Cigar Ass'n of Am. v. U.S. Food & Drug Admin.

• Decision Date: 20 July 2021
• Docket Number: No. 20-5266,20-5266
• Citation: 5 F.4th 68
• Parties: CIGAR ASSOCIATION OF AMERICA, et al., Appellants v. UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

5 F.4th 68

CIGAR ASSOCIATION OF AMERICA, et al., Appellants

v.UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Appellees

No. 20-5266

United States Court of Appeals, District of Columbia Circuit.

Argued May 7, 2021

Decided July 20, 2021

Michael J. Edney argued the cause for appellants. With him on the briefs were Shannen W. Coffin, Mark S. Raffman, and Andrew Kim.

Lindsey Powell, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Brian M. Boynton, Acting Assistant Attorney General, Mark B. Stern and Alisa B. Klein, Attorneys, and Annamarie Kempic, Deputy Chief Counsel for Litigation Food and Drug Division, Department of Health and Human Services.

Andrew N. Goldfarb and William B. Schultz were on the brief for amici curiae Public Health Groups in support of appellees.

Before: Rogers, Tatel and Walker, Circuit Judges.

Concurring Opinion by Circuit Judge Walker.

Rogers, Circuit Judge:

This is a continuing challenge by three non-profit trade associations to the Food and Drug Administration ("FDA") rule deeming cigars and pipe tobacco, among other tobacco products, to be subject to regulation under the Tobacco Control Act. Last year, this court held that the rule's warning requirements for cigars and pipe tobacco violated the Tobacco Control Act and the Administrative Procedure Act.

Cigar Ass'n of Am. v. FDA , 964 F.3d 56, 61–64 (D.C. Cir. 2020). Now the trade associations challenge other unrelated aspects of the rule as well as an accompanying rule assessing user fees for manufacturers and importers of cigars and pipe tobacco but not of other newly deemed products like e-cigarettes. For the following reasons, we affirm the grant of summary judgment to FDA.

I.

The Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, 123 Stat. 1776 (2009) ("Tobacco Control Act"), amended the Federal Food, Drug, and Cosmetic Act "to establish a comprehensive regulatory scheme for tobacco products." Cigar Ass'n of Am. , 964 F.3d at 59. The Tobacco Control Act defines "tobacco product" as "any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product." 21 U.S.C. § 321(rr)(1). It regulates "all cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco," as well as "any other tobacco products" that FDA "by regulation deems to be subject to" the Tobacco Control Act. Id . § 387a(b); Office of the Commissioner Reorganization , 74 Fed. Reg. 41,713, 41,732 (Aug. 18, 2009).

In May 2016, FDA promulgated a rule deeming all products that meet the Tobacco Control Act's definition of "tobacco product," including any "component" and "part" but excluding any "accessory" of those products, to be subject to the Tobacco Control Act. Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic Act, as Amended by the Family Smoking Prevention and Tobacco Control Act; Restrictions on the Sale and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products , 81 Fed. Reg. 28,974, 28,975 (May 10, 2016) (codified at 21 C.F.R. §§ 1100, 1140 & 1143) ("Deeming Rule"). Noting that it was "using the terms ‘component’ and ‘part’ interchangeably and without emphasizing the distinction between the terms," FDA defined "component or part" to mean "any software or assembly of materials intended or reasonably expected: (1) To alter or affect the tobacco product's performance, composition, constituents or characteristics; or (2) to be used with or for the human consumption of a tobacco product." Id . In the preamble, it stated that a pipe used to consume pipe tobacco was such a "component or part." Id . at 29,042.

"The Deeming Rule subjects newly regulated tobacco products, including cigars and pipe tobacco, to requirements akin to those previously imposed by statute on cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco." Cigar Ass'n of Am. , 964 F.3d at 60. One such requirement is premarket review by FDA before the introduction into interstate commerce of any "new tobacco product," defined as a tobacco product that "was not commercially marketed in the United States as of February 15, 2007" or that was modified after that date. 21 U.S.C. §§ 387j(a)(1)–(2). This lookback date is called the "grandfather date." Under the Tobacco Control Act, manufacturers may obtain premarket authorization by showing that "the tobacco product is substantially equivalent ... to a tobacco product commercially marketed (other than for test marketing) in the United States as of February 15, 2007, or to a tobacco product that [FDA] has previously determined ... is substantially equivalent." Id. § 387e(j)(1)(A)(i). To do so, they must submit a "report to [FDA] (in such form and manner as [FDA] shall prescribe)." Id . § 387e(j)(1).

