In depth: California e-cig regulation, November 2014

California stylised map 300x180

CONTENTS

 

 

 

Executive summary

 

  • California state law prohibits the sale of e-cigarettes to minors, but there is no state or federal law that otherwise regulates e-cigarettes in the state.
  • The Californian e-cigarette market is primarily regulated on a local level by zoning laws, public use ordinances, and licensing requirements.
  • Thirty-three municipal governments restrict the use of e-cigarettes in smoke-free locations, while California public universities prohibit the use of e-cigs on campus.
  • ECigIntelligence believes that the sale and use of e-cigs in California will be regulated on a local or quasi-governmental level for the foreseeable future.

 

Introduction

 

The U.S. has the most complex set of e-cigarette regulatory regimes in the world. The Food and Drug Administration (FDA) in April 2014 proposed “deeming regulations” which, if adopted, would put e-cigs in the same category as tobacco products. This would subject them to an onerous layer of federal e-cig regulations, sitting on top of regulations that are continuing to emerge at a state and municipal level. However, we anticipate that it will be several years at least before the FDA finalises any such rules.

Meanwhile, the state of California has considered – but then rejected – legislation that would regulate e-cigarettes in the same manner as tobacco products. The political will to regulate e-cigs at a state level does not appear to exist at this time. However, both federal and state consumer protection laws do affect the e-cigarette industry and offer protection for consumer rights.

Thousands of local governments in California, such as San Francisco and Los Angeles, have regulatory authority over e-cigs. Although to date only a small percentage of these bodies have enacted legislation, local governments are increasingly looking at regulating e-cigs, with measures that control – among other things – the places where e-cigs can be used, by prohibiting them in workplaces and in outdoor spaces, including many leisure facilities such as parks and beaches.

Quasi-governmental institutions, such as state-funded colleges and school districts, also regulate e-cig use. California’s state-funded colleges have substantial student bodies and significant staff numbers; some of these institutions are effectively the size of small cities and they regulate activity on their campuses, including the use of e-cigs. Although such institutions are not exempt from local, state, or federal laws, any analysis of regulation in California is incomplete without considering the effect of such quasi-governmental regulatory regimes.

This report will consider legislation at the state level, followed by the regulation of e-cigs at the local and quasi-governmental levels, and then identify e-cig regulatory trends in this trendsetting state.

 

The matrix of authority

 

California has the eighth-largest economy in the world, and nearly 40m inhabitants; it is considered to be a trendsetter by other states and municipalities when it comes to legislation.

 

Matrix of e-cig regulatory authority in California

Governing bodyTaxRestricted use             e.g.
public  places
Marketing – TV adsMarketing
– price(e.g.
free samples)
Marketing –otherAge restrictionsZoning (how/where sales are permitted)Prohibition                  of sale
State legislatureNENENENENEYNNE
Any county governmentRRRRNRRRRRRRRRR
Any municipal governmentRRRRNRRRRRRRRRR

NE = not exercised, N = no right to regulate, Y = yes, regulated, RR = right to regulate

 

 

State government regulation

 

As in other U.S. states, authority in California is divided among the governor; the state legislature, which comprises the assembly (lower house) and senate (upper house); and the judiciary, ranging from the state supreme court down to the superior courts.

Currently there is no California state law restricting e-cigarette use, but California has enacted one statewide regulation on e-cigs, which prohibits the product from being sold to minors (California Health and Safety Code: Section 119405).

There have been attempts to regulate e-cigarettes more heavily at state level, however. In October 2009, governor Arnold Schwarzenegger vetoed a bill seeking to define e-cigs as tobacco products, which would have therefore banned vaping wherever smoking was prohibited.

In 2013, senator Ellen Corbett reintroduced Senate Bill 648, which passed the state senate in May before being shelved by Corbett when it stalled in committee.

