Tobacco Companies Challenge NYC Coupon Ban

Tobacco companies and three trade groups representing cigarette retailers asked a federal court on Thursday to block a new law designed to keep tobacco prices sky high in New York City.

The lawsuit, filed in Manhattan, challenges a city ordinance passed last fall that set a minimum price of $10.50 for every pack of cigarettes sold in the city, and prohibited the use of coupons or other promotional discounts to lower that price. The coupon ban also applies to other forms of tobacco.

Tobacco manufacturers and sellers say those restrictions on discounts are an unconstitutional violation of free speech rights and they want the court to block parts of the law from taking effect in March. It does not challenge the most high-profile section of the law, which banned the sale of tobacco products to anyone under the age of 21.

Courts have generally upheld laws establishing minimum prices, and the lawsuit filed Thursday does not challenge the city’s $10.50 pricing minimum.

But in other jurisdictions, legal price minimums usually allow for consumers to pay less through manufacturers coupons and other pricing deals, like “buy one, get one free” sales. The tobacco industry filed a similar lawsuit against the city of Providence, R.I., when it implemented a ban on coupons and discounts. That legal challenge failed when the city’s rules were upheld by a federal appeals court.

That decision is not binding in New York, however. A lawyer for the tobacco companies said he believes that different legal standards apply here that put this new challenge on better footing.

This article appeared in print on page 13 of the February 5th, 2014 edition of Hamodia.