Case 6:20-cv-00176-JCB Document 36 Filed 07/02/20 Page 1 of 20 PageID #: 1711
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
`
`
`
`R.J. REYNOLDS TOBACCO COMPANY,
`et al.,
`
`
`
`Plaintiffs,
`
`v.
`
`UNITED STATES FOOD AND DRUG
`ADMINISTRATION, et al.,
`
`
`
`Defendants.
`
`Civil Action No. 6:20-cv-00176
`
`
`
`
`
`
`
`
`DEFENDANTS’ MOTION TO DISMISS
`
`
`
`

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`TABLE OF CONTENTS
`
`INTRODUCTION ........................................................................................................................................... 1
`
`BACKGROUND .............................................................................................................................................. 2
`
`LEGAL STANDARD ...................................................................................................................................... 3
`
`ARGUMENT..................................................................................................................................................... 4
`
`I.
`
`PLAINTIFF NEOCOM SHOULD BE DISMISSED FOR LACK
`OF STANDING. ................................................................................................................... 4
`
`A.
`
`B.
`
`C.
`
`Neocom’s Allegations of Injury .............................................................................. 4
`
`Neocom Fails to Demonstrate any First Amendment Injury. ........................... 6
`
`Neocom Fails to Demonstrate any Financial Injury. ........................................... 8
`
`UPON NEOCOM’S DISMISSAL, THIS CASE SHOULD BE
`DISMISSED FOR LACK OF VENUE. ......................................................................... 12
`
`IN THE ALTERNATIVE, THIS CASE SHOULD BE TRANSFERRED
`TO THE U.S. DISTRICT COURT FOR THE DISTRICT OF
`COLUMBIA. ........................................................................................................................ 13
`
`II.
`
`III.
`
`CONCLUSION ............................................................................................................................................... 14
`
`
`
`
`
`i
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`

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`TABLE OF AUTHORITIES
`
`Cases
`
`Am. Meat Inst. v. USDA,
`760 F.3d 18 (D.C. Cir. 2014) ..................................................................................................................... 14
`
`
`Blacklands R.R. v. Ne. Texas Rural Rail Transp. Dist.,
`No. 1:19-cv-250, 2019 WL 3613071 (E.D. Tex. Aug. 5, 2019) .............................................................. 3
`
`
`Broadrick v. Oklahoma,
`413 U.S. 601 (1973) ....................................................................................................................................... 7
`
`
`Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y.,
`447 U.S. 557 (1980) ....................................................................................................................................... 8
`
`
`Clapper v. Amnesty Int’l USA,
`133 S. Ct. 1138 (2013) .............................................................................................................................3, 11
`
`
`Ctr. for Biological Diversity v. EPA,
`937 F.3d 533 (5th Cir. 2019) ...................................................................................................................... 10
`
`
`Daubert v. Merrell Dow Pharms., Inc.,
`509 U.S. 579 (1993) ..................................................................................................................................... 10
`
`
`Dearth v. Gonzales,
`No. 2:06-cv-1012, 2007 WL 1100426 (S.D. Ohio Apr. 10, 2007)........................................................ 14
`
`
`EnviroGLAS Prod., Inc. v. EnviroGLAS Prod., LLC,
`705 F. Supp. 2d 560 (N.D. Tex. 2010) ....................................................................................................... 3
`
`
`Inst. of Certified Practitioners, Inc. v. Bentsen,
`874 F. Supp. 1370 (N.D. Ga. 1994) .......................................................................................................... 12
`
`
`Little v. KPMG LLP,
`575 F.3d 533 (5th Cir. 2009) ...................................................................................................................... 11
`
`
`Lujan v. Defs. of Wildlife,
`504 U.S. 555 (1992) .................................................................................................................................3, 10
`
`
`Markle Interests, LLC v. United States Fish & Wildlife Serv.,
`827 F.3d 452 (5th Cir. 2016) ........................................................................................................................ 6
`
`
`Martin v. PepsiAmericas, Inc.,
`628 F.3d 738 (5th Cir. 2010) ........................................................................................................................ 3
`
`
`McCormick v. Payne,
`No. 3:15-cv-02729-M, 2015 WL 7424772 (N.D. Tex. Nov. 23, 2015) ............................................... 13
`
`ii
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`

