The owner of the nation's largest tobacco company, Philip Morris USA, said this is the first time a U.S. company has sued China-based websites for selling counterfeit cigarettes to American consumers. Altria Group, based in Richmond, Va., filed the suit in U.S. District Court in California on Monday.
The suit is part of a larger effort to end the trade of counterfeit, stolen and untaxed or under-taxed cigarettes. The company said the Internet-based cigarette vendors are violating U.S. intellectual property laws and the Lanham Act.
Altria also said the websites are violating a federal law that took effect in June prohibiting cigarette sellers from delivering tobacco by mail and requiring them to comply with taxing and other laws in the locations where they do business.
The company is asking the court to ban the online retailers from selling the product and turn over profits from the cigarettes, along with punitive damages.
The federal government and many states have raised cigarette taxes in recent years, driving up their overall cost to consumers. So-called gray-market vendors typically import counterfeit cigarettes and smokes intended for foreign markets and sell them to consumers more cheaply than legitimate products, in part because they're untaxed.
Counterfeit, or gray market cigarettes, are made with different materials and under different quality-control procedures than cigarettes sold in the U.S. and may not display the required health warnings, the company said in the complaint.
The company also said Wednesday it has filed suit against eight retailers in the Los Angeles area for allegedly selling counterfeit cigarettes. The suits stem from an investigation that led to 10 arrests and the seizure of more than 9,200 packs of counterfeit Marlboro cigarettes.