Category: Litigation

Vape Shops Challenge Kentucky Registry Bill

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Several vape businesses, as well as the Kentucky Hemp Association and Kentucky Vaping Retailers Association, are suing the state government over House Bill 11, which will restrict vape sales starting in 2025.
Among other policy changes, HB 11 will bar businesses from selling vapes that are either not authorized by the U.S. Food and Drug Administration or are not currently under review by the regulatory agency.
During public debates, various arguments for and against HB 11 were made before the Legislature passed the law in late March.
But the vape shops’ lawsuit, filed last week in Franklin Circuit Court, challenges the legislation on constitutional grounds, according to media reports.
The lawsuit zeroes in on HB 11’s reliance on defining a “vapor product” in a way that includes devices that feature “vaporized nicotine or other substances.”
The shops’ petition says this definition encompasses not only nicotine vapes but also hemp-derived vaping products they currently sell. And it says the definition is broad enough to apply to medical cannabis vaping products that will become legal in Kentucky next year.
The lawsuit argues this makes the new law unconstitutional for two reasons.
First, it claims HB 11 violates a provision in the Kentucky Constitution that says the Legislature can’t pass a law that relates to more than one subject, and that subject must be specified in its title.
The plaintiffs say HB 11 is titled an “act relating to nicotine products” but actually affects non-nicotine products as well. They argue this effectively violates the constitutional rule.
Second, the lawsuit says hemp-derived vapes generally aren’t regulated by the FDA, which makes it impossible for businesses to comply with HB 11’s requirement that they only sell vapes that have received or are seeking FDA approval.
The suit argues this violates a due process clause in the U.S. Constitution and makes HB 11 an “arbitrary” law, which is prohibited by the Kentucky Constitution.
April 18, 2024
Cuban Origin Ruling Final: Court

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The German Federal Court of Justice has ruled that the use of geographical terms of origin “Cuba” and “Habana” and their derivatives “for tobaccos of other origins are inadmissible,” according to Habanos.
An appeal has been dismissed, and the judgment previously made by the Munich Higher Regional Court ruling that the terms are inadmissible for tobaccos of other origins is final. No further appeals are possible.
The lawsuit was in response to “unauthorized” and “misleading” use of terms such as “Habano Seed,” “Piloto Cubano,” “Habano Wrapper,” “Ecuadorian Habano Wrapper,” “Ecuadorian Habano Seed Wrapper,” “Cubra—the noble fire of Cuba: Criollo” and “Binder Habano Jalapa—Nicaragua” for non-Cuban tobaccos. The suit questioned whether geographical indications like Cuba and Habana and derivatives could be used for cigars from other geographical regions, especially if the origin is “delocalized” and indications of such, like Ecuador and Nicaragua, are used.
Corporacion Habanos took legal action in 2020 against the misleading nomenclature.
The Regional Court of Munich upheld the claim in full, and the Higher Regional Court of Munich dismissed the appeal from the defendant. The Federal Court of Justice has now rejected a final appeal, which was based on points of law not accepted by the Higher Regional Court of Munich.
According to both courts, use of these geographical terms deceives consumers and undermines the reputation of the geographical locations. By using the disputed terminology, one of the courts found, the defendant took advantage of the protected appellations of origin and their reputation to “transfer the concept, image and prestige” to products of other origins.
April 17, 2024
Top Court Asked to Review Anti-FDA Ruling

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The U.S. Department of Justice has asked the Supreme Court to review a lower court’s ruling rejecting the Food and Drug Administration’s reasoning in denying premarket tobacco product applications submitted by Wages and White Lion Investments.
According to the solicitor general, the 5th Circuit Court of Appeals relied upon “legal theories that have been rejected by other courts of appeals that have reviewed materially similar FDA denial orders.”
The federal government’s decision to seek Supreme Court review is unsurprising, according to Reason. However, the libertarian publication also notes that there is a circuit split on whether the FDA acted in an arbitrary and capricious fashion when it refused to consider certain materials submitted with PMTAs and departed from previous guidance it had given the industry. Most circuits to hear such claims turned them away, according to Reason.
The 5th Circuit (along with the 11th Circuit) did not. A Supreme Court review could help resolve the circuit split and remove any cloud over the FDA’s continuing ability to review (and deny) PMTAs for vaping products. Without Supreme Court review, vaping product manufacturers would be incentivized to seek review of any PMTA denials in the 5th and 11th Circuits, which could undermine the FDA’s regulatory authority.

