Case 1:16-cv-01460-APM Document 94 Filed 05/15/18 Page 1 of 70
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
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`CIGAR ASSOCIATION OF AMERICA, et al., )
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`Plaintiffs,
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`v.
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`U.S. FOOD AND DRUG
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`ADMINISTRATION, et al.,
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`Defendants.
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`_________________________________________ )
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`Case No. 1:16-cv-01460 (APM)
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`MEMORANDUM OPINION AND ORDER
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`I.
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`INTRODUCTION
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`On May 10, 2016, the U.S. Food and Drug Administration (“FDA”) published a final rule
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`“deeming” cigars, pipe tobacco, and certain other products (e.g., e-cigarettes) subject to the federal
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`Food, Drug, and Cosmetic Act (“FD&C Act”), 21 U.S.C. §§ 301, et seq., as amended by the Family
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`Smoking Prevention and Tobacco Control Act of 2009 (“TCA”). Known as the “Deeming Rule,”
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`the FDA’s action subjects these newly “deemed” products to comparable statutory and regulatory
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`requirements already imposed on cigarettes, cigarette tobacco, roll-your-own tobacco, and
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`smokeless tobacco. At the same time, the FDA promulgated a separate rule, referred to as the
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`“User Fee Rule,” which assesses “user fees” on manufacturers and importers of cigars and pipe
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`tobacco, but not other newly deemed products, like e-cigarettes. The FDA is statutorily authorized
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`to collect user fees for the purpose of funding the FDA’s regulation of tobacco products under the
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`FD&C Act and the TCA.1
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`1 Hereinafter, for ease of reference, the court refers to the FD&C Act, as amended by the TCA, as the “TCA.”
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`Plaintiffs in this case are three non-profit associations that represent cigar manufacturers,
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`importers, distributors, suppliers, and consumers, as well as premium cigar and tobacco retail
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`shops. They brought this action in July 2016 against the FDA and its Commissioner, and the U.S.
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`Department of Health and Human Services (“HHS”) and
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`its Secretary (collectively,
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`“Defendants”), challenging the Deeming Rule and the User Fee Rule on a host of grounds.2 For
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`reasons explained later in this opinion, not all of Plaintiffs’ challenges to the Rules are presently
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`before the court. Instead, the court addresses only the following subset of challenges: (1) the
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`imposition of health warning requirements for cigar packaging and advertisements; (2) the
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`assessment of user fees on cigar and pipe tobacco products, but not on another newly deemed
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`product, e-cigarettes; (3) the treatment of retailers who blend pipe tobacco in-store as
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`“manufacturers” subject to the regulatory requirements of 21 U.S.C. § 387e; and (4) the
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`classification of pipes as “components” of tobacco products, thereby subjecting pipe makers to
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`regulation. Plaintiffs also have moved to preliminarily enjoin implementation and enforcement of
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`the Deeming Rule’s health warning requirements.
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`For the reasons set forth below, the court grants in part and denies in part the parties’ cross-
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`motions for partial summary judgment and denies Plaintiffs’ motion for a preliminary injunction
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`as moot. The Deeming Rule’s health warning requirements are upheld in all respects, as is the
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`User Fee Rule in its entirety. The court also affirms the agency’s classification of pipes as
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`“components or parts” of tobacco products under the TCA. The court, however, concludes that
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`Defendants’ rationale for subjecting retailers who blend pipe tobacco in-store to the requirements
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`of 21 U.S.C. § 387e is arbitrary and capricious and therefore remands that issue to the FDA for
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`further consideration.
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`2 Pursuant to Federal Rule of Civil Procedure 25(d), Alex M. Azar II, Secretary of Health and Human Services, and
`Dr. Scott Gottlieb, Commissioner of Food and Drugs, are substituted for their predecessors in office.
`2
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`II.
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`BACKGROUND
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`A.
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`Statutory Background
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`In 2009, Congress enacted the TCA to “provide authority to the [FDA] to regulate tobacco
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`products under the [FD&C Act] by recognizing it as the primary Federal regulatory authority with
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`respect to the manufacture, marketing, and distribution of tobacco products,” and “to authorize the
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`[FDA] to set national standards controlling the manufacture of tobacco products and the identity,
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`public disclosure, and amount of ingredients used in such products,” among other purposes.
