Source: https://oag.ca.gov/tobacco/highlights
Timestamp: 2019-04-19 16:53:44+00:00

Document:
February 2009 - U.S. Smokeless Tobacco Company agrees to stop promoting Copenhagen brand at more than one professional bull riding tour.
The San Diego Superior Court entered a stipulated judgment settling California's dispute with U.S. Smokeless Tobacco Company (USSTC) related to the promotion of its Copenhagen brand name through multiple Professional Bull Riders (PBR) series and tours. USSTC agreed to limit its Copenhagen brand name sponsorship to Built Ford Tough series events in California. In addition, it agreed that at those Built Ford Tough events, it will sponsor no more than three bull riders under its Copenhagen brand name. Should Copenhagen-sponsored bull riders compete in other PBR series or tour events in California, they will not wear any Copenhagen branded clothing.
August 2007 - California settles suit with U.S. Smokeless Tobacco Co. for promoting the Skoal brand name at National Hot Rod Association drag races.
The Attorney General's Office reached a settlement with U.S. Smokeless Tobacco Company (USSTC), resolving California's lawsuit alleging that USSTC violated the 1998 Smokeless Tobacco Master Settlement Agreement by, among other things, promoting its Skoal brand name through sponsorship of National Hot Rod Association (NHRA) drag racing events at which minors compete. Central to the settlement was the NHRA's recent decision to change its official rules starting in 2008 so that persons under 18 can no longer compete in any race at the national events Skoal sponsors. USSTC, without admitting any liability, agreed to pay $1.5 million in costs to the state, and agreed to withdraw its brand name sponsorship of national events if at any time the NHRA changes it rules to again permit minors to race. Finally, USSTC agreed never to expand its brand name sponsorship beyond the one series, one competition and one car, that it now sponsors.
March 2003 – Court of Appeals affirms summary judgment against R.J. Reynolds' in case involving outdoor advertising restrictions at sporting events.
July 2002 - California reaches agreement with U.S. Smokeless Tobacco Company regarding adult-only facilities, free sampling restrictions, and inappropriate signage.
The Attorney General entered into a Memorandum of Understanding with U.S. Smokeless Tobacco Company (USSTC). The agreement resolved disputes with USSTC about its compliance with the 1998 Smokeless Tobacco Master Settlement Agreement, relating to the configuration of Adult-Only Facilities (AOFs) (where USSTC gives away free samples) and the Brand Name signs that USSTC uses to identify its AOFs. The MOU required USSTC to enclose all its AOFs in California with an opaque barrier that is at least six feet high, and to instruct its security personnel to discourage people from loitering around the entrances and exits. This part of the agreement implements the provision of the MSA which defines an AOF as a place where persons under the age of 18 are "not present." The agreement also spells out how USSTC may identify its AOFs by using a Brand Name, such as Copenhagen, Skoal, or Rooster, under a limited exception to the MSA's general ban on outdoor advertising of tobacco products.
the attribution of unnatural or extra human abilities, such as imperviousness to pain or injury, X ray vision, tunneling at very high speeds or transformation.
"The term 'Cartoon' includes 'Joe Camel. . . ."
Through protracted litigation, the Attorney General successfully enforced the cartoon ban against R.J. Reynolds' "Farm Rocks" advertising campaign. This campaign used cartoons in its advertising of Camel cigarettes in magazines, newspapers, posters, flyers, projections and videos at musical events. In April 2009, the California Superior Court ruled that Reynolds had used cartoons in its Farm Rocks ad campaign in violation of the MSA' cartoon ban. This ruling was later affirmed on appeal. The appellate court found that Reynolds' Farm Rocks images were "cartoons" under the Consent Decree and MSA. It held that the definition includes objects with unnatural abilities like tractors and radios that fly and televisions that grow on plant stems. The court also noted that the fanciful Farm Rocks images would appeal to youth. The trial and appellate court decisions regarding the merits are available here.
The People also were awarded $3 million in attorneys fees for their work in the case. The trial court initially awarded the People $2.9 million in attorneys' fees. On appeal, the appellate court ruled that the People are entitled to market rates if they were the prevailing party under Civil Code Section 1717 and remanded the case to determine whether they were the prevailing party under this standard. On remand, the superior court found that they were the prevailing party and ordered Reynolds to pay the full $2.9 million fee award. This ruling was affirmed on appeal. The trial and appellate decisions regarding the attorneys' fee awards are available here.
Section III (r) of the MSA provides that "No Participating Manufacturer may make any material misrepresentation of fact regarding the health consequences of using any Tobacco Product, including any tobacco additives, filters, paper or other ingredients. Nothing in this subsection shall limit the exercise of any First Amendment right or the assertion of any defense or position in any judicial, legislative or regulatory forum."
The Consent Decree and Final Judgment has an identical provision in section V. I.
June 2013 - Court rules R.J. Reynolds lacked scientific basis for health claims in marketing Eclipse brand cigarettes, issues permanent injunction, and awards $8.3 million in penalties.
In 2003, R.J. Reynolds Tobacco Company began marketing its Eclipse brand of cigarettes. In a national advertising campaign Reynolds claimed that Eclipse, which heated rather than burnt tobacco, may present less risk of cancer, chronic bronchitis, and emphysema than combustible cigarettes. Reynolds claimed it had scientific studies supporting these health claims. The Vermont Attorney General, with assistance from the Attorneys General from California and seven other states, sued Reynolds, alleging that the company did not have adequate substantiation for its health claims. After a 26-day trial, the Vermont court found that Reynolds had engaged in deceptive advertising in marketing Eclipse as a reduced risk product. Reynolds' ads for Eclipse therefore violated the MSA's prohibition against making any material misrepresentations of fact regarding the health consequences of using any tobacco product, and also violated the Vermont Consumer Fraud Act. In 2013, the court awarded $8.328,000 in civil penalties to the states, attorneys' fees and costs, and issued a permanent injunction against Reynolds.
