Stanford Law School - Robert Crown Law Library

Filed 8/2/07

IN THE SUPREME COURT OF CALIFORNIA

S129522
IN RE TOBACCO CASES II.
Ct.App. 4/1 D041356
San Diego County

JCCP No. 4042
In Mangini v. R.J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057 (Mangini),
this court held that the Federal Cigarette Labeling and Advertising Act (FCLAA)
(15 U.S.C. § 1331 et seq.), which regulates tobacco advertising, did not preempt a
claim against tobacco companies under the state unfair competition law (Bus. &
Prof. Code, § 17200 et seq.) for advertising cigarettes in a manner that encouraged
minors to begin smoking. The main issue presented here is whether, as the Court
of Appeal concluded, the United States Supreme Court’s later decision in
Lorillard Tobacco Co. v. Reilly (2001) 533 U.S. 525 (Lorillard) is inconsistent
with, and thus impliedly disapproved, Mangini. We agree with the Court of
Appeal, and we are bound to accept the high court’s decision in Lorillard as
controlling authority. Accordingly, we will affirm the Court of Appeal’s
judgment.
I
In 1994, four years before this action was filed, the Attorney General of
California joined with the attorneys general of the other 49 states in bringing an
action against six tobacco companies, including Phillip Morris Incorporated
(Phillip Morris), R.J. Reynolds Tobacco Company (R.J. Reynolds), Lorillard
Tobacco Company (Lorillard), and Brown & Williamson Tobacco Corporation
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(Brown & Williamson). In November 1998, that action was resolved by a master
settlement agreement under which the defendants agreed to pay the states a total of
$206 billion and consented to an injunction barring them from “[t]aking any
action, directly or indirectly, to target” minors in their advertising, promotion, or
marketing of tobacco products.1 (People ex rel. Lockyer v. R.J. Reynolds Tobacco
Co. (2004) 116 Cal.App.4th 1253, 1258-1259.) The settlement agreement also
enjoined the defendants from engaging in a number of specific advertising and
promotion techniques, such as brand-name sponsorship of events with a
significant youth audience. The defendants expressly waived any claims that any
provision of the agreement violated state or federal Constitutions. (116
Cal.App.4th at p. 1266, fn. 10.) The agreement provided that it settled claims only
by the state attorneys general, so that individual plaintiffs retained the right to sue.
A month before the master settlement agreement was executed, plaintiffs
Devin Daniels, Bryce Clements, Daimon Fullerton, Nicole Morrow, and Maren
Sandler filed this class action against Phillip Morris, R.J. Reynolds, Lorillard, and
Brown & Williamson on behalf of “all persons who as California resident minors
(under 18 years of age) smoked one or more cigarettes in California between April
2, 1994, and December 31, 1999.” (Daniels v. Phillip Morris Companies, Inc.
(Super. Ct. San Diego County, 1998, No. 719446).) Plaintiffs’ complaint, based
in large part on the California Attorney General’s complaint in the 1994 action,
alleged that defendant tobacco companies’ advertising and promotional activities
intentionally targeted minors.
Specifically, plaintiffs alleged that defendants R.J. Reynolds and Phillip
Morris conducted marketing studies to determine how best to induce teenagers

