Brown & Williamson Tobacco Corp. v. Food & Drug Administration
Docket: Nos. 97-1604, 97-1581, 97-1606, 97-1614 and 97-1605
Court: Court of Appeals for the Fourth Circuit; August 14, 1998; Federal Appellate Court
The court reversed the district court's judgment regarding the FDA's authority to regulate tobacco products, with Judge WIDENER authoring the opinion and Senior Judge K.K. HALL dissenting. The case arose from a challenge by plaintiffs, including tobacco manufacturers and retailers, against the FDA's 1996 final rule aimed at restricting tobacco sales and advertising to minors. The plaintiffs sought declaratory and injunctive relief, arguing that Congress intended to withhold regulatory jurisdiction from the FDA concerning tobacco products under the Federal Food, Drug, and Cosmetic Act (Act).
The district court ruled partially in favor of the plaintiffs, affirming that Congress did not intend to deny the FDA the authority to regulate tobacco products and allowed the FDA to regulate them under the device provision of the Act, but rejected the FDA's advertising restrictions as inconsistent with statutory authority. The implementation of most FDA regulations was stayed pending appeal, and the court certified the order for immediate interlocutory appeal. The appellate court, upon reviewing the case de novo, concluded that the FDA lacked the jurisdiction to regulate tobacco products as asserted and invalidated all regulations issued on August 28, 1996. The FDA had claimed jurisdiction based on the definitions of drugs and devices in the Act, arguing that tobacco products could affect bodily functions and contained nicotine, which is addictive.
The FDA classified tobacco products as combination products, allowing it discretion to apply either drug or device provisions of the Act. It determined that tobacco primarily functions as a drug but concluded they are best regulated under the device provisions, specifically the restricted devices section (21 U.S.C. 360j(e)). The FDA's jurisdictional claim is based on its interpretation that tobacco products meet the definitions of both drugs and devices as outlined in the Act. However, the analysis argues that the FDA's narrow focus on definitions fails to capture Congress' intent, necessitating a deeper examination of statutory construction to clarify whether the FDA has the authority to regulate tobacco products.
The jurisdictional analysis emphasizes that agency power is derived from congressional delegation, with the central question being whether Congress intended to grant the FDA authority over "customarily marketed" tobacco products. The district court mistakenly framed the issue as whether Congress intended to withhold FDA jurisdiction, rather than whether it intended to delegate such authority. Following the Chevron framework, the examination begins with discerning Congress' intent; if clear, that intent must be followed. If ambiguous, deference to the FDA's interpretation may be granted, contingent upon a congressional delegation of authority. The excerpt highlights that the Supreme Court has underscored this requirement for deference, emphasizing the need for clear legislative authority for agency action.
No deference is owed to the FDA's interpretation of the Act unless it operates within its established congressional authority. Courts must give effect to Congress’ intent, particularly in cases where an agency seeks to broaden its jurisdiction. Historical precedents emphasize the need for rigorous analysis of congressional intent when an agency claims powers in new areas, as agencies tend to expand their authority. Statutory construction begins with the statute's language but requires contextual understanding, including the overall statutory scheme, legislative history, and relevant statutes. The inquiry into whether Congress intended to delegate jurisdiction over tobacco products to the FDA will start with the plain meaning of the statute, concluding with that language if it is unambiguous and coherent.
The FDA's and district court's narrow interpretation of the definitions of "drug" and "device" under the Act is flawed because it only considers the literal meanings without examining the intent behind those definitions. For a product to be classified as a drug or device, it must not only affect the body's structure or function but also be intended for such use, as specified in 21 U.S.C. 321(g)(1)(C) and 321(h)(3). No court has established that a product is intended for such use without explicit manufacturer claims, which the FDA acknowledges are absent for tobacco products. Furthermore, both the FDA and the district court neglected to analyze these definitions within the broader context of the statute, which is essential for proper statutory interpretation, as supported by case law emphasizing a holistic approach to statutory language.
