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No summer break for FDA’s lawyers as deeming cases mount up

Written by || 12th July 2016 || Regulatory briefing |

deeming regulations news package - challenges 900x540The U.S. Food and Drug Administration (FDA) this summer faces a welter of lawsuits against its deeming regulations, all of which have some features in common but also employ slightly different strategies in attacking the new rules for e-cigarettes.

The latest suit – at least the sixth filed since the deeming regulations appeared, and the fourth related specifically to vapour products – has been brought by a group of vaping organisations organised as the Right to be Smoke-Free Coalition (RSFC). Members of the coalition said the lawsuit was filed on behalf of the entire vapour industry, whereas previous ones concerned complaints from individual companies or, in one case, a citizen.

The suit is a “facial challenge to the law” – one where it is suggested that the whole regulation is unconstitutional instead of focusing on a specific instance where harm is alleged, said Azim Chowdhury, a partner at Keller and Heckman, a law firm that specialises in regulatory law and is representing the RSFC.

The RSFC member organisations allege that the FDA’s regulations are so unconstitutional and unnecessarily harsh that they will end the U.S. vaping industry in a matter of years.

 

Ill-considered?

 

“Our view is that the FDA acted capriciously and has not considered the full economic effects,” said Mark Block, founder and director of the Electronic Vaping Coalition of America, one of the RSFC member organisations. “It has overstepped its bounds and is going to regulate an entire industry out of business in two to three years.”

For example, there are more than 1500 people in the state of Maryland alone that rely on e-cigarettes for their living, with new shops opening daily throughout the state, said Nathan Willner, general counsel to Maryland Vape Professionals, another of the RSFC members.

“Many times regulators don’t realise the impact on small business owners, they only consider the impact on much larger industry players,” he added.  “These stringent regulations will have a negative impact on small business – and the industry is mostly small businesses.”

“We’re trying to say they didn’t consider all the evidence during the decision making process,” said Chowdhury.  “The FDA needs to show how they came to that decision and how they justify it, that they considered the many thousands of comments submitted and made a thoughtful rule-making process. What we’re showing in complaint is that they didn’t do that. The FDA ignored quite a bit of evidence that would have supported alternative methods of regulation.”

 

Combined effort

 

The lawsuit was filed in the U.S. District Court for the District of Columbia (DC), where it will be combined with one previously filed in the same court by Nicopure.

This consolidation was undertaken by the court system, as it did not make sense for two judges in the same court to be tied up examining the same regulations, said Chowdhury. The Nicopure and RSFC legal teams are now working together on their case, he added.

And indeed, the cases share a number of similarities. The RSFC case alleges eight major violations. Among them, it says that the FDA’s grandfathering date (which may allow a very few older products to be exempt from some of the regulations), its entire premarket product application (PMTA) process, and its inclusion of e-cig components that are not tobacco products such as batteries, tanks and devices all violate the Administrative Procedure Act.

It also charges violations of the first amendment, the addendum to the U.S. constitution guaranteeing free speech.  In this case, according to the litigants, the FDA is preventing companies from fully exercising their right to non-misleading commercial speech through including e-cigarettes in modified risk tobacco product (MRTP) provisions and prohibiting the distribution of free samples.

The first amendment is used as a basis for challenging the regulations by Nicopure, too, and in another suit filed by Lost Art Liquids.

Nicopure also challenges the FDA’s interpretation of “tobacco product”, saying it is “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right”. It calls the PMTA process costly and detrimental to innovation, making it an “arbitrary and capricious” violation of law, and asserts that the FDA “grossly underestimates the number of PMTAs that manufacturers will be required to file”.

It concludes:  “The net effect of the Deeming Rule is a regime that arbitrarily frustrates innovations and advances in public health while preserving the status quo that existed in 2007, i.e., a market dominated by cigarettes.” That passage refers to the 2007 grandfathering date; only products on the market before that time, which are vanishingly few if indeed any still exist on sale, will enjoy partial exemption.

 

Another amendment?

 

The Lost Art Liquids case, which uses the first amendment to say that the FDA cannot prevent the use of modified risk descriptors and require warning labels, also asserts that this would violate the fifth amendment, which states that the government cannot seize private property without justly compensating the owners.

According to Lost Art, the government is unfairly and indirectly regulating vapour products off the market to protect the public, but this regulatory “benefit” disproportionately affects e-cig manufacturers and vape store owners and causes a significant diminution of property value.

However, ECigIntelligence’s U.S. legal team believes this attenuated claim is less likely to prevail in court in the case of e-cigarettes than in cases where more direct and obvious infringements occur, for example where a governmental entity physically seizes property such as a park or highway or physically invades property, such as when low-flying aircraft intrude upon airspace.

There are further similarities between the Lost Arts suit and other cases. For example, Lost Arts says the agency violated laws requiring it to be flexible in enforcement of potential reduced-risk tobacco products, a claim made by the RSFC case as well. Lost Arts also says the FDA did not properly quantify the costs of the final deeming rule or identify less costly alternatives, which meant it undervalued the costs and overvalued the benefits of the rule.

 

A different perspective

 

The fourth major vapour case, however, takes a slightly different approach to attacking FDA regulation. The case, brought by politician Larry W. Faircloth as a consumer, argues that the FDA product review process will lead to an increase in e-cigarette prices which push consumers back toward conventional cigarettes.

It added that the FDA rules violate the tenth amendment– which guarantee that powers not expressly reserved for the federal government belong to states. In particular, it says the deeming rule effectively removes many e-cigs from the market, thus preventing the state of West Virginia from cutting Medicaid costs by promoting vapour products rather than traditional tobacco products.

There are similarities with the other cases as well as differences: the Faircloth lawsuit also makes first amendment free-speech claims. However, it comes at them from another perspective – arguing that consumers are being denied the ability to receive truthful and non-misleading information on vapour products, and that banning free samples violates protected expression.

The agency must answer Faircloth’s complaint by 9th August, the day after the effective date of the deeming regulations, and Faircloth will then have until 30th August to file his reply with the court.

First, however, the FDA must answer Lost Art’s complaint by 22th July, after which the manufacturer will have until 12th August to submit its reply to the court.

The Nicopure/RSFC case, meanwhile, has a scheduled hearing date of 19th October.

 

What This Means: The buzz in the industry is more hopeful of success than expectant: the list of illegalities of which the FDA is accused is certainly extensive, but none of the charges is obviously bound to stick.

The e-liquid firm Totally Wicked, which brought a similarly wide variety of complaints against the EU’s Tobacco Products Directive (TPD), found all of its arguments summarily rejected. That sets no legal precedent for U.S. courts, of course, but it is noteworthy.

– Freddie Dawson ECigIntelligence staff

Graphic: Carl Gamble