Philip Morris USA Inc. v. United States Food and Drug Administration
202 F. Supp. 3d 31
| D.D.C. | 2016Background
- The Family Smoking Prevention and Tobacco Control Act (TCA) makes FDA the primary regulator of tobacco and requires FDA premarket approval for any "new tobacco product." New products can be cleared via (a) substantial equivalence (SE) to a predicate marketed by Feb 15, 2007, or (b) a full premarket application.
- TCA defines "tobacco product" and limits "characteristics" (for SE purposes) to physical attributes (materials, ingredients, design, composition, heating source, or other features). Congress used the terms "label" and "labeling" repeatedly elsewhere in the TCA and gave FDA specific label-related authorities in Sections 903 and 911.
- FDA issued guidance (Second SE Guidance, Sept. 2015) stating (1) a label modification that renders a product "distinct" makes it a "new tobacco product" requiring SE, and (2) changes in product quantity (e.g., pack size or weight) create a new product requiring SE; FDA provided abbreviated SE report forms and set interim enforcement tolerances.
- Major tobacco companies challenged the Guidance as inconsistent with the TCA and as procedurally defective under the APA (and raised First Amendment concerns regarding label changes). This lawsuit followed; cross-motions were filed.
- The district court held that (a) label changes do NOT create a "new tobacco product" under Section 910 and vacated that portion of the Guidance, and (b) quantity changes DO create a "new tobacco product" and the Guidance on quantity changes was lawful and need not be vacated. The case was remanded to FDA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a distinct labeling change creates a "new tobacco product" triggering SE review | Label changes are not covered by the TCA SE definition; Congress granted FDA label-review power only where it expressly did (e.g., Secs. 903 and 911) and would have used "label" if intended | SE and "new tobacco product" definitions must be read together; "same characteristics" contemplates physical identity and non-physical differences (like labeling) can make a product "new" | Label changes do not create a new tobacco product under Section 910; FDA Guidance treating distinct labels as triggering SE is contrary to the TCA and is vacated |
| Whether a change in product quantity creates a "new tobacco product" | Quantity changes do not alter individual unit characteristics (e.g., a cigarette remains the same) and thus should not trigger SE; also attack on procedural basis (Guidance should have been rulemaking) | The statute covers "any modification," and quantity alters design/content (total nicotine/additives) and can affect public-health risks/behavior; FDA permissibly required SE and tailored abbreviated reports | Quantity changes do create new tobacco products under Section 910; FDA's Guidance on quantity changes is lawful and need not be vacated |
| Whether the Guidance (or parts) was a legislative rule requiring notice-and-comment | The Guidance imposes substantive, binding obligations (esp. on labels) and thus should have been promulgated by notice-and-comment | The document is an interpretive guidance explaining FDA's reading of the TCA; interpretive rules need not undergo notice-and-comment | Guidance on labeling was vacated on statutory grounds so APA rulemaking need not be resolved for that part; Guidance on quantity changes is interpretive and not a legislative rule, so notice-and-comment was not required |
| Ripeness / pre-enforcement reviewability of the Guidance | Plaintiffs face immediate practical hardship and chilled First Amendment interests; the Guidance is final and imposes real compliance choices | Guidance is non-binding "current thinking" and no threatened enforcement means not ripe | Guidance is final and ripe for review; plaintiffs face immediate hardship and First Amendment concerns support pre-enforcement review |
Key Cases Cited
- Disc. Tobacco City & Lottery, Inc. v. United States, 674 F.3d 509 (6th Cir.) (context on historical tobacco regulation)
- FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (Sup. Ct.) (limits on FDA authority before TCA)
- Abbott Labs. v. Gardner, 387 U.S. 136 (Sup. Ct.) (ripeness factors for pre-enforcement challenges)
- Bennett v. Spear, 520 U.S. 154 (Sup. Ct.) (final agency action standards)
- Chevron U.S.A. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (Sup. Ct.) (deference framework for agency statutory interpretation)
- Whitman v. Am. Trucking Ass’ns, 531 U.S. 457 (Sup. Ct.) ("no hiding elephants in mouseholes" canon)
- Perez v. Mortgage Bankers Ass'n, 135 S. Ct. 1199 (Sup. Ct.) (interpretive rules vs. legislative rules distinction)
- Ciba-Geigy Corp. v. EPA, 801 F.2d 430 (D.C. Cir.) (agencies' definitive legal positions & ripeness)
- Appalachian Power Co. v. EPA, 208 F.3d 1015 (D.C. Cir.) (when guidance can be treated as having binding effect)