Tobacco Companies v. FDAUNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA GREENSBORO DIVISION
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COMPLAINT FOR DECLARATORY For their Complaint, plaintiffs allege as follows: NATURE OF ACTION 1. This is an action against defendant United States Food and Drug Administration ("FDA" or "Agency") and defendant Dr. David A. Kessler, Commissioner of Food and Drugs, seeking review of FDA's assertion of jurisdiction over cigarettes. FDA's action is an unprecedented and unlawful effort to extend its regulatory reach far beyond its statutory mandate and to usurp the legislative authority of Congress. FDA's action is contrary to Congress's clear intent to withhold from FDA jurisdiction over cigarettes; is irreconcilable with, and precluded by, the Federal Cigarette Labeling and Advertising Act ("FCLAA"), 15 U.S.C. Section 1331; violates FDA's enabling legislation, the Federal Food, Drug, and Cosmetic Act (the "FFDCA" or the "Act"), 21 U.S.C. Sections 301 et seq., and the Administrative Procedure Act ("APA"), 5 U.S.C. Sections 701 et seq; and violates the guarantees of free speech and due process in the United States Constitution, U.S. Const. amend. I and V. 2. Plaintiffs seek a declaration that FDA has no jurisdiction over cigarettes and that FDA's assertion of jurisdiction is ultra vires and contrary to law. Plaintiffs also seek an injunction requiring FDA to withdraw its assertion of jurisdiction over cigarettes, and prohibiting FDA from asserting jurisdiction over, or initiating any rulemaking or enforcement proceedings based on any illegal assertion of jurisdiction over the manufacture, labeling or marketing of cigarettes. 3. Many authorities, including former FDA commissioners, have stated that an assertion of jurisdiction over cigarettes as a "drug" or "drug delivery device," if allowed to stand, would empower FDA to control all aspects of cigarette manufacturing, labeling and sales. Yet Congress has never granted FDA any jurisdiction over cigarettes. To the contrary, Congress has repeatedly rejected proposed legislation that would have given FDA such authority. Rather, Congress has made its own determination of how a comprehensive program for federal regulation of cigarettes should be structured -- a program in which FDA has absolutely no role. FDA's unilateral assertion of jurisdiction irreconcilably conflicts with that regulatory regime on all issues related to smoking. 4. FDA's assertion of jurisdiction over cigarettes has had and will continue to have a substantial adverse impact on plaintiffs' business activities throughout the United States. Indeed, even FDA has acknowledged that its assertion of jurisdiction over cigarettes "could have dramatic effects on our society," including the creation of a black market for cigarettes. THE PARTIES 5. Plaintiff Coyne Beahm, Inc. ("Coyne Beahm") is a North Carolina corporation with its principal place of business in Colfax, North Carolina. A substantial portion of Coyne Beahm's revenue is derived from the marketing, advertising and promotion of cigarettes and other tobacco products. 6. Plaintiff Brown & Williamson Tobacco Corporation ("Brown & Williamson") is a Delaware corporation with major facilities in Reidsville and Winston-Salem, North Carolina. Brown & Williamson purchases substantial quantities of tobacco in this district, manufactures tobacco products at its facilities in Reidsville and Winston-Salem, within the jurisdiction of this Court, and sells and distributes finished cigarettes in this district. 7. Plaintiff Liggett Group Inc. ("Liggett") is a Delaware corporation with a major facility in Durham, North Carolina. Liggett purchases substantial quantities of tobacco in this district, manufactures cigarettes at its facility in Durham, within the jurisdiction of this Court, and sells and distributes finished cigarettes in this district. 8. Plaintiff Lorillard Tobacco Company ("Lorillard") is a Delaware corporation with a major facility in Greensboro, North Carolina. Lorillard purchases substantial quantities of tobacco in this district, manufactures cigarettes at its facility in Greensboro, within the jurisdiction of this Court, and sells and distributes finished cigarettes in this district. 9. Plaintiff Philip Morris Incorporated ("Philip Morris") is a Virginia corporation with a major manufacturing facility in Concord, North Carolina. Philip Morris purchases substantial quantities of tobacco in this district, manufactures cigarettes at its facility in Concord, within the jurisdiction of this Court, and sells and distributes finished cigarettes in this district. 10. Plaintiff R.J. Reynolds Tobacco Company ("Reynolds") is a New Jersey corporation with a major facility in Winston-Salem, North Carolina. Reynolds purchases substantial quantities of tobacco in this district, manufactures cigarettes at its facility in Winston-Salem, within the jurisdiction of this court, and sells and distributes finished cigarettes in this district. 11. Defendant FDA is an executive agency within the Department of Health and Human Services, established to carry out acts of Congress concerning foods, drugs, devices and cosmetics. 21 U.S.C. Section 393; 5 C.F.R. Section 5.10(a)(7). FDA is subject to, and derives its authority to regulate "drugs" or "medical devices" from, the FFDCA. 