Independents Gas & Service Stations Associations, Inc. v. City of Chicago/5827, Inc. v. City of Chicago

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No. 14 C 7536 & No. 14 C 8860 (N.D. Ill. June 29, 2015)

Chicago Ordinance Prohibiting the Sale of Flavored Tobacco Products, Including Menthol, Within 500 Feet of a School Upheld

Background

On December 11, 2013, the Chicago City Council enacted an ordinance prohibiting the sale of any flavored tobacco product within 500 feet of the property line of any city school. Notably, this ordinance did not exempt the sale of menthol cigarettes, the first local law to place any sales restrictions on the products.

On September 27, 2014, the Independents Gas & Service Stations Associations (I-GAS) filed a complaint in the United States District Court for the District of Northern Illinois. On November 5, 2014, 5827, Inc. filed a similar suit in the same district. Both complaints allege that, among other allegations, the Chicago ordinance creates a preempted product standard that is impermissible under federal law. I-GAS filed a motion for a temporary restraining order that was denied by the court on November 12, 2014. On November 21, 2014, the city filed a motion to dismiss the I-GAS case and a similar motion was filed in the 5827 case on April 16, 2015. Because both plaintiffs alleged the same violations of the law and the city’s defense was the same, the motions were decided together.

On October 22, 2014, a third complaint was filed by another group of retailers lead by 76 Enterprises, Inc. After failing to get the court to enjoin enforcement of the law, the plaintiff’s attorneys were no longer able to make contact with their clients. On August 6, 2015, the case was dismissed without prejudice (indicating that it can be refiled) for want of prosecution.

The District Court’s Decision

On June 29, 2015, Judge Matthew F. Kennelly found in favor of the city and dismissed both cases with prejudice, meaning that neither plaintiff may refile their cases against the city. In examining whether or not the Chicago ordinance was preempted by the Tobacco Control Act by creating a product standard, the judge relied heavily on the Second Circuit’s analysis in U.S. Smokeless Tobacco Manufacturing Company LLC v. City of New York.1

The court reasoned that because the ordinance does not entirely prohibit the sale of flavored products throughout the city, only at stores within 500 feet of a school, it is a regulation on the sale of tobacco products that is expressly allowed under the Tobacco Control Act’s preemption provisions.

The plaintiffs also argued that the city’s ordinance was a product standard disguised as a sales restriction because the law would inevitably change the behavior of manufacturers by decreasing the production of flavored products. The court reasoned that all sales restrictions would create some sort of incentive to change behavior, but that this law in particular stops short of imposing requirements on manufacturers.

Litigation Status

This decision was not appealed to the U.S. Court of Appeals for the Seventh Circuit and so Judge Kennelly’s opinion is final.

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1 U.S. Smokeless Tobacco Mfg. Co. v. City of New York, 708 F.3d 428 (2d Cir. 2013).