What’s at Stake for the Premium Cigar Industry as DC Circuit Considers FDA Appeal?

[El Presidente]

 

https://www.regulatoryoversight.com/2024/04/whats-at-stake-for-the-premium-cigar-industry-as-dc-circuit-considers-fda-appeal/

What’s at Stake for the Premium Cigar Industry as DC Circuit Considers FDA Appeal?

By Michael Jordan, Bryan Haynes & Agustin Rodriguez on April 23, 2024

POSTED IN FDA, FEDERAL COURT, REGULATORY LITIGATION, TOBACCO

In August 2023, Judge Amit P. Mehta of the U.S. District Court for the District of Columbia partially vacated a Food and Drug Administration (FDA) rule that had “deemed” premium cigars subject to the Federal Food, Drug, and Cosmetic Act (FDCA), known as the “Deeming Rule.” This decision exempted premium cigars from FDA’s tobacco product authorities. In September 2023, however, FDA appealed, and the U.S. Circuit Court of Appeals for the D.C. Circuit is currently weighing the matter. So, what would it take for FDA to succeed on appeal, and what is at stake for the premium cigar industry?

(1) FDA has two main arguments on appeal.

First, the agency argues that it properly “deemed” premium cigars subject to the FDCA. In July 2022, Judge Mehta determined that the FDA’s decision to deem premium cigars subject to the FDCA was arbitrary and capricious because the agency disregarded data concerning the relative public health risks and negligible youth use of premium cigars.

Second, even if the D.C. Circuit finds FDA did not adequately consider this data, FDA argues that Judge Mehta chose the wrong remedy. Instead of vacating the Deeming Rule for premium cigars, FDA argues that the district court should have remanded the matter back to FDA to consider the data further and issue updated findings. This would have left FDA’s regulation of premium cigars intact. A remand, however, is not the typical remedy in this scenario.

If FDA prevails on either of these issues, premium cigars would again be subject to FDCA requirements, including, user fees; domestic establishment registration requirements; product, ingredient, label, and advertising submissions; recordkeeping requirements; free sampling restrictions; and the federal minimum purchase age of 21.

(2) Importantly, nothing in FDA’s appeal would disturb prior court orders vacating or enjoining the premarket review and health warning requirements for premium cigars.

Judge Mehta included specific language in his prior orders making clear that the district court’s resolution of the claims regarding premarket review and health warning requirements were final judgments, so that they could be appealed.

This includes an order enjoining FDA from enforcing the statutory premarket-review scheme against premium cigars because the agency failed to consider an abbreviated, less burdensome process for premium cigars, which FDA did not appeal. Any attempt by FDA to appeal this decision would be untimely.

The court also already resolved a claim (in favor of FDA) that the Deeming Rule’s requirement that premium cigar packaging and advertising carry specified health warnings was arbitrary and capricious. The court issued an order stating that its decision was an appealable, final judgment, and that order was reversed on appeal by the D.C. Circuit in favor of industry. Thus, premium cigars are not subject to FDA health warning requirements, and no further appeals can be made on this matter.

What’s Next?

Briefing on the matter is currently set to conclude by May 23, and oral argument has not yet been scheduled. It is impossible to predict with certainty how long the D.C. Circuit might take to rule after oral argument, but we anticipate that it could take approximately a year or more.

Our team regularly advises premium cigar manufacturers, importers, distributors, and retailers regarding their obligations under federal and state law. If you have any questions about what the FDA appeal could mean for your business, our team is happy to assist.

[BoliDan]

Why does the FDA want to fight this so hard? Does it create loopholes or are they just poopheads?

[bmac]

7 of the 11 judges on dc circuit court of appeals were appointed by Obama or Biden. For what it’s worth.

[BrightonCorgi]

Cigars and tobacco are always the villain. I'd expect the worst outcome from the Court. 

[MrBirdman]

Don’t expect an opinion for a while. 

5 hours ago, bmac said:

7 of the 11 judges on dc circuit court of appeals were appointed by Obama or Biden.For what it’s worth

Not really that relevant for this case. As John reminds us below, so is Mehta. 

8 hours ago, BoliDan said:

Why does the FDA want to fight this so hard? Does it create loopholes or are they just poopheads?

I think the FDA wants a remand because it would allow them to do the evaluation based only on the evidence that was submitted as part of the original rule making process. Since then, the one major study released basically further muddied the waters, and I wouldn’t be surprised if the cigar community is quietly funding some of its own research for a future attempt to regulate. But if it’s remanded the FDA can ignore anything that wasn’t submitted during the first rule making process way back in 2016. One of the reasons remand isn’t usually used in these situations is that it naturally doesn’t make much sense to ignore information that’s come out while the case was being litigated. 

[Cigar Surgeon]

4 hours ago, bmac said:

7 of the 11 judges on dc circuit court of appeals were appointed by Obama or Biden. For what it’s worth.

Judge Mehta also.