throbber
Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.1 Page 1 of 22
`
`
`1 1
`
`2 2
`
`3 3
`
`4 4
`
`5 5
`
`6 6
`
`7 7
`
`8 8
`
`9 9
`
`10 10
`
`11 11
`
`12 12
`
`13 13
`
`14 14
`
`15 15
`
`16 16
`
`17 17
`
`18 18
`
`19 19
`
`20 20
`
`21 21
`
`22 22
`
`23 23
`
`24 24
`
`25 25
`
`26 26
`
`27 27
`
`28 28
`
`
`
`Steven N. Geise (SBN 249969)
`JONES DAY
`sngeise@jonesday.com
`4655 Executive Drive, Suite 1500
`San Diego, CA 92121
`Tel: (858) 314-1200
`
`[Additional counsel identified on signature page]
`Counsel for Plaintiffs
`R.J. Reynolds Tobacco Company; R.J. Reynolds
`Vapor Company; American Snuff Company, LLC;
`Santa Fe Natural Tobacco Company, Inc.;
`Neighborhood Market Association, Inc.; and
`Morija, LLC dba Vapin’ the 619
`
`Tommy Huynh (SBN 306222)
`ARNOLD & PORTER KAYE SCHOLER LLP
`Tommy.Huynh@arnoldporter.com
`Three Embarcadero Center, 10th Floor
`San Francisco, CA 94111-4024
`Tel: (415) 471-3100
`Fax: (415) 471-3400
`
`[Additional counsel identified on signature page]
`Counsel for Plaintiffs
`Philip Morris USA Inc; John Middleton Co.; U.S.
`Smokeless Tobacco Company LLC; and Helix
`Innovations LLC.
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
`R.J. REYNOLDS TOBACCO COMPANY;
`R.J. REYNOLDS VAPOR COMPANY;
`AMERICAN SNUFF COMPANY, LLC;
`SANTA FE NATURAL TOBACCO
`COMPANY, INC.; PHILIP MORRIS USA
`INC.; JOHN MIDDLETON CO.; U.S.
`SMOKELESS TOBACCO COMPANY LLC;
`HELIX INNOVATIONS LLC;
`NEIGHBORHOOD MARKET
`ASSOCIATION, INC.; and MORIJA, LLC dba
`VAPIN’ THE 619,
`
`Plaintiffs,
`
`
`
`
`
`
`
`
`Case No.
`COMPLAINT FOR
`DECLARATORY AND
`INJUNCTIVE RELIEF
`
`
`v.
`
`XAVIER BECERRA, in his official capacity as
`Attorney General of California; and SUMMER
`STEPHAN, in her official capacity as District
`Attorney for the County of San Diego,
`
`
`Defendants.
`
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`'20
`
`CV1990
`
`RBB
`
`LAB
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.2 Page 2 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`Plaintiffs R.J. Reynolds Tobacco Company (“RJRT”), R.J. Reynolds Vapor
`Company (“RJRV”), American Snuff Company, LLC (“ASC”), Santa Fe Natural
`Tobacco Company, Inc. (“Santa Fe”), Philip Morris USA Inc. (“PM USA Inc.”),
`John Middleton Co. (“JMC”), U.S. Smokeless Tobacco Company LLC (“UST”),
`Helix Innovations LLC (“Helix”), Neighborhood Market Association, Inc., and
`MORIJA, LLC dba Vapin’ the 619 bring this action for declaratory and injunctive
`relief against Defendants Xavier Becerra, in his official capacity as Attorney General
`of California, and Summer Stephan, in her official capacity as District Attorney for
`the County of San Diego.
`PRELIMINARY STATEMENT
`In an overbroad reaction to legitimate public-health concerns about
`1.
`youth use of tobacco products, the state of California recently enacted the most
`draconian ban on tobacco products of any state in the nation. California is rightly
`concerned with youth use of tobacco products. Although youth use of combustible
`cigarettes is at an all-time low, youth vaping and serious health issues from illicit
`products are at the heart of a national discussion. But California’s new law, Senate
`Bill 793, strikes far broader than necessary, banning menthol cigarettes, menthol-
`flavored vapor products, and myriad other flavored tobacco products manufactured
`and sold by Plaintiffs R.J. Reynolds Tobacco Company, R.J. Reynolds Vapor
`Company, American Snuff Company, LLC, and Santa Fe Natural Tobacco Company
`(collectively, “Reynolds”), and by Plaintiffs Philip Morris USA Inc., John Middleton
`Co., U.S. Smokeless Tobacco Company LLC, and Helix Innovations LLC
`(collectively, “PM USA”). SB793 also bans flavored tobacco products sold by
`Plaintiff Vapin’ the 619 as well as by members of Plaintiff Neighborhood Market
`Association.
`Reynolds and PM USA are committed to keeping tobacco products out
`2.
`of the hands of youth. Reynolds and PM USA have rigorous standards to ensure their
`marketing is accurate and responsibly directed to adult tobacco consumers aged
`
`1
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.3 Page 3 of 22
`
`
`twenty-one and over. Reynolds and PM USA also have strict compliance policies for
`retailers who sell their products to prevent youth from purchasing tobacco products
`and support programs that train retailers to comply with age restrictions.
