MEMORANDUM OPINION
Amit
P. Mehta United States District Judge
Pursuant
to Federal Rule of Civil Procedure 62(c) and 5 U.S.C. §
705, Plaintiffs ask for an injunction or stay pending their
appeal of a portion of the court's May 15, 2018
Memorandum Opinion and Order, which granted in part and
denied in part Plaintiffs' Motion for Partial Summary
Judgment and denied as moot Plaintiffs' Motion for
Preliminary Injunction. Specifically, Plaintiffs seek
“an injunction against the enforcement of the [Food and
Drug Administration's (“FDA”)] cigar and pipe
tobacco warnings requirements set forth at 21 C.F.R.
§§ 1143.3 and 1143.5” or “a
postponement of the August 10, 2018 effective date of those
requirements, ” while their appeal is pending and for
60 days after the resolution of that appeal. See
Pls.' Mot. for Stay or Inj. Pending Appeal, ECF No. 95
[hereinafter Pls.' Mot.], at 1. Alternatively, Plaintiffs
move to postpone the effective date of the cigar warnings
requirements, see 21 C.F.R. § 1143.5, until 60
days after the court resolves Count V of the Complaint, which
challenges the FDA's decision to subject premium cigars
to the same regulatory regime as other cigar products,
id.; see Compl., ECF No. 1, ¶¶
125-33.
The
court grants Plaintiffs' Motion for an Injunction Pending
Appeal. The issues appealed by Plaintiffs present
“serious legal questions” as to the
constitutionality of FDA's warnings regime, a conclusion
only reinforced by the Supreme Court's recent decision in
National Institute of Family and Life Advocates v.
Becerra, No. 16-1140, 2018 WL 3116336 (U.S. June 26,
2018). Additionally, Plaintiffs likely will suffer
irreparable harm absent injunctive relief: they will have to
communicate purely factual government speech in a form and
size to which they object; will have their own commercial
speech diminished; and will have to incur millions of dollars
in compliance costs, which they will not be able to recover
if the warnings regime is determined to be unconstitutional.
Finally, both the balance of equities and the public interest
favor an injunction pending appeal.
In the
end, this court believes that Plaintiffs are entitled to a
full hearing before an appellate court without the specter of
a warnings regime going into effect that might ultimately be
found to run afoul of the First Amendment. Accordingly, the
court enjoins Defendants from enforcing the new warnings
requirements for cigars and pipe tobacco set forth in 21
C.F.R. §§ 1143.3 and 1143.5 until final disposition
of Plaint iffs' appeal.[1]
I.
The
court starts with a brief overview of the relevant history of
this case.[2] On May 10, 2016, the FDA published a final
rule-the “Deeming Rule”-subjecting cigars, pipe
tobacco, and other products to statutory and regulatory
requirements comparable to those already imposed on
cigarettes, cigarette tobacco, roll-your-own tobacco, and
smokeless tobacco. See 81 Fed. Reg. 28, 974 (May 10,
2016). As relevant here, the Deeming Rule imposed
comprehensive warning statement requirements for pipe tobacco
and cigar products. Effective August 10, 2018, cigar product
packaging and advertisements must display one of six health
warning statements regarding the health risks associated with
cigar and nicotine use. See 21 C.F.R. §
1143.5(a)(1); see also Id. § 1143.13. On cigar
product packages, each warning statement must occupy
“at least 30 percent of each of the principal display
panels.” Id. § 1143.5(a)(2). On cigar
product advertisements, each warning statement must occupy
“at least 20 percent of the area of the
advertisement.” Id. § 1143.5(b). The
Deeming Rule imposed similar warnings requirements on pipe
tobacco products.[3]
Plaintiffs
filed a nine-count complaint in July 2016, challenging
aspects of the Deeming Rule, including the warning
requirements, as violative of the Tobacco Control Act
(“TCA”), the Administrative Procedure Act
(“APA”), and the U.S. Constitution. See
generally Compl. Following a series of extensions
requested by the parties in order to allow the newly
installed FDA administration time to evaluate its approach to
the Deeming Rule, see Mem. Op. & Order, ECF No.
94 [hereinafter Mem. Op.], at 15-16, the parties jointly
agreed to defer resolution of certain of Plaintiffs'
challenges, namely, Counts I, IV, and V of the Complaint,
see Joint Status Report, ECF No. 53. During this
same period, the FDA announced a “new comprehensive
plan” for regulating tobacco products and nicotine,
pursuant to which the FDA postponed implementation of some
provisions of the Deeming Rule, but not others including the
warnings requirements. Mem. Op. at 13. As part of the new
plan, the FDA announced that it would issue an Advanced
Notice of Proposed Rulemaking (“ANPRM”), inviting
the public to submit studies and information regarding the
health warnings requirements for a higher-end cigar product,
known as “premium cigars, ” and requesting public
comment on the propriety of “additional or alternative
warning statements” for such products. See
Regulation of Premium Cigars, 83 Fed. Reg. 12, 901, 12,
904 (Mar. 26, 2018). Premium cigars typically are
hand-rolled, are made with a higher-grade tobacco, or are
more expensive than other cigars. See Mem. Op. at 4
(citing Defs.' Cross-Mot. for Partial Summ. J. & Mem.
in Supp., ECF No. 74, at 8).
Plaintiffs
moved for partial summary judgment on October 3, 2017.
See Pls.' Mot. for Partial Summ. J., ECF No. 62.