The FDA's Deputy Commissioner stated that drug and device regulation mandates that products must be proven safe and effective before sale. The FDA's findings reveal that tobacco products are dangerous and responsible for significant health issues, including over 400,000 deaths annually. Despite these risks, the FDA has proposed regulating tobacco under provisions requiring safety assurances, arguing that the risks of removing tobacco from the market for addicted adults outweigh the dangers of its continued sale. This rationale, however, conflicts with the statutory requirements.
21 U.S.C. 360c(a)(2)(C) mandates that the FDA assess the safety and effectiveness of medical devices by balancing potential health benefits against the risks of injury or illness. The Supreme Court in United States v. Rutherford clarified that a drug is considered unsafe if its risks outweigh any therapeutic benefits. The FDA's regulatory scope is limited to evaluating health risks and benefits, not broader national policy issues, such as economic impacts or the emergence of a black market, which are within Congress's purview. The FDA has not identified any health benefits from tobacco products, which fail to meet the standards for safety and effectiveness outlined in the statute.
Despite characterizing tobacco as combination products with drug and device components, the FDA's attempt to regulate them under 360j(e) fails because it cannot ensure reasonable safety assurance for products deemed unsafe. This inconsistency is further highlighted by the mandatory approval process for new drugs under 355(a), which requires FDA approval before marketing. Since the FDA acknowledges tobacco products as unsafe, they would technically fall under unapproved new drugs, necessitating their prohibition under 21 U.S.C. 331(d) and 355(a). The FDA tries to circumvent this issue by classifying tobacco as devices, but must first determine the primary mode of action for combination products per 21 U.S.C. 353(g)(1).
If the FDA identifies the primary mode of action of a product as a drug, it must allocate primary jurisdiction to those overseeing drug premarket reviews as per 21 U.S.C. 353(g)(1)(A). The FDA acknowledges that tobacco products act primarily as drugs but opts to regulate them as devices under 360j(e) to circumvent the new drug provisions, suggesting congressional intent did not include tobacco regulation under the Act. However, this classification does not alleviate issues arising from other Act provisions. Section 331(a) prohibits the interstate commerce of misbranded drugs or devices, while Section 352(j) classifies a product as misbranded if its labeling suggests a dangerous use, which applies to tobacco given the FDA's conclusion regarding its health risks. Consequently, the marketing of tobacco products is rendered illegal under these provisions.
Furthermore, a product is misbranded if it lacks "adequate directions for use," as defined by 21 U.S.C. 352(f)(1) to ensure safe consumer usage. Although the FDA can exempt products from these requirements if public health is not at risk, it argues that tobacco products require no directions due to their common usage. Nevertheless, this exemption contradicts the FDA's own safety findings regarding tobacco, making it impossible to provide safe usage instructions. The FDA's rationale for exemptions demonstrates that the Act does not effectively apply to tobacco products. Additionally, under 21 U.S.C. 352(f)(2), a product is also misbranded if it fails to include adequate warnings against use by children, with no exemptions allowed. The FDA highlights youth tobacco use as a significant concern and claims existing federal warnings suffice, despite these warnings not addressing the specific dangers of youth use emphasized by the FDA.
The FDA has determined that existing federal statutes’ warnings are adequate and cannot be altered, as mandated by 15 U.S.C. 1334(a) and 4406(a), indicating that Congress did not intend for the FDA to regulate tobacco products. Under 21 U.S.C. 360c(b)(1), all medical devices must be classified into one of three categories based on safety and effectiveness, which involves assessing potential health benefits against risks. Despite proposing regulations three years prior, the FDA has not yet classified tobacco products, though its findings suggest they should be classified as Class III devices due to their unreasonable risk of illness or injury. Such classification would necessitate premarket approval, requiring proof of safety and effectiveness, which the FDA cannot provide for inherently dangerous products like tobacco. Moreover, the FDA is mandated to issue an immediate cease-distribution order for products causing serious health risks under 21 U.S.C. 360h(e)(1). Tobacco use is identified as the leading preventable cause of death in the U.S., yet the FDA has expressed no intention to comply with the Act's requirements, indicating that a strict adherence to the statutory language would lead to a tobacco ban, which Congress did not intend. The FDA's attempt to navigate this issue linguistically does not mitigate its obligation to act according to the law when health risks are identified.
