Litigation News

California Attorney General Announces Agreement To Fight Unlawful Internet Tobacco Sales

(SACRAMENTO) – Attorney General Bill Lockyer today announced Lorillard Tobacco Company (Lorillard) has reached an agreement with California and 32 other jurisdictions to implement measures to prevent the illegal sale of its cigarettes over the Internet and through the mail.

“Internet and mail order cigarette sales are a public health threat because they help put a deadly product in our children’s hands,” said Lockyer. “That is why I have gone to court to put online providers out of business in California and have worked with my fellow Attorneys General to take other steps to combat the problem. This agreement will help fight this danger to our kids by helping to cut the supply lines to unscrupulous cigarette traffickers. Lorillard deserves praise for stepping up to do the right thing.”

The Lorillard protocols require: termination of cigarette shipments to any Lorillard direct customer the Attorneys General have found to be engaging in illegal Internet or mail order sales; reduction in the supply to any direct customer found by the Attorneys General to be engaged in the illegal re-sale of Lorillard cigarettes to Internet vendors; and suspension from the company’s incentive programs any retailer found by the Attorneys General to be engaging in such illegal sales.

The protocols are being adopted nationwide and voluntarily by Lorillard pursuant to an agreement reached with 33 Attorneys General across the country, including Lockyer. A similar agreement was reached in January 2006 with Philip Morris USA.

“Lorillard always has supported compliance with laws dealing with the illegal sale of our products, and has instituted measures to punish those who are determined to be in violation of the law,” said Ronald S. Milstein, Senior Vice President, Legal and External Affairs of Lorillard. “We are pleased to enter this voluntary accord with the Attorneys General to provide a framework for further cooperation with law enforcement and add additional safeguards against the illegal sale of our products.”

The Attorneys General believe virtually all Internet sales of cigarettes are illegal because the sellers violate one or more state and federal laws, including: state age verification laws; the federal Jenkins Act, which requires that such sales be reported to state tax authorities; state laws prohibiting or regulating the direct shipment of cigarettes to consumers; state and federal tax laws; federal mail and wire fraud statutes; the federal Contraband Cigarette Trafficking Act; and the federal anti-racketeering law. Read more at: www.ag.ca.gov

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