Cigar Association of America v. FDA, 5f4th68

Background

The Tobacco Control Act (2009) lets FDA "deem" other products that meet the definition of "tobacco product" subject to the Act; FDA issued the 2016 Deeming Rule to bring cigars and pipe tobacco (and their "components or parts") under the Act, defined "component or part," and treated a pipe as such.
The Deeming Rule imposed premarket review (substantial equivalence) requirements tied to a grandfather date (Feb. 15, 2007) and provided staggered compliance/enforcement deferrals (18 months to submit reports, additional 12 months for FDA review).
On the same day FDA issued a User Fees Rule to calculate fees for manufacturers/importers of cigars and pipe tobacco, explaining it could not assess fees for non-enumerated classes (e.g., e-cigarettes) under the statutory fee scheme tied to FETRA.
Three non-profit trade associations representing cigar and pipe-tobacco interests sued, challenging multiple aspects of the Deeming Rule and the User Fees Rule; this appeal concerns five APA challenges affirmed for FDA by the district court and now by this Court.
The panel applied arbitrary-and-capricious review under the APA and Chevron deference where statutory ambiguity existed, affirming summary judgment for FDA on the contested claims.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Form/manner instructions for substantial-equivalence (SE) reports	FDA was required by 21 U.S.C. §387e(j)(1) to supply product-specific form/manner instructions before SE reports were due	FDA could defer enforcement and provide instructions after rule promulgation; any failure was not error of the Deeming Rule	Court: Plaintiffs' claim fails; not an error of the Deeming Rule (and some arguments forfeited); summary judgment for FDA
Effective date / due-date authority and notice-and-comment	FDA could not set a due date and later change it without notice-and-comment rulemaking (Md. court said changes require rulemaking)	FDA treated compliance/enforcement policies as not subject to notice-and-comment and did not rely on legal misconception in setting dates	Court: Plaintiffs did not show FDA acted based on legal misconception; claim fails
Authority to alter the statutory grandfather date	FDA could modify the Feb. 15, 2007 grandfather date for cigars/pipe tobacco	Statute contains no grant of authority to change the grandfather date; deeming only brings products into the statute, not alter statutory deadlines	Court: FDA lacks authority to change grandfather date; upheld FDA's position
Regulatory cost–benefit analysis	FDA failed to analyze benefits specific to cigars/pipe tobacco premarket review and mismeasured costs	FDA performed a deferentially reviewable analysis, quantified costs, and gave reasoned explanations	Court: Plaintiffs failed to show arbitrary/capricious error; analysis upheld
Classification of a pipe as "component or part" vs. "accessory"	A pipe is separate and not integrated; it should be an accessory excluded from the Act	FDA's definition reasonably covers devices used with tobacco and Congress left the term undefined	Court: Statute ambiguous; FDA's interpretation reasonable under Chevron; pipe is a component/part
User Fees Rule — excluding e-cigarettes from fees	FDA arbitrarily assessed fees for cigars/pipe but not for e-cigarettes; §387s(a) covers "each manufacturer . . . subject to this subchapter"	The fee scheme is tied to six enumerated classes via FETRA, which allocates 100% of fees to those classes; no statutory mechanism exists for non-enumerated classes	Court: Chevron step one resolves it (statutory scheme limits fees to six classes); alternatively FDA reasonably adopted a bright-line approach; rule upheld

Key Cases Cited

Cigar Ass'n of Am. v. FDA, 964 F.3d 56 (D.C. Cir. 2020) (prior D.C. Cir. opinion addressing Deeming Rule warning requirements)
Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984) (framework for deference to reasonable agency interpretations)
Nicopure Labs, LLC v. FDA, 944 F.3d 267 (D.C. Cir. 2019) (deeming authority does not permit agency to rewrite statutory requirements)
Nat'l Ass'n of Home Builders v. EPA, 682 F.3d 1032 (D.C. Cir. 2012) (deferential review of agency cost–benefit analyses)
Dep't of Homeland Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891 (2020) (standard for APA review; court should not substitute its judgment for the agency's)
Phillips Petroleum Co. v. FERC, 792 F.2d 1165 (D.C. Cir. 1986) (agency error must be shown to have driven the agency's approach)
Am. Academy of Pediatrics v. FDA, 379 F. Supp. 3d 461 (D. Md. 2019) (district-court ruling addressing limits on changing compliance dates without rulemaking)
Vill. of Barrington, Ill. v. Surface Transp. Bd., 636 F.3d 650 (D.C. Cir. 2011) (agency must offer a reasoned explanation for interpretations at Chevron step two)
Emily's List v. FEC, 581 F.3d 1 (D.C. Cir. 2009) (agencies may adopt bright-line rules for administrative convenience if reasonably explained)