Sottera, Inc. v. Food & Drug Administration

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 23, 2010 Decided December 7, 2010

No. 10-5032

SOTTERA, INC., DOING BUSINESS AS NJOY,

APPELLEE

v.

FOOD & DRUG ADMINISTRATION, ET AL.,

APPELLANTS

Appeal from the United States District Court

for the District of Columbia

(No. 1:09-cv-00771-RJL)

Alisa B. Klein, Attorney, U.S. Department of Justice,

argued the cause for appellants. With her on the briefs were

Ronald C. Machen, Jr., U.S. Attorney, Mark B. Stern and

Samantha L. Chaifetz, Attorneys, Ralph S. Tyler, Chief

Counsel, United States Department of Health and Human

Services, Eric M. Blumberg, Deputy Chief Counsel, and

Karen E. Schifter, Associate Chief Counsel. Drake S. Cutini,

Attorney, U.S. Department of Justice, entered an appearance.

William B. Schultz was on the brief for amici curiae

American Academy of Pediatrics, et al. in support of

appellants.

2

Gregory G. Garre argued the cause for appellee Sottera,

Inc. With him on the brief were Richard P. Bress, John R.

Manthei, and Jessica E. Phillips.

Deborah M. Shelton and Christopher M. Loveland were

on the brief for amici curiae Smokefree Pennsylvania, et al. in

support of appellee.

Daniel J. Popeo, Richard A. Samp, Coleen E. Klasmeier,

and Rebecca K. Wood were on the brief for amicus curiae

Washington Legal Foundation in support of appellee.

Before: GARLAND and KAVANAUGH, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS.

Opinion concurring in the judgment filed by Circuit

Judge GARLAND.

WILLIAMS, Senior Circuit Judge: Sottera, Inc., which

does business as NJOY, is an importer and distributor of

“electronic cigarettes” or “e-cigarettes,” a product that enables

users to inhale vaporized nicotine. The question before us is

whether Congress has authorized the Food and Drug

Administration (“FDA”) to regulate e-cigarettes under the

drug/device provisions of the Federal Food, Drug, and

Cosmetic Act (“FDCA”), 21 U.S.C. § 351 et seq., or under the

Family Smoking Prevention and Tobacco Control Act of 2009

(the “Tobacco Act”), Pub. L. 111-31, 123 Stat. 1776. We

think that the statutes, properly read in light of the Supreme

Court’s decision in FDA v. Brown & Williamson, 529 U.S.

120 (2000), locate the product under the Tobacco Act.

3

* * *

Electronic cigarettes are battery-powered products that

allow users to inhale nicotine vapor without fire, smoke, ash,

or carbon monoxide. NJOY Compl. at 2. Designed to look

like a traditional cigarette, each e-cigarette consists of three

parts: the nicotine cartridge, the atomizer or heating element,

and the battery and electronics. The plastic cartridge serves as

the mouthpiece and contains liquid nicotine, water, propylene

glycol, and glycerol. Id. at 5. The atomizer vaporizes the

liquid nicotine, and the battery and electronics power the

atomizer and monitor air flow. Id. When the user inhales, the

electronics detect the air flow and activate the atomizer; the

liquid nicotine is vaporized, and the user inhales the vapor.

Id.

NJOY has imported and distributed e-cigarettes since

2007. Id. at 2, 4. The liquid nicotine in each e-cigarette is

derived from natural tobacco plants, Decl. of John Leadbeater

at 2, and NJOY claims that its product is marketed and labeled

for “smoking pleasure,” rather than as a therapeutic or

smoking cessation product. NJOY Compl. at 2; Decl. of John

Leadbeater at 2. On April 15, 2009 the FDA ordered that a

shipment of NJOY’s e-cigarettes be denied entry into the

United States, asserting that the e-cigarettes appeared to be

adulterated, misbranded, or unapproved drug-device

combinations under the FDCA. April 20, 2009 Notice of

FDA Action.

