throbber
Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 1 of 42 PageID #: 2042
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`TYLER DIVISION
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`CIVIL ACTION NO. 6:20-cv-00176
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`R.J. REYNOLDS TOBACCO COMPANY;
`SANTA FE NATURAL TOBACCO
`COMPANY, INC.; ITG BRANDS, LLC;
`LIGGETT GROUP LLC; NEOCOM, INC.;
`RANGILA ENTERPRISES INC.; RANGILA
`LLC; SAHIL ISMAIL, INC.; and IS LIKE
`YOU INC.;
`
`
`Plaintiffs,
`
`
`v.
`
`UNITED STATES FOOD AND DRUG
`ADMINISTRATION;
`
`UNITED STATES DEPARTMENT OF
`HEALTH AND HUMAN SERVICES;
`
`STEPHEN M. HAHN,
`in his official capacity as Commissioner of the
`United States Food and Drug Administration;
`and
`
`ALEX M. AZAR II,
`in his official capacity as Secretary of the United
`States Department of Health and Human
`Services;
`
`
`
`
`Defendants.
`
`
`
`
`PLAINTIFFS’ OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS
`
`
`
`

`

`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 2 of 42 PageID #: 2043
`
`TABLE OF CONTENTS
`
`
`Page
`
`II.
`
`III.
`
`B.
`
`
`INTRODUCTION .......................................................................................................................................... 1
`BACKGROUND ............................................................................................................................................. 2
`A.
`The Challenged Rule and Statutory Provisions ................................................................. 2
`B.
`Plaintiffs Challenge the Graphic-Warnings Requirements and Detail How
`Those Requirements Harm Them ...................................................................................... 3
`The Court’s Scheduling Order ............................................................................................. 6
`C.
`STATEMENT OF THE ISSUES ................................................................................................................. 7
`ARGUMENT.................................................................................................................................................... 8
`I.
`THE MOTION TO DISMISS SHOULD BE DENIED AS PROCEDURALLY IMPROPER
`BECAUSE IT VIOLATES THE COURT’S SCHEDULING ORDER ........................................................ 8
`THE MOTION TO DISMISS SHOULD BE DENIED BECAUSE VENUE IS PROPER IN THIS
`DISTRICT REGARDLESS OF NEOCOM’S STANDING ........................................................................ 9
`A.
`Venue Is Proper Because Neocom Had a Good-Faith, Colorable Basis For
`Bringing Its Claims ............................................................................................................. 10
`Venue Is Proper Because the Rule Regulates the Manufacturers’ Speech In
`This District ......................................................................................................................... 12
`THE MOTION TO DISMISS SHOULD BE DENIED BECAUSE NEOCOM HAS STANDING ......... 13
`A.
`Neocom Has Standing Based on First Amendment Harms ........................................ 15
`B.
`Neocom Has Standing Based on Aesthetic Harms ....................................................... 19
`C.
`Neocom Has Standing Because It Will Suffer an Increased Regulatory
`Burden .................................................................................................................................. 21
`Neocom Has Standing Because It Will Suffer Monetary Harm .................................. 22
`D.
`AT MINIMUM, THE COURT SHOULD GRANT LEAVE TO AMEND, OR TRANSFER,
`RATHER THAN DISMISS ................................................................................................................... 29
`CONCLUSION ............................................................................................................................................. 30
`
`
`IV.
