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.
Lorillard Tobacco Co. v. Roth, 786 N.E.2d 7 (N.Y., 2003).
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.
Subsequent regulations exceed the scope of the originating law.
Type of Tobacco Product
None
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
"Having identified this aim, we agree with the Department that some promotions—notably those with paper coupons distributed to the public at large—are presumptively lawful. This is so not because the manufacturer repays the retailer and thus brings the price back within permissible bounds, as plaintiffs would have it, but because the circumstances surrounding such promotions rebut the presumption that participants intend to harm competition or their competitors or to evade taxes. Plaintiffs are free to attempt to rebut this presumption factually in any enforcement action that follows if they continue to use buy-down and master-type promotions or sticker promotions not universally available."
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
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.