DENVER (Legal Newsline) – Accused of conspiring with a tobacco giant on legislation, the State of Colorado is hoping to preserve the minimum price it has established on cigarettes.
The State filed on Dec. 15 in Denver federal court a motion to dismiss a lawsuit brought by discount tobacco retailers Liggett Group, Vector Tobacco and Xcaliber International. At issue is House Bill 20-1427, which would increase taxes on cigarettes sold in the state by out-of-state companies.
But a provision requiring a minimum price of $7 per pack 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 plaintiffs say Section 10 was the idea of Philip Morris, which hoped to severely damage their ability to compete with its “market dominance.”
Section 10 was added to the bill as a result of a “back-room deal” between Philip Morris and Colorado lawmakers, the plaintiffs say.
Philip Morris agreed not to spend millions of dollars against the bill if Section 10 was included, they say.
Colorado’s motion to dismiss says the plaintiffs failed to state claims for relief under the Commerce Clause and that the federal court lacks jurisdiction over state law claims.
“Section 10 does not give any in-state business an advantage over its substantially similar out-of-state competitors, and the Cigarette Manufacturers do not argue otherwise,” the motion says.
“For starters, the Cigarette Manufacturers have not even alleged that any Colorado competitor exists.”