12. Defendant Dr. David A. Kessler is the Commissioner of Food and Drugs, the head of FDA. JURISDICTION AND VENUE 13. This Court has jurisdiction over this action pursuant to 28 U.S.C. Section 1331. Declaratory relief is authorized by 28 U.S.C. Sections 2201-2202 and Fed. R. Civ. P. 57. Judicial review is also authorized under the Administrative Procedure Act (the "APA"), 5 U.S.C. Sections 701 et seq. 14. Venue in this district is proper pursuant to 28 U.S.C. Section 1391(e). BACKGROUND 15. On August 10, 1995, Commissioner Kessler issued a Notice of Proposed Rulemaking indicating that FDA has jurisdiction over cigarettes. Commissioner Kessler took this action notwithstanding (a) that Congress has in fact withheld any such jurisdiction from FDA and (b) that Commissioner Kessler, and his predecessors, had previously recognized that FDA has no such authority over cigarettes sold without any therapeutic claims. Plaintiff tobacco companies do not make any claims of therapeutic purpose for their cigarettes. Their cigarettes are promoted solely for smoking pleasure. 16. The proposed rules are framed in terms of preventing "youth smoking," and they focus on the advertising and distribution of cigarettes. The proposed regulations include a ban on vending machines and restrictions on cigarette advertising and promotions. A. Congress Has Withheld From FDA Any Authority to Regulate Cigarettes 17. For more than eight decades, Congress has made clear that cigarettes are not subject to FDA jurisdiction. The issue of smoking and health has been a matter of substantial scientific, public and congressional interest for many years. Consistent with this attention, the issue of whether FDA can assert jurisdiction over cigarettes has been raised in Congress many times. Each time, however, Congress has determined that FDA should have no jurisdiction over cigarettes. 18. The Pure Food and Drugs Act of 1906, P.L. No. 59-384, 34 Stat. 763 (1906), gave FDA's predecessor, the Bureau of Chemistry in the Department of Agriculture, no authority over tobacco products. 19. As the Bureau of Chemistry stated in 1914, tobacco products, which, like plaintiffs' cigarettes, were not labeled for any "medicinal purpose," were beyond the scope of the Food and Drugs Act of 1906: "[T]obacco and its preparations, when labeled in such a manner as to indicate their use for the cure, mitigation, or prevention of disease, are drugs within the meaning of the act, and, as such, are subject to the provisions thereof. "On the other hand, tobacco and its preparations which are not so labeled and are used for smoking or chewing or as snuff and not for medicinal purposes are not subject to the provisions of the act." Service and Regulatory Announcements, No. 13 (Feb. 1914; issued Apr. 2, 1914) (emphasis added). 20. This fundamental position did not change following the enactment of the FFDCA in 1938. Indeed, over a twelve year period from 1940 to 1952, FDA and its predecessor agencies charged with interpretation of the FFDCA consistently stated in correspondence to Congress that cigarettes are not "drugs" or "devices" under the Act absent a claim by the manufacturer of some therapeutic benefit. See Brief for Appellee (FDA), ASH v. Harris, 655 F.2d 236 (D.C. Cir. 1980) (No. 79-1397). 21. Just as clearly, every attempt to extend the scope of the FFDCA to cigarettes has been rejected. In 1929, anti-tobacco forces introduced legislation to bring tobacco products within the jurisdiction of the federal agencies that enforce the nation's drug laws. S. 1468, 71st Cong., 1st Sess. (1929). See also 71 Cong. Rec. 2589 (June 10, 1929) (comments and bill introduced by Sen. Smoot). That bill did not pass. 22. In 1956, another bill was introduced to amend the FFDCA to grant FDA authority over cigarettes. H.R. 11280, 84th Cong., 2d Sess. (1956). The bill did not pass. 23. In 1963, bills to amend the FFDCA to grant FDA jurisdiction over cigarettes were introduced in both Houses of Congress. S. 1682, 88th Cong., 1st Sess. (1963); H.R. 5973, 88th Cong., 1st Sess (1963). The purpose of this legislation was to place "all smoking products under the authority of the Food and Drug Administration." 109 Cong. Rec. 10316, 10317 (June 6, 1963) (statement of Sen. Moss). According to their sponsor, the bills were introduced because it was clear that "smoking products do not come under the protection of the FDA." Id. at 10318. Again, however, the bills did not pass. 24. In 1964, a report was published by the Advisory Committee to the Surgeon General on Smoking and Health concerning the possible risks of smoking. Congress reserved to itself the responsibility to respond to that report. As the House Committee on Interstate and Foreign Commerce observed: "The determination of appropriate remedial action in this area, as recommended by the Surgeon General's Advisory Committee, is a responsibility which should be exercised by Congress after considering all facets of the problem." H.R. Rep. No. 449, 89th Cong., 1st Sess. 1, reprinted in 1965 U.S.C.C.A.N. 2350, 2351-52. 25. Once again, one of the proposed responses to the Surgeon General's report which was considered by Congress was to extend FDA jurisdiction to include cigarettes. H.R. 2448, 89th Cong., 1st Sess. (1965). Both the proponents and opponents of that proposal recognized that, absent such new legislation, FDA has no authority over cigarettes. Again, however, the proposed bills to give FDA jurisdiction over tobacco products did not pass. 26. Instead, as described in greater detail below, Congress enacted the Federal Cigarette Labeling and Advertising Act ("FCLAA" or the "Labeling Act"). Congress made clear that the FCLAA -- not the FFDCA -- established "a comprehensive Federal Program to deal with cigarette labeling and advertising with respect to any relationship between smoking and health." 15 U.S.C. Section 1331 (emphasis added). 27. Congress did not provide any role for FDA in its "comprehensive Federal program." To the contrary, Congress prohibited any entity (including FDA) from requiring any labels or warnings with respect to cigarettes other than those which Congress specifically set forth in the Labeling Act. 15 U.S.C. Section 1334. 28. Congressional consideration -- and rejection -- of proposals to have FDA regulate cigarettes has continued since the time of the enactment of the FCLAA:
