L.A. County prevails over R.J. Reynolds with its ban on flavored tobacco – 9th Circ

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An R.J. Reynolds sign is seen outside the 1-million-square-foot cigarette manufacturing facility in Tobaccoville, North Carolina May 23, 2014. REUTERS/Chris Keane
  • Majority drew distinction between regulating production and marketing and regulating sales
  • Dissent says only FDA can prohibit sale of tobacco products

(Reuters) - Los Angeles County can ban all sales of flavored tobacco products, including vape juice and menthol cigarettes, a divided federal appeals court held Friday in a loss for R.J. Reynolds Tobacco and two sister companies.

In a 2-1 split, the 9th U.S. Circuit Court of Appeals affirmed a lower-court ruling that allowed the county’s ban to take effect in 2020. The tobacco companies’ lawyers, led by Noel Francisco of Jones Day, had argued that only the federal government can regulate tobacco sales.

The 9th Circuit majority said the companies were misreading the Family Smoking Prevention and Tobacco Control Act, or TCA - the 2009 law that gave the Food and Drug Administration sole authority to develop and enforce “tobacco product standards.”

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“Properly understood,” the FDA has exclusive authority to regulate the production and marketing of tobacco products, not retail sales, Circuit Judge Lawrence VanDyke wrote for the majority.

“A state cannot require tobacco companies to make their products according to any particular standard—only the federal government can do that. But a state can place restrictions on the retail sale of a tobacco product, including banning its sale altogether,” VanDyke wrote. He was joined by U.S. District Judge Karen Schreier of South Dakota, sitting by designation.

Circuit Judge Ryan Nelson dissented. Like the tobacco companies, he noted that the U.S. Supreme Court has twice struck down sales bans on other federally regulated products, reversing the 9th Circuit each time.

“The import (of those cases) is clear: When Congress expressly preempts state regulation, states can’t get around Congress’s prohibition by disguising that type of regulation as a sales ban,” Nelson wrote.

Kent Raygor of Sheppard Mullin Richter & Hampton, who argued the county’s case on appeal, said his client “is pleased that its efforts to protect the public health, particularly among our youth, through its ban on the sale of flavored tobacco products has been upheld by the Ninth Circuit.”

RJR Tobacco’s lawyers at Jones Day did not immediately respond to requests for comment. The firm also represented Reynolds American subsidiaries American Snuff Co. and Santa Fe Natural Tobacco Co.

About 300 state, local and Native American governments have restricted or banned the sale of flavored tobacco products, with 100 in California alone, the 9th Circuit said on Friday.

A statewide ban in California has been put on hold pending a referendum election this November.

The case is R.J. Reynolds Tobacco Company et al. v. County of Los Angeles, 9th U.S. Circuit Court of Appeals No. 20-55930.

For R.J. Reynolds: Noel Francisco and Christian Vergonis of Jones Day

For the county: Kent Raygor and Valerie Alter of Sheppard Mullin Richter & Hampton

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