Premium Cigar Industry Scores Another Win in Fight Against FDA

Court refers to FDA's regulation of premium cigars as "arbitrary and capricious"

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FDA | Premium Cigar Regulation News

Was the FDA’s decision not to exempt premium cigars from its Deeming Rule random and fickle? Did the FDA fail to reasonably take into account all of the costs and benefits of subjecting small businesses within the premium cigar industry to regulation? These are two questions recently ruled on in the ongoing lawsuit waged by cigar industry trade associations against the U.S. Food and Drug Administration.

Cigar Association of America et al. v. U.S. Food and Drug Administration is an ongoing challenge to the FDA’s attempts to regulate premium cigars as it does other deemed tobacco products like cigarettes, pipe tobacco, and e-cigarettes. In 2016, the FDA stated that premium cigars were subject to the Family Smoking Prevention and Tobacco Control Act of 2009. After premium cigars were “deemed,” various cigar trade associations challenged the Deeming Rule and, as the court states, they were largely successful in striking down various parts of the Deeming Rule including warning label requirements, advertising restrictions, and Premarket Tobacco Product Application (PMTAs).

Earlier challenges to the FDA’s regulatory power of premium cigars focused on the particular regulatory consequences of the FDA’s decision to deem premium cigars. In this stage of the case, the cigar trade associations argued that the FDA “erroneously based its decision on the belief that there was no evidence in the administrative record of different usage patterns for premium cigars that might lead to different health outcomes, when in fact there was such evidence,” the court document states. Another claim examined was one made by the FDA that had claimed youth usage of premium cigars was premised on “a flawed reading of a particular study.”

When trying to figure out how to regulate premium cigars, the FDA sought public comment to make sure that any exclusion granted to premium cigars would only apply to “those cigars that, because of how they are used, may have less of a public health impact than other types of cigars.” This, according to the court, signaled that evidence of different usage patterns and their public health impacts would be highly considered when deciding whether or not to exclude premium cigars from the scope of the final rule. The FDA did not receive any evidence that premium cigar smokers were not subject to disease risk and addiction. The agency also made other “no data” claims elsewhere in the Final Deeming Rule, including data supporting the claim that there are different patterns of use of premium cigars and that “these patterns result in lower health risks.” These “no data” claims were thus argued to be “arbitrary and capricious” because of the lack of evidence showing a connection between less frequent use among premium cigar smokers and reduced public health risks. This lack of data or evidence situation was explored in great depth and led the court to make the following statement:

“[T]o say that she had ‘no evidence’ … runs counter to the evidence before the agency and is so implausible that it could not be ascribed to a difference in view of the product of agency expertise …. [t]he agency cannot base its decision on a supposed lack of evidence when evidence was not actually lacking.”

The second claim–that the FDA misinterpreted key evidence about premium cigar use among youth in the Final Deeming Rule–was also discussed. The FDA had made the claim that youth and young adults typically smoked more mass market cigar brands but that they were also using premium cigars. This claim was made in reference to a study authored by Christine Delneva that stated that “3.8 percent of youth aged 12 to 17 … identified certain premium cigars to be the brand they smoked most often.” The cigar trade associations pushed back on this claim, accusing the FDA of misreading this study.

“In reality, they say, the percentage of youth that reported that a premium cigar was their brand of choice was far smaller than 3.8 percent. That is because the 3.8 percent figure represents the percentage of youth in the 12-to-17 age cohort that self-identified as having smoked a premium cigar brand within the last 30 days. But only 3.3 percent of the overall sample in that age category reported smoking any cigar product in the last 30 days. So, the actual percentage of premium cigar users among the surveyed 12-to-17-year-old group was 3.8 percent of the 3.3 percent who reported smoking any cigar product within the last 30 days. Thus, the Delnevo study, Plaintiffs contend, found that ‘only 0.1 percent of persons aged 12-17 are premium cigar smokers.”

The court sided with the premium cigar trade associations in their reading of the Delnevo study and urged the FDA to view the Delnevo study “in its proper light.”

Where the court disagreed with the cigar industry was with its challenge to the FDA’s cost-benefit analysis under the Regulatory Flexibility Act (RFA). The cigar trade associations argued that “[t]the costs of regulating premium cigars were not reasonably analyzed” and that the FDA failed to “meaningfully engaged in any effort to show the benefits were worth the costs that deeming would impose on small premium cigar manufacturers and businesses.” The court stated that based on Circuit precedent, the FDA was not required to perform a separate RFA analysis for its selection of Option 2, which made it subject to the requirements of the APA.

“The D.C. Circuit’s ruling squarely forecloses Plaintiff’s contention that the agency [FDA] was required to conduct a separate RFA analysis with respect to the deeming of any particular product–here, premium cigars.”