March 25, 2024
Warnings Don’t Violate First Amendment: Court

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The U.S. 5th Circuit Court of Appeals ruled that the federal requirement for cigarette packs and advertising include graphic images of the effects of smoking, including images of smoke-damaged lungs and blackened feet, does not violate the First Amendment of the Constitution, reports AP News.
The ruling came from a three-judge panel, consisting of Jerry Smith, Jennifer Walker Elrod and James Graves, that also kept alive a tobacco industry challenge of the rule, stating that a lower court should review whether the rule was adopted in accordance with the federal Administrative Procedure Act, which governs the development of regulations.
The panel rejected the argument from the tobacco industry that the rule violates free speech rights and that the requirement overcomes branding and messaging on packages and advertisements due to the size of the images and lettering.
This latest ruling overturns a lower court order from a Texas federal district court, which ruled that the requirements violate the First Amendment.
“We disagree,” Smith wrote for the 5th Circuit panel. “The warnings are both factual and uncontroversial.”
The U.S. is among about 120 countries globally that have adopted larger graphic health warnings. Studies from other countries suggest that the image-based labels are more effective than text warnings.
March 22, 2024
Altria Loses Juul Appeal in British Columbia

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Altria Group has lost an appeal to challenge the territorial jurisdiction of the British Columbia courts in a Juul class action lawsuit, reports Victoria Now.
“The plaintiffs allege the e-cigarette devices are hazardous products but were falsely marketed as a desirable, safe and healthier alternative to smoking,” the civil claim states. “The plaintiffs additionally allege that the defendants conspired together to addict a new generation to nicotine or, alternatively, conspired to maintain and expand the market for Juul products using unlawful means knowing that addiction and other injuries were likely to result.”
Altria was brought into the litigation with Juul Labs Canada and Juul Labs USA in September 2020, a year after the original civil claim was filed, following Altria acquiring a 35 percent stake in Juul in 2018 for $12.8 billion.
According to the litigation, Juul and Altria allegedly “conspired” to “employ strategies perfected in the cigarette industry” to advertise and market Juul products to youth.
“It is alleged that the defendants exploited regulatory loopholes and relied on social media and other viral advertising methods to hook young people on Juul, despite the defendants’ knowledge of the dangers associated with vaping. Altria is alleged to have provided strategies, analyses and services to the defendants in furtherance of the conspiracy,” a judgment reads.
Altria’s claim that the British Columbia courts did not have jurisdiction over the action was dismissed in 2022. Altria then appealed the decision, claiming the judge “failed to address evidence that was materially relevant.”
Altria argued that the judge ignored or misconceived evidence that Altria did not ship Juul products to Canada or send Juul marketing materials to Canadian addresses, among other things.
The appeal decision found that there is not a real and substantial connection because class members may have “hopped the border and been influenced by Altria’s activities in the United States.”
“Rather,” the appeal decision reads, “the judge found that the respondents established a good arguable case that Altria was a party to a conspiracy to advertise and market Juul e-cigarettes to young people in a manner that was misleading about the health risks, including the risk of addiction.”
March 15, 2024
Federal Judge OKs Altria, Juul Class Action

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A federal judge approved the final part of a class action settlement with the e-cigarette company Juul Labs and its parent company Altria, bringing the settlement total to just over $300 million.
In 2018, the plaintiffs charged Juul Labs with misleading the public about the addictiveness of Juul and the risk of the e-cigarettes and its nicotine cartridges.
The plaintiffs also said Juul had targeted teenagers with candy-flavored Juul pods and “multimillion-dollar ad campaigns and social media blitzes using alluring imagery.”
The case survived a number of hurdles: The judge denied multiple motions to dismiss the suit and agreed to certify four different classes of plaintiffs (a nationwide class, a nationwide youth class, a California class and a California youth class).
In January, the judge gave preliminary approval to a $255 million settlement between Juul Labs and the plaintiffs, according to Courthouse news. Friday’s ruling grants approval to Altria’s payment of $45,531,250. The sides have yet to reach an agreement on attorneys fees.
“Court finds that this monetary recovery is fair, reasonable, and adequate given the risks of proceeding to trial and the maximum recovery potentially available to Settlement Class Members if the Class Representatives had prevailed at trial,” wrote U.S. District Judge William Orrick in his order.
Last year, Juul agreed to pay six states $462 million to settle claims that it had marketed its vaping products to teenagers. The year before that, it agreed to pay $438.5 million to 33 different states and Puerto Rico.
Altria Group exchanged its entire investment in Juul Labs in 2023 for a non-exclusive, irrevocable global license to certain of Juul’s heated tobacco intellectual property.
March 15, 2024
California Firm Sues Zyn Makers

