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

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. 1 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 ³⁰⁹ 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 CB-47-2008, 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]e-rives 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 ³¹⁰ 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. ³¹¹ 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, 2 2. express preemption, 3 or 3. implied preemption. 4 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.... ” ³¹² 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 and controlling elections for state and county offices, concluded as follows ( 274 Md. at 62 , 333 A.2d at 602 , footnote omitted): “This pervasive state administrative control of the election process, on both the statewide and local levels, is a compelling indication that the General Assembly did not intend that local governments should enact election laws, but rather intended that the conduct and regulation of elections be strictly a state function.” Soon after the County Council v. Montgomery Association case, this Court in McCarthy v. Bd. of Education of A.A. County, 280 Md. 634 , 374 A.2d 1135 (1977), held that, in light of the extensive state legislation and state control of education, ordinances by the Anne Arundel County Council, imposing certain school transportation duties on the Anne Arundel Board of Education, were impliedly preempted.

Judge Smith for the Court concluded in the McCarthy case as follows ( 280 Md. at 650-651 , 374 A.2d at 1144 ): “This case represents an excellent example of what the Court had in mind in City of Baltimore v. Sitnick & Firey, supra, 254 Md. 303, 323 , [ 255 A.2d 376 ], when it referred to the fact that the General Assembly might ‘so forcibly express its intent to occupy a specific field of regulation that the acceptance of the doctrine of preemption by occupation is compelled.... ’ Our recital of legislation by the State in the field of education demonstrates the occupation of that field by the State. We conclude, therefore, that the County Council of Anne Arundel County was without power to legislate in this field and to place additional duties upon a ³¹³ State agency, the Board of Education of Anne Arundel County.” See also Mont. Co. Bd. of Realtors v. Mont. Co., 287 Md. 101, 110, 411 A.2d 97, 102 (1980) (In striking down certain county tax ordinances, this Court held, inter alia, “that a county may not enter into a field which the State has occupied and preempted as here”); National Asphalt v. Prince George’s Co., 292 Md. 75, 79 , 437 A.2d 651, 653 (1981) (Holding that state laws regarding employment discrimination did not impliedly preempt local employment discrimination ordinances because the state legislation was not “extensive” and did “not comprehensively cover the entire field”); Howard County v. PEPCO, 319 Md. 511, 523 , 573 A.2d 821, 828 (1990) (“[W]e adhere to the rule that ‘[t]he primary indicia of a legislative purpose to preempt an entire field of law is the comprehensiveness with which the General Assembly has legislated in the field,’ ” quoting Board v. Harker, 316 Md. 683, 696-697 , 561 A.2d 219, 226 (1989)); Talbot County v. Skipper, 329 Md. 481, 489, 492 , 620 A.2d 880, 883, 885 (1993) (State comprehensive legislation “regulating all aspects of sewage sludge utilization” was “strongly indicative of the legislative intent to preempt this entire field from local regulation.” In addition, there were “other indications that the General Assembly generally intended to preempt the field”); Soaring Vista v. Queen Anne’s County, 356 Md. 660 , 741 A.2d 1110 (1999) (same).

A case which is somewhat similar to the present one is Allied Vending v. Bowie, 332 Md. 279 , 631 A.2d 77 (1993). Allied Vending involved the validity of two ordinances, enacted by two municipalities, which regulated to some extent the sale of cigarettes through state-licensed cigarette vending machines. One ordinance provided that “[n]o person shall sell tobacco products through a vending machine without first obtaining a permit for the placement of a cigarette vending machine in compliance with” the ordinance. 332 Md. at 283 , 631 A.2d at 78 . The ordinance then listed numerous restrictions upon the placement of cigarette vending machines.

The other municipal ordinance was similar. Prior to the enact ³¹⁴ ment of these two municipal ordinances, the licensing and regulation of cigarette vending machines had been exclusively a matter of state law. In an opinion by Judge Karwacki, this Court in Allied Vending held that the two municipal ordinances were impliedly preempted by state law and were, therefore, invalid. The Court initially pointed out that, until the enactment of the two subject ordinances, “the licensing of cigarette vending machines was accomplished exclusively in accordance with” state law.

Allied, 332 Md. at 288 , 631 A.2d at 81 . The Allied opinion then reviewed the comprehensive state law provisions regulating the licensing and sale of cigarettes “at wholesale, retail, over-the-counter, and through cigarette vending machines.” Allied, 332 Md. at 288-289 , 631 A.2d at 81 . The Court described the different types of state licenses for operating cigarette vending machines, depending upon the number of machines operated by the licensee. With regard to the license required by state law, the Court pointed out ( 332 Md. at 289-290 , 631 A.2d at 82 , footnote omitted): “In addition to obtaining either a cigarette