`The federal Food and Drug Administration shares Reynolds’s and PM
`3.
`USA’s goals, and, earlier this year, effectively banned the sale of flavored cartridge-
`based electronic nicotine delivery system (“ENDS”) products (other than tobacco- or
`menthol-flavored cartridge-based ENDS products). FDA, Enforcement Priorities for
`Electronic Nicotine Delivery Systems (ENDS) and Other Deemed Products on the
`Market Without Premarket Authorization (Revised) 19 (Apr. 2020), available at
`https://www.fda.gov/media/121384/download (“Enforcement Priorities”). In fact,
`the latest report from FDA finds that “1.8 million fewer U.S. youth are currently
`using e-cigarettes compared to 2019.” FDA Statement, National Survey Shows
`Encouraging Decline in Overall Youth E-Cigarette Use, Concerning Uptick in Use
`of Disposable Products (Sept. 9, 2020), available at https://tinyurl.com/y3rpwfph.
`As FDA recognizes, “[t]his is good news” (id.), and it also shows that FDA’s efforts
`as well as those by industry leaders such as Reynolds and PM USA are paying off.
`California could have supplemented these efforts by targeting youth
`4.
`usage of vapor products (and other tobacco products) through increased enforcement
`of age restrictions or public-education campaigns. Instead, Senate Bill 793, which
`added Article 5 to Chapter 1 of Part 3 of Division 103 of the Health and Safety Code,
`bans sales to adult tobacco consumers in the state and, moreover, indiscriminately
`extends the ban to nearly every conceivable flavored tobacco product, from menthol
`cigarettes and smokeless tobacco to flavored vapor products and other flavored
`products. This categorical ban is unjustified.
`For one, Congress has already banned all characterizing flavors in
`5.
`cigarettes other than tobacco or menthol. 21 U.S.C. § 387g(a)(1)(A). And as to
`menthol, Congress left it to FDA to determine whether that flavor should be banned
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`2
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.4 Page 4 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`when it comes to cigarettes. To date, even though FDA has studied the issue, FDA
`has chosen not to ban menthol in cigarettes.
`law could have adverse public health
`6. Moreover, California’s
`consequences. FDA’s Director of the Center for Tobacco Products has asserted that
`“[d]ramatically and precipitously reducing availability of [electronic nicotine
`delivery system products (“ENDS”)] could present a serious risk that adults,
`especially former smokers, who currently use ENDS products and are addicted to
`nicotine would migrate to combustible tobacco products.” Am. Acad. of Pediatrics v.
`FDA, No. 8:18-cv-883, Dkt. 120-1, at ¶ 15 (D. Md. filed June 12, 2019) (Decl. of
`Director of FDA’s Center for Tobacco Products Mitchell Zeller) (“Zeller Decl.”).
`This risk of migration is especially pronounced for menthol-flavored products. When
`FDA previously considered restrictions on flavored ENDS products, FDA declined
`to impose restrictions on menthol-flavored ENDS products precisely because adults
`who used those products “may be at risk of migrating back to cigarettes, which
`continue to be available in menthol flavor, in the absence of access to mint- and
`menthol-flavored ENDS products.” See FDA, Modifications to Compliance Policy
`for Certain Deemed Tobacco Products 19
`(Mar. 2019), available at
`https://tinyurl.com/yyywgoat.
`But not only is California’s law misguided, the sweeping ban is also
`7.
`preempted by federal
`law and
`therefore unconstitutional under
`the U.S.
`Constitution’s Supremacy Clause. In addition, California’s law violates the dormant
`Commerce Clause and is thus unconstitutional.
`First, federal law expressly preempts the state’s ban on flavored tobacco
`8.
`products. The manufacture of tobacco products is subject to intensive regulation by
`the federal Government. In striking a balance between federal authority and state
`authority over the regulation of tobacco products, Congress expressly denied states
`the ability to promulgate any requirement relating to tobacco product standards that
`are different from or in addition to federal standards. California’s ban on flavored
`
`3
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.5 Page 5 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`tobacco products, however, is a product standard because it regulates the ingredients,