The FDA argues that "shall" should be interpreted as "may," allowing it discretion to ban tobacco products if deemed dangerous. However, even under this interpretation, the FDA's findings support a ban, and failure to act would be an abuse of discretion. Nonetheless, an absolute ban is seen as contrary to congressional intent, which does not include tobacco products within the FDA’s regulatory scope. The FDA's attempts to navigate around statutory provisions indicate a misapplication of the Act, which is not aligned with Congress's original purpose. The text references a precedent where the FDA's efforts to expand its jurisdiction were rejected, emphasizing that Congress did not intend for the FDA to regulate tobacco. The analysis includes historical context, illustrating that since the Act's passage in 1938, Congress has not given the FDA authority over tobacco. The FDA’s historical stance has consistently excluded tobacco products from its jurisdiction, underscoring the intent that tobacco regulation was outside its mandate.
The Pure Food and Drugs Act of 1906 did not address tobacco products. The FDA's predecessor recognized in 1914 that it could regulate tobacco if labeled for medicinal use, but not for smoking or chewing. The Food, Drug, and Cosmetic Act of 1938 expanded the definition of "drug" and granted the FDA authority over devices, yet tobacco products were not mentioned in the Act or its legislative history. Over the following 60 years, the FDA consistently informed Congress that cigarettes without health claims did not fall under its jurisdiction, asserting that they do not qualify as food, drugs, devices, or cosmetics. FDA Commissioner Charles Edwards testified that classifying cigarettes as drugs would necessitate their removal from the market due to safety concerns, emphasizing that regulation should be the responsibility of Congress. In 1977, the public health group ASH petitioned the FDA to regulate cigarettes, arguing they are drugs due to nicotine addiction. The FDA rejected this petition, citing a 1953 Second Circuit ruling that affirmed cigarettes marketed without health claims do not fall under its jurisdiction, reinforcing its long-standing position that such cigarettes are not considered drugs under the Act.
In 1978, ASH submitted a petition asserting that cigarettes should be classified as devices under the Act, thereby falling under FDA jurisdiction. The FDA reviewed the legislative history and concluded that it lacked authority to regulate cigarettes as devices, stating that no rulemaking was permissible under the current definition. The FDA Commissioner noted that there was no indication in the legislative history that Congress intended to include cigarettes in the definition of “device,” despite being aware of public concerns regarding smoking hazards. This position was reiterated in 1989, where the FDA Commissioner expressed skepticism regarding the possibility of regulating tobacco products under the Food, Drug, and Cosmetic Act, acknowledging the recognized health risks associated with smoking. The FDA’s consistent interpretation over the years indicates a legal stance against the regulation of tobacco products as marketed. Furthermore, while courts typically hesitate to interpret congressional inaction as a basis for statutory interpretation, such inaction can sometimes be viewed as legislative approval of an agency's stance.
In Bob Jones University v. United States, the Supreme Court highlighted Congress' prolonged awareness and subsequent inaction regarding IRS rulings, indicating legislative acquiescence to those rulings. The Court noted that extensive congressional hearings and numerous failed bills to overturn the IRS's interpretation of the Internal Revenue Code reflected Congress's acceptance of the IRS position. Similarly, in United States v. Riverside Bayview Homes, the Court found that Congress's failure to challenge an agency's interpretation, especially when it was brought to their attention through proposed legislation, suggested acquiescence.