March 2010 - Santa Fe Natural Tobacco Company agrees to use disclaimers in advertisements for organic tobacco.
In March 2010, Santa Fe Natural Tobacco Company entered into an Assurance of Voluntary Compliance with California and 33 other States wherein it agreed to add disclaimers to all of its advertisements for cigarettes or roll your own tobacco which use organic tobacco. These disclaimers addressed the States' concerns that Santa Fe's advertisements for its Natural American Spirit organic tobacco which say "organic tobacco" or "100% tobacco" might mislead consumers into believing that the tobacco or cigarettes are safer, when there is no evidence that is the case. Santa Fe agreed to add a disclaimer to all of their organic tobacco ads which states in a large clear box that "organic tobacco does not mean safer tobacco."
Section III (a) of the MSA provides that "No Participating Manufacturer may take any action, directly or indirectly, to target Youth within any Settling State in the advertising, promotion or marketing of Tobacco Products, or take any action the primary purpose of which is to initiate, maintain or increase the incidence of Youth smoking within any Settling State."
The Consent Decree and Final Judgment has an identical provision in section V. A.
December 2004 – Court approves settlement with RJR Tobacco concerning youth targeting in print advertising.
The San Diego Superior Court approved the settlement of California's litigation against RJR Tobacco Company for unlawfully targeting minors in its print advertising. The settlement resolved claims that RJR's advertising placement practices violated the prohibition against targeting youth in advertising contained in the MSA and accompanying Consent Decree. The settlement required RJR to refrain from advertising in magazines with high youth readerships and to ensure that its advertising reaches mainly adults. The settlement also required RJR to report on its advertising placements and to pay $17.25 million in sanctions and attorneys' fees. Earlier in 2004 the Court of Appeal affirmed the trial court decision that fined RJR for violating the MSA's prohibition against youth targeting. (See People ex rel. Lockyer v. R.J. Reynolds Tobacco Co. (2004) 116 Cal.App.4th 1253, as modified on denial of reh'g (Mar. 19, 2004).) This was the first decision in the nation to enforce the MSA's prohibition against youth targeting.
Order Approving Settlement and Dismissing Claims, pdf.
November 2003 - Attorney General spearheads removal of tobacco ads from magazines in high schools.
The Attorney General announced an agreement to remove tobacco ads from news magazines sent to high schools and middle schools.
March 2001 - California files amicus curiae brief in Lorillard suit.
The Attorney General filed an amicus brief in Lorillard Tobacco Co. v. Reilly (2001) 533 U.S. 525. States joined the brief urging the United States Supreme Court to uphold Massachusetts' regulation restricting outdoor advertising of tobacco products.
October 2017- California settles major payment dispute under MSA.
In October 2017 California and 24 other States executed a final settlement agreement that resolves a major payment dispute under the MSA. The payment dispute arose from a provision in the MSA, called the NPM Adjustment, which entitles the Participating Manufacturers to reduce their annual settlement payments to the Settling States if they lose significant market share to manufacturers that are not part of the MSA and certain other conditions exist. The final settlement agreement, which is based on a November 2012 Term Sheet, fully resolves the Participating Manufacturers' claims to NPM Adjustments for cigarettes sold between 2003 and 2014 on terms that favor the signatory states. The settlement agreement also simplifies the process for resolving future disputes under the NPM Adjustment and significantly limits the Participating Manufacturers' ability to withhold from the signatory states NPM Adjustment funds that are in dispute for cigarette sales in later years. As a result of the effectuation of the Term Sheet, California received an additional $375 million. Under a long-standing side agreement, one half of the additional funds were disbursed to local government. The final settlement agreement can be viewed here.
December 2006 - Attorney General wins $55.4 million settlement against Danish cigarette maker.
In People v. House of Prince, San Diego Superior Court, the Attorney General announced a $55.4 million settlement of this MSA enforcement action against a Danish cigarette maker. Despite the fact that the MSA's terms apply to entities that act "in concert or participation with" MSA signatories, like House of Prince, billions of cigarettes manufactured by a Latvian subsidiary and later affiliate of House of Prince were sold in the U.S. without the required MSA payments being made. The cigarettes, which were sold by two U.S. importers, counted as non-participating manufacturer (NPM) cigarettes and, as such, contributed to the market share lost by participating manufacturers in 2000 to 2003 and the resulting NPM adjustment to MSA payments. California's share of the settlement was $7.15 million and included $309,000 as reimbursement for attorneys' fees and costs. Here is a complete listing of payments received by State and local Governments.
September 2007 - Ninth Circuit rejects antitrust challenge to the MSA.
In Sanders v. Brown (9th Cir. 2007) 504 F.3d 903, the U.S. Court of Appeals for the Ninth Circuit upheld dismissal of a case brought by Steve Sanders on behalf of all California smokers. Sanders alleged that the MSA created a cartel of the major U.S. cigarette makers, allowing them to charge "supra competitive" prices for their product. The appellate court concluded that Sanders had not alleged sufficient facts to show that the MSA and two related state laws violated the federal Sherman Act. The court also held that the state Attorney General and the tobacco company defendants are immune from liability under the Sherman Act because the MSA is a litigation settlement that was approved by a state court and the two state laws are acts of the state legislature.
The California Attorney General, in partnership with other Attorneys General and the public health community, monitors the development, promotion, marketing and sale of the many new products that are in some way related to smoking, aerosolizing, vaporizing, heating, inhaling, tobacco and/or nicotine, and are used for purposes other than smoking cessation.
Electronic cigarettes and vape devices are battery-powered devices that typically contain liquid nicotine and various flavors. Some contain impurities and produce dangerous chemicals.
