Montana DOJ Takes on Vet Business Owner in Tobacco “Manufacturing” Dispute
Billings business owner Casey Brock finds himself in the middle of a legal fight for his business, after the Montana Dept. of Justice successfully sought a court order to prevent Brock’s small smoke shop — Smokes 4 Less — from allowing customers to roll their own smoking products.
At issue is whether or not the business qualifies as a “manufacturer” since the smoke shop provides “roll you own” (RYO) machines for customers to roll their materials — usually purchased at the shop — into a smoking product such as a cigarette. This is a far cheaper option for customers than buying already made smoking products since self-crafted tobacco products are not subject to manufacturing taxes.
“The question I ask is, if our customers are choosing to use the machine and the product is already bagged by another entity, how can I be a manufacturer?” Brock said in written statement. “The answer is simple, I cannot be a manufacturer. My involvement ends when the customer pays me and I hand them a receipt. I no longer have control of that product.”
Brock, a former Marine and disabled Iraq war veteran, states that the injunction will cost two employees their jobs, cost him thousands in personal savings, and cost the state around $250,000 in tax revenue.
The crux of the problem according to critics of the DOJ’s decision to pursue the case against Brock’s smoke shop is that Montana law is not particularly clear on how an operation like Smokes 4 Less, which sells tobacco materials to customers and provides them a place to create their own product, should be categorized. MCA 16-11-102 classifies a tobacco manufacturer as “any person who fabricates tobacco products from raw materials for the purpose of resale.” MCA 16-11-402 defines a “Tobacco Product Manufacturer” as “an entity that…manufactures cigarettes anywhere that such manufacturer intends to be sold in the United States,
MCA-16-307 covers the distribution of tobacco products, though that language largely pertains to products already created. Brock’s supporters contend that the business does not fit those definitions.
For it’s part, the DOJ contends that Smokes 4 Less is a manufacturer because they say their investigation shows that Smoke 4 Less is involved in “virtually every step of the manufacturing process.” John Barnes, spokesman for Republican Attorney General Tim Fox, provided Media Trackers with copies of both the agency’s initial complaint filed in State District Court, and the brief filed on behalf of the state in support of the injunction.
The complaint notes that a DOJ investigator was sent to the smoke shop after an article about Smokes 4 Less appeared in the Billings Gazette earlier this year. The investigator bought an advertised “carton of cigarettes” for $29.99. Brock helped the investigator put the materials together and showed him how to work the machines, but told him that he could not actually push the button on the machine since that would qualify as the business “manufacturing the cigarette.”
“Smokes 4 Less, not the consumer, makes cigarettes by combining loose tobacco leaves and cigarette tubes. Smokes 4 Less owns the machines that manufacture the cigarettes. Smokes 4 Less controls access to these machines by limiting use to paying customers. Regardless of who pushes the button to start the machine, it is Smokes 4 Less that manufactures the cigarettes by providing access to, and use of, these machines by its customers,” states the state brief.
In arguing that Smoke 4 Less is a tobacco manufacturer, the DOJ also cites cases from the Supreme Courts of Alaska and New Hampshire which found that “roll your own tobacco” shops constitute tobacco manufacturers.
One of Brock’s most ardent supporters has been State Rep. Daniel Zolnikov (R-Billings). Zolnikov argues that it ought to be the job of the state legislature and not state agencies or the courts to clean up areas of law where there is uncertainty.
“If our laws are unclear, it is the duty of the legislative branch to fix these laws upon our next session,” Zolnikov stated. “The Department of Justice has circumvented this process. Instead of serving to enact laws, it is working to create laws through lawsuits and judicial activism. This is a disgrace to Democracy, Montana’s Legislature and the entire state of Montana.”
In a telephone interview with Media Trackers, Brock stated that a small business like his simply “cannot afford” a federal tobacco manufacturing license. While the court injunction did not actually order Smoke 4 Less to close its doors (the shop is simply prohibited from allowing customers to roll their own smoking products), Brock said that the business is taking a major hit since a large number of his customers come to the shop specifically because it offers RYO machines for customer use.
Brock told Media Trackers that he plans to take the matter to a jury trial. A Go Fund Me account has been set up to help the business pay for legal fees.