(a) In 1977, 1978, and 1979, five different bills
were introduced in Congress to grant FDA jurisdiction over
cigarettes. None of them passed. (c) In 1987, H.R. 3294 was introduced to expand FDA jurisdiction by creating a new regulatory category for tobacco products. The bill did not pass. (d) In 1989, H.R. 1494 and S. 769 were introduced to expand FDA jurisdiction by creating a new regulatory category for tobacco products. The bills did not pass. (e) Even Rep. Richard Durbin, a staunch critic of tobacco products, conceded in 1989 that FDA's jurisdiction does not extend to tobacco: "It would seem that if you looked at the spectrum of products sold in America, [tobacco] stands out as an extraordinary exception to your mandate under the FDA. . . . ". . . There have been tests over the years in court as to whether or not tobacco is included in the Food, Drug and Cosmetics Act, and the courts have generally concluded it is not. In fact, I think they have concluded unanimously that it is not an ingested food, nor is it a drug taken for an illness or to change some type of body structure." Hearings before the Subcomm. on Rural Development, Agriculture, and Related Agencies, of the House Comm. on Appropriations, 100th Cong., 2d Sess., part 8, at 408 (1989) (emphasis added). 29. In the 1990s, Congress continued to confirm that FDA has no role in regulating cigarettes: (a) In 1992, H.R. 4350 and S. 2298 were introduced to expand FDA jurisdiction by creating a new regulatory category for tobacco products. In connection with that legislation, Rep. Michael Synar, a major opponent of cigarettes, conceded that, "While the FDA has jurisdiction to protect consumers from unsafe foods, drugs, cosmetics and medical devices, it is powerless to do anything about one of the deadliest consumer products -- tobacco." 138 Cong. Rec. E483 (1992) (emphasis added). Neither bill passed. (b) In 1993, H.R. 2147 and S. 672 were introduced to expand FDA jurisdiction by creating a new regulatory category for tobacco products. Again, the bills did not pass. 30. In sum, every time the issue has been presented, Congress has rejected efforts to grant FDA any jurisdiction over cigarettes. B. Congress Regulates Cigarettes Under the FCLAA, Which Precludes FDA Jurisdiction 31. As noted above, Congress, in enacting the FCLAA, has reserved to itself the power to regulate cigarettes so as to maintain an appropriate balance between informing the public of the risks which have been associated with smoking, the freedom of the individual to smoke if he or she chooses, and the significant economic interests involved in the manufacturing, distribution, and marketing of cigarettes. 32. Congress has delegated some of this reserved regulatory power to federal agencies other than FDA by specifically authorizing them to regulate various specific aspects of cigarette manufacturing and sales. For example: (a) the Bureau of Alcohol, Tobacco and Firearms has authority to collect excise taxes on tobacco products, to regulate manufacture of tobacco products, and to qualify and regulate manufacturers of tobacco products, 27 C.F.R. Sections 270.1, et seq. (1995); (b) the Federal Trade Commission has authority to administer the implementation of congressionally mandated warnings, 15 U.S.C. Section 1333(c); (c) the Department of Health and Human Services ("DHHS") has authority to review lists of ingredients added to tobacco in cigarettes and to report to Congress on any perceived health effects of those added ingredients, 15 U.S.C. Section 1335a; (d) the Department of Agriculture has the authority to set production quotas and price levels for tobacco leaf, 7 U.S.C. Sections 1281 et seq.; and (e) the Internal Revenue Service has the authority to implement tax collection for the sale of cigarettes, 26 U.S.C. Section 5701(b). 33. As another part of this comprehensive regulatory program carefully balanced by Congress, the Federal Trade Commission -- not FDA -- administers the program by which all packages of cigarettes sold or distributed in the United States and all advertisements for cigarettes within the United States must carry one of four warning labels. 15 U.S.C. Section 1333(a)(1). Again, FDA has no role in any of these matters, even though the regulation of labeling is one of FDA's most important powers with respect to products properly within its jurisdiction. 34. Congress has also enacted various statutes to keep itself and the public informed of the health risks which have been associated with smoking. For example: (a) the Department of Health and Human Services must conduct, analyze, and make available to the public extensive research on the reported health effects of smoking, 15 U.S.C. Section 1341(a); (b) the FTC must make an annual report to Congress about cigarette advertising, and may include proposed legislation to further restrict cigarette advertising, 15 U.S.C. Section 1337(b); (c) the Interagency Committee on Smoking and Health - - which does not include any representative from FDA -- must make biennial reports to Congress about activities undertaken to inform the public of smoking risks. 