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`Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, § 3, 123 Stat. 1776,
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`1781–82 (2009). Congress made 49 legislative findings in the Act, in which it acknowledged the
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`“inherent dangerous[ness]” of tobacco products and nicotine and the strong public interest in
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`regulating tobacco products and their advertising and promotion, and discussed Congress’s interest
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`in reducing youth tobacco use, in light of judicial findings that major U.S. tobacco companies
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`specifically targeted and marketed their products to youth. TCA § 2. Congress further recognized
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`that no other federal agency except the FDA “possesses the scientific expertise needed to
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`implement effectively all provisions of the [TCA].” TCA § 2(45).
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`In light of those findings, the TCA authorized the Secretary of Health and Human Services
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`to regulate the manufacture, distribution, and marketing of tobacco products. TCA § 901, codified
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`at 21 U.S.C. § 387a (entitled “FDA authority over tobacco products”). The legislation
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`immediately subjected “all cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless
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`tobacco” to a panoply of statutory and regulatory requirements, and also reserved future
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`application of the TCA to “any other tobacco products that the Secretary [of Health and Human
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`Services] by regulation deems to be subject to this chapter.” 21 U.S.C. § 387a(b) (emphasis
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`added). Congress defined “tobacco product” to mean “any product made or derived from tobacco
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`that is intended for human consumption, including any component, part, or accessory of a tobacco
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`product (except for raw materials other than tobacco used in manufacturing a component, part, or
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`accessory of a tobacco product).” 21 U.S.C. § 321(rr)(1). The FDA’s decision in 2016 to “deem”
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`cigars and pipe tobacco as “tobacco products,” and thus subject them to regulation, gave rise to
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`this litigation.
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`B.
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`Regulatory Background
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`1.
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`The Cigar Product
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`Federal regulations define “cigar” to mean any “roll of tobacco that is wrapped in leaf
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`tobacco or any substance containing tobacco” that is “not a cigarette.” 21 C.F.R. § 1143.1. There
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`are three major categories of cigar products: (1) little cigars, (2) cigarillos, and (3) traditional
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`cigars. See Defs.’ Cross-Mot. for Partial Summ. J. & Mem. in Support, ECF No. 74 [hereinafter
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`Defs.’ Cross-Mot.], at 6–7. Little cigars resemble cigarettes in size and tobacco content and thus
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`“are positioned as cheaper substitutes for cigarettes.” See id. at 7. Cigarillos are a shorter, slimmer
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`version of traditional cigars and, generally speaking, contain between 3 and 10 pounds of tobacco
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`per thousand units. See id. at 8. Traditional cigars are the largest cigar product, varying in length
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`and diameter. See id. While little cigars and cigarillos are machine-rolled, traditional cigars may
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`be either machine-rolled or hand-rolled. See id.
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`Within the category of traditional cigars are a sub-category known as “premium cigars.”
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`See id. Premium cigars typically are hand-rolled, made with a higher-grade tobacco, or are more
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`expensive. See id. The term “premium cigar” is not, however, defined by federal statute or
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`regulation. See id.
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`2.
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`The Existing FTC Health Warning Statements Regime
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`Long before the FDA’s action in 2016, cigar products already were subject to some federal
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`regulation. More than a decade earlier, in 2000, in settlements with the Federal Trade Commission
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`(“FTC”), the seven largest U.S. cigar companies agreed to include warnings about significant
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`adverse health risks on their packaging and advertisements. See, e.g., Decision & Order, In the
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`Matter of Swedish Match N. Am., Inc., Docket No. C-3970 (F.T.C. Aug. 18, 2000), 2000 WL
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`1207446. The FTC settlements represented the first national requirements for health warnings on
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`cigar products and applied to approximately 95 percent of the U.S. cigar market at the time. See
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`Press Release, FTC, Nationwide Labeling Rules for Cigar Packaging and Ads Take Effect Today
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`(Feb. 13, 2001), https://www.ftc.gov/news-events/press-releases/2001/02/nationwide-labeling-
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`rules-cigar-packaging-and-ads-take-effect.
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`Pursuant to the consent orders, which remain in effect today, the covered cigar companies
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`must display one of the five following health warning statements “clearly and conspicuously” on
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`their advertising and packaging:
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`SURGEON GENERAL WARNING: Cigar Smoking Can Cause
`Cancers Of The Mouth And Throat, Even If You Do Not Inhale.
