R.J. REYNOLDS TOBACCO CO. v. FOOD AND DRUG ADMIN. Nos. 11-5332, 12-5063.
696 F.3d 1205 (2012)
R.J. REYNOLDS TOBACCO COMPANY, et al., Appellees v. FOOD & DRUG ADMINISTRATION, et al., Appellants.
United States Court of Appeals, District of Columbia Circuit.
Decided August 24, 2012.
Mark B. Stern, Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Tony West, Assistant Attorney General, Beth S. Brinkmann, Deputy Assistant Attorney General, Alisa B. Klein, Sarong V. Damle, Daniel Tenny, and Lindsey Powell, Attorneys, William B. Schultz, Acting General Counsel, U.S. Department of Health and Human Services, Eric M. Blumberg, Deputy Chief Counsel, and Karen E. Schifter, Senior Counsel. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.
Gregory A. Beck and Allison M. Zieve were on the brief for amici curiae American Academy of Pediatrics, et al. in support of appellants.
Lawrence G. Wasden, Attorney General, Office of the Attorney General for the State of Idaho, Brett T. DeLange, Deputy Attorney General, John J. Burns, Attorney General, Office of the Attorney General for the State of Alaska, Tom Horns, Attorney General, Office of the Attorney General for the State of Arizona, Dustin McDaniel, Attorney General, Office of the Attorney General for the State of Arkansas, Kamala D. Harris, Attorney General, Office of the Attorney General for the State of California, George Jepsen, Attorney General, Office of the Attorney General for the State of Connecticut, Todd S. Kim, Solicitor General, Office of the Attorney General for the District of Columbia, David M. Louie, Attorney General, Office of the Attorney General for the State of Hawai'i, Lisa Madigan, Attorney General, Office of the Attorney General for the State of Illinois, Thomas J. Miller, Attorney General, Office of the Attorney General for the State of Iowa, William J. Schneider, Attorney General, Office of the Attorney General for the State of Maine, Douglas F. Gansler, Attorney General, Office of the Attorney for the State of Maryland, Jim Hood, Attorney General, Office of the Attorney General for the State of Mississippi, Steve Bullock, Attorney General, Office of the Attorney General for the State of Montana, Michael A. Delaney, Attorney General, Office of the Attorney General for the State of New Hampshire, Gary K. King, Attorney General, Office of the Attorney General for the State of New Mexico, Michael DeWine, Attorney General, Office of the Attorney General for the State of Ohio, Peter F. Kilmartin, Attorney General, Office of the Attorney General for the State of Rhode Island, Marty J. Jackley, Attorney General, Office of the Attorney General for the State of South Dakota, Mark L. Shurtleff, Attorney General, Office of the Attorney General for the State of Utah, William H. Sorrell, Attorney General, Office of the Attorney General for the State of Vermont, Vincent F. Frazier, Attorney General, Office of the Attorney General for the Virgin Islands, Robert M. McKenna, Attorney General, Office of the Attorney General for the State of Washington, and Darrell V. McGraw, Jr., Attorney General, Office of the Attorney General for the State of West Virginia, were on the brief for amici curiae States.
Noel J. Francisco argued the cause for appellees. With him on the briefs were Warren D. Postman, Philip J. Perry, Jonathan D. Hacker, Floyd Abrams, Joel Kurtzberg, and Patricia A. Barald.
Bert W. Rein, John E. Barry, Robin S. Conrad, Kathryn Comerford Todd, and Sheldon Gilbert were on the brief for amicus curiae Chamber of Commerce of the United States of America in support of appellees.
Daniel J. Popeo, Cory L. Andrews, and Richard A. Samp were on the brief for amicus curiae Washington Legal Foundation.
Robert Corn-Revere and Ronald G. London were on the brief for amici curiae Association of National Advertisers Inc., et al. in support of appellees.
Jeffrey Light was on the brief for amicus curiae Defending Animal Rights Today & Tomorrow in support of neither party.
Dissenting opinion filed by Circuit Judge ROGERS.
BROWN, Circuit Judge:
The Family Smoking Prevention and Tobacco Control Act ("the Act"), Pub.L. No. 111-31, 123 Stat. 1776 (2009), directed the Secretary of the U.S. Department of Health and Human Services to issue regulations requiring all cigarette packages manufactured or sold in the United States to bear one of nine new textual warnings, as well as "color graphics depicting the negative health consequences of smoking." See id. § 201(a). Pursuant to this authority, the Food and Drug Administration ("FDA") initiated a rulemaking proceeding through which it selected the nine images that would accompany the statutorily-prescribed warnings. Five tobacco companies ("the Companies") challenged the rule, alleging that FDA's proposed graphic warnings violated the First Amendment. See Compl. at 35-36.
The Act gives FDA the authority to regulate the manufacture and sale of tobacco products, including cigarettes. In addition to requiring cigarette packages and advertisements to bear one of nine new warning statements, the Act mandates that the new warning labels comprise the top 50 percent of the front and rear panels of cigarette packages and 20 percent of the area of each cigarette advertisement. Act § 201(a), 123 Stat. at 1842-45. The Act directs the Secretary to issue final regulations
Pursuant to the statutory directive, FDA issued a Proposed Rule seeking comment on thirty-six potential images for the new graphic warning labels. Required Warnings for Cigarette Packages and Advertisements, 75 Fed.Reg. 69,524, 69,534 (Nov. 12, 2010) (hereinafter Proposed Rule). At the outset of the Proposed Rule, FDA asserted the government's "substantial interest in reducing the number of Americans, particularly children and adolescents, who use cigarettes and other tobacco products in order to prevent the life-threatening health consequences associated with tobacco use." Id. at 69,525. In accordance with the requirements of the Act, FDA proposed a dramatic expansion of the existing health warnings, which it justified based on scientific literature and a "strong worldwide consensus"
FDA promulgated the final set of nine images — one for each warning statement — by regulations issued on June 22, 2011. See Required Warnings for Cigarette Packages and Advertisements, 76 Fed. Reg. 36,628 (June 22, 2011) (hereinafter Final Rule). FDA also required each graphic image to bear the phone number of the National Cancer Institute's "Network of Tobacco Cessation Quitlines," which uses the telephone portal "1-800-QUIT-NOW." Id. at 36,681.
