Wednesday, February 19, 2014

Trampling on the Constitution: Democratic Lawmakers Urge Attorneys General to Enforce Master Settlement Agreement on Electronic Cigarette Companies

Last week, three Democratic lawmakers -- Rep. Henry A. Waxman (CA), Sen. Tom Harkin (IA), and Rep. Peter Welch (VT) -- sent a letter to the Attorneys General in their states requesting that the AGs declare that electronic cigarettes fall under the terms of the Master Settlement Agreement (MSA) signed in 1998 with the tobacco companies.

The letter requests that the Attorneys General define electronic cigarettes as being cigarettes under the MSA and argues that doing so will bring electronic cigarette companies under the terms of the MSA, therefore placing severe restrictions on the advertising and marketing of these products.

According to the letter: "Today Rep. Henry A. Waxman, Sen. Tom Harkin, and Rep. Peter Welch sent a letter to California Attorney General Kamala D. Harris, Iowa Attorney General Tom Miller, and Vermont Attorney General William H. Sorrell urging them to classify electronic cigarettes as cigarettes under the Tobacco Master Settlement Agreement (MSA) to prevent e-cigarette companies from targeting youth and getting them addicted to their products. ... Classifying e-cigarettes as cigarettes under the MSA would prohibit tobacco companies from targeting youth in advertising and marketing of these products."

If electronic cigarette companies were forced to adhere to the MSA, it would bring an end to all electronic cigarette brand name sponsorships, outdoor and transit advertising, branded merchandise, free product samples (except in adult-only establishments), and targeting of youth in advertising.

The letter concludes: "By taking action to apply the MSA to e-cigarettes, you could make a giant stride in protecting kids from a lifelong addiction to nicotine."

The Rest of the Story

The rest of the story is that what these members of Congress are asking the Attorneys General to do is to trample on the Constitution. They are asking the Attorneys General to violate the established laws of their state by not only ignoring the clear language of the MSA, but by illegally enforcing a contract on parties that did not consent to that contract in the first place.

In other words, what these members of Congress are asking the nation's law enforcement chiefs to do is to violate their own state laws.

This is quite a twist, since usually Congress oversees the enforcement of laws. Here, Representatives Waxman, Harkin, and Welch are requesting that their state Attorneys General violate the law by illegally enforcing an invalid contract.

An established principle of contract law is that both parties must agree to the terms. There must be mutual assent. However, the electronic cigarette companies were not party to the Master Settlement Agreement. Thus, the terms of that settlement cannot be imposed upon them involuntarily, even if electronic cigarettes were considered by the Attorneys General as meeting the MSA's definition of cigarettes.

The Congressmembers are wrong even on that score. The MSA clearly defines a cigarette as a product that contains tobacco. Electronic cigarettes do not contain tobacco. Thus, they do not meet the MSA's definition of a cigarette.

In addition to violating state law by enforcing a contract on a party not subject to that contract, Representatives Waxman, Harkin, and Welch are asking their Attorneys General to violate the Compact Clause of the Constitution by entering into a compact with other states without the consent of Congress. They are asking the states to conspire to an agreement by which they would force electronic cigarette companies to become parties to a contract to which they do not assent.

Clearly, this requested action brings up significant issues under the Compact Clause, issues which certainly do not qualify for an exception from this clause under the Supreme Court's decision in United States Steel. (For a detailed discussion of how enforcing the MSA on electronic cigarette companies would violate the Compact Clause, see the excellent legal brief submitted by the Competitive Enterprise Institute in S&M Brands.)

I understand the venom that these policy makers have for electronic cigarettes because they look like cigarettes; however, their desire to protect tobacco cigarettes from competition from these safer products is not enough to justify urging their state Attorneys General to trample on the Constitution and to violate well-established state contract law.

No comments: