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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.
Nicopure Labs, LLC v. Food and Drug Administration [United States] [July 21, 2017]
A manufacturer of e-cigarette devices and liquids challenged a federal regulation that deemed e-cigarettes to be “tobacco products.” This rule subjects e-cigarettes to the same federal laws as traditional cigarettes under the Tobacco Control Act (TCA). The manufacturer argued that the Food and Drug Administration (FDA), which issued the regulations, did not have the authority to regulate empty e-cigarettes or nicotine free e-liquids, because they were not made or derived from tobacco. The company also argued that the TCA’s ban on distributing free samples and pre-approval for modified risk statements was arbitrary and violated their First Amendment rights.
In this decision, the District Court upheld the FDA’s rule. The TCA gives the FDA the power to regulate “components” of tobacco products. The court found empty e-cigarettes and nicotine-free e-liquids are “components” of a tobacco product because together they make up an electronic nicotine delivery system. Further, the court found that the rule did not violate the manufacturers’ First Amendment rights because the ban on free samples was regulating conduct, not speech. The court also held that pre-approval for modified risk statements did not violate the First Amendment because it does not ban modified risk statements, it only requires the claims be substantiated. Finally, the court found because of the public health risks associated with nicotine and increasing rates of e-cigarette use in adolescents and adults, the decision to subject e-cigarettes to the TCA was not arbitrary.
B v. Waitemata District Health Board [New Zealand] [June 14, 2017]
A patient at a mental health facility sued the Waitemata District Health Board claiming that the Board’s smoke-free policy violated the Smoke-free Environments Act because it did not provide a smoking room for patients. The patient also claimed that the smoke-free policy violated his right to be treated with respect for dignity. In two earlier decisions, the High Court and the Court of Appeals found the smoke-free policy did not violate either the Smoke-free Environments Act or the Bill of Rights. The patient appealed the decision to the Supreme Court.
In this decision, the Supreme Court upheld the smoke-policy. The Court found that the smoke-free policy did not violate the Smoke-free Environments Act because the law states that a smoking room “may” be provided. As a result, the Board is not required to provide a smoking room for patients. Further, the Supreme Court found the patient’s rights were not violated because smokers were given nicotine replacement therapy, which was a humane and meaningful treatment for nicotine withdrawal symptoms, consistent with the Bill of Rights.
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, and 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.
Japan Tobacco International and Others v. Ministry of Health (plain packaging laws) [France] [December 23, 2016]
Legal challenges to the plain packaging of tobacco products laws dismissed.
On December 23, 2016 the Conseil d’Etat (the Council of State, the highest administrative jurisdiction in France) dismissed six legal challenges that were brought against the tobacco products plain packaging laws. Previously, in January 2016, the Constitutional Council had also upheld the law as in accordance with the constitution, on a referral from members of parliament.
In brief, six cases were brought challenging the regulations - four by the tobacco companies, one from the confederation of tobacco retailers, and one from a tobacco paper manufacturer. The Conseil d'Etat dismissed all the claims and held that:
1. The ban on using figurative, semi-figurative signs, and logos on packaging of tobacco products was valid because the brand and variant name is still permitted allowing the identification of the product.
2. Plain packaging constitutes an infringement of property rights, but that this infringement is justified in the light of the objective pursued (public health) and because the measure regulates the use of trademarks but does not completely ban them.
3. There was no 'deprivation' of property rights.
4. For the same reasons, the Conseil d'État held that the national legislation is a quantitative restriction on the importation of goods but this is in conformity with European Union law because the introduction of such restrictions is permitted where they are justified by a public health objective and the protection of human life. The court held that in this case, the challenged provisions must be considered as unable to do anything other than, over time, reduce the consumption of tobacco. The evidence in the case file also showed that neutral packaging would reduce the attractiveness of tobacco products. The measures were therefore proportionate and justified.
A summary of the decisions from the two separate courts is attached in French and English in the section on "Related Documents".
BAT v. UK Department of Health (Appeal) [United Kingdom] [November 30, 2016]
An appeal against the earlier High Court judgment which upheld the UK's Standardised Packaging of Tobacco Products Regulations 2015.
British American Tobacco, Japan Tobacco International and Imperial Tobacco, together with the tipping paper company Tannpapier, appealed the High Court judgment of May 2016. The Appeal Court rejected all grounds of appeal.
The appeal concerned the nature of the claimants' trade mark rights, the extent to which the Regulations interfere with those rights and the lawfulness of any interference. The Claimants also appealed the High Court judgment on the proportionality of the Regulations. The case concerned issues of European Union law and the European Convention on Human Rights (the right to property in Article 1 of Protocol 1), as well as domestic common law.
The Appeal Court confirmed that a positive 'right to use' a registered trade mark did not exist in either domestic law, European Union law or international law. The Court also confirmed that the Regulations amounted to a control on the use of the tobacco trade marks and did not amount to a deprivation of those marks. The Regulations were a proportionate response to the public health objectives and struck a fair balance between the objectives and the interference with the claimant's rights.
British American Tobacco Panama v. Panama [Panama] [August 03, 2016]
Decree 611 establishes that Panama's ban on the advertising, promotion and sponsorship of tobacco products includes a ban on tobacco product display at the point of sale. BAT Panama SA and other tobacco companies filed suit requesting an order declaring Decree 611 illegal, arguing that it violated the right to property including intellectual property and consumers’ right to access information. The Administrative Chamber of the Supreme Court of Panama upheld the decree finding that there was no violation of trademark rights as trademark registration and use still were allowed. The court also found that consumers’ right to access information was assured through the use of the textual listing of products and their prices and through health warnings on packages. Notably, the court used FCTC guidelines to interpret FCTC obligations with regard to tobacco advertisement, promotion and sponsorship.
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.
BAT v. UK Department of Health [United Kingdom] [May 19, 2016]
The judgment dismissed all grounds of challenge against the UK's standardised (or "plain") packaging regulations. The judgment has significant wider implications because Mr Justice Green carefully considered all the evidence as part of the proportionality analysis, which will be similar to the justification analysis for plain packaging in most other jurisdictions. He was highly critical of the evidence put forward by the tobacco industry and provided a damning critique of individual studies and experts as well as making wider criticisms of the tobacco companies including that they failed to disclose any internal documents about their research or consideration of the impact of plain packaging on their business or smoking rates. He also linked his conclusions to the 2006 judgment of Judge Kessler in USA v Philip Morris Inc et al when she found, upon the basis of comprehensive evidence which included internal documents, that the tobacco companies were well aware of the strong causal nexus between advertising and consumer reaction.
The judge's conclusions on whether plain packaging amounts to an expropriation of the tobacco trade marks; on their claim for compensation; on the relevance of the FCTC and its guidelines; and on the compatibility with the WTO TRIPS agreement all have wider international relevance.
A summary of the key findings that have wider application is in the additional documents.
The McCabe Centre has produced an analysis of the key points for other jurisdictions which can be found here: http://www.mccabecentre.org/downloads/McCabe_Centre_-_Key_Points_on_UK_plain_packaging.pdf