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`
`
`Miller v. Albright,
`523 U.S. 420 (1998) ..................................................................................................................................... 12
`
`
`Nat’l Fed’n of the Blind of Texas, Inc. v. Abbott,
`647 F.3d 202 (5th Cir. 2011) ........................................................................................................................ 7
`
`
`Ortho Pharm. Corp. v. Cosprophar, Inc.,
`32 F.3d 690 (2nd Cir. 1994) ....................................................................................................................... 11
`
`
`R.J. Reynolds Tobacco Co. v. FDA,
`696 F.3d 1205 (D.C. Cir. 2012) ................................................................................................................. 14
`
`
`Sec’y of State of Md. v. Joseph H. Munson Co.,
`467 U.S. 947 (1984) ....................................................................................................................................... 7
`
`
`SEIU, Local 5 v. City of Houston,
`595 F.3d 588 (5th Cir. 2010) .................................................................................................................... 7, 8
`
`
`Simon v. E. Ky. Welfare Rights Org.,
`426 U.S. 26 (1976) ......................................................................................................................................... 3
`
`
`Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp.,
`549 U.S. 422 (2007) ..................................................................................................................................... 12
`
`
`Whitmore v. Arkansas,
`495 U.S. 149 (1990) ....................................................................................................................................... 3
`
`
`Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio,
`471 U.S. 626 (1985) ....................................................................................................................................... 8
`
`
`Zimmerman v. City of Austin,
`881 F.3d 378 (5th Cir. 2018) ...................................................................................................................... 11
`
`Statutes
`
`15 U.S.C. § 1333 ........................................................................................................................................ 2, 6, 8
`
`28 U.S.C. § 1391 ................................................................................................................................ 1, 4, 12, 13
`
`28 U.S.C. § 1406 ......................................................................................................................................... passim
`
`Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, 123 Stat. 1776 (2009) ... 2
`
`
`
`
`
`iii
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`Rules
`
`Fed. R. Civ. P. 12(b)(3)........................................................................................................................... 1, 3, 14
`
`Fed. R. Civ. P. 12(h)(3).................................................................................................................................... 12
`
`Fed. R. Civ. P. 41(b) ........................................................................................................................................ 13
`
`Fed. R. Evid. 702 ............................................................................................................................................. 10
`
`Regulations
`
`21 C.F.R. pt. 1141 .............................................................................................................................................. 2
`
`85 Fed. Reg. 15,638 (Mar. 18, 2020) ...................................................................................................... 2, 6, 8
`
`Other Authorities
`
`14D Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure ....................................... 13
`
`iv
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`INTRODUCTION
`This litigation is primarily a dispute between some of the largest cigarette manufacturers in the
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`world—all based in North Carolina—and federal agencies in Washington, D.C. and Maryland. It
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`concerns a Food and Drug Administration (FDA) rule that requires cigarette manufacturers to place
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`new health warnings on cigarette packages and advertisements. So what connects this case to the
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`Eastern District of Texas? Even in Plaintiffs’ telling, but the thinnest of reeds: of the nine plaintiffs,
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`one of them—Neocom, Inc.—operates three convenience stores in Tyler: one Speedy Express, and
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`two Super Food Marts. Each sells cigarettes. Because one of the nine plaintiffs “resides” in this
`
`district, 28 U.S.C. § 1391(e)(1)(C), Plaintiffs claim that venue is appropriate. Compl., ECF No. 1, ¶ 24.
