We light up a cigar maybe once a month. Of course, they’re no damned good for us. If we had any doubts, the headache and swamp-breath the next day would remove them. Still, a spirit of convivial dissipation tells us to smoke’em if we’ve got’em. No need to warn us off cigars, or the inevitable accompaniments of brown liquor, rich food, and bad behavior. That would be futile.
The current issue of Cigar Aficianado has Sean Connery as James Bond on the cover. Connery, though our favorite incarnation of 007, is an odd choice, because Connery’s Bond smoked cigarettes (think of the introduction of “Bond, James Bond” in the casino scene in Dr. No), not cigars. In fact, Bond turns down an offer of a cigar in Goldfinger. Cigars are associated with plutocrats. (There is a reason why Pink Floyd’s song about corruption in the music biz is titled, “Have a Cigar.”) Several Bond villains smoked cigars (e.g., Largo in Thunderball, Sanchez in License to Kill, and Onatopp in Goldeneye). The only Bond who had a cigar habit was Roger Moore. He used one as a weapon, along with an aerosol shave cream can, to dispatch a snake. Moore supposedly had a deal that the producers would furnish an endless supply of Montecristos on Bond sets. By contrast, Moore’s successors seldom smoked. True, Pierce Brosnan lit up a cigar in Die Another Day. Bond was in Cuba, and a good spy finds ways to fit in. Word has it that Daniel Craig was originally going to smoke a cigar in Casino Royale, but the powers that be fretted over the possible effect on young impressionables. That is a foreshadowing of today’s case, the arrival of which, we promise, is imminent.
The fact remains that Bond, as written by Ian Fleming, smoked cigarettes. Lots of them. That is because Ian Fleming smoked cigarettes. Lots and lots of them. Most accounts peg Fleming’s intake at four to five packs per day. Fleming knew his tobacco usage was deleterious to his health. So was his diet of scrambled eggs and martinis. Fleming said that he was not going to waste his days trying to prolong them. He died at age 56. (While his consumption habits seem an obvious culprit for his early demise, Fleming’s friends laid much of the blame on his immense stress from being sued over the authorship of Thunderball. Lawyers, like tobacco, should come with health warnings.
So much for our pretitle sequence. The point of today’s blog (which we are NOT calling “Live and Let Die,” or “Die Another Day,” or even the probably-never-ever-coming out “No Time To Die”), is that we should not assume that health warnings make any difference.
In Cigar Ass’n v. FDA, 2020 U.S. App. LEXIS 21023, 2020 WL 3738096 (D.C. Cir. July 7, 2020), the DC Circuit struck down FDA health warnings on cigars and pipe tobacco because there was no proof that such warnings prompt smokers to cease smoking or dissuade nonsmokers from initiating the filthy habit. As we pointed out a couple of weeks ago, administrative law is having a moment, meaning that courts seem less shy about exercising their powers and applying the Administrative Procedure Act (APA) to rein in agencies that have more ambition than evidence. The Cigars Ass’n case is another instance of courts putting some teeth into APA review.
First, let’s inhale a little regulatory background.
The Federal Food, Drug, and Cosmetic Act (FDCA) reached cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco relatively recently. Even more recently, the FDCA now extends to any other tobacco products that the Secretary of Health and Human Services by regulation deems to be subject to the FDCA. Via the Tobacco Control Act, the FDCA further provides that the Secretary may by regulation restrict the sale or distribution of any tobacco product if she determines that such regulation would be appropriate for the protection of the public health. 21 U.S.C.S. § 387f(d)(1). In making that determination, the Secretary must consider the likelihood that the regulation will increase or decrease the number of tobacco users in the overall population.
Note that “must.”
Next, we will unwrap the particular regulation at issue.
In 2016, the FDA promulgated a regulation deeming the FDCA to cover all tobacco products (the Deeming Rule). Thus, cigars and pipe tobacco were now subject to requirements akin to those previously imposed by statute on cigarettes, etc. The Deeming Rule makes it unlawful to manufacture or sell any cigar product without one of six prominent, rotating warning statements. Collectively, the warnings inform prospective and current smokers that cigars cause various diseases, create pregnancy risks, are addictive, and are not a safe alternative to cigarettes. For pipe tobacco, packages and advertisements must bear a warning that the product contains nicotine, an addictive chemical. Again, we are confident that not one of those warnings will arrive as news to any sentient being.
In promulgating these requirements, the FDA stated that “[t]he warning statements required by this final rule will help consumers better understand and appreciate the risks and characteristics of tobacco products.” Deeming Rule, 81 Fed. Reg. at 28,981. At the same time, the FDA acknowledged that “[r]eliable evidence on the impacts of warning labels … on users of cigars, pipe tobacco, waterpipe tobacco, and [electronic nicotine delivery systems] does not, to our knowledge, exist.” Deeming Tobacco Products to Be Subject to the FDCA, Final Regulatory Impact Analysis, ECF Doc. 81-2 at 62 (May 2016).
Did you get that last bit? The FDA imposed garish warnings on products without any evidence that the warnings would have any effect. That is nothing short of astonishing. What are they smoking? There are all sorts of ways to demonstrate the effect of warnings. Are they noticed? Understood? Remembered? Persuasive? And, ultimately, do the warnings affect conduct? Our drug and device clients are often forced by the FDA to conduct label comprehension tests before securing approval. But the FDA apparently is unwilling to put its own tobacco warnings to a similar test.
Unsurprisingly, then, the cigar and pipe tobacco industry associations challenged various provisions of the Deeming Rule. They argued that the warning requirements for cigars and pipe tobacco violate the Tobacco Control Act and the Administrative Procedure Act because the FDA did not adequately consider how the warnings would affect smoking. The plaintiffs also argued that the warning requirements violate the First Amendment, but the D.C. Circuit didn’t need to go constitutional, because the statutory challenges won the day for the manufacturers.
