Case 1:19-cv-00531-LG-JCG Document 1 Filed 08/19/19 Page 1 of 22
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
`SOUTHERN DIVISION
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`1:19-cv-531-HSO-JCG
`Civil Case No. _________________
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`DECLARATORY AND INJUNCTIVE
`RELIEF REQUESTED
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`BIG TIME VAPES, INC. and UNITED
`STATES VAPING ASSOCIATION,
`INC.,
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`Plaintiffs,
`
`v.
`
`FOOD AND DRUG
`ADMINISTRATION; NORMAN E.
`“NED” SHARPLESS, M.D., in his
`official capacity as Acting Commissioner
`of Food and Drugs; and ALEX M.
`AZAR, II, in his official capacity as
`Secretary of Health and Human Services,
`
`Defendants.
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`COMPLAINT
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`Plaintiffs Big Time Vapes, Inc. and United States Vaping Association bring this action for
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`declaratory and injunctive relief, and will show as follows:
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`INTRODUCTION
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`1.
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`This is an action for declaratory and injunctive relief arising under the Constitution
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`of the United States. Plaintiffs find themselves pleading for the vindication of their rights in the
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`federal court system because a Final Rule promulgated under the auspices of the Food and Drug
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`Administration (“FDA”) imposes severe—even insurmountable—burdens that will harm Plaintiffs
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`and their customers.
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`2.
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`These burdens were imposed not by Congress, but as a result of the policy decisions
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`of the FDA exercising its statutory authority. In 2009, Congress imposed a new regulatory regime
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`on cigarettes and smokeless tobacco via the Family Smoking Prevention & Tobacco Control Act,
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`Pub. L. No. 111-31, 123 Stat. 1777 (2009) (the “Tobacco Control Act” or “TCA”), codified at 21
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`U.S.C. 387 et seq. Notably, Congress left other types of tobacco—including such widely-used
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`products as cigars and hookah—unregulated. While Congress itself declined to impose the new
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`statutory regime on these other products, it purported to transfer the discretion to do so across
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`Independence Avenue, vesting the Executive branch (the Secretary of Health and Human Services)
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`with the authority to impose the Act on “any other tobacco products that the Secretary by regulation
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`deems to be subject to [the Act].” 21 U.S.C. § 387a(b).
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`3.
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`This statute grants the Secretary authority to deem—or to not deem—any “tobacco
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`product” to be subject to the strictures of the Tobacco Control Act, with no guidance as to how the
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`Secretary is expected to exercise such discretion.
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`4.
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`On May 10, 2016, the FDA published a Final Rule deeming all products meeting
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`the statutory definition of “tobacco product” to be subject to the Tobacco Control Act.1 This Rule
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`expressly included not only those products like cigars that are (relatively) similar to cigarettes in
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`their composition and in wide and longstanding use at the time Congress passed the Act (and which
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`Congress declined to regulate), but also products of a materially different nature comprising the
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`vaping industry.2 Given the carte blanche statutory discretion to deem “tobacco products” subject
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`1 “Deeming Tobacco Products to be Subject to the Federal Food, Drug, and Cosmetic Act, as
`Amended by the Family Smoking Prevention and Tobacco Control Act; Restrictions on the Sale
`and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products,”
`No. FDA-2014-N-0189, 81 Fed. Reg. 28,973 (May 10, 2016) (“Deeming Rule” or “the Rule”).
`The Rule went into effect 90 days after its publication. 81 Fed. Reg. at 28,976.
`2 Through the Deeming Rule, FDA interpreted the definition of a “tobacco product” so broadly
`that it also chose to define as a “tobacco product” the electronic components of a vapor device like
`lithium-ion batteries, software, and electronic circuitry. 81 Fed. Reg. at 28,975. This is just one
`more aspect of FDA’s deployment of its discretion under the provision of the TCA challenged here
`2
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`to regulation without reference to any factors or standards, and assuming arguendo that vaping
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`liquids containing nicotine derived from tobacco satisfy the statutory definition, the Secretary
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`could have decided to regulate only cigars and leave vaping and hookah products untouched. Or,
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`the Secretary could have done the opposite, regulating vaping and hookah but not cigars.
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`Ultimately, the Secretary could have “deemed” any product or combination of products, and not
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`deemed others, based on whatever factors she wanted to consider.