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`SURGEON GENERAL WARNING: Cigar Smoking Can Cause
`Lung Cancer And Heart Disease.
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`SURGEON GENERAL WARNING: Tobacco Use Increases The
`Risk Of Infertility, Stillbirth And Low Birth Weight.
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`SURGEON GENERAL WARNING: Cigars Are Not A Safe
`Alternative To Cigarettes.
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`SURGEON GENERAL WARNING: Tobacco Smoke Increases
`The Risk Of Lung Cancer And Heart Disease, Even In Nonsmokers.
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`See Decision & Order, In the Matter of Swedish Match N. Am., Inc., 2000 WL 1207446, at *3.
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`The FTC consent orders specify the size and formatting of the health warnings, and require that
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`they appear on the principal display panel on cigar packages and be rotated at random on a 12-
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`month basis. See id. at *4–7, *10–12.
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`Additionally, the FTC consent orders require the health warnings to appear on visual
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`advertisements in a set-off, rectangular box to ensure that the warnings are readily visible and
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`conspicuous. Id. at *5–8. For audio advertisements, the health warning statement must be
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`delivered so that an ordinary consumer can hear and comprehend it. Id. at *8–9. Cigar companies
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`also were required to submit for FTC approval, in advance of the consent orders’ effective date, a
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`plan for the rotation and display of the health warnings on cigar packages and advertisements. Id.
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`at *11–12.
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`3.
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`FDA Rules
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`a.
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`The Deeming Rule
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`i.
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`Proposed Rule
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`In the years following Congress’s enactment of the TCA, cigar products were free from
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`FDA regulation because cigars were not expressly listed in the Act’s definition of “tobacco
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`product.” A harbinger of change arrived in the spring of 2014. On April 25, 2014, the FDA issued
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`a Proposed Rule that would make, or “deem,” cigars, pipe tobacco, and e-cigarettes subject to the
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`TCA. See Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic
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`Act, as Amended by the Family Smoking Prevention and Tobacco Control Act; Restrictions on the
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`Sale and Distribution of Tobacco Products and Required Warning Statements for Tobacco
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`Products, 79 Fed. Reg. 23,142 (Apr. 25, 2014) (“Proposed Deeming Rule”). In the Proposed
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`Deeming Rule, the FDA announced for consideration two options which “would provide two
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`alternatives for the scope of the deeming provisions and, consequently, the application of the
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`additional specific provisions.” Id. at 23,143. Under Option 1, the FDA would deem all products
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`meeting the statutory definition of “tobacco product”—including cigars and pipe tobacco—except
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`accessories of deemed products to be subject to the TCA. Id. Under Option 2, the FDA would
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`deem “only a subset of cigars” and “exclude from the scope of [the] proposed rule certain cigars
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`that we refer to as ‘premium cigars.’” Id. To effectuate this carve-out, Option 2 proposed a
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`definition for “covered cigar” as:
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`[A]ny cigar as defined in this part, except a cigar that: (1) Is wrapped
`in whole tobacco leaf; (2) contains a 100 percent leaf tobacco binder;
`(3) contains primarily long filler tobacco; (4) is made by combining
`manually the wrapper, filler, and binder; (5) has no filter, tip, or non-
`tobacco mouthpiece and is capped by hand; (6) has a retail price
`(after any discounts or coupons) of no less than $10 per cigar
`(adjusted, as necessary, every 2 years, effective July 1st, to account
`for any increases in the price of tobacco products since the last price
`adjustment); (7) does not have a characterizing flavor other than
`tobacco; and (8) weighs more than 6 pounds per 1000 units.
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`Id. at 23,150. The FDA noted that, while it had proposed a definition with respect to Option 2, it
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`remained “concerned that any attempts to create a subset of premium cigars that are excluded from
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`regulatory authority might sweep other cigar products under its umbrella.” Id. The FDA therefore
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`sought comment as to how to refine this definition, within the context of Option 2, “to ensure that
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`the exclusion would apply only to those cigars that, because of how they are used, may have less
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`of a public health impact than other types of cigars.” Id.
