R.J. Reynolds Tobacco Co. et al v. Becerra et al (2020)

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Docket No. 3:20-cv-01990 (S.D. Cal. Oct. 9, 2020)

Synopsis

Tobacco companies are challenging California’s statewide ban on the sale of flavored tobacco products.

Background

On August 28, 2020, California became the second state in the nation, after Massachusetts, to pass a broad law prohibiting the sale of most flavored tobacco products. The California bill will ban the sale of menthol cigarettes and all flavored e-cigarettes statewide, as well as flavored non-cigarette tobacco products such as smokeless tobacco and some cigars. Governor Gavin Newsom signed the legislation the same day it passed. Three days later, a referendum supported by the tobacco industry was submitted that, if it qualifies for the ballot, would delay implementation of the law for two years pending the referendum result. For more on the referendum and on the law, known as SB-793 after its bill number, see our fact sheet.

In addition to the referendum effort, the tobacco industry is pursuing a court challenge to the law. On October 9, 2020, a group of tobacco industry plaintiffs including R.J. Reynolds and Phillip Morris sued California Attorney General Xavier Becerra and San Diego County District Attorney Summer Stephan, raising preemption claims against SB-793. It appears the inclusion of the San Diego County District Attorney was an effort to have the case transferred to the same judge handling the two lawsuits against San Diego County filed earlier by R.J. Reynolds and other tobacco companies and by the Neighborhood Market Association. The plaintiffs filed a motion making this request, arguing for the transfer because the cases involved some of the same parties and “substantially the same questions of law,” which was granted. 

Under the 2009 Tobacco Control Act, the federal government restricted the sale of some flavored tobacco products, including most flavored cigarettes. However, the Tobacco Control Act exempted menthol flavored cigarettes and flavored non-cigarette tobacco products, such as cigars, smokeless tobacco, hookahs, and e-cigarettes. The law preempts states and localities from enacting “tobacco product standards,” but does not limit their ability to enact requirements “relating to or prohibiting the sale, distribution, [or] possession” of tobacco products.

District Court Proceedings

In their complaint, the plaintiffs bring three claims, arguing:

  1. Express preemption – SB-793 is expressly preempted by the Tobacco Control Act because the Act is “different from, or in addition to” federal requirements related to “tobacco product standards”; and 
  2. Implied preemption – SB-793 is impliedly preempted because it “stands as an obstacle” to the objectives of the Tobacco Control Act to “set national standards” for manufacturing of tobacco products, because FDA has chosen to regulate flavored cigarettes but leave menthol on the market, and because Congress created a “detailed regulatory process” for “evaluating the design and sale of new tobacco products.”
  3. Dormant commerce clause – SB-793 improperly violates the Commerce Clause of the U.S. Constitution by dictating “how out-of-state manufacturers must manufacture their products.”

Also on October 9, plaintiffs filed for a preliminary injunction on the first two claims in their complaint to prevent implementation of SB-793 until the conclusion of the lawsuit. This is the approach the tobacco industry has used in the other challenges to various flavored tobacco product ordinances. Defendants filed an opposition to that motion on November 12, 2020. On December 3, 2020, the State filed a motion to dismiss the case.

Meanwhile, in addition to the lawsuit, R.J. Reynolds has also led an effort to gather signatures in support of a referendum which would place SB 793 on the 2022 ballot to be approved or rejected by voters. While the signatures have not been verified, it is likely that enough signatures have been gathered. As a result, the state has indicated it does not plan to enforce the law as signatures are being verified. On December 10, 2020, the court asked the parties for additional briefing on the effect suspending SB 793 will have on the case. If there are enough verified signatures to place SB 793 on the 2022 ballot, RJR will likely withdraw the lawsuit as there will no longer be any basis for it.  

Litigation Status

A hearing is scheduled on the preliminary injunction and the motion to dismiss on January 28th, 2021. The scheduled hearing is concurrent with hearings in the two lawsuits against San Diego County’s flavored tobacco ordinance.