`
`
`
`
`
`– i –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 3 of 42 PageID #: 2044
`
`
`TABLE OF AUTHORITIES
`
`Page
`
`
`
`CASES
`
`44 Liquormart, Inc. v. Rhode Island,
`517 U.S. 484 (1996) ................................................................................................................................... 18
`
`Albany Ins. Co. v. Almacenadora Somex, S.A.,
`5 F.3d 907 (5th Cir. 1993) .......................................................................................................................... 8
`
`Allandale Neighborhood Ass’n v. Austin Transp. Study Policy Advisory Comm.,
`840 F.2d 258 (5th Cir. 1988) .................................................................................................................... 24
`
`Am. Beverage Ass’n v. City & Cty. of San Francisco,
`916 F.3d 749 (9th Cir. 2019) ............................................................................................................. 18, 19
`
`Aralez Pharm. Inc. v. Teva Pharm. USA, Inc.,
`No. 217CV00071JRGRSP, 2017 WL 3437894 (E.D. Tex. Aug. 10, 2017) ........................................ 7
`
`B, Inc. v. Miller Brewing Co.,
`663 F.2d 545 (5th Cir. 1981) ............................................................................................................. 10, 11
`
`Bel-Ray Co., Inc. v. Chemrite (Pty) Ltd.,
`181 F.3d 435 (3d Cir. 1999) ....................................................................................................................... 9
`
`Bishop v. Oklahoma ex rel. Edmondson,
`447 F. Supp. 2d 1239 (N.D. Okla. 2006) ............................................................................................... 13
`
`Burns v. Events & Transp. Assocs., Inc., No. CV 08-713 LH/RHS, 2008 WL 11322233
`(D.N.M. Dec. 15, 2008)............................................................................................................................ 11
`
`Carpenters Indus. Council v. Zinke,
`854 F.3d 1 (D.C. Cir. 2017) ..................................................................................................................... 24
`
`Cellco P’ship v. FCC,
`357 F.3d 88 (D.C. Cir. 2004) ................................................................................................................... 21
`
`Clear Channel Commc’ns, Inc. v. Citigroup Global Mkts., Inc,
`541 F. Supp. 2d 874 (N.D. Tex. 2008) ................................................................................................... 12
`
`Columbia Broad. Sys. v. United States,
`316 U.S. 407 (1942) ................................................................................................................................... 18
`
`
`
`
`
`– ii –
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`

`

`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 4 of 42 PageID #: 2045
`
`
`Contender Farms, L.L.P. v. USDA,
`779 F.3d 258 (5th Cir. 2015) ....................................................................................................... 16, 21, 22
`
`Crane v. Napolitano,
`920 F. Supp. 2d 724 (N.D. Tex. 2013) ................................................................................................... 11
`
`Czyzewski v. Jevic Holding Corp.,
`137 S. Ct. 973 (2017) ................................................................................................................................. 24
`
`Danvers Motor Co., Inc. v. Ford Motor Co.,
`432 F.3d 286 (3d Cir. 2005) .............................................................................................................. 14, 24
`
`Denver Area Educ. Telecomms. Consortium v. FCC,
`518 U.S. 727 (1996) (plurality opinion) .................................................................................................. 17
`
`Duarte ex rel. Duarte v. City of Lewisville,
`759 F.3d 514 (5th Cir. 2014) .................................................................................................................... 21
`
`EMED Techs. Corp. v. Repro-Med Sys., Inc.,
`No. 2:17-CV-728-WCB-RSP, 2018 WL 2544564 (E.D. Tex. June 4, 2018) ...................................... 7
`
`Emison v. Catalano,
`951 F. Supp. 714 (E.D. Tenn. 1996) ...................................................................................................... 13
`
`Estate of Abtan v. Blackwater Lodge & Training Ctr.,
`611 F. Supp. 2d 1 (D.D.C. 2009) ............................................................................................................ 13
`
`Exact Order Specialties v. Glow Indus., Inc.,
`No. 03:12-CV-00631-HU, 2012 WL 3597432 (D. Or. Aug. 20, 2012) ............................................. 11
`
`Exxon Corp. v. FTC,
`588 F.2d 895 (3d Cir. 1978) .............................................................................................................. 10, 11
`
`Farmland Dairies v. McGuire,
`771 F. Supp. 80 (S.D.N.Y. 1991) ............................................................................................................ 13