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`5.
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`Such standardless discretion violates the United States Constitution. The power to
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`make policy is the legislative power, and that power has been vested exclusively in the “Congress
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`of the United States[.]” U.S. Const., art. I, § 1. It is by design that the power to make policy—to
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`set priorities among competing interests—was vested in the Congress, an institution comprised of
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`two Houses, selected at different times from different constituencies. While broad delegations to
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`the Executive branch have been upheld by the judiciary, the provision here goes further than prior
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`delegations. Section 387a(b) of the Tobacco Control Act violates Article I of the Constitution, and
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`the Deeming Rule—promulgated pursuant to this invalid delegation of legislative power—may
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`not be enforced.
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`JURISDICTION AND VENUE
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`6.
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`This civil action arises under the United States Constitution. This Court has
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`jurisdiction over this case pursuant to 28 U.S.C. § 1331 (federal question jurisdiction). Declaratory
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`relief is authorized by 28 U.S.C. § 2201, and injunctive relief by 28 U.S.C. § 2202 and Federal
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`Rule of Civil Procedure 65.
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`that further demonstrates why delegating standardless legislative power to the Executive branch is
`untenable.
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`3
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`7.
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`Venue is proper under 28 U.S.C. § 1391(e)(1) because Plaintiff Big Time Vapes
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`resides in this district and Division.
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`PARTIES
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`8.
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`Plaintiff Big Time Vapes is an S-Corporation organized under the laws of
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`Mississippi, with its principal place of business at 711 Memorial Boulevard, Picayune, Mississippi
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`39466. Belinda Dudziak is the sole owner. Ms. Dudziak began smoking traditional cigarettes at
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`the age of sixteen. From the age of nineteen to forty-six, she smoked one-and-a-half to three packs
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`a day. After picking up her first e-cigarette in 2011 or 2012, she quit smoking traditional cigarettes
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`entirely within three to four days. She started with a blend of 18% nicotine and gradually reduced
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`to zero nicotine content. She now vapes exclusively without nicotine. She established Big Time
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`Vapes, a retailer and “manufacturer” of vaping products, in 2015, and now employs six full-time
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`employees, not including herself. She has approximately 4,000 customers, 98% of whom have
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`quit smoking cigarettes completely. Big Time Vapes makes its own flavors—350 of them—which
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`can be sold with various levels of nicotine content (from 0-24 mils), and in six different bottle
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`sizes. Due to the various combinations possible with these variables (all the flavors, with all
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`variations of nicotine content, in six different bottle sizes), she has registered 98,000 stock keeping
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`units (SKUs) with FDA. It is impossible for Big Time Vapes to submit the premarket review
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`applications that would be required for it to comply with the Tobacco Control Act.
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`9.
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`Plaintiff United States Vaping Association (USVA) is a trade association organized
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`in accordance with Section 501(c)(6) of the Internal Revenue Code, with its principal place of
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`business at 100 E. Whitestone Blvd., 148, Cedar Park, Texas 78613. USVA was organized in July
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`and August 2019 to represent small-business vaping manufacturers (who make e-liquid) and retail
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`vape shops that sell e-liquid manufactured by other firms and mix and produce their own in-house
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`4
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`e-liquid. The Deeming Rule’s effects were a primary motivation for organization of the USVA.
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`The USVA currently has approximately three dozen paid members, and is growing. With a focus
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`on representing the needs of small-business vaping industry participants, the USVA also furthers
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`its mission by developing recommended industry best practices, and assisting its members in
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`efforts to prepare for and comply with the new regulatory environment. The USVA has standing
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`to bring this suit because (a) its members would otherwise have standing to sue in their own right;
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`(b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the
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`claim asserted nor the relief requested requires the participation of individual members in the
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`lawsuit. United Food and Commercial Workers Union Local 751 v. Brown Group, Inc., 517 U.S.
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`544, 553 (quoting Hunt v. Washington State Apple Advertising Com’n, 432 U.S. 333, 432 (1977)).
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`10.
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`Defendant Food and Drug Administration is an agency of the United States
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`government within the Department of Health and Human Services, with an office at 10903 New
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`Hampshire Avenue, Silver Spring, Maryland 20993. The Secretary of Health and Human Services
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`has purported to delegate to FDA the authority to administer the Tobacco Control Act.
