Protection of the Prevent All Cigarette Trafficking Act (PACT)

April 10, 2013

The PACT Act seeks to ensure federal, state and local tax collection on internet sales of tobacco products, and to help ensure that minors cannot purchase tobacco over the internet. The plaintiff in this case wants to stop the collection of these taxes. Several cases were brought by Indian tribes and others to stop the collection of these taxes as a violation of their sovereignty.

In one of the cases brought in New York, the judge granted an injunction against the tax collection portions of the Act, saying that the vendors were "likely to succeed" in their challenge, and that the risk of economic harm to the plaintiffs was enough to suspend the taxes until the case could be decided on the merits. The proof of age requirements stayed in place. We had filed as amicus along with other health partners to provide evidence on the public health effects of smoking to bolster the government's case for keeping the provisions in place.

The Second Circuit Court of Appeals has not decided on the merits, but reviewed the district court's decision for "abuse of discretion." The "abuse of discretion" standard means that the appeals court would only overturn the earlier decision if it were clearly in error. Thus, the injunction against the tax collection stays in place for now, so buyers can avoid these taxes in the meantime. However, there is still opportunity to convince the trial judge that this case is more about public health than the due process rights of tobacco vendors.

In a similar lawsuit brought in DC, the trial judge upheld most of the PACT Act but issued an injunction against tax collection until the issues have been heard on appeal.

We filed similar briefs in all of the PACT Act cases, along with other public health groups, to draw the court's attention to the public health necessity of these taxes. Rather than just being a financial issue, we emphasize the tragic toll of tobacco as the most preventable cause of death, and provide studies on the importance of tobacco taxes in preventing consumption, particularly by children.