Background
North Carolina enacted Session Law 2024-31 to restrict which electronic nicotine delivery systems may be sold in the state. The law requires manufacturers to certify eligible products to the Department of Revenue, directs the Secretary of Revenue to maintain a product directory, and generally prohibits sales of products omitted from that directory. Eligibility substantially tracks federal regulatory status, including whether the Food and Drug Administration has authorized a product or whether a qualifying premarket application remains pending.
A trade association, a manufacturer, two retailers, and a consumer sued state officials, alleging that the law was preempted by the federal Food, Drug, and Cosmetic Act and Tobacco Control Act and violated equal protection. Their preliminary-injunction motion relied only on preemption. The district court found standing but denied relief because the plaintiffs were unlikely to prevail, and the plaintiffs appealed.
The Court’s Holding
The Fourth Circuit affirmed. It first held that the retailer plaintiffs had Article III standing because enforcement placed them in a choice between discontinuing popular products and losing substantial revenue or continuing sales and risking fines, product seizures, and private deceptive-trade-practices suits. Those threatened financial injuries were traceable to the Secretary’s enforcement authority and could be redressed by invalidating the state law. The majority rejected the argument that the retailers lacked standing merely because federal law independently prohibited sales of unauthorized products.
The court also held that the plaintiffs were unlikely to succeed on their preemption claim. North Carolina was regulating the sale of tobacco products within its borders—an area the federal statutory scheme preserves for state regulation—not impermissibly bringing proceedings to enforce the federal statute. The state directory law operates as an independent state sales restriction, and violation of the state law does not invariably establish a violation of federal law. The district court therefore did not abuse its discretion by denying a preliminary injunction.
Key Takeaways
- Economic losses and threatened state penalties gave the vape retailers standing even though federal law also restricts the products at issue.
- A state may use federal authorization status as part of its own tobacco-product sales rules without necessarily enforcing federal law.
- The Tobacco Control Act preserves substantial state authority over the sale and distribution of tobacco products.
- The ruling resolved only the request for preliminary injunctive relief; the equal-protection claim was not presented as a basis for that request.
Why It Matters
The decision permits North Carolina to enforce its vape-product directory while the litigation continues and gives other states support for similar laws tying in-state sales eligibility to FDA regulatory milestones. For manufacturers and retailers, federal enforcement discretion does not prevent states from imposing stricter market-access rules of their own.
The divided court also exposed an important standing dispute. Judge Quattlebaum agreed that the preemption claim was unlikely to succeed but would have dismissed the case because, in his view, lost revenue from federally prohibited sales is not an injury to a legally protected interest.