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Altadis U.S.A., Inc., et al. v. Prince George's County

April 25, 2013

ALTADIS U.S.A., INC., ET AL.
v.
PRINCE GEORGE'S COUNTY, MARYLAND



The opinion of the court was delivered by: Eldridge, J.

Bell, C. J. Harrell Battaglia Greene *fn1 Murphy Adkins Eldridge, John C. (Retired, Specially Assigned), JJ.

Opinion by Eldridge, J.

This Court granted petitions for a writ of certiorari in the present case to decide the validity, under Maryland law, of two Prince George's County ordinances regulating, inter alia, the packaging, sale or other distribution of cigars. The petitioners challenge the validity of the ordinances on several alternative grounds. They contend that the ordinances are not "local laws" and that, therefore, the ordinances exceed the County's authority under Article XI-A of the Maryland Constitution. The petitioners also maintain that the two ordinances conflict with the state statutes regulating the packaging and sale of cigars, and, consequently, the ordinances are void under the principle of preemption by conflict. In addition, the petitioners invoke the doctrine of "implied preemption" or "preemption by occupation," arguing that the General

Assembly has legislated in the area with such force that an intent to occupy the entire field must be implied. Finally, some of the petitioners contend that the ordinances violate both the equal protection and the due process components of Article 24 of the Maryland Declaration of Rights.*fn2

We shall hold that state law occupies the field of regulating the packaging and sale of tobacco products, including cigars, and thus impliedly preempts the two ordinances enacted by the County Council of Prince George's County. In light of this holding, we need not and shall not reach any of the other issues raised by the parties.

I.

The Prince George's County ordinances regulating the packaging, sale or distribution of cigars are CB-47-2008, passed by the Prince George's County Council and signed by the County Executive in November 2008, and CB-6-2009, amending CB47-2008, and adopted by the Council and signed by the Executive in April 2009. The ordinances were codified as parts of §§ 12-201 through 12-204 of the Prince George's County Code. The petitioners do not challenge any parts of these code sections other than the provisions added by the two ordinances regulating cigars. Consequently, any issues concerning the other provisions in §§ 12-201 through 12-204 of the Prince George's County Code are not before us.

The ordinances in question prohibit the purchase, sale, distribution, or gift, by a retailer, wholesaler, or their agent or employee, of individual or "unpackaged" cigars. The term "unpackaged cigars" is defined as "any cigar or cigar product not contained within a sealed original package of at least five (5) cigars or cigar products." See § 12- 201(a)(8) of the Prince George's County Code. The requirement that cigars be sold, distributed, etc., in sealed packages of at least five cigars does not apply to "the sale or other distribution of any cigar that . . . has a wholesale price of more than $2.00 or a retail price of more than $2.50." Id. at § 12-204(b)(1). Similarly, the packaging requirement does not apply to the sale of any cigar on the premises of a retail tobacco establishment that "[d]erives at least 75% of its revenues, measured by average daily receipts, from the sale of non-cigarette tobacco products." Id. at § 12-204(b)(2)(i). The packaging requirement also does not apply to the sale or distribution of cigars "[m]ade by one person engaged in the business of distributing cigars to another person engaged in the business of distributing cigars." Id. at § 12-204(b)(3)(i). In addition, the packaging requirement is inapplicable to the sale or other distribution of cigars if the sale or other distribution is "[f]or the purpose of reselling or otherwise redistributing the cigars outside of " Prince George's County. Id. at § 12-204(b)(3)(ii).

The purpose of the ordinances, as set forth in their titles, was to prohibit the sale or other distribution of cigars "intended for use, or designed for use, in ingesting, inhaling or otherwise introducing marijuana, cocaine, hashish or hashish oil into the human body . . . ." There was testimony before the County Council that users of these substances would often purchase inexpensive cigars, remove some of the inside tobacco, and replace it with one of the above-mentioned substances. Testimony before the County Council in support of the ordinances also indicated that the ordinances would decrease the smoking of tobacco.

Soon after ordinance CB-47-2008 was signed into law, two groups of plaintiffs filed complaints in the Circuit Court for Prince George's County, against Prince George's County, arguing that the ordinance, insofar as it regulated the sale and distribution of cigars, was invalid. They sought a declaratory judgment and injunctive relief. One group of plaintiffs, referred to as the "Altadis" group, included cigar manufacturers, a national cigar trade association, and a major cigar distributor and wholesaler. The other group of plaintiffs, referred to as the "Plescia" group, included a Prince George's County resident and taxpayer, two Prince George's County tobacco retailers, and a Maryland tobacco distributor and wholesaler. The two complaints were consolidated by the Circuit Court. When ordinance CB-6-2009 was enacted in April 2009, the plaintiffs amended their complaints to include a challenge to that ordinance. All parties filed motions for summary judgment. Following a hearing and the submission of memoranda, the Circuit Court granted the defendants' motions for summary judgment, denied the plaintiffs' motions for summary judgment and for an injunction, and filed an extensive written opinion/declaratory judgment rejecting each of the plaintiffs' contentions.

The plaintiffs filed notices of appeal to the Court of Special Appeals. Prior to any proceedings in the Court of Special Appeals, the plaintiffs filed petitions for a writ of certiorari which were granted. Altadis U.S.A., Inc. v. Prince George's County, 415 Md. 607, 4 A.3d 512 (2010).

II.

This Court has frequently pointed out that Maryland state law may preempt local law in one of three ways: 1. preemption by conflict,*fn3 2. express preemption,*fn4 or 3. implied preemption.*fn5 As earlier indicated, we shall in the present case be concerned with implied preemption or, as it is sometimes referred to, preemption by occupation. The principle that the General Assembly may occupy a particular field so extensively as to preclude local legislation, was first recognized in City of Baltimore v. Sitnick & Firey, 254 Md. 303, 323, 255 A.2d 376, 385 (1969), where Judge Finan for the Court observed that "there may be times when the legislature may so forcibly express its intent to occupy a specific field of regulation that the acceptance of the doctrine of pre-emption by occupation is compelled . . . ."

The first case in this Court to hold that local legislation was invalid under the principle of implied preemption was County Council v. Montgomery Association, 274 Md. 52, 333 A.2d 596 (1975). At issue in that case were three Montgomery County ordinances designed to regulate the campaign finance practices of candidates for County Executive and County Council in Montgomery County. This Court in County Council v. Montgomery Association, after reviewing the comprehensive state legislation regulating ...


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