The district court in Coyne Beahm noted that Congress had introduced multiple bills aimed at granting the FDA jurisdiction over tobacco products, with 15 specific bills cited, yet none were enacted. Despite recognizing the FDA's lack of jurisdiction since 1914, Congress has enacted legislation addressing tobacco's health risks without countering the FDA's jurisdictional interpretation. This inaction demonstrates Congress's intent to control tobacco regulation rather than delegate it to the FDA. The analysis aligns with Chevron's directive to consider the entirety of the law and its objectives to ascertain congressional intent, particularly in light of tobacco-specific legislation aimed at addressing public health concerns related to tobacco use.
The central issue at hand is the interpretation of congressional intent regarding the FDA's jurisdiction over tobacco products, particularly in light of three specific statutes that may limit this jurisdiction. The statutory text suggests that Congress did not originally intend for the FDA to have authority over tobacco products. This interpretation is reinforced by the enactment of tobacco-specific legislation and historical context, including the 1964 Surgeon General’s report on smoking and health, which highlighted the dangers of tobacco and spurred congressional action. Following the report, hearings were held to assess the federal government's role in addressing smoking-related health concerns. During these hearings, Congress explicitly considered and ultimately rejected proposals to grant the FDA jurisdiction over tobacco. Two bills aimed at amending the existing Act to include tobacco products were proposed but not adopted. Testimonies from key officials, including the Surgeon General and the Deputy Commissioner of the FDA, confirmed that the FDA lacked the authority to regulate tobacco products under existing law unless those products made drug claims. Additionally, concerns were raised about the potential consequences of granting the FDA such jurisdiction, with warnings that it could lead to a ban on tobacco products, contrary to congressional intent and public sentiment.
A proposed ban on tobacco products was deemed contrary to public sentiment and historical context, particularly referencing the 18th Amendment. In response to the Surgeon General's report, Congress enacted the Federal Cigarette Labeling and Advertising Act (Cigarette Labeling Act, Pub. L. No. 89-92, 1965), mandating health-hazard warnings on cigarette packaging and advertisements (15 U.S.C. 1333). The Act’s purpose is twofold: to inform the public about smoking's health risks and to protect commerce by avoiding inconsistent state regulations (15 U.S.C. 1331).
The district court interpreted that the Cigarette Labeling Act's preemption clause limits further tobacco regulation to Congress. However, it is argued that this claim is overly broad. While the Act prohibits health-related statements outside those specified, it does not prevent other regulations on tobacco products. The enactment of the Cigarette Labeling Act indicates Congress's intent to regulate tobacco products itself, rather than delegating this authority to the FDA. The regulatory framework established by the Act conflicts with the FDA’s jurisdiction, as the Act emphasizes both public health and economic considerations, which the FDA's mandate does not encompass. Furthermore, the Act's provisions directly oppose the FDA's requirements regarding the sale of unsafe products (21 U.S.C. 331, 352).
The Cigarette Labeling Act acknowledges the inherent dangers of cigarettes but allows their marketing with consumer warnings, as outlined in 15 U.S.C. 1331 and 1333. This legislative choice is inconsistent with the Act’s provisions, which do not permit the FDA to consider the implications of Congress's policy decision to continue marketing unsafe products. Congress explicitly excluded FDA jurisdiction over tobacco products when developing the Act, a point supported by a lack of contrary legislative history. The historical context of the Act is crucial for understanding congressional intent, as established in Radowich v. United States Att’y, which emphasizes the importance of legislative history in interpreting statutes.
Subsequent congressional actions, including debates surrounding the expiration of the Act’s advertising regulations and proposals from the FCC and FTC to ban cigarette advertising, further illustrate Congress's intent to retain exclusive policymaking authority over tobacco regulation. The House Report from 1969 articulated concerns regarding constitutional issues and agency overreach in tobacco policy, reaffirming Congress's role as the primary policymaker. Following these discussions, the Public Health Cigarette Smoking Act of 1969 amended the original Act without altering the provision outlining Congress’s regulatory policy. Additionally, Congress expressed ongoing interest in tobacco regulation through later legislation, such as the Alcohol and Drug Abuse Amendments of 1983.
