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Robert Claiborne

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Robert Claiborne works primarily in the areas of litigation and compliance on behalf of tobacco manufacturers, distributors, retailers, and suppliers.

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Published in Update on May 25, 2023. © Copyright 2023, Food and Drug Law Institute, publisher of Update. Reprinted here with permission.

Recent Freedom of Information Act (FOIA) litigation raises an interesting question: When federal agency action requires analyses under a holistic, multi-factor statutory standard, may the agency withhold from disclosure as “deliberative” records related to analyses that purportedly were not factored into the agency’s final decision? A federal court will address this question of public disclosure in litigation between Juul Labs, Inc. (JLI) and the U.S. Food and Drug Administration (FDA).Continue Reading Juul Labs, Inc. v. FDA: A FOIA Twist on the Challenge to FDA’s Marketing Denial Order

The Virginia ABC will assess a regulatory scheme for liquid nicotine, with the consultation of stakeholders, and issue a report and recommendations.

On April 12, the Virginia General Assembly enacted House Bill 2296 and Senate Bill 1350, incorporating recommendations of Governor Glenn Youngkin to have the Virginia Alcoholic Beverage Control Authority (ABC) “assess” a potential licensing scheme for liquid nicotine manufacturers, distributors, and retail dealers, as well as administrative and enforcement matters relating to liquid nicotine licensing, age verification, product verification, and advertising restrictions. These bills effectively instruct the ABC to tell the Virginia General Assembly whether and how the Commonwealth should regulate liquid nicotine. The ABC’s report and recommendations are due by November 1, and will be informed by stakeholder input. The enactments specify that the ABC will conduct its assessment “in consultation with stakeholders, including public and community health organizations, retailers, tobacco and vaporized nicotine companies, and wholesalers.”Continue Reading Stakeholders’ Input Welcome: Virginia ABC to Assess Options for Regulating Liquid Nicotine in the Commonwealth

Over the last several months, FDA and DOJ enforcement efforts have increasingly focused on manufacturers and distributors of vapor products covered by the Food, Drug, & Cosmetic Act and the PACT Act.

The Food & Drug Administration (FDA) and Department of Justice (DOJ) are increasingly focusing enforcement efforts on electronic nicotine delivery systems (ENDS). Such enforcement priorities have been reflected in six DOJ complaints for injunctions and four FDA complaints for civil monetary penalties (CMP) against businesses dealing in ENDS without marketing authorization under the Food, Drug, and Cosmetic Act (FD&C Act). In addition, ENDS businesses have been receiving communications from DOJ’s Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) alleging violations of the PACT Act, and FDA has issued a substantial number of warning letters alleging ENDS businesses’ FD&C Act violations. Federal prioritization of ENDS enforcement has also been reflected in FDA statements in connection with its CMP complaints and the Reagan-Udall Foundation’s operational evaluation of FDA’s Center for Tobacco Products (CTP), which we have discussed here, here, and here.Continue Reading Federal Government Ramping Up Vapor Enforcement

FDA’s approach to a premarket tobacco product application (PMTA) raises new questions about whether its marketing denial order was arbitrary and capricious and whether the deliberative-process exemption justifies its withholding of related records. The Agency’s approach is partially documented in a memorandum that FDA disclosed in response to a Freedom of Information Act request, and there is pending litigation over other records that FDA continues to withhold. 

May a federal agency that has issued its final determination on a PMTA set aside a portion of its written analysis and withhold those records under the deliberative-process exemption to the Freedom of Information Act (FOIA)? What if those records actually support the PMTA or undermine the purported bases for the agency’s action? These are questions stemming from two pending cases involving FDA and JUUL Labs, Inc. (JLI). In No. 22-1123 (D.C. Cir.), JLI claims that FDA’s marketing denial order (MDO) on its PMTAs was arbitrary and capricious in violation of the Family Smoking Prevention and Tobacco Control Act (TCA) and the Administrative Procedure Act (APA). In No. 1:22-cv-02853 (D.D.C.), JLI claims that FDA’s withholding of these records is not supported by FOIA’s deliberative-process exemption.Continue Reading Hidden FDA Report Raises Questions About Its Approach to Public Records and Premarket Tobacco Review

California voters have approved Senate Bill 793, which prohibits tobacco retailers from selling flavored tobacco products or tobacco product flavor enhancers. A lawsuit has been filed in federal court claiming that it is unconstitutional.