FDA based its selection of the final images on an 18,000-person internet-based consumer study it commissioned. The study divided respondents into two groups: a control group that was shown the new text in the format of the current warnings (located on the side of cigarette packages), and a separate treatment group that was shown the proposed graphic warnings, which included the new text, the accompanying graphic image, and the 1-800-QUIT-NOW number. Id. at 36,638. Each group then answered questions designed to assess, among other things, whether the graphic warnings, relative to the text-only control, (1) increased viewers' intention to quit or refrain from smoking; (2) increased viewers' knowledge of the health risks of smoking or secondhand smoke; and (3) were "salient," which FDA defined in part as causing viewers to feel "depressed," "discouraged," or "afraid." Id.
In selecting these nine images, FDA reviewed and responded to over a thousand public comments, including joint comments submitted by plaintiffs-appellees RJ Reynolds, Lorillard, and Commonwealth Brands. See id. at 36,629. Several comments
Some comments also criticized the lack of statistical evidence supporting FDA's belief that requiring cigarette packages to bear the graphic warnings would reduce smoking rates. See id. For example, the Companies noted that the Canadian data revealed no statistically significant decline in smoking rates for adolescents and adults after the introduction of similar graphic warnings, which implied that the warnings were ineffective and that FDA's warnings would be ineffective as well. Id. FDA summarily disagreed, stating that the images it selected would satisfy its "primary goal, which is to effectively convey the negative health consequences of smoking on cigarette packages and in advertisements," which can help "both to discourage nonsmokers ... from initiating cigarette use and to encourage current smokers to consider cessation." Final Rule at 36,633. FDA also explained that the data from Canada did not indicate that the warnings had been ineffective, because other studies showed that the warnings had been "effective at providing ... smokers with health information, making
After FDA finalized the Rule, the Companies filed suit in the district court, claiming the cigarette warnings required under the Act and FDA's implementing regulations violated the First Amendment. The district court granted the Companies' motion for a preliminary injunction on November 7, 2011, and subsequently granted their motion for summary judgment. FDA appeals, and we review de novo the district court's decision to grant summary judgment. Davis v. Pension Benefit Guar. Corp.,
II. Level of Scrutiny
The Companies do not dispute Congress's authority to require health warnings on cigarette packages, nor do they challenge the substance of any of the nine textual statements mandated by the Act. The only question before us is whether FDA's promulgation of the graphic warning labels — which incorporate the textual warnings, a corresponding graphic image, and the "1-800-QUIT-NOW" cessation hotline number — violates the First Amendment. We begin our analysis by determining the applicable level of scrutiny.
Both the right to speak and the right to refrain from speaking are "complementary components of the broader concept of individual freedom of mind" protected by the First Amendment. Wooley v. Maynard,
This case contains elements of compulsion and forced subsidization. The Companies contend that, to the extent the graphic warnings go beyond the textual warnings to shame and repulse smokers and denigrate smoking as an antisocial act, the message is ideological and not informational. "[B]y effectively shouting well-understood information to consumers," they explain, "FDA is communicating an ideological message, a point of view on how people should live their lives: that the risks from smoking outweigh the pleasure that smokers derive from it, and that smokers make bad personal decisions, and should stop smoking." In effect, the graphic images are not warnings, but admonitions: "[D]on't buy or use this product."
Even assuming the Companies' marketing efforts (packaging, branding, and other advertisements) can be properly classified as commercial speech, and thus subject to less robust First Amendment protections, a thorny question remains: how much leeway should this Court grant the government when it seeks to compel a product's manufacturer to convey the state's subjective — and perhaps even ideological — view that consumers should reject this otherwise legal, but disfavored, product? Neither the Act nor the agency's regulation squarely addresses this question. However, for present purposes, we can assume, without deciding, that if such compulsion is constitutionally permissible, the state's actions must still withstand the applicable level of scrutiny.
Courts have recognized a handful of "narrow and well-understood exceptions" to the general rule that content-based speech regulations — including compelled speech — are subject to strict scrutiny. See Turner Broad. Sys., Inc. v. FCC,
The district court concluded the graphic warnings were "not the type of purely factual and uncontroversial" disclosures reviewable under the less stringent Zauderer standard. R.J. Reynolds Tobacco Co. v.
a. Applicability of the Zauderer Standard
In Zauderer, the Court applied a lower level of scrutiny to regulations requiring attorneys to fully disclose information about the actual cost and consequences of services. 471 U.S. at 651-52, 105 S.Ct. 2265. Noting that the First Amendment's protection of commercial speech is premised on its informational value to consumers, the Court reasoned that an advertiser's constitutional interest in not providing additional factual information was "minimal." Id. at 651, 105 S.Ct. 2265. Although the Court acknowledged that "unjustified or unduly burdensome disclosure requirements might offend the First Amendment by chilling protected commercial speech," it "h[e]ld 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.; see also Milavetz, Gallop & Milavetz, P.A. v. United States, ___ U.S. ___,
The Supreme Court has never applied Zauderer to disclosure requirements not designed to correct misleading commercial speech. FDA argues that Zauderer's lenient standard of scrutiny applies to regulations that serve a different governmental interest: disclosure of the health and safety risks associated with commercial products. See Appellant's Br. at 26.
