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Relying on the regulatory and legal uncertainty surrounding cannabidiol (CBD), Food and Drug Administration statements and state laws, several class actions have been filed since late 2019 against companies selling CBD products, a number of which have been filed in California federal courts. In at least two cases, courts have adopted defendants’ requests to delay the cases while the FDA continues to study CBD and how it should be federally regulated. These cases could represent a developing “wait and see” approach by federal courts dealing with CBD class action lawsuits.
Continue Reading Federal Courts May Be Trending Toward Delaying CBD Consumer Class Action Lawsuits

Following up the R.J. Reynolds-led challenge to FDA’s updated graphic warning label rule, which was filed in the federal court for the Eastern District of Texas, Philip Morris USA Inc. (“Philip Morris”) filed a second, similar challenge on May 6, 2020, in the U.S. District Court for the District of Columbia, Philip Morris USA Inc., et al., v. U.S. Food and Drug Administration, et al., (No. 1:20-cv-01181).

Philip Morris’ complaint makes many of the same challenges seen in the industry’s 2011 challenge to the previous iteration of the graphic warning rule and alleges that the graphic warning label rule violates the First Amendment for multiple reasons. …
Continue Reading Philip Morris USA Leads Second Lawsuit Challenging FDA’s Updated Graphic Warning Label Rule

In a recent article in Bloomberg Tax, Troutman Sanders attorneys Robert Claiborne and Agustin Rodriguez discuss a House subcommittee hearing on the effect of the U.S. Supreme Court’s Wayfair decision on small businesses and whether Congress might try to mitigate the effects of state and local taxation on interstate commerce in the wake of…

Late yesterday, April 22, 2020, the U.S. District Court for the District of Maryland issued its long-awaited Order formally extending the May 12, 2020 deadline for submitting marketing applications for those deemed “new tobacco products” that were on the U.S. market on August 8, 2016.  That deadline is now September 9, 2020.

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On April 9, 2020, RJ Reynolds Tobacco Company and its affiliates (“Reynolds”) filed complaints before the United States International Trade Commission (“ITC”) and the United States District Court for the Eastern District of Virginia seeking to stop Altria Group (“Altria”), Philip Morris International (“PMI”) and certain of their respective affiliates from importing and selling the IQOS heated tobacco device system.  This system is a “heat not burn” device whereby the user inserts a disposable “tobacco stick” into an electronic holder and turns on the device, which then heats the tobacco stick enough to generate an aerosol but not combust the stick.  …
Continue Reading RJ Reynolds Sues Altria and Philip Morris International to Stop IQOS Imports

On April 3, 2020, several tobacco companies, including R.J. Reynolds, Imperial and Liggett, filed suit in a Texas federal court challenging the U.S. Food and Drug Administration’s (“FDA”) March 2020 rule requiring the placement of graphic warnings on cigarette packaging and advertising (“the Rule”).
Continue Reading Tobacco Companies Challenge FDA’s Rule Requiring Cigarette Graphic Warnings

The U.S. Court of Appeals for the D.C. Circuit will hear another challenge to the FDA’s rule Deeming Tobacco Products to Be Subject to the Federal Food, Drug, & Cosmetic Act, 81 Fed. Reg. 28,973 (May 10, 2016) (the “Deeming Rule”). The challenges are based on the Constitution’s Appointments Clause and First Amendment. The cases are Moose Jooce, et al. v. FDA, et al., Nos. 20‑5048, -5049, & -5050 (D.C. Cir.).
Continue Reading D.C. Circuit to Hear Appointments Clause Challenge to Deeming Rule; Challengers Request Expedited Consideration

Do you have a business that sells across State lines? Do you have a substantial number of transactions, or substantial gross receipts from such transactions, across State lines? Are you paying tax to the States and localities where your purchasers reside? These are among the questions businesses should be asking themselves after the Supreme Court’s 2018 decision in South Dakota v. Wayfair, Inc.

Wayfair increases State and local power to tax remote sellers.

In Wayfair, the Court overturned prior holdings that prohibited States from collecting sales tax from sellers lacking a physical presence in the State. After Wayfair, the question is not whether the seller has a physical presence in the State but whether it has a “substantial nexus” with the State. A “substantial nexus” can exist when a remote seller has substantial numbers of transactions with purchasers in a State or substantial receipts from such transactions. After Wayfair, many States have set transaction and/or gross-receipts thresholds to determine which out-of-State sellers must collect and remit sales and use tax.
Continue Reading Five Ways South Dakota v. Wayfair Affects Interstate Sellers

Following its appeal to the U.S. Court of Appeals for the Sixth Circuit, Vapor Stockroom LLC (the “Appellant”) has filed a motion for injunction pending the decision on the merits or, alternatively, for the expedition of briefing, oral argument, and decision of its appeal.

In the Appellant’s words, “The impetus for the present motion . . . is that if this Court fails to grant injunctive relief . . . by May 12, 2020, FDA has threatened industry-wide enforcement action after that date that would require [Appellant] to shutter its business.”…
Continue Reading Injunction and Expedition Sought in Sixth Circuit Appeal over May 12 PMTA Deadline

On February 15, 2020, Plaintiff Vapor Stockroom LLC filed a notice of appeal in Vapor Technology Association v. FDA, No. 5:19-cv-00330-KKC (E.D. Ky.). Vapor Stockroom is appealing the district court’s order granting the FDA’s motion to dismiss and denying their motion for preliminary injunction. The Plaintiffs alleged that, in requiring the submission of premarket tobacco applications by May 12, 2020, the FDA violated the Administrative Procedure Act, 5 U.S.C. § 500, et seq., and the Due Process Clause of the Fifth Amendment to the Constitution.   …
Continue Reading Vapor Company Appeals Dismissal of Challenge to PMTA Deadline