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`The FDA sought comment on both options. Its purpose was “to determine whether all
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`cigars should be subject to deeming and what provisions of the proposed rule may be appropriate
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`or not appropriate for different kinds of cigars,” as well as to determine the “relative merits of
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`Option 1 versus Option 2, taking into account what is appropriate for the public health, including
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`possible benefits to the public health or possible negative public health consequences of adopting
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`one Option or the other.” Id. at 23,143, 23,145. As to Option 2, the FDA noted that while “all
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`cigars are harmful and potentially addictive, it has been suggested that different kinds of cigars
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`may have the potential for varying effects on public health, based on possible differences in their
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`effects on dual use, youth initiation[,] and frequency of use by youth and young adults.” Id. at
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`23,150. Plaintiffs and numerous other members of the public submitted detailed comments on the
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`Proposed Deeming Rule.
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`ii.
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`Final Rule
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`a. Health warning requirements
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`The FDA selected Option 1 and promulgated the final Deeming Rule on May 10, 2016,
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`thus deeming all categories of cigars, including those referred to as “premium cigars,” to be subject
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`to the TCA. See Final Rule Deeming Products To Be Subject to the Federal Food, Drug, and
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`Cosmetic Act, as Amended by the Family Smoking Prevention and Tobacco Control Act;
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`Restrictions on the Sale and Distribution of Tobacco Products and Required Warning Statements
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`for Tobacco Products, 81 Fed. Reg. 28,974, 29,020 (May 10, 2016) (codified at 21 C.F.R. pts.
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`1100, 1140, 1143) (“Deeming Rule”). In support of its decision, the FDA stated that it “concluded
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`that deeming all cigars, rather than a subset, more completely protects the public health.” Id. The
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`FDA found that: “(1) All cigars pose serious negative health risks, (2) the available evidence does
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`not provide a basis for FDA to conclude that the patterns of premium cigar use sufficiently reduce
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`the health risks to warrant exclusion, and (3) premium cigars are used by youth and young
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`adults.” Id.
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`Under the Deeming Rule as originally announced, the newly deemed products would be
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`subject to comparable TCA provisions and regulatory requirements to which cigarettes, cigarette
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`tobacco, roll-your-own tobacco, and smokeless tobacco were already subject. Id. at 28,976. These
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`requirements include:
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`to be
`(1) Enforcement action against products determined
`adulterated or misbranded (other than enforcement actions based on
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`lack of a marketing authorization during an applicable compliance
`period);
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`(2) Required submission of ingredient listing and reporting of
`[harmful and potentially harmful constituents];
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`tobacco product manufacturing
`(3) Required registration of
`establishments and product listing;
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`(4) Prohibition against sale and distribution of products with
`modified risk descriptors (e.g., “light,” “low,” and “mild”
`descriptors) and claims unless FDA issues an order authorizing their
`marketing;
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`(5) Prohibition on the distribution of free samples; and
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`(6) Premarket review applications and approvals.
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`Id.
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`And there is more. The Deeming Rule also sets out comprehensive warning statement
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`requirements, for both cigar product packaging and advertisements. By August 10, 2018, cigar
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`product packages must display one of the six following health warning statements:
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`(i) WARNING: Cigar smoking can cause cancers of the mouth and
`throat, even if you do not inhale.
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`(ii) WARNING: Cigar smoking can cause lung cancer and heart
`disease.
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`(iii) WARNING: Cigars are not a safe alternative to cigarettes.
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`(iv) WARNING: Tobacco smoke increases the risk of lung cancer
`and heart disease, even in nonsmokers.
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`(v)(A) WARNING: Cigar use while pregnant can harm you and
`your baby.3 . . .
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`(vi) WARNING: This product contains nicotine. Nicotine is an
`addictive chemical.
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`3 This warning statement can be replaced with an optional alternative warning stating, “SURGEON GENERAL
`WARNING: Tobacco Use Increases the Risk of Infertility, Stillbirth and Low Birth Weight.” 21 C.F.R.
`§ 1143.5(a)(1)(v)(B).
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`21 C.F.R. § 1143.5(a)(1). These health warnings must be displayed on a rotating basis. See id.
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`On cigar packages, each of the six health warning statements “must be randomly displayed in each
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`12-month period, in as equal number of times as is possible on each brand of cigar sold in product
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`packaging and be randomly distributed in all areas of the United States in which the product is
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`marketed.” Id. § 1143.5(c)(1). On cigar advertisements, the health warning statements “must be
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`rotated quarterly in alternating sequence in each advertisement for each brand of cigar.” Id.