In pertinent part, Plaintiffs pressed their claims in Counts
VI and VII of their Complaint, which alleged that the Deeming
Rule's warning statement requirements violate the TCA,
APA, and the First Amendment. Plaintiffs concurrently sought
a preliminary injunction restraining the FDA from
implementing or enforcing the warnings requirements.
Pls.' Mot. for Prelim. Inj., ECF No. 61. The parties
consented to consolidating the motion for preliminary relief
with briefing on the merits. See Order, ECF No. 57
(dated Sept. 19, 2017); see also Fed. R. Civ. P.
65(a)(2).
The
court granted in part and denied in part Plaintiffs'
motion for partial summary judgment and denied
Plaintiffs' motion for a preliminary injunction as moot.
See Mem. Op. at 70. As relevant here, the court
rejected Plaintiffs' argument that the Deeming Rule's
health warnings requirements violate the TCA or APA. See
Id. at 18-26. Additionally, as to Plaintiffs' First
Amendment challenge, the court assessed the warnings mandate
under the constitutional test articulated in Zauderer v.
Office of Disciplinary Counsel of Supreme Court of Ohio,
471 U.S. 626 (1985). Finding that the warnings required
disclosure of “purely factual and uncontroversial
information about the good or service being offered, ”
Mem. Op. at 29 (quoting Am. Meat Inst. v. U.S. Dep't
of Agric., 760 F.3d 18, 27 (D.C. Cir. 2014)), the court
held that “[b]ecause the warning statements are . . .
aimed at informing the public about the risks of cigar and
pipe tobacco use and at correcting the public's
misperceptions about such products' use, and because the
Rule does not impose these requirements in an
‘unjustified or unduly burdensome' manner, the Rule
is constitutional under Zauderer, ” Mem. Op.
at 43-44.
Plaintiffs
filed the instant Motion on June 8, 2018, see
Pls.' Mot., which Defendants oppose, see
Defs.' Mem. in Opp'n to Pls.' Mot., ECF No. 99
[hereinafter Defs.' Opp'n]. Some three weeks later,
on June 27, 2018, pursuant to Rule 54(b) and with the
parties' consent, the court entered final judgment in
favor of Defendants on Counts VI and VII of the Complaint.
Order, ECF No. 101. Plaintiffs then noticed their appeal to
the D.C. Circuit as to those claims. Notice of Appeal, ECF
No. 102.
II.
Federal
Rule of Civil Procedure 62(c) authorizes a district court to
issue an injunction pending appeal. Fed.R.Civ.P. 62(c). A
motion brought under Rule 62(c) is subject to the same four
criteria as a motion for preliminary injunction. See
Wash. Metro. Area Transit Comm'n v. Holiday Tours,
Inc., 559 F.2d 841, 842-43 (D.C. Cir. 1977). Thus, to
obtain an injunction pending appeal, the moving party
“must establish [1] that he is likely to succeed on the
merits, [2] that he is likely to suffer irreparable harm in
the absence of preliminary relief, [3] that the balance of
equities tips in his favor, and [4] that an injunction is in
the public interest.” See Winter v. Nat. Res. Def.
Council, Inc., 555 U.S. 7, 20 (2008); accord Cuomo
v. U.S. Nuclear Regulatory Comm'n, 772 F.2d 972, 974
(D.C. Cir. 1985) (per curiam) (citing Holiday Tours,
559 F.2d at 843-44).
Courts
in this Circuit traditionally have analyzed these four
factors on a “sliding scale, ” whereby “a
strong showing on one factor could make up for a weaker
showing on another.” Sherley v. Sebelius, 644
F.3d 388, 392 (D.C. Cir. 2011). When considering a motion
under Rule 62(c), the “sliding scale” framework
allows a movant to remedy a lesser showing of likelihood of
success on the merits with a strong showing as to the other
three factors, provided that the issue on appeal presents a
“serious legal question” on the merits.
Holiday Tours, 559 F.2d at 844; see also
Al-Ananzi v. Bush, 370 F.Supp.2d 188, 193 n.5 (D.D.C.
2005) (noting that when evaluating a request for an
injunction pending appeal, “courts often recast the
likelihood of success factor as requiring only that the
movant demonstrate a serious legal question on appeal where
the balance of harms strongly favors a stay”).
Whether
the sliding scale framework survives the Supreme Court's
decision in Winter v. Natural Resources Defense
Council has not been resolved by the Circuit. See
Aamer v. Obama, 742 F.3d 1023, 1043 (D.C. Cir. 2014).
Thus, “it remains an open question whether the
‘likelihood of success' factor is an
‘independent, free-standing requirement,' or
whether, in cases where the three other factors strongly
favor issuing an injunction, a plaintiff need only raise a
‘serious legal question' on the merits.”
Id. (quoting Sherley, 644 F.3d at 393,
398). While acknowledging this uncertainty, the district
judges in this Circuit continue to adhere to binding
precedent and apply the sliding scale approach to determine
whether a movant is entitled to an injunction pending
resolution of its appeal. E.g., Akiachak Native
Cmty. v. Jewell, 995 F.Supp.2d 7, 12-13 (D.D.C. 2014);
see also Dunlap v. Presidential Advisory Comm'n on
Election Integrity, No. 17-2361, 2018 WL 3150217, at
*25-26 (D.D.C. June 27, 2018) (observing that “a
‘serious legal question' could help tip the scales
. . . when the likelihood of success on appeal is
low”). This court must do the same. Thus, the court may
grant Plaintiffs' motion and ...