Also in April 2009, another importer and distributor of e-

cigarettes, Smoking Everywhere, Inc., sought a preliminary

injunction barring the FDA and various officials from denying

their products entry into the United States and from regulating

e-cigarettes under the drug/device provisions of the FDCA.

Smoking Everywhere Compl. at 1-2, 7. NJOY joined as an

intervenor-plaintiff and filed its own complaint and request

4

for a preliminary injunction. NJOY Compl. at 3; Mem. Op. at

7.

Smoking Everywhere and NJOY argued that the FDA can

regulate electronic cigarettes, as they propose to market them,

only under the Tobacco Act, claiming that the Supreme

Court’s opinion in Brown & Williamson foreclosed FDCA

drug/device jurisdiction over tobacco products marketed

without claims of therapeutic effect. The district court agreed

and granted the injunction. While this appeal was pending,

Smoking Everywhere voluntarily dismissed its complaint

against the FDA, leaving NJOY as the sole appellee. See

NJOY Br. at 4.

When deciding whether to grant a preliminary injunction,

a district court must consider four familiar factors: whether

“(1) the plaintiff has a substantial likelihood of success on the

merits; (2) the plaintiff would suffer irreparable injury were an

injunction not granted; (3) an injunction would substantially

injure other interested parties; and (4) the grant of an

injunction would further the public interest.” Ark. Dairy Co-

op Ass’n, Inc. v. U.S. Dep’t of Agric., 573 F.3d 815, 821 (D.C.

Cir. 2009) (citing Serono Labs., Inc. v. Shalala, 158 F.3d

1313, 1317-18 (D.C. Cir. 1998)). We review the district

court’s weighing of these factors under an abuse of discretion

standard, but review questions of law de novo. Id.; see also

Davis v. Pension Benefit Guarantee Corp., 571 F.3d 1288,

1291 (D.C. Cir. 2009).

* * *

Under the FDCA, the FDA has authority to regulate

articles that are “drugs,” “devices,” or drug/device

combinations. 21 U.S.C. § 321(g)(1) defines drugs to include

5

(B) articles intended for use in the diagnosis, cure,

mitigation, treatment, or prevention of disease in man or

other animals; and (C) articles (other than food) intended

to affect the structure or any function of the body of man

or other animals.

21 U.S.C. § 321(g)(1)(B) & (C). The statute defines devices

similarly, see 21 U.S.C. § 321(h)(2) & (3); products that are

“combination[s] of a drug, device, or biological product” are

regulated as combination products, see 21 U.S.C. § 353(g)(1).

Until 1996, the FDA had never attempted to regulate

tobacco products under the FDCA (with one exception,

irrelevant for reasons discussed below) unless they were sold

for therapeutic uses, that is, for use in the “diagnosis, cure,

mitigation, treatment, or prevention of disease” under

§ 321(g)(1)(B). Cf. Action on Smoking and Health v. Harris,

655 F.2d 236 (D.C. Cir. 1980). But in that year, the FDA

changed its long-held position, promulgating regulations

affecting tobacco products as customarily marketed, i.e., ones

sold without therapeutic claims. See Regulations Restricting

the Sale and Distribution of Cigarettes and Smokeless

Tobacco to Protect Children and Adolescents, 61 Fed. Reg.

44,396 (Aug. 28, 1996). The agency asserted that nicotine is a

drug that affects the structure or function of the body under

§ 321(g)(1)(C) and that cigarettes and smokeless tobacco were

therefore drug/device combinations falling under the FDA’s

regulatory purview, even absent therapeutic claims. See 61

Fed. Reg. at 44,397, 44,400.

In FDA v. Brown & Williamson, the Supreme Court

rejected the FDA’s claimed FDCA authority to regulate

tobacco products as customarily marketed. Looking to the

FDCA’s “overall regulatory scheme,” the “tobacco-specific

legislation” enacted since the FDCA, and the FDA’s own

frequently asserted position, it held that Congress had “ratified

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. . . the FDA’s plain and resolute position that the FDCA gives

the agency no authority to regulate tobacco products as

customarily marketed.” 529 U.S. at 126, 159.