`
`Flu Shots of Tex., Ltd. v. Lopez,
`No. 3:13-CV-144-O, 2013 WL 2449175 (N.D. Tex. June 5, 2013) ................................................... 30
`
`Foremost Sales Promotions, Inc. v. Dir. Bureau of Alcohol, Tobacco & Firearms,
`860 F.2d 229 (7th Cir. 1988) .................................................................................................................... 18
`
`Francesca’s Collections, Inc. v. Medina,
`No. CIV.A. H-11-307, 2011 WL 3925062 (S.D. Tex. Sept. 7, 2011) ................................................ 29
`
`
`
`
`
`– iii –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 5 of 42 PageID #: 2046
`
`
`Friends of the Earth, Inc. v. Laidlaw Envt’l Servs. (TOC), Inc.,
`528 U.S. 167 (2000) ................................................................................................................................... 20
`
`Galderma Labs., L.P. v. Teva Pharm. USA, Inc.,
`290 F. Supp. 3d 599 (N.D. Tex. 2017) ................................................................................................... 14
`
`Graham v. Dyncorp Int’l, Inc.,
`973 F. Supp. 2d 698 (S.D. Tex. 2013) ............................................................................................. 29, 30
`
`Guidance Endodontics, LLC v. Dentsply Int’l, Inc., No. CIV 08-1101 JB/RLP, 2009 WL
`3672495 (D.N.M. Sept. 29, 2009) ........................................................................................................... 25
`
`Honey Holdings I, Ltd. v. Alfred L. Wolff, Inc.,
`81 F. Supp. 3d 543 (S.D. Tex. 2015) ...................................................................................................... 12
`
`Horihan v. Hartford Ins. Co.,
`979 F. Supp. 1073 (E.D. Tex. 1997) ....................................................................................................... 11
`
`Humane Soc. of the U.S. v. Hodel,
`840 F.2d 45 (D.C. Cir. 1988) ................................................................................................................... 20
`
`Hunt v. Bankers Tr. Co.,
`799 F.2d 1060 (5th Cir. 1986) ................................................................................................................... 9
`
`In re CTLI, LLC,
`534 B.R. 895 (Bankr. S.D. Tex. 2015) ...................................................................................................... 9
`
`In re Horseshoe Entm’t,
`337 F.3d 429 (5th Cir. 2003) .................................................................................................................... 30
`
`In re Volkswagen of Am., Inc.,
`545 F.3d 304 (5th Cir. 2008) (en banc) .................................................................................................. 30
`
`In re Whitaker Constr. Co., Inc.,
`178 F. App’x 412 (5th Cir. 2006) (per curiam) ..................................................................................... 24
`
`Jacquez v. Compass Bank,
`No. EP-15-CV-26-RFC, Doc. 5 (W.D. Tex. Mar. 4, 2015) .................................................................. 9
`
`Japan Whaling Ass’n v. Am. Cetacean Soc.,
`478 U.S. 221 (1986) ................................................................................................................................... 20
`
`Jelec USA v. Safety Controls, Inc.,
`No. CIV A H-06-2379, 2006 WL 3358896 (S.D. Tex. Nov. 17, 2006) ............................................ 13
`
`
`
`
`
`– iv –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 6 of 42 PageID #: 2047
`
`
`Jimerson v. First Am. Inv. Co., NO. CV H-08-628, 2008 WL 11389428 (S.D. Tex. July
`31, 2008) .................................................................................................................................................9, 30
`
`Johnson v. Dossey,
`515 F.3d 778 (7th Cir. 2008) ...................................................................................................................... 8
`
`Konami Digital Entm’t Co., Ltd. v. Harmonix Music Sys., Inc.,
`No. CIV.A. 6:08CV286, 2009 WL 3448148 (E.D. Tex. Oct. 22, 2009) ............................................. 9
`
`L & A Contracting Co. v. S. Concrete Servs., Inc.,
`17 F.3d 106 (5th Cir. 1994) ...................................................................................................................... 24
`
`Labranche v. Embassy Suites, Inc.,
`No. CIV. A. 97-3721, 1999 WL 58841 (E.D. La. Feb. 3, 1999)......................................................... 11
`
`Langton v. Cbeyond Commc’n, LLC,
`282 F. Supp. 2d 504 (E.D. Tex. 2003) ................................................................................................... 14
`
`Laserdynamics, Inc. v. Acer Am. Corp.,
`209 F.R.D. 388 (S.D. Tex. 2002) ............................................................................................................ 14
`
`League of Women Voters v. Browning,
