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Tag: lawsuit

  • AOI Kenya Loses $183M Tax Case

    AOI Kenya Loses $183M Tax Case

    Alliance One Tobacco Kenya Limited (AOTKL) was ordered to pay the Kenya Revenue Authority (KRA) Sh23.7 billion ($182.8 million) after the High Court dismissed its appeal following a protracted tax dispute, ruling the company’s leaf processing amounted to “manufacturing,” and therefore was subject to excise duties, according to Daily Nation Africa. The ruling comes after years of wrangling over corporate income tax, excise duty, and value-added tax liabilities, with KRA alleging under-declarations and misclassification of tobacco products. According to filings, the revenue body argued that AOTKL reported discrepancies between sales declared for corporate tax versus VAT returns, while also disputing how the company classified stemmed tobacco and semi-processed products.

    “Our operations in Kenya ceased nearly 10 years ago; however, an excise tax matter with the Kenya Revenue Authority remains ongoing in the courts,” said Miranda Kinney, a spokesperson from AOI. “While we respect the judicial process, we strongly disagree with the position taken by the High Court and are pursuing all appropriate avenues of appeal. We remain committed to meeting our regulatory and tax obligations while maintaining transparent, responsible business practices. Given this is an ongoing legal matter, we cannot provide further comment at this time.” 

    According to Kenya Law Reporting, the case was brought before the Tax Appeals Tribunal, which in September 2024 issued a mixed ruling, partly upholding KRA’s claims. AOTKL’s transfer pricing practices also came under scrutiny, with KRA challenging documentation around full-cost mark-up adjustments with related parties. Ultimately, despite some partial relief from the Tribunal, the company has been ordered to settle the liability, making it one of the largest tax recoveries in Kenya’s tobacco sector.

  • NJOY Sues FDA Over Delays in Flavored E-Cigarette Approval

    NJOY Sues FDA Over Delays in Flavored E-Cigarette Approval

    NJOY LLC, a subsidiary of Altria Group, filed a lawsuit in federal court in Louisiana last week (August 21), accusing the U.S. Food and Drug Administration (FDA) of unlawfully delaying its review of applications to market flavored e-cigarettes. According to NJOY, the FDA has failed to adhere to statutory deadlines stipulated in the Family Smoking Prevention and Tobacco Control Act. The company claims such delays unfairly hinder its efforts to provide adult smokers with reduced-risk alternatives to combustible tobacco.

    According to the filing, in December 2020, the FDA denied NJOY’s application with only one deficiency listed: that the flavored products’ applications did not show they “would increase the likelihood of complete switching among adult smokers, compared to the Rich Tobacco and Menthol varieties” (products that were granted marketing authorization). In March 2021, NJOY responded, providing data showing the flavored products’ switch rates were 29-68% higher than the approved products after six months of use. The FDA has yet to respond despite repeated requests for updates, leading to last week’s lawsuit.

    Additionally, the filing states that documents received during a Freedom of Information Act request revealed that the Office of Science’s epidemiology staff concluded that NJOY adequately addressed the flavor-specific deficiency and that the products were associated with higher rates of cessation, and also that unrequested sales restrictions and reporting requirements offered by NJOY would, according to the Office of Health Communication and Education, mitigate concerns about potential youth initiation.

    The lawsuit underscores growing tensions between major industry firms and the FDA, which is facing a massive backlog of Premarket Tobacco Product Applications, particularly as sales of unauthorized flavored vaping products continue to surge. NJOY argues the delays not only burden its business, but also limit smokers’ access to potentially less harmful products.

  • Judge Allows NYC Lawsuit Against Vape Wholesalers to Proceed

    Judge Allows NYC Lawsuit Against Vape Wholesalers to Proceed

    A Manhattan federal judge denied a motion to dismiss a lawsuit brought by New York City against eight vape wholesalers accused of distributing illegal flavored e-cigarettes. Judge Gregory H. Woods determined that the city’s claims were plausible and that the defendants had likely violated federal, state, and local laws regarding the sale of flavored e-cigarettes. 

    Originally filed in state court, the city alleges the companies—Pod Juice, EVO Brands, Midwest Goods Inc., MYLÉ VAPE Inc., MVH I, Inc., Puff Bar Inc., Safa Goods LLC, and Mi-One Brands—violated local and federal laws by “flooding” the market with flavored vapes, despite a citywide ban on such products. The ruling allows the city’s case to move forward, reinforcing its efforts to crack down on youth-targeted vaping products.

    The defendants had argued the lawsuit was preempted by federal law, but the court disagreed, citing the city’s authority to enforce local public health protections.

  • Samsung Back on $10.9M Hook for Vape Battery Explosion

    Samsung Back on $10.9M Hook for Vape Battery Explosion

    Samsung Electronics America Inc. must pay $10.9 million to a Georgia man who said he was seriously injured when the company’s battery inside an e-cigarette device in his pants pocket exploded, the Georgia Court of Appeals ruled Monday (June 23).