The sale of nicotine-containing vape products and e-cigarettes to minors is forbidden in California. (Health & Safety Code § 119405). As of 2016 the sale to minors of products that deliver a non-nicotine product in a vapor state is also forbidden.
The California Attorney General's Office monitors the advertising, marketing and sale of these products and has sent warning letters to numerous companies selling e-cigarette and vape products on the Internet to ensure compliance with the statute prohibiting sales to minors as well as other consumer protection provisions. Many companies have come into compliance voluntarily. The Attorney General has also pursued litigation against two leading companies and urged the FDA to regulate these products effectively.
September 2015 – Attorney General settles claims against NJOY.
In July 2010 the California Attorney General sued Sottera, Inc. (d.b.a. NJOY) for violations of the unfair competition law and Proposition 65. In August 2010 the Alameda County Superior Court entered a consent judgment against Sottera, the company that sells NJOY electronic cigarettes. NJOY agreed to make its websites age-restricted so that it will not sell electronic cigarette products to minors on-line, and not to sell flavors targeted to appeal to minors. NJOY also agreed to stop making false or misleading claims concerning the safety or effectiveness of its products, to put systems for quality control in place, and to place warnings on its products in compliance with Proposition 65 informing consumers that NJOY's electronic cigarettes contain a toxin which could cause reproductive harm. Finally, the company agreed to pay to the state monetary penalties, attorneys' fees and costs. In 2015 the parties entered into a modified consent judgment. NJOY agreed to age-restrict its social media, not to advertise in certain media, to employ an independent entity to monitor whether its products are sold to minors and/or without asking for identification, and to reimburse the Attorney General for costs and fees.
November 2010 - Settlement with Smoking Everywhere approved by Court.
In January 2010, the Attorney General sued Smoking Everywhere, one of the largest electronic cigarette retailers in the U.S., alleging it made false claims about its products, failed to warn consumers of dangerous reproductive toxins, marketed to minors and failed to have adequate quality control in place to protect consumers. The Attorney General settled the lawsuit against Smoking Everywhere and in November 2010, the Alameda County Superior Court entered a consent judgment against Smoking Everywhere very similar to the agreement reached with Sottera/NJOY (below). Smoking Everywhere agreed to make their web sites age-restricted so that they will not sell any electronic cigarette products to minors, and not to sell flavors attractive to young people. Smoking Everywhere also agreed to stop making false or misleading claims concerning the safety or effectiveness of their products. They agreed to put systems for quality control in place and to place warnings on their products in compliance with Proposition 65, warning consumers that their electronic cigarettes contain a toxin which could cause reproductive harm. Finally, the company agreed to pay to the state monetary penalties, attorneys' fees and costs.
People v. Smoking Everywhere Stipulated Consent Judgment, pdf.
The California Attorney General joined 32 other Attorneys General urging the FDA to strengthen its proposed regulations of electronic cigarettes, vape products and other tobacco products, so as to protect children and young adults from nicotine addiction. The Attorneys General specifically asked the agency to mandate appropriate warning labels and child-resistant packaging on e-cigarettes, liquid nicotine, nicotine-containing e-liquids, and other tobacco products such as dissolvables, lotions, gels, and drinks.
The California Attorney General joined 28 other Attorneys General in signing a comment to the FDA regarding the FDA's proposed regulations to deem all tobacco products, including electronic cigarettes, vape products, cigars and pipe tobacco, within the agency's regulatory jurisdiction. The Attorneys General supported the proposal to extend the FDA's jurisdiction, and also urged the FDA to go further and prohibit flavors other than tobacco and menthol in all tobacco products including e-cigarettes and little cigars, restrict marketing and advertising of e-cigarettes in the same ways that it restricts marketing and advertising of cigarettes and smokeless tobacco, strengthen the mandated health warnings on all deemed products, restrict advertising and sale of all tobacco products over the internet, apply the same restrictions to the parts and accessories of vape products whether or not they contain nicotine, not exempt so-called premium cigars, and regulate pipe tobacco in a similar way to roll-you-own tobacco so as to prevent the avoidance of regulations.
The California Attorney General led six State Attorneys General in urging the Food and Drug Administration to apply nicotine standards to all combusted products, not just cigarettes. The Attorney General also urged the FDA to continue to support tobacco control that addresses all aspects of smoking and nicotine addiction, and to increase research on non-combusted tobacco products, such as electronic cigarettes.
The State of California is dedicated to reducing youth access to tobacco products by ensuring that retailers comply with state laws concerning the sale and marketing of tobacco products. The Attorney General has entered into agreements (Assurances of Voluntary Compliance or AVCs) with numerous national retail chains whereby the company agrees to adopt certain standards and practices for their sale and marketing of tobacco products to help reduce the number of tobacco sales to minors.
The AVCs are the result of an ongoing, multi-state enforcement effort among state attorneys general. The agreements incorporate "best practices" to reduce sales to minors, developed by the attorneys general in consultation with retailers, researchers, and state tobacco control officials.
Take various steps to promote responsible tobacco retailing by the company's franchisees.
The Attorney General has entered into 13 multi-state agreements on behalf of the State of California, with Circle K, 7-Eleven, ARCO, BP North America, Chevron, ConocoPhillips, CVS, ExxonMobil, Kroger, Rite-Aid, Shell, Valero, Wal-Mart, and Walgreens, and a litigation settlement agreement with Safeway. Nationwide, these agreements cover over 100,000 retail outlets at which cigarettes are sold. Our office has taken the lead in the negotiations resulting in each of these agreements. Please look below for details and copies of the agreements.
In 2014 CVS halted sales of tobacco products. On March 14, 2014 many Attorneys General sent a letter commending CVS for taking this step to remove tobacco products from pharmacies.
The Attorney General enforces two state laws that prohibit the sale of cigarettes by "remote" means, that is, whenever the seller and the buyer are not face-to-face, as in a retail store. Remote sales include sales made via the Internet, as well as telephone and mail orders. However, a person may sell cigarettes remotely if the person complies with certain conditions specified in the law.
