Category: Litigation

  • Florida Sues Juul

    Florida Sues Juul

    Image: Ulf

    Florida’s attorney general, Ashley Moody, has filed a lawsuit against Juul Labs, alleging that the company improperly marketed its products to children and offered misleading information about its products’ nicotine content, reports WUSF.

    The suit was filed in Hillsborough County Circuit Court. It seeks civil penalties and an injunction to prevent Juul “targeting children through their marketing and product design and from deceiving consumers with respect to the nicotine concentration.”

    “Juul relentlessly marketed to underage users with launch parties, advertisements using trendy-looking and young models, social media posts and free samples,” the lawsuit states. “It created a technology-focused, sleek design that could be easily concealed and sold its product in flavors known to be attractive to underage users. Juul also manipulated the chemical composition of its product to make the vapor less harsh on the throats of the young and inexperienced consumers it courted. To preserve its young customer base, Juul relied on age verification techniques that it knew were ineffective.”

    Juul responded to the lawsuit, stating that “it is disappointing to see the Florida attorney general direct her state’s resources to suing Juul Labs.”

    Juul’s response sets out “a few facts that should be understood,” including that “Florida’s attorney general initially led the negotiations between the state attorneys general and Juul Labs. For reasons that have not been explained to the public, she ultimately decided not to participate in a settlement to which 48 states and territories are now party to. Had she done so, like all those other jurisdictions, Florida would have its share of millions of dollars to help combat underage use and develop cessation programs. Instead, the Florida attorney general has now embarked on a drawn-out, expensive and uncertain legal process.”

    “Second,” the response continued, “Florida today suffers from the highest sales in the nation of illicit and potentially harmful disposable products emanating from China. These products are not in compliance with the [U.S. Food and Drug Administration’s] regulatory regime and, in many cases, are flagrantly targeting the state’s children. By contrast, over the past four years, Juul Labs has taken meaningful steps, including ceasing distribution of nontobacco, nonmenthol products in advance of FDA guidance on flavors, halting mass market product advertising, and restructuring our entire company with an emphasis on combating underage use. In part, due to these efforts, we have seen underage use of Juul products cut by 95 percent.”

    The response went on to allege that “Florida has the highest sales of these mostly foreign-made products in the United States, with over 60 percent of vapor sales dominated by disposables whose companies often disregard responsible practices with inappropriate flavor names and questionable marketing. Over the past months, we have been engaged with the attorney general’s office to help create a best-in-class program to combat illicit products. Even though Juul Labs plans to fight this case vigorously, the company remains ready to help Florida stem the tide of the proliferation of Chinese-made disposable products that have found what amounts to be a safe haven for foreign-made illegal vapor products.”

  • Esco Bar Challenges FDA Rejection

    Esco Bar Challenges FDA Rejection

    Credit: Waldemarus

    Pastel Cartel, manufacturer for Esco Bar, has filed a federal lawsuit challenging the U.S. Food and Drug Administration’s refuse-to-accept (RTA) decision for over 100 products included in multiple premarket tobacco product applications (PMTAs) filed by the company, according to Vaping360.

    The lawsuit was filed in the U.S. District Court for the Western District of Texas. It alleges that the FDA acted arbitrarily and capriciously when it issued an RTA for the PMTAs.

    Esco Bar is seeking: a preliminary injunction staying the RTA orders until the case is decided; a judgment finding that the RTAs violate the Administrative Procedure Act and the U.S. Constitution (due process and the Fifth Amendment); and a final judgment setting aside the RTA orders and remanding the company’s PMTAs back to the FDA for further review.

  • Top Court Poised to Rebuff Land Claim Cutoff Date

    Top Court Poised to Rebuff Land Claim Cutoff Date

    Photo: alexlmx

    Brazil’s Supreme Court is likely to rule against attempts by the country’s farm lobby to limit land claims by indigenous peoples to areas they occupied before 1988, according to Reuters.

    The case stems from a dispute in Santa Catarina state where the government rejected a land claim by the Xokleng people, who were evicted by tobacco farmers from what was their ancestral land.

    Congress has pushed ahead with bills allowing indigenous reservations only on land that was occupied by native communities when Brazil passed its constitution in 1988. The lower house passed a bill last month and its backers want the Senate to follow suit before the Supreme Court rules on the issue.

    On Aug. 31, Justice Cristiano Zanin cast a crucial vote that all but ensures the 1988 cut-off date will be rejected by the court. Zanin said indigenous communities that were not present on their lands in 1988 may have been forced to leave.

