Category: Litigation

  • Brief Supports Limiting ‘Chevron Deference’

    Brief Supports Limiting ‘Chevron Deference’

    Image: Tobacco Reporter archive

    Keller and Heckman has filed an amicus brief with the U.S. Supreme Court on behalf of members of the electronic nicotine-delivery system (ENDS) industry in support of petitioners in a case to overturn or limit the so-called Chevron deference.

    Named after a landmark Supreme Court decision dating from 1984, the Chevron deference is a legal doctrine that generally requires courts to defer to an administrative agency’s interpretation of ambiguous statute so long as that interpretation is reasonable. 

    In practice, Chevron deference often gives agencies broad leeway to reach beyond the limits of a statute’s plain language, often bypassing the rulemaking process otherwise required under the Administrative Procedure Act and making it more difficult to challenge an agency action in court.

    In the years since ENDS became subject to Food and Drug Administration regulation, the vast majority of courts reviewing ENDS industry challenges to premarket application denials, as well as FDA rulemakings and guidance documents, have rubber-stamped the agency’s interpretation of the Family Smoking Prevention and Tobacco Control Act (TCA) and the “appropriate for the protection of the public health” standard, Keller and Heckman wrote on its blog.

    Critics contend that the Chevron deference has enabled the FDA to impermissibly interpret the TCA to implement a de facto ban on all nontobacco-flavored ENDS products without any requisite notice and comment rulemaking or congressional amendments to the TCA.

    The filers on the amicus brief urge the Supreme Court to at least restrict the application of Chevron deference so that it is the exception, not the rule. The Supreme Court will hear oral arguments in the case in its fall 2023 term.

    The petition to overturn or limit the Chevron deference was brought by a group of fishing companies challenging the National Marine Fisheries Service’s construction of the Magnuson-Stevens Act to require the industry to pay the salaries of federal monitors.

    The ENDS industry amici include the American Vaping Manufacturers Association, the American Vapor Group and Bidi Vapor.

  • Distributors Accused of Racketeering

    Distributors Accused of Racketeering

    Credit: Vitalii Vodolazskyi

    New York City has filed a lawsuit in federal court charging four vaping product distributors and six persons associated with the companies for illegally selling flavored vaping products other than tobacco in the city. It is possible more companies will be added to the suit.

    The civil lawsuit, filed Monday in the U.S. District Court for the Southern District of New York, claims the defendants violated “nearly every federal, New York State and New York City law applicable to the marketing, distribution, and sale of flavored e-cigarettes, the sales of which are prohibited under laws enacted by all three jurisdictions.”

    Named in the suit are Magellan Technology Inc., Ecto World LLC (Demand Vape), Mahant Krupa 56 LLC (Empire Vape Distributors) and Star Vape Corp. Also named were Matthew Glauser, Donald Hashagen, Russell Rogers, Nikunj Patel, Devang Koya and Nabil Hassen. The suit also mentions Puff Bar, Elf Bar and Hyde products, however, those manufacturers were not named in the suit.

    The lawsuit alleges the defendants committed mail and wire fraud, alongside violations of New York City’s Administrative Code, New York State Public Health Law, and the federal Tobacco Control Act. The city also accuses the companies of violating both the federal Racketeering Influenced Corrupt Organizations (RICO) Act and the Prevent All Cigarette Trafficking (PACT) Act.

    The suit centers on disposable flavored vapes. However, the suit alleges that is seeking relief for any type of flavored e-cigarette product on the market. This would suggest the suit could grow into anyone entity that has sold flavored vaping products in the city.

    “Although this action speaks principally about (flavored disposables), the favorite type of electronic nicotine delivery system among youth and the most intentionally directed to that market, the City seeks relief for defendants’ violation of laws applicable to e-cigarettes regardless of the type of device with which the violation is committed,” the suit states. “Any non-FDA approved [the FDA authorizes for marketing; it does not approve products] e-cigarette containing a flavored e-liquid is governed by the laws under which the City’s claims are brought and the City seeks relief with respect to all such devices.”

