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Tuesday, July 18, 2023

Mayor Adams, Corporation Counsel Hinds-Radix Announce Lawsuit Against Four Companies Illegally Selling Disposable Flavored E-Cigarettes

– New York City Mayor Eric Adams and New York City Corporation Counsel Sylvia O. Hinds-Radix on Monday, July 10, announced that the City of New York is filing a federal lawsuit against four major distributors of flavored disposable e-cigarettes, the most popular vaping devices among middle-school children and high school youth. The four defendants — Magellan Technology Inc. and Demand Vape, both based in Buffalo, NY; Mahant Krupa 56 LLC d/b/a Empire Vape Distributors, based in Queens; and Star Vape, based in Brooklyn — are alleged to have distributed, and continue to distribute, exotically flavored disposable e-cigarettes to retail vape and smoke shops, convenience stores, and directly to consumers in New York City through online sales, in violation of nearly every applicable federal, New York state, and New York City law governing the sale of such products. Today’s lawsuit seeks to block the four defendants from further sales of these illegal items and seeks both monetary damages and fines.

“There is nothing more important than the health of young New Yorkers, but while these four distributors have chosen profits over people, we won’t sit idly by as they continue to poison our children,” said Mayor Adams. “Even though the packaging and flavoring of some of these products might seem harmless, they are 100 percent harmful. These products are packed with nicotine, a toxic and highly addictive chemical that is particularly damaging to adolescent minds and bodies. We will do whatever it takes to keep our children safe, and today’s lawsuit seeks to put an end to the greedy, harmful, and openly illegal behavior of these four nicotine pushers.”

“The city’s lawsuit represents a significant enforcement step against distributors that are fueling an epidemic of e-cigarette use among youth in our city,” said Corporation Counsel Hinds-Radix. “These defendants continue to supply retail outlets throughout the city with nicotine-laced disposable e-cigarettes in exotic fruit, candy, and dessert-like flavors that are clearly designed to appeal to young people in violation of multiple federal, state, and local laws. The aim of this lawsuit is to put a stop to this illegal conduct and protect our youth against these highly addictive and dangerous products.”

Most e-liquids provide nicotine levels far exceeding that of conventional cigarettes — some have as much nicotine as 175 to 350 cigarettes. Additionally, federal health authorities, such as the U.S. surgeon general and the U.S. Food and Drug Administration (FDA), say youth-friendly flavors in e-cigarettes, such as “strawberry milkshake,” “cola,” and “pina colada” are among the flavors that tempt kids to “vape” high levels of nicotine. Child-friendly, cartoon character packaging on e-cigarettes targeted at young people has also contributed to the epidemic of nicotine addiction among middle and high school youth.  

Between 2017 and 2019, e-cigarette use among young people nearly doubled. In October 2022, the FDA and the Centers for Disease Control and Prevention released federal data from the 2022 National Youth Tobacco Survey finding that one in 10 U.S. middle and high school students had used e-cigarettes in a 30-day sample period. Specifically, 14.1 percent (2.14 million) of high school students and 3.3 percent (380,000) of middle school students reported current e-cigarette use. Flavored e-liquids were used by 81 percent of first-time users, aged 12 to 17, who had ever used electronic nicotine delivery devices, and 85.3 percent of current youth users had used a flavored e-liquid in the past month.

Consistent with the national trend, e-cigarette consumption in New York City schools has climbed in recent years. The 2019 Youth Risk Behavior Survey revealed that 15.2 percent of public high school students and 6.7 percent of public middle school students surveyed reported current use of electronic vapor products.

All this led the FDA, in January 2020, to ban flavored vape products. Flavor bans have also been enacted in New York state and New York City, as well as in many other cities and states nationwide. Additionally, the federal Prevent All Cigarette Trafficking Act prohibits anything other than face-to-face sales of disposable e-cigarettes unless the sales comply with all state and local laws of the jurisdiction in which the sale occurs. This is an impossibility in New York City and in New York state where the New York Public Health Code and the New York City Administrative Code prohibit the sale of flavored disposable e-cigarettes altogether.

Despite these laws, city agencies documented thousands of illegal sales of flavored vapes by city stores in 2022, levying thousands of dollars in fines. In January of this year, deputies from the New York City Sheriff’s Office seized hundreds of thousands of dollars’ worth of illegal flavored vapes from stores located on the Upper West Side. More recently, in May of this year, investigators were able to purchase flavored disposable e-cigarettes from vape and smoke shops, as well as convenience stores throughout the city. Overall, since the formation of the Joint Interagency Task Force convened by Mayor Adams last December, the Sheriff’s Office has seized 319,636 packages of flavored vape, with an estimated value of $6.4 million dollars.
The defendants named in today’s lawsuit include:

  • Magellan Technology Inc.: Magellan Technology owns the trademarks for disposable e-cigarettes sold under the trade name “Hyde,” one of the largest-selling brands of flavored disposable e-cigarettes. Magellan’s website encourages customers to “Choose from our fabulous selection of Hyde flavors you'll love!” including “disposable” and “discreet” flavored e-cigarettes, such as “cherry peach lemonade,” “summer luv,” “caribbean colada,” and “strawberry ice cream.” Magellan sells flavored vapes directly to the public over the Internet and delivers the products to city residences.
  • Demand Vape: Magellan-affiliate Demand Vape is one of the largest e-cigarette distributors in the United States — offering approximately 30,000 products and selling to approximately 5,000 retailers in 49 states, as well as internationally through online sales. Demand Vapes' website displays an extensive selection of flavored disposable e-cigarettes expressly banned by the FDA.
  • Mahant Krupa 56 LLC d/b/a Empire Vape Distributors: Empire Vape is a wholesaler of disposable e-cigarettes to dozens of retail outlets it owns or is affiliated with in New York City and in at least 13 states. Empire Vape boldly markets on its website flavors such as “banana ice,” “lush ice,” “blueberry,” and “cola” through statements such as “FLAVOR BAN? NO WORRIES. WE GOT YOU.” Investigators purchased flavored e-cigarettes at numerous vape shops owned by Empire Vape throughout the city.
  • Star Vape: Star Vape advertises many brands of disposable e-cigarettes with flavors such as “strawberry milkshake” and “aloe grape,” including the popular Hyde brand disposable e-cigarettes, which are all available in wholesale quantities and through Star’s retail outlet in Brooklyn.

The lawsuit — filed today in the U.S District Court for the Southern District of New York —seeks to enjoin all four defendants from further illegal sales that not only constitute a public nuisance and mail and wire fraud, but are also specifically in violation of New York City’s Administrative Code, New York State Public Health Law, the federal Tobacco Control Act, the federal Racketeering Influenced Corrupt Organizations (RICO) Act,  and the federal government’s Prevent All Cigarette Trafficking Act. The city also seeks to recover monetary damages and civil penalties from the defendants, potentially totaling millions.


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