266 F. Supp. 3d 360
D.D.C.2017Background
- In May 2016 the FDA issued the "Deeming Rule" to treat e-cigarettes and related ENDS products as "tobacco products" under the Tobacco Control Act (TCA), bringing them under existing statutory requirements (premarket review, ban on free samples, restriction on modified-risk claims, labeling, etc.).
- Plaintiffs (Nicopure Labs and trade associations collectively "RSF") challenged the Rule on statutory (exceeding authority), APA (arbitrary and capricious; deficient cost-benefit analysis), standing/ripeness, and First/Fifth Amendment grounds; the cases were consolidated and decided on cross-motions for summary judgment.
- Central factual/legal disputes centered on (1) whether "open" refillable devices and nicotine-free e-liquids can be deemed "components/parts" of tobacco products, and (2) whether applying the TCA's premarket/marketing rules to ENDS was reasonable and procedurally adequate.
- The FDA defined "component or part" broadly (includes assemblies, e-liquids, tanks, atomizers, batteries, software when intended or reasonably expected to affect performance or to be used with human consumption of a tobacco product) and stated nicotine-free liquids are covered only if tobacco-derived, tobacco-flavored, or reasonably expected to be used with nicotine-containing products.
- The District Court upheld the Deeming Rule in all respects challenged: FDA acted within statutory authority (Chevron analysis), its decision to deem ENDS was not arbitrary or capricious under the APA, its cost/benefit treatment and RFA compliance were adequate, and the marketing restrictions survived First Amendment review (Central Hudson/O'Brien).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FDA exceeded statutory authority by deeming open-system devices (sold empty) to be "components/parts" of tobacco products | "Open" empty devices are not "made or derived from tobacco" and thus not covered | Statutory definition expressly includes "components/parts" and ordinary meaning supports treating device as a component of an ENDS; FDA's regulatory definition is reasonable | Court: FDA within authority; device is a component/part and interpreting that way survives Chevron steps 1 and 2 |
| Whether FDA may regulate nicotine-free e-liquids | Nicopure: nicotine-free liquids not "made or derived from tobacco" and can't be regulated; lack of standing/ripeness for case-by-case enforcement | FDA: will regulate nicotine-free liquids only when tobacco-derived, tobacco-flavored, or reasonably expected to be used with nicotine (component); plaintiffs who manufacture nicotine-free liquids have standing; challenge is ripe | Court: plaintiffs have standing and challenge is ripe; FDA's interpretation is permissible under Chevron |
| Whether deeming ENDS subject to TCA (and its premarket review) was arbitrary and capricious under the APA | Rule ignores evidence of relative benefits of ENDS, failed to consider reasonable alternatives, and imposes unworkable burdens (including grandfather date enforcement and compliance timelines) | FDA considered record evidence of nicotine addictiveness, youth uptake, product variability/mislabeling, and weighed alternatives; premarket review is statutory and FDA reasonably applied it with phased compliance | Court: decision reasonable, supported by record; FDA did not act arbitrarily or capriciously; statutory grandfather date cannot be altered by agency; compliance periods reasonable |
| Whether FDA's cost/benefit and RFA analyses were inadequate | Michigan v. EPA requires cost consideration; FDA failed to quantify benefits and understated costs; RFA procedural violations | Michigan distinguishes statutory language; agency was not required to conduct formal cost-benefit, but it did consider costs and benefits in RIA and complied with RFA procedures | Court: Michigan is distinguishable; FDA considered costs/benefits sufficiently for APA review and met RFA procedural requirements |
| First Amendment: ban on free samples | Sampling is communicative commercial speech; ban is content/speaker-based and impermissible | Sampling is conduct (or at most incidental commercial speech) and FDA's ban targets youth access to tobacco; alternative channels for speech remain | Court: sampling is regulation of conduct with incidental speech; survives O'Brien and Central Hudson — government has substantial interest and sampling ban directly advances it and is not more extensive than necessary |
| First Amendment: ban on unapproved "modified-risk" claims | Ban prevents truthful, nonmisleading claims and is overbroad; effectively a total ban | Government has compelling/substantial interest in preventing misleading health claims for addictive products; preapproval requirement ensures substantiation | Court: restriction on modified-risk commercial speech satisfies Central Hudson (substantial interest; direct advancement; appropriately tailored) |
Key Cases Cited
- Sottera, Inc. v. Food & Drug Admin., 627 F.3d 891 (D.C. Cir. 2010) (held FDA may regulate e-cigarettes as tobacco products under TCA but did not resolve component/part question)
- Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (two-step test for judicial review of agency statutory interpretation)
- Michigan v. EPA, 135 S. Ct. 2699 (2015) (statutory language requiring regulation "appropriate and necessary" implicated consideration of costs)
- FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000) (agency exceeded authority in attempting to regulate nicotine as a drug under FDCA; background for TCA)
- Central Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557 (1980) (four-part test for regulation of commercial speech)
- United States v. O'Brien, 391 U.S. 367 (1968) (test for when regulation of conduct with incidental expressive elements is permissible)
- Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001) (upheld regulation aimed at youth prevention and applied O'Brien/Central Hudson reasoning)
- Discount Tobacco City & Lottery, Inc. v. United States, 674 F.3d 509 (6th Cir. 2012) (upheld marketing restrictions including sample ban as advancing youth-protection interest)