Cigar Association of America, International Premium Cigar and Pipe Retailers Association and Cigar Rights of America v. U.S. Food & Drug Administration et al. 1:16-cv-1460 (D.D.C July 15, 2016)
Cigar Association of America and two other trade groups filed suit against the Food and Drug Administration (FDA) challenging the agency’s Deeming Rule, which in 2016 extended FDA regulatory authority to all tobacco products, including cigars, hookah and e-cigarettes. Specifically, the plaintiffs claim that the rulemaking process violated federal law, and that the rule itself is unfair and compels speech in violation of the U.S. Constitution.
Administrative Procedure Act claims
The APA is a federal law that governs the process through which federal agencies develop rules to carry out their statutory authority, among other things. Relevant to plaintiffs’ claim, the APA prohibits agencies from acting in an “arbitrary and capricious” manner. In other words, a court can find an agency acted arbitrarily if it failed to base its decisions on relevant factors and whether it made a clear error in judgment when it made that decision. The APA also prohibits agencies from adopting rules exceeding their statutory authority.
Plaintiffs’ argue that FDA violated the APA in several ways:
- Requiring any product not on the market as of February 15, 2007 to undergo premarket review is overly burdensome and costly for newly regulated products, favors those products immediately regulated by the TCA (g., cigarettes and smokeless tobacco), and fails to comply with the TCA (the source of FDA’s authority to adopt the rule);
- User fees imposed on some newly regulated products by the FDA violate the APA because they are not imposed uniformly and therefore fail to comply with the TCA;
- FDA failed to conduct an effective cost-benefit analysis of its rule and discounted what plaintiffs consider the elimination of entire classes of products due to the overly burdensome premarket review requirements;
- FDA’s failure to include a proposed regulatory exemption for premium cigars in its final rule was arbitrary and capricious;
- Warning label requirements for cigars are overly burdensome and unsupported by credible evidence of effectiveness; and
- Regulating tobacconists who blend pipe tobacco or create cigars as manufacturers is overly burdensome.
- Regulating pipes as “components” rather than exempting them from regulation as “accessories” is arbitrary and capricious.
Fifth Amendment claims
The Fifth Amendment to the U.S. Constitution protects the right to due process (i.e., ensures that government rules are fair and reasonable and in furtherance of a legitimate governmental interest). Plaintiffs claim that imposing user fees on some newly regulated products, but not others, is unfair and not supported by any legal rationale.
First Amendment claims
The First Amendment to the U.S. Constitution prohibits the government’s restraint of certain speech. For example, the government typically may not restrict speech based on the content of the speech or the identity of the speaker. The First Amendment also protects one’s right not to speak; however, it permits the government to compel the disclosure of certain truthful and uncontroversial information in order to further a relevant government interest so long as it is not unduly burdensome. This could include disclosure of information to ensure consumers can reach an informed decision. In this case, plaintiffs claim that the warning labels required to be included on cigar packaging and advertising is overly burdensome and not supported by evidence that it is necessary and therefore fails to further a legitimate government interest.
Cigar Association of America and co-plaintiffs requested the court declare FDA’s deeming rule to violate the law and immediately and permanently enjoin the agency’s implementation and enforcement of the rule.
On May 15, 2018, a D.C. district court upheld the FDA’s regulations in part (remanding in part), finding that the agency’s rulemaking process did not violate federal administrative law. Under federal administrative law, the FDA must determine that the regulations are in furtherance of their statutory charge to promote public health. The court found that the FDA had sufficiently established that deeming cigars to be tobacco products would increase cessation and prevent tobacco use, thus promoting public health. The court upheld the FDA’s authority to regulate cigars as tobacco products. However, the court, finding insufficient evidence supporting the relationship between the tobacco retailer registration requirement and public health, remanded this requirement back to the FDA for further consideration.
Further, the court upheld the health warnings for cigars. The court rejected the plaintiff’s claims that the required warnings violated the First Amendment, which requires that regulations compelling speech support a legitimate government interest and not be overly burdensome. The court found that the labels allowed sufficient space for manufacturers and retailers to communicate their messaging on products and advertisements, and therefore, were not overly burdensome. Further, the court found that the labels improved consumer understanding of the risks of tobacco products and corrected misperceptions of the safety of such products—constituting a sufficient government interest.
In response, plaintiffs filed a motion for summary judgement seeking to delay implementation of FDA-mandated warning labels on cigar packaging. Plaintiffs may also appeal the May 2018 ruling.