On Thursday, May 4, 2017, Bryan M. Haynes, Partner, Troutman Sanders LLP, will moderate a session on the FDA Center for Tobacco Products’ Evaluation of Premarket and Modified Risk Tobacco Product Applications at the 2017 Food and Drug Law Institute Annual Conference, which will be held in Washington, DC. This …

On March 24, 2017, the Third Court of Appeals of Texas decided Hegar, et al. v. Texas Small Tobacco Coalition, et al., No. 03-13-00753-CV. The court held that a tax on nonparticipating or non-settling manufacturers (“NPMs”) did not violate either the Equal Protection or the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution. The law at issue, Subchapter V to Chapter 161 of the Texas Health & Safety Code (“Subchapter V”), taxed NPMs remaining outside of the Master Settlement Agreement (“MSA”) at approximately $0.55 per cigarette pack and companies subsequently joining the MSA at approximately $0.15 per pack. The case was of particular interest because Texas is not a party to the MSA, yet the MSA’s distinctions were the bases for Subchapter V’s.

On occasion, a  manufacturer of tobacco products may decide to use its permitted facility for another purpose, one that may exceed the permit or be altogether unrelated to the permitted use.  For example, a manufacturer of tobacco products may decide to manufacture cigarette papers and tubes, or to process tobacco for third parties, or even to make a product similar to a cigarette that has no tobacco in the product. Some manufacturers have assumed that a tobacco producer permit will automatically cover its activity to also make these products, but it does not.   

On September 2, 2016, California’s Office of Environmental Health Hazard Assessment (OEHHA) finalized its rule amending Article 6 of the regulations implementing Proposition 65 (i.e., California’s Safe Drinking Water and Toxic Environment Act of 1986).  As a result of the new regulation, tobacco and electronic cigarette manufacturers may be required to update their Proposition 65 warnings.

On April 21, 2016, Philip Morris, R.J. Reynolds and other tobacco companies filed a petition for writ of certiorari asking the Supreme Court to review a decision allowing Pennsylvania to receive a $125 million payment as part of a nationwide settlement over smoking-related health costs, saying a lower court exceeded its authority by altering an arbitration award.

Troutman Sanders tobacco team partner Bryan Haynes was interviewed for a June 21 Vapor Voice Magazine article titled “Dark Vapor.” The article deals with the huge propensity for black-market growth in the vapor industry as the FDA’s deeming regulations force many companies to cease their innovative efforts – or even shut their doors.

The U.S. Food and Drug Administration (“FDA”) draws its authority from the Food Drug & Cosmetic Act (“FD&C Act”), whereas the Alcohol Tobacco Tax and Trade Bureau (“TTB”) is authorized under the Internal Revenue Code (“IRC”).  Each of these laws has different definitions of “tobacco products” for different purposes.  FDA’s Deeming Rule has no effect on TTB’s jurisdiction over tobacco products, and vice versa.  While the FDA has deemed certain products to be “tobacco products” under the FD&C Act, some deemed products do not meet the definition of “tobacco products” under the IRC. 

The U.S. Department of Transportation (“DOT”) promulgated a regulation in May 2016 prohibiting passengers from packing e-cigarettes in stowed luggage or using them on airline flights.  As a result, two non-profit organizations, the Competitive Enterprise Institute (“CEI”) and the Consumer Advocates for Smoke-free Alternatives Association (“CASAA”) filed a lawsuit against DOT alleging that DOT exceeded its authority when it promulgated the regulation.