`additives, and properties of those products. California’s ban is thus expressly
`preempted by federal law.
`Second, federal law also impliedly preempts California’s law because
`9.
`the state’s ban stands as an obstacle to the purposes of federal law. Congress
`authorized FDA to promulgate tobacco product standards that, in appropriate
`circumstances, can establish uniform, national standards for the manufacture of
`tobacco products and the ingredients used in such products. Congress and FDA have
`made the judgment that certain tobacco products, particularly menthol cigarettes,
`should remain available to adult users of tobacco products. California’s ban,
`however, conflicts with those federal goals and must give way.
`10. Third, because California’s law attempts to regulate manufacturers that
`are not within the state’s borders, the law violates the dormant Commerce Clause.
`And because California’s ban does so, it is unconstitutional and must be set aside.
`11. California has no legitimate interest in enforcing its unconstitutional
`law. The Court should thus grant injunctive and declaratory relief preventing the
`Defendants and their agents from violating the U.S. Constitution’s Supremacy Clause
`and Commerce Clause.
`
`PARTIES
`12. Plaintiff RJRT is a North Carolina corporation headquartered in
`Winston-Salem, North Carolina. RJRT is a leading manufacturer of tobacco
`products. In particular, RJRT develops, manufactures, markets, and distributes a
`variety of flavored tobacco products under a variety of brand names, including
`menthol cigarettes under the brand names Newport and Camel, among others, and
`flavored smokeless tobacco products under the brand name Camel SNUS.
`13. Plaintiff RJRV is a North Carolina corporation headquartered in
`Winston-Salem, North Carolina. RJRV develops, manufactures, markets, distributes,
`and sells menthol-flavored electronic nicotine delivery devices under the brand name
`
`4
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.6 Page 6 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`“VUSE” and a variety of flavored oral nicotine pouches and lozenges under the brand
`name VELO.
`14. Plaintiff ASC is a North Carolina corporation headquartered in
`Winston-Salem, North Carolina. ASC develops, manufactures, markets, and
`distributes a variety of flavored smokeless tobacco products, including under the
`brand name “Grizzly.”
`15. Plaintiff Santa Fe is a New Mexico corporation headquartered in
`Oxford, North Carolina. Santa Fe develops, manufactures, markets, and distributes
`menthol cigarettes under the brand name Natural American Spirit.
`16. All of the aforementioned flavored products manufactured and
`distributed by RJRT, RJRV, ASC, and Santa Fe qualify as “flavored tobacco
`product[s]” that are prohibited under Senate Bill 793.
`17. Plaintiff PM USA Inc. is a Virginia corporation and has its principal
`place of business in Richmond, Virginia. PM USA Inc. is a leading manufacturer of
`cigarettes in the United States. PM USA Inc. sells cigarettes under a number of
`leading brands, including Marlboro, Parliament, Virginia Slims, and L&M. Certain
`of PM USA Inc.’s products qualify as “flavored tobacco product[s]” that are
`prohibited under Senate Bill 793.
`18. Plaintiff JMC is a Pennsylvania limited liability company and has its
`principal place of business in Pennsylvania. JMC manufactures pipe tobacco and
`large machine-made cigars under a variety of brands, including Black & Mild,
`Kentucky Club, and Prince Albert. Certain of JMC’s products qualify as “flavored
`tobacco product[s]” that are prohibited under Senate Bill 793.
`19. Plaintiff UST is a Virginia limited liability company and has its
`principal place of business in Richmond, Virginia. UST manufactures moist
`smokeless tobacco under a variety of brand names, including Copenhagen, Skoal,
`Red Seal, and Husky. Certain of UST’s products qualify as “flavored tobacco
`product[s]” that are prohibited under Senate Bill 793.
`
`5
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.7 Page 7 of 22
`
`
`20. Plaintiff Helix is a Delaware limited liability company and has its
`principal place of business in Richmond, Virginia. Helix manufactures oral nicotine
`pouches under the brand name “on!”. Certain of Helix’s products qualify as “flavored
`tobacco product[s]” that are prohibited under Senate Bill 793.