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`11.
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`Defendant Norman E. “Ned” Sharpless, M.D., is Acting Commissioner of Food
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`and Drugs and is the senior official of the FDA. He is sued in his official capacity. Dr. Sharpless
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`maintains an office at 10903 New Hampshire Avenue, Silver Spring, Maryland 20993.
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`12.
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`Alex M. Azar, II is Secretary of Health and Human Services and the official
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`charged by law with administering the Act. He is sued in his official capacity. Secretary Azar
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`maintains an office at 200 Independence Avenue SW, Washington, D.C. 20201.
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`13.
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`All Defendants are collectively referred to hereinafter as “FDA.”
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`5
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`The “Nondelegation” Doctrine in General
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`LEGAL BACKGROUND
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`14.
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`The Constitution provides that “[a]ll legislative Powers herein granted shall be
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`vested in a Congress of the United States.” U.S. Const., Art. I, § 1 (emphasis added).
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`15.
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`“From this language the [Supreme] Court has derived the nondelegation doctrine:
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`that Congress may not constitutionally delegate its legislative power to another branch of
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`government.” Touby v. United States, 500 U.S. 160, 165 (1991). While “all legislative powers”
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`were granted to the people’s representatives in Congress, Article II vests the “[t]he executive
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`Power” in the President, and Article III vests “[t]he judicial power” in the courts. Thus, “‘[t]he
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`nondelegation doctrine is rooted in the principle of separation of powers that underlies our tripartite
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`system of Government.’” Touby, 500 U.S. at 165 (quoting Mistretta v. United States, 488 U.S.
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`361, 371 (1989)).
`
`16.
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`The essence of “legislative power” is the power to set out the policy by which
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`private conduct is to be governed. In 1810, the Supreme Court described the legislative power as
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`the power to “prescribe general rules for the government of society.” Fletcher v. Peck, 10 U.S. (6
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`Cranch) 87, 136 (1810). While the imposition of a particular policy can be made conditional on
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`the Executive’s finding of the existence of a designated fact or circumstance, the designation of
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`those circumstances—the circumstances in which such policy shall become effective—is
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`fundamentally legislative. See Marshall Field & Co. v. Clark, 143 U.S. 649, 693 (1892)
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`(“Legislative power was exercised when congress declared that the suspension should take effect
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`upon a named contingency.”) (emphasis added).
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`17.
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`The Supreme Court’s statement of the relevant inquiry in Panama Refining
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`Company v. Ryan illustrates the fundamental character of the legislative power:
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`6
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`[T]he question whether th[e interstate] transportation [of “hot oil” extracted in
`violation of state standard’s] shall be prohibited by [federal] law is obviously one
`of legislative policy. Accordingly, we look to the statute to see whether the
`Congress has declared a policy with respect to that subject; whether the Congress
`has set up a standard for the President's action; whether the Congress has required
`any finding by the President in the exercise of the authority to enact the prohibition.
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`293 U.S. 388, 415 (1935) (holding certain Executive Orders and regulations issued by Secretary
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`of the Interior to be invalid under the nondelegation doctrine).
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`The Tobacco Control Act
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`18.
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`In 2009, Congress amended the Food, Drug, and Cosmetic Act, 21 U.S.C. § 301, et
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`seq. (“FD&C Act”) by passing the Family Smoking Prevention & Tobacco Control Act, Pub. L.
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`No. 111-31, 123 Stat. 1777 (2009) (the “Tobacco Control Act” or “TCA”), codified at 21 U.S.C.
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`387 et seq.3 The Tobacco Control Act mandates that “[t]obacco products … shall be regulated by
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`the Secretary [of Health and Human Services] under this subchapter and shall not be subject to the
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`provisions of subchapter V.” 21 U.S.C. § 387a. (Subchapter V of the FD&C Act governs “drugs”
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`and “devices.”).
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`19.
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`“Tobacco product” is defined to mean:
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`any product made or derived from tobacco that is intended for human consumption,
`including any component, part, or accessory of a tobacco product (except for raw
`materials other than tobacco used in manufacturing a component, part, or accessory
`of a tobacco product).
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`21 U.S.C. § 321(rr)(1).
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`20.