1
Forty-six states, including California, signed the master settlement
agreement, while the other four states settled independently.
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ages 13 to 17 to begin smoking; that all defendants designed advertisements and
marketing campaigns to appeal to minors; that these campaigns included placing
advertisements near schools, near playgrounds, in video arcades, and in youth-
oriented publications; that defendants sponsored sporting events and concerts that
appealed to minors; and, finally, that defendants paid to have their products used
in films that appealed to youth audiences. Plaintiffs alleged that other tobacco
companies that did not target minors lost market shares to defendants.
Plaintiffs alleged that defendants’ conduct violated the state unfair
competition law, which authorizes civil suits for “any unlawful, unfair or
fraudulent business act or practice and unfair, deceptive, untrue or misleading
advertising” (Bus. & Prof. Code, § 17200), because the conduct encouraged or
induced violation of Penal Code section 308, which prohibits the sale of tobacco
to minors and the purchase and possession of tobacco by minors. Defendants’
advertising campaigns, plaintiffs alleged, succeeded in inducing plaintiffs and all
other members of the class to begin using defendants’ cigarettes when plaintiffs
were still minors; plaintiffs and the other class members became addicted to
nicotine and are unable to stop smoking, spending substantial sums annually to
buy cigarettes. In their second amended complaint, at issue here, plaintiffs seek
restitution of defendants’ profits from the sale of cigarettes to minors since April
2, 1994.
Other plaintiffs filed actions similar to the suit filed by plaintiffs here. The
trial court ordered the case added to Judicial Council Coordination Proceeding
No. 4042, entitled In re Tobacco Cases II, and it certified the class. In March
2002, defendants jointly moved for summary judgment on the ground that the
FCLAA preempted the state law on which plaintiffs’ complaint was based. Four
days later, defendants jointly filed a second motion for summary judgment on the
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ground that defendants’ advertising and marketing practices were protected speech
under the First Amendment to the federal Constitution.
In support of their summary judgment motions, defendants filed
declarations stating that their advertising appeals to adults as well as to minors,
that defendants themselves do not sell cigarettes to consumers, and that defendants
have fully complied with federal labeling requirements. In opposition, plaintiffs
submitted declarations asserting that defendants’ advertising and promotions
deliberately targeted minors, and they attached copies of defendants’
advertisements.
The trial court granted both of defendants’ summary judgment motions and
entered judgment for defendants. Plaintiffs appealed.
On the preemption issue, the Court of Appeal recognized that our decision
in Mangini, supra, 7 Cal.4th 1057, was directly on point. The Court of Appeal
concluded, however, that Mangini had been superseded by the United States
Supreme Court’s decision in Lorillard, supra, 533 U.S. 525. Relying on
Lorillard, the Court of Appeal affirmed the summary judgment for defendants on
the preemption issue, without deciding whether the federal Constitution’s First
Amendment established an independent ground for sustaining the summary
judgment. We granted plaintiffs’ petition for review.
II
A. Introduction
As we explained in Dowhal v. SmithKline Beecham Consumers Healthcare
(2004) 32 Cal.4th 910, the supremacy clause of article VI of the United States
Constitution grants Congress the power to preempt state law. “[S]tate law that
conflicts with federal law is ‘without effect.’ ” (Cipollone v. Liggett Group, Inc.
(1992) 505 U.S. 504, 516 (Cipollone), quoting Maryland v. Louisiana (1981) 451
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U.S. 725, 746.) It is well established that “[c]onsideration of issues arising under
the Supremacy Clause ‘start[s] with the assumption that the historic police powers
of the States [are] not to be superseded by . . . Federal Act unless that [is] the clear
and manifest purpose of Congress,’ ” and also that “ ‘ “[t]he purpose of Congress
is the ultimate touchstone” ’ of pre-emption analysis.” (Cipollone, supra, at
p. 516; accord, Lorillard, supra, 533 U.S. at pp. 541-542.)
The United States Supreme Court has explained that federal preemption
arises in three circumstances: “First, Congress can define explicitly the extent to
which its enactments pre-empt state law. [Citation.] Pre-emption fundamentally
is a question of congressional intent, [citation] and when Congress has made its
intent known through explicit statutory language, the courts’ task is an easy one.
[¶] Second, in the absence of explicit statutory language, state law is pre-empted
where it regulates conduct in a field that Congress intended the Federal
Government to occupy exclusively. . . . [¶] Finally, state law is pre-empted to the
extent that it actually conflicts with federal law.” (English v. General Electric Co.
(1990) 496 U.S. 72, 78-79; see Crosby v. National Foreign Trade Council (2000)
530 U.S. 363, 372-373; Dowhal v. SmithKline Beecham Consumer Healthcare,
supra, 32 Cal.4th at pp. 923-924.)
Here, we need not consider the second and third forms of preemption
because the preemptive scope of the FCLAA “is governed entirely by the express
language” of the act. (Cipollone, supra, 505 U.S. at p. 517; see also Lorillard,
supra, 533 U.S. at p. 541 [“our task is to identify the domain expressly pre-
empted”].)
Defendants here contend that, notwithstanding our decision to the contrary
in Mangini, supra, 7 Cal.4th 1057, the FCLAA preempts a claim asserted under
the state unfair competition law that seeks to impose liability on tobacco
companies for advertising and promotional practices that target minors for the
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purpose of inducing them to purchase and smoke cigarettes. To evaluate that
contention, we first examine specific provisions of federal and state statutes
concerning cigarette advertising and minors, then turn to Mangini and to the
United States Supreme Court’s decisions in Cipollone, supra, 505 U.S. 504, and
Lorillard, supra, 533 U.S. 525.
B. The Federal Cigarette Labeling and Advertising Act (FCLAA)
We summarized the pertinent federal legislation in People ex rel. Lockyer v.
R.J. Reynolds Tobacco Co. (2005) 37 Cal.4th 707 (Reynolds). The FCLAA,
which Congress enacted in 1965, prohibits manufacturing, packaging, or
importing for sale or distribution any cigarettes whose package fails to bear
specified warnings by the Surgeon General. (15 U.S.C. § 1333.) The preemption
provision of the 1965 federal act prohibited states from requiring tobacco
companies to add to cigarette labels or advertising any statements relating to
smoking and health that were not required by federal law. (See Act of July 27,
1965, Pub.L. No. 89-92, § 5, 79 Stat. 283.) In 1969, however, Congress amended
the FCLAA to require stronger warnings of the dangers of smoking, to allow the
Federal Trade Commission to require warnings in cigarette advertising, and to
prohibit cigarette advertising in “any medium of electronic communication subject
to the jurisdiction of the Federal Communications Commission.” (15 U.S.C.
§ 1335; see Lorillard, supra, 533 U.S. at p. 544.) At the same time, Congress
expanded the scope of federal preemption by amending the federal act to provide:
“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).)
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C. The California Statutes
The state unfair competition law (Bus. & Prof. Code, § 17200 et seq.)
authorizes civil suits for “unfair competition” (id., § 17204), which it defines to
“include any unlawful, unfair or fraudulent business act or practice and unfair,
deceptive, untrue or misleading advertising.” (id., § 17200). “It governs ‘anti-
competitive business practices’ as well as injuries to consumers, and has as a
major purpose ‘the preservation of fair business competition.’ ” (Cel-Tech
Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th
163, 180.) “By defining unfair competition to include any ‘unlawful . . . business
act or practice’ [citation], the [unfair competition law] permits violations of other
laws to be treated as unfair competition that is independently actionable.” (Kasky
v. Nike, Inc. (2002) 27 Cal.4th 939, 949.)
Penal Code section 308 prohibits both the sale of tobacco products to any
person under the age of 18 and the purchase and possession of tobacco products
by any such minor. Violation is a misdemeanor. When first enacted in 1891,
Penal Code section 308 prohibited only selling or furnishing tobacco to minors.
(Stats. 1891, ch. 70, § 1, p. 64.) Subdivision (b), which prohibits the purchase of
tobacco by minors, was added in 1988. (Stats. 1988, ch. 1045, § 1, pp. 3393-
3394.) Penal Code section 308 provides criminal punishment for violators, but it
does not expressly authorize civil liability, nor does it expressly refer to
advertising of tobacco products.
D. Cipollone
The United States Supreme Court’s 1992 decision in Cipollone, supra, 505
U.S. 504, was its first decision construing the FCLAA. “The issue there was
whether the [FCLAA’s] ban on state regulation of advertising in [15 U.S.C.]
section 1334 preempted state common law actions accusing tobacco companies of
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failing to warn of the dangers of smoking, of fraudulent advertising, of breaching
warranties that asserted that the use of cigarettes had no significant health
consequences, and of conspiring to deprive the public of scientific and medical
data showing the dangers of tobacco use. In a divided opinion, the high court held
that the federal act preempted only the causes of action based on failure to warn of
the dangers of tobacco use, but permitted the other causes of action.” (Reynolds,
supra, 37 Cal.4th at p. 721.)
Justice Stevens authored the lead opinion in Cipollone, concluding that the
FCLAA preempted some, but not all, of the plaintiff’s causes of action. Chief
Justice Rehnquist, Justice White, and Justice O’Connor joined fully in that
opinion. Justice Blackmun wrote a concurring and dissenting opinion, in which
Justices Kennedy and Souter joined, asserting there was no evidence of an
unambiguous congressional intent to preempt any common law cause of action.
(Cipollone, supra, 505 U.S. at p. 531 (conc. & dis. opn. of Blackmun, J.).)
Although he joined in parts I through IV of Justice Stevens’s lead opinion, Justice
Blackmun dissented from that opinion’s parts V and VI, in which Justice Stevens
explained why the FCLAA preempted some common law claims but not others.
(505 U.S. at p. 531.) In another concurring and dissenting opinion, Justice Scalia,
joined by Justice Thomas, took the opposite view, that the FCLAA preempted all
of the common law causes of action. (505 U.S. at p. 544 (conc. & dis. opn. of
Scalia, J.).) Justice Scalia did not join in any part of Justice Stevens’s opinion.2

