August 17, 2017, Trial News

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Federal district court upholds FDA regulation of e-cigarettes

Kate Halloran

photo of e-cigarette

The District Court for the District of Columbia has held that the FDA has the authority to regulate electronic nicotine delivery systems, most commonly known as e-cigarettes. The court found that the agency “unquestionably” has the right to exercise its discretion to deem e-cigarettes as tobacco products requiring regulation.
 

The District Court for the District of Columbia has held that the FDA has the authority to regulate electronic nicotine delivery systems (ENDS), most commonly known as e-cigarettes. In a challenge to the agency’s e-cigarette regulations issued in May 2016, an e-cigarette manufacturer and several organizations representing the e-cigarette industry sued the FDA, claiming that it had exceeded its statutory authority. The court found that the FDA “unquestionably” has the right to exercise its discretion to deem e-cigarettes as tobacco products requiring regulation. (Nicopure Labs, LLC v. Food & Drug Admin., 2017 WL 3130312 (D.D.C. July 21, 2017).)

The Family Smoking Prevention & Tobacco Control Act of 2009 (TCA) granted the FDA authority to regulate tobacco products, including “any component, part, or accessory.” When the agency issued its new “deeming rule” last year for ENDS, it asserted its authority to regulate “e-cigarettes, e-hookah, e-cigars, vape pens, advanced refillable personal vaporizers, and electronic pipes” as tobacco products. The FDA clarified that while the deeming rule would apply to ENDS’ components and parts—such as e-liquids, atomizer, and batteries—it would not include accessories.

Once the rule became effective, ENDS would be subject to the same restrictions placed on traditional cigarettes under the TCA, including a ban on free samples, prohibition of modified risk statements in labeling and advertising (such as “light” or “mild”), ingredient listing, and premarket review of new products that entered the market after Feb. 15, 2007.

The plaintiffs challenged the deeming rule, arguing that it exceeded the agency’s authority under the TCA and the Administrative Procedure Act (APA) and violated the First Amendment. They specifically challenged the deeming of open-system vaping devices—which allow users to refill the e-liquid cartridge—and nicotine-free liquids.

But the district court disagreed. Analyzing the agency’s actions through the two-prong Chevron deference test (Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)), the court found that under the TCA, both products are components or parts of a tobacco product. The two prongs of the test ask, first, whether Congress has provided explicit guidance to the agency on how to handle the issue at hand, and, second, if not, whether the agency’s interpretation is reasonable.

Even though the statute does not define the terms “components” or “parts,” the FDA can interpret their meanings. As long as those interpretations are reasonable and not unambiguously prohibited by the TCA, they survive the first Chevron prong. Relying on dictionary definitions and legislative intent, the court found that the agency’s definition was not “unambiguously foreclosed” by the TCA. The court likened empty vaping devices that are not sold with nicotine e-liquids to empty pens sold separately from ink cartridges: Because one is essential to the function of the other, they cannot be separated for regulatory purposes.

Next the court considered whether the agency’s interpretation was reasonable. Using the same rationale as above—that the vaping devices and e-liquids are fundamental components of the vaping process involving tobacco products—the court concluded that it was reasonable for the agency to regulate all components that could be used with a tobacco-derived e-liquid.

It then applied the same analysis to nicotine-free e-liquids, which can be used in standard vaping devices and are often flavored. Again, the court found that agency could regulate these under the Chevron test. The agency had stated that it intended to regulate these e-liquids because often they do contain some nicotine, the flavoring often is derived from tobacco, and sometimes they are mixed with e-liquids containing nicotine. The court noted that it would be reasonable for the FDA to regulate a product whose labeling and marketing is often inconsistent and inaccurate and, as a result, may contain harmful substances.

As for the plaintiff’s APA claim—that the deeming rule was arbitrary and capricious—the court held that the FDA had sufficient evidence to support regulating a potentially harmful substance and the accompanying devices used to ingest that substance. E-cigarette use has skyrocketed, nicotine is unquestionably harmful, and the lack of industry regulation could hurt consumers. The court was not persuaded by the plaintiffs’ arguments that the FDA should have taken into account that e-cigarettes are less harmful than regular cigarettes and considered regulatory alternatives, nor was it persuaded that the FDA should have conducted a cost-benefit analysis of how the regulations would affect businesses. As long as the agency’s actions were not in contravention of the law and were reasonable, the court had to defer to its discretion.

The court also considered the plaintiffs’ contention that the TCA’s marketing restrictions violated the First Amendment. The court relied on the 1980 U.S. Supreme Court decision in Central Hudson Gas & Electric Corp. v. Public Service Commission (447 U.S. 557), which set forth a four-part test for whether regulation of commercial speech is permissible: Is that speech protected? Is there a substantial government interest in regulating it? Does the regulation advance the government interest? Is the regulation overreaching to advance that interest?

Here, the court reasoned that the TCA regulated conduct, not speech, in prohibiting free samples of tobacco products. Even if it could be considered speech, the government has a substantial interest in protecting young people from tobacco products, and there is ample evidence that removing free samples from the marketplace accomplished this without being overly burdensome on the tobacco industry, the court held.