therefor, and the earliest date by which compliance will be possible. The Local Law provides no affirmative procedure for a party to ascertain whether City authorities accept its claim for exemption. The Local Law does provide for an administrative tribunal to levy civil penalties for failure to submit a required written notification of claimed exemption and for "false or misleading" statements in such notices. N.Y. City Admin. Code §§ 621h(2) and 17-624b.
Vango explains that compliance with the Local Law would subject it to significant economic hardship. Because of the requirements of the Local Law, it would automatically have to forego approximately 16.5% of its total advertising revenue (20% of its cigarette advertising revenue) or contract for 25% additional advertising permits, equipment, and space, without compensation, merely to maintain its current revenues. Moreover, Vango asserts that its cigarette advertiser has given it "clear indication" that it will terminate its contract with Vango if the Local Law is valid and applicable to Vango. (Kanefield Decl. P 18.) Vango also points out that in addition to losing 82% of its revenues under the cigarette advertising contract, it will still be liable to the MTBOT for the full number of taxicabs for which it has contracted (1,400 total cabs, 1,150 of which have carried cigarette advertisements pursuant to its contract with a cigarette advertiser). (Id. at P 23.) The remaining contracts could be terminated by the cab companies after three successive months without advertisements. Vango emphasizes that a prompt determination of the Local Law's validity prior to August 31, 1993, is necessary if Vango is to save its business and decide what business decisions must be made, such as whether replacement advertisers can be found if the Local Law is valid and whether to reinvest in $ 80,000.00 worth of permits prior to August 31. Vango contends that violating the Local Law and subjecting itself to an enforcement proceeding after the Local Law is operative will harm its reputation as well as its finances.
On September 22, 1992, Vango contracted with MTBOT for a new five-year contract in anticipation of the enactment of the then proposed Local Law. The contract refers to the Local Law, acknowledges that tobacco advertisements have constituted a substantial portion of the advertising obtained by Vango to display on MTBOT cabs, and states that compliance with the Local Law may jeopardize the placement of such advertisements. The contract then specifies that compliance with the Local Law would constitute a material breach.
Vango asserts that it is exempt from compliance for the taxicabs covered by this contract with the MTBOT.
Vango argues that it is entitled to a declaratory judgment finding that the provisions of the Local Law requiring display of anti-smoking messages in connection with the display of any tobacco advertisements are invalid because they are preempted by the Federal Act, and that Vango is therefore entitled to an injunction prohibiting enforcement of such provisions. The Court agrees with Vango that the Local Law is preempted by the Federal Act.
Preemption doctrine is based upon the Supremacy Clause of the Constitution, which provides that the ". . .Laws of the United States. . .shall be the Supreme Law of the Land; . . .any Thing in the Constitution or Laws of any state to the Contrary notwithstanding." U.S. Const. art. VI, Cl. 2. The Supreme Court long ago held that "basic to this constitutional command" is the fact that all state law that conflicts with federal law is without effect. Maryland v. Louisiana, 451 U.S. 725, 746, 68 L. Ed. 2d 576, 101 S. Ct. 2114 (1981) (citing McCulloch v. Maryland, 17 U.S. 316, 4 Wheat. 316, 427, 4 L. Ed. 579 (1819)). Congress has chosen to enact a comprehensive nationwide scheme to regulate cigarette advertising. Because the preemption argument is dispositive to this action, the Court need not discuss Plaintiff's other claims, constitutional and other. The Court of Appeals for the Third Circuit explains the rationale for this approach:
Although the supremacy clause claim arises under the Constitution, it involves consideration of a state and a federal statute to determine if they conflict rather than interpretation of a substantive provision of the Constitution. . . . Therefore we normally would consider the supremacy clause claim first because, if dispositive, it would obviate the need to decide the substantive constitutional question.
Finberg v. Sullivan, 634 F.2d 50, 56 (3rd Cir. 1980) (citing Hagans v. Lavine, 415 U.S. 528, 549, 39 L. Ed. 2d 577, 94 S. Ct. 1372 (1974)).
Because the Court determines that the Local Law may not be applied against Plaintiff and that the City thus has no role in determining Plaintiff's claim of exemption, Defendants' Motion to Dismiss is denied as moot.
In this Court's view, the Federal Act expressly preempts the Local Law at issue here. In Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 77 L. Ed. 2d 490, 103 S. Ct. 2890 (1983), the Supreme Court explained that preemption may be express or implied, that it "is compelled whether Congress' command is explicitly stated in the statute's language or implicitly contained in its structure and purpose." Id. at 95 (quoting Jones v. Rath Packing Co., 430 U.S. 519, 525, 51 L. Ed. 2d 604, 97 S. Ct. 1305 (1977)) (other citations omitted). In the present case, the preemption provision explicitly bars the Local Law; the Court need only consider the contention that the Federal Act's structure and purpose implicitly preempt the Local Law to supplement its analysis of the express preemption provision. When the statute's language is plain, the function of the Court is to enforce it according to its terms. West Virginia University Hospitals, Inc. v. Casey, 499 U.S. 83, 111 S. Ct. 1138, 1147, 113 L. Ed. 2d 68 (1991) (citations omitted). Where the exercise of state or local police powers is involved, through a provision to protect the health, safety or general welfare of residents, Congress' purpose to preempt such local regulation must be "'clear and manifest'" to "overcome the presumption that state and local regulation of health and safety matters can constitutionally coexist with federal regulation." Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 715-16, 85 L. Ed. 2d 714, 105 S. Ct. 2371 (1985) (quoting Jones v. Rath Packing Co., 430 U.S. 519, 525, 51 L. Ed. 2d 604, 97 S. Ct. 1305 (1977)).
This Court's own evaluation of the Federal Act's preemption provision must be governed to a large extent by the Supreme Court's analysis in Cipollone v. Liggett Group, Inc., U.S. , 120 L. Ed. 2d 407, 112 S. Ct. 2608 (1992).
The Local Law at issue in the present case is distinct from the state laws underlying the Cipollone case. Cipollone dealt with whether certain civil damage actions were preempted by the Federal Act in a suit to recover from cigarette manufacturers after a smoker contracted lung cancer. This Court is convinced that the Local Law at issue in this case is, in fact, a better candidate for preemption than the state law provisions at issue in Cipollone and that the analysis in all three opinions in that case fully support this Court's conclusion that Congress intended to preempt precisely the type of local regulation at issue here.
The Public Health Cigarette Smoking Act of 1969 ("1969 Federal Act") amended the Cigarette Advertising and Labeling Act of 1965 ("1965 Federal Act").
Section 5 of the 1969 Federal Act amended the preemption provision of the 1965 Federal Act
to its present form:
(b) 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 Act.