federal judge rejects demand to suspend minimum price of cigarettes approved by voters | New

A federal judge on Monday rejected a demand by some cigarette manufacturers to suspend the part of a voter-approved nicotine and tobacco tax measure that established a minimum price for cigarettes.

Colorado residents voted in favor of the EE proposal in the November general election, which set the price of cigarettes at least $ 7 per pack, among other changes. Three companies that make discount cigarettes – Liggett Group LLC, Vector Tobacco Inc. and Xcaliber International Ltd., LLC – along with Jennifer A. Smith, a Littleton resident and cigarette user, have filed a federal lawsuit, seeking an injunction preliminary to prevent the floor price from taking effect.

The plaintiffs argued that the provision violated the commerce clause of the United States Constitution by discriminating against them, with the benefits accruing to state cigarette retailers. By setting a floor price, they argued, any money not turned over to the state in the form of taxes would go to cigarette sellers.

In dismissing the request for a preliminary injunction, U.S. District Judge Raymond P. Moore found unconvincing the claim that discount cigarette makers were not only competing with high-end cigarette makers like Philip Morris. , but with the Colorado retail establishments that distribute the products.

“Even though there was an alleged alignment of interests with premium brand manufacturers, discount manufacturers fail to show how this makes retailers the agents of premium brand manufacturers or how it makes retailers compete with manufacturers. discount, “he wrote. “Competition remains between cigarette makers looking to persuade retailers of the products they need to feature on high-end shelves. “

Moore also ruled that the minimum price provision does not impose an unconstitutional burden on interstate commerce, although it does impose a burden on some manufacturers. The provision will now come into effect on Friday.

Elizabeth Kosar, spokesperson for Governor Jared Polis, said the governor was happy with the judge’s order.

“Voters overwhelmingly endorsed Prop EE to help provide free preschool for Colorado children and we look forward to implementing the voters’ will, ”Kosar said.

“We do not agree with the court’s ruling and will appeal,” a spokesperson for the Liggett group said. “Among other things, the Minimum Price Act effectively prohibits competition from discount cigarettes in Colorado and denies consumers affordable choices. Further, as we show in our parallel court proceeding, the law is also void because that it was enacted in violation of the Colorado Constitution, including its disclosure requirements to Colorado voters. ”

The EE proposal also increased the tax per pack of cigarettes to $ 2.64, with revenues going to K-12 education, tobacco programs and general expenses, and then preschool spending over the years. following. The change in law also covers vaping products.

The minimum price for cigarettes will drop to $ 7.50 a pack in 2024.

The plaintiffs’ underlying lawsuit also seeks to permanently overturn the minimum price provision of the EE Proposal and its related legislation, Bill 20-1427. According to the complainants’ calculations, the current price difference of $ 2.40 between a pack of Camel cigarettes and the cheapest discount brand of cigarettes will be reduced to 48 cents from the floor price. For Newport cigarettes, the difference will be $ 1.21, compared to $ 3.13 currently.

“Ultimately, if pricing of this type were to proliferate, discount tobacco companies will have no way to price and sell their products effectively, leaving big tobacco companies like Philip Morris a full control over prices in the domestic market for cigarettes, ”the complainants said. accused in their trial.

This story has been updated with an additional comment.