Section 22963 of the Business and Professions Code is primarily directed at preventing the sale of cigarettes and tobacco products to minors. This law requires a "remote" seller to verify that every customer is at least 18 years old by either matching the customer's name, address and date of birth to a database of government records or by requiring the customer to attest in writing that he or she is at least 18 years old and provide a copy of a government-issued identification, such as a driver's license or passport. In addition, the seller may not fill an order for less than two cartons of cigarettes; he must contact the purchaser by phone after 5:00 p.m. to confirm the order; and he must deliver the cigarettes or tobacco to a verified mailing address, not a Post Office box.
"IF THESE CIGARETTES HAVE BEEN SHIPPED TO YOU FROM A SELLER LOCATED OUTSIDE OF THE STATE IN WHICH YOU RESIDE, THE SELLER HAS REPORTED PURSUANT TO FEDERAL LAW THE SALE OF THESE CIGARETTES TO YOUR STATE TAX COLLECTION AGENCY, INCLUDING YOUR NAME AND ADDRESS. YOU ARE LEGALLY RESPONSIBLE FOR ALL APPLICABLE UNPAID STATE TAXES ON THESE CIGARETTES."
Feb. 2018—California and 19 amicus states and territories submit Amicus Brief re PACT Act.
California, 17 states, the District of Columbia, and Puerto Rico submitted an amicus brief in support of the State of New York and the City of New York as Appellees/Cross-Appellants in The State of New York and the City of New York v. United Parcel Service, Inc., 17-1993 (L) (2d Cir.). UPS appealed the SDNY's ruling that it had violated the PACT Act for delivering cigarettes nationwide, arguing that its settlement agreement with the State of New York exempted it from the PACT Act's requirements because the settlement agreement was "honored throughout the United States to block illegal deliveries of cigarettes or smokeless tobacco to consumers." 15 U.S.C. § 376a(e)(3)(B)(ii)(I). UPS contended that the exemption applied because the settlement was still in existence, and that its lack of compliance with the agreement had no impact on the exemption. The amicus brief explained that UPS's proffered interpretation would create a gaping loophole in the PACT Act, depriving every state except New York of the right to bring both federal and state enforcement actions against UPS for the illegal shipment of cigarettes. The brief explained that this would lead to the absurd result that UPS and other similarly situated common carriers could deliver contraband cigarettes to consumers in 49 states with impunity, thus undermining the underlying purpose of the PACT Act.
June 2012 - California and 39 states sign Amicus Brief re PACT Act.
July 2010 - Attorney General wins judgment against Internet cigarette seller, Scott Maybee, for illegal cigarette sales to California consumers.
The Attorney General sued Scott Maybee, a member of the New York Seneca Tribe, in 2005, seeking injunctive relief and civil penalties. The Attorney General alleged that Maybee engaged in at least 166,716 transactions with California consumers in which he violated Rev. & Tax §30165.1 (tobacco directory law), Health & Saf. Code §14951(fire-safe cigarettes), Bus. & Prof. Code § 22963 and Rev. & Tax Code § 30101.7 (California's remote cigarette sales laws), and Bus. & Prof. Code § 17200 (unfair competition law). The court granted the People's motion for summary adjudication on three causes of action—Bus. & Prof. Code §§ 22963 and 17200, and Rev. & Tax Code § 30101.7. The court denied the tobacco directory and fire-safe claims. In July 2010 the court entered a judgment which permanently enjoined defendants from violating sections 22963, 30101.7 and 17200 and awarded civil penalties in the amount of $130,000 and costs of $7,679.11. The court also awarded California $242,868.00 in attorneys' fees and denied California's request for expert fees and additional costs.
September 2009 - Attorney General enters into a stipulated judgment with the Hemi Group.
The Attorney General entered into a Stipulated Judgment with the Hemi Group, a retailer selling cigarettes illegally over the Internet. The purpose of this Stipulated Judgment is to require Hemi to permanently cease and desist from shipping tobacco products via the Internet to consumers, unlicensed distributors, wholesalers and tribal entities located in California in violation of the following statutes: (1) The Jenkins Act, 15 U.S.C. §§ 375-378 (requires out-of-state seller to report shipments of cigarettes to taxing entity in the state where shipped); (2) Revenue and Taxation Code section 30101.7 (requires cigarette seller to either pay all applicable cigarette taxes or, alternatively, place specified warning on outside of cigarette container advising that buyer must pay taxes); (3) Business and Professions Code section 22963 (prohibiting non-face-to-face tobacco sales to minors; and (4) Business and Professions Code § 17200 (unlawful business practices). Additionally, Hemi is required to produce information concerning shipments made since January 1, 2005, constituting over 100,000 illegal transactions.
Consent Judgment and Permanent Injunction, pdf.
August 2008 through January 2009 - Attorney General enters into assurances of discontinuance with a California bank and a California third party processor.
The Attorney General, along with two other states, entered into Assurances of Discontinuance with First Regional Bank and ECHO, a third party processor. Both companies agreed to stop facilitating illegal tobacco sales and implement "due diligence" policies, such as conducting background checks and obtaining basic information about retailers, and training their employees so that the companies do not inadvertently facilitate illegal Internet sales. These companies were suspected of facilitating hundreds of thousands of illegal tobacco sales. Under the terms of the agreement with First Regional, the bank is required to pay $60,000 for civil penalties and fees and costs.
January 2006 - Tobacco manufacturer Philip Morris adopts protocols to reduce illegal sales of cigarettes over the Internet and through the mail.