To fill the regulatory gap identified in Brown &

Williamson, Congress in 2009 passed the Tobacco Act, Pub.

L. No. 111-31, 123 Stat. 1776, 21 U.S.C. §§ 387 et seq.,

providing the FDA with authority to regulate tobacco

products. The act defines tobacco products so as to include all

consumption products derived from tobacco except articles

that qualify as drugs, devices, or drug-device combinations

under the FDCA:

(rr) (1) The term “tobacco product” means any product

made or derived from tobacco that is intended for human

consumption, including any component, part, or

accessory of a tobacco product . . .

(2) The term “tobacco product” does not mean an article

that is a drug under [the FDCA’s drug provision], a

device under [the FDCA’s device provision], or a

combination product described in [the FDCA’s

combination product provision].

21 U.S.C. § 321(rr).

The Tobacco Act itself states that it does not “affect,

expand, or limit” the FDA’s jurisdiction to regulate products

under the drug/device provisions of the FDCA, 21 U.S.C.

§ 387a(c)(1), and the district court and parties themselves

appear to agree that the Tobacco Act did not expand the

category of drugs, devices, and combination products subject

to FDCA jurisdiction in the wake of Brown & Williamson.

See Mem Op. 9 n.4. The question before us, therefore, is

whether the FDA can regulate electronic cigarettes under the

7

FDCA’s drug/device provisions or whether it can regulate

them only under the Tobacco Act’s provisions.

The FDA at one point argues that its decision to regulate

electronic cigarettes under the FDCA’s drug/device provisions

is entitled to Chevron deference. See Chevron U.S.A. Inc. v.

Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). FDA Br. at

20. But in fact the case does not turn on matters of statutory

interpretation. Rather, as the FDA itself argues, the Tobacco

Act did not alter the FDA’s authority under the FDCA. FDA

Br. at 19; FDA Reply Br. at 21. And with respect to tobacco

products, the breadth of that authority is governed by the

Supreme Court’s decision in Brown & Williamson. We

therefore turn to that case.

* * *

In Brown & Williamson the Supreme Court addressed the

FDA’s regulation of cigarettes and smokeless tobacco

products under the FDCA. It began by noting that the FDCA

seeks to ensure that the FDA will approve products only if

they are safe and effective for their intended use. 529 U.S. at

133. Yet the FDA had itself found that tobacco products are

“unsafe,” “dangerous,” and “cause great pain and suffering

from illness.” Id. at 134 (quoting 61 Fed. Reg. 44,412). If

tobacco products were drug/device combinations under the

FDCA, the FDA would have no choice but to ban them. Id. at

135.

Clearly that could not be the case, the Court reasoned.

After all, Congress had declared, in a provision of the U.S.

Code then in force, that tobacco was “one of the greatest basic

industries of the United States,” id. at 137 (quoting 7 U.S.C.

§ 1311(a)), and it had also passed six separate statutes relating

to tobacco since 1965. Id. at 137-38. See Federal Cigarette

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Labeling and Advertising Act, Pub. L. 89-92, 79 Stat. 282;

Public Health Cigarette Smoking Act of 1969, Pub. L. 91-222,

84 Stat. 87; Alcohol and Drug Abuse Amendments of 1983,

Pub. L. 98-24, 97 Stat. 175; Comprehensive Smoking

Education Act, Pub. L. 98-474, 98 Stat. 2200; Comprehensive

Smokeless Tobacco Health Education Act of 1986, Pub. L.

99-252, 100 Stat. 30; Alcohol, Drug Abuse, and Mental

Health Administration Reorganization Act, Pub. L. 102-321,

§ 202, 106 Stat. 394. Finally, citing its decision in MCI

Telecommunications Corp. v. AT&T Co., 512 U.S. 218

(1994), the Court noted that “Congress could not have

intended to delegate a decision of such economic and political

significance to an agency in so cryptic a fashion.” Brown &

Williamson, 529 U.S. at 160. So the Court held that the

FDA’s claim of FDCA jurisdiction failed.