`21. Neighborhood Market Association is a local non-profit industry trade
`association comprised of various family-owned businesses within San Diego County,
`California. The Association has members who are tobacco retailers, wholesalers, and
`manufacturers located within the County that will be subject to Senate Bill 793 once
`it goes into effect. Many of the Association’s tobacco retailers sell flavored tobacco
`products, including those manufactured by RJRT, RJRV, ASC, and Santa Fe. Those
`retailers will no longer be able to sell “flavored tobacco product[s],” as defined in
`Senate Bill 793, once the law goes into effect. But for Senate Bill 793, those members
`who currently sell flavored tobacco products would continue to do so to consumers
`in California. Dozens of NMA’s members, including Vapin’ the 619, will likely have
`to close shop completely and lay off their employees if California’s ban goes into
`effect.
`22. MORIJA, LLC is headquartered in El Cajon, California. The company
`does business as Vapin’ the 619 and is a tobacco retailer with a retail establishment
`located on Clairemont Mesa Boulevard in the City of San Diego, California. The
`establishment exclusively sells electronic smoking devices and e-liquid tobacco
`products used in conjunction with such devices. In particular, the establishment sells
`flavored tobacco products as defined in Senate Bill 793. Vapin’ the 619 will no longer
`be able to sell “flavored tobacco product[s],” as defined in Senate Bill 793, once the
`law goes into effect. But for Senate Bill 793, Vapin’ the 619 would continue to sell
`flavored tobacco products to consumers in California. If Senate Bill 793 does go into
`effect, Vapin’ the 619 will likely have to close its store permanently and lay off its
`employees.
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`6
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.8 Page 8 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`23. Defendant Xavier Becerra is sued in his official capacity as Attorney
`General of California. The Attorney General is “the chief law officer of the state”
`and exercises “direct supervision over every district attorney.” Cal. Const. art. V,
`§ 13. The California Constitution also imposes on the Attorney General the duty “to
`prosecute any violations of law” and grants him “all the powers of a district attorney”
`whenever he believes that the law is not being adequately enforced. Id. Because a
`violation of Senate Bill 793 is an “infraction,” the Attorney General has direct
`enforcement power of the law and supervises district attorneys who also have
`enforcement power. Cal. Gov. Code § 26500 (“[t]he district attorney is the public
`prosecutor” who “shall initiate and conduct on behalf of the people all prosecutions
`for public offenses”); see also Cal. Penal Code § 16 (defining “[c]rimes and public
`offenses” to include “infraction[s]”).
`24. Defendant Summer Stephan is sued in her official capacity as District
`Attorney for the County of San Diego. As District Attorney, Stephan has the power
`to enforce Senate Bill 793 because a violation of that law is an “infraction.” Cal. Gov.
`Code § 26500 (“[t]he district attorney is the public prosecutor” who “shall initiate
`and conduct on behalf of the people all prosecutions for public offenses”); see also
`Cal. Penal Code § 16 (defining “[c]rimes and public offenses” to include
`“infraction[s]”).
`
`JURISDICTION AND VENUE
`25. The Court has subject-matter jurisdiction under 28 U.S.C. § 1331
`because this action arises under the Constitution and laws of the United States.
`26. This Court also has authority to grant relief under the Declaratory
`Judgment Act, 28 U.S.C. § 2201 et seq.
`27. This judicial district is the proper venue under 28 U.S.C. § 1391(b)(2)
`because it is where a substantial part of the events giving rise to the claims occurred
`and where the effects of Senate Bill 793 will be felt. Prior to Senate Bill 793’s
`enactment, Reynolds’s and PM USA’s flavored tobacco products were sold by
`
`7
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.9 Page 9 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`retailers in this judicial district, including Reynolds’s products by members of
`Neighborhood Market Association. In addition, prior to Senate Bill 793’s enactment,