2
Because seven justices joined in parts I through IV of Justice Stevens’s
opinion, we attribute the analysis and conclusions in those parts to the high court.
Because only four justices joined in parts V and VI of Justice Stevens’s opinion,
we refer to those parts as a plurality opinion or a plurality analysis.
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In Cipollone, the high court noted that in the FCLAA’s 1965 preemption
provision “Congress spoke precisely and narrowly” (Cipollone, supra, 505 U.S. at
p. 518), but that “the plain language of the pre-emption provision in the 1969 Act
is much broader” (id. at p. 520). The Cipollone plurality set forth an analysis to be
used to determine whether, as amended in 1969, the FCLAA preempts a common
law cause of action. “The central inquiry in each case,” Justice Stevens wrote, “is
straightforward: we ask whether the legal duty that is the predicate of the
common-law damages action constitutes a ‘requirement or prohibition based on
smoking and health . . . imposed under State law with respect to . . . advertising or
promotion,’ giving that clause a fair but narrow reading.” (Cipollone, supra, 505
U.S. at pp. 523-524 (plur. opn. of Stevens, J.).) The plurality then applied that
analysis to the common law claims at issue there, which were based on New
Jersey law, for failure to warn, breach of express warranty, fraudulent
misrepresentation, and conspiracy to misrepresent or conceal material facts.
To support the claim for failure to warn, the plaintiff in Cipollone had
asserted two related theories: “first, that [the defendant tobacco companies] ‘were
negligent in the manner [that] they tested, researched, sold, promoted, and
advertised’ their cigarettes; and second, that [the tobacco companies] failed to
provide ‘adequate warnings of the health consequences of cigarette smoking.’ ”
(Cipollone, supra, 505 U.S. at p. 524 (plur. opn. of Stevens, J.).) The plurality
reasoned that because the FCLAA preempts common law claims “to the extent
that they rely on a state-law ‘requirement or prohibition . . . with respect to . . .
advertising or promotion,’ ” it preempted the plaintiff’s failure-to-warn claim,
under either theory, insofar as it asserted that the tobacco companies’ “post-1969
advertising or promotions should have included additional, or more clearly stated,
warnings.” (Cipollone, supra, at p. 524 (plur. opn. of Stevens, J.).) The FCLAA
did not preempt the failure-to-warn claim, however, insofar as that claim relied
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“solely on [the tobacco companies’] testing or research practices or other actions
unrelated to advertising or promotion.” (Cipollone, supra, at pp. 524-525 (plur.
opn. of Stevens, J.).)
The Cipollone plurality concluded that the FCLAA did not preempt the
claim for breach of express warranty because any requirements enforced through
that claim were not imposed under state law but instead had been voluntarily
untaken by the party issuing the warranty. “In short, a common-law remedy for a
contractual commitment voluntarily undertaken should not be regarded as a
‘requirement . . . imposed under State law’ within the meaning of § 5(b) [of the
FCLAA].” (Cipollone, supra, 505 U.S. at p. 526 (plur. opn. of Stevens, J.), fn.
omitted.)
The plaintiff in Cipollone had alleged two theories of fraudulent
misrepresentation. The Cipollone plurality concluded that the FCLAA preempted
the claim under the first theory, which was that the defendant tobacco companies,
“through their advertising, neutralized the effect of federally mandated warning
labels,” because that theory was “predicated on a state-law prohibition against
statements in advertising and promotional materials that tend to minimize the
health hazards associated with smoking.” (Cipollone, supra, 505 U.S. at p. 527
(plur. opn. of Stevens, J.).) But the Cipollone plurality concluded that the FCLAA
did not preempt the claim under the second theory, which was that the defendant
tobacco companies had falsely represented material facts, because that theory was
“predicated not on a duty ‘based on smoking and health’ but rather on a more
general obligation—the duty not to deceive.” (Id. at pp. 528-529 (plur. opn. of
Stevens, J.).)
For similar reasons, the Cipollone plurality concluded that the FCLAA did
not preempt the claim for conspiracy to misrepresent or conceal material facts
concerning the health hazards of smoking, because “[t]he predicate duty
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underlying this claim is a duty not to conspire to commit fraud,” which was “not a
prohibition ‘based on smoking and health’ as that phrase is properly construed.”
(Cipollone, supra, 505 U.S. at p. 530 (plur. opn. of Stevens, J.).)
E. Mangini
In Mangini, which we decided in 1994, the plaintiff sued R.J. Reynolds
under the state unfair competition law, claiming that its advertising campaign for
Camel cigarettes, featuring a cartoon character called Old Joe Camel, improperly
targeted minors. After reviewing the United States Supreme Court decision in
Cipollone, supra, 505 U.S. 504, decided two years earlier, we concluded that the
plaintiff’s claims were not preempted. (Mangini, supra, 7 Cal.4th at p. 1073.)
The state unfair competition law claim, we reasoned, was analogous to the
common law claims for conspiracy and misrepresentation that the high court in
Cipollone, supra, 505 U.S. 504, had held were not preempted by the FCLAA.
(Mangini, supra, 7 Cal.4th at pp. 1068-1069.) Under the reasoning of the
Cipollone plurality, we observed, whether the FCLAA preempts a cause of action
depended upon whether “the predicate legal duty” underlying that cause of action
was “ ‘based on smoking and health.’ ” (Mangini, supra, at p. 1068.) Applying
that test to the plaintiff’s action in Mangini, we concluded: “The predicate duty
[under the state unfair competition law] is to not engage in unfair competition by
advertising illegal conduct or encouraging others to violate the law. In Cipollone,
the predicate duty—not to deceive—was not ‘based on smoking and health’; this
one is similarly not.” (Id. at p. 1069.)
Our decision in Mangini also examined Penal Code section 308, which
prohibits the sale of tobacco to minors and the purchase of tobacco by minors. We
observed that this statutory prohibition was originally enacted in 1891, long before
concerns about the effect of smoking on health arose, and was apparently intended
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to protect minors from immoral activities. (Mangini, supra, 7 Cal.4th at p. 1070.)
It is part of a chapter of the Penal Code containing offenses “against good morals,”
and it is immediately followed by prohibitions against admitting a minor to a
house of prostitution (Pen. Code, § 309) or to a prize fight or cockfight (id.,
§ 310). (Mangini, supra, at p. 1070.) We concluded: “[T]he state’s protective
role, and not primarily health concerns, motivated the prohibition against selling
cigarettes to minors.” (Ibid.)
F. Lorillard
Acting under the authority of a state statute banning unfair or deceptive
trade practices, and intending to fill gaps in the master settlement agreement that
terminated the action brought by the 50 state attorneys general (see ante, pp. 1-2),
the Massachusetts Attorney General in January 1999 issued regulations that,
among other things, barred outdoor advertising of cigarettes within 1,000 feet of
any school, park, or playground. (Lorillard, supra, 533 U.S. at pp. 532-535.) The
United States Supreme Court in 2001 held that the FCLAA preempted the
Massachusetts regulations. (Lorillard, supra, at p. 548.) Justice O’Connor wrote
the majority opinion, in which Chief Justice Rehnquist and Justices Scalia,
Thomas, and Kennedy joined. Justice Stevens authored a dissenting opinion, in
which Justices Souter, Ginsberg, and Breyer joined.
In Lorillard, the high court rejected the Massachusetts Attorney General’s
contention that the state regulations were “not ‘based on smoking and health,’
because they do not involve health-related content in cigarette advertising but
instead target youth exposure to cigarette advertising.” (Lorillard, supra, 533 U.S.
at p. 547.) The court noted that Congress in the FCLAA had “sought to protect
the public, including youth, from being inundated with images of cigarette
smoking in advertising” and for that reason had “banned electronic media
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advertising of cigarettes” and had vested the Federal Trade Commission with
authority to regulate cigarette advertising. (Lorillard, supra, at p. 548.)
Observing that the Massachusetts Attorney General’s attempt “to address the
incidence of underage cigarette smoking by regulating advertising” was similar to
the FCLAA’s “ban on cigarette advertising in electronic media,” the court
concluded: “At bottom, the concern about youth exposure to cigarette advertising
is intertwined with the concern about cigarette smoking and health. Thus the
Attorney General’s attempt to distinguish one concern from the other must be
rejected.” (Lorillard, supra, at p. 548.)
The high court in Lorillard also rejected the argument that federal
preemption was limited to cigarette advertising’s content, not its location: “[T]he
content/location distinction cannot be squared with the language of the pre-
