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On July 28, the Iowa attorney general’s office filed suit against Philip Morris, USA, R.J. Reynolds Tobacco Co., and 16 other tobacco companies, accusing them of defrauding Iowa of over $133 million by allegedly engaging in bad faith disputes over amounts due under the Master Settlement Agreement (MSA).

Tobacco company signatories to the MSA, also known as participating manufacturers (PMs), must pay the settling states their portion of $9 billion dollars on an annual basis. These payments are subject to a handful of various upward and downward adjustments, one of which is known as the “Non-Participating Manufacturer Adjustment” or “NPM Adjustment.” The NPM Adjustment may reduce the amount of money a state is due from the PMs in a given year if the state did not enact and “diligently enforce” an “escrow statute,” requiring non-participating manufacturers (NPMs) to place money in proportion to their sales made into that state into an escrow account.
Continue Reading Iowa Attorney General Brings Suit Against Participating Manufacturers to the Master Settlement Agreement

On July 5, the U.S. District Court for the District of Columbia ruled that the decision of the Food and Drug Administration (FDA) to “deem” premium cigars subject to the same federal law as other tobacco products like cigarettes was “arbitrary and capricious.” In reaching this conclusion, Judge Amit Mehta relied heavily on industry comments regarding the relative public health risks and negligible youth use of premium cigars, as well as related studies — which the court said FDA either ignored or glossed over. The opinion underscores the importance of the role of public comments in agency rulemaking.
Continue Reading Industry Comments Loom Large in DC Court, Finding FDA Regulation of Premium Cigars “Arbitrary and Capricious”

The U.S. Court of Appeals for the Ninth Circuit has denied the Plaintiffs’/Appellants’ petition for a rehearing en banc following a divided panel’s holding that the Family Smoking Prevention and Tobacco Control Act neither expressly nor impliedly preempts Los Angeles County’s ban on the sale of flavored tobacco products.

On May 11, 2022, a divided panel of the U.S. Court of Appeals for the Ninth Circuit denied a petition for rehearing en banc filed by Plaintiffs/Appellants R.J. Reynolds Tobacco, Inc., American Snuff Co., and Santa Fe Natural Tobacco Co. (together, the “Plaintiffs/Appellants”) in R.J. Reynolds Tobacco Co., et al. v. Los Angeles County, et al., No. 20-55930.  As discussed more fully by Troutman Pepper in Vapor Voice, the same panel earlier held in a split 2-1 decision that Los Angeles County’s flavored tobacco ban is not preempted by the Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, 123 Stat. 1776 (June 22, 2009) (the “TCA”).
Continue Reading Ninth Circuit Denies Petition for Rehearing en Banc in Appeal over Preemption of Los Angeles County’s Flavored Tobacco Ban

Retailers should take note that Philip Morris USA Inc., Altria Group, Inc, R.J. Reynolds Tobacco Company have reached an agreement with the United States Department of Justice on warnings to be placed in retail stores carrying the manufacturers’ cigarettes to warn consumers about the health effects of tobacco. These are referred to as “corrective-statement signs” because they are meant as “corrections” to the manufacturers’ alleged deliberate misleading of consumers as to the dangers of smoking from the 1950s until the early 2000s.
Continue Reading Cigarette Companies and Federal Government Reach Agreement on Warnings to be Displayed in Retail Stores

Under Judge Grimm’s Revised Remedial Order, FDA must submit quarterly status reports regarding its review of pending PMTAs for certain popular vapor products.

On April 15, 2022, Judge Paul W. Grimm of the U.S. District Court for the District of Maryland ordered  FDA to submit status reports to the Court and to the Plaintiffs in the case every ninety days, beginning on April 29th.
Continue Reading Deeming Regulations Litigation Update—Federal Court Exercises Even More Oversight over FDA’s PMTA Review

In a 2-1 decision, a panel of the U.S. Court of Appeals for the Ninth Circuit held that the Family Smoking Prevention and Tobacco Control Act neither expressly nor impliedly preempts Los Angeles County’s ban on the sale of flavored tobacco products.

In a Vapor Voice posting on April 2, 2022, the Troutman Pepper Tobacco…

The U.S. District Court for the Eastern District of Pennsylvania entered a permanent injunction against Philadelphia’s enforcement of an ordinance banning the sale of certain flavored tobacco products, after the U.S. Court of Appeals for the Third Circuit upheld a preliminary injunction against the same.

Litigation over a local flavor ban came to a close on March 8, 2022, with Judge Gene E.K. Pratter of the U.S. District Court for the Eastern District of Pennsylvania entering a permanent injunction:

  • prohibiting the City of Philadelphia from enforcing City Ordinance No. 180457 (the “Ordinance”); and
  • requiring the City to void and withdraw any and all regulations regarding the Ordinance.

The case is Cigar Association of America, et al. v. City of Philadelphia, et al., No. 2:20-cv-03220 (E.D. Pa.).Continue Reading Philadelphia Flavor Ban Case Results in Permanent Injunction Against the City

In August 2021, Swisher International Inc. filed a lawsuit against the Food and Drug Administration (FDA) seeking to have the FDA’s Deeming Rule declared invalid. Swisher followed its lawsuit with a petition for injunction to prevent FDA from taking enforcement action against Swisher while Swisher’s lawsuit against the FDA’s implementation of the Deeming Rule is under consideration and while the FDA processes Swisher’s pending 173 premarket applications. On February 3, 2022, the Eleventh Circuit Court of Appeals upheld a lower court’s denial of a motion for a preliminary injunction finding that Swisher was not likely to suffer “irreparable harm.”
Continue Reading Eleventh Circuit Denies Swisher International’s Request For An Injunction of Further Enforcement by FDA

On Wednesday, the Massachusetts Supreme Judicial Court upheld a jury’s award of $10 million in punitive damages in a wrongful-death case against Philip Morris USA Inc. (“PM USA”), rejecting the tobacco company’s argument that such relief was precluded by the 1998 master settlement agreement between the Massachusetts Attorney General, PM USA, and other attorneys general and tobacco manufacturers.[1]
Continue Reading Massachusetts Supreme Judicial Court Affirms Punitive Damages Award Against Philip Morris USA Inc. In Spite of Master Settlement Agreement Release

We previously wrote about a hemp industry case against the Texas Department of State Health Services, challenging the state legislature’s smokable hemp ban and the Department’s implementing regulations. Plaintiffs, Texas hemp producers and retailers, argued that H.B. 1325, which banned the in-state manufacture of smokable hemp, but not the possession, consumption, or importation of smokable hemp from other states, was unconstitutional because it was not rationally related to any legitimate government interest (smokable hemp could still be sold and consumed in the state, just not produced by Texas hemp businesses).
Continue Reading Hemp Industry Victory in Texas: Court Finds Smokable Hemp Ban Unconstitutional