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Philip Morris USA and Sherman Group Holdings File Lawsuit to Invalidate New FDA Cigarette Health Warnings

The following is an update from the National Association of Tobacco Outlets (NATO) sourced through their May 8th online bulletin. Reposted with permission.

On May 6, 2020, Philip Morris USA Inc. and Sherman Group Holdings, LLC filed a lawsuit in Federal District Court for the District of Columbia against the U.S. Food and Drug Administration seeking to invalidate both the FDA’s recently issued rule for new text and graphic cigarette health warnings on cigarette packages, cigarette cartons, and cigarette advertisements and the requirement under the Family Smoking Prevention and Tobacco Control Act that the FDA promulgate such graphic health warnings (a copy of the lawsuit complaint is below).

This is the second federal lawsuit to be filed against the FDA seeking to invalidate the new graphic cigarette health warnings. The other lawsuit was filed in April of this year against the FDA by R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, ITG Brands, Liggett Group and five tobacco retailers.

Background: Based on decisions issued by the U.S. Supreme Court, the First Amendment to the U.S. Constitution protects free speech, which includes “commercial speech” or advertising since advertising is how manufacturers and retailers “speak” to the general public. The First Amendment free speech protections have been applied specifically to tobacco products.

The Family Smoking Prevention and Tobacco Control Act, the law that granted the FDA the authority to regulate tobacco products, directs the FDA to issue regulations requiring new text and color graphic health warnings depicting the negative health consequences of cigarette smoking. The FDA issued a rule in June of 2011 requiring nine text warnings and graphic pictures to be printed on cigarette packages, cigarette cartons, and cigarette advertisements.

Several cigarette manufacturers challenged this first text and graphic cigarette health warning rule in court on the grounds that the warnings violated the free speech protections under the First Amendment to the U.S. Constitution. On August 24, 2012, the U.S. Circuit Court of Appeals for the District of Columbia overturned the first FDA cigarette health warnings as violating the First
Amendment and sent the matter back to the FDA to create new warnings that comply with constitutional standards.

On March 17, 2020, the FDA issued a rule requiring eleven new health warnings on cigarette packages, cigarette cartons, and cigarette advertisements. These new cigarette health warnings consist of eleven text warning statements accompanied by a photo-realistic graphic color image. The new health warnings are shown at the end of this article.

Legal Claims Against the New FDA Cigarette Health Warnings: The lawsuit filed by Philip Morris USA Inc. and Sherman Group Holdings LLC against the FDA has seven different claims, including the following key claims:

  1. The new rule requiring eleven different text/graphic cigarette health warnings to appear on cigarette packages, cigarette cartons, and cigarette advertisements violates the First Amendment to the U.S. Constitution.
  2. The Family Smoking Prevention and Tobacco Control Act’s requirement that the FDA issue a rule requiring text and graphic cigarette health warnings violates the Frist Amendment to the U.S. Constitution.
  3. The FDA violated the Administrative Procedures Act.
  4. The FDA violated the Family Smoking Prevention and Tobacco Control Act by adopting a rule with eleven new graphic and text warnings when the law only allows for nine such warnings.

First Amendment Claim on the FDA Rule: This claim argues that the new graphic cigarette warnings would force manufacturers to convey the government’s anti-smoking message “through shocking and inflammatory warnings aimed at eliciting negative emotional responses rather than informing consumers.” In addition, the requirement that the text and graphic warnings cover the top 50% of the front and back of each cigarette package, the left 50% of the front and back panels of cigarette cartons, and the top 20% of cigarette advertisements is more extensive that necessary to support the FDA’s newly stated government interest of educating consumers about the lesser known health risks of cigarette smoking. Moreover, the graphics are misleading because they depict “extreme and unlikely conditions and treats conditions of differing severity as if they were equal.”

First Amendment Claim Against Family Smoking Prevention and Tobacco Control Act: With the 2012 court decision that held the text and graphic cigarette health warnings were unconstitutional and the new warnings also raising the same First Amendment free speech issues, there is an underlying problem with the Family Smoking Prevention and Tobacco Control Act itself. Specifically, Congress did not include any findings or justification in the provisions of the Family Smoking Prevention and Tobacco Control Act itself regarding the need to impose such a burden on the free speech rights of cigarette manufacturers. Moreover, the size and placement requirements of the graphic warnings as specified in the Family Smoking Prevention and Tobacco Control Act unduly burden the manufacturer’s right to advertise their lawful products.
This means that any text and graphic cigarette health warnings issued by the FDA will suffer from the same constitutional shortcomings, whether that be the first set of warnings already struck down by the courts, the current warnings now the subject of two lawsuits, or any future version of graphic cigarette health warnings. As a result, there is no set of circumstances under which the text and graphic cigarette warning requirement would be valid, which necessitates the invalidating of the suspect provision in the Family Smoking Prevention and Tobacco Control Act.