    The city says it “seeks to recover monetary damages and civil penalties from the defendants, potentially totaling millions,” according to a press release. The suit also alleges the sales of disposable flavored vapes created a youth use crisis. The suit alleges the largest increase in youth use ever. The claim is unsupported by any facts.

    “By distributing devices that provide larger than normal doses of nicotine in a mild aerosol formulated to reduce or eliminate the harshness of burning tobacco and tasting pleasantly of fruit, candy or desserts, [flavored vaping device] manufacturers and distributors have triggered the largest increases in youth nicotine use ever seen,” the suit claims.

    The lawsuit states the city will seek triple the damages awarded at trial under the RICO guidelines.

  • Ninth Circuit Denies Lotus MDO Review

    Ninth Circuit Denies Lotus MDO Review

    Entrance to United States Court of Appeals for the Ninth Circuit . Headquartered in San Francisco, California, the Ninth Circuit is by far the largest of the 13 courts of appeals. (Credit: Eric BVD)

    The U.S. Court of Appeals for the 9th Circuit on June 30 declined to review a Food and Drug Administration marketing denial order for Lotus Vaping Technologies’ flavored e-liquid products.

    The FDA issued marketing denial orders for Lotus’ flavored products, finding that the petitioners’ applications lacked sufficient evidence showing that the flavored products would provide a benefit to adult users that outweighs the risks such products pose to youth.

    Lotus challenged the ruling in court, but the judges held that the text of the Family Smoking Prevention and Tobacco Control Act authorizes the FDA to require that manufacturers submit comparative health risk data, which necessarily includes comparisons of flavored e-liquids to tobacco-flavored e-liquids.

    The judges also held that the FDA did not arbitrarily or capriciously deny Lotus’ applications and that any error the agency committed by failing to consider Lotus’ marketing plans was harmless.

  • Court Sets Wrongful Death Timeline

    Court Sets Wrongful Death Timeline

    Image: mehaniq41 | Adobe Stock

    The Supreme Judicial Court of Massachusetts ruled that family members of a deceased individual cannot file wrongful death suits if the death occurred more than three years after the injury that caused the death, reports Reuters. This ruling upholds the dismissal of claims against Philip Morris USA and R.J. Reynolds Tobacco Co. 

    Under Massachusetts law, according to Justice David Lowy, wrongful death claims are “derivative” of personal injury claims that the deceased could have brought in life. If the three-year statute of limitations has run out at time of death, family members have no wrongful death claims. 

    This latest decision follows two lawsuits, one against Philip Morris USA in 2017 (Fabiano v. Philip Morris USA Inc and others, No. SJC-13282) and one against R.J. Reynolds in 2016 (Fuller v. R.J. Reynolds Tobacco Co and others, No. SJC-13346). Both were brought by the wives of men who became sick and died after lifetimes of smoking. The lawsuits accused the companies of breach of warranty, negligence and conspiracy. These wrongful death claims were dismissed by different trial judges, who stated that both men would have been time-barred from bringing their own claims when they died, meaning their family members were not able to file wrongful death claims.

    The Supreme Judicial Court agreed to hear both cases. The court previously decided that wrongful death claims are derivative of the deceased’s claims but had not addressed how that would affect the statute of limitations, according to Lowy’s opinion.

    The statute of limitations for the deceased’s underlying injury claims determines whether surviving family can bring a wrongful death claim, according to the language of the Massachusetts wrongful death law.

    Lowy wrote that the decision “in no way changes what has long been true of persons suffering from serious injuries,” in a footnote addressing an argument by plaintiffs that the decision creates a “fundamental unfairness” by forcing sick individuals to bring lawsuits while they are suffering or forfeit their heirs’ rights to recovery.

    “Once those injuries are knowable, plaintiffs must assert their rights within a specified period of time or lose their ability to recover for their injuries,” Lowy wrote. 

  • FTC Drops Complaint After Altria’s Juul Exit

    FTC Drops Complaint After Altria’s Juul Exit

    Photo: Paul Brady

    The U.S. Federal Trade Commission (FTC) on July 3 dismissed a complaint against Altria Group and Juul Labs relating to the cigarette maker’s 2018 investment in Juul, reports Reuters.