But by its own terms, Zauderer's holding is limited to cases in which disclosure requirements are "reasonably related to the State's interest in preventing deception of consumers." 471 U.S. at 651, 105 S.Ct. 2265. Zauderer "carries no authority for a mandate unrelated to the interest in avoiding misleading or incomplete commercial messages." Glickman v. Wileman Bros. & Elliott, Inc.,
Ibanez v. Florida Department of Business and Professional Regulation also suggests that Zauderer should be construed to apply only when the government affirmatively demonstrates that an advertisement threatens to deceive consumers. In that case, the state Board of Accountancy contended that an attorney's use of her Certified Financial Planner designation in an advertisement was "potentially misleading," and thus entitled the Board to require her to include a disclaimer.
In fact, the Court's only recent application of the Zauderer standard involved a disclosure requirement that "share[d] the essential features of the rule at issue in Zauderer." Milavetz, 130 S.Ct. at 1340. In Milavetz, a law firm challenged a provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA") that required professionals qualifying as debt relief agencies to "clearly and conspicuously disclose in any advertisement of bankruptcy assistance services ... that the services or benefits are with respect to bankruptcy relief under this title." 11 U.S.C. § 528(a)(3). BAPCPA also required qualifying professionals to state that "[w]e are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code." Id. § 528(a)(4). The Court upheld the statute's disclosure requirement because, as in Zauderer, the law firm's advertisements were "inherently misleading" — in this case, because they "promis[ed] ... debt relief without any reference to the possibility of filing for bankruptcy, which has inherent costs." Milavetz, 130 S.Ct. at 1340. One Justice even cautioned against interpreting the Court's holding as a "presumptive endorse[ment of] laws requiring the use of government-scripted disclaimers in commercial advertising," noting that Zauderer does not stand for the proposition that government "can constitutionally compel the use of a scripted disclaimer in any circumstance in which its interest in preventing consumer deception might plausibly be at stake." Id. at 1343-44 (Thomas, J., concurring in part and concurring in the judgment).
Zauderer, Ibanez, and Milavetz thus establish that a disclosure requirement is only appropriate if the government shows that, absent a warning, there is a self-evident — or at least "potentially real" — danger that an advertisement will mislead consumers. Ibanez, 512 U.S. at 146, 114 S.Ct. 2084. In this case, the proposed disclosure requirements would apply to both cigarette advertisements and cigarette packages. The Act bans any labeling or advertising representing that any tobacco product "presents a lower risk of tobacco-related disease or is less harmful than one or more other commercially marketed tobacco products," "contains a reduced level of a substance or presents a reduced exposure to a substance," or "does not contain or is free of a substance." 21 U.S.C. § 387k. The Act also bans advertising or labeling using the descriptors "light," "mild," "low," or similar descriptors. Id. In light of these restrictions, and in the absence of any congressional findings
The dissent's argument that cigarette packages and other advertisements that fail to prominently display the negative health consequences of smoking are misleading, see Dissent at 1228-29, seems to blame the industry for playing by the government's rules. The Companies have never argued that no disclosure requirements are warranted; they merely object to the form and content of the specific requirements proposed by the FDA. Indeed, it seems likely the FDA did not make any such claims because the industry has complied precisely with all of the government's previous disclosure requirements, and continues to do so. Moreover, the Companies generally acknowledge the need for effective warnings and concede in their brief that they would be amenable to a number of new disclosure requirements, including putting the Act's new text on the side of packages, the bottom front of packages and advertisements, or using less shocking graphics. Appellees' Br. at 58.
The amicus States suggest that the graphic warnings be evaluated in the context of the years of deception that preceded them.
By contrast, FDA does not frame this rule as a remedial measure designed to counteract specific deceptive claims made by the Companies, nor did it offer a remedial justification for the graphic warnings during the rulemaking proceeding. While the Companies' representations about
Moreover, the graphic warnings do not constitute the type of "purely factual and uncontroversial" information, Zauderer, 471 U.S. at 651, 105 S.Ct. 2265, or "accurate statement[s]," Milavetz, 130 S.Ct. at 1340, to which the Zauderer standard may be applied. The disclosures approved in Zauderer and Milavetz were clear statements that were both indisputably accurate and not subject to misinterpretation by consumers. See Zauderer, 471 U.S. at 633, 105 S.Ct. 2265 (describing the disciplinary rule that required "that any advertisement that mentions contingent-fee rates must disclos[e] whether percentages are computed before or after deduction of court costs and expenses"); Milavetz, 130 S.Ct. at 1330 (describing BAPCPA disclosure requirements, including, inter alia, a statement that "[w]e are a debt relief agency. We help people file for relief under the Bankruptcy Code.").
The FDA's images are a much different animal. FDA concedes that the images are not meant to be interpreted literally, but rather to symbolize the textual warning statements, which provide "additional context for what is shown." Final Rule at 36,655. But many of the images chosen by FDA could be misinterpreted by consumers. For example, the image of a man smoking through a tracheotomy hole might be misinterpreted as suggesting that such a procedure is a common consequence of smoking — a more logical interpretation than FDA's contention that it symbolizes "the addictive nature of cigarettes," which requires significant extrapolation on the part of the consumers. Id. at 36,649. Moreover, the graphic warnings are not "purely" factual because — as FDA tacitly admits — they are primarily intended to evoke an emotional response, or, at most, shock the viewer into retaining the information in the text warning. See Appellant's Br. at 33 (citing research showing that "pictures are easier to remember than words"); id. at 38 (citing FDA's finding that a substantial body of scientific literature shows that emotional responses, such as worry and disgust, "reliably predict the likelihood that consumers will understand and appreciate the substance of the warnings").
