ILNews

Court explores definition of tobacco manufacturing

Michael W. Hoskins
January 1, 2007
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The Indiana Court of Appeals today delved into what it means to manufacture cigarettes under state law.

A unanimous 30-page decision came in Steve Carter in his role as Attorney General v. Carolina Tobacco Company, Inc. http://www.in.gov/judiciary/opinions/pdf/09170702jgb.pdf,No. 49A04-0503-CV-151, affirming a lower court decision that the state attorney general's office improperly refused to include an Indiana tobacco company in a yearly directory of manufacturers allowed to sell cigarettes in the state.

The Marion County suit involves the "Roger" brand of cigarettes that began being distributed in the mid-1990s in Eastern Europe, but came to the United States in August 1999 with the creation of Oregon-based CTC - though the company's registered agency for service of proof is Indianapolis. These cigarettes were produced outside the country and then distributed by CTC here, and the Indiana Department of Revenue determined that Roger brand sales from 1999 to 2002 amounted to about 283 million cigarettes sold in the state.

But based on the tobacco settlement agreements in the late 1990s, certain manufacturers were included on a list compiled by state attorney general offices and CTC was not included. Both sides debated whether state statutes adequately defined "manufacture," and Carter's office equated the term "manufacture" with "fabricate" - only an entity physically assembling or fabricating cigarettes could be dubbed a tobacco product manufacturer and included on the list.

CTC debated this interpretation for the 2003 list, and eventually sued for not being included. Marion Circuit Judge Ted Sosin granted a preliminary injunction against the attorney general's office from enforcing the rules that would mean pulling Roger brand cigarettes from sales locations.

"Based on the factual evidence in this case, the Court concludes that, at all times since its founding in 1999, CTC has directly manufactured Roger cigarettes," Judge Sosin found as a conclusion of law. "The Court, therefore, concludes that CTC has been and continues to be the tobacco product manufacturer of Roger cigarettes."

On appeal, Chief Judge John Baker and Judges Mark Bailey and Nancy Vaidik determined the court did not err in ruling against the attorney general's office. It noted that other Indiana statutes are more broadly interpreted, citing Indiana's product liability statute that defines manufacturer as a "person or entity who designs, assembles, fabricates, produces, constructs, or otherwise prepares a product or a component part of a product before the sale of the product to a user or consumer."

"In our view, the totality of the evidence presented at trial establishes that OAG's decision to equate 'manufacture' with 'fabricate' for purposes of considering CTC's request for inclusion in the Directory was arbitrary and, therefore, unreasonable," Chief Judge Baker wrote. "Therefore, the trial court's determination... was proper."
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  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

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