Amendments mandate the Secretary of Health and Human Services (HHS) to report to Congress every three years on the addictive properties of tobacco and to suggest legislative or administrative actions deemed appropriate (42 U.S.C. 290aa-2(b)). This reflects Congress's acknowledgment of tobacco's addictive nature and its intention to maintain regulatory oversight. The 1984 Comprehensive Smoking Education Act amended the Cigarette Labeling Act, establishing rotating warnings on cigarette packaging and advertising, creating an Interagency Committee on Smoking and Health (excluding FDA representation), and requiring annual ingredient disclosures to HHS (15 U.S.C. 1333; 15 U.S.C. 1341(b); 15 U.S.C. 1335a). The House Report emphasized cigarette smoking as a critical public health issue while noting that federal consumer protection laws do not cover cigarettes.
In 1986, Congress enacted the Comprehensive Smokeless Tobacco Health Education Act, which imposed health warning requirements on smokeless tobacco products, authorized the Federal Trade Commission (FTC) to regulate label warnings, banned certain advertising, and mandated annual ingredient and nicotine reporting to HHS (15 U.S.C. 4401-4408). The Act also tasked the Secretary of HHS with public education on smokeless tobacco hazards, aimed at school systems, and provided technical and financial support to states for educational initiatives and age restrictions on sales. Additionally, it requires biennial reports to Congress evaluating health education efforts and the health impacts of smokeless tobacco, alongside recommendations for legislative action (15 U.S.C. 4407(a)). Both Acts include preemption clauses (15 U.S.C. 4406).
Federal agencies are not required to include any health-related statements about smokeless tobacco products on packages or advertisements, except those mandated by section 4402. The Smokeless Tobacco Act reflects congressional concerns regarding the rising popularity of smokeless tobacco among minors, as highlighted in the House Report. Congress has explicitly addressed youth tobacco use, indicating that the FDA lacks jurisdiction over tobacco regulation. The detailed legislative framework established by Congress demonstrates an intention to retain regulatory authority over smokeless tobacco, contrary to any claim that the FDA should have such authority.
Court precedent advises against broadly interpreting earlier statutes to undermine the specific regulatory schemes created by later statutes. If the FDA finds a need for more regulation, it should recommend this to Congress, as stipulated in the Smokeless Tobacco Act. Additionally, the 1992 Amendments focused on state-level regulation of youth access to tobacco, providing incentives for states to enforce access restrictions. The FDA’s proposed regulations could preempt state laws, undermining states' traditional roles in regulating youth access. While the FDA suggests that states might qualify for exemptions from preemption, this does not resolve the conflict between state regulatory authority and the FDA's proposed regulations. Ultimately, Congress has made it clear that state participation is essential for effectively addressing youth access to tobacco products, and allowing the FDA to supersede this determination would contradict congressional intent. Over the past six decades, Congress has consistently enacted laws concerning tobacco regulation.
Congress recognized the health risks of tobacco products and the FDA's stance that it lacked jurisdiction over them, yet it chose not to challenge this interpretation from 1965 to 1993. Instead of allowing the FDA to regulate tobacco, Congress opted to retain regulatory authority and established a system for agencies to report new information and legislative recommendations. This indicates that Congress did not intend to delegate jurisdiction over tobacco products to the FDA. The core issue is not about the need for more stringent regulations but rather about which entity has the authority to make such policy decisions. Citing a Supreme Court precedent, it is emphasized that neither federal agencies nor courts can override Congressional policy decisions. The FDA's actions are characterized as exceeding its granted authority, leading to the reversal of the district court's judgment. The FDA had only proposed regulations before the complaint was filed, and while some age restrictions were upheld, all states had already independently prohibited sales of tobacco to minors. The regulatory authority of the Secretary of Health and Human Services, acting through the FDA, is noted, but the focus remains on the lack of Congressional delegation of power concerning tobacco regulation.