15 U.S.C. Section 1341(b). Again, Congress has never authorized FDA to participate in any of these activities and has never granted any such reporting responsibility over cigarettes to FDA. 35. These comprehensive requirements demonstrate that cigarettes are subject to substantial regulations that are closely supervised by Congress. Further, Congress has made clear that, absent specific congressional action, these are to be the only federal restrictions on the manufacturing and marketing of cigarettes. As one congressional report stated, "[T]he clear mandate of the Congress [is] that the basic regulation of tobacco and tobacco products is governed by the legislation dealing with the subject, the Cigarette Labeling and Advertising Act of 1969, and that any further regulation in this sensitive and complex area must be reserved for specific Congressional action." S. Rep. No. 94-251, 94th Cong., 2d Sess. 43 reprinted in, 1976 U.S.C.C.A.N. 993, 1012 (emphasis added). 36. Indeed, as described in greater detail below, FDA, itself, has long acknowledged that regulation of cigarettes is the exclusive domain of Congress. For example, in 1972, FDA Commissioner Charles Edwards, M.D., stated before Congress that "the regulation of cigarettes is to be the domain of Congress. No statement relating to smoking and health can be required on cigarettes except the warning prescribed by Congress." Hearings before the Consumer Subcomm. of the Senate Comm. on Commerce on S.1454, Public Health Cigarette Amendments of 1971, 92d Cong., 2d Sess. 240, 242 (1972) ("1972 Hearings"). C. FDA's Prior Long-Standing Position Was That It Has No Jurisdiction Over Cigarettes 37. In addition to conflicting with Congress's clear intent to withhold from FDA jurisdiction over cigarettes, Commissioner Kessler's assertion of such jurisdiction contradicts FDA's own prior decisions, submissions to courts, and other pronouncements. 38. In a 1963 letter from the FDA's Bureau of Enforcement to Congress, FDA acknowledged that it does not have jurisdiction over tobacco products unless they are sold with some accompanying therapeutic claim: "The statutory basis for the exclusion of tobacco products from FDA's jurisdiction is the fact that tobacco marketed for chewing or smoking without accompanying therapeutic claims, does not meet the definitions in the Food, Drug, and Cosmetic Act for food, drug, device or cosmetic." Letter from FDA Bureau of Enforcement to Directors of Bureaus and Divisions (May 24, 1963), reprinted in 1972 Hearings at 240. 39. During the 1965 hearings on the FCLAA, representatives of both HEW and FDA likewise testified, "The Food and Drug Administration has no jurisdiction under the Food, Drug, and Cosmetic Act over tobacco, unless it bears drug claims." Cigarette Labeling and Advertising: Hearings Before the House Comm. on Interstate and Foreign Commerce, 89th Cong., 1st Sess. 193 (1965). 40. In 1972, FDA Commissioner Edwards similarly testified before Congress that FDA does not have jurisdiction over cigarettes: "[C]igarettes recommended for smoking pleasure are beyond the Federal Food, Drug and Cosmetic Act." 1972 Hearing at 239. 41. Commissioner Edwards further testified that any such assertion of FDA jurisdiction would lead to the prohibition, or at least severe restriction, of cigarettes -- an outcome contrary to Congress's clear decision to permit cigarette sales with congressionally-mandated warnings: "Indeed, if cigarettes were to be classified as drugs, they would have to be removed from the market because it would be impossible to prove they were safe for their intended use. ". . . In sum, labeling or banning cigarettes is a step that can be take[n] only by the Congress. Any such move by FDA would be inconsistent with the clear congressional intent." 1972 Hearings at 242 (emphasis added). 42. Peter Hutt, then FDA Chief Counsel, similarly testified that "Congress decided in 1970 that cigarettes should not be banned, that they should be allowed to remain in commerce with the warning decided on by Congress, and we therefore feel that we have no basis for making any kind of determination literally contrary to the congressional determination." Id. at 245. 43. Shortly thereafter, Mr. Hutt wrote to the same congressional committee reporting on discussions he had had with Wilmont Hastings, then General Counsel of HEW, "on whether a test case might be brought to determine whether FDA has jurisdiction over cigarettes." Mr. Hutt advised Congress that "Mr. Hastings and I believe that such a test case would be without sound legal basis, and thus should not be instituted. ". . . The Public Health Cigarette Smoking Act of 1969 does not allow FDA either to require additional warning statements on the label or to ban cigarettes from interstate commerce." Letter from Peter Barton Hutt to Senator Frank E. Moss, reprinted in 1972 Hearings at 245-46 (emphasis added). 44. A few years later, when Action on Smoking and Health ("ASH") petitioned FDA to regulate cigarettes as drugs or devices, FDA similarly stated that it had no such jurisdiction absent some therapeutic claim by the manufacturer. ASH argued that the nicotine in cigarettes was used by smokers to affect the function of their bodies. Without disputing ASH's factual allegation, FDA denied the petition. Letter from FDA Commissioner Donald Kennedy to John F. Banzhaf, III (Dec. 5, 1977). The Agency explained that "[t]he interpretation of the Act by FDA consistently has been that cigarettes are not a drug unless health claims are made by the vendors." Id. at 3. 45. When ASH sought judicial review of FDA's position, FDA vigorously and successfully defended its position that it did not have jurisdiction. In its brief to the court of appeals, FDA stated: "In the 73 years since the enactment of the original Food and Drug Act, and in the 41 years since the promulgation of the modern Food, Drug, and Cosmetic Act, the FDA has repeatedly informed Congress that cigarettes are beyond the scope of the statute absent health claims establishing a therapeutic intent on behalf of the manufacturer or vendor." Brief for Appellee (FDA) at 14-15, Action on Smoking and Health v. Harris, 655 F.2d 236 (D.C. Cir. 1980) (No. 79- 1397). 