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`The terms “component,” “part,” and “accessory” are not further defined by statute.
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`21. While tobacco products fitting the statutory definition were extant in many and
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`long-established forms when Congress enacted the TCA—including cigarettes, cigars, smokeless
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`3 The TCA comprises subchapter IX of the Food, Drug, and Cosmetic Act (FDCA), which is
`codified in chapter 9 of title 21 of the United States Code.
`7
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`tobacco, and hookah—Congress did not choose to impose the Act’s requirements on all such forms
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`of tobacco products. Instead, Section 901 of the TCA provides that “[t]his chapter shall apply to
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`all cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco and to any other
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`tobacco products that the Secretary by regulation deems to be subject to this chapter.” Id., codified
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`at 21 U.S.C. § 387a(b).
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`22.
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`“Roll-your-own tobacco” is defined to mean “any tobacco product which … is
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`suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making
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`cigarettes.” 21 U.S.C. § 387(15) (emphasis added).
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`23.
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`Therefore, Congress itself imposed the TCA only upon cigarettes and cigarette
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`tobacco, and “smokeless tobacco,” which is limited to “any tobacco product that consists of cut,
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`ground, powdered, or leaf tobacco and that is intended to be placed in the oral or nasal cavity.” Id.
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`§ 387(18). Left unregulated were all other forms of tobacco products, including such widely used
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`products as cigars (premium and all other varieties) and hookah.
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`24. While Congress itself declined to impose the TCA’s requirements on anything other
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`than cigarettes or “smokeless tobacco,” it purported to vest the Secretary of Health and Human
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`Services with the authority impose the Act on “any other tobacco products that the Secretary by
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`regulation deems to be subject to [the TCA].” 21 U.S.C. § 387a(b).4
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`25.
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`The TCA imposes a variety of regulatory requirements on tobacco products subject
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`to it.
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`4 While the statute delegates deeming authority to “the Secretary [of HHS],” through a staff
`manual, the Secretary sub-delegated this power to the FDA Commissioner. FDA Staff Manual
`Guide 1410.10. The FDA Commissioner, in turn, sub-delegated this power to the Associate
`Commissioner for Policy. FDA Staff Manual Guide 1410.21 (authorizing the Associate
`Commissioner for Policy to assume the FDA Commissioner’s authority to issue “proposed and
`final regulations”).
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`8
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`26. Many of the most onerous burdens apply to “tobacco product manufacturers,” a
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`term whose application is broader than it might first appear. The TCA defines “tobacco product
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`manufacturer” as “any person, including any repacker or relabeler, who—(A) manufactures,
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`fabricates, assembles, processes, or labels a tobacco product; or (B) imports a finished tobacco
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`product for sale or distribution in the United States.” 21 U.S.C. § 387(20).
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`27.
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`In the Deeming Rule, FDA’s application of the term “manufacturer” captures the
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`vast majority of “e-cigarette retail stores and vape establishments.” 81 Fed. Reg. at 28,979. FDA
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`explained that “establishments that mix or prepare e-liquids or create or modify aerosolizing
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`apparatus for direct sale to consumers are tobacco product manufacturers under the definition set
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`forth in the FD&C Act and, accordingly, are subject to the same legal requirements that apply to
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`other tobacco product manufacturers.” Id.
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`28.
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`The Act requires each covered manufacturer, including Plaintiff Big Time Vapes
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`and the businesses represented by the USVA, to provide FDA a list of all ingredients and
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`compounds added to its products, as well as any and all documentation pertaining to the products’
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`health and related effects. 21 U.S.C. § 387d(a)-(b). The Act also requires manufacturers to register
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`their places of business and their product listing with the agency. Id. § 387e. It prohibits, among
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`other things, the marketing of any covered “new tobacco product” without the FDA’s approval,
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`unless the product is grandfathered. Id. § 387j. The effect of this provision is that any covered
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`tobacco product that was “not commercially marketed in the United States as of February 15,
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`2007” is banned from the marketplace without prior FDA approval. See id. § 387j(a).
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`29.
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`There are two main pathways for FDA approval to market a “new tobacco product”
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`covered by the TCA.
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`9
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`30.