`
`That might have been right, except for one foundational oversight: Neocom lacks Article III
`
`standing. As a cigarette retailer, which sells cigarettes as packaged by the manufacturer, Neocom is
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`neither compelled to say anything, nor prohibited from speaking any message that it wishes. So, unlike
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`the manufacturer Plaintiffs, Neocom cannot rely on any alleged First Amendment injury to establish
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`standing. Neocom’s standing allegations thus focus largely on alleged financial harm. But those
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`allegations rely on speculative hypotheticals about the Rule’s potential future impact on sales of
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`non-cigarette items at its three convenience stores. And under Article III, such speculative theories of
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`injury cannot support the exercise of federal jurisdiction. Tellingly, Plaintiffs do not advance what
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`might seem to be a more obvious theory of financial injury: that cigarette sales will fall once the FDA’s
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`new warning requirements take effect. Presumably, that was a strategic litigation judgment, made
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`because an allegation that the Rule would actually affect smoking rates—and thus, cigarette profits—
`
`would undermine their desired narrative on the merits: that the Rule “will achieve nothing[.]” Pls.’
`
`Mot. for Summ. J., ECF No. 34 (Pls.’ Br.), at 3.
`
`Whatever the reason for Plaintiffs’ pleading decisions, the result is clear: Neocom lacks
`
`standing, and it must be dismissed from the litigation. The same is likely true for the other retailer
`
`Plaintiffs, although the Court need not decide that—because without Neocom, there is no basis for
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`venue in this district. Accordingly, the case should be dismissed for lack of venue under Federal Rule
`
`of Civil Procedure 12(b)(3) and 28 U.S.C. § 1406(a). In the alternative, the case should be transferred
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`1
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`

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`to the U.S. District Court for the District of Columbia, where it “could have been brought,” 28 U.S.C.
`
`§ 1406(a), and where nearly identical litigation is pending.
`
`BACKGROUND1
`On March 18, 2020, FDA issued a Final Rule requiring the use of eleven new textual warnings,
`
`accompanied by eleven color graphics, on cigarette packages and advertisements. See Tobacco Products;
`
`Required Warnings for Cigarette Packages and Advertisements, 85 Fed. Reg. 15,638 (Mar. 18, 2020) (to be
`
`codified at 21 C.F.R. pt. 1141) (“the Rule”). The Rule was promulgated pursuant to the Tobacco
`
`Control Act’s mandate that FDA require new warnings “depicting the negative health consequences
`
`of smoking.” Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, § 201(a),
`
`123 Stat. 1776, 1845 (2009) (codified at 15 U.S.C. § 1333(d)). The statute and the Rule generally
`
`prohibit the manufacture, sale, or advertising of cigarettes without the required warnings, see 15 U.S.C.
`
`§ 1333(a)(1), (b)(1), but also specify that retailers generally “shall not be in violation” for displaying
`
`manufacturer-provided packaging or advertising—unless, for example, the retailer “alter[s]” packaging
`
`or advertising “in a way that is material to the requirements” of the statute or the Rule, id. § 1333(a)(4),
`
`(c)(4); see also 85 Fed. Reg. at 15,708. The Rule takes effect on October 16, 2021. See May 8, 2020
`
`Order, ECF No. 33, at 2.
`
`Plaintiffs—four cigarette manufacturers from North Carolina (R.J. Reynolds Tobacco
`
`Company; Santa Fe Natural Tobacco Company, Inc.; ITG Brands, LLC; and Liggett Group LLC)
`
`(collectively, the “manufacturer Plaintiffs”), and five cigarette retailers from Texas (Neocom; Rangila
`
`Enterprises Inc.; Rangila LLC; Sahil Ismail, Inc.; and Is Like You Inc.) (collectively, the “retailer
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`Plaintiffs”)—filed their complaint on April 3, 2020. The complaint names four Defendants, all of
`
`whom are located in the District of Columbia or its Maryland suburbs: the United States Food and
`
`Drug Administration (FDA), the United States Department of Health and Human Services (HHS),
`
`
`1 More detailed background information—none of which is necessary to resolve this motion
`to dismiss—is included in Defendants’ cross-motion for summary judgment and opposition to
`Plaintiffs’ motions for summary judgment and for a preliminary injunction, which is being filed
`concurrently with this motion, and which Defendants incorporate here by reference.
`
`2
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`

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`Stephen M. Hahn (in his official capacity as the Commissioner of Food and Drugs), and Alex M. Azar
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`II (in his official capacity as the Secretary of Health and Human Services). Plaintiffs bring First
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`Amendment and statutory claims, and they seek an order that would vacate the Rule in its entirety,
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`along with certain aspects of the Tobacco Control Act’s warnings requirements.
