E-Cigarettes Versus Oregon

Smoking Everywhere, a distributor of electronic cigarettes has agreed to cease sales in the State of Oregon, following a lawsuit settlement, the Miami Herald reported.

Oregon last year became the first state to go to court to attempt to block the sale of the devices. Attorney General John Kroger said Smoking Everywhere did not seek U.S. Food and Drug Administration (FDA) approval and provides no evidence to support claims that ‘e-cigarettes’ are a safe alternative to conventional tobacco products. He also alleged that the company geared its marketing toward young people.

Smoking Everywhere’s electronic cigarettes feature a battery-powered heating element and a replaceable plastic cartridge that contains chemicals, including liquid nicotine. The heat vaporizes the liquid for inhalation.

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In settling the suit, Smoking Everywhere admitted violating Oregon’s Unlawful Trade Practices Act. In addition to no longer selling its products in Oregon, the company agreed to pay more than $95,000 to the Oregon Department of Justice. Elico Taieb, the company president, will pay another $25,000 and is barred from doing any business in Oregon that involves tobacco, nicotine or electronic cigarettes.

Smoking Everywhere and Sottera, which does business as the e-cigarette brand NJOY, won a case against the FDA in January, where it was ruled that the agency doesn’t have the authority to regulate electronic cigarettes as a drug-device combination. The U.S. Court of Appeals will review the case next month.

“Since we are not part of the appeal, it just made sense for us to settle out with Oregon and be done with it,” Taieb’s attorney, Jason Weaver told the Miami Herald.

Hallandale Beach-based Vapor Corp., which has 20% of the market share of the electronic cigarette industry, was not banned from selling in Oregon but voluntarily pulled the product from distributors in Oregon to avoid any issues, company attorney Adam Laufer told the Miami Herald. “We’re basically waiting to see and be reactive to whatever the proper and current law is,” he said.

Ray Story, a Smoking Everywhere shareholder who is in litigation against Taieb, did not approve of the settlement.  Story stepped down as CEO earlier this year because he felt the company was “on the wrong track,” he told the Miami Herald. He said Smoking Everywhere is a cigarette company and should to act as such-a point where he said he and Taieb disagreed.

Story also noted e-cigarettes are less harmful than conventional cigarettes and less intrusive to nonsmokers. He criticized Attorney General Kroger for banning the product in Oregon. “The attorney general there really doesn’t know what he’s talking about,” he said. “A state cannot ban a product without it banning every product within that same category.”

Last year, Kroger convinced two travel store chains to stop selling e-cigarettes in Oregon and persuaded another e-cigarette company, Sottera, to leave the state. After Smoking Everywhere declined a request to restrict its Oregon sales-it led the lawsuit it just settled, which was filed last year in Salem.