Philip Morris USA agreed to implement landmark protocols to reduce the illegal sale of its cigarettes over the Internet and through the mail. Philip Morris voluntarily adopted the protocols pursuant to an agreement reached with the Office of the Attorney General and Attorneys General in 32 other states, Washington D.C. and three territories. Under the protocols, Philip Morris will terminate shipments of cigarettes to any of its direct customers that Attorneys General have found to be engaging in illegal Internet and mail order sales; reduce the amount of products made available to direct customers found by the Attorneys General to be engaged in the illegal resale of Philip Morris cigarettes to Internet vendors; and suspend from the company's incentive programs any retailer found by the Attorneys General to be engaging in such illegal sales.
January 2004 through December 2005 - Attorney General secures stipulated judgments from five Internet tobacco sellers and a default judgment against a sixth retailer.
The Attorney General entered into stipulated judgments with five retailers, Dirt Cheap Cigarettes, eSmokes, Inc., Cyco.net, Inc., LLP Enterprises and eCommerce Today, Ltd., that were selling cigarettes illegally over the Internet to hundreds of thousands of California consumers. These Internet retailers agreed not to do business in California and to pay penalties, costs, and attorneys' fees totaling more than $1 million. Additionally, the two biggest retailers, Dirt Cheap Cigarettes and eSmokes, agreed to file reports with the California Board of Equalization providing the Board with information concerning approximately 350,000 California customers who purchased their cigarettes since January 1, 2000. Those records will provide the Board with the necessary information to attempt to collect the more than $11.5 million in taxes owed to the State of California from those customers. The Attorney General also obtained a $4.3 default judgment, plus attorneys' fees and costs against the remaining Internet cigarette seller, Smokin4Less.
E-Commerce Today Stipulated Final Judgment and Permanent Injunction dated April 21, 2004, pdf.
July 2002 - California wants "Tobacco Candy" project regulated.
The Office of the Attorney General Calls on FDA to Regulate New "Tobacco Candy" Product.
Effective January 1, 2004, the Attorney General must create and maintain a directory of tobacco product manufacturers and their cigarette brands that are lawful for sale in California. (Rev. & Tax. Code, § 30165.1.) For any of its brands to be listed on the directory, a manufacturer must certify annually to the Attorney General that it is either a "Participating Manufacturer" under the 1998 Tobacco Master Settlement Agreement or a "Non-Participating Manufacturer" that is in compliance with certain financial responsibility laws applicable to manufacturers choosing not to join the MSA. The directory is posted on the Attorney General's public website.
It is illegal in California to sell or distribute brands of cigarettes and roll-your-own (RYO) tobacco brands that are not listed on the directory. A violation of the tobacco directory law constitutes an unlawful business practice, and violators may be subject to stiff fines and injunction. The Attorney General enforces the tobacco directory law throughout the state.
It is also illegal in California to sell cigarettes that do not comply with the product-testing, certification, and package-marking requirements of the Cigarette Fire Safety and Firefighter Protection Act. (Health & Saf. Code, §§ 14950-14960.) The purpose of this law is to prevent fires and the death and destruction they cause. A violation of this law may constitute an unlawful business practice, subjecting violators to monetary penalties, injunction, and attorney's fees. The Attorney General enforces the fire-safe-cigarette law throughout the state.
February 2019 – Appellate court affirms superior court’s summary adjudication and permanent injunction against distributor and retailer of unlawful cigarettes.
The First District Court of Appeal affirmed the superior court’s permanent injunction and summary adjudication against Huber Enterprises, a smokeshop and distributor located on a reservation near Eureka. Huber, a tribal member, sold millions of packs of contraband cigarettes to non-members of her tribe, in violation of the Tobacco Directory, Fire-Safe Cigarette, and tax stamp laws, and those violations were also predicate unlawful acts under the unfair competition law. The court concluded that the exercise of state court jurisdiction did not infringe on tribal sovereignty and that the balance of federal, tribal and state interests weighed in favor of California’s authority to regulate. The court permanently enjoined Huber from selling any untaxed cigarettes that are not listed on the state’s Tobacco Directory or certified as fire-safe, to persons who are not members of the Wiyot Tribe. The panel certified the opinion for publication. Penalties in the case remain unresolved.
Make available a reliable, affordable and convenient field test to better determine if a product meets the required standards.
September 2017 – The People prevail in appeal of judgment against retailer of unlawful cigarettes, and appellate court affirms issuance of permanent injunction and award of attorneys' fees and costs.
Following a three-day trial, the Shasta County Superior Court found that Defendant Darren Rose sold cigarettes that were not lawful for sale in California, untaxed, and not certified as fire-safe. The trial court rejected Defendant's arguments that his membership in a federally-recognized tribe and the location of the business in Indian Country barred the People's suit. The court issued a judgment awarding $765,000 in civil penalties and permanently enjoined Defendant from selling any cigarettes that are not on the State's tobacco directory, fire-safe, and state excise tax paid, to anyone except members of Defendant's tribe on Defendant's reservation. In a published decision, the Court of Appeal for the Third District rejected Defendant's challenges to the jurisdiction of the state and the court, upheld the penalty award in full, and awarded costs on appeal. The trial court also granted the People $519,562.98 in attorneys' fees and costs for the successful prosecution of the tobacco directory and fire-safe cigarette claims and $78,393.44 for attorneys' fees and costs related to the appeal. The court looked to hourly rates used by private Sacramento counsel handling similarly complex work to calculate the hourly rates for the Attorney General's staff. Defendant did not appeal these fee awards.
December 2016 – Sacramento Superior Court grants the State of California's motion for summary judgment, denies defendant Native Wholesale Supply Company's motion for summary judgment and enters a judgment awarding civil penalties and imposing injunction.
