DENVER (Legal Newsline) – Tobacco retailers are suing Colorado over a ballot measure that would require cigarettes to be sold at a certain minimum price.
Liggett Group, Vector Tobacco and Xcaliber International filed suit on Oct. 15 in Colorado federal court over House Bill 20-1427, which would increase taxes on cigarettes sold in the state.
But a provision requiring a minimum price is unconstitutional under the Commerce Clause of the U.S. Constitution, the suit says. It adds that voters weren’t given the full picture of what the bill would create because it was rushed through the General Assembly.
“The bill… would impose hundreds of millions of dollars in new and increased taxes on cigarettes and other nicotine products,” say the plaintiffs, who describe themselves as discount tobacco retailers.
“Section 10 of the bill, which establishes a minimum price for all cigarettes, was added to the bill in a ‘back-room’ deal to ensure Philip Morris USA, Inc., by far the largest premium cigarette manufacturer in the country, would not spend millions of dollars to defeat the bill, as it had successfully done with previous cigarette tax bills in Colorado.
“Philip Morris wanted Section 10 added to the bill because it would severely damage the ability of discount cigarette manufacturers to compete with Philip Morris and would solidify Philip Morris’ market dominance in Colorado.”