46. In 1978, ASH filed a second petition arguing that filtered cigarettes should be regulated by FDA as "medical devices." Again, however, FDA denied the petition. 47. In 1989, FDA Commissioner Frank Young, M.D., Ph.D., and FDA Chief Counsel Thomas Scarlett testified before a Subcommittee of the House Appropriations Committee on the possible regulation of tobacco under the FFDCA. Commissioner Young testified that "it doesn't look like it is possible to regulate [tobacco] under the Food, Drug and Cosmetic Act. . . ." Hearings before the Subcomm. on Rural Development, Agriculture, and Related Agencies, of the House Comm. on Appropriations, 100th Cong., 2d Sess., part 8, at 409 (1989). Mr. Scarlett elaborated as follows: "[T]he [FFDCA] draws lines and we have to respect them. . . . [W]hat is fairly important in FDA law is whether a product has a therapeutic purpose, at least if you are talking about something that might be a drug. ". . . Cigarettes themselves are not used for a therapeutic purpose as that concept is ordinarily understood." Id. at 410. 48. From its rejection of the ASH petitions until only a few days ago, FDA has never expressed a contrary view. Over and over, FDA adhered to its position that it has no jurisdiction over cigarettes. 49. Congress's affirmative concurrence and acquiescence in this longstanding interpretation of the FFDCA by FDA itself, as well as Congress's own action in delegating authority to agencies other than FDA, further demonstrates that Congress has never intended FDA to have jurisdiction over cigarettes. D. Even Commissioner Kessler Previously Acknowledged that FDA Cannot Regulate Cigarettes Without Congressional Direction 50. On February 25, 1994, Commissioner Kessler announced that FDA would -- subject to congressional direction -- "reconsider" whether it has jurisdiction to regulate cigarettes. Letter from David Kessler to Scott Ballin (February 25, 1994). 51. Commissioner Kessler further recognized in his February 25 letter that, "[g]iven the widespread use of cigarettes," any such regulatory action by FDA "could have dramatic effects on our society." Id. at 3. Accordingly, Commissioner Kessler recognized that congressional legislation on these issues was essential: "We recognize that the regulation of cigarettes raises societal issues of great complexity and magnitude. It is vital in this context that Congress provide clear direction to the Agency. We intend therefore to work with Congress to resolve, once and for all, the regulatory status of cigarettes under the Food, Drug, and Cosmetic Act." Id. (Emphasis added). 52. Commissioner Kessler's request for congressional direction was a further recognition that FDA could not, by unilateral action, undermine the careful balance in existing legislation relating to cigarettes, nor depart from decades of prior practice and binding law. 53. In response to Commissioner Kessler's request for direction, a congressional subcommittee commenced hearings. Commissioner Kessler testified before the Subcommittee twice, and addressed the issue of FDA regulation of cigarettes. 54. In his first appearance before the subcommittee, Commissioner Kessler emphasized that FDA would need congressional direction before it could assert jurisdiction over cigarettes. Regulation of Tobacco Products (Part 1), Hearings Before the Subcomm. on Health and the Environment of the H. Comm. on Energy and Commerce, 103d Cong., 2d Sess. 73 (1994). 55. A few months later in June 1994, Commissioner Kessler further testified that, before FDA could assert jurisdiction over cigarettes, it would be necessary for experts advising the Agency to determine some "threshold" of nicotine per cigarette that might be said to affect the function of the body. Commissioner Kessler told the subcommittee that he intended to present that question to a meeting of outside experts on the FDA's Drug Abuse Advisory Committee ("DAAC"). 56. On August 2, 1994, Commissioner Kessler and other FDA representatives presented the information they had concerning the "threshold" issue to the DAAC. The DAAC formally concluded that there are inadequate data on which to establish any particular level of nicotine in cigarettes as "addictive," and called for further meetings on that issue. FDA, however, has not convened the DAAC since on that issue. E. Commissioner Kessler Reverses FDA's Long-Standing Policy on Cigarettes 57. While the 1994 congressional campaigns were still going on, Commissioner Kessler did not claim that FDA had the statutory authority to exercise jurisdiction over tobacco products, or to announce administrative initiatives with respect to such products. As soon as the congressional elections were over, however, FDA began to suggest that it might be able to act against tobacco products without waiting for direction from Congress. On November 10, 1994 -- just one day after it was clear there would be a change in political control of both Houses of Congress -- FDA advised Congress that the decision on whether or not to assert FDA jurisdiction over tobacco products was "a decision FDA will make." Letter from Diane E. Thompson, Assoc. Comm. for Legislative Affairs, to Hon. H. Martin Lancaster (Nov. 10, 1994). 58. A few weeks later, Commissioner Kessler announced in a "60 Minutes" interview that he now believed that FDA alone was authorized to decide whether FDA could regulate the sale of nicotine-containing cigarettes. 60 Minutes (Dec. 4, 1994). 