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Case 3:22-cv-01755-BEN-MSB Document 1 Filed 11/09/22 PageID.

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1 Steven N. Geise (SBN 249969)


JONES DAY
2 sngeise@jonesday.com
4655 Executive Drive, Suite 1500
3 San Diego, CA 92121
Tel: (858) 314-1200
4 [Additional counsel identified on
5 signature page]
Counsel for Plaintiffs
6 R.J. Reynolds Tobacco Company; R.J.
Reynolds Vapor Company; American
7 Snuff Company, LLC; Santa Fe Natural
Tobacco Company, Inc.; Modoral
8 Brands Inc.; Neighborhood Market
Association, Inc.; and Morija, LLC dba
9 Vapin’ the 619

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11 UNITED STATES DISTRICT COURT
12 SOUTHERN DISTRICT OF CALIFORNIA

13 R.J. REYNOLDS TOBACCO COMPANY; Case No. '22CV1755 BEN MSB


R.J. REYNOLDS VAPOR COMPANY;
14 AMERICAN SNUFF COMPANY, LLC; COMPLAINT FOR
SANTA FE NATURAL TOBACCO DECLARATORY AND
15 COMPANY, INC.; MODORAL BRANDS INJUNCTIVE RELIEF
INC.; NEIGHBORHOOD MARKET
16 ASSOCIATION, INC.; and MORIJA, LLC dba
VAPIN’ THE 619,
17
Plaintiffs,
18
v.
19
ROBERT BONTA, in his official capacity as
20 Attorney General of California; and SUMMER
STEPHAN, in her official capacity as District
21 Attorney for the County of San Diego,
22 Defendants.

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COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF


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1 Plaintiffs R.J. Reynolds Tobacco Company (“RJRT”), R.J. Reynolds Vapor


2 Company (“RJRV”), American Snuff Company, LLC (“ASC”), Santa Fe Natural
3 Tobacco Company, Inc. (“Santa Fe”), Modoral Brands Inc. (“Modoral”),
4 Neighborhood Market Association, Inc., and MORIJA, LLC dba Vapin’ the 619
5 bring this action for declaratory and injunctive relief against Defendants Robert
6 Bonta, in his official capacity as Attorney General of California, and Summer
7 Stephan, in her official capacity as District Attorney for the County of San Diego.
8 PRELIMINARY STATEMENT
9 1. Under the federal Tobacco Control Act (“TCA”), states and localities
10 have broad authority to regulate the sale of tobacco products. But one thing they
11 cannot do is completely prohibit their sale because they do not meet the state or
12 locality’s preferred “tobacco product standards.” Nonetheless, on November 8, 2022,
13 Californians voted to approve SB793, which bans the sale of “flavored tobacco
14 products” throughout the state. See Cal. Sec’y of State, State Ballot Measures –
15 Statewide Results, https://tinyurl.com/224csfnk (reporting that as of 8:05 a.m. on
16 Nov. 9, 2022, 95.1% of precincts had partially reported results, and 62.3% of voters
17 approved SB793); see also 2022 California midterm election: Live results, L.A.
18 Times, https://tinyurl.com/jdbxbdxw (last visited Nov. 9, 2022) (reporting that
19 SB793 has been approved). The ban will take effect five days after the Secretary of
20 State certifies the results of the vote, which must occur by December 16, 2022. See
21 Cal. Const., art. II, § 10(a); Cal. Elec. Code § 15501(b).
22 2. California’s SB793 cannot stand because it is preempted by the federal
23 Tobacco Control Act. First, the ban falls under the TCA’s express preemption clause,
24 which preempts “any [state] requirement” that is “different from, or in addition to,”
25 a federal requirement about a tobacco product standard. A flavor ban is a
26 paradigmatic tobacco product standard. 21 U.S.C. § 387p(a)(2)(A). Indeed, one of
27 the only tobacco product standards that Congress itself adopted in the TCA was a ban
28 on flavored cigarettes except menthol ones. Id. § 387g(a)(1)(A). The state’s ban,

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1 however, is broader than the federal one—it bans all characterizing flavors (including
2 menthol) and it applies to tobacco products other than cigarettes. It therefore falls
3 squarely under the TCA’s preemption clause. Second, the state’s ban is not saved by
4 the TCA’s savings clause. Id. § 387p(a)(2)(B). The TCA distinguishes between
5 requirements “relating to” the sale of tobacco products, on the one hand, and
6 requirements “prohibiting” their sale, on the other. The savings clause saves the first
7 type of requirement, but not the second, and so does not save the state’s absolute ban.
8 Id. Thus, SB793’s ban on flavored tobacco products manufactured and sold by
9 Plaintiffs RJRT, RJRV, ASC, Santa Fe, and Modoral (collectively, “Reynolds”) and
10 on flavored tobacco products sold at retail by Plaintiff Vapin’ the 619 as well as by
11 members of Plaintiff Neighborhood Market Association is preempted by federal law
12 and therefore invalid.
13 3. In addition, because California’s law attempts to regulate manufacturers
14 that are not within the state’s borders, the law violates the dormant Commerce
15 Clause. And because California’s ban does so, it is unconstitutional and must be set
16 aside.
17 4. California has no legitimate interest in enforcing its preempted and
18 unconstitutional law. The Court should thus grant injunctive and declaratory relief
19 preventing the Defendants and their agents from violating the U.S. Constitution’s
20 Supremacy Clause and Commerce Clause.
21 PARTIES
22 5. Plaintiff RJRT is a North Carolina corporation headquartered in
23 Winston-Salem, North Carolina. RJRT is a leading manufacturer of tobacco
24 products. In particular, RJRT develops, manufactures, markets, and distributes a
25 variety of flavored tobacco products under a variety of brand names, including
26 menthol cigarettes under the brand names Newport and Camel, among others, and
27 flavored smokeless tobacco products under the brand name Camel SNUS.
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1 6. Plaintiff RJRV is a North Carolina corporation headquartered in