For our purposes, the central question is whether Brown

& Williamson’s reading of the FDA’s authority under the

drug/device provisions of the FDCA applies only to tobacco

products for which Congress has passed specific regulatory

statutes or whether it extends to all tobacco products as

customarily marketed. The FDA argues that Brown &

Williamson takes a statute-specific approach, excluding the

FDA from regulating only those tobacco products that at the

time of Brown & Williamson had been the subject of specific

federal legislation. FDA Br. at 14. Though Brown &

Williamson is not crystal clear, we think the better reading is

that the FDA lacks FDCA drug/device authority to regulate all

tobacco products marketed without claims of therapeutic

effect, i.e., as customarily marketed.

Brown & Williamson’s focus was not on the particular

products that the six statutes cover or even on the six statutes

themselves; at no point did it quote the precise language in

which the six statutes identified covered products. Rather,

Brown & Williamson considered the context of each statute to

9

show that Congress was actively thinking about “the tobacco

problem. ” 529 U.S. at 145. In situating the statutes, Brown

& Williamson found that “[i]n adopting each statute, Congress

has acted against the backdrop of the FDA’s consistent and

repeated statements that it lacked authority under the FDCA to

regulate tobacco absent claims of therapeutic benefit by the

manufacturer.” Id. at 144.

Brown & Williamson concentrated overwhelmingly on

the unifying theme of historic FDA policy towards tobacco

products—a policy that it saw as undifferentiated except with

regard to the presence or absence of claims of therapeutic

effect. See, e.g., id. at 145 (“[T]obacco marketed for chewing

or smoking without accompanying therapeutic claims, does

not meet the definitions in the Food, Drug, and Cosmetic

Act…” (citing Letter to Directors of Bureaus, Divisions and

Directors of Districts from FDA Bureau of Enforcement (May

24, 1963))); id. at 146 (“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” (citing Brief for Appellee (FDA) in Action on

Smoking and Health v. Harris, 655 F.2d 236 (D.C. Cir.

1980))); id. at 146 (noting that the FDA’s predecessor agency,

the Bureau of Chemistry, stated it lacked authority to regulate

tobacco products absent therapeutic claims); id. at 155

(quoting the FDA’s General Counsel as defining regulatory

scope over tobacco products based on therapeutic purpose);

id. at 158 (citing the FDA Deputy Commissioner stating that

FDA’s jurisdiction was limited to tobacco products bearing

“drug claims”); id. at 158 (citing the Commissioner of the

FDA stating that FDA’s jurisdiction was limited to tobacco

products bearing “health claims”).

10

Moreover, discussing the record before Congress in the

period when it passed these six statutes, Brown & Williamson

noted that Congress knew of both “the adverse health

consequences of tobacco use” and of “nicotine’s

pharmacological effects.” Id. at 138. Nonetheless, Congress

“considered and rejected bills that would have granted the

FDA” jurisdiction over tobacco products. Id. at 144.

In this light, Brown & Williamson interprets the six

statutes not as a particular carve-out from the FDCA for

cigarettes and smokeless tobacco (plus any additional

products covered in the six statutes, which the FDA briefs

make no effort to itemize), but rather as “a distinct regulatory

scheme to address the problem of tobacco and health”—one

that Congress intended would “preclude[] any role for the

FDA” with respect to “tobacco absent claims of therapeutic

benefit by the manufacturer.” Id. In doing so, Congress also

“persistently acted to preclude a meaningful role for any

administrative agency in making policy on the subject of

tobacco and health.” Id. at 156. As customarily marketed,

tobacco products were to remain the province of Congress.

Reflecting on the history and structure of tobacco

regulation, Brown & Williamson concluded,

Congress has affirmatively acted to address the issue of

tobacco and health, relying on the representations of the

FDA that it had no authority to regulate tobacco. It has

created a distinct scheme to regulate the sale of tobacco

products, focused on labeling and advertising, and

premised on the belief that the FDA lacks such

jurisdiction under the FDCA. As a result, Congress’

tobacco-specific statutes preclude the FDA from

regulating tobacco products as customarily marketed.