`No. 08-21243-CIV, 2008 WL 11332046 (S.D. Fla. May 2, 2008) ...................................................... 13
`
`Markle Interests, LLC v. U.S. Fish & Wildlife Serv.,
`139 S. Ct. 590 (2018) ................................................................................................................................. 22
`
`Markle Interests, LLC v. U.S. Fish & Wildlife Serv.,
`827 F.3d 452 (5th Cir. 2016) .................................................................................................................... 22
`
`Massachusetts v. EPA,
`549 U.S. 497 (2007) ................................................................................................................................... 10
`
`Mem’l Hermann Health Sys. v. Blue Cross Blue Shield of Tex.,
`No. CV H-17-2661, 2017 WL 5593523 (S.D. Tex. Nov. 17, 2017) .................................................. 14
`
`Metromedia, Inc. v. City of San Diego,
`453 U.S. 490 (1981) (plurality opinion) .................................................................................................. 17
`
`Mississippi Chem. Corp. v. Dresser-Rand Co.,
`287 F.3d 359 (5th Cir. 2002) .................................................................................................................... 25
`
`Mo. Broadcaster Ass’n v. Schmitt,
`946 F.3d 453 (8th Cir. 2020) .................................................................................................................... 18
`
`
`
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`
`– v –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 7 of 42 PageID #: 2048
`
`
`Moreau v. FERC,
`982 F.2d 556 (D.C. Cir. 1993) ................................................................................................................. 20
`
`Mountain States Legal Found. v. Glickman,
`92 F.3d 1228 (D.C. Cir. 1996) ................................................................................................................. 20
`
`Napodano v. Ericsson Inc. Short Term Disability Plan,
`406 F. Supp. 3d 569 (E.D. Tex. 2019) ................................................................................................... 24
`
`Nat’l Collegiate Athletic Ass’n v. Califano,
`622 F.2d 1382 (10th Cir. 1980) ............................................................................................................... 21
`
`Nat’l Distillers & Chem. Corp. v. Dep’t of Energy,
`487 F. Supp. 34 (D. Del. 1980) ............................................................................................................... 11
`
`Nutritional Health All. v. Shalala,
`144 F.3d 220 (2d Cir. 1998) .............................................................................................................. 17, 18
`
`Oceana, Inc. v. Pritzker,
`58 F. Supp. 3d 2 (D.D.C. 2013) .............................................................................................................. 13
`
`Philip Morris USA Inc. v. FDA,
`No. 20-cv-1181 (D.D.C. July 6, 2020) ................................................................................................... 30
`
`Pitt News v. Pappert,
`379 F.3d 96 (3d Cir. 2004) (Alito, J.) ...................................................................................................... 19
`
`Preferred Commc’ns, Inc. v. City of Los Angeles,
`754 F.2d 1396 (9th Cir. 1985) ................................................................................................................. 18
`
`R.J. Reynolds Tobacco Co. v. FDA,
`696 F.3d 1205 (D.C. Cir. 2012) .............................................................................................. 3, 11, 26, 27
`
`Ramirez v. Abreo,
`No. 5:09-CV-189-C, 2011 WL 6205910 (N.D. Tex. Jan. 18, 2011) ..................................................... 9
`
`Roach v. Bloom,
`No. 3:08-cv-493, 2009 WL 667218 (N.D. Tex. Mar. 16, 2009) ......................................................... 14
`
`Ross v. Bank of Am., N.A.,
`524 F.3d 217 (2d Cir. 2008) ..................................................................................................................... 28
`
`Rowe v. N.H. Motor Transp. Ass’n,
`552 U.S. 364 (2008) ................................................................................................................................... 16
`
`
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`
`– vi –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 8 of 42 PageID #: 2049
`
`
`Rubin v. Coors Brewing Co.,
`514 U.S. 476 (1995) ................................................................................................................................... 17
`
`Sabine River Auth. v. U.S. Dep’t of Interior,
`951 F.2d 669 (5th Cir. 1992) ............................................................................................................. 20, 23
`
`Sanchez v. Pingree,
`494 F. Supp. 68 (S.D. Fla. 1980) ............................................................................................................. 13
`
`Save Our Wetlands, Inc. v. Sands,
`711 F.2d 634 (5th Cir. 1983) .................................................................................................................... 20
`
`Seitz v. Envirotech Sys. Worldwide Inc.,
`No. CIV. A. H-02-4782, 2008 WL 656513 (S.D. Tex. Mar. 6, 2008)................................................ 25
`
`Sheffield v. Texas,
`411 F. Supp. 709 (N.D. Tex. 1976) (per curiam) .................................................................................. 13
`
`Sidco Indus. Inc. v. Wimar Tahoe Corp.,
`768 F. Supp. 1343 (D. Or. 1991) ............................................................................................................ 11
`
`Sidney Coal Co., Inc. v. Soc. Sec. Admin.,
`427 F.3d 336 (6th Cir. 2005) .................................................................................................................... 30
`
`Sorrell v. IMS Health Inc.,
`564 U.S. 552 (2011) ................................................................................................................................... 17
`
`St. Paul Fire & Marine Ins. Co. v. City of Lubbock,
`No. 3:09-CV-1400-P, 2010 WL 11619033 (N.D. Tex. June 3, 2010) ............................................... 29
`
`Susan B. Anthony List v. Driehaus,
`573 U.S. 149 (2014) ................................................................................................................................... 14
`
`Taylor v. Rumsfeld,
`No. CIV.A. G-05-517, 2006 WL 213961 (S.D. Tex. Jan. 25, 2006) .................................................. 29
`
`TBC-JP-LR, JV v. Allied Prop. & Cas. Ins. Co.,
`No. 4:17-CV-131-Y, 2018 WL 10562785 (N.D. Tex. Sept. 28, 2018) ................................................ 9
`
`Tex. A&M Research Found. v. Magna Transp., Inc.,
`338 F.3d 394 (5th Cir. 2003) .................................................................................................................... 25
`
`Texas v. United States,
`809 F.3d 134 (5th Cir. 2015) .................................................................................................................... 27
`
`
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`– vii –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 9 of 42 PageID #: 2050
`
`
`Texas v. United States,
`945 F.3d 355 (5th Cir. 2019) .................................................................................................................... 10
`
`Versai Mgmt. Corp. v. Clarendon Am. Ins. Co.,
`597 F.3d 729 (5th Cir. 2010) .................................................................................................................... 25
`
`Vill. of Arlington Heights v. Metro. Hous. Dev. Corp.,
`429 U.S. 252 (1977) ................................................................................................................................... 10
`
`CONSTITUTIONAL PROVISIONS AND STATUTES
`
`15 U.S.C. § 1333 ............................................................................................................................................. 2, 3
`
`21 U.S.C. § 334 ........................................................................................................................................ 3, 5, 21
`
`28 U.S.C. § 1391 ........................................................................................................................................ 12, 13
`
`28 U.S.C. § 1404 ............................................................................................................................................... 29
`
`28 U.S.C. § 1406 ............................................................................................................................................... 29
`
`U.S. Const., amend. I................................................................................................................................. passim
`
`RULES AND REGULATIONS
`
`Fed. R. Civ. P. 7 ................................................................................................................................................. 8
`
`Fed. R. Civ. P. 12 ............................................................................................................................................... 9
`
`Fed. R. Civ. P. 15 ............................................................................................................................................... 8
`
`Fed. R. Evid. 701 ...................................................................................................................................... 24, 25
`
`Local Rule CV-7 ............................................................................................................................................. 7, 8
`
`Tobacco Products; Required Warnings for Cigarette Packages and Advertisements, 85 Fed. Reg.