2 Winston-Salem, North Carolina. RJRV develops, manufactures, markets, and
3 distributes menthol-flavored electronic nicotine delivery devices under the brand
4 name “VUSE.”
5 7. Plaintiff ASC is a North Carolina corporation headquartered in
6 Winston-Salem, North Carolina. ASC develops, manufactures, markets, and
7 distributes a variety of flavored smokeless tobacco products, including under the
8 brand name “Grizzly.”
9 8. Plaintiff Santa Fe is a New Mexico corporation headquartered in
10 Oxford, North Carolina. Santa Fe develops, manufactures, markets, and distributes
11 menthol cigarettes under the brand name Natural American Spirit.
12 9. Plaintiff Modoral is a North Carolina corporation headquartered in
13 Winston-Salem, North Carolina. Modoral develops, manufactures, markets, and
14 distributes various flavored tobacco products, including nicotine lozenges and
15 pouches, under the brand name VELO.
16 10. All of the aforementioned flavored products manufactured and
17 distributed by RJRT, RJRV, ASC, Santa Fe, and Modoral qualify as “flavored
18 tobacco product[s]” for which retail sale is prohibited under SB793.
19 11. Neighborhood Market Association is a local non-profit industry trade
20 association comprised of various businesses, including family-owned businesses
21 within San Diego County, California. The Association has members who are tobacco
22 retailers, wholesalers, and manufacturers located within the State that will be subject
23 to SB793 once it goes into effect. Many of the Association’s tobacco retailers sell
24 flavored tobacco products, including those manufactured by RJRT, RJRV, ASC,
25 Santa Fe, and Modoral. Those retailers will no longer be able to sell “flavored tobacco
26 product[s],” as defined in Senate Bill 793, once the law goes into effect. But for
27 Senate Bill 793, those members who currently sell flavored tobacco products would
28 continue to do so to consumers in California. Dozens of NMA’s members, including

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1 Vapin’ the 619, will likely have to close shop completely and lay off their employees
2 if California’s ban goes into effect.
3 12. MORIJA, LLC is headquartered in El Cajon, California. The company
4 does business as Vapin’ the 619 and is a tobacco retailer with a retail establishment
5 located on Clairemont Mesa Boulevard in the City of San Diego, California. The
6 establishment exclusively sells electronic smoking devices and e-liquid tobacco
7 products used in conjunction with such devices. In particular, the establishment sells
8 flavored tobacco products as defined in Senate Bill 793. Vapin’ the 619 will no longer
9 be able to sell “flavored tobacco product[s],” as defined in Senate Bill 793, once the
10 law goes into effect. But for Senate Bill 793, Vapin’ the 619 would continue to sell
11 flavored tobacco products to consumers in California. If Senate Bill 793 does go into
12 effect, Vapin’ the 619 will likely have to close its store permanently and lay off its
13 employees.
14 13. Defendant Robert Bonta is sued in his official capacity as Attorney
15 General of California. The Attorney General is “the chief law officer of the State”
16 and exercises “direct supervision over every district attorney.” Cal. Const. art. V,
17 § 13. The California Constitution also imposes on the Attorney General the duty “to
18 prosecute any violations of law” and grants him “all the powers of a district attorney”
19 whenever he believes that the law is not being adequately enforced. Id. Because a
20 violation of Senate Bill 793 is an “infraction,” SB793 § 104559.5(f), the Attorney
21 General has direct enforcement power of the law and supervises district attorneys
22 who also have enforcement power, Cal. Gov. Code § 26500 (“[t]he district attorney
23 is the public prosecutor” who “shall initiate and conduct on behalf of the people all
24 prosecutions for public offenses”); see also Cal. Penal Code § 16 (defining “[c]rimes
25 and public offenses” to include “[i]nfractions”).
26 14. Defendant Summer Stephan is sued in her official capacity as District
27 Attorney for the County of San Diego. As District Attorney, Stephan has the power
28 to enforce Senate Bill 793 because a violation of that law is an “infraction.” SB793

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1 § 104559.5(f); Cal. Gov. Code § 26500 (“[t]he district attorney is the public
2 prosecutor” who “shall initiate and conduct on behalf of the people all prosecutions
3 for public offenses”); see also Cal. Penal Code § 16 (defining “[c]rimes and public
4 offenses” to include “[i]nfractions”).
5 JURISDICTION AND VENUE
6 15. The Court has subject-matter jurisdiction under 28 U.S.C. § 1331
7 because this action arises under the Constitution and laws of the United States.
8 16. This Court also has authority to grant relief under the Declaratory
9 Judgment Act, 28 U.S.C. § 2201 et seq.
10 17. This judicial district is the proper venue under 28 U.S.C. § 1391(b)(2)
11 because it is where a substantial part of the events giving rise to the claims occurred
12 and where the effects of Senate Bill 793 will be felt. Prior to Senate Bill 793’s
13 enactment, Reynolds’ flavored tobacco products were sold by retailers in this judicial
14 district, including by members of Neighborhood Market Association. In addition,
15 prior to Senate Bill 793’s enactment, members of Neighborhood Market Association
16 as well as Vapin’ the 619 sold flavored tobacco products in this judicial district.
17 Senate Bill 793 forbids the sale of nearly all flavored tobacco products in this judicial
18 district, and will thus cause financial injury to Plaintiffs in this district.
19 BACKGROUND
20 The Tobacco Control Act and Federal Regulation of Tobacco Products
21 18. Long before California considered prohibiting flavored tobacco
22 products, Congress enacted a comprehensive regime distributing authority over all
23 aspects of tobacco regulation between FDA and state and local governments. In 2009,
24 Congress enacted the Family Smoking Prevention and Tobacco Control Act of 2009,
25 Public Law No. 111-31, 123 Stat. 1776. Among other things, the Act added a new
26 Chapter IX to the Federal Food, Drug, and Cosmetic Act (“FDCA”), granting FDA
27 primary authority to regulate tobacco products. See FDCA §§ 900-919, 21 U.S.C.
28 §§ 387-387s.

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1 19. The TCA addresses flavors in tobacco products in the section entitled
2 “Tobacco product standards.” Id. § 387g. Within that section, Congress expressly
3 enacted a “tobacco product standard” that prohibits characterizing flavors in
4 cigarettes other than tobacco or menthol. Id. § 387g(a)(1)(A). Congress, moreover,
5 enforced that standard through a sales ban, by providing that any cigarettes
6 containing impermissible characterizing flavors are “adulterated,” and cannot be
7 sold. Id. §§ 387b(5), 331(a), (c). Thus, federal tobacco product standards explicitly
8 ban all flavored cigarettes except menthol and tobacco flavors. Congress then left it
9 to FDA to decide, subject to various requirements, whether to extend that prohibition
10 to other tobacco products or flavors. E.g., id. § 387g(a).
11 20. Given the primary role Congress assigned to FDA, Congress also
12 addressed the relationship between federal authority and state and local authority to
13 regulate tobacco products. Congress did so in three interrelated provisions:
14 21. The preservation clause generally preserves “the authority of” states,
15 localities, the Armed Forces, federal agencies, and Indian tribes to promulgate
16 measures that are “in addition to, or more stringent than, requirements” under the
17 TCA, including “measure[s] relating to or prohibiting the sale … of tobacco products
18 by individuals of any age.” Id. § 387p(a)(1) (emphasis added). While the preservation
19 of those entities’ authority is broad, when it comes to state and local governments,
20 the preservation clause has an express exception: If a state or local law falls within
21 the TCA’s preemption clause, that law is not protected by the preservation clause. Id.
22 (stating that preservation clause applies “[e]xcept as provided in paragraph (2)(A),”
23 i.e., the preemption clause).
24 22. The preemption clause then prohibits states and localities from
25 “establish[ing] … any requirement” that “is different from, or in addition to,” federal
26 requirements “relating to tobacco product standards, premarket review, adulteration,
27 misbranding, labeling, registration, good manufacturing standards, or modified risk
28 tobacco products.” Id. § 387p(a)(2)(A) (emphasis added).

