FDA 'deeming rule' survives first court challenge

On Friday, a federal district court turned away the first legal challenge to the Food and Drug Administration's so-called deeming rule. This regulation subjects electronic cigarettes to regulation as "tobacco products" under federal law. Although the FDA's primary charge is to protect public health, there are reasons to believe that this rule will achieve the opposite, as I discussed in these posts. That the regulation may be inadvisable does not mean it is unlawful.

In Nicopure Labs, LLC v. FDA, e-cigarette retailers and associations challenged the FDA's deeming rule on several grounds, all of which were unavailing. Among other things, the plaintiffs alleged that the rule exceeded the FDA's authority under the Family Smoking Prevention and Tobacco Control Act ("Tobacco Act"), violated the First Amendment and was arbitrary and capricious. The FDA, for its part, argued that the challenges should be dismissed on standing or ripeness grounds. Judge Amy Berman Jackson accepted none of these arguments, rejecting the challengers' claims on the merits.

The Tobacco Act, by its terms, authorized FDA regulation of cigarettes, cigarette tobacco and smokeless tobacco. It further authorized the FDA to "deem" other "tobacco products" subject to its regulation, too. Under the act, a "tobacco product" is:

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).

With its deeming rule, the FDA declared e-cigarettes and other forms of electronic nicotine delivery systems (ENDS), in addition to their parts and components, to be subject to regulation under the Tobacco Act.

The challengers in Nicopure Labs did not contest the FDA's authority over e-cigarettes generally. Given the capacious terms of the Tobacco Act, this would be hard to do. Nearly all nicotine used in e-cigarettes is derived from tobacco, creating an easy regulatory hook for the FDA. Rather, the plaintiffs challenged the FDA's ability to reach modular ENDS, so-called open-system vaping devices that users may fill with the vaping fluid (a.k.a. e-liquid or "vape juice") of their choice, and those fluids that lack nicotine or other tobacco derivatives. Whatever the FDA's authority over other ENDS and associated components, they argued, the FDA cannot reach those items not "made or derived from tobacco."

There's some logic to the challengers' position—the FDA has only that authority granted by Congress, and Congress delegated FDA the authority only to reach "tobacco products" as defined in the Tobacco Act—but Jackson wasn't persuaded. The FDA concluded that because the act allows it to reach "parts" and "components" of regulated products, it could reach vaping pens and other open-system devices, and at least that nicotine-free fluid that might be combined with nicotine-containing fluid, and Jackson concluded this interpretation was consistent with the plain language of the act (even if she somewhat garbled the relevant inquiry under Chevron).

The most interesting—and in my view problematic—portions of Jackson's opinion are those concerning the challengers' First Amendment claims. Nicopure and its allies raised two separate First Amendment claims: one against the prohibition on distributing free product samples, the other against the prohibition on "modified-risk" claims about tobacco products.

The first of these claims is rather easy to dismiss, as Jackson did. First Amendment protection may extend to what retailers and producers say about their products, but it does not extend to product sale and distribution, particularly of a product (such as e-cigarettes) that are not inherently expressive. There is a difference between what a seller says about a product and how much the seller charges for it (as the Supreme Court noted last term in Expressions Hair Design v. Schneiderman). A prohibition on the distribution of free samples may limit a seller's ability to promote its product, but it operates much like a minimum-price law (i.e. a prohibition on distributing a product below a set price). Were the FDA's prohibition on giving out free samples to violate the First Amendment, all manner of price control statutes would be vulnerable to constitutional challenge.

The challenge to the prohibition on making truthful claims about the relative risk of e-cigarettes, on the other hand, is more challenging, and more serious than Jackson recognized. Under the Tobacco Act's provisions concerning "Modified Risk Tobacco Products," manufacturers of regulated tobacco products must obtain FDA approval before they make any claim, representation or suggestion that a product is "less harmful" than other tobacco products (i.e. cigarettes). This prohibition includes basic factual claims, such as that the product "contains a reduced level of a substance or a reduced exposure to a substance." In other words, an e-cigarette manufacturer could not inform consumers that e-cigarette vapor does not contain numerous substances found in cigarette smoke, even if the manufacturer made no specific claim of a health benefit. As Jackson notes, this provision bars manufacturers "from making truthful and non-misleading claims" about their products. For this reason, the prohibition raises serious First Amendment concerns.

