Significant Cases

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This week, in a rare instance of a court directing a federal agency to take action, the U.S. District Court for the District of Massachusetts ordered FDA to expedite the issuance of a final rule for cigarette graphic warnings. The order comes after the Court concluded that FDA “unlawfully withheld” or “unreasonably delayed” the promulgation of graphic health warnings as mandated by the 2009 Family Smoking Prevention and Tobacco Control Act.

The Tobacco Control Act requires FDA to issue regulations requiring color graphics depicting the health consequences of smoking on product labeling within 24 months after the date of enactment of the Act, or by June 22, 2011. According to FDA, however, the final rule is now expected to be completed in November 2021. Calling this an “extraordinary delay,” the Court stated that FDA’s duty to issue the graphic warnings rule by June of 2011 was “nondiscretionary.” Accordingly, the Court concluded that the statute and deadlines set forth by Congress continue to apply to the FDA — despite the D.C. Circuit’s vacatur and remand back to the agency in R.J. Reynolds Tobacco Co. v. Food & Drug Administration in 2012 based on First Amendment challenges. In coming to this conclusion, U.S. District Judge Indira Talwani stated that “it cannot be the case that the FDA has freed itself from Congressional mandates and may now take the opportunity to promulgate this rule at whatever pace it chooses. While the vacatur may reset the two-year clock, it does not negate the FDA’s continuing obligation to comply with Congress’ deadlines.”

The Court did not accept FDA’s argument that the Agency had competing priorities because FDA failed to identify any single, specific competing priority. The Court also rejected any notion of FDA suffering from limited resources since CTP operations are funded by user fees and the amount of user fees collected in FY 2018 alone was $672,000,000 (even though FDA did not allege that limited resources were at issue in this case). Thus, in light of the original June 2011 timeline set forth by Congress, FDA’s current estimated timeline (and lack of progress in recent years), and the lack of competing priorities outlined in FDA’s brief, the Court found that FDA failed to convincingly show that it did not “unreasonably delay” promulgation of the final graphic health warnings rule for cigarette packs. As such, the court declined to defer to the Agency’s timeline. Instead, the Court has now given FDA a deadline of September 26, 2018 to provide the following:

  • an expedited schedule for the completion of outstanding studies for the graphic warnings;
  • the publication of the proposed graphic warnings rule for public comment;
  • review of public comments, and
  • issuance of a final graphic warnings rule.

According to FDA’s own

With a related appeal pending in the U.S. Court of Appeals for the D.C. Circuit, what will become of pending trial litigation in Cigar Association of America, et al. v. U.S. Food & Drug Administration, et al., No. 1:16-cv-01460 (D.D.C.) (“Cigar Association”), and En Fuego Tobacco Shop LLC, et al. v. U.S. Food & Drug Admin., et al., No. 1:18-cv-1797 (D.D.C.) (“En Fuego”)?

It seems that the appeal will take the larger focus for now.

The FDA has advanced in its “procedural maneuvering” in three constitutional challenges to the Deeming Regulations. The challenges – premised on the First Amendment and on the Appointments Clause – were filed by vapor-industry plaintiffs represented by the Pacific Legal Foundation (“PLF”): Moose Jooce, et al. v. Food & Drug Admin., et al., No. 1:18-cv-203 (D.D.C.), Rave Salon, Inc. v. Gottlieb, et al., No. 3:18-cv-237 (N.D. Tex.), and Hoban, et al. v. Food & Drug Admin., et al., No. 0:18-cv-269 (D. Minn.).

On June 21, 2018, the United States Supreme Court issued its decision in South Dakota v. Wayfair.  The decision overruled decades of prior precedent holding that remote sellers of products – including tobacco products – ordinarily are not required to collect sales or excise taxes if they lack a physical presence in the purchaser’s state.  In Wayfair, the Court upheld a South Dakota statute that required sellers in other states to collect taxes for sales to South Dakota consumers if the seller annually delivers more than $100,000 worth of goods in South Dakota or makes more than 200 sales to South Dakota consumers.

The federal government is attempting to intervene in a lawsuit between a tribal tobacco manufacturer and the State of Nebraska.

HCI Distribution Inc. (“HCI”) and Rock River Manufacturing (“Rock River”) filed a lawsuit against the State of Nebraska alleging that Nebraska was attempting to regulate the companies’ tobacco production in violation of the U.S. Constitution. HCI and Rock River are subsidiaries of Ho-Chunk Incorporated (“Ho-Chunk”), which is the economic development arm of the Winnebago Tribe.

The United States Food and Drug Administration recently obtained summary judgment on several cigar industry claims challenging the FDA’s Deeming Regulations.  The case was filed by industry plaintiffs Cigar Association of America, the International Premium Cigar and Pipe Retailers Association and Cigar Rights of America on July 15, 2016, shortly after the FDA issued the final regulations.  The plaintiffs have indicated that they will appeal the court’s decision, and have requested that the court enjoin enforcement of the FDA’s health warning requirements pending the resolution of the appeal.

There has been new activity in two of the three Deeming Regulations challenges filed by vapor-industry plaintiffs represented by the Pacific Legal Foundation (“PLF”): Moose Jooce, et al. v. Food & Drug Admin., et al., No. 1:18-cv-203 (D.D.C.), and Rave Salon, Inc. v. Gottlieb, et al., No. 3:18-cv-237 (N.D. Tex.). The cases involve challenges based on the Appointments Clause and the First Amendment of the U.S. Constitution.

A federal court has dismissed a case challenging the FDA’s allowance of the word “natural” in Natural American Spirit’s (“NAS”) product packaging and labeling. The Plaintiff lacks standing to sue under Article III, § 2, of the U.S. Constitution, which limits federal courts to deciding actual “cases” or “controversies.”

On January 30, 2018, three separate challenges to the Deeming Regulations were filed by vapor-industry plaintiffs represented by the Pacific Legal Foundation (“PLF”), each raising issues under the Appointments Clause and the First Amendment of the U.S. Constitution:

  • Moose Jooce, et al. v. Food & Drug Admin., et al., No. 1:18-cv-203 (D.D.C.);
  • Rave Salon, Inc. v. Gottlieb, et al., No. 3:18-cv-237 (N.D. Tex.); and
  • Hoban, et al. v. Food & Drug Admin., et al., No. 0:18-cv-269 (D. Minn.).

When PLF announced the filings, it characterized “[t]hese three simultaneously filed lawsuits” as an “opening salvo.” Will the FDA be able to outmaneuver the three-pronged attack?