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1 23. The savings clause then provides an exception to preemption. It saves


2 state and local “requirements relating to the sale … of, tobacco products by
3 individuals of any age.” Id. § 387p(a)(2)(B) (emphasis added). But the clause does
4 not reference—and so does not save—local power to enact “requirements prohibiting
5 the sale” of those products. Compare id. (savings clause), with id. § 387p(a)(1)
6 (preservation clause).
7 Plaintiffs and FDA Work To Keep Tobacco Products Away from Youth
8 24. The original motivation for California’s ban on flavored tobacco
9 products was to prevent youth usage of tobacco products. See Cal. Sen. Comm. on
10 Health, SB 793 Analysis (May 2020), https://tinyurl.com/2p93tebk. Plaintiffs and
11 FDA are both committed to keeping tobacco products out of the hands of youth.
12 25. Reynolds has taken active steps to prevent youth access to their
13 products. Reynolds is an original sponsor and lead participant in the We Card
14 program. Reynolds requires its contracted retailers to commit to participating in We
15 Card. Since this partnership began in 1995, We Card has trained nearly half a million
16 storeowners, managers, and frontline employees to help prevent youth access to
17 tobacco products.
18 26. Reynolds has expanded those efforts, including through use of We
19 Card’s “mystery shopper” program, which also will provide additional retailers with
20 further education and training on verifying legal age of purchasers.
21 27. In 2018, RJRV took targeted action to ensure youth were not obtaining
22 its vapor products. The company instituted a contract-based tiered compliance
23 program that involves penalties on retailers that are found to have illegally sold
24 VUSE products to youth. In conjunction with this program, RJRV also had its trade
25 marketing representatives discuss the issue of underage youth access with each of
26 RJRV’s contracted retailers. And the company provides access to additional
27 materials and resources on preventing youth access to tobacco products via its online
28 customer portal, engageVIP.com.

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1 28. In 2022, Reynolds expanded its youth access prevention initiatives by


2 extending the contract-based tiered compliance program to include penalties on
3 retailers that are found to have illegally sold any Reynolds product to youth.
4 29. FDA also has specifically addressed concerns about youth vaping. In
5 guidance for the industry, FDA stated that it “intends to prioritize enforcement for
6 lack of marketing authorization against any flavored, cartridge-based [electronic
7 nicotine delivery system (“ENDS”)] product (other than a tobacco- or menthol-
8 flavored ENDS product) that is offered for sale in the United States without regard
9 to whether or when premarket application for such product has been submitted.”
10 FDA, Enforcement Priorities for Electronic Nicotine Delivery Systems (ENDS) and
11 Other Deemed Products on the Market Without Premarket Authorization (Revised)
12 19 (Apr. 2020), https://www.fda.gov/media/133880/download (“Enforcement
13 Priorities”). By way of background, when FDA promulgated its Deeming Rule, it
14 brought ENDS products within its regulatory umbrella—meaning that before the
15 products were sold, they needed FDA authorization. 81 Fed. Reg. 28,974. At the time,
16 FDA said it would use its enforcement discretion and allow the products to stay on
17 the market for some time even if they had not received FDA authorization. Id. at
18 28,977–78. FDA has now changed course with regard to flavored, cartridge-based
19 ENDS products (other than those that are tobacco- or menthol-flavored). FDA,
20 Enforcement Priorities 19. The upshot of the new policy is that flavored, cartridge-
21 based e-cigarettes (other than those that are tobacco- or menthol-flavored) can no
22 longer be sold, unless and until FDA grants authorization for such products.
23 30. In addition, as part of the same guidance referred to above, FDA stated
24 that it would prioritize enforcement against ENDS products for which the
25 manufacturer has failed to take adequate measures to prevent minors’ access. Id. at
26 3. And FDA will make enforcement a priority with respect to ENDS products that
27 are “targeted to minors or whose marketing is likely to promote use of ENDS by
28 minors.” Id.

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1 31. Consistent with that enforcement policy, FDA has issued numerous
2 warning letters to entities that are improperly marketing or selling “unauthorized
3 flavored, cartridge-based ENDS products” and other ENDS products that are being
4 marketed or sold in ways that are appealing to youth. See, e.g., FDA In Brief, FDA
5 Warns Firm with Over 15 Million Products Listed with FDA to Remove
6 Unauthorized E-Cigarette Products from Market, (July 28, 2021),
7 https://tinyurl.com/2p92mtd4; FDA In Brief, FDA Warns Firms for Continuing to
8 Market E-cigarette Products after Agency Denied Authorizations (Oct. 7, 2021),
9 https://tinyurl.com/563s3mda; FDA, Warning Letter re EVO Brands, LLC and
10 PVG2, LLC d/b/a Puff Bar (Oct. 6, 2022), https://tinyurl.com/3sua44tp;.
11 32. Further, FDA has issued warning letters to manufacturers selling e-
12 cigarette products despite FDA’s denial of the manufacturers’ premarket tobacco
13 product applications. E.g., FDA, Warning Letter to Ecig Vapor Juice Store (Sept. 27,
14 2022), https://tinyurl.com/mr3f9mrt. FDA is thus taking action to remove products
15 that have received marketing denial orders off the market.
16 33. Importantly, however, FDA has continued to allow the sale of many
17 menthol-flavored e-cigarettes. That approach allows menthol cigarette smokers to
18 transition to other “potentially less harmful” menthol-flavored products, which also
19 makes sense because “[d]ata shows that … menthol-flavored ENDS products are not
20 as appealing to minors as other flavored ENDS products.” FDA, Enforcement
21 Priorities 23–24, 39. As FDA has explained, “[t]his approach”—effectively banning
22 characterizing flavors except for menthol and tobacco—“strikes an appropriate
23 balance between restricting youth access to such products, while maintaining
24 availability of potentially less harmful options for current and former adult smokers
25 who have transitioned or wish to transition completely away from combusted
26 [tobacco- and menthol-flavored] tobacco products.” Id. at 20.
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1 The State’s Categorical Ban on Flavored Tobacco Products


