Legal

National

Suit on tobacco ads sparks feisty debate
The Supreme Court began its fall session with a case that will determine whether smokers’ litigation over deceptive “light” cigarette marketing should be heard in state courts. Tobacco company Altria’s argument is that cigarette companies are protected from these lawsuits by federal laws requiring warning labels on cigarettes to keep the public informed, and that it is the FTC’s responsibility to block misleading advertising. The smokers counter that tobacco companies should be held responsible for their fraudulent claims, and that even if “light” cigarettes truly had lower amounts of harmful chemicals, smokers compensate by smoking them with more intensity. In August 2007, a lower court ruled against Altria that smokers can sue tobacco companies in state courts, but the decision was later reversed. Most Supreme Court Justices seemed to side with cigarette company Altria’s argument that federal regulations preempt smokers’ legal claims that they were misled by cigarette In fact, Justice Samuel Alito criticized the FTC for allowing tobacco companies to release the misleading advertisements in the first place. Click here for more details on the case. Click here to read the transcript of the oral arguments in Altria Group Inc. v. Good.

Legacy Tobacco Documents Library adds over 14,000 Tobacco Industry documents
Over 14,000 new industry documents were posted to the Legacy Tobacco Documents Library  (R.J. Reynolds: 7,090 documents, 152,244 pages  Lorillard: 7,125 documents 59,052 pages  Brown and Williamson: 37 documents, 1,298 pages, Philip Morris: 44 documents, 188 pages Total: 14,296 documents, 212,782 pages) To find these new documents, search for ddu:20081028 in the Expert Search page.

San Francisco says smoking ads are not free speech (CA)
On October 1, San Francisco became the first U.S. city to ban cigarette sales in pharmacies. So far, San Francisco’s ban has faced two legal challenges, one from pharmacy chain Walgreens, and the other from tobacco company Philip Morris. Walgreens sought an injunction against the legislative measure, maintaining that because the law does not regulate cigarette sales in grocery stores or other retail outlets, drugstores face undue financial harm. The judge sided with the city’s attorney, who argued that compared to grocery stores, drugstores represent a different purpose to consumers as businesses that promote health. Walgreens plans to appeal the ruling. Philip Morris filed another injunction, arguing that the law blocks the company’s free speech by banning advertisements in drugstores. Attorneys for the city argued that the law blocks an action—the sale of tobacco—which has nothing to do with the right to free speech. A preliminary hearing on the Philip Morris injunction request will be heard on October 30. Click here for more details about the Walgreens case, or click here for more information about the Philip Morris injunction.

Bloomberg targets smoke shops on Poospatuck reservation (NY)
New York City Mayor Michael Bloomberg filed a lawsuit to collect taxes he claims the Poopsatuck Indian Reservation owes the state from past sales of untaxed cigarettes. The suit is seen as an effort to coerce Governor David Paterson into signing a pending bill to allow the state to begin taxing cigarettes sold on Indian reservations. According to a representative for Paterson, the governor plans to meet with tribal leaders in hopes of forging an agreement and avoiding a legal battle. New York Indian reservations are permitted to sell cigarettes tax-free to residents of the reservation for personal use, but cigarettes sold to the general public must be taxed. Officials estimate that the state has lost $525 million in annual tax revenue from the millions of untaxed cigarettes sold in the eight smoke shops named in Bloomberg’s lawsuit. Click here to learn more.

U.S. court has no jurisdiction in fight with Canadian cigarette makers
(SD) South Dakota courts do not have the legal power to require a Canadian native cigarette manufacturer to make Master Settlement Agreement (MSA) payments, according to a unanimous Supreme Court ruling. According to the 1998 agreement, major cigarette manufacturers are required to compensate states annually for smoking-related healthcare expenses, and companies not included in the MSA are required to make payments to an escrow account to prevent them from having an unfair advantage over companies included in the MSA. According to the ruling, the Ontario-based manufacturer, Grand River Enterprises Six Nations Ltd., does not have a sufficient connection with the state of South Dakota to give the state regulatory authority over the company. Therefore, South Dakota cannot require the company to make payments to its escrow account. According to the attorney for the state, the decision could potentially be reversed if the state was able to prove that Grand River Enterprises Six Nations was aware that its products were distributed in South Dakota, and would be subject to South Dakota’s regulatory policies. Click here to read the full article.

Washington State requires advance notice on cigarette sampling events (WV)
The Washington State Liquor Control Board recently modified a rule to now require 45 days advance notice of cigarette sampling events.  Previously, the state Legislature had passed a law banning the use of sampling as a marketing tool for both cigarettes and other tobacco products.  R. J. Reynolds Tobacco Company then sued the state alleging that, as to cigarettes, the state was preempted by federal law and could not impose a sampling ban on cigarettes.  Settlement of the lawsuit left the state ban on tobacco sampling events other than cigarettes and prompted the rule change requiring advance notice of cigarette sampling events.  For more information, contact Paul Davis at 360-236-3642 or paul.davis@doh.wa.gov

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