Significant Cases

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In a blog post on January 26, 2013, we discussed a case pending before the Idaho Supreme Court.  The State of Idaho and the Idaho State Tax Commission sued Native Wholesale Supply Company, a native-owned tobacco distributor.  Native Wholesale sold cigarettes that were not listed in the Idaho Directory to a native-owned business on an Idaho reservation. 

The United States Court of Appeals for the Fourth Circuit is scheduled to hear oral arguments on September 19, 2013 in an appeal filed by Philip Morris.  In October 2012, the United States District Court for the Eastern District of Virginia evaluated the methodology used by the United States Department of Agriculture (“USDA”) to determine the amount of assessments levied against tobacco product manufacturers and importers under the Fair and Equitable Tobacco Reform Act (“FETRA”).  Philip Morris sued the USDA, among others, claiming that the USDA improperly calculated the FETRA assessments.

On June 3, 2013, a Vermont Superior Court judge ordered R.J. Reynolds Tobacco Company to pay more than $8.3 million in civil penalties for violating the Vermont Consumer Fraud Act (“CFA”), the Master Settlement Agreement and a related Consent Decree between the State of Vermont and R.J. Reynolds.  The Vermont court found R.J. Reynolds liable of deceptive advertising of its Eclipse cigarette brand over three years ago.  The parties engaged in extensive settlement discussions before the court ultimately imposed civil penalties earlier this month.

On April 22, 2013, the United States Supreme Court denied a petition for writ of certiorari in a First Amendment challenge to the 2009 Family Smoking Prevention and Tobacco Control Act’s graphic warning label requirement.  The law requires that cigarette packages display graphic warning labels covering 20 to 50 percent of the product packaging.

On March 4, 2013, the Office of the New York Attorney General filed a lawsuit against Grand River Enterprises Six Nations, Ltd., Native Wholesale Supply Company Inc., Jerry Montour, Jr. and Kenneth Hill in the United States District Court for the Eastern District of New York.  Grand River, a Canadian-based manufacturer, sells cigarettes throughout the United States.  Native Wholesale Supply, a New York-based distributor, purchases Grand River cigarettes for resale in New York.  The Plaintiff’s four-count complaint alleges violations of: (1) the Contraband Cigarette Trafficking Act; (2) the PACT Act; and (3) New York Tax Law.

On February 26, 2013, the United States Court of Appeals for the Second Circuit affirmed the Southern District of New York’s ruling upholding a New York City local ordinance that prohibits the sale of flavored tobacco products, including smokeless tobacco, anywhere in the city other than at existing “tobacco bars.”  As we reported in a December 15, 2011 blog post, Plaintiffs U.S. Smokeless Tobacco Manufacturing Company, LLC and U.S. Smokeless Tobacco Brands Inc. sued the City of New York, challenging a city ordinance on grounds that the ordinance is preempted by the federal Family Smoking Prevention and Tobacco Control Act (“Tobacco Control Act”).  The District Court awarded summary judgment in favor of the City and dismissed the lawsuit.