2 34. On August 28, 2020, the Governor of California signed Senate Bill 793
3 (“SB793”) into law, banning the retail sale of nearly all flavored tobacco products
4 anywhere in the state. A copy is attached to this Complaint as Exhibit 1. SB793 was
5 set to go into effect on January 21, 2021, but a referendum challenging the law
6 qualified to be on the ballot for the November 8, 2022 general election. See
7 Proposition 31, Qualified Statewide Ballot Measures, https://tinyurl.com/y6cwbuyr.
8 Accordingly, the referendum suspended operation of SB793 unless and until “it is
9 approved by a majority of voters.” Wilde v. City of Dunsmuir, 9 Cal. 5th 1105, 1111
10 (2020); see Cal. Const. art. IV, § 8(c)(2).
11 35. Plaintiffs previously sued to challenge SB793 in this Court. R.J.
12 Reynolds Tobacco Co. v. Becerra, No. 20-CV-1990, 2021 WL 3472697, at *1 (S.D.
13 Cal. Aug. 6, 2021). This Court dismissed that case as unripe. The Court explained
14 that because Proposition 31 had qualified for the ballot, SB793 “will never be
15 enforceable against Plaintiffs (or anyone) if it does not survive the referendum set to
16 go forward on November 8, 2022.” Id. at *1. The injury the Plaintiffs faced from
17 SB793 was thus “contingent on the outcome of the referendum.” Id. at *1–2.
18 36. The referendum has now occurred and the injury Plaintiffs face is no
19 longer theoretical, but concrete and imminent. On November 8, 2022, Californians
20 went to the polls and approved SB793. See supra ¶ 1. That means that the law will
21 go into effect five days after the California Secretary of State formally certifies the
22 results, which must occur no later than December 16. See Cal. Const., art. II, § 10(a);
23 Cal. Elec. Code § 15501(b). Accordingly, without judicial intervention, SB793 will
24 go into effect no later than December 21, 2022.
25 37. SB793 states that tobacco retailers “shall not sell, offer for sale, or
26 possess with the intent to sell or offer for sale, a flavored tobacco product or a tobacco
27 product flavor enhancer.” SB793 § 104559.5(b)(1).
28

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1 38. The law defines “[f]lavored tobacco product” as “any tobacco product
2 that contains a constituent that imparts a characterizing flavor.” Id. § 104559.5(a)(4).
3 A “constituent” is defined as “any ingredient, substance, chemical, or compound …
4 that is added by the manufacturer … during the processing, manufactur[ing], or
5 packing of the tobacco product.” Id. § 104559.5(a)(2) (emphasis added).
6 39. “Tobacco product” means “[a] product containing, made, or derived
7 from tobacco or nicotine that is intended for human consumption.” Cal. Health &
8 Safety Code § 104495(8)(A)(i). “Tobacco product” explicitly includes “cigarettes,”
9 “chewing tobacco,” “snuff,” and electronic nicotine delivery systems. Id.
10 §§ 104495(a)(8)(A)(i), (a)(8)(A)(ii). Senate Bill 793 defines “[c]haracterizing
11 flavor” as “a distinguishable taste or aroma, or both, other than the taste or aroma of
12 tobacco, imparted by a tobacco product or any byproduct produced by the tobacco
13 product.” SB793 § 104559.5(a)(1). The definition explicitly includes “menthol.” Id.
14 The sales ban excludes a handful of products sold in certain situations, including
15 shisha tobacco products, premium cigars, and loose leaf pipe tobacco. Id.
16 §§ 104559.5(c), (d), (e).
17 40. A person who violates the law “is guilty of an infraction and shall be
18 punished by a fine of two hundred fifty dollars ($250) for each violation.” Id.
19 § 104559.5(f).
20 41. At the same time, SB793 excepts from its ban “flavored shisha tobacco
21 products” sold “by a hookah tobacco retailer” if certain “conditions” are met. Id.
22 § 104559.5(c) (including license, age restriction, and state and local law compliance
23 preconditions).
24 42. In short, the law bans nearly all kinds of flavored tobacco products,
25 including the sale of all menthol flavored cigarettes, menthol flavored e-cigarettes,
26 flavored smokeless tobacco products, and other flavored products, including those
27 specifically found by FDA to be appropriate for the protection of the public health.
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1 Plaintiffs’ Products
2 43. Plaintiffs RJRT, RJRV, ASC, Santa Fe, and Modoral collectively
3 manufacture numerous tobacco products, which are subject to California’s
4 prohibition on flavored tobacco products and which Plaintiffs would continue
5 distributing for resale in the state—including in this District—but for Senate Bill 793.
6 44. RJRT manufactures various tobacco products—including products with
7 characterizing flavors, such as menthol cigarettes, as well as cigarettes that do not
8 have characterizing flavors—under a variety of brand names, including Newport and
9 Camel. RJRT also manufactures other tobacco-related products, including flavored
10 smokeless tobacco products, under the brand name Camel SNUS.
11 45. RJRV manufactures tobacco products. Those include menthol- and
12 tobacco-flavored vaping products, under the brand name VUSE. FDA is reviewing
13 numerous premarket tobacco product applications for currently marketed menthol-
14 flavored VUSE products.
15 46. ASC manufactures various smokeless tobacco products—including
16 products with and without characterizing flavors—under the brand name “Grizzly.”
17 47. Santa Fe manufactures various tobacco products—including menthol
18 cigarettes as well as cigarettes that do not have characterizing flavors—under the
19 brand name Natural American Spirit.
20 48. Modoral manufactures various flavored tobacco products, including
21 nicotine lozenges and pouches, under the brand name VELO. FDA is reviewing
22 numerous premarket tobacco product applications for currently marketed flavored
23 VELO products.
24 49. RJRT, RJRV, ASC, Santa Fe, and Modoral each desires to continue
25 distributing banned “flavored tobacco products” for resale within California.
26 50. Plaintiff Neighborhood Market Association has members who are
27 tobacco retailers and who sell numerous “flavored tobacco product[s],” which are
28 subject to California’s prohibition on the sale of flavored tobacco products and which

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1 those members would continue selling in this state—including in this District—but


