June 6, 2013 4th Circuit published opinions

American Petroleum Institute v Cooper

North Carolina passed a statute requiring gasoline suppliers to allow their customers to mix gasoline and ethanol in trucks instead of requiring the purchaser to obtain gas already mixed. Institute sued arguing the law was preempted by federal law. The district court granted summary judgment to North Carolina. The panel affirmed in part, reversed in part and remanded. It held that the fact that some suppliers are taking steps to get around the state law did not provide a basis to conclude there was no preemption. It held that the state law was not preempted by the petroleum Marketing Practices Act because the 1994 amendments to the Act allow states to declare certain franchise terms unlawful and mixing gasoline and ethanol in a truck container is not “willful adulteration’ of the suppliers gasoline brand. The panel held that the renewable energy statutes did not present the state law as the EPA regulations anticipated that supplier’s customers would be doing the mixing and allowing Institute’s relief would allow suppliers to monopolize the market for qualifying products which is not the intent of Congress. The panel reversed and remanded the Lanham act claim holding that the record created a genuine issue of material fact as to whether the truck mixing method created a substantial risk of negative impact on the suppliers. This is so because the mixing method may not meet the suppliers’ benchmark for quality. The district court was reminded to presume there was no intent to preempt and that any preemption would be limited to a requirement to allow sale under the suppliers name and mark.

United States v Hasan

Hasan purchased thousands of cigarettes from undercover ATF agents and sold them in New York without paying the required cigarette tax. He was convicted of trafficking contraband cigarettes and ordered to forfeit the gross receipts of his sales. The panel affirmed. It held that the agents were allowed by law to possess the cigarettes without paying tax on them and to sell them to Hasan as part of a sting. Thus, there was no due process violation. As to the forfeiture, the panel held that the cigarettes became contraband as soon as they entered New York and were therefore illegal goods and not legal goods sold in an illegal manner. The panel relied on the plain language of the definition which is framed in terms of possessing 10,000 or more cigarettes without being taxed or stamped. Thus the cigarettes were unlike securities or IT services which are legal products or services which can be sold in illegal ways.

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