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Argument: Right to Commerce

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Public Ministry of Rio de Janeiro v. Rock World SA, Souza Cruz Ltda, and Vega Fina Tabacaria Eireli [Brazil] [November 02, 2020]

The Public Ministry in Rio de Janeiro presented a civil action against Rock World SA, Souza Cruz Ltda, and Vega Fina Tabacaria Eireli for illegal advertising in the festival "Rock in Rio" 2017. On November 2, 2020, the court concluded that the defendants engaged in unlawful advertising during the festival. The illegal advertising included (i) visually ostentatious advertising of smoking products and (ii) "mobile sellers.” On the other hand, the sale of a kit that included cigarettes and a lighter with the logo of "Rock in Rio" was not recognized as an illegal practice. The defendants were sanctioned as follows – (1) Defendants were fined R$ 2,000,000.00 for collective moral damages. For individual material and moral damages, each consumer will need to prove individually the actual damage suffered. (2) Defendants must carry out counter-advertising in partnership with public universities and hospitals informing consumers about the risks, prevention, and treatment of Chronic Obstructive Pulmonary Disease (COPD), and smoking cessation.

In addition to bringing this enforcement action against the illegal advertising that took place at the Rock in Rio 2017, the Public Ministry sought an interim judgment barring illegal promotional activities at the then upcoming Rock in Rio 2019 festival. In response to this request, the court issued a series of orders restricting the promotional activities at the 2019 festival.

Dir. of CPI of SIC v. Coltabaco S.A.S. et al. [Colombia] [December 27, 2019]

In 2017, the Directorate of Consumer Protection Investigations of the Superintendence of Industry and Commerce ("SIC") opened an investigation following a complaint to prompt the SIC to stop IQOS marketing. The SIC issued a decision in the pending administrative investigation dismissing the complaint.

The SIC closed their decision after taking the following into consideration:

- The Ministry of Health asks for IQOS products to be treated as tobacco products.

- The SIC focused on the fact that only the tobacco sticks for heated tobacco products, as opposed to the IQOS device, are mandated to have health warnings.

- According to the SIC, IQOS does not fall under the authority of the tobacco control law in Colombia (Law No. 1335).

- IQOS marketing practices have not violated consumer protection regulations in Colombia.

[Unnamed Actor] v. México [Mexico] [October 02, 2019]

An agent from the Federal Commission for the Protection Against Sanitary Risks (COFEPRIS) confiscated electronic cigarettes from the plaintiff under Article 16(VI) of the General Law on Tobacco Control, which states: "It is prohibited to trade, sell, distribute, display, promote or produce any object that is not a tobacco product which contains some of the brand elements or any type of design or auditory sign that identifies it with tobacco products." The plaintiff filed an Amparo action challenging the interpretation of Article 16. The Ministers of the Second Chamber of the Supreme Court of Justice of the Nation (SCJN) decided unanimously that it is unconstitutional to ban the sale of electronic cigarettes while, on the other hand, the sale of tobacco products is allowed in Mexico. The Court considered that even though the law seeks to protect the right to health, this cannot be done at the cost of an excessive affectation of other goods and rights. The Ministers agreed that prohibiting the sale of electronic cigarettes while the sale of tobacco products is allowed violates the right to equality, and that the measure is not the least restrictive to guarantee other constitutionally protected rights. As a result, they revoked the order from COFEPRIS and ordered the return of the seized goods to the plaintiff.

This ruling applies only to the plaintiff who was a party to this case. However, if the same court issues five judgments with identical holdings, the decision would be binding nationally. This is the third such decision by the Second Chamber.

Jaunait Consulting v. México [Mexico] [July 02, 2019]

The Supreme Court of Justice of the Nation (SCJN) determined that electronic cigarettes cannot be banned under the interpretation of Article 16(VI) of the General Law on Tobacco Control, which states: "It is prohibited to trade, sell, distribute, display, promote or produce any object that is not a tobacco product which contains some of the brand elements or any type of design or auditory sign that identifies it with tobacco products." The Court found that this interpretation is unconstitutional since (i) the sale of tobacco products is allowed, and (ii) banning non-tobacco products without a proper justification violates the principles of equality, legality, proportionality, and non-discrimination.

This ruling applies only to the plaintiff who was a party to this case, Juanait Consulting. However, if the same court issues five judgments with identical holdings, the decision would be binding nationally. This is the such first decision by the First Chamber.

Philippine Tobacco Institute v. City of Balanga et al. [Philippines] [May 21, 2019]

The Philippine Tobacco Institute ("PTI"), whose members include JTI and PMI, challenged a City of Balanga ordinance creating a tobacco-free generation, which prohibits the sale of tobacco products and e-cigarettes to any person born on or after January 1, 2000. The Regional Trial Court ruled in favor of PTI in July 2018, concluding that "any ordinance prohibiting PTI from selling to any person regardless of age is an unreasonable and oppressive interference of business." The court reasoned that the ordinance now covers individuals who have reached the age of majority and is not limited to minors. In addition, the court held that the ordinance violates substantive due process of those exercising parental authority since the ordinance attempted to extend criminal liability to parents.

The City’s appeal to the Court of Appeals was denied, as was a motion for reconsideration.

Grişciuc, Simion v. Republic of Moldova [Moldova] [April 08, 2019]

On April 8, 2019, the Constitutional Court upheld the Tobacco Control Law’s provision banning tobacco sales from commercial establishments that are smaller than 20 m^2 (i.e., kiosks) and are located within 200 meters of educational and healthcare facilities. This provision was adopted in May 2015 and came into force on September 17, 2015, but the Moldovan Parliament passed an amendment delaying the effective date to January 1, 2019 for commercial establishments that were in existence before July 1, 2016.