2 for Senate Bill 793. In particular, members of Neighborhood Market Association sell
3 menthol cigarettes, flavored smokeless tobacco products, flavored vapor products,
4 and other flavored products, including products manufactured by Reynolds. Those
5 members desire to continue selling banned “flavored tobacco product[s]” within the
6 state of California, including in this District.
7 51. Plaintiff Vapin’ the 619 is a tobacco retailer that sells “flavored tobacco
8 product[s],” particularly flavored vapor products, which are subject to California’s
9 prohibition on the sale of flavored tobacco products and which Vapin’ the 619 would
10 continue selling in this state—including in this District—but for Senate Bill 793.
11 Vapin’ the 619 desires to continue selling banned “flavored tobacco product[s]”
12 within the state of California, including in this District.
13 52. The Act’s categorical ban on “flavored tobacco product[s]” harms
14 RJRT, RJRV, ASC, Santa Fe, Modoral, members of Neighborhood Market
15 Association, and Vapin’ the 619 because it severely restricts their ability to market
16 and sell such products to customers in California.
17 CLAIMS FOR RELIEF
18 COUNT I
19 Express Preemption
20 53. The preceding paragraphs are incorporated and re-alleged here.
21 54. The Supremacy Clause of the Constitution provides that the laws of the
22 United States “shall be the supreme Law of the Land … any Thing in the Constitution
23 or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2.
24 Thus, state laws that conflict with federal law are “without effect.” Maryland v.
25 Louisiana, 451 U.S. 725, 746 (1981).
26 55. As of the effective date of Senate Bill 793, Plaintiffs can no longer “sell”
27 “flavored tobacco product[s]” in the state. SB793 § 104559.5(b)(1). Any violation
28 can result in fines. Id. § 104559.5(f).

13
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Case 3:22-cv-01755-BEN-MSB Document 1 Filed 11/09/22 PageID.15 Page 15 of 18

1 56. Under the Tobacco Control Act’s preemption clause, the state is
2 prohibited from enacting and enforcing laws that are “different from, or in addition
3 to,” any of the Tobacco Control Act’s or FDA’s requirements relating to federal
4 “tobacco product standards.” 21 U.S.C. § 387p(a)(2)(A). The state’s ban on flavored
5 tobacco products is “different from, or in addition to,” the requirements of federal
6 law, and is thus preempted.
7 57. The Tobacco Control Act’s savings clause does not save the state’s ban
8 on flavored tobacco products, because that clause saves only requirements “relating
9 to” the sale of tobacco products, not requirements “prohibiting” their sale. Id.
10 § 387p(a)(2)(B). SB793 totally prohibits the sale of “flavored tobacco products” and
11 thus is not a “requirement relating to” the sale of tobacco products.
12 58. Accordingly, the Tobacco Control Act preempts California’s ban on
13 flavored tobacco products, rendering it invalid and unenforceable.
14 59. Plaintiffs acknowledge that, at this time, this Court is bound by the Ninth
15 Circuit’s decision in R.J. Reynolds Tobacco Co. v. Cnty. of Los Angeles, 29 F.4th 542
16 (9th Cir. 2022) (“Los Angeles County”), which held that “tobacco product standards”
17 preempted by the Tobacco Control Act are limited to regulations of how a “product
18 must be produced” and do not include sales prohibitions. Id. at 556. Plaintiffs
19 respectfully maintain that County of Los Angeles was wrongly decided. The decision
20 conflicts with the TCA’s plain text, decisions of the Supreme Court, and reasoning
21 of decisions from other courts of appeals. Los Angeles County’s flavored tobacco
22 product ban, like California’s, falls in the heartland of the TCA’s preemption clause
23 and is not saved by the savings clause. See id. at 561–67 (Nelson, J., dissenting).
24 Moreover, even under the Ninth Circuit’s interpretation of the TCA’s preemption
25 clause (that “tobacco product standards” are limited to manufacturing regulations),
26 the state’s ban qualifies as a requirement related to “tobacco product standards”
27 because SB793 explicitly regulates the manufacturing process. SB793 § 104559.5(a)
28 (defining “[f]lavored tobacco product” with reference to whether a manufacturer

14
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Case 3:22-cv-01755-BEN-MSB Document 1 Filed 11/09/22 PageID.16 Page 16 of 18

1 adds a flavoring ingredient during the manufacturing process). Finally, Plaintiffs in


2 Los Angeles County have filed a petition for writ of certiorari asking the Supreme
3 Court to review the Ninth Circuit’s holding in that case. R.J. Reynolds Tobacco Co.
4 v. County of Los Angeles, No. 22-338 (U.S. filed Oct. 7, 2022).
5 COUNT II
6 Commerce Clause
7 60. The preceding paragraphs are incorporated and re-alleged here.
8 61. The dormant Commerce Clause provides a “self-executing limitation on
9 state authority to enact laws imposing substantial burdens on interstate commerce
10 even in the absence of Congressional action.” United Egg Producers v. Dep’t of
11 Agric. of P.R., 77 F.3d 567, 570 (1st Cir. 1996).
12 62. The dormant Commerce Clause prohibits California from enforcing a
13 law that “regulates or discriminates against interstate commerce, or when its effect is
14 to favor in-state economic interests over out-of-state interests.” Tenn. Wine & Spirits
15 Retailers Ass’n v. Thomas, 139 S. Ct. 2449, 2471 (2019); Brown-Forman Distillers
16 Corp. v. N.Y. State Liquor Auth., 476 U.S. 573, 579 (1986).
17 63. The dormant Commerce Clause specifically prohibits “the application
18 of a state statute to commerce that takes places wholly outside of the State’s borders,
19 whether or not the commerce has effects within the State.” Healy v. Beer Institute,
20 Inc., 491 U.S. 324, 336 (1989). When a state directly regulates interstate commerce,
21 it “exceeds the inherent limits of the enacting State’s authority and is invalid
22 regardless of whether the statute’s extraterritorial reach was intended by the
23 legislature.” Id.
24 64. California’s SB793 violates the dormant Commerce Clause because it
25 dictates how out-of-state manufacturers must manufacture their products. By banning
26 characterizing flavors in most tobacco products, California has attempted to dictate
27 how out-of-state manufacturers produce their tobacco products. The law thus directly
28

15
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Case 3:22-cv-01755-BEN-MSB Document 1 Filed 11/09/22 PageID.17 Page 17 of 18