Id. at 156.

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Brown & Williamson therefore did not preclude the FDA

from regulating only those products for which Congress had

passed specific statutes. Rather, it recognized that Congress

had consciously developed a statutory scheme for tobacco and

health that distinguished tobacco products as customarily

marketed from ones marketed for therapeutic purposes.

“Thus, what Congress ratified was the FDA’s plain and

resolute position that the FDCA gives the agency no authority

to regulate tobacco products as customarily marketed.” Id. at

159.

At oral argument the FDA observed with some justice

that the regulatory scheme before the Court in Brown &

Williamson addressed only cigarettes and smokeless tobacco;

it would have us infer that the Court used the incessantly

repeated phrase “tobacco products” as a shorthand, confined

to the products before the Court (supplemented by whatever

additional products were reached by the six statutes). We find

no evidence of any such restrictive intent; certainly the Court

did not use the familiar economizing form: “cigarettes and

smokeless tobacco (‘tobacco products’).”

The Tobacco Act is wholly consistent with this reading of

Brown & Williamson. Written to address the regulatory gap

that the case identified, the Tobacco Act provides the FDA

with regulatory authority over tobacco products without

requiring therapeutic claims. Besides leaving the FDA’s

authority under the drug/device provisions of the FDCA

undisturbed, see 21 U.S.C. § 321(rr)(2) & § 387a(c)(1), the act

broadly defines tobacco products as extending to “any product

made or derived from tobacco,” 21 U.S.C. § 321(rr)(1)

(emphasis added). To be sure, this definition could align with

a variety of interpretations of Brown & Williamson’s scope

(including the one FDA proffers here), but our reading is

squarely within that range.

12

The FDA responds that its treatment of the Favor

Smokeless Cigarette in 1987 supports its reading of Brown &

Williamson. FDA Br. at 14-15. We think not. Favor was a

small tube containing a nicotine solution, enabling the user to

inhale nicotine vapor without smoke. Id. at 14. Though the

Smokeless Cigarette was marketed without therapeutic claims,

the FDA warned Favor that it was an unapproved new drug.

Id. at 14-15. The FDA’s claimed authority over Favor was,

however, never challenged or adjudicated in court. Nor did

Brown & Williamson address the Smokeless Cigarette,

perhaps because neither side brought it before the Court

(perhaps in turn because the individuals litigating the case

were unaware of it). In its argument in Brown & Williamson,

the FDA stated that “the only instances in which the agency

had found that tobacco products were drugs involved cases in

which there were express market claims of therapeutic value.”

Pet’rs’ Br., FDA v. Brown & Williamson, 529 U.S. 120 (2000)

(No. 98-1152), 1999 WL 503874 at *37 (emphasis added). In

fact, one of the FDA’s arguments in Brown & Williamson was

that the agency was “free to change its position” as long as it

provided a reasoned justification for the change. Id. at *38

(emphasis added). And that would likely have been true—but

for the Court’s conclusion that Congress had ratified what the

Court understood as the FDA’s invariable exclusion of

tobacco products made without claims of therapeutic effect.

The FDA has also offered a consequentialist argument,

namely, that understanding Brown & Williamson in this

fashion leaves the FDA severely thwarted in any effort to

nudge e-cigarettes toward relatively healthful forms (or at

least away from relatively unhealthful ones). Whether such a

consequentialist argument should play any role in our

interpretation of Brown & Williamson is questionable, but no

matter. In fact the Tobacco Act gives the FDA broad

regulatory authority over tobacco products, including, for

instance, authority to impose restrictions on their sale, and on

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the advertising and promotion of such products, see 21 U.S.C.

§ 387f(d), to regulate the mode of manufacture of tobacco

products, see id. § 387f(e), and to establish standards for

tobacco products, see id. § 387g. To the extent that Congress

believed Brown & Williamson left an insufficiently regulative

environment for cigarettes, smokeless tobacco, cigars, and

other tobacco products, it found the Tobacco Act an adequate

remedy.

