• May 21, 2024

Minimum Price Challenge Rejected

 Minimum Price Challenge Rejected
Photo: Okan Caliskan from Pixabay

A U.S. federal judge has denied a request to halt the portion of a tax measure that established a minimum price for cigarettes in Colorado.

In the November general election, Colorado voters approved a proposition that set the price of cigarettes to at least $7 per pack.

Three manufacturers of discount cigarettes—Liggett Group, Vector Tobacco and Xcaliber International— plus Littleton resident and smoker Jennifer A. Smith, filed a federal complaint, asking for a preliminary injunction to prevent the price floor from taking effect.

The plaintiffs had argued that the provision violated the Commerce Clause of the U.S. Constitution by discriminating against them, with benefits accruing to in-state retailers of cigarettes. By establishing a price floor, they contended, any money not remitted to the state in the form of taxes would accrue to the sellers of cigarettes.

However, U.S. District Judge Raymond P. Moore deemed unpersuasive the claim that the discount cigarette companies competed not only with premium cigarette manufacturers like Philip Morris but also with the Colorado-based retail establishments that dispense the products.

Moore also decided the minimum price provision did not place an unconstitutional burden on interstate commerce, even though it does put burdens on certain manufacturers. The provision will now take effect on Friday.