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A law group in California has filed a lawsuit against Philip Morris in the state’s Southern District. The Schmidt National Law Group claims that the maker of Zyn is targeting children and young adults with its flavored nicotine pouches.
“Now comes along Zyn the chewing gum, and the common denominator of all these nicotine delivery systems is as far as targeting towards kids, and I’m talking about kids, middle school, high school, younger and younger,” said Martin Schmidt, managing attorney at The Schmidt National Law Group.
Although a person must be at least 21 years old to purchase the product legally, Schmidt says it is very accessible to people younger than 21. The class action lawsuit seeks “damages” from Philip Morris and Schmidt said he would like stricter limits on access to the product, according to media reports.
The case could take years to work its way through the litigation process, according to Schmidt.
March 13, 2024
Dutch Retail Bonuses Not Advertising

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Paying retailers bonuses for meeting sales targets does not represent a violation of tobacco advertising restrictions, the Netherlands’ top business court ruled, reports Dutch News.
The product safety board NVWA fined 11 manufacturers and wholesalers for giving bonuses to shopkeepers who sold pre-agreed-upon quantities of cigarettes or placed products in highly visible spots. The NVWA stated that these practices were against the tobacco advertising ban. The companies, however, argued that they were “quite normal business practices.”
The Dutch business court found that the NVWA applied the law too widely, stating that advertising only exists if its purpose is to encourage consumers to use the products.
Starting July 1, supermarkets in the Netherlands will be banned from selling tobacco. Beginning 2032, only specialist tobacco shops will be allowed to sell cigarettes and rolling tobacco.
February 21, 2024
Court Urged to Revive Liquid Application

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SWT Global Supply, a maker of menthol-flavored e-cigarette liquids, has urged the 8th U.S. Circuit Court of Appeals to revive its rejected application with the U.S. Food and Drug Administration to continue selling its products, arguing that the FDA had not given the company fair notice of what would be required for approval, reports Reuters.
This latest appeal is one of many similar cases by e-cigarette companies following the FDA’s rule deeming e-cigarette products be subject to the same law as cigarettes and the FDA’s denial of millions of applications by manufacturers to sell their products. Federal appeals courts are split as to whether the FDA acted fairly.
SWT lawyer Jerad Najvar told a three-judge panel that SWT’s applications were denied because the company failed to present a controlled trial or study showing that menthol liquids can help adult smokers quit smoking compared to tobacco-flavored liquids. According to Najvar, the FDA’s guidance did not make it clear that such a study would be required.
“A client like mine doesn’t have a lot of arrows in its quiver when it’s trying to fight a decision by a federal agency,” said Navjar, referring to SWT being a small company with limited resources.
Comparing a product’s effectiveness to tobacco-flavored products is “a natural part of the risk benefit analysis,” according to Catherine Padhi, a lawyer for the FDA. She noted that SWT was free to submit additional information to support its application.
In 2021, the FDA denied SWT’s applications for liquids in various nonmenthol flavors, and in 2023, the FDA denied applications for menthol flavors. The nonmenthol denials are part of a separate, still-pending appeal in the 5th Circuit.
Most other appeals courts have sided with the FDA in similar cases.
February 16, 2024
Italy: BAT Fined Over Heated-Tobacco Ads

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BAT’s Italian division has been fined €6 million ($6.4 million) for “misleading advertising of a heated-tobacco product,” according to Barron’s. Amazon was fined €1 million for the same reason.
According to the AGCM watchdog, BAT and Amazon advertised the Glo Hyper X2 and Glo Hyper Air devices without making “information about the tobacco/nicotine consumption connected to the use of these devices and the prohibition of their sale to minors” clear.
The products were marketed “as simple electronic devices and mere design objects,” the watchdog said.
“This is seriously misleading conduct, which induces the customer to buy a product that poses health risks and is banned for minors,” the authority said.
An investigation into the marketing of the heated-tobacco products began in April 2023.
BAT plans to appeal the fine, according to Bloomberg.
“We are clear that our products are for adults only, and we adhere to the highest standards of conduct to prevent underage use of any nicotine product,” a BAT Italia spokesperson said. “We cooperated with Italian authorities and implemented all suggested changes to our marketing immediately. While we acknowledge the decision, we plan to appeal.”
February 14, 2024