Several years ago, the state of California filed suit against Native Wholesale Supply Company (“NWS”) for allegedly violating California’s MSA, cigarette fire safety, and unfair competition laws. NWS, a tribally-chartered corporation headquartered in New York, sells and distributes cigarettes manufactured by the Canadian tribally-owned corporation Grand River Enterprises Six Nations. In California, NWS primarily sells these cigarettes to Big Sandy Rancheria. Big Sandy – or other Indian retailers in California to which Big Sandy directs NWS to transport Grand River cigarettes – then sells the cigarettes to the California general public. Since late 2003, NWS has delivered over 325 million cigarettes, worth nearly $12 million, to California.
Significant Cases
Lawsuits Likely Following FDA’s Release of Mandated Graphic Warning Labels
In the wake of the FDA’s release of new graphic cigarette health warnings that must cover the top fifty percent of both the front and rear panels of each cigarette package as of September 2012, the four leading tobacco companies are threatening legal action, claiming the required warnings violate their property and free speech rights.
State Law, or Federal Law—Which controls? Dumb Question? Maybe not!
As reported in the Boston Globe, the City of Worcester seems to be among one of the first localities to take advantage of powers provided by the federal 2009 Family Smoking Prevention and Tobacco Control Act. That Act allows not only states but also localities to impose “specific bans or restrictions on the time, place and manner” of cigarette advertising. The Worcester City Council, taking advantage of such provisions enacted a local ordinance banning any tobacco brand advertising visible from streets, parks and schools. The initiative for the City Council action was a mounting campaign by teenagers who had statics regarding not only the health effect of smoking but also how outdoor advertising was concentrated in low-income communities, especially in communities of color.
Lawsuit Challenges Law Banning Blunt Wraps
In February, National Tobacco Company, the fourth largest manufacturer and marketer of roll-your-own tobacco products in the United States, filed a lawsuit against the District of Columbia seeking a declaration that certain provisions of the Prohibition Against Selling Tobacco Products to Minors Amendment Act of 2009 (the “Act”) are unconstitutional and an injunction prohibiting the District from enforcing the provisions.
E-Cigarettes Regulated as Tobacco Products
FDA announced yesterday that it will not appeal the December 2010 court decision that determined e-cigarettes will be regulated as a tobacco product rather than as a drug-delivery device.
General Tobacco Appeal Rejected by Arkansas Supreme Court
On March 31, 2011, the Arkansas Supreme Court rejected an appeal by General Tobacco regarding its payment obligations under the MSA.
Nonparticipating Manufacturer Legislation Pending in Florida and Texas
Bills are pending in both the Florida and Texas legislatures that would, respectively, impose a 52 cent per pack tax and a 43 cent per pack tax on cigarettes manufactured by companies that have not settled with these states.
Last Significant Challenge to Escrow Requirements Rejected
We reported last month that the United States Supreme Court was considering a challenge to New York’s escrow statute in the Freedom Holdings case. The Supreme Court recently refused to consider the challenge, thereby dismissing the last major challenge to the escrow statutes enacted under the MSA.
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Kentucky Tobacco Farmers File Class Action Lawsuit Against a Leading Tobacco Merchant
On March 22, four Kentucky tobacco farmers filed a state class action lawsuit against Universal Leaf North America, a subsidiary of Universal Corporation, the world’s leading leaf tobacco merchant and processor.
Supreme Court Denies Appeal in MSA Challenge
On March 7th, the United States Supreme Court denied a challenge by a tobacco manufacturer and smoker to the 1998 tobacco Master Settlement Agreement.