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Texas Tobacconists and Manufacturers File New Lawsuit Against FDA

January 12th, 2018

On Thursday, January 11th a group of Texas-based tobacconists and premium cigar manufacturers filed a lawsuit against the Food and Drug Administration (FDA).

This new lawsuit specifically contends the FDA’s warning label regulations are unconstitutional. This new move is a separate legal action- not to be confused with the joint lawsuit filed by Cigar Rights of America, Cigar Association of America and the International Premium Cigar & Pipe Retailers Association.

While both suits attack the overreaching new regulations, this new suit focuses on the FDA’s warning labels restrictions, which heavily impede retailer’s ability to effectively advertise to customers.

The group of tobacconists consists of En Fuego Tobacco Shop LLC (whom own Cuba Libre and El Cubano Cigars) and the Texas Cigar Merchants Association (TCMA). En Fuego is a family-owned business that operates three cigar retail stores and lounges and roughly employs 15 staffers. The TCMA is a “not-for-profit association representing premium cigar manufactures and retailers in the State of Texas”, largely representing small businesses, most of which are family-owned and operated.

The new regulations are set to take effect on August 10, 2018 and include a wide variety of harsh and stringent new rules for the premium cigar industry to adhere to. This new lawsuit is geared specifically toward the new warning label requirements which unjustifiably put a large strain on the boxing and advertising aspect of premium cigar retailers and manufacturers.

The new rules include:

  • All future advertisements must be submitted to the FDA 12 months prior to publication.
  • The FDA’s six warning statements must be randomly displayed in each 12-month period in as equal number of times as is possible on each brand of cigars sold in product marketing and must be randomly distributed in all areas of the United States.
  • Warning statements must be rotated quarterly in an alternating sequence in each advertisement for each brand of cigar.
  • 30 percent of the two principal display panels of any cigar or pipe tobacco package must feature the FDA’s public health message.
  • 20 percent of any advertisement for a cigar or pipe tobacco product must display the FDA’s public health message.
  • Warnings are required at the point of sale for cigars sold individually.
  • Advertisements include any visual medium including newspaper ads, websites, social media, e-mails, billboards, pamphlets, catalogs, and direct mailings, as well as TV and radio ads.
  • Warnings must also be included on in-store fixtures such as shelf-talkers and placards that describe the products for sale.
  • All six warnings must also be posted within 3 inches of each cash register.

 

The plaintiffs argue that this series of regulations are “an unprecedented incursion on First Amendment liberties” and are “arbitrary, capricious, and unduly burdensome” for retailers. Customers visiting a retail store will be bombarded with hundreds of warning labels, effectively snuffing out any commercial expression for retailers and ruining any unique experience of visiting a local tobacco shop.

According to the suit, En Fuego and TCMA argue the new regulations are a violation of First Amendment rights, do not serve a substantial government interest, fail the Central Hudson test, and violate the Family Smoking Prevention and Tobacco Control Act.

The “FDA plan creates an ‘indefinite government gag order’ on the company’s ability to communicate with customers.” The harm to freedom of speech that is especially severe for retailers is: “If a neighborhood tobacconist wants to announce a sale, or even just to tell its customers about a new cigar on offer, it must ask the FDA’s permission with at least one year of lead time.”