US E-cigarette Industry Sues North Carolina Over FDA Authorization Law, Claims State Overreach in Federal Regulation

Key Points:

Lawsuit Focus: The American e-cigarette industry sues North Carolina, opposing its S.L. 2024-31 regulation banning the sale of unauthorized e-cigarettes by the FDA, claiming it is an overreach interfering with federal regulation.​​ 

Arguments: The industry cites the FDA's "regulatory balance" policy, asserting the exclusive enforcement authority of federal agencies; North Carolina cites the Tobacco Control Act, emphasizing state regulatory authority.​​ 

Legal Consequences: State law mandates a maximum fine of $1500 for retailers found in violation, potentially leading to license revocation, scheduled to take full effect on June 29.​​ 

Case Background: Reynolds American, a subsidiary of British American Tobacco, unsuccessfully promoted similar policies, turning to lobbying various states; a judge had previously considered the industry's chances of success in court to be slim.

According to a report by Law360 on August 12, stakeholders in the US e-cigarette industry are working to maintain the validity of their federal lawsuit aimed at blocking North Carolina's ban on multiple e-cigarette products. They argue that the state's actions are disrupting the established regulatory framework for the industry by the federal government.

The Vapor Technology Association (VTA) and co-plaintiffs argued in a motion on August 11 that the U.S. Food and Drug Administration (FDA) recognizes that if it were to use its power to force all disposable e-cigarette products off the market, many e-cigarette users would instead turn to traditional cigarettes, which goes against the goals set by Congress. They stated that this is why the FDA is "striving for balance" in nicotine regulation — allowing some e-cigarette products to continue to be sold without passing all regulatory hurdles.

The document opposing the state's motion to dismiss points out that North Carolina's S.L. 2024-31 law explicitly prohibits the sale of all e-cigarettes that have not received premarket authorization from the FDA, which is not only harmful but also infringes on the exclusive authority of the federal regulatory agency.

The motion states, "Congress has granted the FDA exclusive enforcement discretion to balance the risks and benefits to public health of allowing unauthorized e-cigarette products to remain on the market. This regulation in North Carolina indirectly enforces federal law and directly conflicts with the FDA's carefully considered and publicly announced policy of delayed enforcement, and should therefore be prioritized for exclusion.

These industry businesses stated that, in addition to having standing to sue, they have thoroughly demonstrated that the state law is superseded by federal law and is unconstitutional.

A few months ago, U.S. District Judge Richard E. Myers II refused to issue a temporary restraining order to block the law from taking effect, as these businesses were suing the state. Judge Myers stated in his order that the industry plaintiffs had a "very small likelihood of success on the merits of their substantive claims.

According to the lawsuit, state law in North Carolina gives the state tax department the power to fine retailers and manufacturers of e-cigarettes that are sold without FDA marketing authorization. Court records show that retailers found selling these unapproved products could face fines of up to $1,500, as well as possible penalties such as license suspension or revocation and product confiscation. The law was originally set to take effect statewide on June 29th.

The state argued in a motion filed in July that when Congress passed the Tobacco Control Act, it explicitly allowed states to implement sales restrictions.

The state of North Carolina references a 2013 ruling from the United States Court of Appeals for the Second Circuit in the case of U.S. Smokeless Tobacco Manufacturing Co. v. City of New York, which stated that "Congress has clearly determined to preserve the significant role of states in regulating or even prohibiting the sale of tobacco products.

The state of North Carolina states that it has an important responsibility in monitoring the regulation of synthetic e-cigarettes for the safety of its residents.

The e-cigarette industry companies have refuted this viewpoint, stating that federal law grants the FDA exclusive authority to enforce the Food, Drug, and Cosmetic Act.

The organization referenced a letter sent by the FDA to the U.S. International Trade Commission and mentioned the lengthy process of requesting certain e-cigarettes to be removed from shelves, stating, "Congress hopes that decisions on the regulation or compliance status of tobacco products and which products should be prioritized for regulation reflect the views of the agency responsible for enforcing the Food, Drug, and Cosmetic Act.

The group stated that before the S.L. 2024-31 regulation became a law, the subsidiary of British American Tobacco, Reynolds American Inc., tried to convince the FDA in February 2023 to implement a similar policy nationwide, claiming it would reduce underage e-cigarette use. However, the agency denied this request. The group said that thereafter, Reynolds Tobacco attempted to get the International Trade Commission to ban the importation of e-cigarettes not approved by the FDA, but the commission rejected the request, citing that such a policy would "usurp the FDA's authority.

The organization stated that after all other attempts had failed, Reynolds Tobacco began lobbying various states.