Search Results Results 1-10 of 33
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.
British American Tobacco Ltd v. Ministry of Health [Kenya] [February 17, 2017]
British American Tobacco appealed a 2016 court decision, which upheld nearly all elements of Kenya’s Tobacco Control Regulations. The appeals court ruled that the tobacco company’s appeal had no merit and affirmed the decision of the lower court. The earlier ruling upheld nearly all elements of the Regulations, which are designed to implement the Tobacco Control Act, including:
- a 2% annual contribution by the tobacco industry to help fund tobacco control education, research, and cessation;
- graphic health warnings;
- ingredient disclosure;
- smoke-free environments in streets, walkways, verandas adjacent to public places and in private vehicles where children are present;
- disclosure of annual tobacco sales and other industry disclosures; and
- regulations limiting interaction between the tobacco industry and public health officials.
The appeals court agreed with the lower court that the tobacco company had been given adequate opportunities for participation in the development of the regulations and that the regulations do not violate the tobacco company’s constitutional rights.
Philip Morris SÀRL v. Uruguay [Uruguay] [July 08, 2016]
In February 2010, three subsidiary companies of Philip Morris International (PMI) initiated an investment arbitration claim at the International Centre for the Settlement of Investment Disputes (ICSID), an arbitration panel of the World Bank. PMI alleged that two of Uruguay’s tobacco control laws violated a Bilateral Investment Treaty (BIT) with Switzerland. PMI brought the claim after legal challenges in Uruguay’s domestic courts by the Philip Morris subsidiaries had failed. The panel of three arbitrators published their ruling on July 8, 2016, dismissing all PMI’s claims and awarding Uruguay its legal costs ($7 million).
The two “Challenged Measures” required:
1. Large graphic health warnings covering 80% of the front and back of cigarette packets; and
2. The Single Presentation Requirement (SPR) that limited each cigarette brand to just a single variant or brand type (eliminating brand families to address evidence that some variants can mislead consumers and falsely imply some cigarettes are less harmful than others).
PMI alleged that the 80% health warnings left insufficient room on the packs for it to use its trademarks and branding as they were intended, and the SPR meant it could not market some of its brands such as Marlboro Gold. PMI therefore alleged that Uruguay had breached the terms of the BIT because the Challenged Measures: Expropriated the property rights in PMI’s trademarks without compensation; were arbitrary as they were not supported by evidence to show they would work and so did not accord PMI with Fair and Equitable Treatment; did not meet PMI’s Legitimate Expectations of a stable regulatory environment or to be able to use their brand assets to make a profit; and that the Uruguayan courts had not dealt properly or fairly with PMI’s domestic legal challenges such that there was a Denial of Justice.
Philip Morris sought an order for the repeal of the Challenged Measures and for compensation in the region of $25 million.
The tribunal’s findings
This highly anticipated award addressed a number of fundamental legal issues concerning the balance between investor rights and the space available for states’ to regulate for public health. While there is no doctrine of binding precedent in international arbitration law, the development of an investment treaty case law and jurisprudence means that the wider value of each award can be very significant. This ruling highlighted the importance of the WHO Framework Convention on Tobacco Control (FCTC) in setting tobacco control objectives and establishing the evidence base for measures, and confirmed that states therefore need not recreate local evidence. It addressed the wide ‘margin of appreciation’ and deference provided to sovereign states in adopting measures or decisions concerning public health. The tribunal also identified that a state need not prove a direct causal link between the measure and any observed public health outcomes – rather that it was sufficient that measures are an attempt to address a public health concern and taken in good faith.
The ruling sets an extremely high bar for any foreign investor seeking to bring an investment arbitration challenge against a non-discriminatory public health measure that has a legitimate objective and that has been taken in good faith.
JT International (Thailand) v. Minister of Public Health [Thailand] [May 29, 2014]
Japan Tobacco challenged a Ministry of Health order that required the display of combined picture and text health warnings covering at least 85% of at least two of the largest surfaces of the cigarette packs and cartons. While in the lower court, the tobacco company plaintiff sought and received an order that temporarily suspended the implementation of the pack warnings while the case was ongoing.
In this decision, following an appeal by the government, the Supreme Administrative Court reversed the lower court’s temporary order. The Supreme Administrative Court found that the requirements issued are not outside the intended scope of the tobacco control law and noted that the requirements were issued to “protect the people and our youth.” Additionally, the Court held that allowing the regulations to remain in effect while this case was still being decided on the merits would not burden the state or in any way cause problems that would be difficult to remedy after the fact because (a) plaintiffs could restore their production system to its former state without experiencing undue loss, as they would be using their former production system and would not experience any impact to their trademarks or other advantages; and (b) the admissible fact that there were other producers who had been able to comply with the disputed regulations refuted the claim that compliance with the regulations was an insurmountable manufacturing technical problem.
