FDA Regulation of Tobacco

Discount Tobacco & Lottery v. United States, Nos. 10-5234 and 10-5235, 674 F.3d 509 (6th Cir. 2012)

On March 19, 2012, the U.S. Court of Appeals for the Sixth Circuit issued a decision in Discount Tobacco City & Lottery v. United States upholding nearly all challenged aspects of the Family Smoking Prevention and Tobacco Control Act (FSPTCA).  This was the first federal appeals court opinion in over a decade to discuss how the First Amendment applies to tobacco marketing.  The opinion makes it clear that tobacco marketing practices that are proven to appeal to youth can be restricted without violating the First Amendment.  The decision therefore provides a boost to state and local efforts to protect youth by restricting tobacco advertising and promotion at the point-of-sale.

Background:  Shortly after President Obama signed the FSPTCA in 2009, a group of tobacco manufacturers and retailers filed suit in federal court in Kentucky challenging numerous provision of the law, primarily on First Amendment grounds.  In January 2010, a district court judge upheld most provisions of the law, but found that two sections were unconstitutional:  the prohibition on the use of color and graphics in tobacco advertising, and the ban on claiming FDA authorization or approval for tobacco products.  Both sides appealed to the Sixth Circuit.

The Decision:  On appeal, the Sixth Circuit affirmed all of the district court’s conclusions, with two exceptions.  It found that the restriction on claiming FDA authorization or approval for tobacco products was constitutional.  But it concluded that the law’s ban on “continuity programs” (giveaways of free items to reward frequent customers), which had been upheld by the district court, was invalid.

Next Step:  Either party may appeal the ruling to the Supreme Court.  The Supreme Court can choose whether or not to review the case.

Key Points: 

  • The court agreed with the government that tobacco marketing is a major cause of youth smoking.  The court rejected the tobacco companies’ claim that their marketing is only intended to promote brand-switching among adults.  Some key quotes:
  • “Though [the tobacco companies] would have us believe that there is no causal connection between product advertising and the consumer behavior of children, such a claim stretches the bounds of credulity, even in the absence of the extensive record submitted by the government, which indicates the contrary.”
  • “[T]he record suggests that the massive amount of money invested by the tobacco industry in advertising and marketing is largely devoted to (1) attracting new young adult and juvenile smokers, and (2) brand competition in the young adult and juvenile market.  The record shows that tobacco advertising has a dramatic impact on juveniles’ decision to use tobacco products.”
  • “[C]redible evidence has been presented to support the conclusion that the advertising and marketing practices of the tobacco industry more heavily influence juveniles than adults.”
  • Applying the Central Hudson test, the Court concluded that “there is a substantial state interest in curbing juvenile tobacco use that can be directly advanced by imposing limitations on the marketing of tobacco products.”
  • To support a restriction on marketing, the government must present evidence that the marketing technique in question influences youth tobacco use.
  • The government must also establish the restriction is not more extensive than necessary, recognizing the tobacco companies’ interest in “conveying truthful information about their products to adults.”
  • In this case, most of the marketing restrictions in the FSPTCA passed the Central Hudson test and did not violate the First Amendment.
  • The same First Amendment standards would apply to actions by state and local governments.

The Details: 

Cigarette Graphic Health Warnings:  By a 2-1 decision, the court upheld the requirement for cigarette companies to place updated health warnings, including graphic images, on the top 50% of cigarette packages and on 20% of all cigarette advertisements.  (The was the only section of the opinion where there was a split opinion; the rest of the court’s conclusions were unanimous.)  While the court considered only the validity of graphic warnings requirement, and not the specific images selected by the FDA, its reasoning clearly conflicts with the recent decision by a federal district court judge in D.C. invalidating the rule that the FDA issued pursuant to this provision.  That separate ruling is currently being appealed to the U.S. Court of Appeals for the District of Columbia.

The majority explained that the government can require the disclosure of factual information needed to inform consumers of the health risks of tobacco, particularly because the tobacco companies “knowingly and actively conspired to deceive the public about the health risks and addictiveness of smoking for decades.”  Presenting the warnings in graphic form is appropriate because “abundant evidence” – including the experience of other countries – “establishes that larger warnings including graphics promote a greater understanding of tobacco-related health risks and materially affect consumers’ decisions regarding tobacco use.”  The majority specifically rejected the D.C. district court’s argument that graphic warnings that cause strong emotional reactions are impermissible, writing that the legal test “turns on whether the disclosure conveys factual information . . . not on whether the disclosure emotionally affects its audience or incites controversy.”

Modified Risk Tobacco Product (MRTP) Regulation: This section of the FSPTCA requires FDA approval before the introduction of a tobacco product into the marketplace that claims to present a reduced risk of harm when compared to other tobacco products.  The court held that this provision does not unconstitutionally restrain speech, because “[t]here is no question that the harm caused by the tobacco industry’s use of misleading advertising and marketing tactics regarding the relative risks of certain tobacco products is real and significant.”  Given this historical context, Congress had a valid reason for requiring prior approval and validation of reduced risk claims.

Ban on the Use of Color and Graphics:  Under this provision, makers and sellers of tobacco products are required to label and advertise cigarettes and smokeless tobacco using only black text on white background, with some narrow exceptions.  Like the district court, the appeals court concluded that this provision was too broad because it prohibits the use of color and graphics even in cases where they would hold no appeal for youth.  The court suggested that a narrower restriction would have been upheld.

Marketing Restrictions:  The court upheld the FSPTCA’s restrictions on giving out free samples of tobacco products, distributing branded non-tobacco items such as hats and t-shirts, and sponsoring athletic and cultural events.  It found that the government had introduced evidence establishing that all of these practices increased youth tobacco use.  It further concluded that these restrictions were narrowly targeted at the problems identified (in other words, they did not restrict much more speech than necessary).

The court however, ruled that the restriction on “continuity programs” was invalid because the evidence introduced by the government to support the measure was limited and dated.  (The only evidence introduced was a study conducted in 1996 and a poll conducted in 1992.)  Importantly, if the government had introduced more recent evidence to support this provision, it likely would have been upheld.

Claims of FDA Approval:  The FSPTCA prohibits mentioning FDA regulation of tobacco on product packaging or in advertising in order to avoid misleading consumers into believing a tobacco product is safe or less harmful by virtue of its regulation by the FDA.  The district court had invalidated the provision because of its concern that it was worded too openly and could have been applied to anyone, including doctors and journalists, who made public statements about FDA regulation of tobacco products.  The appeals court held that the language of the statute applied only to the makers and sellers of tobacco products, and it was therefore a valid restriction on commercial speech.