Together, Brown & Williamson and the Tobacco Act

establish that the FDA cannot regulate customarily marketed

tobacco products under the FDCA’s drug/device provisions,

that it can regulate tobacco products marketed for therapeutic

purposes under those provisions, and that it can regulate

customarily marketed tobacco products under the Tobacco

Act.

* * *

As to NJOY’s likelihood of success on the merits, the

firm claims that its electronic cigarettes use a liquid nicotine

mixture derived from tobacco and that its products are not

marketed for therapeutic uses, NJOY Compl. at 5; Decl. of

John Leadbeater at 2; the FDA appears not to challenge either

claim. Still, the district court noted that the factual record on

NJOY is meager and that the FDA may establish that NJOY

does in fact make therapeutic claims regarding its electronic

cigarettes. Mem. Op. at 25 n. 17. Until such time, the

definitional line laid down in Brown & Williamson (as we

understand it) leaves the FDA without jurisdiction over these

products under the FDCA’s drug/device provisions. On the

merits, then, NJOY is likely to succeed.

We also find that the district court did not abuse its

discretion in finding that the balance of harms tips toward

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NJOY. In showing irreparable harm, the injury to the party

must “be both certain and great; it must be actual and not

theoretical.” Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674

(D.C. Cir. 1985). The FDA’s refusal to admit NJOY’s

products into the United States obviously destroyed the firm’s

ability in the United States to cover its costs for purchase or

production of e-cigarettes. The district court’s finding that

this loss would be irreparable absent an injunction appears

entirely reasonable. Mem. Op. at 29. Regarding harm to third

parties and to the public interest, the district court observed

that the FDA had cited no evidence to show that electronic

cigarettes harmed anyone. Id. at 30. More significantly, the

court rightly found that the FDA has authority under the

Tobacco Act to regulate electronic cigarettes, enabling it to

mitigate or perhaps extinguish any harm to public health. Id.

at 31. Given the likelihood of NJOY’s success on the merits,

the irreparable harm to NJOY’s business, and the FDA’s

unquestioned Tobacco Act authority to mitigate any public

harm, the district court did not abuse its discretion in granting

the preliminary injunction.

* * *

As we have already noted, the FDA has authority to

regulate customarily marketed tobacco products—including e-

cigarettes—under the Tobacco Act. It has authority to

regulate therapeutically marketed tobacco products under the

FDCA’s drug/device provisions. And, as this decision is

limited to tobacco products, it does not affect the FDA’s

ability to regulate other products under the “structure or any

function” prong defining drugs and devices in 21 U.S.C.§ 321

(g) and (h), as to the scope of which—tobacco products

aside—we express no opinion. Of course, in the event that

Congress prefers that the FDA regulate e-cigarettes under the

FDCA’s drug/device provisions, it can always so decree.

15

The judgment of the district court is

Affirmed.

GARLAND , Circuit Judge, concurring in the judgment:

Although I join my colleagues in the disposition of this case, I do

so based on different reasoning. I do not read FDA v. Brown &

Williamson, 529 U.S. 120 (2000), as barring the FDA from

regulating “electronic cigarettes” under the Food, Drug, and

Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq., because I do not

believe the Supreme Court intended its use of the term “tobacco

products” to extend to products that do not contain tobacco.

The Tobacco Control Act of 2009, Pub. L. No. 111-31, 123 Stat.

1776, however, expressly extends to products that are merely

“derived from” tobacco. Accordingly, at least in the absence of

a contrary agency interpretation entitled to Chevron deference,

I read the Tobacco Control Act as requiring the FDA to regulate

products like electronic cigarettes under that Act, rather than

under the FDCA.