On November 8, 2022, California voters said “yes” to Proposition 31, a referendum on a 2020 law that would prohibit the retail sale of certain flavored tobacco products. The constitutionality of the referenced law, Senate Bill 793 (“SB793”), is at issue in a case filed the next day in the U.S. District Court for the Southern District of California, R.J. Reynolds Tobacco Co., et al. v. Bonta, et al., No. 3:22-cv-01755 (S.D. Cal.); however, the plaintiffs’ success in that case will likely depend on the development of favorable precedents in other cases pending before appellate courts.Continue Reading California Voters Approve Flavored Tobacco Ban in Referendum; Is It Unconstitutional?

Dealing in goods subject to cigarette and other tobacco products (OTP) taxes presents considerable administrative burdens. The sale of cigarettes and other tobacco products, on which all 50 states impose an excise tax, requires accurate bookkeeping, regular reporting, and tax remittance practices. In addition, manufacturers, distributors, and wholesalers of these highly-regulated products will be the subject of audits by state revenue departments.Continue Reading Practical Tips for Avoiding and Contesting Tobacco Tax Assessments

Over the past few years, at least five states and several hundred localities have passed, or attempted to pass, laws banning flavored tobacco products. There have been a number of challenges to those laws—few of which have been successful. In a recent ruling, the Washington County Circuit Court handed a win to businesses challenging a local ordinance (the Ordinance) seeking to impose a ban on the sale of flavored tobacco products.Continue Reading Oregon Court Sides with Businesses Challenging Local Flavor Ban Ordinance

In determining whether the commerce clause of the U.S. Constitution prohibits a state’s taxation of a remote seller, the U.S. Supreme Court for decades has upheld a tax if (1) there is a substantial nexus between the taxing state and the taxpayer; (2) the tax is fairly apportioned; (3) the tax does not discriminate against interstate commerce; and (4) the tax is fairly related to the taxing state’s provision of services to the taxpayer.[1]

What kind of nexus is substantial enough to allow a state to tax a business’s sales in interstate commerce? In its 2018 decision in South Dakota v. Wayfair, Inc., the U.S. Supreme Court held that a business’s physical presence in the taxing state is not required.[2] Describing the remote-seller litigants as “large, national companies that undoubtedly maintain an extensive virtual presence,” the Court held that substantial nexus was clear in view of “both the economic and virtual contacts” that the remote-seller litigants had with South Dakota.[3] The U.S. Supreme Court recited the general rule that substantial nexus exists when a taxpayer has availed itself of the substantial privilege of carrying on business in the taxing state, and it appeared to describe “virtual contacts” and “virtual presence” as follows: “Between targeted advertising and instant access to most consumers via any internet-enabled device, ‘a business may be present in a State in a meaningful way without’ that presence ‘being physical in the traditional sense of the term.’”[4] Wayfair left many questions unanswered, including whether (and, if so, how) “virtual contacts” and “virtual presence” may be required for a substantial nexus to tax in compliance with the commerce clause.Continue Reading State Taxation of Remote Sellers: US Supreme Court Declines Review of First Post-Wayfair Decision from a State Supreme Court

The Department has issued updated guidance addressing remote sellers’ cigarette and tobacco tax responsibilities after the Minnesota Legislature’s mid-2021 amendments to the State’s cigarette and tobacco tax and tobacco product delivery sales statutes, Congress’ late-2020 amendment of the Jenkins Act, and a 2018 decision of the U.S. Supreme Court on permissible state taxation of remote sales.

On May 9, 2022, the Minnesota Department of Revenue (the “Department”) issued Revenue Notice # 22‑02 on remote sellers’ tax payment responsibilities under the State’s cigarette and tobacco tax and tobacco product delivery sales statutes. The notice applies to all delivery sales after December 31, 2021, and it revokes and replaces the Department’s earlier notice on these subjects.
Continue Reading Minnesota Department of Revenue Revokes and Replaces Guidance on Remote Sellers’ Tobacco Tax Responsibilities

FDA reports that the progress of its review of popular vapor products’ pending PMTAs remains in line with its first report.

On July 28, 2022, FDA filed a status report in American Academy of Pediatrics, et al. v. FDA, et al., No. 8:18-cv-00883 (D. Md.), addressing its review of pending premarket tobacco applications (“PMTAs”) for certain popular vapor products.  FDA filed the status report pursuant to a court order previously covered on this blog.  This is FDA’s second status report filed pursuant to that order, the first having been filed on May 13.
Continue Reading Deeming Regulations Litigation Update – FDA Files Second Status Report on Pending Vapor Products PMTAs