  • Court Poised to Rebuff Land Claim Cutoff

    Court Poised to Rebuff Land Claim Cutoff

    Photo: alexlmx

    Brazil’s Supreme Court is likely to rule against attempts by the country’s farm lobby to limit land claims by indigenous peoples to areas they occupied before 1988, according to Reuters.

    The case stems from a dispute in Santa Catarina state where the government rejected a land claim by the Xokleng people, who were evicted by tobacco farmers from what was their ancestral land.

    Congress has pushed ahead with bills allowing indigenous reservations only on land that was occupied by native communities when Brazil passed its constitution in 1988. The lower house passed a bill last month and its backers want the Senate to follow suit before the Supreme Court rules on the issue.

    On Aug. 31, Justice Cristiano Zanin cast a crucial vote that all but ensures the 1988 cut-off date will be rejected by the court. Zanin said indigenous communities that were not present on their lands in 1988 may have been forced to leave.

  • Court Upholds IP Damages for Republic Tobacco

    Court Upholds IP Damages for Republic Tobacco

    The U.S. Court of Appeals for the Eleventh Circuit on Aug. 22 upheld a multimillion dollar verdict against Diamond Wholesale and its owner, Raj Solomon, for infringing trademarks owned by Top Tobacco, Republic Technologies and Republic Tobacco, reports IPWatchdog.

    In March 2022, a jury in the U.S. District Court of Georgia awarded Top Tobacco $11 million in damages against the wholesale company and its owner. Diamond Wholesale appealed the ruling, arguing that the district curt erred in excluding evidence, including witness testimony and invoices, that would have proven the retailer and its owner believed it was purchasing the counterfeit product from a legitimate seller, Star Importers, and that their infringement could therefore not have been intentional.

    However, the Eleventh Circuit ruled that a “showing of intent or bad faith is unnecessary to establish a violation.”

    Earlier this year, federal jurors in Atlanta awarded Republic Brands $2.3 million in statutory damages in a case about counterfeit tobacco rolling papers against Star Importers and ZCell & Novelties.

  • Court Upholds IP Damages for Republic

    Court Upholds IP Damages for Republic

    The U.S. Court of Appeals for the Eleventh Circuit on Aug. 22 upheld a multimillion dollar verdict against Diamond Wholesale and its owner, Raj Solomon, for infringing trademarks owned by Top Tobacco, Republic Technologies and Republic Tobacco, reports IPWatchdog.

    In March 2022, a jury in the U.S. District Court of Georgia awarded Top Tobacco $11 million in damages against the wholesale company and its owner. Diamond Wholesale appealed the ruling, arguing that the district curt erred in excluding evidence, including witness testimony and invoices, that would have proven the retailer and its owner believed it was purchasing the counterfeit product from a legitimate seller, Star Importers, and that their infringement could therefore not have been intentional.

    However, the Eleventh Circuit ruled that a “showing of intent or bad faith is unnecessary to establish a violation.”

    Earlier this year, federal jurors in Atlanta awarded Republic Brands $2.3 million in statutory damages in a case about counterfeit tobacco rolling papers against Star Importers and ZCell & Novelties.

  • ‘FDA Botched Review’

    ‘FDA Botched Review’

    Image: Tobacco Reporter archive

    The U.S. Food and Drug Administration failed to conduct a proper analysis before rejecting premarket tobacco product applications (PMTAs) submitted by Fontem U.S. for certain vaping products, the U.S. Court of Appeals for the D.C. Circuit found on Aug. 29.

    The court upheld the regulatory agency’s denial of Fontem’s application to market flavored vaping products but rejected the FDA’s denial of Fontem’s application for unflavored products.

    “While the FDA identified multiple ‘deficiencies’ [in Fontem’s application], it failed to analyze the trade-offs necessary to make a public health finding,” the judges wrote in their ruling. “Nor did the agency explain how the specific deficiencies relate to its overall conclusion that Fontem failed to demonstrate its unflavored products were appropriate for the protection of public health. The agency’s denial therefore failed to comport with the requirements of the Tobacco Control Act.”

    The FDA’s failure to correctly apply the public health inquiry to Fontem’s unflavored products led it to make another serious error, according to the court. In its initial deficiency letter, the FDA requested certain information from Fontem, thereby indicating such information would be sufficient for the agency to approve Fontem’s products.

