Cigar Association of America v. FDA, 964 F.3d 56

Background

Congress enacted the Family Smoking Prevention and Tobacco Control Act, empowering the FDA to regulate tobacco products but mandating that any regulation be evaluated for its effects on population-level tobacco use (both cessation and initiation).
The FDA’s 2016 Deeming Rule brought cigars and pipe tobacco under the FDCA and required prominent, formatted health warnings on cigar packages, advertisements, and signs, and a nicotine-addiction warning for pipe tobacco.
The FDA asserted the warnings would better inform consumers of health risks but acknowledged a lack of reliable evidence about how such warnings affect cigar and pipe-tobacco users’ behavior.
Three industry associations sued, arguing the warnings violated the Tobacco Control Act and the APA (and raised a First Amendment claim); the district court upheld the rule and enforcement was stayed pending appeal.
The D.C. Circuit reviewed the statutory and APA claims and focused on whether the FDA complied with 21 U.S.C. § 387f(d)(1)’s requirement to take into account the likelihood that regulations will increase or decrease tobacco use.
The court concluded the FDA failed to consider how the warnings would affect smoking initiation and cessation, held the rule arbitrary and capricious, reversed the district court’s grant of summary judgment to the FDA, and remanded.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FDA complied with § 387f(d)(1)’s command to consider effects on tobacco use (cessation and initiation)	FDA failed to consider whether warnings would increase or decrease number of smokers	Section requires only population-level public-health finding; FDA considered risks and benefits generally and need not find reduced use	Held: FDA must consider likely effects on cessation/initiation; it did not; violation of statute and arbitrary and capricious
Whether the final rule may be upheld by reasoning in the NPRM (notice)	NPRM reasoning insufficient to satisfy statutory requirement; final rule must include basis and purpose after comment	FDA argued the final rule incorporated the NPRM analysis and therefore satisfied the statutory consideration	Held: Final rule cannot be upheld on reasoning that appears only in the NPRM; incorporation did not cure the omission
Whether failure to analyze mandated factors renders agency action arbitrary and capricious under the APA	Agency action is arbitrary for failing to consider an important statutorily required aspect (impact on smoking rates)	FDA argued it analyzed related matters (communication of risks) and did not need to show regulation would reduce use	Held: Agency action arbitrary and capricious for failing to address statutorily mandated consideration of effects on users/nonusers
Remedy and posture: whether district court decision should stand and preliminary injunction appeal	Plaintiffs sought reversal and remand; preliminary-injunction appeal became moot after merits disposition	FDA sought affirmation of district court judgment	Held: Reversed grant of summary judgment to FDA, denied to plaintiffs vacated; remanded; appeal from denial of preliminary injunction dismissed as moot

Key Cases Cited

Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (agency must consider important aspects; arbitrary and capricious standard)
Lindeen v. SEC, 825 F.3d 646 (agency must consider factors required by statute)
Time Warner Entm’t Co. v. FCC, 56 F.3d 151 (need for an express and considered conclusion under statutory mandates)
Gerber v. Norton, 294 F.3d 173 (mere reference to a requirement does not equal compliance)
Susquehanna Int’l Grp., LLP v. SEC, 866 F.3d 442 (agency must actually address statutorily mandated factors)
Deppenbrook v. PBGC, 778 F.3d 166 (de novo appellate review of district court’s APA decision)
R.J. Reynolds Tobacco Co. v. FDA, 696 F.3d 1205 (warning requirements implicated manufacturers’ speech interests)
Perez v. Mortgage Bankers Ass’n, 575 U.S. 92 (procedural requirements of notice-and-comment rulemaking)
Nat’l Mining Ass’n v. MSHA, 512 F.3d 696 (final rule must include statement of basis and purpose addressing significant comments)
Pub. Citizen v. Fed. Motor Carrier Safety Admin., 374 F.3d 1209 (relatedness of discussed issues does not excuse failure to address mandated factor)
Kingdomware Techs., Inc. v. United States, 136 S. Ct. 1969 (distinction between “may” and “shall” imposes mandatory duty)
Cigar Ass’n of Am. v. FDA, 315 F. Supp. 3d 143 (district court decision below)