`15,638 (Mar. 18, 2020) ........................................................................................................................ passim
`
`OTHER AUTHORITIES
`
`13a Charles Alan Wright et al., Federal Practice & Procedure § 3531.4 (3d ed. 2015) .......................... 28
`
`13a Charles Alan Wright et al., Federal Practice & Procedure § 3531.5 (3d ed. 2015) .......................... 23
`
`14D Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 3815
`(4th ed. 2020) ............................................................................................................................................. 11
`
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`– viii –
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`
`14D Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 3826
`(4th ed. 2020) ............................................................................................................................................. 13
`
`14D Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 3827
`(4th ed. 2020) ............................................................................................................................................. 29
`
`Global Economy: Tobacco: Maps, DUKE CENTER ON GLOBALIZATION, GOVERNANCE &
`COMPETITIVENESS, http://www.ncglobaleconomy.com/tobacco/maps.shtml ............................. 30
`
`National Law Review, Prop 65 Warnings and Acrylamide in Food – Can I Still Have My
`Coffee and Drink it Too? (Mar. 10, 2020),
`https://www.natlawreview.com/article/prop-65-warnings-and-acrylamide-food-
`can-i-still-have-my-coffee-and-drink-it-too ........................................................................................... 19
`
`Tampa Bay Times, Lottery Ticket Warnings Get Vetoed by Ron DeSantis (July 1,
`2019), www.tampabay.com/florida-politics/buzz/2019/07/01/lottery-ticket-
`warnings-gets-vetoed-by-ron-desantis/ ................................................................................................. 19
`
`
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`– ix –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 11 of 42 PageID #: 2052
`
`
`INTRODUCTION
`
`Defendants’ motion to dismiss contends that venue is improper in this District because a
`
`single retailer Plaintiff—Neocom, Inc.—purportedly lacks standing. The motion should be denied for
`
`multiple reasons. To begin, the motion is procedurally improper, because it violates the Court’s
`
`scheduling order. More fundamentally, the substance of the motion is deeply flawed.
`
`For one thing, Defendants assume that the question whether venue is proper in this District
`
`turns on whether Neocom has standing. This is wrong twice over. First, venue would remain proper
`
`even if Neocom were dismissed because, absent fraudulent joinder (which Defendants do not and
`
`could not prove), venue is not lost by the subsequent dismissal of a party whose presence was
`
`necessary to establish venue. Second, venue would remain proper even if Neocom were dismissed,
`
`because the four manufacturer Plaintiffs sell and advertise cigarettes extensively in this District, and
`
`therefore the challenged graphic warnings requirements would compel their speech in this District.
`
`This means that the requirements would directly impact this District, and that is sufficient to make
`
`this District a proper venue.
`
`In any event, Defendants are profoundly mistaken as to Neocom’s standing. In fact, the
`
`graphic warnings requirements will cause four distinct forms of injury to Neocom, each of which is
`
`sufficient to establish standing. First, Neocom will suffer a First Amendment injury by being forced
`
`to convey a message with which it disagrees. Second, Neocom will suffer an aesthetic injury by having
`
`to display grotesque images in its stores. Third, Neocom will suffer a regulatory injury because the
`
`challenged requirements dictate how it can sell and advertise one of its most important products.
`
`Fourth, Neocom will suffer a monetary injury because the graphic warnings will cause it to lose
`
`customers, and will cause remaining customers to buy fewer non-cigarette items.
`
`Finally, even if Defendants were right about everything else, they would be wrong about the
`
`remedy. If the Court concludes that venue is improper, it should grant leave to amend or transfer the
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`– 1 –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 12 of 42 PageID #: 2053
`
`
`case to the Eastern District of North Carolina, instead of dismissing it.
`
`BACKGROUND
`
`A.
`
`The Challenged Rule and Statutory Provisions
`
`In 2009, Congress mandated that the Food and Drug Administration (“FDA”) issue
`
`regulations requiring massive “color graphics depicting the negative health consequences of smoking.”
`
`Family Smoking Prevention and Tobacco Control Act (“TCA”), Pub. L. No. 111-31, § 201(a), 123
`
`Stat. 1776, 1845 (2009) (codified at 15 U.S.C. § 1333(d)[1]). The warnings would have to appear on
`
`cigarette packaging as well as cigarette advertising, and the regulation would apply to both
`
`manufacturers and retailers. See id. at § 1333(a)(1) (making it “unlawful for any person to manufacture,
`
`package, sell, [or] offer to sell . . . any cigarettes” that do not contain graphic warnings (emphasis
`
`added)); id. § 1333(b)(1) (making it “unlawful for any tobacco product manufacturer . . . or retailer of
`
`cigarettes to advertise or cause to be advertised . . . any cigarettes unless its advertising bears” graphic
`
`warnings); id. at § 1333(c)(2) (noting a “tobacco product manufacturer, . . . . or retailer” would have
`
`to submit advertising plans to FDA).