emption provision, which reaches all ‘requirements’ and ‘prohibitions’ ‘imposed
under State law.’ A distinction between the content of advertising and the location
of advertising in the FCLAA also cannot be reconciled with Congress’ own
location-based restriction, which bans advertising in electronic media, but not
elsewhere.” (Lorillard, supra, 533 U.S. at pp. 548-549.)
The high court summarized its conclusions: “[W]e fail to see how the
FCLAA and its pre-emption provision permit a distinction between the specific
concern about minors and cigarette advertising and the more general concern
about smoking and health in cigarette advertising, especially in light of the fact
that Congress crafted a legislative solution for those very concerns. We also
conclude that a distinction between state regulation of the location as opposed to
the content of cigarette advertising has no foundation in the text of the pre-
emption provision. Congress pre-empted state cigarette advertising regulations
like the Attorney General’s because they would upset federal legislative choices to
require specific warnings and to impose the ban on cigarette advertising in
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electronic media in order to address concerns about smoking and health.
Accordingly, we hold that the Attorney General’s outdoor and point-of-sale
advertising regulations targeting cigarettes are pre-empted by the FCLAA.”
(Lorillard, supra, 533 U.S. at pp. 550-551.)
The high court cautioned, however, that the FCLAA did not preempt
“generally applicable zoning restrictions” and that “[r]estrictions on the location
and size of advertisements that apply to cigarettes on equal terms with other
products appear to be outside the ambit of the pre-emption provision.” (Lorillard,
supra, 533 U.S. at pp. 551-552.) Nor does the FCLAA preempt “state laws
prohibiting cigarette sales to minors” or state prohibitions on “common inchoate
offenses that attach to criminal conduct, such as solicitation, conspiracy, and
attempt.” (Lorillard, supra, at p. 552.)
G. Analysis
Plaintiffs argue that their claim is indistinguishable from the fraud claim at
issue in Cipollone, supra, 505 U.S. 504, which the United States Supreme Court
held was not preempted by the FCLAA. They maintain that both the state unfair
competition law, on which their claim is based, and the common law prohibition
on fraud, on which one of the claims at issue in Cipollone was based, are laws of
general application not motivated by concerns about smoking and health. But the
Cipollone plurality did not conclude that, to avoid FCLAA preemption, it was
sufficient that a state law claim be based on a law of general application not
predicated on concerns about smoking and health. Rather, the plurality there
considered each common law theory to determine whether, as applied in the
particular case, the claim based on that theory would impose a duty based on
concerns about smoking and health. (Cipollone, supra, 505 U.S. at pp. 523-530
(plur. opn. of Stevens, J.).) The fraud claim in Cipollone sought to regulate
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cigarette advertising on the basis that it contained false assertions of fact—a
content-neutral basis—and the claim sought to impose a duty—the duty not to
deceive—that was broader and more general than concerns about smoking and
health. (Id. at pp. 528-529 (plur. opn. of Stevens, J.).)
The Cipollone plurality concluded that the FCLAA did preempt other
common law claims insofar as they sought to impose duties on cigarette
advertisers based on concerns about smoking and health. (Cipollone, supra, 505
U.S. at pp. 523-530 (plur. opn. of Stevens, J.).) Thus, the plurality concluded that
the FCLAA preempted the plaintiff’s failure-to-warn and fraudulent
misrepresentation claims to the extent they sought to impose restrictions, based on
concerns about smoking and health, on the content of cigarette advertising.
(Cipollone, supra, at pp. 524, 527-529 (plur. opn. of Stevens, J.).)
Likewise in Lorillard, supra, 533 U.S. 525, the United States Supreme
Court stated that the FCLAA did not preempt general zoning regulations that
“apply to cigarettes on equal terms with other products” (Lorillard, supra, 533
U.S. at p. 552), but also that the FCLAA did preempt the regulations at issue there,
which applied only to cigarettes and were based on concerns about youth
smoking, because the court concluded that those concerns were indistinguishable
from the concern about cigarette smoking and health (Lorillard, supra, at p. 548).
Accordingly, it is not sufficient to consider here whether plaintiffs have
based their claim on a law of general application that is not motivated by concerns
about smoking and health. (See Morales v. Trans World Airlines, Inc. (1992) 504
U.S. 374, 386 [“there is little reason why state impairment of the federal scheme
should be deemed acceptable so long as it is effected by the particularized
application of a general statute”].) Rather, we must also determine whether
plaintiffs seek, by a particularized application of a general law, to restrict the
content or location of cigarette advertising based on concerns about youth
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smoking, concerns that cannot be distinguished from concerns about smoking and
health.
The state unfair competition law is a law of general application, and it is
not based on concerns about smoking and health. Therefore, the FCLAA does not
preempt that law on its face; nor would the FCLAA preempt a claim under that
law that sought to impose only content-neutral restrictions on cigarette
advertising—such as a requirement that the advertising not contain false
statements of fact—that were unrelated to concerns about smoking and health. To
the extent we so concluded in Mangini, supra, 7 Cal.4th 1057, we were correct,
and we reaffirm those conclusions.
Here, however, as in Mangini, plaintiffs’ claim is based not only on the
state unfair competition law but also on Penal Code section 308, which prohibits
sales of tobacco products to minors and possession of tobacco products by minors.
The purpose of Penal Code section 308 is to prevent minors from smoking or
otherwise using tobacco products. Although we observed in Mangini that when
enacted in 1891 Penal Code section 308 was not based on health concerns, but
rather on concerns about immoral activities (Mangini, supra, 7 Cal.4th at p. 1070),
the legislative history of recent amendments to that statute shows that it is now
unquestionably based in large part, if not entirely, on health concerns. (See, e.g.,
Off. of Sen. Floor Analyses, Analysis of Sen. Bill No. 1849 (1995-1996 Reg.
Sess.) as amended Aug. 26, 1996, pp. 3-4 [detailing major health problems caused
by youth smoking as justification for stiffening penalties for minor purchases];
Sen. Com. on Public Safety, Analysis of Sen. Bill No. 757 (2001-2002 Reg. Sess.)
as introduced Feb. 23, 2001 [detailing health risks in support of stiffening
enforcement of Pen. Code, § 308].) Indeed, the former State Department of
Health Services sponsored the 2001 amendment to Penal Code section 308 (Stats.
2001, ch. 376, § 4), and its deputy director wrote, in a letter to the Chair of the
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Assembly Committee on Governmental Organization urging passage of the
amending legislation, that “[p]reventing youth tobacco use is a major public health
concern.” (Deputy Director Terri Delgadillo, letter to Assemblyman Herb
Wesson, June 25, 2001.) And the United States Supreme Court has concluded, in
an opinion that is binding on this court, that concerns about youth smoking are
inherently intertwined with, and cannot validly be distinguished from, concerns
about smoking and health. (Lorillard, supra, 533 U.S. at p. 548.)
Plaintiffs’ unfair competition claim here seeks to impose on defendant
tobacco companies a duty not to advertise in a way that could encourage minors to
smoke. That is precisely the duty that the United States Supreme Court in
Lorillard, supra, 533 U.S. 525, held subject to FCLAA preemption because it is
necessarily and inherently based on concerns about smoking and health.
Accordingly, plaintiffs’ unfair competition claim is preempted, unless it falls
within an exception to FCLAA preemption.
Plaintiffs contend that even if the FCLAA otherwise preempts their cause
of action, it falls within an exception allowing states to prohibit conduct that
constitutes an inchoate crime. In Lorillard, after observing that the FCLAA does
not preempt state laws prohibiting sales to minors, the high court added: “Having
prohibited the sale and distribution of tobacco products to minors, the State may
prohibit inchoate offenses that attach to criminal conduct, such as solicitation,
conspiracy, and attempt.” (Lorillard, supra, 533 U.S. at p. 552.)
In stating in Lorillard that the FCLAA does not preempt state prohibitions
on cigarette sales to minors or common inchoate offenses that attach to criminal
conduct, the United States Supreme Court cannot have meant to include
restrictions and regulations on the content and location of cigarette advertising, at
least when, as here, there is no allegation that the advertisements directly and
expressly incited criminal violations. The purpose underlying FCLAA preemption
17

