On June 21, 2018, the United States Supreme Court issued its decision in South Dakota v. Wayfair.  The decision overruled decades of prior precedent holding that remote sellers of products – including tobacco products – ordinarily are not required to collect sales or excise taxes if they lack a physical presence in the purchaser’s state.  In Wayfair, the Court upheld a South Dakota statute that required sellers in other states to collect taxes for sales to South Dakota consumers if the seller annually delivers more than $100,000 worth of goods in South Dakota or makes more than 200 sales to South Dakota consumers.
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The federal government is attempting to intervene in a lawsuit between a tribal tobacco manufacturer and the State of Nebraska.

HCI Distribution Inc. (“HCI”) and Rock River Manufacturing (“Rock River”) filed a lawsuit against the State of Nebraska alleging that Nebraska was attempting to regulate the companies’ tobacco production in violation of the U.S. Constitution. HCI and Rock River are subsidiaries of Ho-Chunk Incorporated (“Ho-Chunk”), which is the economic development arm of the Winnebago Tribe.
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The United States Food and Drug Administration recently obtained summary judgment on several cigar industry claims challenging the FDA’s Deeming Regulations.  The case was filed by industry plaintiffs Cigar Association of America, the International Premium Cigar and Pipe Retailers Association and Cigar Rights of America on July 15, 2016, shortly after the FDA issued the final regulations.  The plaintiffs have indicated that they will appeal the court’s decision, and have requested that the court enjoin enforcement of the FDA’s health warning requirements pending the resolution of the appeal.
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There has been new activity in two of the three Deeming Regulations challenges filed by vapor-industry plaintiffs represented by the Pacific Legal Foundation (“PLF”): Moose Jooce, et al. v. Food & Drug Admin., et al., No. 1:18-cv-203 (D.D.C.), and Rave Salon, Inc. v. Gottlieb, et al., No. 3:18-cv-237 (N.D. Tex.). The cases involve challenges based on the Appointments Clause and the First Amendment of the U.S. Constitution.
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U.S. Magistrate Judge Kimberly C. Priest Johnson has denied a motion to transfer the Deeming Regulations challenge in En Fuego Tobacco Shop LLC, et al. v. U.S. Food & Drug Administration, et al., No. 4:18-cv-00028 (E.D. Tex.). On June 5, the FDA appealed her decision to District Judge Amos L. Mazzant III.
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A federal court has dismissed a case challenging the FDA’s allowance of the word “natural” in Natural American Spirit’s (“NAS”) product packaging and labeling. The Plaintiff lacks standing to sue under Article III, § 2, of the U.S. Constitution, which limits federal courts to deciding actual “cases” or “controversies.”
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On January 30, 2018, three separate challenges to the Deeming Regulations were filed by vapor-industry plaintiffs represented by the Pacific Legal Foundation (“PLF”), each raising issues under the Appointments Clause and the First Amendment of the U.S. Constitution:

  • Moose Jooce, et al. v. Food & Drug Admin., et al., No. 1:18-cv-203 (D.D.C.);
  • Rave Salon, Inc. v. Gottlieb, et al., No. 3:18-cv-237 (N.D. Tex.); and
  • Hoban, et al. v. Food & Drug Admin., et al., No. 0:18-cv-269 (D. Minn.).

When PLF announced the filings, it characterized “[t]hese three simultaneously filed lawsuits” as an “opening salvo.” Will the FDA be able to outmaneuver the three-pronged attack?
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In connection with FDA Commissioner Scott Gottleib’s July 2017 announcement regarding a new comprehensive nicotine strategy, the FDA gave manufacturers an extension to comply with certain deadlines under the Deeming Regulations. The extension governed all premarket review submissions for newly-deemed products and “applie[d] only to compliance deadlines relating to . . . substantial equivalence exemption requests (SE EX requests), substantial equivalence reports (SE reports), and premarket tobacco product applications (PMTAs).”
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How many tobacco violations can a retailer be charged with for each transaction? On March 20, 2018, the U.S. Court of Appeals for the D.C. Circuit decided Orton Motor, Inc. v. U.S. Dep’t of Health & Human Servs., No. 16-1299 (D.C. Cir.), upholding the FDA Center for Tobacco Products’ (“CTP”) practice of counting multiple violations, even if all violations occurred within a single consumer transaction.
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