“The FDA is clearly overstepping it’s authority.”
Why the Premium Cigar Industry is Suing the FDA
On Friday, July 15, 2016, The Cigar Association of America, International Premium Cigar and Pipe Retailers Association, and the Cigar Rights of America filed suit against the Food and Drug Administration’s recent “Deeming Rule” on premium handmade imported cigars.
The rule, which was announced on June 2nd of this year, includes a 499-page litany of guidelines that tobacco growers and premium cigar manufacturers in the United States and Central America allege is “draconian,” and will tighten the regulatory noose already around their necks even further.
The three cigar associations are asking the District Court for the District of Columbia for a declaratory injunction to “vacate, set aside and enjoin the enforcement of the final rule” because it violates numerous federal statutes as well as the federal rulemaking process.
A full copy of the filing, which details nine counts against the FDA and the United States Department of Health and Human Services, can be found here.
“Just over one month ago, our three associations pledged to work together to develop the appropriate response to the FDA’s new Deeming Rule,” said Mark Pursell, CEO of the International Premium Cigar and Pipe Retailers Association. “After a thorough and detailed legal review, we are challenging this unlawful regulatory action in federal court to protect the statutory and constitutional rights of our industry and its members. The fact that all three of our organizations are acting in one voice speaks to the urgency and seriousness of this action.”
This challenge asserts nine violations of federal law and rulemaking authority starting with the FDA’s improper application of the February 15, 2007 grandfather date, which “subjects cigars and pipe tobacco to more intrusive regulations than cigarettes and smokeless tobacco.”
The suit also includes the following complaints against the FDA’s “Deeming Rule:”
- The impermissible assessment of a tax in the form of user fees, and its allocation of these user fees only to cigars and pipe tobacco and not to other newly deemed products
- The failure to perform an adequate cost-benefit analysis to take into account the effects of the Final Rule on small businesses as is required by the Regulatory Flexibility Act
- The unjustified decision to require cigar health warning labels to be 30% of the two principal display panels of packages
- Unlawful designation of tobacconists who blend finished pipe tobacco or create cigar samplers of finished cigars as “manufacturers,” which subjects those businesses to greater regulation than if they were “retailers”
- The incorrect decision to regulate pipes as “components” or “parts” rather than as “accessories”
“The FDA ignored the law to craft these expansive and sweeping regulations and cannot justify many of the arbitrary and capricious regulations it purports to enact, said Glynn Loope, Executive Director of Cigar Rights of America.”
“This lawsuit is a specific and detailed challenge to the FDA’s unprecedented assertion of rulemaking authority. We are acting in one voice to protect the legal rights of our industry at all levels, from the manufacturer, the community retail tobacconist, to the adult patrons of cigars.”
Adding his voice in support of the lawsuit, Cigar Association of America President, Craig Williamson said, “We all worked in good faith to inform and educate the FDA on the unique nature of our industry, its members and our consumers. We hoped the FDA would craft a flexible regulatory structure that accounted for the uniqueness of our industry. Instead, we got a broad, one-size-fits-all rule that fails to account for how cigars and premium cigars are manufactured, distributed, sold and consumed in the United States. The FDA exceeded its statutory authority and violated the federal rulemaking process when crafting this set of broad and sweeping regulations.”
Now that the suit has been filed, cigar manufacturers and consumers will have to wait for the courts to decide. Should the regulations stand, it could mean the loss of hundreds of jobs throughout the premium cigar industry and could also result in dozens of cigar manufacturers, and for that matter, retailers, closing their doors forever.
“We are asking the court to enjoin the enforcement of this unlawful regulatory scheme,” added Mr. Williamson, “And we are confident that when the court reviews our case on its merits, we will prevail.”
Those interested in reading a detailed summary of the FDA deeming regulations by the National Association of Tobacco Outlets should click here.
Additional Legal Actions on Behalf of the Cigar Industry
The John Middleton Co. LLC, makers of Black & Mild cigars, filed an important lawsuit in May 2016 arguing that enforcement of the FDA’s deeming rule should be suspended until courts can rule on whether or not the regulations should be eliminated. Global Premium Cigars, LLC, also filed suit against the FDA, requesting a suspension of the rule as litigation proceeds.
The Middleton case focuses on the FDA’s intentions to ban the word “mild” from all cigar packaging, and accuses the FDA of an “arbitrary and capricious” violation of the Administrative Procedure Act. Banning the word “Mild,” Middleton argues, would effectively ban Black & Mild cigars – which is “an unconstitutional taking of private property under the Fifth Amendment.”
Global’s complaint (filed in Florida) referred to the lack of financial consideration required by the FDA, according to the Regulatory Flexibility Act. Global also believes that FDA has violated the First Amendment by “limiting the expressive nature of cigar boxes, and takes away trademark rights and copyright”; they also argue that “the predicate date is a violation of substantive due process” guaranteed by the Fifth Amendment, which protects personal property against government infringement.