1 regulates interstate commerce and exceeds the inherent limits of the Commerce
2 Clause.
3 65. SB793 also violates the dormant Commerce Clause because it contains
4 exceptions that discriminate against out-of-state businesses, in favor of local
5 businesses.
6 66. In addition, the ban imposes burdens on out-of-state commerce that are
7 “clearly excessive in relation to the putative local benefits” from the ban. Pike v.
8 Bruce Church, Inc., 397 U.S. 137, 142 (1970).
9 67. Accordingly, California’s law is unenforceable under the Commerce
10 Clause.
11 REQUEST FOR RELIEF
12 Plaintiffs request that this Court grant the following relief:
13 68. Pursuant to 28 U.S.C. § 2201, declare that under the Supremacy Clause
14 of the United States Constitution, federal law preempts Senate Bill 793’s ban on
15 flavored tobacco products, rendering it invalid and unenforceable.
16 69. Pursuant to 28 U.S.C. § 2201, declare that Senate Bill 793 is invalid and
17 unenforceable under the Commerce Clause of the United States Constitution.
18 70. Under Federal Rule of Civil Procedure 65, preliminarily enjoin
19 Defendants and their agents from enforcing or implementing the state’s ban on
20 flavored tobacco products;
21 71. Permanently enjoin Defendants and their agents from enforcing or
22 implementing California’s ban on flavored tobacco products;
23 72. Award Plaintiffs their costs and disbursements associated with this
24 litigation under 28 U.S.C. § 2412 and other applicable authority; and
25 73. Provide such other relief as the Court deems appropriate.
26

27

28

16
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Case 3:22-cv-01755-BEN-MSB Document 1 Filed 11/09/22 PageID.18 Page 18 of 18

1
Dated: November 9, 2022 Respectfully submitted,
2
JONES DAY
3

4
By: /s/ Steven N. Geise
5 Steven N. Geise
sngeise@jonesday.com
6
Noel J. Francisco* (D.C. Bar No. 464752)
7 Christian G. Vergonis* (D.C. Bar No. 483293)
Ryan J. Watson* (D.C. Bar No. 986906)
8 Andrew Bentz* (D.C. Bar No. 1020719)
JONES DAY
9 51 Louisiana Ave., N.W.
Washington, D.C. 20001
10 Tel: (202) 879-3939
Fax: (202) 626-1700
11 * pro hac application forthcoming
12 Counsel for Plaintiffs
R.J. REYNOLDS TOBACCO COMPANY; R.J.
13 REYNOLDS VAPOR COMPANY; AMERICAN
SNUFF COMPANY, LLC; SANTA FE
14 NATURAL TOBACCO COMPANY, INC.;
MODORAL BRANDS INC.; NEIGHBORHOOD
15 MARKET ASSOCIATION, INC.; and MORIJA,
LLC dba VAPIN’ THE 619
16

17

18

19

20

21

22

23

24

25

26

27

28

17
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
Case 3:22-cv-01755-BEN-MSB
JS 44 (Rev. 04/21) Document
CIVIL COVER1-1 SHEET
Filed 11/09/22 PageID.19 Page 1 of 3
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)
I. (a) PLAINTIFFS DEFENDANTS
See attached. See attached.
(b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)

See attached. '22CV1755 BEN MSB


II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
1 U.S. Government ✖ 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State 1 1 Incorporated or Principal Place 4 4
of Business In This State

2 U.S. Government 4 Diversity Citizen of Another State 2 2 Incorporated and Principal Place 5 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State

Citizen or Subject of a 3 3 Foreign Nation 6 6


Foreign Country
IV. NATURE OF SUIT (Place an “X” in One Box Only) Click here for: Nature of Suit Code Descriptions.
CONTRACT TORTS FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES
110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 422 Appeal 28 USC 158 375 False Claims Act
120 Marine 310 Airplane 365 Personal Injury - of Property 21 USC 881 423 Withdrawal 376 Qui Tam (31 USC
130 Miller Act 315 Airplane Product Product Liability 690 Other 28 USC 157 3729(a))
140 Negotiable Instrument Liability 367 Health Care/ INTELLECTUAL 400 State Reapportionment
150 Recovery of Overpayment 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS 410 Antitrust
& Enforcement of Judgment Slander Personal Injury 820 Copyrights 430 Banks and Banking
151 Medicare Act 330 Federal Employers’ Product Liability 830 Patent 450 Commerce
152 Recovery of Defaulted Liability 368 Asbestos Personal 835 Patent - Abbreviated 460 Deportation
Student Loans 340 Marine Injury Product New Drug Application 470 Racketeer Influenced and
(Excludes Veterans) 345 Marine Product Liability 840 Trademark Corrupt Organizations
153 Recovery of Overpayment Liability PERSONAL PROPERTY LABOR 880 Defend Trade Secrets 480 Consumer Credit
of Veteran’s Benefits 350 Motor Vehicle 370 Other Fraud 710 Fair Labor Standards Act of 2016 (15 USC 1681 or 1692)
160 Stockholders’ Suits 355 Motor Vehicle 371 Truth in Lending Act 485 Telephone Consumer
190 Other Contract Product Liability 380 Other Personal 720 Labor/Management SOCIAL SECURITY Protection Act
195 Contract Product Liability 360 Other Personal Property Damage Relations 861 HIA (1395ff) 490 Cable/Sat TV
196 Franchise Injury 385 Property Damage 740 Railway Labor Act 862 Black Lung (923) 850 Securities/Commodities/
362 Personal Injury - Product Liability 751 Family and Medical 863 DIWC/DIWW (405(g)) Exchange
Medical Malpractice Leave Act 864 SSID Title XVI 890 Other Statutory Actions
REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 790 Other Labor Litigation 865 RSI (405(g)) 891 Agricultural Acts
210 Land Condemnation 440 Other Civil Rights Habeas Corpus: 791 Employee Retirement 893 Environmental Matters
220 Foreclosure 441 Voting 463 Alien Detainee Income Security Act FEDERAL TAX SUITS 895 Freedom of Information
230 Rent Lease & Ejectment 442 Employment 510 Motions to Vacate 870 Taxes (U.S. Plaintiff Act
240 Torts to Land 443 Housing/ Sentence or Defendant) 896 Arbitration
245 Tort Product Liability Accommodations 530 General 871 IRS—Third Party 899 Administrative Procedure
290 All Other Real Property 445 Amer. w/Disabilities - 535 Death Penalty IMMIGRATION 26 USC 7609 Act/Review or Appeal of
Employment Other: 462 Naturalization Application Agency Decision
446 Amer. w/Disabilities - 540 Mandamus & Other 465 Other Immigration ✖ 950 Constitutionality of
Other 550 Civil Rights Actions State Statutes
448 Education 555 Prison Condition
560 Civil Detainee -
Conditions of
Confinement
V. ORIGIN (Place an “X” in One Box Only)
✖ 1 Original 2 Removed from 3 Remanded from 4 Reinstated or 5 Transferred from 6 Multidistrict 8 Multidistrict
Proceeding State Court Appellate Court Reopened Another District Litigation - Litigation -
(specify) Transfer Direct File
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
Supremacy Clause and Commerce Clause of U.S. Constitution; Declaratory Judgment Act, 28 U.S.C. § 2201.
VI. CAUSE OF ACTION Brief description of cause:
Express Preemption; Dormant Commerce Clause
VII. REQUESTED IN CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, F.R.Cv.P. See attached. JURY DEMAND: Yes ✖ No
VIII. RELATED CASE(S)
(See instructions):
IF ANY JUDGE See attached. DOCKET NUMBER See attached.
DATE SIGNATURE OF ATTORNEY OF RECORD
November 9, 2022 /s/ Steven N. Geise
FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE