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`§ 1143.5(c)(2). Each cigar company must submit for FDA approval a plan for rotating warnings
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`twelve months before advertising or commercially marketing a cigar product. Id. § 1143.5(c)(3).
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`The Deeming Rule also specifies the placement and size of the required health warnings.
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`With respect to packaging, each warning statement must “appear directly on the package” and
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`must be “located in a conspicuous and prominent place on the two principal display panels of the
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`package,” comprising “at least 30 percent of each of the principal display panels.” Id.
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`§ 1143.5(a)(2). For cigars that are sold individually and not in a product package, the health
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`warning statements must be posted at the retailer’s point-of-sale on an 8.5 by 11-inch “clear,
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`legible, and conspicuous” sign. Id. § 1143.5(a)(3). As to print and other visual advertisements,
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`the warning statement must be located in the “upper portion of the area of the advertisement” and
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`occupy “at least 20 percent of the area of the advertisement.” Id. § 1143.5(b).4
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`These size mandates are more demanding than the size requirements under the FTC consent
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`orders. According to Plaintiffs, the required package warnings are 195 to 237 percent larger on
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`any one panel than under the FTC warnings scheme. And, when the Deeming Rule’s additional
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`4 The Deeming Rule imposes similar warning requirements on pipe tobacco packaging and advertisements. 81 Fed.
`Reg. at 29,060. Pursuant to 21 C.F.R. § 1143.3(a)(1), all pipe tobacco packages must display the following warning
`statement on the package label: “WARNING: This product contains nicotine. Nicotine is an addictive chemical.” The
`warning must occupy at least 30 percent of the two principal display panels. Id. § 1143.3(a)(2). On pipe tobacco
`advertisements, the warning must occupy at least 20 percent of the area of the advertisement. Id. § 1143.3(b)(1)–(2).
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`requirement to cover a second display panel is included, Plaintiffs assert that the FDA’s mandate
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`covers approximately 390 to 475 percent more of a package’s surface area than is required under
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`the FTC’s consent orders.
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`b. Related deemed products
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`In addition to cigars, pipe tobacco, and e-cigarettes, the Deeming Rule also deemed the
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`“components or parts” of those newly deemed products to be subject to the TCA. The FDA defines
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`the statutory term “component or part” to mean:
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`[A]ny software or assembly of materials intended or reasonably
`expected: (1) [t]o alter or affect the tobacco product’s performance,
`composition, constituents, or characteristics; or (2) [t]o be used with
`or for the human consumption of a tobacco product. Component or
`part excludes anything that is an accessory of a tobacco product.
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`81 Fed. Reg. at 29,102; 21 C.F.R. § 1100.3. Within the category of “component or part,” the FDA
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`included pipes used to consume pipe tobacco. 81 Fed. Reg. at 29,042.
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`Although it had the authority to do so, the FDA did not deem “accessories” of the newly
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`deemed tobacco products subject to the TCA. The agency reasoned that “accessories, unlike
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`components or parts, are expected to have little direct impact on the public health.” Id. at 28,975.
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`The FDA defined “accessories” to mean “any product” intended or reasonably expected to be used
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`with or for the human consumption of a tobacco product, but not containing, made, or derived
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`from, tobacco, that is: (1) “not intended or reasonably expected to affect or alter the performance,
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`composition, constituents, or characteristics of a tobacco product,” or (2) “intended or reasonably
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`expected to affect or maintain the performance, composition, constituents, or characteristics of a
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`tobacco product,” but solely: (i) “controls moisture and/or temperature of a stored tobacco
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`product,” or (ii) provides an external heat source to initiate but not maintain combustion of a
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`tobacco product.” Id. at 29,102; 21 C.F.R § 1100.3. The FDA identified as examples of
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`unregulated accessories items like “ashtrays, spittoons, hookah tongs, cigar clips and stands, and
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`pipe pouches,” as well as “humidors or refrigerators that solely control the moisture and/or
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`temperature of a stored product and conventional matches and lighters that solely provide an
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`external heat source to initiate but not maintain combustion of a tobacco product.” 81 Fed. Reg.
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`at 28,975.
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`b.
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`The User Fee Rule
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`To fund the regulation of tobacco products under the TCA, Congress requires the FDA to
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`“assess user fees on, and collect fees from, each manufacturer and importer of tobacco products
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`subject to this subchapter.” See 21 U.S.C. § 387s. The user fees “are available only for the purpose
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`of paying the costs of the activities of the [FDA] related to the regulation of tobacco products
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`under . . . the [TCA].” Id. § 387s(c)(2).