59. During the Spring of 1995, Commissioner Kessler made various speeches before college audiences, which further suggested that he might take some action to assert jurisdiction over cigarettes. But he has never so testified before any congressional committee; has never officially proposed any legislation to extend FDA's authority in that manner; and has never otherwise consulted with the new congressional leadership on that issue. 60. In fact, the congressional subcommittee that heard Commissioner Kessler's testimony in 1994 has never reported, nor has Congress enacted, any legislation evidencing that Congress has changed its position and now intends that FDA, rather than Congress itself, should regulate cigarettes. 61. On June 15, 1995, the Action on Smoking and Health ("ASH"), an anti-tobacco group, threatened to file a lawsuit against FDA if FDA did not regulate cigarettes by August 15, 1995. ASH announced that the basis of the suit would be FDA's failure to act on ASH's pending petition before FDA. That petition was filed by ASH on March 4, 1994 and seeks the initiation of a rulemaking to regulate cigarettes. 62. Soon after ASH's threat to sue, rumors surfaced that FDA had made the decision to regulate cigarettes. See, e.g., FDA Seeks to Mount Attack on Smoking by Minors That Could Mean Regulation, Wall St. J. (July 13, 1995), at A3. 63. Over the last few weeks, anti-smoking groups continued a carefully orchestrated public relations campaign designed to put pressure on the White House and FDA to issue Commissioner Kessler's proposed regulations. Finally, on August 10, 1995 -- without any further direction from Congress and apparently bowing to the anti-tobacco groups -- Commissioner Kessler announced that FDA had concluded that it has jurisdiction over cigarettes. 64. Commissioner Kessler failed to state a reasoned basis for FDA's abrupt change in position. Instead, he claimed that FDA regulation of cigarettes is necessary to prevent minors from smoking. While plaintiffs agree that minors should not smoke -- and have taken many steps to try to discourage them from doing so -- Commissioner Kessler's stated desire to prevent youth smoking cannot create FDA jurisdiction where none exists. FDA has no authority to regulate plaintiff tobacco companies' cigarettes -- in any way. 65. Commissioner Kessler's proposed regulations, which seek, among other things, to restrict cigarette sales, advertising and promotion, do not fit within the framework of FDA's regulatory authority and are largely duplicative of programs already in place. 66. In fact, the issue of youth smoking is currently being addressed by Congress, state governments, and the private sector -- all of which have the authority and ability (unlike FDA) to implement the type of actions proposed by Commissioner Kessler: (a) In 1991 Congress determined in the Alcohol, Drug Abuse, and Mental Health Amendments Reorganization Act that, as a matter of federal policy, restricting minors' access to tobacco products is a task for the states. 42 U.S.C.A. Section 300x-26. That Act conditions federal substance abuse block grants to the states on the enactment and enforcement of state laws prohibiting tobacco product sales to minors. The Department of Health and Human Services has proposed regulations to implement this law, which would recommend a "model law" for the states aimed at reducing minors' access to tobacco products. This model includes vending machine restrictions, a licensing system, proof-of-age requirements, and a graduated schedule of penalties for violations. (b) Regulation of tobacco advertising -- an important part of Commissioner Kessler's proposal -- is already within the purview of the Federal Trade Commission. Congress specifically granted the FTC broad authority to oversee tobacco advertising and promotional practices. Under the FCLAA, the FTC -- not FDA -- has express authority to regulate unfair or deceptive ads or promotional practices concerning tobacco products. In addition, Congress gave the Department of Justice the authority to enforce the ban on broadcast advertising of tobacco products. (c) The following are a few examples of other government programs aimed at preventing youth smoking: * The Pro-Children Act of 1994, 20 U.S.C.A. Section 6081 et seq., mandates that smoking be prohibited in any school receiving federal funds. * The Centers for Disease Control and Prevention's Division of Adolescent and School Health has several programs aimed at decreasing tobacco use by youth. * The Safe and Drug-Free Schools and Communities Act of 1994, 20 U.S.C. Sections 7101 et seq., provides for tobacco education in the schools by reauthorizing the Drug-Free Schools and Communities Act of 1988 and providing $655 million for programs to prevent, among other things, the illegal use of tobacco. * Numerous states have launched multimillion dollar efforts to prevent smoking among youth. For example, the Massachusetts Department of Health has initiated a $58 million program designed to prevent smoking among youth. * "ASSIST," American Stop Smoking Intervention Study for Cancer Prevention, is a large project cosponsored by the National Cancer Institute ("NCI") to provide funding to participating states to, among other things, reduce smoking among youth through educational activities in schools and in communities. 67. Moreover, Commissioner Kessler's proposed regulations for controlling the advertising, marketing, and distribution of cigarettes would be an unprecedented and unauthorized departure from FDA's regulatory mandate. Commissioner Kessler has stated that under the FFDCA, FDA's declaration that a product is a "drug" or "drug delivery device" ordinarily requires FDA to determine that the product is "safe and effective" for its intended use. But Commissioner Kessler and others have stated that FDA will not conclude that cigarettes are safe for their intended use. 68. Indeed, anti-tobacco groups have argued that FDA's assertion that nicotine-containing cigarettes are a "drug" or "drug delivery device" within its jurisdiction automatically constitutes a finding that plaintiffs and their distributors must immediately cease the sale of cigarettes. 