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would be severely undermined if states could invoke the inchoate crime exception
on the ground that cigarette advertising, because of its content or location, was
intentionally designed to encourage youth smoking.
In addition, the First Amendment to the United States Constitution limits a
state’s power to treat speech as criminal. Here, plaintiffs contend that defendant
tobacco companies aided and abetted unlawful sales of cigarettes to minors, in
violation of Penal Code section 308, because they intentionally used advertising
and marketing techniques that target minors, thereby encouraging and facilitating
illegal transactions.3 Defendants contend, however, that when the alleged aiding
and abetting consists of speech, the First Amendment to the United States
Constitution severely limits accomplice liability.
Cigarette advertising is commercial speech, and the United States Supreme
Court established the principles governing First Amendment protection of
commercial speech in Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n
of New York (1980) 447 U.S. 557 (Central Hudson). (See Lorillard, supra, 533
U.S. at pp. 561-568.) “For commercial speech to come within [the First
Amendment’s protection], it at least must concern lawful activity and not be
misleading. Next, we ask whether the asserted governmental interest is
substantial. If both inquiries yield positive answers, we must determine whether
the regulation directly advances the governmental interest asserted, and whether it
is not more extensive than is necessary to serve that interest.” (Central Hudson,
supra, at p. 566.)

3
Because the California statute prohibiting “solicitation” is limited to certain
enumerated felonies (see Pen. Code, § 653f, subd. (a)), and a violation of Penal
Code section 308 is a misdemeanor, plaintiffs do not contend that defendants’
conduct constituted the inchoate crime of soliciting the sale or use of cigarettes in
violation of Penal Code section 308.
18