    In late 2018, Altria paid $12.8 billion for a 35 percent state in Juul. The FTC said in 2020 that Altria’s investment violated antitrust law because the company acquired the position rather than continuing to compete against Juul in the market for closed-system e-cigarettes.

    After Altria exchanged its entire investment in Juul for a global license to Juul heated tobacco intellectual property, the tobacco giant asked the FTC to drop its challenge.

    Altria terminated its Juul stake after the investment lost much of its value in the wake of regulatory scrutiny and litigation relating to Juul’s marketing practices. On June 23, 2022, the U.S. Food and Drug Administration ordered Juul Labs to pull its e-cigarettes from U.S. store shelves, saying the e-cigarette manufacturer had submitted insufficient evidence that they were “appropriate for the protection of the public health.” After Juul challenged the marketing denial order (MDO), the FDA agreed to take another look at the company’s pre-market tobacco product application.

    The agency said it had determined that there are scientific issues unique to the Juul application that warrant additional review. 

    In early September 2022, Juul Labs agreed to pay nearly $440 million to settle a two-year investigation by 33 U.S. states into the marketing of its vaping products, which critics have blamed for sparking a surge in underage vaping.

    On Sept. 30, 2022, Altria announced it was ending its noncompete agreement with Juul.

  • NGOs Challenge Nicotine Delisting

    NGOs Challenge Nicotine Delisting

    Photo: Purilum

    Three groups have sued the government of Malaysia for removing liquid nicotine from the list of controlled substances, reports Bloomberg, citing local media reports.

    Malaysia is preparing legislation that seeks to ban the sale of all tobacco products, including e-cigarettes, to those born after 2007. The NGOs contended that removing nicotine from the list of controlled substances before the tobacco-control rules are in place would allow vape products to be sold openly and legally to anyone, including children.  

    Malaysia’s health ministry removed the restrictions on nicotine liquids and gels on March 31, which allowed the government to tax vape products containing them starting April 1.

    The NGOs argue that the move is unconstitutional, arguing that it went against the recommendation of the Poisons Board.

    The plaintiffs in the suit are the Malaysian Council for Tobacco Control, Malaysian Green Lung Association and Voice of the Children.

  • Juul Accuses NJOY of Patent Infringement

    Juul Accuses NJOY of Patent Infringement

    Photo: TheaDesign

    Juul Labs has asked the U.S. International Trade Commission (ITC) to block sales and imports of the NJOY Ace vapor device, claiming that the product infringes several Juul patents. It has also filed a complaint against NJOY with the U.S. District Court for the District of Arizona.

    “Our technology, designed internally and in the U.S. and protected by our robust patent portfolio, has been the most effective product development to transition adult smokers from combustible cigarettes—switching over 2 million adult smokers in this country. Innovation is critical in this space to advance tobacco harm reduction,” said Juul Labs Chief Legal Officer Tyler Mace in a statement.

    “When others infringe on our technology, we have no choice but to protect our intellectual-property rights.”

    This ITC complaint follows three prior successful actions from Juul Labs at the Commission, which all resulted in barring the importation and sale of infringing products, according to Juul Labs.

    “Just like we have in three prior successful ITC actions that vindicated our company’s IP rights, we intend to reach the same result here,” said Mace.

    Juul Labs complain also targets Altria Group, which agreed to acquire the NJOY in March after exchanging its minority investment in Juul for a heated tobacco product intellectual property license.

    The NJOY Ace device received marketing authorization from the Food and Drug Administration in April 2022.

     

  • Firms Start Posting Warning Statements

    Firms Start Posting Warning Statements

    Photo: Krakenimages.com

    Altria Group, R.J. Reynolds Tobacco Co. and ITG Brands have started posting warning signs about cigarette smoking in more than 200,000 stores across the United States, reports CNN. The move represents one of the final steps in a lawsuit the Justice Department filed against the tobacco industry in 1999.

    The signs include court-specified statements such as “Smoking kills, on average, 1,200 Americans. Every day.” They must be posted until June 30, 2025, in “highly visible places” in English and also Spanish in regions with significant numbers of Spanish speakers.