69. The inapplicability of the FFDCA to cigarettes can also be seen from the fact that dictating the content of labels of prescription and over-the-counter drugs, and among the various classes of devices, is an integral part of FDA regulation. Yet, as shown above, Congress has retained exclusive control over the content of the health warnings on cigarette packages pursuant to the FCLAA, which would preempt any effort by FDA to add to or alter these warnings. In fact, to the extent that FDA's proposed regulations would require that any statement be made on any package of cigarettes, or in any advertising of cigarettes, or otherwise in connection with the distribution or sale of cigarettes, such regulations would exceed FDA's authority and would be preempted by the FCLAA. 70. Indeed, the very advertising and distribution restrictions of the proposed regulations are inconsistent with the proper limits of FDA authority over even true "drugs" or "devices." Moreover, to the extent that FDA's proposed regulations would impose any restrictions or preconditions (other than a prescription requirement) on the distribution or sale of cigarettes otherwise lawfully distributed, they would exceed FDA's authority. 71. Under the FFDCA, the FDA must classify a drug for sale either as "over-the-counter" or prescription. If the decision is to permit the drug to be sold "over-the-counter" -- as Commissioner Kessler appears to believe is still appropriate with cigarettes -- there are no permissible limitations on the manner in which it is distributed. Aspirin, for example, is sold in unattended vending machines. FDA likewise has no authority to regulate advertising of over-the-counter drugs. 72. FDA's ability to regulate advertising of drugs is limited to advertising of prescription drugs. Thus, even if the FCLAA did not preempt FDA restrictions on cigarette advertising - - and it does -- Commissioner Kessler would have to require that all cigarettes be sold by prescription in order to implement the proposed advertising restrictions. 73. These absurd results that would occur if FDA were to apply its statutory mandate to cigarettes are further proof that Congress never meant the FFDCA to reach plaintiffs' cigarettes. Commissioner Kessler has no authority and cannot implement the regulations he now seeks to impose on the American public. F. Plaintiffs Have Been Harmed And Will Continue To Be Harmed By Defendants' Actions 74. FDA's assertion of authority to exercise jurisdiction over cigarettes has harmed and will irreparably harm plaintiffs. 75. As Commissioner Kessler predicted in his earlier presentations to Congress, his assertion of FDA jurisdiction over cigarettes, and his unauthorized rulemaking, have already had a significant, negative effect. 76. Stock analysts and other commentators have emphasized the adverse impact of an illegal assertion of FDA jurisdiction: "...[W]e believe that granting the FDA regulatory authority over tobacco opens Pandora's Box, very significantly increasing the potential risk of more serious regulation in the future, which could include: A) A total tobacco advertising ban; B) Limits on nicotine levels; C) Sales by prescription only; and D) Product packaging limited to black-and-white generic labeling." Market Report of Dean Witter (August 3, 1995). 77. FDA's proposed regulation of plaintiffs' speech in connection with cigarettes would violate plaintiffs' rights under the First Amendment to the U.S. Constitution. 78. To the extent that FDA's proposed regulations would prohibit plaintiffs from using certain trade marks or copyrighted material, such regulations would be without statutory authorization and would constitute a deprivation by FDA of property without due process of law and a taking of private property by FDA without just compensation, in violation of the Fifth Amendment to the U.S. Constitution. 79. FDA's declaration of jurisdiction is definitive and final. Commissioner Kessler has made the decision that FDA can regulate cigarettes. 80. Other than review in this Court, no avenue for redress exists for plaintiffs to undo the harm that has been done to date and will be done in the future. Unless FDA's assertion of jurisdiction is reviewed, the Agency will continue to assert unauthorized power over an industry by condemning its products as "drugs" or "drug delivery devices." 81. FDA's attempt to regulate cigarettes contradicts Congress's clear intent to withhold jurisdiction over cigarettes from FDA, and is a clear violation of the jurisdictional limits on its authority. Because there is no legislative basis for FDA's action, immediate review by this Court is necessary. COUNT I