The manufacturers did not win at first. The district court rejected the challenges to the warning requirements. The district court granted the FDA’s crossmotion for summary judgment, and denied as moot the plaintiffs’ motion for a preliminary injunction. But at least the district court stayed enforcement of the warning requirements during the appeal.
The D.C. Circuit reviewed the district court’s ruling de novo, which meant that it would review the FDA’s action under the APA to determine whether it was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” It is usually hard for a court to conclude that an agency flunked that standard, but it wasn’t hard in this case. Under the APA, agency action is arbitrary and capricious if the agency “failed to consider an important aspect of the problem” before it. Under 21 U.S.C. § 387f(d)(1), the FDA “may” impose warning requirements for a tobacco product if it determines that the warnings are “appropriate for the protection of the public health.” This “finding” on public health “shall be determined” for the “population as a whole, including users and nonusers of the tobacco product.” More to the point, the finding “shall … tak[e] into account” two further considerations: (A) the “likelihood that existing users of tobacco products will stop using such products” and (B) the “likelihood that those who do not use tobacco products will start using such products.”
Note that “shall.”
The FDA could not impose the new cigar and pipe warnings without considering the likely impact on tobacco cessation and adoption rates. Congress invoked the FDA’s expertise “to evaluate the impact of labels, labeling, and advertising on consumer behavior in order to reduce the risk of harm.” Moreover, Congress specifically directed the FDA to consider the impact of any regulation on cessation and adoption rates—separately identified in their own subsections—even as the FDA considers other public-health issues as well. 21 U.S.C. § 387f(d)(1).
In administrative law, one basis cited for deference to agencies is their alleged expertise in a given subject matter. Here, Congress itself cited the FDA’s expertise in assessing the impact of health warnings on consumer behavior. But did the FDA really exercise such expertise? That is not an inconsequential question. The required package warnings occupy more than four times the surface area than do the package warnings previously required under settlements among large cigar manufacturers and the Federal Trade Commission. And there is that small matter of imposed speech.
The FDA argued that the statute “does not require a finding that a regulation will reduce the use of tobacco products” and that Congress gave it “leeway to determine what measures would be appropriate for the protection of the public health, as long as the agency considered the effects of regulation across all populations.” Ah, good old leeway. But how much? The problem for the FDA is that the statute specifies how the agency should determine what would be appropriate for protection of public health – namely by addressing risks and benefits for the entire population and taking into account effects on cessation and initiation. The D.C. Circuit declined “to read the latter requirement out of the statute.”
The Deeming Rule simply did not consider the impact of health warnings on smoking cessation and adoption rates. In fact, according the the court, “the rule scrupulously avoids that issue, and the FDA barely even contends otherwise.” Remember, the FDA candidly acknowledged that “[r]eliable evidence on the impacts of warning labels … on users of cigars [and] pipe tobacco … does not, to our knowledge, exist.” The best that the FDA could offer was its conclusion that the expanded health warnings are “an effective means to help consumers understand and appreciate the risks of using tobacco products.” Deeming Rule, 81 Fed. Reg. at 29,064; see also id. at 28,981. That sounds more like an article of faith than a finding. It was not enough to satisfy the D.C. Circuit: “Because the regulation contains no discussion tying the warnings to reduced smoking, the FDA failed to bridge the gap between effective communication and fewer smokers.”
The second best that the FDA could offer in support of its Deeming Rule was its statement in the notice of proposed rulemaking to the effect that the various cigar and pipe regulations it was proposing, including the new warnings, age and identification requirements “would be appropriate for the protection of the public health with respect to the risks and benefits to the population as a whole, including the increased likelihood that existing users will quit using tobacco products and the decreased likelihood that new users will initiate tobacco product use.” Deeming Tobacco Products to Be Subject to the FDCA, 79 Fed. Reg. 23,142, 23,146 (proposed Apr. 25, 2014) (NPRM). Can you say “smoke and mirrors”? Quite correctly, the D.C. Circuit refused to uphold a final rule based on reasoning that appears only in the notice. The APA prescribes a three-step procedure for notice-and-comment rulemaking: notice, public comments, and then issuance of a final rule with a statement of basis and purpose that must address significant comments. Here, the FDA insisted that its notice was as good as the final findings. Comments? FDA needs no stinking comments. Maybe there was no proverbial smoke-filled room, but the FDA sure makes it sound like the fix was in. It is administrative arrogance at its most breathtaking. Too bad for the FDA that there is now robust judicial review of agency whim and caprice. The D.C. Circuit held that it could not “uphold a final rule based on strands of reasoning that precede public comment and appear nowhere in the final rule.” Even if the notice somehow assumed the cloak of finality, it coagulated the effects of warnings with other restrictions, plus it did “little more than parrot the governing statutory language, rather than set forth evidence or a reasonable explanation of the likelihood that the proposed warnings would cause smokers to quit and prevent others from starting.” Close, but no cigar.
The D.C. Circuit opinion in Cigar Ass’n is worth celebrating. We might even break out an old Romeo y Julieta. At least let’s break out an old cigar joke. A cigar smoker bought several hundred expensive cigars and had them insured against fire. After he’d smoked them all, he filed a claim, pointing out that the cigars had been destroyed by fire. The insurance company refused to pay, and the man sued. A judge ruled that because the insurance company had agreed to insure against fire, it was legally responsible. The insurer paid the claim and and when the man accepted the money, the insurer had him arrested for arson.