We reported last month that the United States Supreme Court was considering a challenge to New York’s escrow statute in the Freedom Holdings case.  The Supreme Court recently refused to consider the challenge, thereby dismissing the last major challenge to the escrow statutes enacted under the MSA.

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A bill is currently pending before the Nebraska legislature that would impose significant new requirements for nonparticipating manufacturers to the MSA and relating to tribal sales.  Legislative Bill 590, which was introduced on January 19, 2011 and reported from the legislature’s revenue committee (as amended) on April 7, 2011, also would impose stringent new requirements regarding the taxation and sale of tobacco products.  The bill appears to be spearheaded by the Nebraska Attorney General, who is co-chair of the National Association of Attorneys General Tobacco Committee.

With respect to nonparticipating manufacturers, the Nebraska bill:

Since the 2009 passage of the Tobacco Control Act, the Troutman Sanders Tobacco Practice has been helping our clients comply with the many new Food & Drug Administration requirements for tobacco companies.  These requirements include FDA registration and other filing requirements.

More recently, the Troutman Sanders Tobacco Practice has been working around the clock to help our clients file their “substantial equivalence” reports due on March 22nd.  This requires reports to the FDA regarding products that were first sold after February 2007, or products that have changed since then.

The PACT Act, passed by Congress last year, is recognized by many in the tobacco industry as imposing new requirements for Internet sales, including generally prohibiting the use of the U.S. mail to deliver cigarettes and smokeless tobacco and imposing new age-verification requirements to stop remote sales to minors.

Arkansas Attorney General Dustin McDaniel, who is co-chair of the National Association of Attorneys General Tobacco Committee, is supporting legislation in that state that would impose significant new requirements for nonparticipating manufacturers to the Master Settlement Agreement.  We understand that the legislation may be used as a model in other states.