In fact, many of the images do not convey any warning information at all, much less make an "accurate statement" about cigarettes. For example, the images of a woman crying, a small child, and the man wearing a T-shirt emblazoned with the words "I QUIT" do not offer any information about the health effects of smoking. And the "1-800-QUIT-NOW" number, when presented without any explanation about the services provided on the hotline, hardly sounds like an unbiased source of information. These inflammatory images and the provocatively-named hotline cannot
b. Applicability of Central Hudson
Because this case does not fall within the narrow enclave carved out by Zauderer, we must next determine which level of scrutiny — strict or intermediate — is appropriate. The district court held that compelled speech that falls outside the Zauderer framework is subject to strict scrutiny. See Merits Op. at 274-75. See also Disc. Tobacco City & Lottery, Inc. v. United States,
This Court recently evaluated the constitutionality of compelled commercial speech in United States v. Philip Morris, where it reviewed a district court order requiring the defendant tobacco manufacturers to publish corrective statements on their websites, in newspapers, and on major television networks. 566 F.3d at 1142-43. This Court began by noting that "[b]ecause commercial speech receives a lower level of protection under the First Amendment, burdens imposed on it receive a lower level of scrutiny from the courts." Id. After acknowledging that "the standard for assessing burdens on commercial speech has varied," the Court concluded that "the Supreme Court's bottom line is clear: the government must affirmatively demonstrate its means are narrowly tailored to achieve a substantial government goal." Id. at 1143. See also Novartis Corp., 223 F.3d at 789 (evaluating a corrective remedy involving corrective statements under Central Hudson). Because this case also involves a compelled commercial disclosure, we follow the lead of Philip Morris and apply the intermediate standard set forth in Central Hudson.
III. Evaluating the Graphic Warnings Under Intermediate Scrutiny
Under Central Hudson, the government must first show that its asserted interest is "substantial." 447 U.S. at 566, 100 S.Ct. 2343.
Unlike rational-basis review, the Central Hudson standard does not permit this Court to "supplant the precise interests put forward by [FDA] with other suppositions." Edenfield, 507 U.S. at 768, 113 S.Ct. 1792. We thus begin by identifying FDA's asserted interests.
A review of the statute and the administrative record makes clear that the graphic warnings are intended to encourage current smokers to quit and dissuade other consumers from ever buying cigarettes. One of the Act's many stated purposes is "promot[ing] cessation to reduce disease risk and the social costs associated with tobacco-related diseases." Act § 3.9. The only explicitly asserted interest in either the Proposed or Final Rule is an interest in reducing smoking rates. The Proposed Rule states in its preamble that the government has a "substantial interest in reducing the number of Americans, particularly children and adolescents, who use cigarettes and other tobacco products." Proposed Rule at 69,525. And the preamble to the Final Rule reiterates the same interest. Final Rule at 36,629.
Assuming FDA's interest in reducing smoking rates is substantial,
FDA has not provided a shred of evidence — much less the "substantial evidence" required by the APA — showing that the graphic warnings will "directly advance" its interest in reducing the number of Americans who smoke. FDA makes much of the "international consensus" surrounding the effectiveness of large graphic warnings, but offers no evidence showing that such warnings have directly caused a material decrease in smoking rates in any of the countries that now require them. While studies of Canadian and Australian youth smokers showed that the warnings on cigarette packs caused a substantial number of survey participants to think — or think more — about quitting smoking, Proposed Rule at 69,532, and FDA might be correct that intentions are a "necessary precursor" to behavior change, Final Rule at 36,642, it is mere speculation to suggest that respondents who report increased thoughts about quitting smoking will actually follow through on their intentions. And at no point did these studies attempt to evaluate whether the increased thoughts about smoking cessation led participants to actually quit. Another Australian study reported increased quit attempts by survey participants after that country enacted large graphic warnings, but found "no association with short-term quit success." Proposed Rule at 69,532. Some Canadian and Australian studies indicated that large graphic warnings might induce individual smokers to reduce consumption, or to help persons who have already quit smoking remain abstinent. See id. But again, the study did not purport to show that the implementation of large graphic warnings has actually led to a reduction in smoking rates.
FDA's reliance on this questionable social science is unsurprising when we consider the raw data regarding smoking rates in countries that have enacted graphic warnings. FDA claims that Canadian national survey data suggest that graphic warnings may reduce smoking rates. But the strength of the evidence is underwhelming, making FDA's claim somewhat misleading. In the year prior to the introduction of graphic warnings, the Canadian national survey showed that 24 percent of Canadians aged 15 or older smoked cigarettes. In 2001, the year the warnings were introduced, the national smoking rate dropped to 22 percent, and it further dropped to 21 percent in 2002. Id. at 69,532. But the raw numbers don't tell the whole tale. FDA concedes it cannot directly attribute any decrease in the Canadian smoking rate to the graphic warnings because the Canadian government implemented other smoking control initiatives, including an increase in the cigarette tax and new restrictions on public smoking, during the same period. Id. Although FDA maintains the data "are suggestive" that large graphic warnings "may" reduce smoking consumption, id., it cannot satisfy its First Amendment burden with "mere speculation and conjecture." Rubin, 514 U.S. at 487, 115 S.Ct. 1585.
FDA's Regulatory Impact Analysis ("RIA")
Logic dictates that these procedural shortcuts would, if anything, lead to an overly optimistic prediction of the efficacy of the proposed graphic warnings. Not so. The RIA estimated the new warnings would reduce U.S. smoking rates by a mere 0.088%, Final Rule at 36,721, a number the FDA concedes is "in general not statistically distinguishable from zero." Id. at 36,776. Indeed, because it had access to "very small data sets," FDA could not even reject the statistical possibility that the Rule would have no impact on U.S. smoking rates. Id.