Case 3:22-cv-01755-BEN-MSB Document 1-1 Filed 11/09/22 PageID.20 Page 2 of 3

Civil Cover Sheet


Addendum

I
(a) Plaintiffs

R.J. Reynolds Tobacco Company; R.J. Reynolds Vapor Company;


American Snuff Company, LLC; Santa Fe Natural Tobacco Company, Inc.;
Modoral Brands Inc.; Neighborhood Market Association, Inc.; and Morija,
LLC dba Vapin’ the 619.

(b) County of Residence of First Listed Plaintiff

Forsyth County, NC

(c) Attorneys

Steven N. Geise (SBN 249969)


JONES DAY
4655 Executive Drive, Suite 1500
San Diego, CA 92121
(858) 314-1200

Noel J. Francisco* (D.C. Bar No. 464752)


Christian G. Vergonis* (D.C. Bar No. 483293)
Ryan J. Watson* (D.C. Bar No. 986906)
Andrew Bentz* (D.C. Bar No. 1020719)
JONES DAY
51 Louisiana Ave., N.W.
Washington, D.C. 20001
Tel: (202) 879-3939
Fax: (202) 626-1700
* pro hac application forthcoming

I
(a) Defendants

Robert Bonta, in his official capacity as Attorney General for California; Summer
Stephan, in her official capacity as District Attorney for the County of San Diego.
Case 3:22-cv-01755-BEN-MSB Document 1-1 Filed 11/09/22 PageID.21 Page 3 of 3

VII
Requested in Complaint:
Demand: Preliminary injunction, permanent injunction, declaratory judgment

VIII
Related cases:

Judge Docket Number


Hon. Cathy Ann Bencivengo R.J. Reynolds Tobacco Co. v. Xavier Becerra,
No. 3:20-cv-01990 (dismissed Aug. 6, 2021)
(complaint filed Oct. 9, 2020)
Hon. Dale S. Fischer R.J. Reynolds Tobacco Co. v. County of Los
Angeles, No. 2:20-cv-4880, 2020 WL 5405668
(C.D. Cal. Aug. 7, 2020) (complaint filed June
1, 2020), aff’d, No. 20-55930, 29 F.4th 542 (9th
Cir. 2022), cert. pending, No. 22-338 (U.S.
filed Oct. 7, 2022)
Hon. Janis Sammartino R.J. Reynolds Tobacco Co. v. County of San
Diego, No. 3:20-cv-01290, appeal docketed,
No. 21-55348 (9th Cir. Apr. 13, 2021)
Hon. Patrick J. Schiltz R.J. Reynolds Tobacco Co. v. City of Edina, No.
0:20-cv-1402, 482 F. Supp. 3d 875 (D. Minn.
2020) (complaint filed June 17, 2020), appeal
docketed, No. 20-2852 (8th Cir. Sept. 4, 2020)
(argued May 12, 2021)
Case 3:22-cv-01755-BEN-MSB Document 1-2 Filed 11/09/22 PageID.22 Page 1 of 6

INDEX OF EXHIBITS TO
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
'22CV1755 BEN MSB

EXHIBIT DESCRIPTION PAGES

 August 28, 2020 Senate Bill No. 793 1-4


An act to add Article 5 (commencing with Section
104559.5) to Chapter 1 of Part 3 of Division 103 of
the Health and Safety Code, relating to tobacco
products.
Case 3:22-cv-01755-BEN-MSB Document 1-2 Filed 11/09/22 PageID.23 Page 2 of 6

EXHIBIT 
Case 3:22-cv-01755-BEN-MSB Document 1-2 Filed 11/09/22 PageID.24 Page 3 of 6
STATE OF CALIFORNIA
AUTHENTICATED
ELECTRONIC LEGAL MATERIAL

Senate Bill No. 793

CHAPTER 34

An act to add Article 5 (commencing with Section 104559.5) to Chapter


1 of Part 3 of Division 103 of the Health and Safety Code, relating to tobacco
products.

[Approved by Governor August 28, 2020. Filed with Secretary


of State August 28, 2020.]

legislative counsel’s digest


SB 793, Hill. Flavored tobacco products.
Existing law, the Stop Tobacco Access to Kids Enforcement (STAKE)
Act, prohibits a person from selling or otherwise furnishing tobacco products,
as de¿ned, to a person under 21 years of age. Existing law also prohibits
the use of tobacco products in county of¿ces of education, on charter school
or school district property, or near a playground or youth sports event, as
speci¿ed.
This bill would prohibit a tobacco retailer, or any of the tobacco retailer’s
agents or employees, from selling, offering for sale, or possessing with the
intent to sell or offer for sale, a Àavored tobacco product or a tobacco product
Àavor enhancer, as those terms are de¿ned, except as speci¿ed. The bill
would make a violation of this prohibition an infraction punishable by a
¿ne of $250 for each violation. The bill would state the intent of the
Legislature that these provisions do not preempt or prohibit the adoption
and implementation of local ordinances that impose greater restrictions on
the access to tobacco products than the restrictions imposed by the bill, as
speci¿ed. The bill would state that its provisions are severable. By creating
a new crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies
and school districts for certain costs mandated by the state. Statutory
provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for
a speci¿ed reason.

