Last week, the U.S. Supreme Court declined a request by Vibo Corporation, Inc. d/b/a General Tobacco (“General Tobacco”) to review the Supreme Court of Arkansas’ decision upholding a lower’s court’s order that, among other things, directed General Tobacco to pay almost $300 million to satisfy an MSA backpayment obligation and refused to stay the proceedings pending arbitration ( the “Backpayment Decision”).   

Last month, a New York federal court upheld the Department of Agriculture’s (“USDA”) computation of delinquent tobacco buy-out assessments against Native Wholesale Supply (“NWS”) under the Fair and Equitable Tobacco Reform Act of 2004 (“FERTA”).  

After years of political wrangling, in 2010 New York state taxing authorities instituted a regime to tax cigarette sales on Native American reservations.  After courts rejected various challenges to the new regime, taxing authorities appeared poised to enforce the new requirements.  But they didn’t.

What is and is not a cigarette has become increasingly difficult as states attempt to subject more and more cigars to their generally higher cigarette tax rate.  To clarify these issues, in November, the Tennessee Department of Revenue has recently issued a guidance document (“Notice #11-15”)[1]  to assist wholesalers and manufacturers in ensuring that tobacco products, particularly little cigars, are taxed correctly.

On Monday, U.S. District Judge Richard Leon issued a preliminary injunction blocking implementation of FDA’s new graphic warnings requirements, which would have required, beginning September 22, 2012, all cigarette packages to display one of nine new textual warnings showing the dangers of smoking, graphic images on the top fifty percent of both the front and rear panels.

Earlier this week, the California Attorney General’s Office filed a lawsuit against Huber Enterprise Smoke Shop, a tribal tobacco shop located on the Wiyot Table Bluff Reservation, and its owner, Ardith Huber, claiming the tobacco shop’s sales of untaxed, non-fire-safe-certified, off-directory cigarettes to non-Native Americans beyond the reservation’s boundaries violates California law, including California’s Unfair Competition Law. 

According to the Las Cruces Sun-News, the New Mexico legislature’s Tobacco Settlement Revenue Oversight Committee voted this week to endorse legislation that would require nonparticipating manufacturers to make escrow payments for sales on Native American reservations.

On October 14th, 2011, Senators Lautenberg (NJ), Blumenthal (CT) and Brown (IL) wrote to FDA Commissioner Hamburg to request FDA’s action to regulate additional tobacco products under the Tobacco Control Act.

The Tobacco Control Act requires FDA to regulate certain tobacco products, including cigarettes, roll-your-own and smokeless, and permits FDA to regulate others, such as pipe tobacco, cigars and electronic cigarettes.  FDA must promulgate regulations in order to assert authority over these tobacco products.

Earlier this week, FDA published guidance to help small businesses understand and comply with FDA’s regulations regarding the new required cigarette warnings.  These regulations take effect on September 22, 2012 and, as previously reported, require all cigarette packages and advertisements to contain one of nine new textual warning statements, a corresponding graphic image, and a specified toll free smoking cessation assistance resource phone number.  Roll-your-own and cigarette tobacco are not covered by the regulations.  Further, small advertisements of less than 12 square inches need not comply with the smoking cessation assistance resource requirement.