    The postings come after years of dispute following U.S. District Court Judge Gladys Kessler’s judgment in 2006, when the tobacco companies were first ordered to make the corrective statements. The landmark judgment found the industry defendants guilty of lying about the dangers of cigarettes and secondhand smoke.

    The defendants lied “about the devastating health effects of smoking and environmental tobacco smoke, they suppressed research, they destroyed documents, they manipulated the use of nicotine so as to increase and perpetuate addiction, they distorted the truth about low tar and light cigarettes so as to discourage smokers from quitting, and they abused the legal system in order to achieve their goal—to make money with little, if any, regard for individual illness and suffering, soaring health costs, or the integrity of the legal system,” Kessler said in her final opinion.

    R.J. Reynolds said these corrective statement signs appear on its website and had previously appeared in newspapers, television, radio and on pack inserts. “The tobacco industry has evolved considerably since this lawsuit was filed nearly 25 years ago, back in 1999,” a company spokesperson said. “Today, Reynolds American Inc. and its operating companies have a clear purpose to build ‘A Better Tomorrow’ by reducing the health impact of our business.”

  • Keller and Heckman Files Amicus Brief

    Keller and Heckman Files Amicus Brief

    Image: Tobacco Reporter archive

    Eric Gotting and Azim Chowdhury, partners at Keller and Heckman, filed an amicus brief with the Supreme Court of the United States (SCOTUS) in support of Avail Vapor’s writ of certiorari petitioning the SCOTUS to review the 4th Circuit’s decision to uphold the Food and Drug Administration’s marketing denial order of Avail’s premarket tobacco product application for its nontobacco-flavored e-liquids, according to a post on The Continuum of Risk.

    The brief, filed on behalf of a group of public health experts, is intended to provide relevant scientific background on comparative health impacts of electronic nicotine-delivery system (ENDS) products with combustible cigarettes. The brief argues that ENDS are, beyond reasonable doubt, much safer than cigarettes; ENDS help adult smokers quit and can reach many adults who would not otherwise quit smoking; ENDS flavors are important to adults trying to quit smoking; youth vaping has declined markedly since 2019, with most youth vaping being infrequent, nonaddictive and temporary, and more frequent and intense vaping generally limited to adolescents who are otherwise likely to smoke; young people do not generally use the refillable tank devices sold in vape shops but instead use more mass-market products; claims that vaping is a gateway to smoking are based on a misunderstanding of the evidence; and because smoking and vaping are linked, measures like e-liquid flavor bans can cause more smoking or other damaging unintended consequences.

  • Second Circuit Appeals Court Rules for FDA

    Second Circuit Appeals Court Rules for FDA

    Credit: Andrey Popov

    The U.S. Food and Drug Administration acted reasonably in denying vapor maker Magellan Technology’s request for a marketing order for its flavored vaping products, the U.S. Court of Appeals for the 2nd Circuit ruled May 16.

    The court upheld the FDA’s finding that Magellan failed to show the product would provide a benefit to adult users that would outweigh the risks to youth.

    The agency found Magellan’s evidence—four nonclinical studies—was insufficient to establish that the flavored pods would be more effective than tobacco-flavored electronic nicotine-delivery systems in helping smokers switch to e-cigarettes to stop smoking altogether, according to Bloomberg Law.

    The manufacturer of Hyde and Juno brand e-cigarettes sued the FDA and the U.S. Department of Health and Human Services, claiming the agencies violated the Administrative Procedure Act.

    New York-based Magellan Technology accused the agencies of refusing to review the company’s premarket tobacco product applications (PMTAs) for 12 products, a process that cost the company $1 million. Magellan claims the FDA “arbitrarily” and “capriciously” rejected the applications.

    “Magellan had already spent over $1 million on the PMTAs at the time the RTA [refuse-to-accept] order [was] issued and plans to spend over $10 million on the PMTAs in total,” the suit states.

    Texas-based retailer Vapor Train 2 is also a plaintiff in the suit. The companies asked a Texas federal court to temporarily stay the RTA order that the FDA issued to Magellan, according to the lawsuit filed Thursday.

    The companies are expected to appeal the ruling. Magellan could now seek an en banc review of the case (a rehearing by the full 2nd Circuit) or could appeal to the Supreme Court of the United States.