To allow manufacturers time to prepare premarket review applications, in the preamble to the Deeming Rule, FDA adopted "staggered compliance periods" during which it would defer enforcement of the Tobacco Control Act's premarket review requirements for newly deemed products that were being marketed as of the Rule's effective date. 81 Fed. Reg. at 29,010. Pertinently, it stated that it did not intend to enforce the requirements for 18 months from the Rule's effective date while manufacturers submitted substantial equivalence reports and for an additional 12 months while it reviewed those reports. See id . at 29,011.

On the same day that it issued the Deeming Rule, FDA promulgated a separate rule addressing the assessment of user fees for manufacturers and importers of cigars and pipe tobacco. See Requirements for the Submission of Data Needed to Calculate User Fees for Domestic Manufacturers and Importers of Cigars and Pipe Tobacco , 81 Fed. Reg. 28,707 (May 10, 2016) (codified at 21 C.F.R. § 1150) ("User Fees Rule"). In the preamble, FDA stated that it was precluded by the Tobacco Control Act from assessing user fees for manufacturers and importers of tobacco products, such as e-cigarettes, beyond six enumerated classes of tobacco products. See id . at 28,709 –11.

Appellants, three non-profit trade associations representing cigar and pipe tobacco manufacturers, importers, distributors, suppliers, and consumers, filed a lawsuit challenging the Deeming Rule and the User Fees Rule in the district court in July 2016. FDA announced in July 2017 that it intended to make regulatory changes that might affect certain of appellants’ claims. See Cigar Ass'n of Am. v. FDA , 315 F. Supp. 3d 143, 158 (D.D.C. 2018). Appellants have since "sought resolution of their claims piecemeal." Cigar Ass'n of Am. v. FDA , 480 F. Supp. 3d 256, 265 (D.D.C. 2020). The present appeal concerns only the district court's grant of summary judgment to FDA on five of appellants’ Administrative Procedure Act ("APA") challenges to the Deeming Rule concerning its implementation of the Tobacco Control Act's premarket review requirements, underlying cost-benefit analysis, and classification of a pipe as a "component or part" of a tobacco product subject to regulation under the Tobacco Control Act, as well as appellants’ APA challenge to the User Fees Rule. See Cigar Ass'n of Am. v. FDA , 480 F. Supp. 3d at 266–77 ; Cigar Ass'n of Am. , 315 F. Supp. 3d at 177–82, 185–88.

II.

The court must uphold agency action under the APA unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2). Further, the "court is not to substitute its judgment for that of the agency, but instead to assess only whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Dep't of Homeland Sec. v. Regents of the Univ. of California , ––– U.S. ––––, 140 S. Ct. 1891, 1905, 207 L.Ed.2d 353 (2020) (internal citations and quotation marks omitted). When the district court reviews agency action under the APA, the court reviews the district court's decision de novo . Cigar Ass'n of Am. , 964 F.3d at 61. Applying that standard, appellants’ APA challenges to the Deeming Rule and the User Fees Rule in the instant case are unpersuasive.

A. The Deeming Rule

. Appellants first challenge FDA's failure to provide instructions about the form and manner of substantial equivalence reports specific to cigars and pipe tobacco. They emphasize that the Tobacco Control Act provides that manufacturers shall "at least 90 days prior to making such introduction or delivery, report to the Secretary (in such form and manner as the Secretary shall prescribe )." 21 U.S.C. § 387e(j)(1) (emphasis added).

The court need not decide whether § 387e(j)(1) required FDA to supply product-specific instructions before the due date for substantial equivalence reports. In the preamble to the Deeming Rule, FDA stated that it did not intend to enforce the Act's premarket review requirements for 18 months from the Rule's effective date while manufacturers submitted substantial equivalence reports. See 81 Fed. Reg. at 29,011. Appellants acknowledge that FDA did not need to include any form and manner instructions in the Deeming Rule itself and could have provided such instructions after the Rule's promulgation. See Appellants Br. 18–19; Oral Arg. Rec. 2:02. Therefore, even assuming FDA's failure to provide such instructions violated § 387e(j)(1), that failure is not an error stemming from the Deeming Rule.

Furthermore, the court need not consider appellants’ contention that FDA acted arbitrarily and capriciously by inadequately considering "whether instructions needed to be in place before substantial equivalence reports were due," Appellants Br. 20–21, because appellants "forfeited" it by failing to raise it before the district court, Cigar Ass'n of Am. , 480 F. Supp. 3d at 274 ; see District of Columbia v. Air Florida, Inc., 750 F.2d 1077, 1084 (D.C. Cir. 1984).

2. Appellants next contend that the Deeming Rule is arbitrary and...