Synopsis

Cigar and pipe tobacco trade associations filed suit against the FDA, challenging its decision to deem premium cigars and pipe tobacco subject to the agency’s regulatory authority under the Family Smoking Prevention and Tobacco Control Act. On July 5, 2022, the District Court for the District of Columbia ruled against the FDA with respect to its decision not to exempt premium cigars from the final Deeming Rule, considering this act to be arbitrary and capricious. The court ruled against the Cigar Association with respect to its claim that the FDA failed to consider the costs and benefits of regulating small businesses within the premium cigar industry. On August 9, 2023, the district court vacated the FDA’s decision to deem premium cigars subject to its regulatory authority. 

Why It Matters for Public Health

This case has been ongoing for several years and has presented a number of challenges for the FDA in its assertion of regulatory authority over cigars. So far, cigar warning label requirements have been suspended, eliminating an important method for communicating about their health risks to users. At issue in the litigation is whether the FDA’s Deeming Rule would be applied to cigars in the same way that it is applied to other products, which is an important question with potentially negative implications for flavored products in particular.

Background

On May 5, 2016, the FDA issued the final rule deeming all existing and future tobacco products to be subject to the agency’s jurisdiction, including cigars and pipe tobacco. Among the requirements applicable to cigars and pipe tobacco under the Deeming Rule were required health warnings and the premarket review process.

Proceedings

District Court

On July 15, 2016, trade associations for retailers and manufacturers filed suit in the District Court of the District of Columbia. The plaintiffs requested that the court issue a preliminary injunction barring enforcement of the Deeming Rule while the litigation proceeded and asked the court to strike down the rule permanently. The case was consolidated with another case, En Fuego Tobacco Shop et al. v. FDA (2018), which raised similar issues.

Following the FDA’s announcement of a new regulatory plan in July of 2017, the industry plaintiffs agreed to narrow the scope of their lawsuit and the court established a new briefing schedule. The plaintiffs filed a motion for summary judgment on October 3. The FDA filed its opposition to the plaintiffs’ motion and its own motion for summary judgment, and public health groups filed a supporting amicus curiae brief on October 31. On May 15, 2018, the court partially granted and partially denied the plaintiffs’ motion for summary judgment. The court found that the required health warning labels did not violate the First Amendment or the Tobacco Control Act, that the FDA’s user fee rule was legal, and that the FDA’s decision to regulate pipes did not violate the Administrative Procedure Act. The court did find, however, that the FDA’s regulation of tobacco retailers who blend pipe tobacco as manufacturers was a violation of the APA and remanded the issue to the FDA. The plaintiffs filed an appeal of the health warning rulings to the D.C. Circuit.

Meanwhile, several issues remained unresolved at the district court level. On June 8, the plaintiffs filed a motion for an injunction of the enforcement of the warning label requirement for cigars and pipe tobacco pending the resolution of the plaintiffs’ appeal. On July 5, the court granted the injunction, staying enforcement of the warning label requirement for cigars and pipe tobacco until sixty days after the resolution of the plaintiffs’ appeal.

D.C. Circuit

As noted above, the industry appealed the district court’s ruling on the warning requirements as applied to cigars and pipe tobacco. The parties and amicus curiae submitted briefs in the spring of 2019, and oral arguments were held on October 29, 2019. On July 6, 2020, the three-judge panel issued its opinion, finding that the health warnings requirement was issued in violation of the Tobacco Control Act as applied to cigars and pipe tobacco. More specifically, the court found that because the FDA failed to consider whether the warnings would effectively reduce smoking rates by encouraging some smokers to quit or prevent others from starting—a required element under the Tobacco Control Act—the rule was issued in violation of the Tobacco Control Act and the APA.

Additional District Court Proceedings

As the appeal was proceeding, the district court allowed the plaintiffs in En Fuego (which had been consolidated with the Cigar Association case) to proceed with their own complaint. On March 15, 2019, the En Fuego plaintiffs filed a motion for summary judgment and a request for a permanent injunction. On April 26, the FDA filed its opposition to the plaintiffs’ motion for summary judgment and cross-motion for summary judgment.