Jackson is too quick to reject the challengers' objection to the Tobacco Act's modified-risk product provisions. Her analysis is quite cursory—occupying a fraction of the space taken up by her analysis of the ban on free samples—and inconsistent. In the opening portion of the opinion, Jackson characterizes the relevant prohibition as nothing more than a requirement that manufacturers "tell the truth when making any claims about their [products'] health benefits," even though later in the same opinion she acknowledges that the law, in fact, prohibits making truthful, fact-based claims. It is, she later notes, "a clear restriction on truthful and non-misleading speech."

The FDA claims that the restriction is necessary to safeguard public health and prevent manufacturers from making unsubstantiated claims. Yet the Supreme Court has long held that restrictions on truthful speech are heavily disfavored, even where health is concerned. (See, e.g., Thompson v. Western States Medical Center.) While the FDA wants to claim that regulating such claims is important to safeguard public health, there is a powerful argument that such restrictions could have the exact opposite effect. The FDA has acknowledged that e-cigarettes are likely safer than tobacco cigarettes and keeping smokers in the dark about the relative risks posed by e-cigarettes might discourage some from switching. If nothing else, Jackson should not have been so quick to uphold the prohibition on easily verifiable-yet-not-FDA-approved claims, particularly when less restrictive alternatives (such as disclaimers) are available. There is more known about the potential heath benefits of switching from smoking to vaping than there is about many nutritional supplements, and yet manufacturers can say far more about the latter than e-cigarette companies may about the former. I will be interested to see what the D.C. Circuit makes of this issue on appeal.

Speaking of the D.C. Circuit, that court decided its own e-cigarette case on Friday, Competitive Enterprise Institute v. U.S. Dept. of Transportation. In this case, a divided panel upheld the Transportation Department's decision to extend the ban on smoking on airplanes to include use of e-cigarettes.

Writing for himself and Judge Kavanaugh, Judge Randolph concluded that the department's regulation represented a permissible application of the statutory prohibition on smoking on airplanes.

The text itself, rather than the subjective intentions of legislators, governs our review. . . . We must ask whether the term "smoking" in a statute enacted before modern e-cigarettes existed covers these devices. . . .

Although the statute does not define "smoke," some dictionary definitions, some state laws, and some characterizations of smoking by the e-cigarette industry itself support the Department. But other dictionary definitions and other state laws support petitioners. We therefore cannot say that Congress spoke to the precise question at issue. . . .

The Chevron-one analysis supports a reasonableness finding. So does our 2010 decision concluding that the Food and Drug Administration can regulate e-cigarettes as "tobacco products" because the liquid nicotine solution in e-cigarettes is derived from tobacco plants. See Sottera, 627 F.3d at 898-99. A "smoking prohibition" reasonably applies to products intended to enable users to inhale and exhale such nicotine.

Judge Ginsburg dissented, arguing that smoking and vaping are not the same thing. His dissent begins:

An axiom of statutory interpretation is that "unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning . . . at the time Congress enacted the statute." Perrin v. United States, 444 U.S. 37, 42 (1979). Today this Court departs from this principle to redefine "smoking" from conventional tobacco consumption, as it was commonly understood in 1987, to prohibit the use of electronic cigarettes, a new technology with a substantially different nicotine delivery process and likely different secondhand effects as well. Just as some people will, no doubt, "find ambiguity even in a 'No Smoking' sign," Int'l Union v. Gen. Dynamics Land Sys. Div., 815 F.2d 1570, 1575 (D.C. Cir. 1987), the Court manufactures ambiguity from the lack of a statutory definition and some abstract dictionary definitions of "smoking" even though the Congress that adopted the statute and the public it represented would have found the term unambiguous when relating to passenger
aviation.