Arizona Court ofAppeals Division One Holds that a Business that Meets the Definition of a “Retail Tobacco Store” Under A.R.S. § 36-601.01 Is Excepted from the Smoke-Free Arizona Act, Even if the Business Also Holds a Liquor License and Sells Alcohol on the Premises.

Prince and Princess Enterprises, LLC owns Magnum’s Cigar, Wine & Liquor Emporium, which sells both tobacco and alcohol for consumption on and off its premises.  The Smoke-Free Arizona Act bans smoking “in all public places and places of employment within the state of Arizona.”  A.R.S. 36-601.01.  The Act excepts from its broad ban “retail tobacco stores.”  See A.R.S. § 36-601.01(A)(10), (B)(3).  Magnum’s sought declaratory and injunctive relief against the Arizona Department of Health Services to prevent enforcement of the Act on the ground that Magnum’s qualified as an exempt “retail tobacco store.”  The trial court denied relief, ruling that Magnum’s was a “liquor bar” not a retail tobacco store.  Magnum’s appealed.     

The ArizonaAppeals Court reversed and remanded for further proceedings.  The Court concluded that in order for a business to qualify for the retail tobacco store exception to the smoking ban, it “must: (1) be a retail store that derives the majority of its sales from tobacco products and accessories, and (2) be physically separated so that smoke does not infiltrate into areas where smoking is prohibited.”  See A.R.S. § 36-601.01(A)(10), (B)(3).  As Magnum’s complaint alleged that it satisfied both of the preceding elements, Magnum’s seemingly qualified for the exception.  The court found nothing in the plain language of the Act militating in favor of the state’s argument that even though a business falls within the retail tobacco store exception, its simultaneous status as a bar somehow renders the exception inapplicable. 

Judge Barker filed a special concurrence in which he agreed with the majority’s result, but not all of its reasoning.  In particular, Judge Barker concluded that the majority’s two-part test omitted a crucial element that must be examined on remand: Whether the establishment comports with the common understanding of a “retail store.”  The operable test should be whether the “principal or primary use” of the premises is as a “retail store,” not a bar or other establishment.               

Judge Gemmill authored the opinion; Judge Brown concurred.  Judge Barker specially concurred.