    But in its denial order, the agency changed its tune, reproaching Fontem for failing to provide information that the agency had never explicitly sought.

    “Shifting the regulatory goal posts without explanation is arbitrary and capricious,” the judges wrote. “By indicating in its deficiency letter that Fontem could resolve issues with its applications by providing specific information, the FDA represented such information would be sufficient to secure approval.”

  • Court Tosses Premium Cigar Regulations

    Court Tosses Premium Cigar Regulations

    Photo: Olena

    The U.S. District Court for the District of Columbia has vacated the Food and Drug Administration’s deeming regulations for premium cigars, reports Halfwheel.

    As a result, the deeming regulations introduced by the agency in 2016 do not apply to cigars that meets all of the following criteria:

    • It is wrapped in whole tobacco leaf
    • It contains 100 percent leaf tobacco binder
    • It contains at least 50 percent long filler tobacco
    • It is handmade or hand rolled
    • It has no filter, nontobacco tip or nontobacco mouthpiece
    • It does not have a characterizing flavor other than tobacco
    • It contains only tobacco, water and vegetable gum with no other ingredients or additives
    • It weighs less than 6 pounds per 1,000 units.

    The lawsuit was filed by the Cigar Association of America, the Cigar Rights of America (CRA) and the Premium Cigar Association.

    The case focused in part on the rulemaking process, which requires the FDA to inform the public about upcoming regulation and solicit feedback on those proposed rules.

    Contrary to the FDA’s assertion when it announced its finalized rules in 2016, the agency received feedback, according to Judge Amit P. Mehta. Specifically, the CRA in a comment to the proposed rules cited a finding from an FDA-funded study indicating that cigar smokers do not have higher “all-cause” mortality rates than nonsmokers.

    According to Halfwheel, the cigar industry is likely to ask the FDA to reimburse the user fees it has paid the agency, which the publication estimates at about $100 million per year for both premium and non-premium cigars.

    The FDA still has the option to deem premium cigars as regulated tobacco products, but it must complete the process that it failed to complete properly from 2014 to 2016.  

  • Korean Court Overturns PM Tax Refund

    Korean Court Overturns PM Tax Refund

    Photo: mnimage

    The Supreme Court of Korea has overturned a ruling that awarded Philip Morris Korea a tax refund, reports Business Korea. The case has now been sent back to the Suwon High Court.

    The dispute stems from 2014, when fiscal authorities announced new cigarette taxes that caused the price of pack of cigarettes to increase from KRW2,500 ($1.95) to KRW4,500 in January 2015.

    The National Tax Service (NTS) argued that Philip Morris Korea had sold cigarettes stored in purpose-build warehouses to wholesalers at an inflated price after January 2015, but had manipulated the sale to appear earlier in order to evade the additional special consumption tax that followed the price increase.

    When the NTS demanded tax payments of KRW99.7 billion, Philip Morris Korea challenged the decision, first the Tax Tribunal and then in court.

    The lower court accepted the company’s claim that the cigarettes in question were shipped to wholesalers in 2014, before the special consumption tax was applied.

    However, the Supreme Court viewed Philip Morris Korea’s temporary warehouses as a stopgap measure intended to accumulate as much inventory as possible before the price increase, in order to profit from the price differential later on.

    “Even if the computer system shows that the cigarettes were sold in advance before the tax increase, the special consumption tax should be levied based on Jan. 1, 2015, when the cigarettes actually moved from the temporary warehouses to the wholesalers,” the court said in its ruling.

  • Former Juul Exec Loses Contamination Case

    Former Juul Exec Loses Contamination Case

    Photo: Steheap

    A former Juul Labs executive has lost a case accusing the vapor company of shipping contaminated vaping pods to retailers and firing him in retaliation for complaining, reports Reuters.

    Siddharth Breja,  a former senior vice president of global finance, sued Juul in October 2019. He alleged that the company endangered consumers by refusing to recall mint-flavored e-cigarette nicotine pods or to issue a safety warning.

    Breja said he objected to the company re-selling products that were nearly a year old without a “best by” date on their packages. He said his complaints angered his superiors and that he was fired in retaliation in March 2019.

    Juul denied all claims and sought to have the case sent to arbitration. The federal court lawsuit was put on hold pending arbitration in March 2020.

    In a joint filing on July 27, lawyers for both parties said an arbitrator had ruled against Breja and ordered him to pay certain of the company’s legal costs. They did not give further details about the decision, but asked that the lawsuit be dismissed once Breja had paid the award.