Sottera, Inc. v. Food & Drug Admin.

• Decision Date: 24 January 2011
• Docket Number: No. 10-5032,10-5032
• Citation: 393 U.S.App.D.C. 257,627 F.3d 891
• Court: U.S. Court of Appeals — District of Columbia Circuit
• Parties: SOTTERA, INC., doing business as NJOY, Appellee v. FOOD & DRUG ADMINISTRATION, et al., Appellants.

627 F.3d 891
393 U.S.App.D.C. 257

SOTTERA, INC., doing business as NJOY, Appellee
v.
FOOD & DRUG ADMINISTRATION, et al., Appellants.

No. 10-5032.

United States Court of Appeals,
District of Columbia Circuit.

Argued Sept. 23, 2010.
Decided Dec. 7, 2010.
Rehearing En Banc Denied Jan. 24, 2011.

627 F.3d 892

Appeal from the United States District Court for the District of Columbia (No. 1:09-cv-00771-RJL).

Alisa B. Klein, Attorney, U.S. Department of Justice, argued the cause for appellants. With her on the briefs were Ronald C. Machen, Jr., U.S. Attorney, Mark B. Stern and Samantha L. Chaifetz, Attorneys, Ralph S. Tyler, Chief Counsel, United States Department of Health and Human Services, Eric M. Blumberg, Deputy Chief Counsel, and Karen E. Schifter, Associate Chief Counsel. Drake S. Cutini, Attorney, U.S. Department of Justice, entered an appearance.

William B. Schultz was on the brief for amici curiae American Academy of Pediatrics, et al. in support of appellants.

Gregory G. Garre argued the cause for appellee Sottera, Inc. With him on the brief were Richard P. Bress, John R. Manthei, and Jessica E. Phillips.

Deborah M. Shelton and Christopher M. Loveland were on the brief for amici curiae Smokefree Pennsylvania, et al. in support of appellee.

Daniel J. Popeo, Richard A. Samp, Coleen E. Klasmeier, and Rebecca K. Wood were on the brief for amicus curiae Washington Legal Foundation in support of appellee.

Before: GARLAND and KAVANAUGH, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge WILLIAMS.

Opinion concurring in the judgment filed by Circuit Judge GARLAND.

WILLIAMS, Senior Circuit Judge:

Sottera, Inc., which does business as NJOY, is an importer and distributor of "electronic cigarettes" or "e-cigarettes," a product that enables users to inhale vaporized nicotine. The question before us is whether Congress has authorized the Food and Drug Administration ("FDA") to regulate e-cigarettes under the drug/device provisions of the Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. § 351 et seq., or under the Family Smoking Prevention and Tobacco Control Act of 2009 (the "Tobacco Act"), Pub.L. 111-31, 123 Stat. 1776. We think that the statutes, properly read in light of the Supreme Court's decision in FDA v. Brown & Williamson, 529 U.S. 120, 120 S.Ct. 1291, 146 L.Ed.2d 121 (2000), locate the product under the Tobacco Act.

* * *

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Electronic cigarettes are battery-powered products that allow users to inhale nicotine vapor without fire, smoke, ash, or carbon monoxide. NJOY Compl. at 2. Designed to look like a traditional cigarette, each e-cigarette consists of three parts: the nicotine cartridge, the atomizer or heating element, and the battery and electronics. The plastic cartridge serves as the mouthpiece and contains liquid nicotine, water, propylene glycol, and glycerol. Id. at 5. The atomizer vaporizes the liquid nicotine, and the battery and electronics power the atomizer and monitor air flow. Id. When the user inhales, the electronics detect the air flow and activate the atomizer; the liquid nicotine is vaporized, and the user inhales the vapor. Id.

NJOY has imported and distributed e-cigarettes since 2007. Id. at 2, 4. The liquid nicotine in each e-cigarette is derived from natural tobacco plants, Decl. of John Leadbeater at 2, and NJOY claims that its product is marketed and labeled for "smoking pleasure," rather than as a therapeutic or smoking cessation product. NJOY Compl. at 2; Decl. of John Leadbeater at 2. On April 15, 2009 the FDA ordered that a shipment of NJOY's e-cigarettes be denied entry into the United States, asserting that the e-cigarettes appeared to be adulterated, misbranded, or unapproved drug-device combinations under the FDCA. April 20, 2009 Notice of FDA Action.

Also in April 2009, another importer and distributor of e-cigarettes, Smoking Everywhere, Inc., sought a preliminary injunction barring the FDA and various officials from denying their products entry into the United States and from regulating e-cigarettes under the drug/device provisions of the FDCA. Smoking Everywhere Compl. at 1-2, 7. NJOY joined as an intervenor-plaintiff and filed its own complaint and request for a preliminary injunction. NJOY Compl. at 3; Mem. Op. at 7.

