For Immediate Release
November 16, 2009
Assistant Attorney General David Rienzo
Attorney General Michael Delaney today announced that the Merrimack County Superior Court has ordered North of the Border, LLC, d/b/a Tobacco Haven to comply with a state law that was enacted as part of the landmark settlement agreement between 46 states and all territories and the major tobacco manufacturers in 1998.
Tobacco Haven, located in Brookline, New Hampshire, is a tobacco retailer that installed two high-speed cigarette-making machines in its store. Tobacco Haven would then sell its customers loose tobacco identified as pipe tobacco and empty cigarette tubes in quantities large enough to make at least 200 cigarettes. Tobacco Haven would then instruct its customers on how to use the cigarette-making machines to make the equivalent of a carton of cigarettes.
The State filed suit in August of this year and asked the Court to determine whether these acts made Tobacco Haven into a cigarette manufacturer obligated to make payments into an escrow fund. State law requires all tobacco products manufacturers to either join in the 1998 settlement agreement or to establish an escrow account and make payments into that account for every cigarette sold in the State. Tobacco Haven answered, saying that it was not a manufacturer, that it merely sold all the materials needed to make cigarettes and then provided its customers access to the cigarette-making machines, and that no escrow payments were required. Alternatively, Tobacco Haven claimed that its loose tobacco suppliers are responsible for the escrow payments, regardless of the suppliers' classification of the tobacco as pipe tobacco.
The Court rejected Tobacco Haven's arguments, saying in its order that by using pipe tobacco in the cigarettes made in the store, Tobacco Haven is manufacturing cigarettes and therefore escrow payments are due. Thus, Tobacco Haven must either use cigarette tobacco on which its supplier has made the required escrow payments, make the escrow payments itself, or halt the use of the cigarette-making machines.
Attorney General Delaney said "This Office will continue to be diligent in its enforcement of all laws relating to the sale of tobacco products in the State." The Attorney General further noted that the retail price for these cigarettes was so low that young people would have found them affordable. "Not only did Tobacco Haven's plan violate the law, but it placed a dangerous and addictive product within the financial reach of vulnerable children. The State has an obligation to its citizens to make sure this does not continue," he added.
New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301