FDA Violated the Administrative Procedures Act: The federal Administrative Procedures Act establishes requirements for federal agencies to draft and implement new rules and regulations. The lawsuit claims that the FDA did not: (1) provide meaningful notice to the public of the proposed graphic cigarette health warnings, (2) disclose to the public key technical data about the health warnings, or (3) disclose reports about the FDA’s own studies that sought to support the graphic cigarette health warnings.

FDA Violated the Family Smoking Prevention and Tobacco Control Act: The Family Smoking Prevention and Tobacco Control Act authorizes the FDA to issue nine new text and graphic cigarette health warnings. However, the FDA rule includes 11 such warnings, two more warnings than allowed by the law. Since the Family Smoking Prevention and Tobacco Control Act does not authorize the FDA to issue more than nine warnings, the eleven-warning rule does not comply with the law.

Request for Relief: Based on the numerous claims in the lawsuit, Philip Morris USA and Sherman Group Holdings are asking the Federal District Court for the District of Columbia for the following relief:

  1. Declare that the new graphic cigarette health warning rule and the Family Smoking Prevention and Tobacco Control Act violate the First Amendment to the U.S. Constitution.
  2. Declare that the new graphic cigarette health warning rule violates the Administrative
    Procedures Act and the Family Smoking Prevention and Tobacco Control Act.
  3. Enter an injunction prohibiting the FDA from enforcing both the new rule until 15
    months after a final court decision on the merits of the case.
  4. Enter an injunction against the graphic cigarette health warning requirements under the
    rule and the Family Smoking Prevention and Tobacco Control Act.
  5. Vacate or invalidate the new graphic cigarette health warning rule in its entirety.
  6. Other relief based on additional claims made in the lawsuit.

New FDA Health Warnings and Graphic Images: The new text and graphic cigarette health warnings which are the subject of the lawsuit are shown below:

Manufacturers and FDA File Motion to Extend Effective Date of Graphic Cigarette Health Warnings

On April 3, 2020, R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, ITG Brands, Liggett Group and five tobacco retailers filed a lawsuit in the Federal District Court for the Eastern District of Texas against the U.S. Food and Drug Administration. The lawsuit seeks to invalidate both the FDA’s recently issued rule for new text and graphic cigarette health
warnings plus the Congressionally-mandated requirement under the Family Smoking Prevention and Tobacco Control Act directing the FDA to issue these cigarette health warnings.

On May 6, 2020, the plaintiffs and the FDA filed a joint motion with the Federal District Court requesting a 120-day extension of the effective date for the new graphic cigarette health warnings. In the joint motion, the parties stated that due to the disruptive effects of the global outbreak of COVID-19 on both the regulated community affected by the graphic cigarette health warning rule and on the FDA, the FDA agrees that justice requires a 120-day postponement of the effective date for the new health warnings, from June 18, 2021, to October 16, 2021. A decision by the Federal District Court on this joint motion to extend the effective date is pending.

State Legislative Bill Introductions

State tobacco-related legislative bills that have been introduced in the past week are listed below alphabetically by state:

New Jersey: Assembly Bill 4001 (same as Senate Bill 2399) establishes certain regulations regarding vapor products.

State Legislative Bill Actions

State tobacco-related legislative bills that have been acted on by a state legislative committee or state legislature are listed below alphabetically by state:

California: Senate Bill 793, which prohibits the sale of all flavored tobacco products, was amended on May 5, 2020 to also prohibit flavored tobacco product enhancers.

Maryland: House Bill 732, which would have taxed electronic smoking devices at 12%; imposed a tax of 60% on vaping liquid in containers less than 5ml; increased the cigarette tax by $1.75 per 20 pack; and increased the OTP tax to 53%, was vetoed by Governor Hogan on May 7, 2020.

Minnesota: House File 331, which increases the tobacco sales age to 21 years of age and adds charter schools to the prohibition of tobacco in schools, is scheduled to be considered on the House Floor on Saturday, May 9, 2020.