Photo of Bryan Haynes

Bryan Haynes

Subscribe to Bryan Haynes's Posts

Bryan serves clients by developing and implementing creative solutions for complex issues. Focusing in tobacco industry regulatory compliance and enforcement matters, Bryan efficiently assists clients in complying with regulatory obligations and managing risk, consistent with clients' business objectives.

Contact:Read more about Bryan Haynes

In 2023, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) placed Twenty-Nine Palms Band of Mission Indians (Twenty-Nine Palms), a federally recognized Indian tribe that sells cigarettes on sovereign reservations in California, on the Prevent All Cigarette Trafficking Act’s (PACT Act’s) noncompliant list (NCL). The PACT Act generally prohibits common carriers from shipping products to or from companies on the NCL. After ATF placed Twenty-Nine Palms on the NCL, the tribe sued ATF and its parent agency, the Department of Justice (DOJ), in federal court. This case is worth following because it involves key issues related to ATF’s authority to enforce the PACT Act against federally recognized Indian tribes and ATF’s interpretation of key sections of the PACT Act.

In June, the Appellate Court of Illinois upheld an assessment of over $314 million against Sam’s Club for unpaid county cigarette excise taxes, including a 10% late fee, a 25% penalty, and accrued interest. The assessment arose from Sam’s Club’s alleged failure to pay taxes on cigarettes that it sold to out-of-county retailers from 2009 to 2016. Following the June ruling, the company now appears poised to bring its arguments to the state’s highest court in a case illustrating the ambiguities of state and local excise taxation laws.

On June 20, the Supreme Court concluded that marketing denial orders (MDOs) issued by the Food and Drug Administration (FDA) can be challenged not only by the applicants (typically, the manufacturer or importer of the products), but also by retailers who would sell such products. As a result, more challenges to MDOs are likely to be brought before the U.S. Court of Appeals for the Fifth Circuit, where litigants have generally had greater success to date in challenging MDOs relative to other appellate courts.

Effective July 1, Mississippi will require all cigarette and ENDS manufacturers to provide annual certifications and have their products listed on a state directory in order for their products to be sold in the state. The law, enacted through HB 916, creates separate directories for cigarettes, including roll-your-own (RYO) tobacco, and Electronic Nicotine Delivery Systems (ENDS) products, such as e-cigarettes and vapes.

In the first major enforcement action involving the importation of illegal tobacco products by the new administration, and on the heels of the appointment of the new acting director of the U.S. Food and Drug Administration (FDA) Center for Tobacco Products, FDA and U.S. Customs and Border Protection (CBP) seized illegal e-cigarettes valued at nearly $34 million. This operation underscores the ongoing efforts by federal agencies to combat the influx of unauthorized tobacco products into the U.S.

Our colleagues recently wrote about 14 memoranda from the new U.S. Attorney General (AG) Pam Bondi to Department of Justice (DOJ) employees framing the DOJ’s current policies and enforcement priorities. In a memorandum addressing DOJ’s general charging, plea bargaining, and sentencing policy, the AG stated the following: “To free resources to address more pressing priorities, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) shall shift resources from its Alcohol and Tobacco Enforcement Programs to focus on matters relating to the other priorities set forth herein. No resources shall be diverted from the ATF’s regulatory responsibilities, such as federal firearms licenses and background checks.”

In late January, the U.S. Food and Drug Administration (FDA) withdrew its proposed rules to prohibit menthol as a characterizing flavor in cigarettes and all characterizing flavors in cigars. Although either proposal could be revived under a future administration, the withdrawal ends both of the current rulemaking processes. The move also strongly indicates shifting FDA priorities under the second Trump administration. Amid these changes, industry may find the agency more receptive to its arguments — particularly those submitted in comments to proposed rulemaking.

Yet again, the premium cigar industry has prevailed in federal court against the U.S. Food and Drug Administration (FDA). As we have previously discussed here and here, FDA appealed a federal district court decision vacating its rule (the Deeming Rule) subjecting premium cigars to the Federal Food, Drug, and Cosmetic Act, as amended by the Tobacco Control Act (TCA). On January 24, the U.S. Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) issued an opinion agreeing[1] with (i) the district court’s ruling that FDA acted arbitrarily and capriciously when it sought to include premium cigars in its Deeming Rule and (ii) the district court’s vacatur of the Deeming Rule as applied to premium cigars, but it remanded the case to the district court to determine the appropriate definition of “premium cigar.” Now, the district court will reconsider the appropriate definition of “premium cigar,” which will ultimately determine the types of cigars that are not subject to the TCA and FDA’s Deeming Rule. In one potential setback for industry, the D.C. Circuit also stated that it understood the district court’s order as granting relief from user fees prospectively but that it does not read it as permitting the refunding of past user fee payments.