    Jordan Brewer sued Samsung in July 2020, and a county judge held Samsung liable by default in September 2020 after the company failed to respond to Brewer’s complaint. In December 2020, Samsung asked the court to set aside the default judgment, but the court said, “Samsung’s action in pursuing its company protocol in response to similar lawsuits as ‘a failed legal strategy’ that was ‘willful and deliberate and done with indifference to the correct legal process or else was gross negligence.’”

    In 2022, however, Samsung filed a motion with a new judge, who set aside the judgment, citing unclear damages and a lack of a hearing transcript. Brewer appealed, arguing Samsung didn’t meet its burden to justify overturning the judgment.

    This week, the Georgia Court of Appeals ruled that the trial court improperly shifted the burden of proof to Brewer and should not have set aside the judgment based on an incomplete record. The court vacated the order, setting aside the judgment and remanded for reconsideration under the correct legal standard. Since that judgment is now vacated, Samsung’s related appeal trying to open the default was ruled premature and dismissed.

  • Trucking Company Sued for Overcharging Smokers

    Trucking Company Sued for Overcharging Smokers

    An ex-employee of Marten Transport Ltd. is suing the trucking company in Wisconsin federal court, alleging that a tobacco surcharge in its health plan violates federal antidiscrimination law by charging workers who smoke an extra $780 per year for their health-care coverage than those who don’t, without offering a legally compliant way to avoid the penalty.

    In the complaint, plaintiff Mark Maurer said going forward, workers can avoid these penalties by participating in quit-smoking programs, but there’s no way for them to be reimbursed for fees they’ve already paid. This runs afoul of the Employee Retirement Income Security Act, which allows health plans to charge higher rates to tobacco-using employees only if they provide a “reasonable alternative standard” that allows workers to have the full penalty waived without quitting smoking, the complaint said.

    According to Hylant Law, numerous class-action lawsuits have recently been filed against employers alleging that health plan premium surcharges related to tobacco use violate federal compliance requirements. These lawsuits have been filed by current and former employees of major U.S. companies, such as PepsiCo, Walmart, Target and Whole Foods, who have paid more in premiums due to their tobacco use, often hundreds of dollars more per employee per year.

    A handful of employers have agreed to class-wide settlements over similar cases, including Bass Pro Group LLC for $5 million, Lippert Components Inc. for $310,000, and UGN Inc. for $299,000.

  • Baltimore Sues PMI for “Peddling Zyn to Kids”

    Baltimore Sues PMI for “Peddling Zyn to Kids”

    The City of Baltimore filed a lawsuit against Philip Morris yesterday (May 7) in the city’s Circuit Court for violating Baltimore’s Consumer Protection Ordinance through deceptive marketing practices to “peddle Zyn oral nicotine pouches to minors.” The city said PMI used “Big Tobacco’s well-developed playbook” to deceptively market flavored Zyn nicotine pouch products and hook a new generation of nicotine users.”

    “The purpose of creating a flavored tobacco product is clear — it is meant to capture children and adolescents,” the city’s complaint says.

    The complaint cites recent research that nearly 2% of middle and high school students report using nicotine pouches, and a separate survey where more than two-thirds of underage respondents reported Zyn as their favorite brand of tobacco pouches.

    In response, officials from PMI said, “Although we have not yet been served with the complaint and are not in a position to comment, we can assure you that the interests of PMI and its affiliates will be vigorously defended.”

    This is not the first time the city has targeted nicotine-related products with a lawsuit alleging deceptive marketing. Baltimore sued Juul Labs Inc. in 2020, accusing the electronic cigarette maker of promoting to minors. In September, the city reached an $8 million settlement with the California-based company.

  • Dem Lawsuit Wants HHS “Restructure” Undone

    Dem Lawsuit Wants HHS “Restructure” Undone

    A group of Democratic-led states filed a lawsuit today (May 5) to challenge the Trump administration’s decision to fire 10,000 U.S. Department of Health and Human Services employees. Filed in federal court in Providence, Rhode Island, attorneys general from 19 states and the District of Columbia said the job cuts and agency consolidations U.S. Health and Human Services Secretary Robert F. Kennedy announced in late March unconstitutionally stripped the department of the resources necessary to do its job.

    The layoffs, in addition to earlier buyout offers and firings of probationary employees, reduced the number of full-time HHS employees from 82,000 to 62,000 and left key offices unable to perform statutory functions, the lawsuit said.

    As part of the restructuring plan, HHS said it was also collapsing 28 divisions into 15 and closing half of its 10 regional offices.

    The states argue that Kennedy lacked the authority to launch the widespread layoffs and restructuring and that the administration violated the U.S. Constitution by usurping Congress’ authority to create and fund agencies’ operations. The states asked a judge to block HHS from implementing Kennedy’s plan announced on March 27, prevent the department from being dismantled, and force the administration to restore health

    HHS declined to comment on the lawsuit. It previously said the restructuring was necessary to streamline its functions and that the layoffs would save taxpayers $1.8 billion annually.