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`The less onerous pathway is to demonstrate that the new product is “substantially
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`equivalent” to a product that was being commercially marketed in the United States on the
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`February 2007 grandfather date. 21 U.S.C. § 387j(b). Substantial equivalence is demonstrated if
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`the product “(i) has the same characteristics5 of the predicate tobacco product; or (ii) has different
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`characteristics and the information submitted [in the substantial equivalence report] contains
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`information … that demonstrates that it is not appropriate to regulate the product … because the
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`product does not raise different questions of public health.” Id. § 387j(a)(3)(A). If the FDA
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`concludes that the new product is substantially equivalent to the predicate product, it must issue
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`an order allowing the product to be commercially marketed. Id. § 387j(c).
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`31.
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`If the sponsor of a covered new product cannot invoke the substantial equivalence
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`pathway because there was no predicate product on the market as of February 15, 2007, it must
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`seek FDA approval through a “premarket tobacco application,” sometimes referred to as a
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`“PMTA.”6 This process requires the development and submission of substantial amounts of data,
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`see 21 U.S.C. § 387j(b), an arduous undertaking that FDA itself has estimated may cost the vaping
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`industry hundreds of thousands of dollars or more per product. See FDA, Final Regulatory Impact
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`Analysis 87-88 Tbls. 11(a) & 11(b) (2016).
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`32.
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`The TCA requires the FDA either approve or deny a premarket review application
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`within 180 days. 21 U.S.C. § 387j(c)(1)(A).
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`5 “Characteristics” means “the materials, ingredients, design, composition, heating source, or other
`features of a tobacco product.” 21 U.S.C. § 387j(a)(3)(B).
`6 See U.S. DEP’T OF HEALTH AND HUMAN SERVICES, Premarket Tobacco Product
`Applications for Electronic Nicotine Delivery Systems: Guidance for Industry at 1 (Jun. 2019),
`https://www.fda.gov/media/127853/download.
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`10
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`33.
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`Failure to comply with the above-described provisions can result in a variety of
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`serious consequences for manufacturers and retailers, including designation of one’s products as
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`misbranded or adulterated, see 21 U.S.C. §§ 387b, 387c, which in turn can trigger substantial civil
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`penalties and imprisonment, 21 U.S.C. §§ 331, 333, as well as seizure of the offending products,
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`21 U.S.C. § 334.
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`The Deeming Rule
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`STATEMENT OF FACTS
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`34.
`
`35.
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`FDA published the Deeming Rule in the Federal Register on May 10, 2016.
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`In the Deeming Rule, FDA exercised its authority under 21 U.S.C. § 387a(b),
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`decreeing that it “deems all products meeting the statutory definition of ‘tobacco product,’ except
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`accessories of the newly deemed tobacco products, to be subject to FDA’s tobacco product
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`authorities under chapter IX” of the FD&C Act. 21 Fed. Reg. 28,976 (emphasis added). FDA
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`explained the breadth of the Rule:
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`Products that meet the statutory definition of “tobacco products” include currently
`marketed products such as dissolvables not already regulated by FDA, gels,
`waterpipe tobacco, ENDS (including e-cigarettes, e-hookah, e-cigars, vape pens,
`advanced refillable personal vaporizers, and electronic pipes), cigars, and pipe
`tobacco.
`
`In addition, this final rule deems any additional current and future tobacco products
`that meet the statutory definition of “tobacco product,” except accessories of such
`newly deemed products, to be subject to FDA's authorities under chapter IX of the
`FD&C Act. For example, FDA envisions that there could be tobacco products
`developed in the future that provide nicotine delivery through means (e.g., via
`dermal absorption or intranasal spray) similar to currently marketed medicinal
`nicotine products, but which are not drugs or devices. These products would be
`“tobacco products” and subject to FDA's chapter IX authorities in accordance with
`this final deeming rule.
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`11
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`81 Fed. Reg. 28,976.7
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`36.
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`Application of the TCA to ENDS and all other newly-deemed products imposed
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`immediate restrictions upon the effective date of the Rule (August 8, 2016), including the required
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`submission of ingredient listing, “manufacturer” registration and product listing, prohibition of the
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`sale or distribution of products bearing ‘modified risk’ descriptions (such as ‘light,’ ‘low,’ or
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`‘mild’) without FDA approval (subject to a separate “Modified Risk” approval process), and a
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`prohibition on distribution of free samples. See Deeming Rule, 81 Fed. Reg. at 28,976.