FDA has thus presented us with only two studies that directly evaluate the impact of graphic warnings on actual smoking rates, and neither set of data shows that the graphic warnings will "directly" advance its interest in reducing smoking rates "to a material degree." Rubin, 514 U.S. at 487, 115 S.Ct. 1585. And one of the principal researchers on whom FDA relies recently surveyed the relevant literature and conceded that "[t]here is no way to attribute ... declines [in smoking] to the new health warnings." David Hammond, Health Warnings Messages on Tobacco Products: A Review, 20 Tobacco Control 327, 331 (2011), available at http://tobaccocontrol.bmj.com/content/20/5/327.full.pdf In light of the number of foreign jurisdictions that have enacted large graphic warning labels, the dearth of data reflecting decreased smoking rates in these countries is somewhat surprising, and strongly implies that such warnings are not very effective at promoting cessation and discouraging initiation. While APA review of final agency action is deferential, it surely does not require us to accept a flawed interpretation of Canadian survey data or the agency's own projected 0.088% decrease in the U.S. smoking rate as "substantial evidence" that its warnings will advance its stated interest.
FDA attempts to downplay the significance of the RIA by explaining that it "must be included in all federal rulemaking to improve the internal management of the Federal Government," and that it "was not intended to second-guess Congress's judgment regarding the value of new health warnings." Pet. Reply Br. at 15-16.
Alternatively, FDA asserts an interest in "effectively communicating health information" regarding the negative effects of cigarettes. Appellant's Br. at 28. But as FDA concedes, this purported "interest" describes only the means by which FDA is attempting to reduce smoking rates: "[t]he goal of effectively communicating the risks of cigarette smoking is, of course, related to the viewer's decision to quit, or never to start, smoking." Id. at 47. The government's attempt to reformulate its interest as purely informational is unconvincing, as an interest in "effective" communication is too vague to stand on its own. Indeed, the government's chosen buzzwords, which it reiterates through the rulemaking, prompt an obvious question: "effective" in what sense? Allowing FDA to define "effectiveness" however it sees fit would not only render Central Hudson's "substantial interest" requirement a complete nullity, but it would also eviscerate the requirement that any restriction "directly advance" that interest. See 447 U.S. at 566, 100 S.Ct. 2343. In this case, both the statute and the Rule offer a barometer for assessing the effectiveness of the graphic warnings — the degree to which they encourage current smokers to quit and dissuade would-be smokers from taking up the habit. See Final Rule at 36,630, 36,707-08. As such, FDA's interest in "effectively communicating" the health risks of smoking is merely a description of the means by which it plans to accomplish its goal of reducing smoking rates, and not an independent interest capable of sustaining the Rule.
In the Proposed Rule, FDA lamented that their previous efforts to combat the tobacco companies' advertising campaigns have been like bringing a butter knife to a gun fight. According to the FTC, tobacco companies spent approximately $12.49 billion on advertising and promotion in 2006 alone, employing marketing and advertising experts to incorporate current trends and target their messages toward certain demographics. Proposed Rule at 69,531. The graphic warnings represent FDA's attempt to level the playing field, not only by limiting the Companies' ability to advertise, but also by forcing the Companies to bear the cost of disseminating an anti-smoking message. But as the Supreme
ROGERS, Circuit Judge, dissenting:
The threshold question in this government appeal is whether the district court applied the correct level of scrutiny in addressing the tobacco companies' First Amendment challenge to the requirement that they disclose the negative health consequences of smoking on cigarette packages and other advertisements.
Because the warning labels present factually accurate information and address misleading commercial speech, as defined in Supreme Court precedent, Zauderer scrutiny applies, and the government need
Regardless of which level of scrutiny applies, the court errs in failing to examine both of the government's stated interests. In the rulemaking, the FDA articulated complementary, but distinct, interests in effectively conveying information about the negative health consequences of smoking to consumers and in decreasing smoking rates. See, e.g., Final Rule, 76 Fed.Reg. at 36,633. The court dismisses the former interest as "too vague," Maj. Op. at 1221, thereby sidestepping much of the substantial evidence supporting the warning label requirement. Yet this court has "recognize[d] that the government's interest in preventing consumer fraud/confusion may well take on added importance in the context of a product ... that can affect the public's health." Pearson v. Shalala,
Accordingly, because the district court erred in applying strict scrutiny to the commercial disclosures at issue, and because those disclosures, except as discussed below, appear to survive either level of scrutiny under traditional commercial speech precedent, I would reverse the grant of summary judgment, and I respectfully dissent.
The context of the challenged warning label requirement can be summarized briefly. First, it is beyond dispute that the textual statements in the warning labels required under the Tobacco Control Act convey factually accurate information. Tobacco use is the leading preventable cause of death in the United States. It causes or contributes to at least sixteen kinds of cancer, as well as heart and cerebrovascular disease, chronic bronchitis, and emphysema, thereby "kill[ing] more than 400,000 Americans every year — more deaths than from AIDS, alcohol, car accidents, murders, suicides, drugs, and fires, combined." President's Cancer Panel, Promoting Healthy Lifestyles 61 (2007)
Second, it is also beyond dispute that the tobacco companies have engaged in a decades-long campaign to deceive consumers about these facts. Despite knowledge of "the negative health consequences of smoking, the addictiveness and manipulation of nicotine, [and] the harmfulness of secondhand smoke," tobacco company executives "made, caused to be made, and approved public statements contrary to this knowledge." United States v. Philip Morris USA Inc.,
Beginning in 1965, the government undertook to warn consumers of the health risks associated with smoking by requiring the inclusion of a health warning on the side of cigarette packages. See Federal Cigarette Labeling and Advertising Act of 1965, Pub.L. No. 89-92, 79 Stat. 282 (1965). Congress last revised the content and format of these warning labels in 1984. See Comprehensive Smoking Education Act of 1984, Pub.L. No. 98-474, 98 Stat. 2200 (1984). Since then, "evidence regarding the ineffectiveness of the prescribed warnings has continued to accumulate," supporting the conclusion that these warnings "are unnoticed and stale, and they fail to convey relevant information in an effective way." IOM Report at 291.
