On February 12, 2014, congressmen from California, Iowa and Vermont sent a joint letter to the Attorneys General in those states, urging them to classify electronic cigarettes as cigarettes under the Master Settlement Agreement (“MSA”). The MSA was adopted in 1998 and applies to cigarette and roll-your-own tobacco manufacturers. In the letter, the lawmakers stated that classifying electronic cigarettes as cigarettes would be a “bold step” in the battle against tobacco use.
The MSA defines a “cigarette,” in part, as “any product that contains nicotine.” The lawmakers said that e-cigarettes meet the definition of a cigarette because they “contain nicotine.” Additionally, the lawmakers believe that inclusion of electronic cigarettes within the definition of a cigarette is consistent with the MSA’s overall goal of reducing tobacco use among America’s youth.
While recognizing that the Food and Drug Administration plans to issue a deeming regulation, which presumably will include electronic cigarettes, the lawmakers claimed that “[o]ne of the primary causes of the rising use of e-cigarettes by children is the lack of effective regulation. E-cigarettes are subject to none of the restrictions on advertising and marketing that apply to conventional cigarettes.”
The lawmakers acknowledged that such expansion of the MSA would not eliminate electronic cigarettes from the marketplace, but would restrict them to adult use. Among other things, the MSA bars marketing efforts by tobacco companies that could be considered appealing to youth. In particular, the MSA prohibits tobacco companies from advertising on outdoor billboards, advertising using cartoons and youth-oriented means to promote their tobacco products, and using the company’s brand names on merchandise. The lawmakers’ letter mentions only the MSA’s advertising and marketing restrictions; they do not address how the MSA’s payment requirements should apply to e-cigarette companies.
The lawmakers’ argument is a huge stretch. Although the MSA’s definition of a “cigarette” includes products containing nicotine, the definition is further limited to products containing tobacco and wrapped in paper, or products that are likely to be purchased by consumers as a cigarette. This is where the argument fails. E-cigarettes are not sold as cigarettes. They are sold as alternatives to cigarettes, with significant differences between the products.
Any effort to coerce electronic cigarettes into the Master Settlement Agreement – an ostensibly voluntary settlement agreement – would be highly vulnerable to legal challenge.
For questions and/or comments, please contact Bryan Haynes, Troutman Sanders practice partner, at 804.697.1420 or by email.