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Cigar Association of America v. U.S. Food and Drug Administration

United States District Court, District of Columbia

July 5, 2018



          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]


         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.


         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 ...

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