By Richard Rothfelder, Rothfelder and Falick

At last week’s IBOUSA conference in Columbus, I presented a power point on “Objectionable or Defamatory Messages Displayed on Billboards: What the Operator Can Refuse to Display, and How He Can Protect Himself.”   In general, I reported that the operator of a privately owned billboard located and leased on privately owned land can validly refuse to display advertisements on his billboard in his sound business discretion. A good example of this in today’s news is the refusal of Facebook, YouTube, Google, and other privately owned and operated social media platforms to maintain the website of conspiracy-theorist Alex Jones and his show InfoWars. On the other hand, the First Amendment may obligate the outdoor advertiser to display messages on his billboards affixed to public bus benches and shelters, trains and buses, sidewalk kiosks, and “street furniture.” In short, if the government has created and maintained a “Public Forum,” the First Amendment is implicated. Another good example from today’s news is the recent judicial ruling that President Trump created and maintains a Public Forum in his tweeter account, which therefore prohibited him from blocking those critical tweets from appearing on this tweeter page.

In applying these legal principals to real life questions, it follows that the operator of a privately owned billboard located and leased on privately owned land may refuse to display often controversial advertisements and social messages, such as marijuana, alcohol, and same sex marriage. Or, if the product or service is legal, the operator is usually afforded the right under the First Amendment (subject to reasonable time, place, and manner restrictions) to display them as well. Again, the recent demand for marijuana billboard advertisement, in those states where the product is legal, is a good example. An exception, however, exists for billboard advertisement of tobacco products, which have been prohibited by a master settlement agreement entered in 1998 between the Federal Government and the major tobacco companies. Thus, even though tobacco is legal, billboard advertising of this product is prohibited by contract-the master settlement agreement-not by legislation.

During my presentation in Columbus, the questions arose that, since tobacco billboard advertisements are prohibited by a contract instead of by legislation, what if a potential advertiser was not a party to the contract, or he is only a small tobacco shop that didn’t even exist, when the Federal Government executed the master settlement agreement in 1998 with the big tobacco companies? Or, even more fundamentally, what if the product itself, like vaping, didn’t exist when the agreement was signed? Are tobacco billboard advertisements still prohibited under these circumstances? In most instances, the answers are no.

When the master settlement agreement was signed in 1998, only the five major tobacco companies agreed to settle with the 46 states, the District of Columbia, and five U.S. territories (the other four states had settled separately). However, since the settlement was signed, over 40 more tobacco companies have signed onto the agreement as well. In doing so, these companies agreed to follow the restrictions imposed by the agreement, but they are also protected from certain future legal claims brought by the states and territories. While the vast majority of tobacco companies have agreed to the settlement, there are some small tobacco companies that have not signed the settlement. These “non-participating manufacturers” are allowed to advertise on billboards, but mostly rely on other forms of advertisement. Thus, it follows that mere “smoke shops” and cigar lounges, which were not participants in the original or subsequent master settlement agreements, and in fact don’t even manufacture tobacco products, would therefore not be subject to the contractual ban on billboard advertising.

Electronic cigarettes and vaping companies, likewise, are not bound by the same advertising restrictions imposed on traditional tobacco product manufactures, including billboard advertising.  While the FDA now officially considers electronic cigarettes and vaping products to be tobacco products, the advertising regulations are far more relaxed. Vaping companies are allowed to advertise their products on TV, radio, the internet, and billboards, so long as they follow certain guidelines on safety warnings. Certainly, vaping companies and shops, as non-participants in the master settlement agreement, are not contractually bound to those restrictions on billboard advertisements agreed to by the tobacco manufactures.

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