Bellion Spirits, LLC v. United States

Citation7 F.4th 1201
Decision Date06 August 2021
Docket NumberNo. 19-5252,19-5252
Parties BELLION SPIRITS, LLC and Chigurupati Technologies Private Ltd., Appellants v. UNITED STATES of America, et al., Appellees
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Jonathan W. Emord argued the cause for appellants. With him on the briefs was Peter A. Arhangelsky.

Leif Overvold, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Joseph H. Hunt, Assistant Attorney General, and Daniel Tenny, Attorney.

Before: Srinivasan, Chief Judge, Katsas, Circuit Judge, and Ginsburg, Senior Circuit Judge.

Srinivasan, Chief Judge:

Bellion Spirits, LLC produces and distributes vodka. Bellion infuses its vodka with NTX, a proprietary blend that Bellion contends mitigates alcohol's damage to a person's DNA.

In 2016, Bellion filed a petition with the Alcohol and Tobacco Tax and Trade Bureau (TTB), the agency that regulates alcoholic beverage labeling and advertising. The petition sought to determine whether Bellion could lawfully make certain claims on labels and in advertisements about the alleged health benefits of NTX. TTB denied the petition on the grounds that the claims were scientifically unsubstantiated and misleading. TTB thus concluded that including the claims on vodka labels and in advertisements would violate the Federal Alcohol Administration Act and TTB's regulations.

Bellion then brought this suit in the district court. Bellion contends, among other things, that TTB's denial of the petition violates Bellion's First Amendment rights and that the standards under which TTB rejected the proposed claims about NTX are unconstitutionally vague. The district court granted TTB's motion for summary judgment. Because we agree with the district court that Bellion's various challenges lack merit, we affirm.

I.
A.

The Federal Alcohol Administration Act regulates the production, sale, labeling, and advertising of alcoholic beverages. See 27 U.S.C. §§ 201 – 219a. The Act requires product labels and advertisements for alcoholic beverages to comply with regulations issued by the Secretary of the Treasury. Id. § 205(e), (f). And the Act calls for those regulations to prevent "deception of the consumer" and to "prohibit, irrespective of falsity, such statements relating to age, manufacturing processes, analyses, guarantees, and scientific or irrelevant matters as the Secretary of the Treasury finds to be likely to mislead the consumer." Id. The regulations also must "prohibit statements" in labeling or advertising that are "false, misleading, obscene, or indecent." Id. The Secretary of the Treasury has delegated responsibility for issuing those regulations to the Administrator of TTB. U.S. Dep't of Treasury, Treasury Order 120-01 (Dec. 10, 2013), https://home.treasury.gov/about/general-information/orders-and-directives/treasury-order-120-01.

TTB's regulations addressing alcoholic beverage labels and advertisements prohibit statements that are "false or untrue in any particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific or technical matter, tend[ ] to create a misleading impression." 27 C.F.R. § 5.42(a)(1) ; see id. § 5.65(a)(1). The regulations also specifically address claims made on labels and in advertisements about the relationship between alcohol consumption and human health. Those regulations address two categories of claims about alcohol's effects on health.

First, the broader category of "[h]ealth-related statements" encompasses "any statement related to health," including "statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, distilled spirits, or any substance found within the distilled spirits, and health benefits or effects on health." Id. § 5.65(d)(1)(i). TTB's regulations pertaining to health-related statements state that an alcoholic-beverage label or advertisement "may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects on health of alcohol consumption." Id. §§ 5.42(b)(8)(ii)(A) ; 5.65(d)(2)(i). TTB evaluates health-related statements "on a case-by-case basis," and the agency may require "a disclaimer or some other qualifying statement to dispel any misleading impression" created by health-related statements. Id. § 5.65(d)(2)(i).

TTB describes the second, narrower type of claims about alcohol and human health as "specific health claims." Id. § 5.65(d)(1)(ii). A specific health claim is "a type of health-related statement that, expressly or by implication, characterizes the relationship of the distilled spirits, alcohol, or any substance found within the distilled spirits, to a disease or health-related condition." Id. A specific health claim must comply with the more general regulations applicable to health-related statements. See id. In addition, a specific health claim will be approved only if it is supported by scientific or medical evidence, contains appropriate qualifiers, and discloses relevant health risks. See id. §§ 5.42(b)(8)(ii)(B)(2) ; 5.65(d)(2)(ii). If a specific health claim is accompanied by a qualifier or disclaimer, that information "must appear as part of the specific health claim." Id.

