In October, the Oregon Court of Appeals ruled that a law restricting the packaging of e-cigarettes violates the state constitution’s free speech protections. The decision illustrates the utility of free speech arguments against packaging requirements and the importance of state constitutions in regulatory challenges generally.

Oregon E-Cigarette Packaging Law

In 2015, the Oregon Legislative Assembly passed House Bill 2546, which enacted Or. Rev. Stat. § 431A.175(2)(f). This statutory provision makes it unlawful to “distribute, sell or allow to be sold an inhalant delivery system if the inhalant delivery system is packaged in a manner that is attractive to minors, as determined by the [Oregon Health Authority] by rule.” Pursuant to this provision, the Oregon Health Authority (OHA) issued Or. Admin. R. 333-015-0357, which stated that an e-cigarette is packaged in a manner “attractive to minors” if, “because of the packaging’s presentation, shape, graphics, coloring or writing, it is likely to appeal to minors.”

The OHA’s regulation also provided a “nonexclusive list” of packaging that is “likely to appeal to minors,” including:

1. Cartoons;
2. Celebrities, athletes, mascots, fictitious characters played by people, or other people likely to appeal to minors;
3. Food or beverages likely to appeal to minors such as candy, desserts, soda, food, or beverages with sweet flavors, including fruit or alcohol;
4. Terms or descriptive words for flavors that are likely to appeal to minors such as tart, tangy, sweet, cool, fire, ice, lit, spiked, poppin’, juicy, candy, desserts, soda, sweet flavors, including fruit, or alcohol flavors; or
5. The shape of any animal, commercially recognizable toy, sports equipment, or commercially recognizable candy.

Lawsuit Under Oregon Constitution

In 2021, plaintiffs Paul Bates and No Moke Daddy LLC sued the OHA for declaratory and injunctive relief, alleging that Or. Rev. Stat. § 431A.175(2)(f) and the regulations promulgated thereunder violated Article I, Section 8 of the Oregon Constitution. In relevant part, this constitution provision prohibits the passing of laws “restricting the right to speak, write, or print freely on any subject whatever.”

The plaintiffs argued that the law facially infringed upon their right to free speech by prohibiting truthful, nonmisleading communication of information about legal products based on the content of the communications. The plaintiffs further asserted that the statute and regulations were overbroad and unconstitutionally vague. The Multnomah County Circuit Court ruled for the OHA on summary judgment. The court noted that a facial challenge to an agency regulation must be brought in the Court of Appeals under the Oregon Administrative Procedures Act. Further, the court concluded that the statute was not subject to facial challenge because it did not expressly regulate speech, despite its potential effect of prohibiting or limiting speech.

The plaintiffs appealed and argued that the circuit court erred by (1) concluding that Or. Rev. Stat. § 431A.175(2)(f) does not violate the state constitution, (2) failing to address whether the statute was unconstitutionally vague, (3) concluding that it lacked jurisdiction over the challenge to the regulations, and (4) failing to conclude that the regulations were unconstitutional.

Oregon Court of Appeals

The Court of Appeals found that Or. Rev. Stat. § 431A.175(2)(f) violated Article I, Section 8 of the Oregon Constitution on its face. The opinion found that the statute prohibits the sale of packaging with certain expressive content — packaging that is “attractive to minors.” And, the opinion explains, “there is nothing about the expressive content being regulated here that necessarily involves harm to children.” Without an established correlation between the “attractive” packaging and the harm to minors (i.e., actually using e-cigarettes), the Court of Appeals reasoned that the statute was directed at the speech itself, rather than “a forbidden effect or harm of the regulated speech.” On this basis, the court applied a strict standard of review under Oregon law, finding that the statute unconstitutionally restrains expression.

The Court of Appeals declined to rule on whether the OHA’s regulations under the statute were themselves invalid. It agreed that the circuit court did not have jurisdiction to adjudicate the plaintiffs’ facial challenge to the regulations and consequently declined to reach the merits of the regulations’ constitutionality. The court also opted not to address the plaintiffs’ vagueness argument, given the overarching finding of facial unconstitutionality. The Court of Appeals has remanded the case to the circuit court, ordering it to enter a judgment consistent with its opinion.

Why It Matters

The recent opinion of the Oregon Court of Appeals exemplifies the importance of state constitutions as a potential basis for challenging state tobacco and nicotine restrictions. Importantly, the free speech arguments raised in Oregon are uniquely tailored to the Oregon Constitution. The types of constitutional arguments available against similar laws in other states will therefore vary greatly — even within the realm of free speech challenges.

This litigation also highlights how the constitutional notions of free speech are particularly important for combating laws related to the labeling of tobacco and nicotine products. In a previous blog post, we discussed the ongoing litigation over the U.S. Food and Drug Administration’s rule requiring graphic warning labels on cigarette packaging. The graphic warning litigation involves First Amendment free speech protections under the U.S. Constitution, while the Oregon e-cigarette packaging case involves similar protections under the Oregon Constitution.

As this litigation illustrates, a careful reading of constitutional law is a critical element of regulated industry’s response formulation in the face of burdensome new regulations.