In June, the Appellate Court of Illinois upheld an assessment of over $314 million against Sam’s Club for unpaid county cigarette excise taxes, including a 10% late fee, a 25% penalty, and accrued interest. The assessment arose from Sam’s Club’s alleged failure to pay taxes on cigarettes that it sold to out-of-county retailers from 2009 to 2016. Following the June ruling, the company now appears poised to bring its arguments to the state’s highest court in a case illustrating the ambiguities of state and local excise taxation laws.
Supreme Court Says Affected Retailers May Challenge ENDS Manufacturer’s Marketing Denial Orders
On June 20, the Supreme Court concluded that marketing denial orders (MDOs) issued by the Food and Drug Administration (FDA) can be challenged not only by the applicants (typically, the manufacturer or importer of the products), but also by retailers who would sell such products. As a result, more challenges to MDOs are likely to be brought before the U.S. Court of Appeals for the Fifth Circuit, where litigants have generally had greater success to date in challenging MDOs relative to other appellate courts.
New Mississippi Cigarette and ENDS Directory Laws Take Effect in July
Effective July 1, Mississippi will require all cigarette and ENDS manufacturers to provide annual certifications and have their products listed on a state directory in order for their products to be sold in the state. The law, enacted through HB 916, creates separate directories for cigarettes, including roll-your-own (RYO) tobacco, and Electronic Nicotine Delivery Systems (ENDS) products, such as e-cigarettes and vapes.
FDA and CBP Seize Nearly $34M Worth of Illegal E-Cigarettes in Joint Operation
In the first major enforcement action involving the importation of illegal tobacco products by the new administration, and on the heels of the appointment of the new acting director of the U.S. Food and Drug Administration (FDA) Center for Tobacco Products, FDA and U.S. Customs and Border Protection (CBP) seized illegal e-cigarettes valued at nearly $34 million. This operation underscores the ongoing efforts by federal agencies to combat the influx of unauthorized tobacco products into the U.S.
Troutman Pepper Locke Tobacco + Nicotine Team to Attend the Next Generation Nicotine Delivery Conference
Bryan Haynes, Agustin Rodriguez and Michael Jordan of the Troutman Pepper Locke Tobacco + Nicotine team will attend the Next Generation Nicotine Delivery Conference in Miami, Florida next week.
This conference will address ongoing changes at the Food and Drug Administration Center for Tobacco Products, legal updates, tax issues, product
Troutman Pepper Locke Tobacco + Nicotine Team to Attend EVO NXT 2025
Bryan Haynes of the Troutman Pepper Locke Tobacco + Nicotine team will attend EVO NXT 2025 in Milan, Italy next week.
EVO NXT is an international business festival for next-generation nicotine and hemp products. Trade visitors and decision-makers from the category will join to discover the latest trends and technologies.
New US AG Shifts Resources Away From Tobacco Enforcement
Our colleagues recently wrote about 14 memoranda from the new U.S. Attorney General (AG) Pam Bondi to Department of Justice (DOJ) employees framing the DOJ’s current policies and enforcement priorities. In a memorandum addressing DOJ’s general charging, plea bargaining, and sentencing policy, the AG stated the following: “To free resources to address more pressing priorities, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) shall shift resources from its Alcohol and Tobacco Enforcement Programs to focus on matters relating to the other priorities set forth herein. No resources shall be diverted from the ATF’s regulatory responsibilities, such as federal firearms licenses and background checks.”
California and Denver Impose New Restrictions on Nicotine Analog Products
In what appear to be the first restrictions of their kind, the state of California and the city and county of Denver have adopted bans on flavored tobacco products that cover not only products containing tobacco and nicotine, but also nicotinic alkaloids and nicotine analogs.
FDA Withdraws Proposed Bans on Menthol Cigarettes and Flavored Cigars
In late January, the U.S. Food and Drug Administration (FDA) withdrew its proposed rules to prohibit menthol as a characterizing flavor in cigarettes and all characterizing flavors in cigars. Although either proposal could be revived under a future administration, the withdrawal ends both of the current rulemaking processes. The move also strongly indicates shifting FDA priorities under the second Trump administration. Amid these changes, industry may find the agency more receptive to its arguments—particularly those submitted in comments to proposed rulemaking.
Supreme Court Weighs Vape Venue Dispute
On January 21, the Supreme Court heard arguments in a case addressing who may challenge Food and Drug Administration (FDA) marketing denial orders for new tobacco products.