B.

TTB provides an avenue for regulated entities to seek advisory rulings on matters relating to the Act and its implementing regulations. "Any person who is in doubt as to any matter arising in connection with the [Act] may request a ruling thereon by addressing a letter to the appropriate TTB officer." Id. § 70.471(a). There is no requirement for a regulated entity to seek such a ruling before including a health-related statement or a specific health claim in advertisements. See 27 U.S.C. § 205(e), (f).

While regulated entities thus need no preapproval to make health-related statements or specific health claims in advertisements, they generally do need preapproval to make such statements or claims on labels. In particular, before bottlers and importers introduce alcoholic beverages into interstate or foreign commerce, they generally must obtain a certificate of label approval (COLA) from TTB. Id. § 205(e). As part of that process, TTB reviews statements made on an alcoholic-beverage label—including health-related statements and specific health statements—to determine whether the proposed label "complies with applicable laws and regulations." 27 C.F.R. § 13.21(a). TTB has 90 days after receiving a COLA application to "notify the applicant whether the application has been approved or denied," unless TTB extends that period by 90 days under "unusual circumstances." Id. § 13.21(b). When TTB denies a COLA application, it must issue a notice setting forth the reasons for the denial. Id. § 13.23. The applicant may then submit a new amended application or file up to two administrative appeals. See id. §§ 13.25, 13.27.

Although TTB has primary responsibility for regulating the labeling and advertising of alcoholic beverages, the Food and Drug Administration (FDA) also plays a role. For instance, the rulemaking that led to the regulations concerning health-related statements noted that TTB's predecessor agency had "always utilized, as TTB does now, the scientific and public health expertise of FDA in approving ingredients in alcohol beverages, requiring label disclosure of certain substances, and identifying adulterated alcohol beverages that are deemed mislabeled." Health Claims and Other Health-Related Statements in the Labeling and Advertising of Alcohol Beverages, 68 Fed. Reg. 10,076, 10,078 (Mar. 3, 2003). Consistent with that recognition, TTB's regulations addressing specific health claims state that "TTB will consult with [FDA], as needed, on the use of a specific health claim on a distilled spirits label." 27 C.F.R. § 5.42(b)(8)(ii)(B)(1).

C.

In April 2016, Bellion Spirits, LLC, and Chigurupati Technologies Private Ltd. filed a petition with TTB. Bellion Spirits is the producer and distributor of Bellion brand vodka. Chigurupati Technologies is a research and development institution that developed a proprietary blend of ingredients known as NTX, which Bellion includes in its vodka. Bellion's petition inquired about whether it could lawfully make certain statements about the health benefits of NTX on its vodka labels and in its advertising.

The petition asked TTB to review eight proposed statements, two of which are in issue here. Those two proposed statements are: (i) "NTX helps protect DNA from alcohol-induced damage," and (ii) "NTX reduces alcohol-induced DNA damage." Bellion Petition for Health Claims, J.A. 426. Bellion also submitted a proposed disclaimer that would accompany those claims. The disclaimer states:

NTX does not protect against all health risks associated with moderate and heavy levels of alcohol consumption, including, but not limited to, motor vehicle accidents, high blood pressure

, stroke, cancer, birth defects, psychological problems, and alcohol dependency. Do not consume alcohol if: you are younger than the legal drinking age; you are pregnant or may become pregnant; you are taking medicine that can interact with alcohol; you have a medical condition for which alcohol is contraindicated; you plan to drive; or you cannot restrict your drinking to moderate levels. If you consume alcohol, only consume it in moderation. "Moderation" means up to one drink per day for women and up to two drinks per day for men.

Id. at 427.

Bellion did not file a COLA application. And its petition stated that "[p]etitioners are not requesting the use of specific health-related statements on a specific label." Id. at 433. Rather than make use of the preapproval process for labels, Bellion sought advisory guidance from TTB under 27 C.F.R. § 70.471(a) about whether its claims would comply with the Act and the agency's regulations. Shortly after...

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