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.
Federal Court Pumps the Brakes on Iowa Vape Directory
We previously wrote about this case last January, here and here, when Iowans for Alternatives to Smoking & Tobacco, Inc., Global Source Distribution, LLC, and others filed a complaint and motion for a preliminary injunction in federal district court against the Iowa Department of Revenue (the Department), challenging Iowa House File 2677 (HF 2677), a law imposing certification and directory requirements on vapor products sold in Iowa. On May 2, the court granted plaintiffs’ motion for preliminary injunction and enjoined the Department from implementing and enforcing HF 2677’s vapor product directory provisions. The court held that the Department could, however, continue to enforce the provisions of HF 2677 requiring nonresident vapor product manufacturers not registered to do business in the state as a foreign corporation or business entity to appoint and continually engage an agent for service of process. The parties have a status conference before the court scheduled for May 29.
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.”
Federal Appellate Court Agrees that FDA Cannot Regulate “Premium Cigars”
Yet again, the premium cigar industry has prevailed in federal court against the U.S. Food and Drug Administration (FDA). As we have previously discussed here and here, FDA appealed a federal district court decision vacating its rule (the Deeming Rule) subjecting premium cigars to the Federal Food, Drug, and Cosmetic Act, as amended by the Tobacco Control Act (TCA). On January 24, the U.S. Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) issued an opinion agreeing[1] with (i) the district court’s ruling that FDA acted arbitrarily and capriciously when it sought to include premium cigars in its Deeming Rule and (ii) the district court’s vacatur of the Deeming Rule as applied to premium cigars, but it remanded the case to the district court to determine the appropriate definition of “premium cigar.” Now, the district court will reconsider the appropriate definition of “premium cigar,” which will ultimately determine the types of cigars that are not subject to the TCA and FDA’s Deeming Rule. In one potential setback for industry, the D.C. Circuit also stated that it understood the district court’s order as granting relief from user fees prospectively but that it does not read it as permitting the refunding of past user fee payments.
Vape Companies Challenge Iowa’s New Vape Directory Law
On December 17, 2024, Iowans for Alternatives to Smoking & Tobacco, Inc., Global Source Distribution, LLC, and others filed a complaint[1] and motion for a preliminary injunction[2] in federal district court against the Iowa Department of Revenue (the Department) challenging Iowa House File 2677 (HF 2677), a law imposing certification and directory requirements on vapor products sold in Iowa. A hearing on the plaintiffs’ motion for a preliminary injunction is scheduled for March 5. If the court rules in the plaintiffs’ favor, it could stay enforcement of the new law until the case is ultimately resolved. While the Department was previously scheduled to publish the vapor products directory on January 2 and begin enforcement on February 3, the Department has not published the directory, and its website indicates that it will not be enforcing the directory. The Department’s website states: “Publication and enforcement of Iowa’s vapor products directory is delayed until further notice. The Department will make an additional announcement before publication and enforcement of the vapor products directory begins. During the delay, manufacturers should continue to submit certification applications.”
California AG Provides Update on State Tobacco Enforcement Efforts
Last month, California Attorney General (AG) Rob Bonta announced the awardees for the 2024-2025 Tobacco Grant Program, a program spearheaded by the California Department of Justice (DOJ) that aims to support local law enforcement agencies in their efforts to reduce illegal tobacco sales and usage, particularly among minors. Bonta also provided an update on “Operation Up in Smoke,” a comprehensive law enforcement operation targeting illegal tobacco sales. These updates illustrate that California continues to prioritize coordinated law enforcement efforts against businesses that make illegal tobacco sales, particularly to minors.
Class Action Lawsuit Alleges Puff Bar Violated State Consumer Protection Laws
A consumer class action lawsuit has been filed in the U.S. District Court for the Southern District of New York against EVO Brands, LLC and PVG2, LLC, both doing business as Puff Bar. The lawsuit alleges that Puff Bar violated state consumer protection laws by engaging in deceptive marketing practices aimed at youth, and by misleading consumers about the legality and safety of their synthetic nicotine e-cigarettes.
State AGs File Amicus Curae Brief in US Supreme Court Case Involving Flavored E-Cigarettes
Earlier this month, 20 Democratic state attorneys general (AG) filed an amicus brief supporting the U.S. Food and Drug Administration’s (FDA) marketing denial orders (MDOs) of premarket tobacco applications (PMTAs) for flavored electronic nicotine delivery systems (ENDS or e-cigarettes) currently under review by the U.S. Supreme Court. The brief not only demonstrates which side these states support, but also identifies specific enforcement priorities for these states.
Key Takeaways from the 2024 Federation of Tax Administrators (FTA) Tobacco Tax Annual Conference
We recently had the opportunity to attend, and present at, the industry portion of the 2024 Federation of Tax Administrators Tobacco Tax Annual Conference in Mobile, Alabama.
Presentations at the conference included topics of interest to state tobacco tax administrators and industry (the agenda is located here). The conference was well attended by both industry members and state and federal agencies responsible for enforcing tobacco and nicotine laws. Our team has attended this conference for several years and it always provides a great opportunity for collaboration between government and industry, and this year was no different.
Troutman Pepper Team to Attend the 2024 FTA Tobacco Section Annual Conference
Agustin Rodriguez and Nicholas Ramos of the Troutman Pepper Tobacco Team will be attending the 2024 Federation of Tax Administration (FTA) Tobacco Section Annual Conference. This in-person event will be held in Mobile, Alabama from August 18-21, 2024, and presents a great opportunity for government and industry members to collaborate