Smoking Everywhere and NJOY argued that the FDA can regulate electronic cigarettes, as they propose to market them, only under the Tobacco Act, claiming that the Supreme Court's opinion in Brown & Williamson foreclosed FDCA drug/device jurisdiction over tobacco products marketed without claims of therapeutic effect. The district court agreed and granted the injunction. While this appeal was pending, Smoking Everywhere voluntarily dismissed its complaint against the FDA, leaving NJOY as the sole appellee. See NJOY Br. at 4.

When deciding whether to grant a preliminary injunction, a district court must consider four familiar factors: whether "(1) the plaintiff has a substantial likelihood of success on the merits; (2) the plaintiff would suffer irreparable injury were an injunction not granted; (3) an injunction would substantially injure other interested parties; and (4) the grant of an injunction would further the public interest." Ark. Dairy Coop. Ass'n, Inc. v. U.S. Dep't of Agric., 573 F.3d 815, 821 (D.C.Cir.2009) (citing Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1317-18 (D.C.Cir.1998)). We review the district court's weighing of these factors under an abuse of discretion standard, but review questions of law de novo. Id.; see also Davis v. Pension Benefit Guaranty Corp., 571 F.3d 1288, 1291 (D.C.Cir.2009).

* * *

Under the FDCA, the FDA has authority to regulate articles that are "drugs," "devices," or drug/device combinations. 21 U.S.C. § 321(g)(1) defines drugs to include

(B) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; and (C) articles (other than

627 F.3d 894

food) intended to affect the structure or any function of the body of man or other animals.

21 U.S.C. § 321(g)(1)(B) & (C). The statute defines devices similarly, see 21 U.S.C. § 321(h)(2) & (3); products that are "combination[s] of a drug, device, or biological product" are regulated as combination products, see 21 U.S.C. § 353(g)(1).

Until 1996, the FDA had never attempted to regulate tobacco products under the FDCA (with one exception, irrelevant for reasons discussed below) unless they were sold for therapeutic uses, that is, for use in the "diagnosis, cure, mitigation, treatment, or prevention of disease" under § 321(g)(1)(B). Cf. Action on Smoking and Health v. Harris, 655 F.2d 236 (D.C.Cir.1980). But in that year, the FDA changed its long-held position, promulgating regulations affecting tobacco products as customarily marketed, i.e., ones sold without therapeutic claims. See Regulations Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco to Protect Children and Adolescents, 61 Fed.Reg. 44,396 (Aug. 28, 1996). The agency asserted that nicotine is a drug that affects the structure or function of the body under § 321(g)(1)(C) and that cigarettes and smokeless tobacco were therefore drug/device combinations falling under the FDA's regulatory purview, even absent therapeutic claims. See 61 Fed.Reg. at 44,397, 44,400.

In FDA v. Brown & Williamson, the Supreme Court rejected the FDA's claimed FDCA authority to regulate tobacco products as customarily marketed. Looking to the FDCA's "overall regulatory scheme," the "tobacco-specific legislation" enacted since the FDCA, and the FDA's own frequently asserted position, it held that Congress had "ratified ... the FDA's plain and resolute position that the FDCA gives the agency no authority to regulate tobacco products as customarily marketed." 529 U.S. at 126, 159, 120 S.Ct. 1291.

To fill the regulatory gap identified in Brown & Williamson, Congress in 2009 passed the Tobacco Act, Pub.L. No. 111-31, 123 Stat. 1776, 21 U.S.C. §§ 387 et seq., providing the FDA with authority to regulate tobacco products. The act defines tobacco products so as to include all consumption products derived from tobacco except articles that qualify as drugs, devices, or drug-device combinations under the FDCA:

(rr)(1) The term "tobacco product" means any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product ...

(2) The term "tobacco product" does not mean an article that is a drug under [the FDCA's drug provision], a device under [the FDCA's device provision], or a combination product described in [the FDCA's combination product provision].

21 U.S.C. § 321(rr).

The Tobacco Act itself states that it does not "affect, expand, or limit" the FDA's jurisdiction to regulate products under the drug/device provisions of the FDCA, 21 U.S.C. § 387a(c)(1), and the district court and parties themselves appear to agree that the Tobacco Act did not expand the category of drugs, devices, and combination products subject to FDCA jurisdiction in the wake of Brown & Williamson. See Mem. Op. 9 n. 4. The question before us, therefore, is whether the FDA can regulate electronic cigarettes under the FDCA's drug/device provisions or whether it can regulate them only under the Tobacco Act's provisions.

The FDA at one point argues that its decision to regulate electronic cigarettes under the FDCA's drug/device provisions

627 F.3d 895

is entitled to Chevron deference. See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). FDA Br. at 20. But in fact the case does not turn on matters of statutory interpretation. Rather, as the FDA itself argues, the Tobacco Act did not alter the FDA's authority under the FDCA. FDA Br. at 19; FDA Reply Br. at 21. And with respect to tobacco products, the breadth of that authority is governed by the Supreme Court's decision in Brown & Williamson. We therefore...