Kasowitz Files Preliminary Injunction against the State of Colorado to Prevent Enforcement of Minimum Cigarette Price Requirement

Kasowitz Files Preliminary Injunction against the State of Colorado to Prevent Enforcement of Minimum Cigarette Price Requirement

On November 20, 2020, Kasowitz Benson Torres, on behalf of discount cigarette manufacturers Liggett Group and Vector Tobacco and deep discount manufacturer Xcaliber International and a Colorado citizen and cigarette smoker filed a motion for a preliminary injunction against the State of Colorado in the United States District Court for the District of Colorado to enjoin Colorado from enforcing its recently enacted minimum cigarette price requirement, which would drastically raise retail discount cigarette prices for Colorado consumers to premium brand levels.

As alleged in the motion, the requirement was inserted into a cigarette tax increase bill solely to secure support for the bill from Philip Morris, the largest U.S. seller of premium cigarettes such as Marlboro, which had spent millions of dollars successfully opposing previous proposed tax increases.  Along with Colorado cigarette retailers, Philip Morris will reap huge benefits from the new legislation because the minimum price requirement will eliminate price competition from companies that sell discount and deep discount cigarettes and destroy their ability to compete in Colorado.

The motion also alleges that the minimum price requirement violates the Commerce Clause of the U.S. Constitution by favoring Colorado retailers’ in-state economic interests over the interests of out-of-state discount manufacturers.  Further, in violation of the Colorado Constitution, the minimum price requirement was not properly disclosed to Colorado voters who approved the bill on Election Day, November 3, 2020.  Voters were led to believe that the bill would benefit education and other public purposes, when in fact all of the benefit of the minimum price provision will go to retailers and Philip Morris and other premium cigarette manufacturers, and none to the State of Colorado.

The Kasowitz team representing Liggett Group, Vector Tobacco, Xcaliber International and the Colorado citizen is led by partners Marc E. Kasowitz and Daniel R. Benson and includes partner Leonard A. Feiwus, counsel Maria Gorecki, and associates Deva Roberts, Rachel Bandli and Maxwell Sandgrund.