive in

relation to the putative local benefits." The warning requirements, as

they apply to advertisements, satisfy the first inquiry of the Pike

analysis uncontroversially: informing consumers of the health risks

associated with cigar consumption is unquestionably a legitimate local

public interest. However, even accepting the Attorney General's

further position that any effect on interstate commerce is only

incidental, the resulting burden on interstate commerce is clearly

excessive, even in relation to the Commonwealth's strong interest in

informing consumers of health risks.

The plain language of the regulations, which makes it

unlawful to "cause to be advertised" cigar products in Massachusetts,

imposes liability on manufacturers for advertising in national

magazines that are distributed in the Commonwealth, as well as for

advertising on the Internet which can be viewed from a terminal in

Massachusetts.14 As the district court recognized, this "would place

14 On their face, the regulations arguably impose liability on the
print and Internet media, as well.

-61-
a great burden on interstate commerce since it would require the

Massachusetts Warning to be carried by a national magazine in order to

ensure that any copies ending up in Massachusetts carry the Warning."

Lorillard II, 84 F. Supp. 2d at 203. The court also concluded that

"the Commonwealth's local interest in capturing national magazines [and

Internet media] is outweighed by the burden it would place on

interstate commerce." Id. We agree with this evaluation of the burden

imposed by the regulations, and we similarly conclude that in this

respect § 22.05 runs afoul of the Pike analysis.

The district court, however, endeavored to save the

regulations from invalidation by adopting a narrow interpretative gloss

to avoid the constitutional problems posed by a facial reading. With

little if any support in the language of the regulations, the court

held that they would not apply to magazines of truly national

distribution, unless the magazine had a regional or Massachusetts

version, nor to Internet media. Id.

Although federal courts may in some circumstances adopt a

"narrowing construction to which the law is fairly susceptible," Rhode

Island Assoc. of Realtors, Inc. v. Whitehouse, 199 F.3d 26, 36 (1st

Cir. 1999), the courts must also take care not to trample the

legislative or executive province of state authorities by making unduly

substantive additions or changes to laws and regulations. As the

companies point out, the district court's interpretative gloss may pose

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its own problems and ambiguities, such as the determination of whether

a magazine is "truly national" in scope. We also are skeptical of the

court's reasoning that Internet advertisements are not "within"

Massachusetts; although we understand the court's point, and appreciate

the difficulties inherent in regulation of speech in "cyberspace," the

plain language of the regulations covers a person or entity that

advertises on any Internet site viewable from a terminal in

Massachusetts. Most important, there is simply no basis in the

language or history of § 22.05 to support the narrow reading of the

district court. See Erzoznick v. City of Jacksonville, 422 U.S. 205,

216 (1975) (rejecting narrowing interpretation where, inter alia, "the

ordinance by its plain terms is not susceptible to a narrowing

construction"). In sum, although there can be no easily and brightly

demarcated line between proper narrowing construction and judicial

overreaching, we conclude that the regulations are simply not "fairly

susceptible" to the district court's narrowing interpretation. Rhode

Island Assoc. of Realtors, 199 F.3d at 36.

We therefore hold that the warnings requirements for

advertising are unconstitutional. Although appropriate intrastate

application of these or similar restrictions may be permissible,

§ 22.05 does not lend itself to judicial parsing, and we leave it to

the Attorney General, if he so wishes, to craft a constitutional

warnings requirement for media and other cigar advertising.

-63-
 b. Packaging Requirements

The cigar companies also challenge the provision making it

unlawful to "manufacture, package, import for sale or distribute within

Massachusetts any manufactured cigar or manufactured little cigar the

package of which does not bear" the required warning. 940 C.M.R. §

22.04(1). As all parties seem to agree, this language imposes

liability on a manufacturer whenever one of its cigars appears in

Massachusetts without the required warning, even when the sale is

conducted by third parties without the knowledge or consent of the

manufacturer. We think that this provision burdens interstate commerce

in an impermissible manner.

As an initial matter, we would note that we do not find Pike

problems with the Attorney General's labeling scheme in general.

Similar warnings are required on a range of products by a number of

states, see, e.g., California Health & Safety Code § 104550 (cigar

labels and warnings); Ala. Code § 8-19-5(23) (making it unlawful to

affix a required revenue stamp to improperly labeled cigarette

packages); New York Alcoholic Beverage Control Law § 107-a (authorizing

and governing state labeling scheme for alcoholic beverages), and the

burden on manufacturers and retailers of requiring state-specific

packaging, while significant, does not generally outweigh the benefits

of informing the public of serious health issues. We generally agree

with the Attorney General that the companies' interest in the

-64-
efficiency of a uniform national labeling system cannot override the

Commonwealth's substantial interest in protecting its citizens.

Although it might not be ideal for the companies to have to coordinate

all Massachusetts distribution through a central point to affix labels,

this option certainly would give the manufacturers adequate room within

which to maneuver, without imposing any undue burden on interstate

commerce.

However, there is one aspect of the regulations that renders

them unduly burdensome, and that is § 22.05's imposition of liability

for third party action. As mentioned above, the regulations impose

liability on the manufacturers for every import, sale, or distribution

of an improperly labeled package in Massachusetts, even when the sale

or distribution is made by a third party unconnected with the

manufacturer, such as a mail-order seller in another state or any other

distributer, wholesaler, or retail seller that sells cigars to

Massachusetts consumers independent of the manufacturer. Under this

scheme, the manufacturers may not safely label only those packages

intended for Massachusetts; instead, to protect themselves against

liability for conduct totally without their control, the manufacturers

have no choice but to include the Massachusetts warnings on all

packages, just in case one should later appear in Massachusetts through

unforeseen channels. This harsh practical effect of the regulations

stands in sharp contrast to all other warnings schemes of which the

-65-
Court is aware, which typically impose liability on the ultimate

seller, thus containing the law's effect intrastate and also allowing

all affected parties to take the necessary precautions to comply with

the law and avoid substantial liability. In this respect, we conclude

that the benefit derived from the regulations is clearly outweighed by

the substantial burdens placed on interstate commerce.

Unlike the advertising requirements, the labeling provisions

are not easily susceptible to parsing of what is constitutional and

what runs afoul of the Commerce Clause. Therefore, although we would

find many aspects of the package labeling provisions to pass

constitutional muster, we must invalidate them in their entirety and

leave it to the Attorney General to reformulate them, if he so desires,

in a manner consistent with this decision and the Constitution. We

therefore hold 940 C.M.R. § 22.04 to be unconstitutional and without

effect, except insofar as it provides the warnings and format

specifications required in 940 C.M.R. § 22.05.

III. Conclusion

For the reasons set forth above, we hold that the

Massachusetts regulations are not preempted by federal law, do not

violate the First Amendment, and do not violate the Commerce Clause

except for 940 C.M.R. § 22.04 and § 22.05. The judgment of the

district court is

Affirmed in part, reversed in part.

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