e-Cig Makers Set to Light Up
California Lawyer

e-Cig Makers Set to Light Up

January 2014

Illustration by Anthony Freda

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Americans who hope to kick their smoking habit in the New Year by switching to electronic cigarettes are entering a booming, largely unregulated market that could change dramatically in 2014.

The Food and Drug Administration is mulling rules to incorporate the devices under 2009's Family Smoking Prevention and Tobacco Control Act (Pub. L. No. 111-31; see also 21 U.S.C. ยงยง 387-387u). The attorneys general of California and 39 other states and territories have urged FDA to move quickly, citing potential health risks to children. While they wait for federal standards, states and cities across the country have banned e-cigarettes in workplaces, restaurants, and bars. But the industry keeps growing: A Wells Fargo analyst estimated in December that e-cigarette sales could top $1.8 billion in the United States in 2013 and surpass traditional cigarettes within a decade.

The three biggest American tobacco companies have entered the market: Lorillard Inc. sells the popular Blu e-cigarette and last fall acquired Skycig, based in the United Kingdom. Altria Group and Reynolds American both announced their own e-cigarette brands in June.

There's been little independent research and no consensus on the health effects - positive or negative - from using e-cigarettes or being near someone who's using them. The battery-powered devices, sometimes made to look like regular cigarettes, deliver nicotine in a vapor when a user inhales. Advertisements aim to conjure nostalgia. "There was a time when no one was offended by it," says a television spot for Fin e-cigarettes, made by Fin Branding Group. "That time has come again." Critics note similarities to tobacco advertising, down to the use of cartoons, celebrity spokespeople, and implications that "vaping" is sexy.

"We are really going back," says Cynthia Hallett, executive director of Americans for Nonsmokers' Rights in Berkeley. "E-cigarettes are currently unregulated, and [makers] are just running amok until they are told to do otherwise."

The FDA has had the authority since 2010 to restrict the content, labeling, and Internet sales of e-cigarettes, the same way it regulates traditional cigarettes; it can't regulate how they're used. Larger e-cigarette manufacturers see limited regulation as a means of gaining more solid footing for the industry. But Phil Daman, an attorney and president of the Smoke Free Alternatives Trade Association, says e-cigarettes should be viewed as an alternative to smoking, not a public health problem. "Here, our government has an opportunity to leverage these products to help fulfill [its] goal of reducing tobacco consumption," Daman says.

In 2010, in the absence of federal action, California's then-Attorney General Jerry Brown sued e-cigarette maker Smoking Everywhere, Inc. (now defunct), alleging the company targeted minors and misled consumers. The state subsequently settled with both Smoking Everywhere and Sottera, maker of Njoy. (Sottera consented to judgment prior to the filing of a complaint.) (See People v. Smoking Everywhere, Inc., No. RC10493637 (Alameda Super. Ct. stipulated judgment filed Nov. 2, 2010); and People v. Sottera, Inc. (Alameda Super. Ct. consent judgment filed Sept. 10, 2010).) The companies promised not to market to minors or claim that e-cigarettes are safer than traditional cigarettes. California later outlawed sales of e-cigarettes to minors, and a spokesman for the present AG, Kamala Harris, says her staff continues to monitor the issue.

Marin and Santa Clara counties and Los Angeles and several other California cities now regulate e-cigarettes essentially like traditional cigarettes. So do scores of other cities nationwide and Utah, New Jersey, and North Dakota. But a proposal by Sen. Ellen M. Corbett (D-San Leandro) covering California (SB 648) got stuck in an Assembly committee last year.

"It certainly was the most important usage ban we've dealt with," says Gregory Conley, a lawyer and adviser to the Consumer Advocates for Smoke-free Alternatives Association, which helped "vape shops" and "vapers" organize against the bill. "I don't know what direction [Corbett] is going, but it will be interesting to see." Corbett said she hadn't decided.

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