Favorable Decision for Large, Regional Supermarket Chain Regarding Sale of Tobacco Products at Fuel Kiosks
As counsel for a large, regional supermarket chain, Hodgson Russ convinced an administrative law judge and the Commissioner of the New York State Department of Health (“Department”) to dismiss all charges stemming from 32 separate Department inspections of the client’s fuel kiosks.
Over the course of 17 months (October 2020 to February 2022), Department inspectors observed tobacco products for sale at 17 fuel kiosks owned by the client. The fuel kiosks are located on the same property as the client’s supermarkets with pharmacy departments but are entirely separate buildings. The Department claimed that the sales violated New York State Public Health Law § 1399-mm-2 (“the law”) prohibiting the sale of tobacco products in pharmacies or retail establishments that contain a pharmacy as a department. The Department claimed that the client’s supermarkets with a pharmacy department and the adjacent fuel kiosks constituted a single “retail establishment” under the law.
The Department sought a $2,000 fine for each violation and for the client to immediately discontinue sales of tobacco at fuel kiosks on the client’s properties where supermarkets with in-store pharmacies were also located.
Hodgson Russ argued that the client did not violate the law because its fuel kiosks are not retail establishments containing “a pharmacy operated as a department” as defined by the law. The fuel kiosks are separate establishments evidenced by the fact that they were not included in either the floor plans for the pharmacy area or the overall retail establishment included with the client’s pharmacy applications. Because the client’s pharmacy departments are not in the same retail establishment as the fuel kiosks selling tobacco products, Hodgson Russ argued the Department’s interpretation of the law was not reasonable.
An administrative law judge ruled in favor of the client, the order was confirmed by the Commissioner of Health, and all charges against the client were dismissed.