During the briefing on the summary judgment cross-motions, the district court also allowed the Cigar Association plaintiffs to amend their original complaint. On August 8, the Cigar Association plaintiffs amended their complaint to include a request for declaratory relief. This claim asked the court to declare the FDA’s 2017 guidance document, which effectively suspended premarket review enforcement for products subject to the Deeming Rule, invalid (this 2017 guidance document was later declared invalid by the District Court for the District of Maryland and by the Fourth Circuit in American Academy of Pediatrics v. FDA (2018)). On September 26, public health groups that had previously participated as amici filed a motion requesting to participate in oral arguments.

On February 3, 2020, the court vacated the warning requirement for premium cigars, finding that the FDA had failed to “explain … why health warnings for premium cigar packaging and advertising are appropriate” in light of the “demographic differences and usage patterns” specific to premium cigars (the D.C. Circuit later reversed and remanded the health warning labels as applied to all cigars and pipe tobacco, including premium cigars, in the Cigar Association appellants’ interlocutory appeal discussed above).

On August 19, the court ruled on several outstanding issues. First, the court determined that the relevant date applicable to tobacco products applies once a product is deemed a tobacco product subject to FDA regulation, and the FDA had no authority to change it for specific products like cigar and pipe tobacco products. Second, the court found that the Deeming Rule’s August 2016 effective date was not based on legally incorrect assumptions about the FDA’s authority to set compliance periods. Third, the court determined that the FDA’s premarket review application deadline of September 9 was not arbitrarily and capriciously applied to substantial equivalence reports for cigar and pipe tobacco manufacturers. Fourth, the FDA’s cost-benefit analysis related to requiring substantial reports for cigars and pipe tobacco and for regulating cigars and pipe tobacco in general was not arbitrary and capricious.

The industry’s arguments as to the FDA’s regulation of premium cigars, however, fared better. The court held that the FDA had not adequately considered or responded to industry comments related to the possibility of creating a separate process applicable to premium cigars. The court remanded the issue to the FDA specifically to determine whether a streamlined substantial equivalence process is appropriate for premium cigars. The court therefore enjoined the enforcement of premarket review requirements as to premium cigars, leaving it to the FDA to specify when manufacturers will have to submit substantial equivalence reports.

Additional D.C. Circuit Proceedings

On August 31, the industry appealed the district court’s decision to the D.C. Circuit. The issues on appeal included the 2007 date that applied to all new tobacco products, whether the application of the substantial equivalence process to cigars and pipe tobacco was arbitrary and capricious, and whether the FDA should include e-cigarette manufacturers in its assessment of user fees that help fund the FDA’s Center for Tobacco Products. Public health groups, led by the American Academy of Pediatrics, filed an amicus brief in support of the FDA on February 19, arguing that the substantial equivalence process should apply to cigars, using the original date of February 15, 2007.

On July 20, the D.C. Circuit issued a decision upholding the district court’s ruling on these issues. It found that the FDA’s application of the premarket review requirements, including the agency’s application of substantial equivalence and date requirements to cigars and pipe tobacco, was not arbitrary and capricious, and also found that the FDA did not erroneously exclude e-cigarette manufacturers from the application of user fees.

Litigation Status (OPEN)

On July 5, 2022, the D.C. Circuit granted summary judgment for Cigar Association on the claim that the FDA acted arbitrarily and capriciously in its decision not to exempt premium cigars from the final Deeming Rule. The court noted that the FDA ignored an evidence base including data on how premium cigars were consumed, rather than consider it and any of its deficiencies. On remand, the court instructed the FDA to address the evidence base around cigar use more thoroughly.

The issue of remedy was left to the district court. The Cigar Association requested that the court vacate the FDA’s deeming of premium cigars as within its regulatory scope, while the FDA requested remand without vacatur. On August 9, 2023, the district court chose to vacate the FDA’s decision to deem premium cigars subject to the agency’s tobacco regulatory authority.