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`When it promulgated the final Deeming Rule, the FDA simultaneously issued the User Fee
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`Rule. Under that Rule, the FDA announced its intention to collect information from domestic
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`manufacturers and importers of cigars and pipe tobacco in order to calculate the amount of user
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`fees to be collected from these entities. See Requirements for the Submission of Data Needed To
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`Calculate User Fees for Domestic Manufacturers and Importers of Cigars and Pipe Tobacco, 81
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`Fed. Reg. 28,707 (May 10, 2016); 21 C.F.R. § 1150.5. Domestic manufacturers and importers of
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`cigars and pipe tobacco were required to submit information to support the assessment of user fees
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`to the FDA on August 20, 2016. 81 Fed. Reg. at 28,707; 21 C.F.R. § 1150.5. Because the FDA
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`performs class allocations only on a full fiscal-year basis, domestic manufacturers and importers
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`of cigars and pipe tobacco became subject to user fee assessments on October 1, 2016, the first
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`full fiscal year following the User Fee Rule’s effective date of August 8, 2016. 81 Fed. Reg. at
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`28,707.
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`Notably, the User Fee Rule excluded from coverage other newly deemed products, such as
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`e-cigarettes. The FDA explained that it lacked the statutory authority to impose user fees on any
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`newly deemed products other than cigars and pipe tobacco. See id. at 28,711–12.
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`c.
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`FDA’s July 2017 Announcement of a “New Comprehensive Plan”
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`The presidential election of 2016 ushered in change to the FDA’s approach to the Deeming
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`Rule. On July 28, 2017, the FDA announced a “new comprehensive plan” for regulating tobacco
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`products and nicotine. See Pls.’ Mot. for Partial Summ. J., ECF No. 62 [hereinafter Pls.’ Mot.],
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`Ex. D, ECF No. 62-4 [hereinafter FDA Press Release]. In accordance with the plan, the FDA
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`delayed implementation of some provisions of the Deeming Rule, but allowed others to go into
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`effect. For instance, the agency extended until August 8, 2021, the compliance period for tobacco
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`manufacturers to submit applications for newly deemed products that were on the market as of
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`August 8, 2016. See Joint Status Report (dated Sept. 5, 2017), ECF No. 51 [hereinafter Sept. 5,
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`2017 JSR], ¶ 3; FDA Press Release. The health warning requirements, on the other hand, were
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`left undisturbed.
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`The FDA also announced its intention to issue Advance Notices of Proposed Rulemaking
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`(“ANPRM”). The contemplated rulemaking included a focus on the previous issue of whether to
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`regulate premium cigars. An ANPRM, the FDA stated, would seek public comment on “the
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`patterns of use and resulting public health impacts from premium cigars, which were included in
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`the FDA’s 2016 rule.” FDA Press Release. Commenting on the FDA’s “new comprehensive
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`plan,” Mitch Zeller, Director of the FDA’s Center for Tobacco Products, explained: “Public input
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`on these complex issues will help ensure the agency has the proper science-based policies in place
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`to meaningfully reduce the harms caused by tobacco use.” Id.
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`13
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`Case 1:16-cv-01460-APM Document 94 Filed 05/15/18 Page 14 of 70
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`d.
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`Recent Regulatory Developments
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`In December 2017, the FDA formally announced its intention to initiate a rulemaking
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`process focused on the question of premium cigars. See “Premium Cigars; Request for Scientific
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`Information,” Agency Rule List - Fall 2017: Department of Health and Human Services, Unified
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`Agenda
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`of
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`Regulatory
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`and
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`Deregulatory
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`Actions,
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`OIRA,
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`https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201710&RIN=0910-AH88. The
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`FDA observed that while it had received comments in response to the Proposed Deeming Rule
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`“claiming that the health risks associated with cigar use generally, or with the use of premium
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`cigars in particular were not significant because of the way such products are used,” these
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`comments ultimately failed to provide an adequate scientific basis for excluding those products
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`from regulation. Id. The FDA therefore announced its intention to issue an ANPRM to request
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`scientific information “that might support” exempting premium cigars from regulation or
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`regulating them in a manner different from other cigars. Id.