Native Wholesale Supply Company is a cigarette distributor located on the Seneca Reservation in New York that funneled over a billion contraband cigarettes into California between 2004 and 2012 using a small Indian tribe in Fresno as a middleman. In granting the State's motion for summary judgment, the court ruled that these sales violated California's Directory Statute (Rev. & Tax. Code, § 30165.1), Fire Safety Act (Health & Saf. Code, § 14950 et seq.) and Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.). The court also permanently enjoined Native Wholesale from making any such illegal sales in the future and awarded $4,292,500 in civil penalties.
Then, in March 2017, the Sacramento Superior Court granted the People an additional $3,853,097.50 in statutory attorneys' fees and expert witness fees. The award was based on current Sacramento market rate for all hours reasonably expended by the People over eight years of litigation.
June 2015 – Court issues final judgment and permanently enjoins retailer of unlawful cigarettes.
The People alleged that defendants Kelly Sixkiller and Rufus Sixkiller, doing business as Sixkiller Native Tobacco Shop, unlawfully sold cigarettes that were not listed on California's Tobacco Directory, not certified as fire-safe, and for which the applicable California excise taxes had not been paid. In July 2014, Riverside County Superior Court entered a preliminary injunction and Sixkiller Native Tobacco Shop then closed. In 2015, the parties stipulated to entry of a final judgment and a permanent injunction pursuant to which Rufus Sixkiller paid $10,000 to the Cigarette Fire Safety and Firefighter Protection Fund, and both defendants agreed to a permanent injunction barring them from selling cigarettes that are not state-excise tax paid, or that are off-directory, or not fire-safe certified. The court then issued a final judgment and permanent injunction.
October 2013 – Court enters default judgment against retailer of unlawful cigarettes, and permanently enjoins retailer.
The Riverside County Superior Court entered a default judgment against Defendant Road Runner Trading Post, a tobacco retailer. The court granted the People's requested relief, including a permanent injunction against violations of the State's directory law and Cigarette Fire Safety and Firefighter Protection Act, as well as the State's excise tax laws by way of the Contraband Cigarette Trafficking Act. The judgment included penalties of more than $4 million, payable to the State under the Unfair Competition Law and in part to the State Fire Marshal under the cigarette fire safety law.
July 2013 - Court awards Attorney General almost $500,000 in attorney's fees in Nativebuy case.
The Riverside County Superior Court concluded that the Attorney General had prevailed on all claims against a retailer that sold unlawful cigarettes, and was entitled to a fee award based on all hours reasonably expended at prevailing market rates for private attorneys in similar cases.
December 2012 - Court assesses $5 million penalty against Nativebuy smoke shop.
The Riverside County Superior Court found that Nativebuy had sold contraband cigarettes almost 190,000 times before the shop shut down in November 2010. Nativebuy marketed an illegal exemption from state tobacco taxes and sold cigarettes that were not listed on the State Tobacco Directory and had not been certified to the California Fire Marshal as "fire-safe."
November 2012 - Court orders tobacco seller to pay Attorney General's attorney's fees and costs.
The Riverside County Superior Court awarded $890,391.25 to the Attorney General's Office for attorney and paralegal work, plus the costs of hiring investigators and expert witnesses. Having previously won a $3.5 million judgment and a preliminary injunction against Black Hawk Tobacco, Inc., and its owner Frederick McAllister (see July 2012 item, below), the court concluded that the Attorney General was entitled to reasonable attorney's fees and costs.
July 2012 - Court assesses $3.5 million fine and appellate court upholds injunction against tobacco seller.
In July 2012, the Riverside County Superior Court granted the Attorney General's motion for summary judgment in this unfair business practices case against a Palm Springs tobacco retailer. The defendants, Black Hawk Tobacco, Inc., and its owner, Frederick McAllister, sold contraband cigarettes (untaxed, off-directory, non-fire-safe-certified brands) in four smoke shops and by mail order until May 2009, when the court preliminarily enjoined them from further illegal sales. That injunction was upheld on appeal in July 2011. (See People ex rel. Brown v. Black Hawk Tobacco, Inc. (2011) 197 Cal.App.4th 1561.) Defendants claimed various exemptions based on McAllister's membership in a federally recognized Indian tribe and on the business's location on the Aqua Caliente Indian Reservation. The court rejected those claims, holding that no federal law preempted the state laws the People sought to enforce and that state interests outweighed any countervailing federal or tribal interests. The Tribe was supportive of the People's action. The People sought summary judgment on five causes of action, and the trial court granted the motion in full, awarding over $3.5 million in civil penalties and entering a preliminary injunction.
June 2011 – California prevails in repeated jurisdictional challenges raised by out-of-state distributor of unlawful cigarettes.
In 2008, the People sued Native Wholesale Supply ("NWS") for violations of the Directory statute (Cal. Rev. & Tax. Code, § 30165.1), Cigarette Fire Safety and Firefighter Protection Act (Health & Saf. Code, § 14950 et seq.), and Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.). NWS, based in New York, moved to quash service of the summons for lack of personal jurisdiction. Sacramento Superior Court granted NWS's Motion to Quash and the People appealed. The Court of Appeal overturned the trial court ruling in a published decision, People v. Native Wholesale Supply (2011) 196 Cal.App.4th 357, concluding that "NWS's distribution into California of hundreds of millions of profitable cigarettes over the past few years, via a small Indian tribal network in which the cigarettes are eventually sold to the general public, meets the 'minimum contacts' legal standard of 'purposeful availment': NWS has 'purposefully derived benefit' from California activities through a 'substantial' stream of commerce." NWS thereafter filed a "Renewed Motion to Quash Service of Summons for Lack of Personal Jurisdiction." Sacramento Superior Court denied NWS's renewed motion and NWS filed an Answer on September 18, 2014. In 2012 NWS stopped doing business in California.
February 2011 – California obtains permanent injunction against Cathedral City Ventures, LLC dba 7 Leaf Trading Post.
