Congress is due back in session next week, beginning a last minute sprint for adjournment before the November elections. What is scheduled for consideration remains uncertain, although it appears that House and Senate Republicans may seek to strengthen their political advantage on the topic of national security. Provided the petroleum markets continue to either retreat or hold relatively steady, it is likely that, barring an unforeseen significant disruption, additional energy policy will be held in abeyance until after the elections.

As is often the case in Washington, however, if the Congress is away somebody else will likely play. Typically, action during a congressional recess comes from the federal departments and agencies -- but not this time.

On August 17, the U.S. District Court for the District of Columbia in the case of United States v. Phillip Morris, et al. found that the cigarette manufacturer defendants had misled the public regarding the health benefits of light, ultra light and low tar cigarettes. Part of the order to remedy these actions calls for the manufacturers to inform the public that statements they have made in the past regarding these products were untrue. Unfortunately, the order has provisions that will unfairly penalize retailers.

One part of the order requires the manufacturers to include in their merchandising agreements with retailers that the retailers will have countertop and header displays in their stores informing the public of the manufacturers' misleading statements. If retailers refuse to agree to having the displays, the manufacturers will be unable to have merchandising agreements with those retailers.

Therefore, on August 31, NACS provided two affidavits from Senior Vice President of Government Relations Lyle Beckwith and 2005-2006 Chairman Scott Hartman, president and CEO of Rutter's Farm Stores (York, Pa.), attesting to the problems with the order. Both affidavits lay out the difficulties the court's order would create for retailers and object to the injustice of taking revenue from retailers when they have done nothing wrong. The affidavits were filed in support of a motion by the manufacturers to stay and clarify the court's order. Once the court rules on the manufacturers' motion, the case is likely to be appealed.

We will keep you informed of developments in this case.

Have a great weekend.

John Eichberger
Vice President, Government Relations