The Act defines "drug" as articles intended to affect the structure or function of the body, excluding food (21 U.S.C. 321(g)(1)(C)). A "device" is defined as an article intended to affect the body's structure or function, which does not achieve its primary purpose through chemical action or metabolism (21 U.S.C. 321(h)(3)). A "combination product" includes any combination of a drug, device, or biological product (21 U.S.C. 353(g)). Tobacco products are not considered "biological products" as defined in the Act (42 U.S.C. 262(1)). Section 360j(e) allows the Secretary to impose restrictions on the sale, distribution, or use of devices if they pose potential harm and lack reasonable assurance of safety and effectiveness (21 U.S.C. 360j(e)). The plaintiffs refer to "customarily marketed" tobacco products as those marketed with general claims (e.g., smoking pleasure) rather than specific therapeutic claims (e.g., weight loss). The interpretation of statutory language should align with Congressional intent, as strict adherence may contradict that intent (Maryland State Dep't of Educ. v. U.S. Dep’t of Veterans Affairs). The district court's jurisdictional analysis focused only on definitions, overlooking critical operative provisions of the Act. A "new drug" is defined as one not generally recognized by qualified experts as safe and effective for its labeled use (21 U.S.C. 321(p)(1)). Notably, the FDA regulates tobacco products as devices, while nicotine products like patches and gums are classified as drugs.
Under 21 U.S.C. 360h(e)(1), the FDA is mandated to order the immediate cessation of distribution of any device that poses a reasonable probability of causing serious health consequences or death. Historical support for the Act came from key figures in tobacco-producing states, specifically Senator Bailey and Representative Chapman, who were involved in its congressional management. Had there been any awareness that the Act could apply to tobacco products, opposition from these representatives would likely have emerged. The FDA has previously cited several court cases, including FTC v. Liggett and others, to support its stance that it lacks authority over cigarettes as they are marketed. A federal appeals court reaffirmed this lack of jurisdiction in ASH v. Harris, referencing past judicial interpretations that suggest legislators did not intend for the definitions in the Act to be all-encompassing. Although an agency may change its interpretations, any conflicting new interpretation is entitled to less deference. Evidence of legislative ratification also counters the FDA's current actions. The district court's attempt to differentiate between agency actions and jurisdictional statements was deemed unconvincing. Additionally, the 1970 amendments to cigarette regulations indicate that Congress recognized the need for a distinct jurisdiction for tobacco products, evidenced by changes to warning labels and advertising restrictions, despite acknowledging tobacco's addictive nature.
The Drug Abuse and Mental Health Administration Reorganization Act of 1992 establishes eligibility criteria for states to receive financial incentives related to tobacco control. States must: 1) prohibit sales of tobacco products to individuals under 18 years old; 2) enforce this prohibition effectively to reduce availability to minors; 3) conduct random, unannounced inspections of retailers for compliance; and 4) submit annual reports to the Secretary of Health and Human Services (HHS) detailing enforcement efforts.
Between 1965 and 1993, Congress introduced at least 13 bills to grant the FDA jurisdiction over tobacco products, none of which were enacted. The FTC has limited authority to regulate tobacco advertising, constrained by specific tobacco legislation. The HHS, FTC, and an Interagency Committee are required to report periodically to Congress on the health impacts, addictive nature, and advertising of tobacco products.
Additionally, a footnote clarifies that a district court's judgment on the interpretation of 21 U.S.C. 360j(e) is vacated due to its incorrect conclusion that the FDA had regulatory authority over tobacco products. Consequently, the court did not need to address the interpretation of 360j(e), and the appellate decision does not endorse or reject the district court's prior ruling on that matter.