A Member of Parliament filed a complaint alleging that the provision violated several articles of the Constitution, including equal protection, freedom of commerce and entrepreneurial activity, and protection of fair competition, among others.

In upholding the measure, the court concluded that the policy serves a legitimate aim – limiting access by minors and protecting the health of minors and patients – and there were no less restrictive alternative measures that would be as effective in achieving the objectives. The court also cited the four-year delay in implementation given to existing commercial establishments, concluding that this time period provided sufficient time to adapt to the new sales restrictions. The decision is final and cannot be appealed.

J. Anbazhagan v. Union of India [India] [April 26, 2018]

J. Anbazhagan, a member of the legislative assembly in the State of Tamil Nadu, filed a writ petition to highlight the illegal manufacture and sale of gutka and pan masala in the state and to urge the High Court of Madras to order an independent investigation into the matter. Mr. Anbazhagan alleged such sales were carried out in collusion with several high dignitaries and bureaucrats, such as central excise officials, central government officials, officials from different state governments, including the Government of Tamil Nadu, councilors of the Chennai Corporation, and officials of the food safety department, among others. The Court observed that it was compelled to take up the case as the issues involved the right to health and directed that the Central Bureau of Investigation investigate the matter, since, among other reasons, central government officials allegedly were involved.  In response to arguments made by the respondents, the Court also clarified that the definition of “food” under Section 3(j) of the Food Safety Act includes any substance, whether processed, partially processed or unprocessed, which is intended for human consumption and that the definition undoubtedly was wide enough to include gutka, and other forms of chewable tobacco/nicotine products intended for human consumption. The Court further clarified that India’s omnibus tobacco control law, COTPA, and the Food Safety Act were not in conflict, but were meant to be read in conjunction with each other as COTPA does not contain a non-obstante clause that excludes operation of other laws.

Swedish Match Ltd. v. The Ministry of Health and Care Services [Norway] [February 19, 2018]

Swedish Match Ltd. filed a petition to appeal the 2017 Oslo County Court decision upholding Norway's plain packaging laws, specifically challenging 'snus' (oral tobacco). The Oslo County Court had dismissed the application ruling that plain packaging is both suitable, appropriate and necessary and that it does not involve any arbitrary discrimination or hidden trade restriction. The Borgarting Court of Appeal upheld the Oslo Country Court's decision and dismissed the appeal on February 19, 2018.

Health for Millions Trust v. Union of India [India] [January 08, 2018]

Using the powers conferred by India’s omnibus tobacco control law, the government introduced new graphic health warnings in October 2014 that, among other things, increased the graphic health warning size from 40 percent of one side to 85 percent of both sides of tobacco product packaging and amended the rotation scheme of the warnings.  The Karnataka Beedi Industry Association, the Tobacco Institute of India, and other pro-tobacco entities challenged the validity of the 2014 pack warning rules in five cases in the Karnataka High Court – Bengaluru, and the court initially stayed the implementation of the warnings via interim orders.  Following a petition by tobacco control advocates, the court lifted the stays, and a division bench of the court affirmed the decision on appeal.  The association and others challenged this ruling in the Supreme Court.  Paving the way for immediate implementation of the warnings, the Supreme Court, on May 4, 2016, directed that the matter be decided within six weeks in the Karnataka High Court by a bench constituted by the Karnataka Chief Justice and that any stays of the warnings in other high courts not be given effect until the conclusion of the matter.  After months of hearings, a two judge bench of the Karnataka High Court struck down the 2014 rules, and the Government and public health groups appealed the matter to the Supreme Court. The Supreme Court stayed implementation of the Karnataka High Court order and set final disposal of the matter for March 12, 2018. The Court stated: "[W]e are inclined to think that health of a citizen has primacy and he or she should be aware of that which can affect or deteriorate the condition of health. We may hasten to add that deterioration may be a milder word and, therefore, in all possibility the expression ‘destruction of health’ is apposite." India’s 85% graphic health warning rules accordingly remain in effect for now.

Karnataka Beedi Industry Association v. Union of India [India] [December 15, 2017]

Using the powers conferred by India’s omnibus tobacco control law, the government introduced new graphic health warnings in October 2014 that, among other things, increased the graphic health warning size from 40 percent of one side to 85 percent of both sides of tobacco product packaging and amended the rotation scheme of the warnings.  The Karnataka Beedi Industry Association, the Tobacco Institute of India, and other pro-tobacco entities challenged the validity of the 2014 pack warning rules in five cases in the Karnataka High Court – Bengaluru, and the court initially stayed the implementation of the warnings via interim orders.  Following a petition by tobacco control advocates, the court lifted the stays, and a division bench of the court affirmed the decision on appeal.  The association and others challenged this ruling in the Supreme Court.  Paving the way for immediate implementation of the warnings, the Supreme Court, on May 4, 2016, directed that the matter be decided within six weeks in the Karnataka High Court by a bench constituted by the Karnataka Chief Justice and that any stays of the warnings in other high courts not be given effect until the conclusion of the matter.  The Supreme Court identified pending pack warning challenges in courts throughout India (more than 27 in number) and transferred these cases to Karnataka. After months of hearings, a two judge bench of the Karnataka High Court struck down the 2014 rules. One judge found the rules illegal, holding that the Ministry of Health did not possess authority to act unilaterally. Both judges found the rules to be arbitrary and unreasonable.