Significant Cases

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The FDA’s July 28, 2017, announcement has spurred the parties and would-be intervenors to address the issue to the Court in Cyclops Vapor 2, LLC, et al. v. FDA, et al., No. 2:16-cv-556 (M.D. Ala.). A hearing will be held in the morning of August 10, 2017, in this case challenging the FDA’s Deeming Regulations.

On July 28, the FDA specially announced a new comprehensive plan for focusing its regulatory efforts regarding nicotine, including extending the deadline for premarket review of electronic nicotine delivery systems.

Pending a Pennsylvania state court’s determination of claims under state law, a federal court has put on hold a federal challenge to the Pennsylvania Department of Revenue’s expansive reading of Pennsylvania’s new tax on vapor products. The suit began in the Commonwealth Court of Pennsylvania and challenges the Department’s reading as a matter of statutory interpretation, the Pennsylvania Constitution and the U.S. Constitution.

For agreeing not to challenge Natural American Spirit’s use of the word “Natural” in its product packaging and labeling, the U.S. Food and Drug Administration (“the FDA”) has been sued in the U.S. District Court for the Southern District of Florida. The case is Sproule v. U.S. Food & Drug Administration, et al., No. 9:17‑cv‑80709 (S.D. Fla.).

Troutman Sanders attorneys Bryan Haynes and Robert Claiborne, Jr. were featured in the April 2017 issue of SMOKESHOP magazine. The article, titled “UPS Untaxed Cigarette Trafficking Liability: Increased Scrutiny on Tobacco Companies”, discusses a recent court decision finding United Parcel Service liable to New York City and New York State …

How much must a common carrier do to police its shipments? The U.S. Court of Appeals for the Second Circuit will have the opportunity to weigh in on a $246,975,614 judgment against the United Parcel Service, Inc., (“UPS”) now that the firm has filed a Notice of Appeal. The Notice was filed on June 23, 2017, in the U.S. District Court for the Southern District of New York.

On March 24, 2017, the Third Court of Appeals of Texas decided Hegar, et al. v. Texas Small Tobacco Coalition, et al., No. 03-13-00753-CV. The court held that a tax on nonparticipating or non-settling manufacturers (“NPMs”) did not violate either the Equal Protection or the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution. The law at issue, Subchapter V to Chapter 161 of the Texas Health & Safety Code (“Subchapter V”), taxed NPMs remaining outside of the Master Settlement Agreement (“MSA”) at approximately $0.55 per cigarette pack and companies subsequently joining the MSA at approximately $0.15 per pack. The case was of particular interest because Texas is not a party to the MSA, yet the MSA’s distinctions were the bases for Subchapter V’s.

On April 21, 2016, Philip Morris, R.J. Reynolds and other tobacco companies filed a petition for writ of certiorari asking the Supreme Court to review a decision allowing Pennsylvania to receive a $125 million payment as part of a nationwide settlement over smoking-related health costs, saying a lower court exceeded its authority by altering an arbitration award.

The U.S. Department of Transportation (“DOT”) promulgated a regulation in May 2016 prohibiting passengers from packing e-cigarettes in stowed luggage or using them on airline flights.  As a result, two non-profit organizations, the Competitive Enterprise Institute (“CEI”) and the Consumer Advocates for Smoke-free Alternatives Association (“CASAA”) filed a lawsuit against DOT alleging that DOT exceeded its authority when it promulgated the regulation.