The people of the State of California do enact as follows:

SECTION 1. Article 5 (commencing with Section 104559.5) is added


to Chapter 1 of Part 3 of Division 103 of the Health and Safety Code, to
read:

93

Exhibit 
Page 1
Case 3:22-cv-01755-BEN-MSB Document 1-2 Filed 11/09/22 PageID.25 Page 4 of 6

Ch. 34 —2—

Article 5. Tobacco Sale Prohibition

104559.5. (a) For purposes of this section, the following de¿nitions


apply:
(1) “Characterizing Àavor” means a distinguishable taste or aroma, or
both, other than the taste or aroma of tobacco, imparted by a tobacco product
or any byproduct produced by the tobacco product. Characterizing Àavors
include, but are not limited to, tastes or aromas relating to any fruit,
chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, menthol,
mint, wintergreen, herb, or spice. A tobacco product shall not be determined
to have a characterizing Àavor solely because of the use of additives or
Àavorings or the provision of ingredient information. Rather, it is the
presence of a distinguishable taste or aroma, or both, as described in the
¿rst sentence of this de¿nition, that constitutes a characterizing Àavor.
(2) “Constituent” means any ingredient, substance, chemical, or
compound, other than tobacco, water, or reconstituted tobacco sheet, that
is added by the manufacturer to a tobacco product during the processing,
manufacture, or packing of the tobacco product.
(3) “Flavored shisha tobacco product” means any shisha tobacco product
that contains a constituent that imparts a characterizing Àavor.
(4) “Flavored tobacco product” means any tobacco product that contains
a constituent that imparts a characterizing Àavor.
(5) “Hookah” means a type of waterpipe, used to smoke shisha or other
tobacco products, with a long Àexible tube for drawing aerosol through
water. Components of a hookah may include heads, stems, bowls, and hoses.
(6) “Hookah tobacco retailer” means a tobacco retailer that is engaged
in the retail sale of shisha tobacco products, hookah, and hookah smoking
accessories.
(7) “Labeling” means written, printed, pictorial, or graphic matter upon
a tobacco product or any of its packaging.
(8) “Loose leaf tobacco” consists of cut or shredded pipe tobacco, usually
sold in pouches, excluding any tobacco product which, because of its
appearance, type, packaging, or labeling, is suitable for use and likely to be
offered to, or purchased by, consumers as tobacco for making cigarettes,
including roll-your-own cigarettes.
(9) “Packaging” means a pack, box, carton, or container of any kind, or,
if no other container, any wrapping, including cellophane, in which a tobacco
product is sold or offered for sale to a consumer.
(10) “Premium cigar” means any cigar that is handmade, is not mass
produced by use of mechanization, has a wrapper that is made entirely from
whole tobacco leaf, and has a wholesale price of no less than twelve dollars
($12). A premium cigar does not have a ¿lter, tip, or nontobacco mouthpiece
and is capped by hand.
(11) “Retail location” means both of the following:
(A) A building from which tobacco products are sold at retail.
(B) A vending machine.

93

Exhibit 
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Case 3:22-cv-01755-BEN-MSB Document 1-2 Filed 11/09/22 PageID.26 Page 5 of 6

—3— Ch. 34

(12) “Sale” or “sold” means a sale as that term is de¿ned in Section


30006 of the Revenue and Taxation Code.
(13) “Shisha tobacco product” means a tobacco product smoked or
intended to be smoked in a hookah. “Shisha tobacco product” includes, and
may be referred to as, hookah tobacco, waterpipe tobacco, maassel, narghile,
and argileh. “Shisha tobacco product” does not include any electronic
devices, such as an electronic hookah, electronic cigarette, or electronic
tobacco product.
(14) “Tobacco product” means a tobacco product as de¿ned in paragraph
(8) of subdivision (a) of Section 104495, as that provision may be amended
from time to time.
(15) “Tobacco product Àavor enhancer” means a product designed,
manufactured, produced, marketed, or sold to produce a characterizing
Àavor when added to a tobacco product.
(16) “Tobacco retailer” means a person who engages in this state in the
sale of tobacco products directly to the public from a retail location.
“Tobacco retailer” includes a person who operates vending machines from
which tobacco products are sold in this state.
(b) (1) A tobacco retailer, or any of the tobacco retailer’s agents or
employees, shall not sell, offer for sale, or possess with the intent to sell or
offer for sale, a Àavored tobacco product or a tobacco product Àavor
enhancer.
(2) There is a rebuttable presumption that a tobacco product is a Àavored
tobacco product if a manufacturer or any of the manufacturer’s agents or
employees, in the course of their agency or employment, has made a
statement or claim directed to consumers or to the public that the tobacco
product has or produces a characterizing Àavor, including, but not limited
to, text, color, images, or all, on the product’s labeling or packaging that
are used to explicitly or implicitly communicate that the tobacco product
has a characterizing Àavor.
(c) Subdivision (b) does not apply to the sale of Àavored shisha tobacco
products by a hookah tobacco retailer if all of the following conditions are
met:
(1) The hookah tobacco retailer has a valid license to sell tobacco products
issued pursuant to Chapter 2 (commencing with Section 22971.7) of Division
8.6 of the Business and Professions Code.
(2) The hookah tobacco retailer does not permit any person under 21
years of age to be present or enter the premises at any time.
(3) The hookah tobacco retailer shall operate in accordance with all
relevant state and local laws relating to the sale of tobacco products.
(4) If consumption of tobacco products is allowed on the premises of the
hookah tobacco retailer, the hookah tobacco retailer shall operate in
accordance with all state and local laws relating to the consumption of
tobacco products on the premises of a tobacco retailer, including, but not
limited to, Section 6404.5 of the Labor Code.

93

Exhibit 
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Case 3:22-cv-01755-BEN-MSB Document 1-2 Filed 11/09/22 PageID.27 Page 6 of 6

Ch. 34 —4—

(d) Subdivision (b) does not apply to sales of premium cigars sold in
cigar lounges where products are purchased and consumed only on the
premises.
(e) Subdivision (b) does not apply to loose leaf tobacco or premium
cigars.
(f) A tobacco retailer, or agent or employee of a tobacco retailer, who
violates this section is guilty of an infraction and shall be punished by a ¿ne
of two hundred ¿fty dollars ($250) for each violation of this section.
(g) This section does not preempt or otherwise prohibit the adoption of
a local standard that imposes greater restrictions on the access to tobacco
products than the restrictions imposed by this section. To the extent that
there is an inconsistency between this section and a local standard that
imposes greater restrictions on the access to tobacco products, the greater
restriction on the access to tobacco products in the local standard shall
prevail.
SEC. 2. The provisions of this act are severable. If any provision of this
act or its application is held invalid, that invalidity shall not affect other
provisions or applications that can be given effect without the invalid
provision or application.
SEC. 3. No reimbursement is required by this act pursuant to Section 6
of Article XIII B of the California Constitution because the only costs that
may be incurred by a local agency or school district will be incurred because
this act creates a new crime or infraction, eliminates a crime or infraction,
or changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the de¿nition of a crime
within the meaning of Section 6 of Article XIII B of the California
Constitution.

93

Exhibit 
Page 4

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