---

The first three components of the Central Hudson test present no
controversy here. Defendants’ cigarette advertising concerns lawful activity
because it is addressed to adults who can legally purchase and use cigarettes, and
not exclusively to minors who cannot, and plaintiffs have not alleged that it is
misleading. As defendants acknowledge, California has a substantial interest in
discouraging the sale of cigarettes to minors and the use of cigarettes by minors.
Restricting advertising that has the effect of encouraging minors to smoke would
directly advance that interest.
Thus, we arrive at the fourth component of the Central Hudson test,
whether the state regulation “is not more extensive than is necessary to serve [the
state’s] interest.” (Central Hudson, supra, 447 U.S. at p. 566.) As we have
explained: “The court has clarified that the last part of the test—determining
whether the regulation is not more extensive than ‘necessary’—does not require
the government to adopt the least restrictive means, but instead requires only a
‘reasonable fit’ between the government’s purpose and the means chosen to
achieve it.” (Kasky v. Nike, Inc., supra, 27 Cal 4th at p. 952, citing Board of
Trustees, State Univ. of N. Y. v. Fox (1989) 492 U.S. 469, 480.)
Here, treating defendants’ conduct in advertising their cigarettes as aiding
and abetting a violation of Penal Code section 308, and thereby rendering
defendants subject to criminal prosecution whenever a minor acquires the
cigarettes they marketed, is not a “reasonable fit” with the state’s purpose of
discouraging smoking by minors. California has, and has employed, many other
means of carrying out its policy of discouraging minors from smoking, such as
prosecuting retailers who sell cigarettes to minors, taxation to raise the price of
cigarettes, advertising and other publicity about the dangers of smoking, and legal
actions to restrict the distribution of cigarettes in places where minors are present.
(See Reynolds, supra, 37 Cal.4th 707.) Through the state Attorney General,
19

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California has brought suit under the state unfair competition law to enjoin
defendants from targeting minors in their advertising, and it has secured a
settlement in which defendants agreed to refrain from such advertising. It has
filed actions to enforce that settlement. (See, e.g., People ex rel. Lockyer v. R.J.
Reynolds Tobacco Co., supra, 116 Cal.App.4th 1253.) Such remedies focus
properly on smoking by minors as an overall problem, instead of inquiring into
which tobacco company may have encouraged a particular minor to smoke a
particular brand of cigarette.
We therefore conclude that the free speech guarantee of the federal
Constitution’s First Amendment does not permit defendants’ cigarette advertising
to be treated as the aiding and abetting of a criminal offense. Consequently,
plaintiffs cannot escape the FCLAA’s preemptive force by claiming that
defendants’ conduct constituted an inchoate criminal offense.
III
We summarize: Plaintiffs’ cause of action against defendant tobacco
companies is based on two laws: Penal Code section 308 (which does not itself
regulate advertising but is based on concerns about smoking and health) and the
state unfair competition law (which does regulate advertising but is not itself based
on concerns about smoking and health). By combining these two laws in a single
claim, plaintiffs seek to regulate cigarette advertising on the ground that it targets
minors and encourages them to begin smoking. As the United States Supreme
Court made clear in Lorillard, supra, 533 U.S. 525, the FCLAA preempts any
state law or cause of action that seeks to regulate cigarette advertising on that
basis. To the extent it concluded otherwise, our opinion in Mangini, supra, 7
Cal.4th 1057, has been superseded by the high court’s later decision in Lorillard,
and Mangini is therefore overruled.
20

---

The judgment of the Court of Appeal is affirmed.
KENNARD,
J.
WE CONCUR:

GEORGE, C. J.
BAXTER, J.
WERDEGAR, J.
CHIN, J.
MORENO, J.
CORRIGAN, J.

21

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See last page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion In re Tobacco Cases II
__________________________________________________________________________________

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted XXX 123 Cal.App.4th 617
Rehearing Granted

__________________________________________________________________________________

Opinion No.

S129522
Date Filed: August 2, 2007
__________________________________________________________________________________

Court:

Superior
County: San Diego
Judge: Ronald S. Prager

__________________________________________________________________________________

Attorneys for Appellant:

Blumenthal & Markham, Norman B. Blumenthal, David R. Markham, Kyle R. Nordrehaug; Thorsnes,
Bartolotta & McGuire, Vincent J. Bartolotta, Jr., John F. McGuire, Karen Frostrom; Chavez & Gertler,
Mark A. Chavez; and Thomas E. Sharkey for Plaintiffs and Appellants.

Bill Lockyer and Edmund G. Brown, Jr., Attorneys General, William N. Brieger, Acting Chief Assistant
Attorney General, Tom Greene, Chief Assistant Attorney General, Dennis Eckhart, Albert Norman
Shelden and Herschel T. Elkins, Assistant Attorneys General, Ronald Reiter, Seth E. Mermin and Alan
Lieberman, Deputy Attorneys General, as Amici Curiae on behalf of Plaintiffs and Appellants.

__________________________________________________________________________________

Attorneys for Respondent:

Munger, Tolles & Olson, Gregory P. Stone, Daniel P. Collins, Steven B. Weisburd, Anne M. Voigts;
Seltzer Caplan McMahon Vitek, Gerald L. McMahon and Daniel E. Eaton for Defendant and Respondent
Philip Morris USA Inc.

Gray Cary Ware & Freidenrich, DLA Piper Rudnick Gray Cary, DLA Piper US, William S. Boggs, Brian
A. Foster, Brian A. Fogarty; Shook Hardy & Bacon, Craig Gustafson and Gregory L. Fowler for
Defendant and Respondent Lorillard Tobacco Company.