Corbett rewrote the bill to allow for e-cigarettes to be sold from vending machines in bars. However, health advocates opposed the new language on the grounds that it created a broader definition of e-cigs which the industry could subsequently use to evade federal regulatory efforts. Although the bill is up for reconsideration, it “died in committee” on 6th August 2014, meaning that it has not progressed further than the stage of committee discussion.

Another bill, designed to restrict online sales of e-cigs, was also recently shelved, and the stalling of these bills suggests that the political will to regulate e-cigs at the state level does not currently exist.

However, the California attorney general’s office has expressed concern that e-cigs are being sold with false or misleading claims regarding safety and effectiveness. In addition, the attorney general believes many e-cig retailers are violating California’s Proposition 65, which mandates health warnings on products with chemicals like nicotine.

And, while state law does not regulate e-cigarettes, California consumer laws do offer protection for consumer rights. The California Department of Consumer Affairs (DCA), a cabinet-level state agency, enforces consumer protection laws to prevent deceptive business practices, protect the public health, and ensure a fair marketplace.

California consumer protection laws are the most robust in the country and designed to protect both consumers and professionals through regulation and licensing. As the DCA says, “in more than 100 business and 200 professional categories, [DCA entities] investigate complaints and discipline violators. The committees, commission and boards are semi-autonomous bodies whose members are appointed by the Governor and the Legislature.”

Consumer protection laws cover a wide range of issues ranging from advertising to credit transactions to tenant-landlord laws. Notably, the Consumers Legal Remedies Act empowers consumers with a private right of action.

In the context of e-cigarettes, many California consumer protection laws could be triggered, including complaints of unfair business practices, untrue or misleading advertising, or exposure to chemicals without warning (see link to Proposition 65 below). For example, any advertising of an e-cigarette as a safe alternative to smoking, or as a smoking cessation device, would be misleading and held in violation of consumer protection laws because the FDA has not approved such claims.

Because of California Proposition 65, all e-cig packages are required to have the following warning label: “This product contains nicotine, a chemical known to the state of California to cause birth defects or other reproductive harm.”

 

Local government regulation

 

In California, municipal or local governments are regulating e-cigarettes in three principal ways: zoning laws, public use laws, and licensing regulations.

 

Zoning laws

A number of local governments, including the municipalities of Fremont, Dublin, Hayward and Temple City, have used zoning laws to prevent e-cig retail locations in areas such as schools and parks where under-age persons may be present.

In accordance with the age restriction imposed by California law, e-cig retailers, vapour bars and lounges may be deemed inappropriate in these zoning districts.

Accordingly, municipalities have the authority to implement ordinances with the purpose of decreasing the number of e-cig retailers and lounges, and/or preventing such businesses from opening in these areas.

Examples include:

  • Duarte adopted a moratorium on shops selling e-cigs, tobacco and paraphernalia (July 2013).
  • Freemont adopted a moratorium on e-cig shops, vapour bars and lounges (February 2014; a two-year extension was passed in March 2014).
  • Union City banned e-cig bars and lounges within the city limits (November 2013).

 

Public use laws

To date, 33 local governments in California have specifically restricted the use of e-cigs in places where smoking is also prohibited.

The definition of what these public places are varies from one municipality to another, but they typically include workplaces, restaurants, bars and gambling facilities.

Dozens of other municipalities have incorporated e-cigs in tobacco regulations that have not yet taken effect. Some local non-smoking ordinances prohibit selling conventional cigarettes, tobacco products and now e-cigs from vending machines; violating such regulations constitutes a misdemeanour.

