California voters have approved Senate Bill 793, which prohibits tobacco retailers from selling flavored tobacco products or tobacco product flavor enhancers. A lawsuit has been filed in federal court claiming that it is unconstitutional.
On November 8, 2022, California voters said “yes” to Proposition 31, a referendum on a 2020 law that would prohibit the retail sale of certain flavored tobacco products. The constitutionality of the referenced law, Senate Bill 793 (“SB793”), is at issue in a case filed the next day in the U.S. District Court for the Southern District of California, R.J. Reynolds Tobacco Co., et al. v. Bonta, et al., No. 3:22-cv-01755 (S.D. Cal.); however, the plaintiffs’ success in that case will likely depend on the development of favorable precedents in other cases pending before appellate courts.
SB793, Its Enactment, and the Referendum
SB793 provides that “[a] tobacco retailer, or any of the tobacco retailer’s agents or employees, 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.” There are exceptions for:
- “the sale of flavored shisha tobacco products by a hookah tobacco retailer” under specified circumstances;
- “sales of premium cigars sold in cigar lounges where products are purchased and consumed only on the premises;” and
- “loose leaf tobacco or premium cigars.”
After the Legislature passed SB793, Governor Gavin Newsome signed it on August 28, 2020. Opponents to SB793 took the necessary actions to send SB793 to a voter referendum in the November 2022 election, suspending SB793 before it took effect. As a majority voted in support of SB793, the law “takes effect on the fifth day after the Secretary of State files the statement of the vote for the election,” as provided in the California Constitution.
Constitutional Challenge to SB793
On November 9, a suit for declaratory and injunctive relief was filed claiming that SB793 is unconstitutional. The plaintiffs are R.J. Reynolds Tobacco Company, R.J. Reynolds Vapor Company, American Snuff Company, LLC, Santa Fe Natural Tobacco Co., Modoral Brands Inc., Neighborhood Market Association, Inc., and MORIJA, LLC d/b/a Vapin’ the 619. The defendants are Attorney General Robert Bonta and San Diego County District Attorney Summer Stephan. The case is before the Honorable Cathy Ann Bencivengo of the U.S. District Court for the Southern District of California.
- Under the Supremacy Clause, the plaintiffs claim that the Family Smoking Prevention and Tobacco Control Act (the “TCA”) expressly preempts SB793. A provision of the TCA preserves certain state and local authority over tobacco products, with an exception for certain preempted areas of authority, which itself has an exception for certain allowable state and local requirements.
- Under the Commerce Clause, the plaintiffs claim that SB793 is unconstitutional state regulation of interstate commerce because, “[b]y banning characterizing flavors in most tobacco products, California has attempted to dictate how out-of-state manufacturers produce their tobacco products.”
Notably, on October 9, 2020, a similar group of plaintiffs sued then-Attorney General Becerra, claiming that SB793 violated the Supremacy Clause (with “express” and “implied” preemption claims) and the Commerce Clause. Philip Morris USA Inc., John Middleton Co., U.S. Smokeless Tobacco Co., and Helix Innovations LLC were additional plaintiffs in that case, and Modoral Brands Inc. was not a plaintiff in that case. Judge Bencivengo also presided over that case. On August 6, 2021, she dismissed the case for lack of subject-matter jurisdiction, holding that the referendum measure’s pendency made the case unripe.
The referendum election in favor of SB793 spurred the 2022 filing, as the plaintiffs maintain that their case is now ripe. On November 10, the plaintiffs filed a motion for preliminary injunction and injunction pending appeal on their preemption claim. The motion was intended to preserve the claim for appellate view, as the plaintiffs recognized that, “at this time, their express preemption claim is foreclosed in this Court under Ninth Circuit precedent and that this Court therefore must deny the motion.” On November 15, Judge Bencivengo accordingly denied the plaintiffs’ motion. The plaintiffs filed a notice of appeal on the same day.
The Ninth Circuit Precedent
The referenced Ninth Circuit decision is R.J. Reynolds Tobacco Co., et al. v. Los Angeles County, et al., No. 20-55930 (9th Cir. May 11, 2022), aff’g, No. 2:20-cv-04880 (C.D. Cal. Aug. 7, 2020), which Troutman Pepper has discussed here, here, here, and here. In that case, the Ninth Circuit held that the TCA neither impliedly nor expressly preempts Los Angeles County’s flavored tobacco ban. The challengers in that case (R.J. Reynolds Tobacco Co., American Snuff Co., and Santa Fe Natural Tobacco Co.) have petitioned the U.S. Supreme Court for a writ of certiorari.
Other Cases of Note
In addition to Los Angeles County, a number of other localities have enacted flavored tobacco bans in recent years, and a number of lawsuits have been filed challenging their lawfulness. E.g., R.J. Reynolds Tobacco Co., et al. v. San Diego Cnty., et al., No. 3:20-cv-01290 (S.D. Cal. Mar. 29, 2021) (granting the county’s motion to dismiss and denying the plaintiffs’ motion for preliminary injunction), on appeal, No. 21-55348 (9th Cir.). A pending appeal before the Eighth Circuit is notable because a TCA preemption in conflict with the Ninth Circuit’s decision could prompt the U.S. Supreme Court to grant review on a writ of certiorari. R.J. Reynolds Tobacco Co., et al. v. City of Edina, et al., No. 20-2852 (8th Cir.), on appeal from No. 0:20-cv-01402 (D. Minn. Aug. 31, 2020) (granting the city’s motion to dismiss and denying the plaintiffs’ motion for preliminary injunction). And courts recently found two local flavored tobacco bans to be unlawful on state-law grounds, as this blog has reported here and here.
Local restrictions on the sale of flavored tobacco products withstood challenges in several earlier federal cases, e.g., Nat’l Ass’n of Tobacco Outlets, Inc., et al. v. City of Providence, et al., 731 F.3d 71 (1st Cir. Sept. 30, 2013);U.S. Smokeless Tobacco Mfg. Co., et al. v. City of New York, No. 11-5167-cv (2d Cir. Feb. 26, 2013); Indeps. Gas & Serv. Stations Ass’ns v. City of Chicago, 112 F. Supp. 3d 749 (N.D. Ill. 2015); however, a California Deputy Attorney General has observed that the same TCA-preemption issue was not “squarely resolve[d]” because “none of the operative ordinances were complete prohibitions” on flavored tobacco products.
Although not involving tobacco, there is also a Commerce Clause case (now before the U.S. Supreme Court) that could bear on the success of the SB793 plaintiffs’ claim under that constitutional provision. In National Pork Producers Council, et al. v. Ross, et al., No. 20-55631 (U.S.), one of the questions presented is “[w]hether allegations that a state law has dramatic economic effects largely outside of the state and requires pervasive changes to an integrated nationwide industry state a violation of the dormant Commerce Clause[.]”
There are several appellate matters in other cases that could be material to the outcome in the litigation over SB793. The plaintiffs challenging SB793 have readily acknowledged this regarding TCA preemption under the Supremacy Clause, as they confront binding Ninth Circuit precedent adverse to that claim. Of course, that Ninth Circuit decision could be reversed if the U.S. Supreme Court were to grant certiorari. Also, the decision on the plaintiffs’ claim of unconstitutional state regulation violating the Commerce Clause could be influenced by a forthcoming decision of the U.S. Supreme Court.
We will continue to monitor for further developments.