By Robert Claiborne, Dascher Pasco & Bryan Haynes, Troutman Pepper Hamilton Sanders LLP
Did the FDA violate the Constitution when it issued its rule Deeming Tobacco Products to Be Subject to the Federal Food, Drug, & Cosmetic Act, 81 Fed. Reg. 28,973 (May 10, 2016) (the “Deeming Rule”)? No, according to a recent decision from the U.S. Court of Appeals for the D.C. Circuit. The decision addressed arguments from several vapor-product manufacturers, retailers, and a non-profit claiming the Deeming Rule violated the Constitution’s Appointments Clause and First Amendment. The cases were consolidated for appeal as Moose Jooce, et al. v. FDA, et al., Nos. 20-5048, -5049, -5050 (D.C. Cir.), decided December 1, 2020.
Appointments Clause Challenge
The Appointments Clause challenge focuses on the fact that the FDA’s Associate Commissioner for Policy (the “ACP”) issued the Deeming Rule. The ACP is a “senior executive service” position in the FDA, appointed by the Secretary of Health and Human Services (the “HHS Secretary”). The Family Smoking Prevention and Tobacco Control Act (the “TCA”) vests the deeming authority in the HHS Secretary. The HHS Secretary delegated the deeming authority to the FDA Commissioner, who subdelegated it to the ACP. Later, the FDA Commissioner – an officer appointed by the President with the Senate’s advice and consent – acted to ratify the Deeming Rule. In September 2016, the FDA Commissioner issued a general ratification statement covering prior FDA rules issued by subordinates and, in April 2019, executed a statement specifically ratifying the Deeming Rule.
Article II, § 2, clause 2, of the Constitution is known as the “Appointments Clause.” Under that Clause, the President, with advice and consent of the Senate, has the authority to appoint principal “Officers of the United States.” Regarding “inferior Officers,” Congress may provide by law for their appointment by the President alone, the courts, or department heads. Principal and inferior officers are further distinguished from federal employees.
According to the challengers, the authority to issue the Deeming Rule could only be exercised by a principal officer. In the challengers’ view, the ACP was not a principal (or even an inferior) officer but, rather, a federal employee. Thus, they argued that the Deeming Rule was unconstitutional in that it was not issued by a principal officer but by an employee lacking rulemaking authority.
The FDA countered that the Appointments Clause challenge was effectively forfeited (because it was not presented during the notice-and-comment phase before the Deeming Rule’s issuance) and further maintained that there was no defect in the Deeming Rule’s issuance. In its view, the HHS Secretary’s and FDA Commissioner’s supervisory authority over the agency’s rulemaking constitutionally allowed for the Deeming Rule’s issuance by an inferior officer. The FDA contended that the ACP was a lawfully-appointed inferior officer, not merely an employee. However, the FDA argued that, even if there had been a defect in the Deeming Rule’s issuance, it was cured by the subsequent ratifications of the FDA Commissioner.
First Amendment Challenge
The First Amendment challenge focused on a TCA requirement regarding modified risk tobacco products (“MRTP”). One must obtain FDA authorization to market a tobacco product that is labeled or advertised in such a way that it explicitly or implicitly represents that the product is less harmful than another tobacco product. (To date, the FDA has only authorized twelve products as MRTP.)
The challengers contended that the MRTP requirement was a law “abridging the freedom of speech” in violation of the First Amendment. In their view, they were impermissibly burdened with a requirement to justify proposed speech – including statements to the effect that they “themselves quit smoking by switching to vaping products” – which were supported by peer-review studies. The challengers maintained that their proposed speech was “literally true” and should not be subject to MRTP burdens.
The FDA argued that the First Amendment challenge was foreclosed by the D.C. Circuit’s prior decision in Nicopure Labs, LLC, et al. v. FDA, et al., No. 17-5196 (D.C. Cir. Dec. 10, 2019). According to the FDA, Nicopure addressed “an identical First Amendment challenge to the same provision” of the TCA and the same arguments as the challengers’ here. In Nicopure, the D.C. Circuit decided in the FDA’s favor.
The challengers attempted to distinguish Nicopure, arguing that Nicopure did not address whether the MRTP burdens on speech survived scrutiny under the First Amendment. They also contended that Nicopure’s holding – that the government has an interest in preventing the dissemination of misleading information – did not foreclose the claims of the challengers, “whose proposed statements are literally true.”
District Court’s Decision
The challengers appealed from a decision of U.S. District Court Judge Christopher R. Cooper, dated February 11, 2020. Judge Cooper decided in the FDA’s favor, on both the Appointments Clause and First Amendment claims.
Judge Cooper resolved the Appointments Clause claim without reaching the constitutional question of the ACP’s exercise of rulemaking authority. He held that the FDA Commissioner’s ratifications sufficed. There was no prejudice to the challengers in the Deeming Rule’s initial issuance by the ACP rather than the FDA Commissioner. There was insufficient cause to have the FDA start the rulemaking process over. Insofar as the challengers objected to the content of the Deeming Rule, Judge Cooper recognized that they remained free to petition for its repeal or amendment. Although Judge Cooper did not reach the constitutional question, he did not diminish its importance: interested parties “can (and should) raise potential Appointments Clause violations to the agency during such future rules’ notice-and-comment periods to give the FDA the chance to confront any problems before they materialize.”
On the First Amendment claim, Judge Cooper held that the decision in Nicopure controlled. He opined, “The Circuit expressly held that ‘[p]lacing an obligation on a manufacturer to demonstrate that an e-cigarette is in fact safer before it may market it as such easily’ passes First Amendment scrutiny.”
D.C. Circuit’s Decision
In an opinion less than ten pages long, the D.C. Circuit affirmed Judge Cooper’s decision.
Assuming for purposes of argument that the ACP’s issuance of the Deeming Rule violated the Appointments Clause and the FDA Commissioner’s general ratification of September 2016 was invalid, the D.C. Circuit held that the specific ratification of April 2019 “cured any Appointments Clause defect.” Because the record disclosed nothing other than an independent evaluation supporting the FDA Commissioner’s ratification and there was no material “continuing prejudice” from the ratification, the Court took the FDA Commissioner’s ratification “at face value and treat[ed] it as an adequate remedy.” (Citation omitted.)
The D.C. Circuit agreed with the FDA and Judge Cooper that Nicopure foreclosed the challengers’ First Amendment claims. “There, the court found unpersuasive the objection that appellants make now, namely that the Deeming Rule violates the First Amendment because it places the burden on manufacturers to show that certain of their marketing claims are truthful and not misleading before they make them. The court sustained the preclearance pathway even when applied to modified-risk statements that manufacturers insist are ‘accurate’ — such as claims that e-cigarettes contain less of or are free of specified ingredients — because ‘modified risk claims that might be technically accurate if viewed in isolation are in fact often misunderstood by consumers.’” (Citations omitted).
The Deeming Rule has been a fact of life for many since its issuance, and it will continue to be so for the vapor industry. Moose Jooce marks a third in a line of cases where U.S. Courts of Appeals have upheld the Deeming Rule against challenges filed by the vapor industry. See also Big Time Vapes, Inc., et al. v. FDA, et a., No. 19-60921 (5th Cir. June 25, 2020); Nicopure, supra. As manufacturers of vapor products have confronted FDA deadlines during the pendency of some of this litigation, the D.C. Circuit’s decision upholding the Deeming Rule serves as another reminder that businesses should not stake their compliance strategies upon the hope for a particular litigation outcome.