`
`When FDA promulgated the final Rule at issue here, it also explicitly regulated manufacturers
`
`and retailers. Tobacco Products; Required Warnings for Cigarette Packages and Advertisements, 85 Fed. Reg.
`
`15,638 (Mar. 18, 2020) (“the Rule”). The Rule makes it “unlawful for any person to manufacture,
`
`package, sell, offer to sell, [or] distribute . . . any cigarettes unless” the top 50% of the front and back
`
`of the cigarette package contains one of eleven graphic warnings. Id. at 15,708–09. The Rule also
`
`makes it “unlawful for any manufacturer, distributor, or retailer of cigarettes to advertise or cause to be
`
`advertised . . . any cigarette unless [20% of] each advertisement” is dedicated to one of the disturbing
`
`graphic warnings. Id. at 15,709 (emphasis added).
`
`
`
`The Rule and the TCA contain narrow safe harbor provisions that relieve retailers from
`
`liability in certain circumstances. Specifically, “[a] cigarette retailer will not be in violation” of the
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`– 2 –
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`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 13 of 42 PageID #: 2054
`
`
`prohibition on non-compliant cigarette packaging if (1) the cigarette package contains a warning,
`
`(2) the package was supplied by a properly licensed manufacturer, and (3) the retailer does not
`
`materially alter the package. 85 Fed. Reg. at 15,708; see 15 U.S.C. § 1333(a)(4). A retailer similarly is not
`
`liable for non-compliant advertisements if the retailer (1) is not “responsible for or [does not] direct[]
`
`the warnings required . . . for advertising,” (2) does not display an advertisement without a warning,
`
`and (3) does not materially alter an advertisement. 85 Fed. Reg. at 15,708; see 15 U.S.C. § 1333(c)(4).
`
`These carve-outs, however, do not change the bottom line—namely, that retailers will be
`
`unable to sell cigarette packages and display cigarette advertisements that do not contain the graphic
`
`warnings. The carve-out for cigarette packages applies only if the cigarette packages are provided by a
`
`properly licensed manufacturer, and those manufacturers will be forced to include the graphic
`
`warnings. See 85 Fed. Reg. at 15,708–09. Similarly, the advertising safe harbor applies only if the retailer
`
`is not responsible for and does not direct the warnings. See id. at 15,708. So even if the retailer decides
`
`to use exclusively manufacturer-provided advertising, the advertising will feature the graphic warnings
`
`because the manufacturer will be obligated to include them. See id. at 15,708–09. What is more, the
`
`carve-outs are narrowly targeted and do not provide a comprehensive defense against the Rule’s
`
`strictures. For example, if a retailer displays or sells cigarette packages without graphic warnings after
`
`the Rule goes into effect, FDA can seize those cigarettes as misbranded. See 85 Fed. Reg. at 15,709;
`
`21 U.S.C. § 334(a)(2), (g).
`
`B.
`
`Plaintiffs Challenge the Graphic-Warnings Requirements and Detail How
`Those Requirements Harm Them.
`
`
`
`In this lawsuit, Plaintiffs challenge the Rule and the statutory graphic-warnings requirements
`
`under the First Amendment, the Administrative Procedure Act (“APA”), and the TCA. See Compl.
`
`(ECF No. 1) ¶¶ 114, 122–50. Plaintiffs have explained that this version of the Rule is as unlawful as
`
`the previous version, which was struck down by the D.C. Circuit. See Pls.’ SJ & PI Mot. 2 (ECF NO.
`
`34) (discussing R.J. Reynolds Tobacco Co. v. FDA, 696 F.3d 1205, 1212 & n.6 (D.C. Cir. 2012)).
`
`– 3 –
`
`

`

`Case 6:20-cv-00176-JCB Document 48 Filed 07/17/20 Page 14 of 42 PageID #: 2055
`
`
`Plaintiffs are four companies that manufacture cigarettes (R.J. Reynolds Tobacco Company,
`
`Santa Fe Natural Tobacco C

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