Howard, Rice, Nemerovski, Canady, Falk & Rabkin, Dechert LLP, H. Joseph Escher III, Todd E.
Thomson; Wright & L’Estrange, Robert C. Wright; Jones, Day, Reavis & Pogue, Jones Day and William
T. Plesec for Defendants and Respondents R. J. Reynolds Tobacco Company.

Sedgwick Detert Moran & Arnold and Steve D. DiSaia for Defendant and Respondent Brown &
Williamson Tobacco Corporation.

---

Page 2 - S129522 - counsel continued

Attorneys for Respondent:

Susan Liebeler; Daniel J. Popeo and Richard A. Stamp for Washington Legal Foundation as Amicus
Curiae on behalf of Defendants and Respondents.

Horvitz & Levy, Lisa Perochet, John A. Taylor, Jr., Jeremy B. Rosen; Cahill Gordon & Reindell, Floyd
Abrams and Joel Kurtzberg for Association of National Advertisers, Inc., American Advertising Federation
and American Association of Advertising Agencies as Amici Curiae on behalf of Defendants and
Respondents.

Hugh F. Young, Jr.; Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr., Gail E. Lees and William E.
Thomson for The Product Liability Advisory Council, Inc., as Amicus Curiae on behalf of Defendants and
Respondents.

Fred J. Hiestand for The Civil Justice Association of California as Amicus Curiae on behalf of Defendants
and Respondents.

---

Counsel who argued in Supreme Court (not intended for publication with opinion):

Norman B. Blumenthal
Blumenthal & Markham
2255 Calle Clara
La Jolla, CA 92037
(858) 551-1223

Daniel P. Collins
Munger, Tolles & Olson
355 Grand Avenue, 35th Floor
Los Angeles, CA 90071-1560
9213) 683-9100