`members of Neighborhood Market Association as well as Vapin’ the 619 sold
`flavored tobacco products in this judicial district. Senate Bill 793 forbids the sale of
`nearly all flavored tobacco products in this judicial district, and will thus cause
`financial injury to Plaintiffs in this district.
`BACKGROUND
`The Tobacco Control Act and Federal Regulation of Tobacco Products
`28. The Family Smoking Prevention and Tobacco Control Act of 2009,
`Public Law 111-31, 123 Stat. 1776 (June 22, 2009), amended the Federal Food, Drug,
`and Cosmetic Act and established the U.S. Food and Drug Administration as “the
`primary Federal regulatory authority with respect to the manufacture, marketing, and
`distribution of tobacco products.” Id. § 3(1), 123 Stat. at 1781 (codified at 21 U.S.C.
`§ 387 note). The Tobacco Control Act applies to cigarettes, cigarette tobacco, roll-
`your-own tobacco, and smokeless tobacco products, as well as to any other tobacco
`products that FDA by regulation deems subject to the Act. 21 U.S.C. § 387a(b). The
`Act defines “tobacco product” as “any product made or derived from tobacco that is
`intended for human consumption.” 21 U.S.C. § 321(rr)(1).
`In 2016, FDA exercised its deeming authority, 21 U.S.C. § 387a(b), to
`29.
`bring within its regulatory authority all products meeting the statutory definition of a
`tobacco product, except accessories of the newly deemed tobacco products. See
`Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic
`Act, as Amended by the Family Smoking Prevention and Tobacco Control Act;
`Restrictions on the Sale and Distribution of Tobacco Products and Required Warning
`Statements for Tobacco Products, 81 Fed. Reg. 28,974 (May 10, 2016).
`30. Congress passed the Tobacco Control Act to, inter alia, “authorize the
`[FDA] to set national standards controlling the manufacture of tobacco products and
`the … amount of ingredients used in such products.” Tobacco Control Act § 3(3),
`
`8
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.10 Page 10 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`123 Stat. at 1782 (codified at 21 U.S.C. § 387 note). To that end, the Act empowers
`FDA to adopt “tobacco product standards,” 21 U.S.C. § 387g, including “provisions
`respecting the … additives … [and] properties of the tobacco product,” id.
`§ 387g(a)(4)(B)(i). The term “additives” includes “substances intended for use as a
`flavoring.” Id. § 387(1).
`31. The Act also directly created tobacco product standards such as a
`“Special Rule for Cigarettes.” The Special Rule for Cigarettes bans the use in
`cigarettes of “characterizing flavor[s]” “other than tobacco or menthol.” 21 U.S.C.
`§ 387g(a)(1)(A). But the Act expressly reserves “menthol cigarettes” to FDA’s
`regulatory authority. See id. (noting “the Secretary’s authority to take action . . .
`applicable to menthol”). To date, the FDA has chosen not to ban the use of menthol
`in cigarettes.
`In fact, FDA has issued advance notices of proposed rulemaking
`32.
`(“ANPRMs”) contemplating the adoption of “tobacco product standard[s]” banning
`various flavored tobacco products, including menthol cigarettes and flavored vapor
`products. See, e.g., Menthol in Cigarettes, Tobacco Products; Request for Comments,
`78 Fed. Reg. 44,484, 44,485 (July 24, 2013); Regulation of Flavors in Tobacco
`Products, 83 Fed. Reg. 12,294, 12,299 (Mar. 21, 2018). But it has never banned
`menthol in cigarettes. And studies have shown that menthol cigarettes do not
`adversely affect initiation of or progression to smoking, and there is no clear
`association between menthol use and decreased smoking cessation. See RAI Services
`Company, Comment Letter on Advance Notice of Proposed Rulemaking Regarding
`Regulations of Flavors in Tobacco Products (July 18, 2018), available at
`https://www.regulations.gov/document?D=FDA-2017-N-6565-18265.
`33. The Tobacco Control Act expressly preempts state or local regulations
`that set forth requirements “different from, or in addition to,” any of the Tobacco
`Control Act’s or FDA’s requirements relating to federal “tobacco product standards.”
`Id. § 387p(a)(2)(A) (“Tobacco Preemption Clause”). The Tobacco Preemption
`
`9
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.11 Page 11 of 22
`
`
`Clause ensures that tobacco product manufacturers will have to comply with just one
`set of product specifications nationwide—rather than having to grapple with