In view of this background, in 2009 Congress enacted the Tobacco Control Act. Congress found that "[a] consensus exists within the scientific and medical communities that tobacco products are inherently dangerous and cause cancer, heart disease, and other serious adverse health effects," and that "[n]icotine is an addictive drug." Tobacco Control Act § 2(2), (3), 123 Stat. at 1777 (codified at 21 U.S.C. § 387 Note (2011)). Additionally, Congress found that in 2005 the tobacco companies "spent more than $13 [billion] to attract new users, retain current users, increase current consumption, and generate favorable long-term attitudes toward smoking and tobacco use," id. § 2(16), "often misleadingly
In the Final Rule, the FDA, acting on behalf of the Secretary,
"Because the degree of protection afforded by the First Amendment depends
Indeed, in view of "material differences between disclosure requirements and outright prohibitions on speech," id. at 650, 105 S.Ct. 2265, the Supreme Court has taken this distinction a step further. Whereas in the context of noncommercial speech, "compulsion to speak may be as
As the Supreme Court explained in Milavetz, where the challenged requirements are "directed at misleading commercial speech," and where they "impose a disclosure requirement rather than an affirmative limitation on speech, ... the less exacting scrutiny described in Zauderer governs [a court's] review." 130 S.Ct. at 1339; see Spirit Airlines, 687 F.3d at 412. The warning label requirement meets both of these criteria.
First, the government need show only that the targeted commercial speech presents the "possibility of deception" or a "tendency to mislead." Milavetz, 130 S.Ct. at 1340 (citation and internal quotation marks omitted). If the speech is actually misleading, it enjoys no First Amendment protection. See Thompson v. W. States Med. Ctr.,
Even absent any affirmatively misleading statements, see Maj. Op. at 1214-15, cigarette packages and other advertisements that fail to display the final costs of smoking in a prominent manner are at least as misleading as the airline advertisements in Spirit Airlines. Existing warnings, last revised in 1984, appear on one side panel and occupy only four percent of cigarette packages. See Final Rule, 76 Fed.Reg. at 36,678. Common sense, experience, and substantial scientific evidence support the conclusion that these warnings are ineffective. "For example," in 2007 the Institute of Medicine "concluded that U.S. package warnings are both `unnoticed and stale.'" Proposed Rule, 75 Reg. at 69,530 (quoting IOM Report at 291); see generally id. The government has thus provided more than sufficient evidence that cigarette packages and other advertisements remain likely to mislead consumers notwithstanding the existing warnings. See Discount Tobacco City & Lottery v. United States,
Furthermore, even if (contrary to Supreme Court and this court's precedent) these findings were inadequate to establish a "tendency to mislead," this court has recognized that certain advertisements, "although not misleading if taken alone," can "become misleading" when "considered in light of past advertisements." Warner-Lambert Co. v. FTC,
Second, the warning label requirement does not impose "an affirmative limitation on speech," Milavetz, 130 S.Ct. at 1339; rather, the warning labels disclose information about the negative health consequences of smoking. (The one exception is discussed infra.) Unlike other provisions of the Tobacco Control Act, Section 201 does not restrict the information conveyed to consumers, but requires additional information to be conveyed with the aid of graphic images. Although the tobacco companies object that the warnings "monopolize all the prominent space on cigarette packages, and thereby make it impossible for manufacturers to communicate their own messages and their own viewpoints prominently in packaging," Joint Comments of R.J. Reynolds Tobacco Co., Lorillard Tobacco Co. & Commonwealth Brands, Inc. 9 (Jan. 11, 2010) (J.A. 216) (emphasis added), their objection rings hollow in the absence of any evidence of difficulty in conveying their desired messages notwithstanding a decade of experience under a similar warning label requirement in Canada. See Final Rule, 76 Fed.Reg. at 36,633, 36,698; Appellants' Br. at Add. 6-12; cf. Ibanez v. Fla. Dep't Bus. & Prof'l Regulation,
The tobacco companies do not challenge the factual accuracy of the textual statements included in the warning labels. See Appellees' Br. at 54-55. Nor could they reasonably do so, given the scientific consensus "that tobacco products are inherently dangerous and cause cancer, heart disease, and other serious adverse health
Contrary to the tobacco companies' suggestion, see Appellees' Br. at 24, the use of graphic images, even if digitally enhanced, illustrated, or symbolic, does not necessarily make the warnings nonfactual. The Supreme Court recognized in Zauderer that "[t]he use of illustrations or pictures in advertisements serves important communicative functions: it attracts the attention of the audience to the advertiser's message, and it may also serve to impart information directly." Zauderer, 471 U.S. at 647, 105 S.Ct. 2265; see N.Y. Times Co. v. NASA,
The tobacco companies further object that the graphic images were chosen not to convey information, but to evoke negative emotions and thereby discourage smoking. See Appellees' Br. at 26-27. The FDA explained, however, that "considerable scientific evidence shows that health warnings that elicit strong emotional and cognitive reactions," as reflected in their salience measures, "are better processed and more effectively communicate information about the negative health consequences of smoking." Final Rule, 76 Fed.Reg. at 36,642; see id. at 36,639, 41, 46; IOM Report at C-3. Thus, the FDA's reliance on salience measures was in the service of — not inconsistent with — the warnings' informational purpose. Moreover, factually accurate, emotive, and persuasive are not mutually exclusive descriptions; the emotive quality of the selected images does not necessarily undermine the warnings' factual accuracy.
Aside from their general objections to the inclusion of graphic images for the above reasons, the tobacco companies specifically object to five of the nine selected images. They maintain that the images of a man smoking through a tracheotomy hole in his throat and a man with chest staples on an autopsy table convey misleading messages about the consequences of smoking, and that the images of a man wearing a t-shirt reading "I QUIT," a baby enveloped in smoke, and a woman crying convey no information about the consequences of smoking whatsoever. See Appellees' Br. at 25-26. All of these objections pertain to the images divorced from their accompanying text and thus fail to address the relevant question — whether the images render the overall message conveyed by the warning labels nonfactual. Viewed with the text they accompany, none of these images has that effect.