`
`Neocom is the only party that resides in the Eastern District of Texas.
`
`LEGAL STANDARD
`a. “[T]he irreducible constitutional minimum of standing contains three elements.” Lujan v.
`Defs. of Wildlife, 504 U.S. 555, 560 (1992). “First, the plaintiff must have suffered an ‘injury in fact.’”
`
`Id. To suffice under Article III, that injury must be “concrete and particularized” and “actual or
`
`imminent,” not “conjectural or hypothetical.” Id. For a future injury to satisfy this standard, the injury
`
`must be “certainly impending.” Clapper v. Amnesty Int’l USA, 133 S. Ct. 1138, 1143, 1147 (2013).
`
`“Allegations of possible future injury are not sufficient.” Id. at 1147 (quoting Whitmore v. Arkansas, 495
`
`U.S. 149, 158 (1990)). “Second, there must be a causal connection between the injury and the conduct
`
`complained of.’” Lujan, 504 U.S. at 560-61 (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26,
`
`41-42 (1976)). “Third, it must be ‘likely,’ as opposed to merely ‘speculative,’ that the injury will be
`
`‘redressed by a favorable decision.’” Id. at 561. As always, “the party asserting jurisdiction bears the
`
`burden of proof.” Martin v. PepsiAmericas, Inc., 628 F.3d 738, 740 (5th Cir. 2010).
`
`b. Federal Rule of Civil Procedure 12(b)(3) authorizes a district court to “dismiss an action
`where venue in that court is improper.” Blacklands R.R. v. Ne. Texas Rural Rail Transp. Dist.,
`
`No. 1:19-cv-250, 2019 WL 3613071, at *2 (E.D. Tex. Aug. 5, 2019) (internal quotation marks omitted).
`
`“Once defendants raise the issue of improper venue, the plaintiffs have the burden to prove that the
`
`chosen venue is proper.” EnviroGLAS Prod., Inc. v. EnviroGLAS Prod., LLC, 705 F. Supp. 2d 560, 567
`
`(N.D. Tex. 2010). And where, as here, the case is brought against “an agency of the United States,”
`
`venue is proper only in a “judicial district in which (A) a defendant in the action resides, (B) a
`
`substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of
`
`property that is the subject of the action is situated, or (C) the plaintiff resides if no real property is
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`3
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`

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`involved in the action.” 28 U.S.C. § 1391(e)(1). If venue is lacking, the district court has only two
`
`choices: either (1) “dismiss” the case altogether, or (2) “if it be in the interest of justice, transfer such
`
`case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a).
`
`ARGUMENT
`This case should be dismissed for lack of venue, because Neocom—the only party that resides
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`in (or has any relevant connection to) this district—lacks Article III standing. In the alternative, the
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`case should be transferred to the U.S. District Court for the District of Columbia.
`
`I.
`
`PLAINTIFF NEOCOM SHOULD BE DISMISSED FOR LACK OF STANDING.
`A.
`Neocom’s Allegations of Injury
`In the complaint, Neocom makes only rare and fleeting appearances, as Plaintiffs’ challenge—
`
`like the statutory and regulatory scheme itself—is overwhelmingly focused on the legal obligations of
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`cigarette manufacturers in designing their packaging and advertisements. Nonetheless, Plaintiffs do
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`allege that Neocom “is a Texas corporation headquartered in Tyler, Texas,” which “operates three
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`convenience stores in Tyler that sell cigarettes.” Compl. ¶ 14. Plaintiffs further allege that, when the
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`Rule takes effect, “[t]he retailer Plaintiffs may incur costs to alter the manner in which cigarette packs
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`and cartons are displayed to their customers.” Id. ¶ 120 (emphasis added). Finally, Plaintiffs offer the
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`following complicated hypothetical about future sales of non-cigarette items, which they believe suggests
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`that “the retailer Plaintiffs are likely to suffer financial harm” from the Rule:
`
`The retailer Plaintiffs currently display cigarette packages and
`advertising in their convenience stores. After the Rule takes effect,
`however, those packages and advertising will necessarily contain
`grotesque images that are designed to frighten, shock, and disgust
`people who look at them, including smokers and non-smokers. If the
`retailer Plaintiffs continue to display cigarette packages and advertising,
`non-smokers will be more likely to shop in stores that do not display
`those packages and advertising, and thus do not contain these
`offensive images. Customers who continue to shop at their stores will
`be less likely to purchase certain non-cigarette items, such as food
`items that are displayed at the counter within view of the graphic
`cigarette packages and advertising. If the retailer Plaintiffs stop
`displaying cigarette packages and advertising, smokers will be more
`
`4
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`

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`likely to shop in stores that do display those packages and advertising.