`potentially hundreds of different requirements set by different states and local
`jurisdictions governing the same products. See Tobacco Control Act § 3(3), 123 Stat.
`1782 (codified at 21 U.S.C. § 387 note).
`34. The Tobacco Control Act also contains a narrow saving clause, which
`provides that the Tobacco Preemption Clause “does not apply to requirements
`relating to the sale [and] distribution . . . of . . . tobacco products by individuals of
`any age.” Id. § 387p(a)(2)(B). But the saving clause narrows the category of
`permissible state and local requirements to those that turn on the “age” of the
`“individuals” buying or using the regulated tobacco products. See id. And even if the
`saving clause applies beyond age-based requirements, the clause does not protect
`state and local laws that prohibit a product’s sale and distribution altogether, but
`rather only more limited laws that regulate the time, place, and manner of the
`product’s sale and distribution. Compare id., with id. § 387p(a)(1).
`Plaintiffs and FDA Work To Keep Tobacco Products Away from Youth
`35. The original motivation for California’s ban on flavored tobacco
`products was to prevent youth usage of tobacco products. See Sen. Hill, SB 793
`Frequently Asked Questions (2020), available at https://tinyurl.com/yyomllfx. Both
`Plaintiffs and FDA are committed to keeping tobacco products out of the hands of
`youth.
`36. Reynolds and PM USA have taken active steps to prevent youth access
`to their products. Reynolds and PM USA are original sponsors and lead participants
`in the We Card program. Reynolds and PM USA require their contracted retailers to
`commit to participating in We Card. Since this partnership began in 1995, We Card
`has trained nearly half a million storeowners, managers, and frontline employees to
`help prevent youth access to tobacco products.
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`10
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.12 Page 12 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`37. Reynolds has expanded those efforts, including through use of We
`Card’s “mystery shopper” program, which also will provide additional retailers with
`further education and training on verifying legal age of purchasers.
`In 2018, RJRV took targeted action to ensure youth were not obtaining
`38.
`its vapor products. The company instituted a contract-based tiered compliance
`program that involves penalties on retailers that are found to have illegally sold
`VUSE products to youth. In conjunction with this program, RJRV also has its trade
`marketing representatives discussing the issue of underage youth access with each of
`RJRV’s contracted retailers on an ongoing basis. And the company provides access
`to additional materials and resources on preventing youth access to tobacco products
`via its online customer portal, engageVIP.com.
`In 2019, PM USA announced a new retailer incentive program to further
`39.
`encourage responsible retailing through age-validation technology at the point of
`purchase. To participate in the incentive program, retailers must implement a
`technological solution at a store’s point(s) of purchase, requiring the electronic scan
`of a consumer’s government-issued identification to complete a sales transaction
`involving the purchase of a tobacco product.
`40. FDA also has specifically addressed concerns about youth vaping. In a
`recent guidance for industry, FDA states that it “intends to prioritize enforcement for
`lack of marketing authorization against any flavored, cartridge-based ENDS product
`(other than a tobacco- or menthol-flavored ENDS product) that is offered for sale in
`the United States without regard to whether or when premarket application for such
`product has been submitted.” FDA, Enforcement Priorities 19. By way of
`background, when FDA promulgated its Deeming Rule, it brought ENDS products
`within its regulatory umbrella—meaning that before the products were sold, they
`needed FDA authorization. 81 Fed. Reg. 28,974. At the time, FDA said it would use
`its enforcement discretion and allow the products to stay on the market for some time
`even if they had not received FDA authorization. Id. at 28,977–78. FDA has now
`
`11
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.13 Page 13 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`changed course with regard to flavored, cartridge-based ENDS products (other than