On February 18, 2011, the California Attorney General's Office entered into a Stipulated Judgment and Permanent Injunction with Cathedral City Ventures, LLC dba 7 Leaf Trading Post. The Court found that Cathedral City Ventures, LLC dba 7 Leaf Trading Post violated the California tobacco directory law, the Cigarette Fire-Safety and Firefighter Protection Act, and the Contraband Cigarette Trafficking Act. The retailer was selling cigarettes that were untaxed, unstamped, and not certified as fire-safe to the general public. If Cathedral City Ventures, LLC dba 7 Leaf Trading Post violates this stipulation, the Court will order penalties of $5,000 for each violation.
February 2011 - California obtains permanent injunction against Rhonda R. Gasaway and Native Made Tobacco.
On February 14, 2011, the California Attorney General's Office entered into a Stipulated Judgment and Permanent Injunction with Rhonda R. Gasaway, individually and Native Made Tobacco. The Court found that Rhonda R. Gasaway and Native Made Tobacco violated the California tobacco directory law, the Cigarette Fire-Safety and Firefighter Protection Act, and the Contraband Cigarette Trafficking Act. The retailer was selling cigarettes that were untaxed, unstamped, and not certified as fire-safe to the general public. If Rhonda R. Gasaway or Native Made Tobacco violates this stipulation, the Court will order penalties of $5,000 for each violation.
The Proposition 56 tobacco tax revenue also funds a grant program. Every year the DOJ distributes $30 million to local law enforcement agencies to support and hire front-line law enforcement peace officers for various programs. These programs include, but are not limited to, enforcement of state and local laws related to the illegal sales and marketing of tobacco to minors, and investigative activities and compliance checks to reduce illegal sales of cigarettes and tobacco products to minors and youth. (See Rev. & Tax Code, § 30130.57(e)(1).) Together with the Division of Law Enforcement, the Tobacco Section participates in the administration of this grant program.
The California Healthcare, Research and Prevention Tax Act of 2016 (Proposition 56) provides local public agencies with funding to promote a healthier California by reducing illegal sales and marketing of cigarettes and tobacco products to minors. The Office of the Attorney General makes these annual funds available to local law enforcement agencies through the California Department of Justice Tobacco Grant Program.
Approved by voters in 2016, Proposition 56 increased taxes on cigarettes and other tobacco products by $2.00 starting in April 2017. The Proposition specifically allocates $30 million of annual revenue to the California Department of Justice. (Rev. & Tax Code, § 30130.57(e)(1).) These funds support local agencies to enforce tobacco-related statutes and ordinances, including to reduce the illegal sale of tobacco products to minors.
The Attorney General encourages local public agencies to learn more about the Tobacco Grant Program, become familiar with the grant requirements and understand the grant proposal process.
Any local public agency within the State of California that has authority to enforce tobacco-related state laws or local ordinances is eligible to apply. This may include cities, counties, public school districts, college districts, law enforcement agencies, city attorneys and county counsels.
Selected public agencies will be funded for up to a three-year cycle. Funding amount will be evaluated based on the submitted grant proposal.
The California Department of Justice issued a Request for Proposals on September 5, 2018. Eligible agencies must submit applications to the California Department of Justice by October 5, 2018 at 5:00 PM. All applications must be received by the California Department of Justice by the deadline; late applications will not be considered.
Grant applications will be assessed for their potential to improve enforcement of laws relating to the sale, marketing, and restrictions on the use of tobacco products to minors.
To obtain a copy of the Request for Proposal and related documents, go to the "More Information" section below.
Questions regarding the application process may be directed to the California Department of Justice at tobaccogrants@doj.ca.gov.
install signs or air quality detection devices in school bathrooms and other areas to discourage vaping and smoking on school grounds.
investigate and prosecute the unlawful sales of tobacco products to minors on the internet and marketing on social media.
provide education classes or diversion programs for tobacco retailers to help ensure that they understand state and local tobacco laws.
The following is a select list of fiscal year 2017/2018 grant recipients along with a brief description of how they propose to use grant funding.
The Fresno County Sheriff's Office will conduct tobacco enforcement operations, inspect and educate tobacco retailers, install no smoking signage, meet with youth organizations, and train officers.
The Los Angeles City Attorney's Office will enforce laws prohibiting underage tobacco sales, develop a multiagency tobacco task force, conduct hookah lounge abatement activities, increase youth outreach on tobacco use, and develop a pilot social media campaign to reduce underage tobacco use.
The Long Beach Police Department will conduct underage decoy operations of tobacco retailers, partner with other entities for educational campaigns, and liaison with the school district.
The San Francisco Department of Public Health will expand the compliance, outreach, and enforcement of tobacco laws applicable to tobacco retailers.
The Santa Paula Unified School District will hire school resource officers to conduct student and parent education classes on the harms of tobacco use, conduct tobacco enforcement operations where minors are likely to be present, and conduct tobacco retailer educational classes.
The Trinity County Probation Department will hire a school resource officer focused on tobacco education, prevention, intervention and enforcement. The officer will conduct tobacco intervention and cessation classes and tobacco enforcement operations targeting locations where minors are likely to be present. The officer will also maintain partnerships with the local tobacco coalition.
For a complete list of the 2017-2018 grantees, please see the list of Prior Awards, pdf.
Questions regarding the application process may be directed to the Department of Justice at tobaccogrants@doj.ca.gov.
May 2004 - 9th Circuit upholds lower court decision dismissing tobacco companies' challenge to state's anti-industry ads.
July 2003 - Court dismisses lawsuits filed by tobacco giants, R.J. Reynolds and Lorillard.
Court's Decision dated July 23, 2003, pdf.
Health and Safety Code section 118950 prohibits, with some specific exceptions, the "non-sale" (that is, free or at nominal cost) distribution of cigarettes or smokeless tobacco on any publicly owned or leased property or on any private property that is open to the general public, except in an enclosed, adult-only area.