`Either way, the retailer Plaintiffs are likely to suffer financial harm.
`Id. ¶ 116. In short, the retailer Plaintiffs hypothesize that if they continue to sell cigarettes, they might
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`lose business from non-smokers, who might seek out other stores that do not sell cigarettes (though
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`they identify no actual customers with such plans, nor do they provide any data or research to support
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`this hypothetical). Conversely, the theory goes, if they stop selling cigarettes, then they will lose
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`business from smokers (but, curiously, they do not mention that they would gain business from the
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`non-smokers that they predict will be fleeing from convenience stores that continue to sell cigarettes).
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`Absent from the complaint, however, are any allegations at all that Neocom, or any of the
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`retailer Plaintiffs, will suffer a particularized First Amendment harm. By contrast, the complaint
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`contains detailed allegations regarding the manufacturer Plaintiffs’ alleged First Amendment interests,
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`the messages they wish to convey on their packaging, and so on. See, e.g., Compl. ¶ 115 (“By severely
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`undermining the manufacturer Plaintiffs’ ability to communicate their truthful messages to adult
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`cigarette consumers through packages and advertising, the Rule and the Act’s graphic-warnings
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`requirement undermine these Plaintiffs’ ability to convince adult consumers currently choosing their
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`competitors’ brands to switch.”).
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`
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`Plaintiffs also submitted additional standing-related material with their summary-judgment
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`motion. In those declarations, the retailer Plaintiffs raise for the first time allegations that suggest they
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`view themselves as suffering a First Amendment injury. In particular, Neocom’s president, Nooralam
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`Erkin, submitted a declaration in which he claims that, although he does “not object to the
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`government advocating against smoking in other ways,” he does not want to “be forced to be its
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`‘mouthpiece’ to do so.” Erkin Decl., ECF No. 34-8, ¶ 7. Mr. Erkin also states that “Neocom does
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`not want to display these graphic warnings,” which he believes “are designed to frighten, shock, and
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`disgust its customers and employees[.]” Id. ¶ 6. As for financial injury, Mr. Erkin states that “[a] large
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`proportion of cigarette purchasers also purchase other goods at the same time,” and that cigarette
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`sales are “importan[t]” to “the overall profitability of Neocom stores.” Id. ¶ 4. He also rehashes the
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`5
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`same hypothetical (quoted above) that appears in the complaint, about a purported choice between a
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`potential impact on sales of non-cigarette products or loss of business from smokers. See id. ¶¶ 8, 9.2
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`B.
`Neocom Fails to Demonstrate any First Amendment Injury.
`At the outset, it is important to contrast Neocom’s alleged First Amendment injury with that
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`of the manufacturer Plaintiffs. Plainly, the Rule compels speech from the manufacturer Plaintiffs, by
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`requiring them to add specific health warnings to their cigarette packages and advertisements that they
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`would allegedly prefer not to include. For that reason, although the manufacturers’ claims fail on the
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`merits, Defendants do not challenge their standing.