`those that are tobacco- or menthol-flavored). FDA, Enforcement Priorities 19. The
`upshot of the new policy is that flavored, cartridge-based ENDS products (other than
`those that are tobacco- or menthol-flavored) can no longer be sold, unless and until
`FDA grants authorization for such products.
`In addition, as part of the same guidance referred to above, FDA stated
`41.
`that it would prioritize enforcement against ENDS products for which the
`manufacturer has failed to take adequate measures to prevent minors’ access. Id. at
`3. And FDA will make enforcement a priority with respect to ENDS products that
`are “targeted to minors or whose marketing is likely to promote use of ENDS by
`minors.” Id.
`42. FDA has also issued numerous warning letters to entities that are
`improperly marketing or selling “unauthorized flavored, cartridge-based ENDS
`products” and other ENDS products that are being marketed or sold in ways that are
`appealing to youth. See, e.g., FDA News Release, FDA Warns Manufacturers and
`Retailers to Remove Certain E-cigarette Products Targeted to Youth from the Market
`(Apr. 27, 2020), at https://tinyurl.com/ybg9yny3 (announcing warning letters); FDA
`News Release, FDA Notifies Companies, Including Puff Bar, to Remove Flavored
`Disposable E-Cigarettes and Youth-Appealing E-Liquids from Market for Not
`Having Required Authorization (July 20, 2020), at https://tinyurl.com/y4shrbuj.
`Importantly, however, FDA has decided to allow the sale of menthol-
`43.
`flavored ENDS products. That is, in part, to allow menthol cigarette smokers to
`transition to other “potentially less harmful” menthol-flavored products and also
`because “[d]ata shows that . . . menthol-flavored ENDS products are not as appealing
`to minors as other flavored ENDS products.” FDA, Enforcement Priorities 23–24,
`39. In FDA’s view, “[t]his approach”—effectively banning flavors except for
`menthol and tobacco—“strikes an appropriate balance between restricting youth
`access to such products, while maintaining availability of potentially less harmful
`
`12
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.14 Page 14 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`options for current and former adult smokers who have transitioned or wish to
`transition completely away from combusted [tobacco- and menthol-flavored]
`tobacco products.” Id. at 20. And, as of September 9, 2020, virtually all ENDS
`products must be off the shelves unless the product is the subject of a timely filed
`premarket tobacco product application under review by FDA. Id. at 3.
`The State’s Categorical Ban on Flavored Tobacco Products
`44. On August 28, 2020, the Governor of California signed Senate Bill 793
`into law, banning the sale of nearly all flavored tobacco products anywhere in the
`state. A copy is attached to this Complaint as Exhibit 1.
`45. The law states that tobacco retailers “shall not sell, offer for sale, or
`possess with the intent to sell or offer for sale, a flavored tobacco product or a tobacco
`product flavor enhancer.” SB 793 § 14559.5(b)(1).
`46. The law defines “[f]lavored tobacco product” as “any tobacco product
`that contains a constituent that imparts a characterizing flavor.” Id. § 104559.5(a)(4).
`“Tobacco product” means “[a] product containing, made, or derived from tobacco or
`nicotine that is intended for human consumption.” Cal. Health & Safety Code
`§ 104495(8)(A)(i). “Tobacco product” explicitly includes “cigarettes,” “chewing
`tobacco,”
`“snuff,”
`and
`electronic
`nicotine
`delivery
`systems.
`Id.
`§§ 104495(a)(8)(A)(i), (a)(8)(A)(ii). Senate Bill 793 defines “[c]haracterizing
`flavor” as “a distinguishable taste or aroma, or both, other than the taste or aroma of
`tobacco, imparted by a tobacco product or any byproduct produced by the tobacco
`product.” SB 793 § 104559.5(a)(1). The definition explicitly includes “menthol.” Id.
`The sales ban excludes a handful of products sold in certain situations, including
`shisha tobacco products, premium cigars, and loose leaf pipe tobacco. Id.
`§§ 104559.5(c), (d), (e).
`47. A person who violates the law “is guilty of an infraction and shall be
`punished by a fine of two hundred fifty dollars ($250) for each violation.” Id.
`§ 104559.5(f).
`
`13
`COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
`
`