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`37.
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`The TCA also would have authorized FDA to halt sales of newly-deemed products
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`until the TCA-required premarket review applications were processed and approved. See 21
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`U.S.C. § 387b (finding a tobacco product is adulterated if it is required to have a premarket review
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`order but does not have one); id. § 331(a) (making it unlawful to introduce an adulterated tobacco
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`product into interstate commerce). But as part of the Deeming Rule, FDA opted to implement the
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`statutory requirement more gradually, establishing a “staggered initial compliance period”:
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`[M]anufacturers of all newly deemed, new tobacco products will have a 12-, 18- or
`24-month initial compliance period in which to prepare applications for marketing
`authorization, as well as a 12-month continued compliance period after those dates
`in which to obtain authorization from FDA (resulting in total compliance periods
`of 24, 30, or 36 months). After the close of the continued compliance period,
`products will be subject to enforcement unless they are grandfathered or are the
`subject of a marketing authorization order.
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`81 Fed. Reg. at 28978.
`
`38.
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`Because ENDS products are not eligible for grandfathering or the “substantial
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`equivalence” pathway, the FDA acknowledged that “nearly all ENDS products will be subject to
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`7 Plaintiffs note the acronym “ENDS”—short for “electronic nicotine delivery systems” and
`deployed by FDA in the Deeming Rule—can be misleading, given that many persons who vape
`cease using nicotine blends at at all, and vape only the flavors. Nonetheless, Plaintiffs utilize the
`term interchangeably herein with “vaping” products.
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`premarket review,” and the FDA candidly predicted “considerable product consolidation and
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`[market] exit.” Regulatory Impact Analysis, AR 23,912-24,067 (“RIA”). This is because any
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`variation, however slight, of any ingredient or component of either an e-liquid or an ENDS delivery
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`device, would render the product a unique “new tobacco product” as defined in the TCA and
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`therefore require its own unique premarket review application.
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`39.
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`FDA itself estimated that an initial premarket review application for e-liquids
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`would cost between $181,686 and $2,014,120 per application, and applications for delivery
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`devices it estimated would cost between $285,656 and $2,622,224 per application. RIA, AR
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`23,998 (Table 11a), AR 24,001-02 (Table 12a).
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`40.
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`Under the “staggered compliance policy,” a manufacturer submitting a premarket
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`review application was initially required to do so by August 8, 2018—24 months after the Rule
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`became effective. Id. at 28,977-78 (describing compliance periods for the different pathways).
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`FDA stated that it would then allow an additional 12-month period for review and approval of the
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`PMTA before enforcement would commence, and would defer enforcement even further on a case-
`
`by-case basis. Id. at 28,978 (“However, if at the time of the conclusion of the continued
`
`compliance period, the applicant has provided the needed information and review of a pending
`
`marketing application has made substantial progress toward completion, FDA may consider, on a
`
`case-by-case basis, whether to defer enforcement of the premarket authorization requirements for
`
`a reasonable time period.”).
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`41.
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`FDA subsequently extended the compliance deadlines. First, in May 2017, it
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`extended the deadlines outlined in the Deeming Rule by three months.8 Then, in August 2017,
`
`
`8 Three-Month Extension of Certain Tobacco Product Compliance Deadlines Related to the Final
`Deeming Rule: Guidance for Industry (May 2017).
`13
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`Case 1:19-cv-00531-LG-JCG Document 1 Filed 08/19/19 Page 14 of 22
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`FDA announced another extension applying “only to compliance deadlines relating to premarket
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`review requirements.” Extension of Certain Tobacco Product Compliance Deadlines Related to
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`the Final Deeming Rule: Guidance for Industry (Revised) (“August 2017 Guidance”). The August
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`2017 Guidance amended the FDA’s prior compliance approach in substantive ways.
`
`42.
`
`For example, whereas the Deeming Rule’s “staggered compliance schedule” set out
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`different deadlines for submission of applications by application type (substantial equivalence,
`
`exception to substantial equivalence, or premarket review), the August 2017 Guidance
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`distinguished between product type. The deadline for any type of application regarding a newly
`
`deemed combustible tobacco product was established as August 8, 2021, and the deadline for any
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`type of application for a noncombustible product was established as August 8, 2022. See August
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`2017 Guidance at 3, 8.