---

Opinion Information

Date:	Docket Number:
Thu, 08/02/2007	S129522

Disposition
Aug 2 2007	Opinion: Affirmed

Dockets
Nov 9 2004	Received premature petition for review   from counsel for appellants (Devin Daniels et al.). **note: Opinion filed 10/6/04 but certified for publication on 10/27/04. See CRC rule 24(b)(5).
Nov 11 2004	Received:   amended proof of service for petn for review.
Nov 30 2004	Case start: Petition for review filed   for appellants (Devin Daniels et al.).
Nov 30 2004	Record requested
Dec 1 2004	Received Court of Appeal record   one doghouse/five volumes of reporter's transcripts
Dec 7 2004	Request for extension of time filed   By appellants requesting a 13-day extension to and including January 13, 2005 to file appellants' reply to answer to petition for review.
Dec 14 2004	Extension of time granted   To January 13, 2004 to file appellants' reply to answer to petition for review.
Dec 20 2004	Answer to petition for review filed   respondent Philip Morris USA
Dec 29 2004	Request for depublication (petition for review pending)   In Sacramento by The Attorney General.
Jan 6 2005	Received:   letter from N. Blumenthal attorney for appellant ( Daniels ).
Jan 10 2005	Opposition filed   to depublication request>>respondents Philip Morris, Inc., etal
Jan 12 2005	Reply to answer to petition filed   Appellant ( Daniels).
Jan 19 2005	Time extended to grant or deny review   to Feb. 28, 2005.
Feb 16 2005	Letter sent to:   All counsel enclosing a copy of the grant order and the certificate of interested entities or persons form
Feb 16 2005	Petition for review granted (civil case)   Votes: George, C.J., Kennard, Baxter, Werdegar, Chin, Brown, and Moreno, JJ.
Feb 16 2005	2nd record request   for the balance of the record: Five or six boxes.
Feb 18 2005	Received Court of Appeal record   5-boxes [Box 1 containing: 6 vols. of Rspdt's Suppl. Appendix; Box 2 containing: Vol. 1-10 of Aplts. Appendix; Box 3 containing: Vol. 11-21 of Aplts. Appendix; Box 4 containing Vol. 22 - 32; and Box 5 containing Vol. 33 - 42 of Aplts. Appendix.
Feb 25 2005	Certification of interested entities or persons filed   by attorneys for appellants ((Daniels et al.)
Feb 28 2005	Filed:   Joint application for modification of the due dates and lengths of the parties' merits briefs.
Mar 1 2005	Certification of interested entities or persons filed   respondent Philip Morris USA
Mar 2 2005	Extension of time granted   For good cause shown, it is hereby ordered that: The Joint Applicationn of the Petitioners and Respondents under California Rules of Court, Rules 29.1, 45 and 45.5, for modification of the due dates and lengths of the parties' merits briefs is hereby granted and the modified briefing schedule and brief word length must be as follows: Opening Brief -- Due Date: 4-18-2005 -- Brief in Length in Words: 16,000 Answer Brief -- Due Date: 6-17-2005 -- Brief in Length in Words: 16,000 Reply Brief -- Due Date: 7/18/2005 -- Brief in Length in Words: 4,800
Mar 3 2005	Certification of interested entities or persons filed   by H. Joseph Escher III of Howard, Rice et al., counsel for Respondents R. J. Reynolds Tobacco Company et al.
Mar 4 2005	Certification of interested entities or persons filed   by Brian A. Foster, DLA Piper Rudnick et al., counsel for Respondent Lorillard Tobacco Company
Apr 15 2005	Opening brief on the merits filed
Jun 17 2005	Change of contact information filed for:   counsel for Respondent (Lorillard Tobacco Company)
Jun 17 2005	Answer brief on the merits filed   respondent Phillip Morris USA, Inc.
Jul 15 2005	Reply brief filed (case fully briefed)   by plaintiffs/appellants (Devin Daniels, et al)
Jul 22 2005	Request for extension of time to file amicus curiae brief   to 9-14-2005 by the Attorney General - San Diego
Jul 26 2005	Received:   Appellants Statement of Non-Opposition to the appilcation of Attorney General for extension of time
Aug 1 2005	Application filed to:   modify amicus briefing schedule>>respondents Philip Morris USA, Inc.etal
Aug 1 2005	Extension of time granted   On application of the Attorney General, and good cause appearing, it is ordered that the time to serve and file its application and amicus curiae brief is hereby extended to and including 9-14-2005. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Aug 4 2005	Order filed   Under rule 29.1 of the California Rules of Court, the times stated in rule 29.1 for filing briefs in the Supreme Court "may not be extended by stipulation but only by order of the Chief Justice under rule 45." FOR GOOD CAUSE SHOWN, IT IS ORDERED that: (1) Any application to file an amicus curiae brief under rule 29.1(f) in this matter must be filed and served, accompanied by the proposed brief, on or before September 14, 2005; and (2) the parties' answers to any amicus curiae briefs that are filed must be filed and served on or before November 3, 2005.
Sep 14 2005	Application to appear as counsel pro hac vice (granted case)   Floyd Abrams and Joel Kurtzberg on ac brief of American Advertising Federation, et al.
Sep 14 2005	Amicus curiae brief filed   by The Attorney General (Filed in Sacramento)
Sep 14 2005	Received application to file Amicus Curiae Brief   and brief (separate) by Washingron Legal Foundation in support of respondents.
Sep 14 2005	Received application to file Amicus Curiae Brief   American Advertising Federation, American Assn of Advertising Agencies, & Assn of National Advertisers, Inc. [in support of resps]
Sep 14 2005	Received application to file Amicus Curiae Brief   Product Liability Advisory Council, Inc. [in support of respondents]
Sep 15 2005	Received application to file Amicus Curiae Brief   and brief of Civil Justice Association of California in support of respondents
Sep 19 2005	Permission to file amicus curiae brief granted   The application of Civil Justice Association of California for permission to file an amicus curiae brief in support of respondents (Philip Morris USA, Inc., et al.) is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Sep 19 2005	Amicus curiae brief filed   Civil Justice Association of California in support of respondents.
Sep 19 2005	Permission to file amicus curiae brief granted   The application of Washington Legal Foundation for permission to fle an amicus curiae brief in support of respondents (Philip Morris USA, Inc., et al.) is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Sep 19 2005	Amicus curiae brief filed   Washington Legal foundation in support of respondents.
Sep 23 2005	Permission to file amicus curiae brief granted   The applications of the Product Liability Advisory Council, Inc., and the American Advertising Federation et al. to file amicus curiae briefs in support of defendants and respondents are granted. The applications of Floyd Abrams (N.Y. Reg. No. 1758184) and Joel Kurtzberg (N. Y. Reg. No. 2835007) of the State of New York to appear as counsel pro hac vice on behalf of amicus curiae American Federation et al. are granted. On or before October 19, 2005, plaintiffs and appellants may file a single consolidated anwer to all amicus curiae briefs in support of defendants and respondents.
Sep 23 2005	Amicus curiae brief filed   Product Liability Advisory Council, Inc. in support of defendants and respondents.
Sep 23 2005	Amicus curiae brief filed   American Advertising Federation et al. in support of defendants and respondents
Sep 23 2005	Application to appear as counsel pro hac vice granted   Floyd Abrams (N.Y. Reg. No. 1758184 and Joel Kurtzberg (N.Y. Reg. No. 2835007) on behalf of amicus curiae American Advertising Federation et al.
Nov 3 2005	Response to amicus curiae brief filed   to ac brief of Attorney General>>respondent Philip Morris USA, Inc.
Nov 4 2005	Response to amicus curiae brief filed   Appellants' response to amici curiae briefs (CRC 40.1(b)
Mar 1 2006	Received:   Notice of Substition of Counsel for Respondent R. J. Reynolds Tobacco Company for H. Joseph Escher III of Dechert LLP, Robert C. Wright of Wright & L'Estrange, and William T. Plesec of Jones Day in place of Howard Rice Nemerovski Canady Falk & Rabkin, APC and as co-counsel Respondent Brown & Williamson (formerly known as Brown & Williamson Tobacco Corporation ) for Sedgwick Detert Moran & Arnold LLP.
Sep 11 2006	Received:   Notice of Change of Firm Name of DLA Piper Rudnick Gray Cary US LLP, counsel for Respondent Lorillard Tobacco Company, to DLA Piper US LLP.
May 2 2007	Case ordered on calendar   to be argued on Wednesday, June 6, at 9:00 a.m., in Los Angeles
May 25 2007	Received:   Letter dated 5-24-2007 from Norman B. Blumenthal of Blumenthal & Nordrehaug, counsel for appellants, re case cties.
Jun 1 2007	Received:   Letter dated June 1, 2007, from atty Daniel P. Collins of Munger, Tolles & Olson, counsel for respondents, re additional authorities.
Jun 6 2007	Cause argued and submitted
Aug 1 2007	Notice of forthcoming opinion posted
Aug 2 2007	Opinion filed: Judgment affirmed in full   Judgment of the Court of Appeal. Opinion by Kennard, J. -- Joined by George, C.J., Baxter, Werdegar, Chin, Moreno, Corrigan, JJ
Sep 6 2007	Remittitur issued (civil case)
Sep 14 2007	Received:   Acknowledgment of receipt for remittitur from Fourth District, Div. 1, signed for by Rita Rodriguez, Deputy Clerk
Oct 29 2007	Received:   Letter dated 10-22-2007 from Supreme Court of the United States. The application for an extension of time to file petition for writ of certiorari in the above-entitled case has been presented to Justice Kennedy, who on October 22, 2007 extended the time to and including November 30, 2007. This letter has been sent to those designated on the attached notification list. William K. Suter, Clerk by Melissa Blalock, Case Analyst.
Mar 21 2008	Received:   Superme Court of the United States letter dated March 17, 2008 advising that the following order was entered: Petition for writ of certiorari is denied.

Briefs
Apr 15 2005	Opening brief on the merits filed
Jun 17 2005	Answer brief on the merits filed
Jul 15 2005	Reply brief filed (case fully briefed)
Sep 14 2005	Amicus curiae brief filed
Sep 19 2005	Amicus curiae brief filed
Sep 19 2005	Amicus curiae brief filed
Sep 23 2005	Amicus curiae brief filed
Sep 23 2005	Amicus curiae brief filed
Nov 3 2005	Response to amicus curiae brief filed
Nov 4 2005	Response to amicus curiae brief filed

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