There are two particularly notable recent examples in major cities:

  • On 4th March 2014, the Los Angeles City Council unanimously voted to include e-cigs in the city’s existing smoke-free air ordinance, prohibiting e-cig use in indoor workplaces, parks, beaches within city limits, and outdoor dining areas – anywhere cigarettes and other tobacco products are already banned. The mayor endorsed the ban the following day. The new law does not prohibit the use of e-cigs in vaping lounges or for “theatrical purposes”.
  • On 18th March 2014, the San Francisco Board of Supervisors unanimously voted to restrict e-cigs under the city’s anti-smoking laws, in the same manner as traditional cigarettes. Supervisor Eric Mar wrote that the ordinance “would allow smoking e-cigarettes in the same places that cigarettes are allowed; prohibit them where cigarettes are prohibited; prohibit the sale of e-cigarettes on City and County property and other places cigarettes can’t be sold; and require a tobacco permit for the sale or furnishing of e-cigarettes”.

 

Licensing laws

Some municipal governments have created laws that require tobacco retailers to be licensed to sell e-cigs.

Approximately 60 cities – including San Francisco and Oakland – have adopted laws requiring e-cig retailers to obtain a licence to sell the products (see appendix 1).

Moreover, most local tobacco retailer licensing laws automatically incorporate any new state tobacco control laws such as California Health and Safety Code Section 119405, which prohibits selling e-cigarettes to minors. Accordingly, selling e-cigs to anyone under the age of 18 is a licence violation in these localities.

 

Regulation by quasi-governmental institutions

 

Some California state bodies that would not normally be considered part of “legislative government” nonetheless exercise considerable control over e-cigarettes. The effect of e-cig regulation by quasi-governmental institutions like the state-funded University of California (UC) system, with 233,000 students and 190,000 faculty and staff across ten campuses, and the California State University (CSU) system, with 437,000 students and 44,000 faculty and staff across 23 campuses, is tremendous.

As of 1st January 2014, all ten UC campuses were tobacco-free and prohibited the use of e-cigs as well as tobacco products both indoors and outdoors at all sites owned or fully leased by the UC system, in accordance with the University of California Smoke and Tobacco Free Environment Policy.

Under this policy, a tobacco product is defined as “any form of tobacco, including but not limited to cigarettes, cigars, pipes, water pipes (hookah), smokeless tobacco products, and unregulated nicotine products (e.g. e-cigarettes)”. A map of UC, San Diego illustrates the vast amount of property affected by this ban.

Schools are covered by vaping bans too. If a high school is located in a city where e-cig use is regulated like smoking, the use of e-cigs is automatically covered by the city’s anti-smoking laws. However, the city’s e-cig restrictions do not extend to schools that are located in unincorporated areas of counties, where separate action is required.

This action may include a ban by the school board and/or the country health department. For example, in Oakland, a city in which e-cigs are not regulated, the Oakland Unified School District plans to vote by the end of the year to include e-cigs in its anti-smoking         policy; likewise, the Alameda County Public Health Department intends to introduce a policy in surrounding unincorporated areas (not including the city of Oakland) to ban e-cig use everywhere that traditional cigarettes are also prohibited.

 

 

Unlike the statewide tobacco smoking ban implemented on 1st January 1998, there is no statewide e-cigarette ban. However, local governments are taking action to regulate e-cigs in the same vein as traditional cigarettes by creating new laws to prohibit vaping in public, or by rewriting existing smoke-free laws to include e-cigs in the definitions of “smoking” and “tobacco product”.

In addition, on 22nd October 2014, Healdsburg became the first Californian city to raise the threshold for tobacco purchases – in which it includes e-cigs – from the state-mandated 18 to 21 years of age. This ordinance is expected to take effect in early December.

Local governments in California are also increasingly passing laws to require e-cig venders to have a tobacco retailer licence before selling e-cigs. In July 2014, the San Diego City Council unanimously adopted legislation to regulate the sale of e-cigs by prohibiting vending machine sales and requiring retailers to acquire permits prior to selling. The county government and sister cities of Carlsbad, Oceanside, Vista, El Cajon, and La Mesa joined San Diego in adopting this policy. These governments also extended the ban on smoking in public places to include e-cigs, which means that vaping will no longer be permitted at beaches, boardwalks, piers or parks, on sidewalks, or at airports and other enclosed public spaces like sports venues.