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`43.
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`Additionally, the August 2017 Guidance “revis[ed] the compliance policy relating
`
`to the period after FDA receipt” of product applications. Id. at 3. In the Deeming Rule, FDA had
`
`established a 12-month compliance period for FDA review. The August 2017 Guidance reverted
`
`to a less definite compliance period pending review of submitted applications. Id. (“Under this
`
`new compliance policy, there will be a continued compliance period pending review of
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`[marketing] applications … [t]his compliance period will continue until the agency renders a
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`decision on an application … or the application is withdrawn.”).
`
`44.
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`However, FDA has now been ordered by the federal district court for the District
`
`of Maryland to severely accelerate the compliance deadlines. In American Academy of Pediatrics
`
`v. Food and Drug Administration, the district court held that the Administrative Procedures Act
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`applied to the FDA’s compliance guidance establishing the deadlines, and that FDA had failed to
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`abide by the notice and comment requirements. 379 F. Supp. 3d 461 (D. Md. 2019). After briefing
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`Case 1:19-cv-00531-LG-JCG Document 1 Filed 08/19/19 Page 15 of 22
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`by the parties as to the appropriate remedy, in a subsequent order issued July 12, 2019, the District
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`Court for the District of Maryland vacated FDA’s August 2017 Guidance, and ordered as follows:
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`1. [T]he FDA shall require that, for new tobacco products on the market as of
`the August 8, 2016 effective date of the Deeming Rule (“New Products”),
`applications for marketing orders must be filed within 10 months of the date
`of this Memorandum Opinion and Order;
`
`2. New Products for which applications have not been filed within this period
`shall be subject to FDA enforcement actions, in the FDA’s discretion;
`
`3. New Products for which applications have been timely filed may remain on
`the market without being subject to FDA enforcement actions for a period
`not to exceed one year from the date of application while FDA considers the
`application;
`
`4. The FDA shall have the ability to exempt New Products from filing
`requirements for good cause on a case-by-case basis.
`
`American Academy of Pediatrics v. Food and Drug Administration, No. 8:18-cv-00883-PWG,
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`2019 WL 3067492, at *7 (D. Md. Jul. 12, 2019).
`
`45.
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`In other words, rather than allowing premarket review applications to be submitted
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`for ENDS products by August 2022, FDA has been ordered to require their submission by May
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`2020.9 This severely accelerates the period within which Plaintiffs and others similarly situated
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`are expected to prepare and file the complex PMTAs that even the FDA acknowledges are
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`prohibitively expensive, and predicted would prompt “considerable product consolidation and
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`[market] exit.” RIA, AR 23,989-90 (FDA itself assuming that “54 percent of delivery systems and
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`somewhere between 50 and 87.5 percent of e-liquids [would] not submit a marketing application
`
`and will exit the market after the initial compliance period … ends.”).
`
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`9 No formal order effectuating the court-mandated deadlines has yet been promulgated by FDA,
`as the Maryland court held that such guidance will be subject to the APA’s notice and comment
`requirements. See 2019 WL 3067492, at *1 (indicating that while FDA need not effectuate the
`court’s order through a formal rulemaking, it must do so through guidance following the notice
`and comment period).
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`Case 1:19-cv-00531-LG-JCG Document 1 Filed 08/19/19 Page 16 of 22
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`Impact of the Deeming Rule on Plaintiffs
`
`46.
`
`The Deeming Rule went into effect on August 8, 2016, subjecting all “retailers”
`
`and “manufacturers” (as defined in the TCA) of vaping industry products immediately to all of the
`
`requirements of the Tobacco Control Act, including the premarket approval, reporting,
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`recordkeeping, inspection, labeling, manufacturing, and testing requirements.
`
`47.
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`Such regulations severely burden Plaintiffs and all businesses active in the vaping
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`industry, from the larger firms and those that concentrate on manufacturing e-liquids and devices
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`down to the smallest retail shops, many or most of which are also regulated as “manufacturers”
`
`under the TCA.
`
`48.
`
`The Deeming Rule’s premarket approval requirement has effectively frozen the
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`vaping industry in time as of August 8, 2016, the Rule’s effective date. This is because