  • Gurkha, Davidoff Settle “Year of the Dragon” Lawsuit

    Gurkha, Davidoff Settle “Year of the Dragon” Lawsuit

    Last week, the U.S. District Court for the Southern District of Florida approved the request from both sides’ attorneys to dismiss the case of Gurkha Cigar Group Inc. v. Davidoff of Geneva USA Inc. in the battle over the Year of (the) Dragon name. Judge William P. Dimitrouleas dismissed the case with prejudice, however, little is known about the settlement other than both parties agreed to pay for their court costs.

    Halfwheel reported that Davidoff did not reply to a request for comment, but Bianca Lopez, director of marketing for Gurkha, said, “It was an amicable agreement that was reached.”

    Gurkha has an arrangement to license the trademarks from K. Hansotia & Co., Inc., a company presumably named after Gurkha’s owner Kaizad Hansotia. Those trademarks include a variety of dragon-related words within the cigar industry, including dragon, dragon fire, dragon lord, dragonslayer, imperial dragon, red dragon, and royal dragon. The company also filed for a trademark on “Year of Dragon,” which Davidoff & Cie SA opposed.

    “It’s unclear what impact the settlement will have on the trademark process, which was suspended due to this lawsuit, which Gurkha filed in late 2023,” Charlie Minato wrote for Halfwheel. “In late 2023, Davidoff released the Davidoff Limited Edition 2024 Year of the Dragon cigar as part of its long-running Zodiac Series, which is named after the various symbols on the Chinese zodiac calendar. Davidoff was hardly alone. Asylum, De Los Reyes, Drew Estate, El Septimo, General Cigar Co., Habanos S.A., J.C. Newman, JM Tobacco, La Galera, Oliva, Maya Selva, Plasencia, Rocky Patel, United Cigars, and Vega Fina also introduced Year of the Dragon-themed cigars. There’s no evidence that any other company was sued other than Davidoff.”

    “Gurkha released its own dragon-themed cigars, five different blends using the Year of the Dragon name. Both companies—as well as a host of others—also released Year of (the) Snake cigars. K. Hansotia & Co. has a trademark on Year of Snake.”

  • Federal Judge Allows Zyn Lawsuit to Progress

    Federal Judge Allows Zyn Lawsuit to Progress

    A federal judge in Florida allowed key claims to move forward in two consumer class action lawsuits against Philip Morris and its subsidiary, Swedish Match, over allegations that their Zyn nicotine pouches cause ongoing health issues and are deceptively marketed, especially to young people.

    In March, U.S. District Judge William P. Dimitrouleas partially granted the defendants’ motion to dismiss, tossing a single claim of fraudulent concealment for lacking sufficient detail and a clear connection between the alleged misrepresentation and the plaintiffs’ injuries. However, the claims were reportedly dismissed without prejudice, giving the plaintiffs an opportunity to amend their complaints. The court upheld the bulk of the plaintiffs’ claims, including those for design defects, failure to warn, and negligence. The judge also rejected Philip Morris’ efforts to dismiss the lawsuits for lack of jurisdiction, finding that the companies’ business activities in Florida, including marketing and selling Zyn, provided sufficient basis for the federal court to hear the case.

    Plaintiffs in the Zyn lawsuits allege Philip Morris and Swedish Match falsely maintain Zyn is a smokeless nicotine replacement therapy from cigarettes or e-cigarettes, despite the nicotine concentration levels in Zyn exceeding the levels found in nicotine replacement therapies. Philip Morris said it is reviewing the ruling and intends to “vigorously defend” itself against the remaining claims.

  • Juul Cleared in Patent Dispute with Altria

    Juul Cleared in Patent Dispute with Altria

    The U.S. International Trade Commission affirmed a judge’s decision exculpating Juul in an infringement case brought by Altria-owned NJOY over several vaping patents. In January, Administrative Law Judge Doris Johnson Hines found that Juul did not violate Section 337 of the Tariff Act by importing vaping products, which Altria claimed was an infringement on two patents covering vaping technologies.

    In a three-page decision, the ITC reviewed the noninfringement finding to revise a citation in the judge’s initial determination that concluded NJOY “did not satisfy the economic prong of the domestic industry requirement, which requires the complainant to show that it has made significant investment in products protected by the patent,” Theresa Schliep wrote for Law 360.

    Concerning the economic prong, the ITC took “no position on these findings,” the decision said, and the ITC declined to review the remainder of the decision, including the judge’s conclusion that Juul did not violate Section 337.

    The Juul products the ITC investigated were “electronic nicotine delivery systems” and the cartridges or pods that go with them, as well as the pieces that make up the pods, such as “atomizers, subassemblies, devices subassemblies, [and] chargers,” according to court filings.