A New York State “minimum price” law prohibits cigarettes from being sold below cost if the intent is to harm competition or avoid taxes. The state agency that enforces the law issued a memo saying that certain price promotions – specifically “master-type” and “buy-down” promotions – violate the law. In these types of promotions, a retailer charges a lower price for cigarettes and is later reimbursed by the manufacturer or wholesaler at the end of the promotion period. A tobacco company and retailer challenged the agency’s interpretation of the law, arguing that these types of promotions are not illegal under the law. The court ruled that the agency’s interpretation is consistent with the law, because the law intended to prohibit promotions that create price differentiation among retailers. However, the court noted that it was not deciding whether a specific sale under a master-type or buy-down promotion violated the law, only that such types of promotions were intended to be covered by the law.
Tobacco companies or front groups may challenge any legislative or regulatory measure that affects their business interests. Unlike public interest litigation, these cases seek to weaken health measures. These cases frequently involve the industry proceeding against the government. For example, a group of restaurant owners challenging a smoke free law as unconstitutional.
Government, through its agencies and officials including prosecutors, may seek to enforce its health laws. For example, the government may revoke the license of a retailer that sells tobacco products to minors. These cases may also directly involve the tobacco industry, for example, a government might impound and destroy improperly labeled cigarette packs.
The court might consider procedural matters without touching the merits of the case. These might include: improper joinder, when third parties, such as Health NGOs or government officials, seek to become parties to the suit; lack of standing, where a plaintiff fails to meet the minimum requirements to bring suit; lack of personal jurisdiction, where the court does not have jurisdiction to rule over the defendant; or lack of subject matter jurisdiction, where the court does not have jurisdiction over the issue at suit.
A New York State “minimum price” law prohibits cigarettes from being sold below cost if the intent is to harm competition or avoid taxes. The state agency that enforces the law issued a memo saying that certain price promotions – specifically “master-type” and “buy-down” promotions – violate the law. In these types of promotions, a retailer charges a lower price for cigarettes and is later reimbursed by the manufacturer or wholesaler at the end of the promotion period. A tobacco company and retailer challenged the agency’s interpretation of the law, arguing that these types of promotions are not illegal under the law. The court ruled that the agency’s interpretation is consistent with the law, because the law intended to prohibit promotions that create price differentiation among retailers. However, the court noted that it was not deciding whether a specific sale under a master-type or buy-down promotion violated the law, only that such types of promotions were intended to be covered by the law.