Cause of Action Institute (“CoA Institute”) has been active as an amicus curiae (friend of the court) in an ongoing federal lawsuit regarding cigars and other tobacco products.  Meaning, while we don’t represent any of the parties, we have been submitting briefs to help the Court reach its final decision. The Food and Drug Administration (“FDA”) originally proposed a burdensome tobacco-safety regulation that would have effectively crippled the premium cigar market, putting countless American small businesses out on the street.  After the 2016 election, however, new FDA leadership delayed that rule with the intent to change it. This was a wonderful development for both cigar companies and hobbyists alike. However, the FDA kept pushing a scaled-back rule that would require large, intrusive warning labels on premium cigar products.  We submitted a brief opposing that rule.

CoA Institute did not take a position on the efficacy or utility of tobacco warning labels.  Our concern was, as it frequently is, that agencies must show their work when they enact a new regulation.  The governing statute here, the Family Smoking Prevention and Tobacco Control Act (“FTA”), required the FDA to show that any new regulations would be appropriate for the protection of the public health.  Plaintiffs, as well as CoA Institute, argued that the FDA had not done its work and, indeed, had conceded it had no real quantitative data or analysis for the efficacy of these new warning labels for cigar products.  Regulatory action for the sake of regulatory action is bad policy.

Unfortunately, the Judge disagreed, finding that the FDA had done its due diligence in determining that the warning labels would be effective.  He held that the FDA’s statements connecting the labels to public health, as well as their citation of certain data, such as the overall addictiveness of nicotine, was enough.  Furthermore, he found that the agency’s concession that it had no data available was merely an admission of the “agency’s inability to quantify the benefits of the Deeming Rule’s requirements prior to their implementation date.”  He held that a mere connection, quantifiable or not, between smoking prevention and the larger warning labels is enough.  He cited the agency’s prior work with other tobacco products, singling out cigarettes, as the foundation for the FDA’s contention that the new health warnings were appropriate and would affect cigar and pipe tobacco usage.

As any cigar aficionado knows, cigars and cigarettes are distinct products.  I regularly enjoy cigars, but I never touch cigarettes.  Why?  Because, in my opinion, the health risks are profoundly different for the two products.  More importantly, the addictive nature of the two is incomparable.  I regularly smoke cigars during the summer—which, for me, is 1-3 a week—and completely stop for the long winter months with no undesired effects or feelings of withdrawal.  That, to put it lightly, is not the usual experience with cigarettes.  Aficionados know: these are two different worlds.

Some might criticize me for relying on personal anecdotes to argue a federal regulation is unfounded.  I agree!  And that’s why the FDA should have conducted quantitative studies specific to premium cigars, rather than just relying on general science on nicotine addiction and the agency’s experience with a totally different product, cigarettes.  I suspect this is why Congress included language in the statute mandating that a “finding as to whether such regulation would be appropriate for the protection of the public health shall be determined[.]”  Of course, we live in the era of Chevron deference, where the Supreme Court has instructed the lower courts to defer to an agency’s interpretation of a statute and, sometimes by extension, the agency’s own science (or lack thereof).  Accordingly, the agency’s own statements in support of the rule were given enormous deference by the Court.

The Plaintiffs in the case argued that it was ridiculous for the FDA to claim to not have access to quantitative data, since they’ve had “sixteen years and an entire nation’s worth of data to examine the efficacy of the [prior-implemented] FTC warnings.”  After all, most of the cigars produced and sold in the United States are subject to an FTC consent decree that requires these companies to put warning labels on their products.  The FDA could have studied the efficacy of the FTC warnings on cigar use, but failed to do so.  In rejecting this argument, the Judge made an interesting comment: “Plaintiffs, however, have identified no requirement, statutory or otherwise, that compelled the FDA to undertake such studies to make the findings required by [the statute].”  CoA Institute, as amici, did just that though.  We contended that Chamber of Commerce of the United States v. Securities & Exchange Commission, which applied to similar statutory language in the financial sector, was controlling here.  The SEC made basically the same claim the FDA did, arguing “it was without a reliable basis” to determine costs associated with a regulation.  In Chamber, the D.C. Circuit recognized that limitations on data cannot “exclude the Commission from its statutory obligation to determine as best it can the economic implications of the rule it has proposed.” In its decision upholding the labeling rule, the District Court did not cite Chamber.

If this case were to be appealed—and, again, CoA Institute was just amici and did not represent any of the parties—we believe the D.C. Circuit would be faced with two interesting questions.  First, is the statutory language enforced by the Court in Chamber similar enough to the FTA that the case controls here?  And second, if Chamber does apply, can the FDA comply by simply reaching back and pointing to data based on cigarettes and other general science on tobacco?  We, of course, would argue no, given the distinct differences between premium cigars and cigarettes.

What does this all mean for cigar smokers?  Probably not that much, at least for now.  The original rule would have rocked the market, cutting off competition, reducing quality, and increasing prices exponentially.  The new, cutback rule might result in some increase in price, given the labeling costs cigar companies will now need to endure, but the same quality and quantity of cigars should be available for purchase.

But here’s the important point: there’s nothing preventing a future administration from bringing back the original rule.  And, given the Judge’s opinion in this case, the FDA would not have to reach a high bar to “deem” and regulate cigars the same way it does cigarettes.  This could be a death knell for the pastime.  The Courts and Congress must act to hold agencies accountable to good science and, most importantly, to doing their job.

*There were many other strong arguments made by the Plaintiffs, including Administrative Procedure Act and constitutional claims.  These were similarly rejected by the Court. For this blog post, I concentrated only on the arguments CoA Institute highlighted in our amicus brief.  The Court did vacate one part of the rule, which defined retailers who blend pipe tobacco in their stores as “manufacturers,” asking the agency to justify its reasoning.*