The image accompanying the textual warning "Cigarettes are addictive" depicts a man smoking through a tracheotomy opening in his throat. Viewed with the accompanying text, this image conveys the tenacity of nicotine addiction: even after under undergoing surgery for cancer, one might be unable to abstain from smoking. Indeed, government counsel represented that this situation is not so extreme or unusual as the court and the tobacco companies suggest. Compare Oral Arg. Tr. at 57 (stating that fifty percent of neck and head cancer patients continue to smoke) with Maj. Op. at 1216-17; Appellees' Br. at 25. This representation finds support from the President's Cancer Panel. "Smoking among cancer survivors (including individuals diagnosed with, being treated for, and surviving cancer)," the Panel reported, "is an underappreciated and understudied problem." PCP Report at 70. "[S]moking prevalence in this population is approximately equivalent to people with no history of cancer," despite "mounting evidence confirm[ing] the adverse effects of continued smoking on cancer treatment outcomes regardless of treatment modality." Id.
Similarly, the image of a man with staples in his chest lying on an autopsy table works with, not against, the textual warning "Smoking can kill you." Assuming "autopsies are not a common consequence of smoking," Appellees' Br. at 25, neither are coffins or gravestones; yet the status evoked by images of an autopsy-scarred man, a coffin, or a gravestone — death — is a common consequence of smoking. See Proposed Rule, 75 Fed.Reg. at 69,526; PCP Report at 61, 64. The FDA might have opted for an image of a decaying cadaver or of a pile of ashes to portray the likely physical consequences of smoking, but it was not limited to such images in its representation of those consequences. An autopsy scar is merely one way of communicating that the man in the image is dead; viewed in connection with the textual warning, the image conveys the message that smoking can result in death.
The images of a baby enveloped in smoke and a woman crying both depict the significant harms of secondhand smoke. These images accompany the textual warnings "Tobacco smoke can harm your children" and "Tobacco smoke causes fatal lung disease in nonsmokers," respectively. Regarding the former image, commenters noted that it would "clearly inform parents that when they smoke in the presence of their children, their children will also be inhaling toxins." Final Rule, 76 Fed.Reg. at 36,650. The latter image, as the FDA explained, highlights the "emotional suffering" dimension of fatal lung disease and other "negative health consequences caused by secondhand smoke exposure." Id. at 36,656. Those negative health consequences are significant. Secondhand smoke "has been established as a cause of approximately 3,000 lung cancer deaths each year among nonsmokers in the United States"; it also "is a significant contributor to cardiac, respiratory, and other diseases in individuals exposed to it." PCP Report at 95; see id. at 95-96. As a result, secondhand smoke exposure "claims the lives of approximately 38,000 nonsmokers annually." Id. at 95. Addressing potential purchasers of cigarettes, these two warning labels convey the message that smoking poses risks not only to them, but also to their family members and others.
Initially more problematic is the image of a man wearing a t-shirt that reads "I QUIT," which the tobacco companies maintain "provides no information about smoking risks (or even the benefits of quitting)." Appellees' Br. at 26. But the tobacco companies overstate the objection, for the image does address the benefits of quitting. As the FDA viewed this image, in connection with the textual warning "Quitting smoking now greatly reduces serious risks to your health," it conveys the message "I quit, and I am alive and healthy." This message comports with the evidence showing that "[s]moking cessation decreases the risk of the health consequences of smoking." Proposed Rule, 75 Fed.Reg. at 69,529. "For example, persons who quit smoking before age 50 have one-half the risk of dying in the next 15 years compared with continuing smokers." Id. Nothing in this image, or any other image selected by the FDA, renders nonfactual or controversial the textual warning it accompanies. The warning labels thus qualify as factually accurate, uncontroversial disclosures.
Under this "less exacting scrutiny," the warning label requirement appears to pass muster. The government need only justify the requirement on the basis of substantial evidence on the record. See Nat'l Cable & Telecomms. Ass'n v. FCC,
Attempting to distinguish Zauderer, the court adopts the view that the warning label requirement involves "elements of compulsion and forced subsidization." Maj. Op. at 1211. Commercial disclosure requirements can involve involuntary statements and compliance costs. See, e.g., Milavetz, 130 S.Ct. at 1340-41; Meese v. Keene,
Unlike the graphic images envisioned in Section 201, however, the additional inclusion of the telephone number "1-800-QUIT-NOW" on each warning label does not directly disclose factual information about the health consequences of smoking. The FDA imposed this requirement, pursuant to separate statutory authority, 21 U.S.C. § 387f(d), see Final Rule, 76 Fed. Reg. at 36,681, in order "to provide a place where smokers and other members of the public can obtain smoking cessation information from staff trained specifically to help smokers quit by delivering unbiased and evidence-based information, advice, and support," Proposed Rule, 75 Fed.Reg. at 69,540. In the FDA's view, inclusion of the number would also enhance the effectiveness of the warning labels. See Final Rule, 76 Fed.Reg. at 36,681. To the extent the purpose is directed toward reducing smoking rates, the constitutionality of the number's mandatory inclusion in the warning labels requires examination under a different standard than Zauderer, to which I now turn.