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`Neocom, by contrast, has not alleged any cognizable First Amendment injury. Although
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`Neocom’s president professes a desire not to “be forced to be [the government’s] ‘mouthpiece,’”
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`Erkin Decl. ¶ 7, the Rule generally does not compel retailers to say anything, nor to be the “mouthpiece”
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`for any government message—at least, so long as a retailer does not choose to take it upon itself to
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`modify or direct the content of cigarette health warnings. In fact, to the extent that they address
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`retailers at all, both the Tobacco Control Act and the Rule largely go out of their way to explain that
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`retailers “shall not be in violation” for displaying manufacturer-provided packages or advertisements
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`containing warnings—unless, for example, the retailer “alter[s]” a package or an advertisement “in a
`
`way that is material to the requirements” of the statute or the Rule. 15 U.S.C. § 1333(a)(4), (c)(4); see
`
`also 85 Fed. Reg. at 15,708. And here, Neocom does not allege that it wishes to proclaim any
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`prohibited message of its own—for example, by modifying manufacturer packages or advertising—
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`so those limited, warning-related obligations that do apply directly to retailers (unchallenged here)
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`cannot sustain an Article III injury for Neocom. See, e.g., Markle Interests, LLC v. U.S. Fish & Wildlife
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`Serv., 827 F.3d 452, 462 (5th Cir. 2016) (holding that plaintiff allegedly facing “[a]n increased regulatory
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`burden” did not “satisf[y] the injury in fact requirement” because that “regulatory burden . . . is purely
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`speculative at this point”).
`
`2 Suleman Ismail, President of the other four retailer Plaintiffs—none of which resides in this
`district—submitted a declaration that is nearly identical to Mr. Erkin’s. See Ismail Decl., ECF No.
`34-9.
`
`6
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`

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`As a result, Neocom’s only potential First Amendment interest would necessarily be derivative
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`of the interests of the manufacturer Plaintiffs—who, after all, are the ones who must actually print
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`specific warnings on their packaging and advertising. But that First Amendment interest cannot be
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`vicariously asserted by cigarette retailers—that is, not without stretching third-party-standing doctrine
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`well past its breaking point.
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`Generally, “constitutional rights are personal and may not be asserted vicariously.” Broadrick
`
`v. Oklahoma, 413 U.S. 601, 610 (1973). And as the Fifth Circuit has made clear, “[a]lthough various
`
`prudential standing principles have been relaxed in some First Amendment cases, this relaxation does
`
`not eliminate the distinct and independent requirement[s] of Article III.” Nat’l Fed’n of the Blind of
`
`Texas, Inc. v. Abbott, 647 F.3d 202, 210 (5th Cir. 2011). That is especially true where, as here, the
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`so-called “third party” whose rights are directly at issue—cigarette manufacturers—are already before
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`the Court, represented by the same counsel, vigorously asserting their own rights in the same case.
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`Under these circumstances, any comparative leniency of third-party standing doctrine in the First
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`Amendment context has no application. See Sec’y of State of Md. v. Joseph H. Munson Co., 467 U.S. 947,
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`958 (1984) (“Facial challenges to overly broad statutes are allowed not primarily for the benefit of the
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`litigant, but for the benefit of society—to prevent the statute from chilling the First Amendment rights
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`of other parties not before the court.”) (emphasis added).
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`Even setting aside the presence of cigarette manufacturers in the caption, in the Fifth Circuit,
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`the path to third-party standing on a First Amendment claim is a narrow one. It applies only “on a
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`provision by provision basis: the plaintiff must establish injury under a particular provision of a regulation
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`that is validly applied to its conduct, then assert a facial challenge, under the overbreadth doctrine, to
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`vindicate the rights of others not before the court under that provision.” Nat’l Fed’n of the Blind, 647 F.3d
`
`at 210 (citations omitted); see also SEIU, Local 5 v. City of Houston, 595 F.3d 588, 598 (5th Cir. 2010)
`
`(“[I]f SEIU is limited by one provision of an ordinance and makes a facial challenge due to the
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`overbreadth of a different provision, there is no constitutional standing . . . as to the separate
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`provision.”). This provision-by-provision rule also forecloses Neocom’s claim to standing on a theory
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`of a generic First Amendment injury: to the extent Neocom has any First Amendment interest at stake
`
`7
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`here that is distinct from the manufacturer Plaintiffs, it would necessarily derive from the “separate
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`provision[s]” of the statute and the Rule that do apply directly to retailers. Local 5, 595 F.3d at 598; see
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`15 U.S.C. § 1333(a)(4), (c)(4) (defining the limited scope of potential retailer liability). But, as discussed
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`above, Neocom does not allege that those provisions are actually preventing it from doing or saying
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`anything—in fact, Plaintiffs do not even challenge those requirements in this case.