Outside of government regulation, businesses and private property owners may implement voluntary policies to limit the use of e-cigs on their premises. Likewise, employers may restrict employees’ use of e-cigs through workplace policies prohibiting vaping altogether, and landlords may incorporate an anti-vaping provision in tenants’ contracts.

 

Appendix 1: state law, consumer protection law and licensing law

 

State law

California Health & Safety Code: Section 119405

(a) To the extent not preempted by federal law, including, but not limited to, the regulation of electronic cigarettes by the U.S. Food and Drug Administration, it shall be unlawful for a person to sell or otherwise furnish an electronic cigarette, as defined in subdivision (b), to a person under 18 years of age.

(b) “Electronic cigarette” means a device that can provide an inhalable dose of nicotine by delivering a vaporised solution.

(c) A violation of this section shall be an infraction punishable by a fine not exceeding $200 for the first violation, by a fine not exceeding $500 for the second violation, or by a fine not exceeding $1,000 for a third or subsequent violation.

(d) Nothing in this section, nor any other law, shall be construed to invalidate an existing ordinance of, or prohibit the adoption of an ordinance by, a city or county that regulates the distribution of electronic cigarettes in a manner that is more restrictive than this section, to the extent that the ordinance is not otherwise prohibited by federal law.

 

Health and Safety Code: Section 25249.6 (Proposition 65)

Failing to warn persons of exposure to chemicals such as nicotine, benzene, and tobacco nitrosamines, which can cause, cancer, birth defects, or other harm, is a violation of the Safe Drinking Water and Toxic Enforcement Act of 1986, Health and Safety Code; Section 25249.6 (Proposition 65).

The warning requirement of Proposition 65 provides that: No person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual, except as provided in Section 25249.10.

 

Consumer protection laws

Consumer rights in the U.S are protected by federal and state laws. The Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), and U.S. Department of Justice (DOJ) create and enforce federal consumer protection laws, while all but four states enumerate the rights of consumers in their constitutions. In addition, most states have a department of consumer affairs and many have adopted the standardised Uniform Deceptive Trade Practices Act (UDTPA).

Claims that electronic cigarettes are safe and may be used as a treatment for smoking addiction are false and misleading under California’s Business and Professions Code: Sections 17500 and 17508.

Marketing e-cigarettes as a safe, carcinogen-free, alternative to traditional cigarettes may constitute unfair business practices with respect to sales and marketing in violation of the Business and Professions Code: Section 17200 (Unfair Competition Law).

 

Licensing laws

If a local government requires a vendor to have a California Cigarette and Tobacco Products Retailer’s License prior to selling e-cigs to consumers, the retailer must apply for a licence with the California Board of Equalization (BOE).

 

Appendix 2: notable lawsuits – Smoking Everywhere and Sottera

 

Smoking Everywhere. The California attorney general sued Smoking Everywhere, one of the largest electronic cigarette retailers in the U.S., alleging it made false claims about its products, failed to warn consumers of reproductive toxins, marketed products to minors, and failed to have adequate quality control in place to protect consumers.

Sottera. The attorney general sued Sottera, the company behind the NJOY brand, alleging it made false or misleading claims concerning the safety or effectiveness of its products, and violated Proposition 65. In a settlement agreement, Sottera agreed to stop making false or misleading claims and to place warnings on products in compliance with Proposition 65.

– Carly Souther ECigIntelligence staff

 

The author

Carly Souther, legal and regulatory analyst, ECigIntelligence. Carly is a graduate of the Florida State University College of Law and also has a BA in Political Science from Mercer University. She was admitted to the Florida Bar in 2013, and was Assistant General Counsel at Florida’s Agency for Health Care Administration (AHCA). She is currently studying for a postgraduate Master of Laws (LLM) degree on a part-time basis.

 

 

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