Where Zauderer scrutiny is inapplicable to a commercial speech regulation, "the Supreme Court's bottom line is clear: the government must affirmatively demonstrate its means are `narrowly tailored' to achieve a substantial government goal." Philip Morris, 566 F.3d at 1143 (quoting Bd. of Trs. v. Fox,
Even assuming that the graphic images, by depicting the actual negative consequences of cigarette smoking and thereby evoking emotional reactions, "go beyond... purely factual and accurate commercial disclosures," Maj. Op. at 1212, there would still appear, with one exception, no basis to conclude that the warning label requirement violates the tobacco companies' First Amendment rights. The court reaches the opposite conclusion by dismissing one of the two government interests stated in the rulemaking. Its analysis is
The government's informational interest in effectively conveying the negative health consequences of smoking clearly qualifies as "substantial" under the second prong of Central Hudson. "The Supreme Court has said `there is no question that [the government's] interest in ensuring the accuracy of commercial information in the marketplace is substantial,'" Pearson, 164 F.3d at 656 (quoting Edenfield v. Fane,
The warning label requirement appears to meet the third and fourth prongs of Central Hudson as well. The rulemaking record includes substantial evidence from international experience, see Proposed Rule, 75 Fed.Reg. at 69,531-32, and the FDA Study, see Final Rule, 76 Fed.Reg. at 36,637-42, supporting the government's reasoned determination that the warnings would "directly advance" its informational interest, not least by "ensur[ing] that the health risk message[s] [are] actually seen by consumers in the first instance." Commonwealth Brands, Inc. v. United States,
The one exception is the "1-800-QUIT-NOW" telephone number. As mentioned, it is not designed directly to inform consumers of the health consequences of smoking, but to assist smokers in their cessation efforts. See Final Rule, 76 Fed. Reg. at 36,681. Under Central Hudson intermediate scrutiny, the government's interest in reducing smoking rates is doubtless substantial. See, e.g., Lorillard, 533 U.S. at 564, 121 S.Ct. 2404; Brown & Williamson, 529 U.S. at 161, 120 S.Ct. 1291. There also is substantial evidence to support the FDA's determination that the display of the "1-800-QUIT-NOW" number will directly advance this interest. The biological and psychological effects of nicotine "can make smoking cessation extremely difficult," PCP Report at 62; "about 40 percent of smokers try to quit" each year, but "95 percent of those who try to quit on their own relapse," Final Rule, 76 Fed.Reg. at 36,681. In comparison to minimal or no counseling interventions, quitlines have been found to "significantly increase abstinence rates." Id. at 36,687 (citing U.S. Dep't Health & Human Servs., Public Health Serv., Treating Tobacco Use and Dependence: 2008 Update 91 (May 2008)); see also IOM Report at C-7. International experience referenced in the rulemaking, see Final Rule, 76 Fed. Reg. at 36,682, further supports the common sense proposition that informing smokers of cessation resources is likely to increase rates of successful quit attempts.
But the additional inclusion of the "1-800-QUIT-NOW" number on the warning labels does not meet the fourth prong of Central Hudson. The number is prominently presented in imperative terms, directing consumers to "QUIT NOW." That command directly contradicts the tobacco companies' desired message at the point of sale, thereby imposing a significant burden on their protected commercial speech. "In previous cases addressing [the] final prong of the Central Hudson test," the Supreme Court has "made clear that if the Government could achieve its interests in a manner that does not restrict speech, or that restricts less speech, the Government must do so." Thompson, 535 U.S. at 371, 122 S.Ct. 1497. Unlike the warning label requirement imposed pursuant to Section 201 in response to the demonstrated failures of previously attempted, less burdensome warning requirements, the inclusion of the "1-800-QUIT-NOW" number follows upon no apparent consideration of the effectiveness of alternative means of connecting smokers to cessation resources, such as a package insert.
Finally, it bears noting that the court's understanding of the precedent governing the appropriate level of scrutiny, as well as its dismissal of a well established and substantial government interest, is inconsistent with the Supreme Court's "principal" justification for "extend[ing] ... First Amendment protection to commercial speech" — "the value to consumers of the information such speech provides." Zauderer, 471 U.S. at 651, 105 S.Ct. 2265. The Supreme Court has reiterated this justification in the tobacco context. Addressing "substantial" restrictions on tobacco advertising imposed by Massachusetts, the Court identified as the "countervailing First Amendment interests" the tobacco companies' "interest in conveying truthful information about their products to adults" and adults' "corresponding interest in receiving truthful information about tobacco products." Lorillard, 533 U.S. at 564, 121 S.Ct. 2404. In view of this justification, the Court has treated disclosure requirements "as constitutionally preferable to outright suppression." Pearson, 164 F.3d at 657 (citing recent cases). Here, the government has required the tobacco companies not only to state, but also to show, the significant negative health consequences of using their product as intended. The court identifies no principled distinction, for purposes of determining the applicable level of scrutiny, between the stating and the showing of such information. In view of the record evidence — as well as experience and common sense — supporting the communicative power of graphic images accompanying textual warnings, no such distinction appears to exist.
Given the evidence demonstrating the tenacity of nicotine addiction, the young age at which the vast majority of smokers begin smoking cigarettes, these smokers' "incomplete understanding of the addictive nature of tobacco use that is related, in part, to their inaccurate assessment of smoking risks and their belief that they can quit at any time and therefore avoid addiction," IOM Report at 89, and the significant negative health consequences of smoking, the government has an interest of paramount importance in effectively conveying information about the health risks of smoking to adolescent would-be smokers and other consumers. The tobacco companies' decades of deception regarding these risks, especially the risk of addiction, buttress this interest. Contrary to their arguments, nothing in the Supreme Court's commercial speech precedent would restrict the government to conveying these risks in ways that have already proved ineffective or would prohibit the government from employing the communication tools tobacco companies have wielded to great effect over the years.
For these reasons, the district court erred in applying strict scrutiny in sustaining the tobacco companies' as-applied First Amendment challenge to the Tobacco Control Act and the Final Rule, and in issuing a permanent injunction. Because the warning label requirement (absent the "1-800-QUIT-NOW" number) appears to survive the First Amendment challenge
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