FDA REGULATION OF CIGARETTES 82. Plaintiffs incorporate, repeat, and reallege each and every allegation contained in Paragraphs 1 through 81 of the Complaint as though fully set forth herein. 83. In enacting the Federal Cigarette Labeling and Advertising Act of 1965, Congress declared its intention "to establish a comprehensive Federal Program to deal with cigarette labeling and advertising with respect to any relationship between smoking and health." 15 U.S.C. Section 1331. 84. The FCLAA embodies Congress's careful balancing of issues of public health, the individual's freedom to smoke, and the substantial economic interests associated with cigarettes. 85. Congress explicitly prohibited any authority from requiring any labels or warnings other than those prescribed in the FCLAA. 15 U.S.C. Section 1334. 86. Although Congress has chosen to delegate some of its reserved regulatory power to federal agencies, Congress has repeatedly refused to enact legislation that would give FDA any role in the regulation of cigarettes. In the 30 years since the enactment of the FCLAA, Congress has considered granting some power to FDA over cigarettes many times; but every time it has declined to do so. 87. FDA's assertion of jurisdiction is thus contrary to, and precluded by, the FCLAA. WHEREFORE, plaintiffs pray that this Court grant plaintiffs the following relief: (A) Declare that FDA's assertion of jurisdiction over cigarettes was, and is, inconsistent with the express terms of the FCLAA and thereby is preempted; (B) Declare that FDA has no jurisdiction with respect to cigarettes, and that any FDA assertion of jurisdiction over cigarettes, or enforcement action taken against plaintiffs' products, is contrary to express congressional enactments and unlawful because it is in excess of the authority of the defendants; (C) Grant a preliminary injunction and, on final hearing, a permanent injunction requiring FDA to withdraw its assertion of jurisdiction under the FFDCA over cigarettes, and prohibiting FDA from asserting jurisdiction over cigarettes and from initiating any rulemaking or enforcement proceedings based on any illegal assertion of jurisdiction over the manufacturing, labeling and marketing of cigarettes ; and (D) Grant plaintiffs such additional relief as the Court may deem just and proper. COUNT II
FDA LACKS AUTHORITY UNDER THE FEDERAL FOOD DRUG 88. Plaintiffs incorporate, repeat and reallege each and every allegation contained in Paragraphs 1 through 81 of this Complaint as though set forth fully herein. 89. FDA has no authority with respect to cigarettes, under the FFDCA or any other statute. In particular, cigarettes are not drugs or drug delivery systems within the meaning of 21 U.S.C. Section 321(g). 90. FDA's assertion of jurisdiction over cigarettes violates (a) Congress's repeated decision to withhold such jurisdiction from FDA, (b) Congress's pervasive regime for the regulation of cigarettes, which excludes any role for FDA, (c) FDA's own long-standing precedent that it has no such jurisdiction, and (d) Congress's acquiescence in, endorsement of, and reliance on that agency position. 91. FDA's action in asserting jurisdiction over cigarettes is "in excess of statutory jurisdiction, authority, or limitations of statutory right," and therefore is in derogation of the public interest. It is therefore unlawful, and must be set aside in accordance with Section 706(2) of the APA. 5 U.S.C. Section 706(2). 92. Additionally, any FDA enforcement resulting from its declaration should be enjoined pending judicial review of such actions pursuant to Section 705 of the APA. 93. As a direct and proximate result of FDA's unlawful acts, plaintiffs have been seriously injured as alleged in this Complaint. WHEREFORE, plaintiffs pray that this Court grant plaintiffs the following relief: (A) Declare that FDA's assertion of jurisdiction over plaintiffs' cigarettes was, and is, unlawful and exceeds FDA's authority prescribed by the FFDCA and thereby contravenes Section 706(2)(C) of the APA; (B) Declare that FDA has no jurisdiction with respect to cigarettes, and that any FDA assertion of jurisdiction over cigarettes, or enforcement action taken against plaintiffs' products, is contrary to express congressional enactments and unlawful because it is in excess of the authority of the defendants; (C) Grant a preliminary injunction and, on final hearing, a permanent injunction requiring FDA to withdraw its assertion of jurisdiction under the FFDCA over cigarettes, and prohibiting FDA from asserting jurisdiction over cigarettes and from initiating any rulemaking or enforcement proceedings based on any illegal assertion of jurisdiction over the manufacturing, labeling and marketing of cigarettes; and (D) Grant plaintiffs such additional relief as the Court may deem just and proper. COUNT III
FDA'S PROPOSED REGULATIONS VIOLATE THE FIRST AND 94. Plaintiffs incorporate, repeat and reallege each and every allegation contained in Paragraphs 1 through 81 of this Complaint as though set forth fully herein. 95. FDA's proposed regulations would impose restrictions on plaintiffs' ability to advertise and promote their products, and, therefore, violate the plaintiffs' First Amendment right of free speech. 96. FDA's proposed regulations would prohibit plaintiffs from using certain trademarks or copyrighted materials and, therefore, would constitute a deprivation by FDA of property without due process of law and a taking of private property by FDA without just compensation, in violation of the Fifth Amendment of the U.S. Constitution. WHEREFORE, plaintiffs pray this Court grant plaintiffs the following relief: (A) Declare that FDA's proposed regulations over cigarettes violate the guarantee of due process of law in the U.S Constitution, U.S. Const. amend. V.; (B) Declare that FDA's proposed regulations violate the guarantee of free speech in the United States Constitution, U.S. Const. amend. I.; (C) Grant a preliminary injunction and, on final hearing, a permanent injunction requiring FDA to withdraw its assertion of jurisdiction under the FFDCA over cigarettes, and prohibiting FDA from asserting jurisdiction over cigarettes and from initiating any rulemaking or enforcement proceedings based on any illegal assertion of jurisdiction over the manufacturing, labeling and marketing of cigarettes; and (D) Grant plaintiffs such additional relief as the Court may deem just and proper.
Keith W. Vaughan
1600 BB&T Financial Center
Attorneys for Plaintiffs,
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