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`The agency issued the ANPRM in late March 2018. See Defs.’ Notice of Publication of
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`ANPRM, ECF No. 91. It explained that in light of “the ongoing interest from many parties and
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`sectors, such as industry and Members of Congress, in the regulatory status of premium cigars,”
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`the purpose of the ANPRM is “to request relevant new and different information, data, and analysis
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`not submitted in response to FDA’s proposed deeming rule . . . that could inform FDA’s regulation
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`of premium cigars.” See Regulation of Premium Cigars, 83 Fed. Reg. 12,901, 12,902 (Mar. 26,
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`2018). Specifically, the FDA invited submission of comments, data, research results, and other
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`information related to three topics: (1) the definition of premium cigars; (2) usage patterns of
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`premium cigars; and (3) public health considerations associated with premium cigars. Id. at
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`12,903. The FDA also asked the public to submit studies or information regarding the Deeming
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`Case 1:16-cv-01460-APM Document 94 Filed 05/15/18 Page 15 of 70
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`Rule’s current health warning statements, and requested comment on “whether any additional or
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`alternative warning statements would be appropriate.” Id. at 12,904.
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`C.
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`Procedural Background
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`The Cigar Association of America, the International Premium Cigar and Pipe Retailers
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`Association, and Cigar Rights of America (collectively, “Plaintiffs”) filed suit in this court, seeking
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`declaratory, injunctive, and other relief from the Deeming Rule and challenging the legality of the
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`User Fee Rule.
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`After Defendants filed their Answer, Plaintiffs filed an initial motion for summary
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`judgment on February 13, 2017. Thereafter, the newly installed FDA administration signaled an
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`openness to evaluating the agency’s approach to aspects of the Deeming Rule. The parties
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`accordingly requested multiple extensions of the briefing deadlines in order “to allow new
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`leadership personnel at [HHS] to more fully consider the issues raised in [the] case and determine
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`how best to proceed.” Joint Mot. to Amend Scheduling Order (dated May 1, 2017), ECF No. 34,
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`at 1. The court granted the requests, resulting in over four months of extensions. After the FDA’s
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`July 2017 announcement of its new comprehensive plan for the regulation of tobacco products,
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`the parties sought one final 30-day extension of the briefing schedule. Joint Mot. to Amend
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`Scheduling Order (dated Aug. 1, 2017), ECF No. 40, at 2–3. The court also granted this motion.
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`Minute Order Aug. 7, 2017.
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`In a Joint Status Report dated September 5, 2017, the parties explained that, as a result of
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`the FDA’s announcement, they had agreed to defer resolution of certain of Plaintiffs’ challenges
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`to the Deeming Rule. Specifically, the parties agreed that Plaintiffs’ challenges relating to the
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`premarket review process, the FDA’s decision to deem premium cigars subject to regulation, and
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`the agency’s cost-benefit analysis underlying the Deeming Rule—claims asserted in Counts I, IV,
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`15
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`Case 1:16-cv-01460-APM Document 94 Filed 05/15/18 Page 16 of 70
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`and V of Plaintiffs’ Complaint—“should await the further regulatory action that the FDA has
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`announced it intends to pursue, because those announced regulatory actions may materially change
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`the regulatory scheme underlying these claims.” Sept. 5, 2017 JSR at 2. The court agreed to defer
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`resolution of those issues.
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`Other challenged aspects of the Rules remain unaffected by the agency’s July 2017
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`announcement, id., and as to those, Plaintiffs filed a new dispositive motion, this time only for
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`partial summary judgment. Of the nine original counts in their Complaint, Plaintiffs presently
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`seek summary judgment on six, asserting that: (1) the Deeming Rule’s health warning statement
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`requirements violate the TCA and the Administrative Procedure Act (“APA”) (Count VI) and the
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`First Amendment (Count VII); (2) the User Fee Rule’s assessment of user fees on domestic
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`manufacturers and importers of cigars and pipe tobacco, but not e-cigarettes, violates the APA
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`(Count II) and the Fifth Amendment (Count III); (3) the Deeming Rule’s treatment of retailers who
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`blend pipe tobacco as “manufacturers” within the meaning of 21 U.S.C. § 387e violates the TCA
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`and the APA (Count VIII); and (4) the Deeming Rule’s classification of pipes as “components” of
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`a tobacco product subject to regulation—rather than “accessories”