`

`
`
`Case 3:20-cv-01990-LAB-RBB Document 1 Filed 10/09/20 PageID.15 Page 15 of 22
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`In short, the law bans nearly all kinds of flavored tobacco products,
`48.
`including the sale of all menthol flavored cigarettes, menthol flavored e-cigarettes,
`flavored smokeless tobacco products, and other flavored products.
`49.

This document is available on Docket Alarm but you must sign up to view it.


Or .

Accessing this document will incur an additional charge of $.

After purchase, you can access this document again without charge.

Accept $ Charge
throbber

Still Working On It

This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.

Give it another minute or two to complete, and then try the refresh button.

throbber

A few More Minutes ... Still Working

It can take up to 5 minutes for us to download a document if the court servers are running slowly.

Thank you for your continued patience.

This document could not be displayed.

We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.

Your account does not support viewing this document.

You need a Paid Account to view this document. Click here to change your account type.

Your account does not support viewing this document.

Set your membership status to view this document.

With a Docket Alarm membership, you'll get a whole lot more, including:

  • Up-to-date information for this case.
  • Email alerts whenever there is an update.
  • Full text search for other cases.
  • Get email alerts whenever a new case matches your search.

Become a Member

One Moment Please

The filing “” is large (MB) and is being downloaded.

Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.

Your document is on its way!

If you do not receive the document in five minutes, contact support at support@docketalarm.com.

Sealed Document

We are unable to display this document, it may be under a court ordered seal.

If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.


Access Government Site

We are redirecting you
to a mobile optimized page.





Document Unreadable or Corrupt

Refresh this Document
Go to the Docket

We are unable to display this document.

Refresh this Document
Go to the Docket