The legal challenge was ultimately withdrawn.
Philip Morris (Thailand) Limited et al. v. Ministry of Public Health [Thailand] [August 23, 2013]
Tobacco manufacturers brought case to stop the Minister of Public Health from implementing a rule that would expand the size of the combined picture and text health warnings from 55% to 85% of the front and back of cigarette packaging. The tobacco companies argued, among other things, that the Minister lacked the legal authority to make the rule, the rule infringed on their property rights, and that the rule did not meet necessity and proportionality standards under administrative law. The court granted a temporary injunction, preventing implementation of the larger health warnings until the court issues a final decision on the merits of the case.
Ontario v. Rothmans Inc. [Canada] [May 30, 2013]
The government of Ontario sued a variety of tobacco manufacturers seeking to recover $50 billion in health care costs caused by tobacco-related disease. The claim was brought under the Tobacco Damages and Health Care Costs Recovery Act, an Ontario law that gives the government the right to recover health care costs arising from “tobacco-related wrongs.” The government alleged that the tobacco companies engaged in a decades-long conspiracy to mislead Ontario about the health risks of smoking and to suppress information about the dangers of smoking. Six of the foreign tobacco companies argued that the Ontario courts do not have jurisdiction over them. The appeals court affirmed an earlier ruling finding that that the court has sufficient jurisdiction to proceed against the foreign companies.
Sal's Restaurant, Inc. v. Dep't of Health, Bureau of Health Promotion and Risk Reduction (Pennsylvania) [United States] [April 04, 2013]
A restaurant owner challenged the Pennsylvania Department of Health’s determination that the restaurant did not comply with the requirements for an exception to Pennsylvania’s Clean Indoor Air Act to allow smoking in the bar section of their establishment. The law banned smoking in indoor public places, but allowed certain exceptions. The establishment had a bar area, a dining area and a shared hallway with bathrooms for both areas. The bar area was separated by swinging saloon style doors that did not cover the entire doorway, thus allowing smoke to filter into the shared hallway. The establishment sought an exception to allow smoking in the bar area but the state agency determined that the bar did not meet the enclosed requirement to prevent smoke from getting out of the smoking area. The court held that despite attempts to comply with the requirements, the restaurant still did not fulfill the statute and was not compliant by the statutorily required time. The court affirmed the state agency’s ruling denying the application for exception to the non-smoking law.
Goodpaster et al. v. City of Indianapolis [United States] [March 06, 2013]
In 2012 the City of Indianapolis and Marion County expanded a local smoking ordinance to include bars and taverns. A number of bar owners sued, seeking a preliminary and a permanent injunction to prohibit the ordinance from taking effect. The bar owners claimed that the ordinance violated their rights to due process, freedom of association, and equal protection and constituted a taking under the federal and state Constitutions. The court found that all of the bar owners’ claims failed. The court ruled that the ordinance did not violate due process or equal protection because the city had at least three rational reasons for adopting the ordinance: (1) to protect the health and safety of the general public; (2) to abate the nuisance effects of secondhand smoke; and (3) to positively impact the city’s economy by decreasing healthcare costs and increasing tourism. Additionally, the court found that the ordinance did not violate the freedom of association because it regulates conduct (i.e., smoking) not who is allowed to enter the bars. Finally, the ordinance did not constitute an unconstitutional taking because even though the bars have lost business they have not lost all economically beneficial use of their property. As a result, the court denied both the preliminary and permanent injunctions.
Ceylon Tobacco v. Minister of Health [Sri Lanka] [February 22, 2013]
The Sri Lanka Ministry of Health passed a regulation requiring tobacco products to contain graphic pictorial health warnings on 80% of the pack. The Ceylon Tobacco Company challenged the regulation as ultra vires the authority of the ministry and sought an interim order to stop the implementation of the regulation until their substantive challenge was concluded. Here the Court of Appeal denied the tobacco company’s request to delay implementation of the regulation. The court found the regulation was sufficiently clear for implementation. The court said the timeline of the regulation provided sufficient time for implementation and the balance of convenience supported the Minister.
VFW Post v. City of Evansville [United States] [February 15, 2013]
The City of Evansville enacted a smoke-free ordinance banning smoking in workplaces and other public places within the city limits with the exception of riverboat casinos. Several private fraternal organizations and tavern owners challenged the law as a violation of the Indiana Constitution. The plaintiffs claimed the ordinance violated the Privileges and Immunities clause by allowing the exception for the riverboat casinos and infringed their Right to Speak. Giving broad deference to the legislature of the city, the Court of Appeal affirmed the trial court’s dismissal of the case. The court said the private clubs were not similarly situated as the casino and the prohibition on smoking was incidental to their freedoms to speak and assemble.