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`Finally, it is worth stepping back to appreciate the implications of Plaintiffs’ theory. If
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`Neocom has standing to challenge the content of cigarette warning labels under the First Amendment,
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`then every retailer in the nation would have standing to challenge laws that do not directly regulate
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`them at all, even without a showing of financial harm—for example, every hardware store could sue
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`to challenge the contents of required warnings on lawn mowers. It is no coincidence that the canonical
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`First Amendment commercial-speech cases were brought by the individuals or businesses that would
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`actually be compelled to speak. See, e.g., Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio,
`
`471 U.S. 626 (1985); Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y., 447 U.S. 557 (1980).
`
`First Amendment doctrine addresses what the government may or may not compel regulated parties
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`to say, and the restrictions it may place on their speech. Because the Rule neither compels nor restricts
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`Neocom’s speech, Neocom cannot rely on any First Amendment injury to establish standing.
`
`C.
`Neocom Fails to Demonstrate any Financial Injury.
`Before analyzing Neocom’s alleged financial injury, it bears repeating: if any of the retailer
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`Plaintiffs had alleged that, as a general matter, fewer people will buy cigarettes once the warnings go
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`into effect, they might have had a simpler argument for standing. (That conclusion is unaffected by
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`the fact that FDA’s interest in issuing the rule was not, in fact, to reduce smoking rates, but instead to
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`promote greater understanding of the negative health consequences of smoking, as explained in
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`greater detail in FDA’s summary-judgment motion and in the Rule itself, see 85 Fed. Reg. at 15,638,
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`15,644.) But, presumably because Plaintiffs wish to leave the Court with the impression that FDA’s
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`warnings “will achieve nothing in terms of improving public health,” Pls.’ Br. 3, they decline to make
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`that relatively straightforward allegation.
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`Case 6:20-cv-00176-JCB Document 36 Filed 07/02/20 Page 14 of 20 PageID #: 1724
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`But that litigation-strategy judgment has consequences. Now, the retailer Plaintiffs, including
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`Neocom, are left to rely on tortured and speculative hypotheticals to suggest that they will somehow
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`suffer financially as a result of these warnings—even if overall cigarette sales are unaffected, and even
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`though it is the cigarette manufacturers, not retailers, who will bear the costs associated with actually
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`changing packages or advertisements. In fact, the complaint is quite clear that even cigarette
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`advertisements that appear in retail stores are to be updated or replaced by manufacturers, not retailers.
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`See, e.g., Compl. ¶ 117(f) (“Reynolds and Santa Fe will thus need to modify existing brand advertising
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`that appears on their websites and retail point-of-sale advertising. Collectively, Reynolds and Santa
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`Fe will need to redesign, print, and replace point-of-sale advertising at approximately 200,000
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`retailers.”); id. ¶ 118(e) (“ITG Brands will need to redesign, print, and replace point-of-sale advertising
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`at approximately 102,000 retailers.”); id. ¶ 119(e) (“Liggett will need to redesign, print, and replace all
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`point-of-sale communications at each of approximately 35,000 retailers.”).
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`As for retailers specifically, Plaintiffs allege that if they “continue to display cigarette packages
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`and advertising, non-smokers will be more likely to shop in stores that do not display those packages
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`and advertising.” Id. ¶ 116. In addition, the retailer Plaintiffs allege that “[c]ustomers who continue
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`to shop at their stores will be less likely to purchase certain non-cigarette items, such as food items
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`that are displayed at the counter within view of the graphic cigarette packages and advertising.” Id.
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`Finally, they allege that, “[i]f the retailer Plaintiffs stop displaying cigarette packages and advertising,
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`smokers will be more likely to shop in stores that do display those packages and advertising.” Id.
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`As an initial matter, Plaintiffs’ theory of standing for the retailer Plaintiff