Section III (g) of the MSA provides that "no Participating Manufacturer may . . . distribute or cause to be distributed any free samples of Tobacco Products except in an Adult Only Facility. For purposes of this Agreement, a "free sample" does not include a Tobacco Product that is provided to an Adult in connection with (1) the purchase, exchange or redemption for proof of purchase of any Tobacco Products (including, but not limited to, a free offer in connection with the purchase of Tobacco Products, such as a "two for one" offer), or (2) the conducting of consumer testing or evaluation of Tobacco Products with persons who certify that they are Adults."
The Consent Decree and Final Judgment has an identical provision in section V. E.
May 2006 - R.J. Reynolds to pay $5 million to settle free-sampling lawsuit.
The Attorney General announced that R.J. Reynolds Tobacco Company (RJR) will pay $5 million to resolve a lawsuit in which the California Supreme Court found RJR liable for violating state law when it distributed 108,155 free packs of cigarettes on public grounds. Under the settlement, RJR agreed to pay $1 million to the Public Health Institute, a nonprofit organization that administers the Public Health Trust and will use the money to fund tobacco control advocacy and education programs. Additionally, RJR will pay a $3.1 million civil penalty, and $900,000 to cover the Attorney General's cost and fees.
December 2005 - California Supreme Court finds R.J. Reynolds liable for violating state free-sampling ban.
In a unanimous decision, the Supreme Court upheld the constitutionality of the state's ban on cigarette and smokeless tobacco giveaways on public property. The Court rejected Reynolds' argument that the ban was preempted by federal law. The Court sent the case back to the trial court for further proceedings regarding the size of the fine Reynolds would pay.
March 2004 - Court orders R.J. Reynolds to pay settlement fee to help fund projects for tobacco control for California youth and young adults.
The San Diego Superior Court approved a settlement of claims against R.J. Reynolds and its marketing agent for distributing free cigarettes in violation of the MSA and California law. The court required payment of $60,000 to fund projects to support youth and young adult tobacco control .
Stipulation for Order and Order for Entry of Final Judgment, pdf.
October 2003 - Court of Appeal upholds $14.8 million judgment against R.J. Reynolds.
The Court of Appeal upheld a trial court decision that R.J. Reynolds violated California's tobacco sampling law, and confirmed a $14.8 million civil penalty against R.J. Reynolds.
January 2001 - Settlement reached with R.J. Reynolds over free cigarette mailings.
The Attorney General reached a settlement with R.J. Reynolds over free cigarette mailings and Reynolds agreed to take further steps to protect against marketing to children.
June 2001 - Final Judgment and permanent injunction ordered against Swedish Match North America, Inc.
A judgment and permanent injunction were entered against Swedish Match North America, Inc. for violating the prohibition against free sampling of smokeless tobacco.
December 2000 - California reaches settlement with U. S. Tobacco Company.
The Attorney General reached a settlement with United States Tobacco Company over alleged advertisement violations, and U.S. Tobacco agreed to run ads against tobacco use.
The California Attorney General led four State Attorneys General in urging the Food and Drug Administration not to exempt premium cigars from its regulation. The comment noted the lack of evidence that any health benefit would result from exempting premium cigars from FDA regulation, and leveraged the Attorney General Office's tobacco enforcement experience to highlight enforcement difficulties that could arise from an exemption.
March 2007 - Comments filed by States on proposed federal regulations governing tax classifications for cigars and cigarettes.
The California Attorney General's Office and the Attorneys General of 38 other states and the District of Columbia filed comments on proposed federal regulations governing the tax classification of cigars and cigarettes.
May 2006 - States file petition asking the federal Alcohol Tobacco Tax and Trade Bureau for clarification of the definitions of cigars, cigarettes and little cigars.
The Attorney General and 38 other state attorneys general petitioned the federal government to close a regulatory loophole that has increased youth and adult smoking of cigarettes disguised as "little cigars." The petition announced May 16 notes that the regulatory loophole allows manufacturers to evade marketing restrictions and higher taxes that apply to cigarettes. The federal Alcohol Tobacco Tax and Trade Bureau (TTB) is being asked to adopt rules revising the definitions of cigars and cigarettes to ensure that "little cigars" – which actually are cigarettes wrapped in brown paper – are classified, taxed and priced as cigarettes.
Office of the Attorney General Press Release and Petition for Rulemaking, pdf.
The California Attorney General submitted a comment in response to the Food and Drug Administration's notice of proposed rulemaking, urging the FDA to prohibit flavored tobacco products unless the manufacturer is able to prove that the flavored product has an overall public health benefit. The comment argued that implementation of such a standard is appropriate given the scientific evidence on the role of flavors in initiation of tobacco product use and the paucity of evidence regarding the efficacy of flavors for purposes of tobacco product use cessation by established smokers.
The California Attorney General and 26 other Attorneys General submitted a comment in response to the Food and Drug Administration's notice of proposed rulemaking, to support a ban on menthol flavored cigarettes. The comment presented facts and arguments that a complete ban would assist efforts to curb youth smoking, would better protect the health of all citizens, and would be enforceable.
In February 2014, the California Attorney General and 47 other Attorneys General submitted a request to the U.S. Trade Representative, to ensure that the Trans-Pacific Partnership trade agreement include a tobacco carve-out so that federal, state and/or local tobacco control measures could not be challenged under the investment arbitration provisions of the treaty.
In addition to working to reduce youth access to tobacco, the Attorney General's office has worked to reduce youth access to alcohol. We negotiated a commitment from Beam Global in 2007 to adopt standards to limit youth exposure to its alcohol advertising. These standards were endorsed by other manufacturers and the National Alcohol Beverage Control Association (NABCA). In 2008 we helped lead a multi-state effort that resulted in Assurances of Voluntary Compliance with Anheuser-Busch and with MillerCoors, to cease the manufacture and distribution of alcoholic energy drinks.

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