New Mexico lawsuit against vape retailers awaits hearing as lawmakers mull industry regulations

In a public hearing on Tuesday, New Mexico state Sen. Martin Hickey (D-Albuquerque) likened the state’s ongoing litigation against vape retailers and distributors to the decades-old struggle to convict Al Capone and his gang of “untouchables.”

While prosecutors couldn’t successfully try the notorious bootlegger for selling alcohol during the prohibition era, they were able to convict him of tax evasion and send him to prison. Hickey, who chairs the Legislature’s interim Tobacco Settlement Revenue Oversight Committee, said that’s not very different from the New Mexico Department of Justice’s litigation strategy of suing Circle K, Alon and several other companies under the state’s consumer protection law for allegedly contributing to outsized rates of nicotine addiction among New Mexico’s youth.

NMDOJ has already proved it’s a workable strategy by using the same law to win a string of high-profile victories in court against the social media giant Meta, Hickey said.

Moreover, “in both that suit and in this one, these are selling products that are clearly hurtful to youth,” he said.

Defendants in the March NMDOJ lawsuit against the vaping retailers and distributors recently asked a judge to dismiss the case. New Mexico Department of Justice attorneys rebutted their request and are awaiting a hearing before Judge Bryan Biedscheid, who previously presided over two of the state’s cases against Meta.

The NMDOJ’s case alleges that retailers such as gas stations sell vapes and e-cigarettes in colorful packaging and bold flavors that appeal to children in “blatant disregard for public health and safety.”

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It seeks damages under the state’s Unfair Practices Act, a late-1960s consumer protection law that caps penalties at $5,000 per violation. Torrez, Democratic gubernatorial nominee Deb Haaland and state Rep. Linda Serrato (D-Santa Fe) recently announced plans to attempt to overhaul the law in the 2027 legislative session. One proposed change would increase penalties to $50,000 per violation, which could increase further when companies target children, people with disabilities or people under a guardianship.

Studies have found that use of vapes and e-cigarettes during childhood and adolescence can lead to adverse health effects, such as increased suicide attempts. Studies have also found that young people who use e-cigarettes believe they’re a healthier alternative to traditional cigarettes, despite the common presence of chemicals like formaldehyde.

Hickey updated his fellow committee members on the litigation during a daylong hearing at the University of New Mexico Comprehensive Cancer Center in Albuquerque. Throughout the day, state lawmakers discussed how they could pursue legislation in the upcoming legislative session to further hold the industry to account.

They discussed whether to seek an increase to the state’s taxes on tobacco products. On cigarettes, the tax is currently $2 per pack, slightly below the national average of $2.05, but it varies significantly for other products. Taxes on e-cigarettes, for example, vary on how much liquid the cartridge contains.

Other potential ideas included limiting how these companies can market to young people by restricting what flavors stores can sell, and implementing greater taxes on alternative nicotine products, such as pouches. Currently, public health law consultant Megan Boelter told the committee, nicotine pouches are taxed at 25% of the manufacturer’s price, but that only applies to tobacco-derived nicotine. If the nicotine is synthetic, she said, it isn’t taxed.