I

In Brown & Williamson, the Supreme Court held that the

FDA lacks authority to regulate “tobacco products” under the

drug/device provisions of the FDCA, unless those products are

marketed with therapeutic claims. 529 U.S. at 144, 158-59. On

its face, the natural meaning of the term “tobacco product” is a

product -- like cigarettes or chewing tobacco -- that contains

tobacco. Although it is true that the liquid nicotine in NJOY’s

electronic cigarettes is derived from tobacco, it seems less

natural to regard that fact as sufficient to transform NJOY’s

plastic cartridges -- which contain no tobacco -- into a tobacco

product. As NJOY acknowledges, its reading leads to the

counterintuitive conclusion that a syringe filled with injectable

nicotine is a tobacco product as well. Oral Argument Tr. 40-41.

On many, although not all, occasions on which Brown &

Williamson used the term “tobacco products,” the Court coupled

it with an express reference to tobacco or to products that plainly

2

contain tobacco.1 At no point did the Court state that the FDA

was barred from regulating “nicotine” (or a product containing

nicotine but not tobacco) under the FDCA. Thus, the most

straightforward reading of the term “tobacco products” is as

short-hand for products that contain tobacco. Compare 529 U.S.

at 155 (describing several congressional statutes as “creating a

distinct regulatory scheme for cigarettes and smokeless

tobacco”), with id. at 159 (describing the same statutes as

“creat[ing] a distinct regulatory scheme for tobacco products”)

(emphases added).

This reading is consistent with the context in which the

Court decided Brown & Williamson. In that case, the Court

1

See, e.g., 529 U.S. at 126, 127, 128, 129 (using the term

“tobacco products” in reference to the FDA’s rule concerning the sale

of “cigarettes and smokeless tobacco”); id. at 129 (describing that rule

-- which was limited to cigarettes and smokeless tobacco -- as

requiring that a specified statement appear on “all tobacco product

packages”); id. at 134 (noting that the FDA had found “tobacco

products” to cause “tobacco-related illnesses, such as cancer,

respiratory illnesses, and heart disease” -- illnesses that the FDA

associated with tobacco, not nicotine); id. at 142 (noting that “tobacco

products” cannot “be safe within the meaning of the FDCA” because,

“[a]s the FDA has documented in great detail, cigarettes and

smokeless tobacco are an unsafe means to obtaining any

pharmacological effect”); id. at 145 (describing the FDA’s 1964

testimony that it lacked authority to label cigarette packages as

testimony that it lacked jurisdiction to regulate “tobacco products”);

id. at 146 (citing, in support of the proposition that the FDA had never

before “asserted authority to regulate tobacco products as customarily

marketed,” the fact that the “FDA has repeatedly informed Congress

that cigarettes are beyond the scope of the statute absent health

claims”).

3

upheld a challenge to a 1996 FDA rule asserting authority to

regulate the sale of cigarettes and smokeless tobacco under the

FDCA. 529 U.S. at 126-30 (citing Regulations Restricting the

Sale and Distribution of Cigarettes and Smokeless Tobacco to

Protect Children and Adolescents, 61 Fed. Reg. 44,396 (Aug. 28,

1996)). Because all of the products at issue in the rule contained

tobacco, the Court had no occasion to opine upon the FDA’s

authority to regulate a product, like electronic cigarettes, that

does not. Indeed, although a product indistinguishable from

electronic cigarettes had been introduced some ten years earlier

-- the “Favor Smokeless Cigarette,” which consisted of a small

tube containing an inhalable nicotine solution -- there is no

indication in Brown & Williamson that the Court had ever heard

of it. (The FDA had asserted authority to regulate Favor in

1987, notwithstanding that it was marketed without therapeutic

claims. Regulatory Letter from FDA to Advanced Tobacco

Prods. Inc. (Feb. 9, 1987) (J.A. 425-26)).

But the most telling indication that the holding of Brown &

Williamson does not extend to electronic cigarettes is that the

Court’s reasoning does not apply to products that do not contain

tobacco. The Supreme Court’s chief rationale for its holding had

two premises. First, the Court determined that, “if tobacco

products were ‘devices’ under the FDCA, the FDA would be

required to remove them from the market.” 529 U.S. at 135. It

reached this conclusion because the FDA may only approve a

product for marketing under the FDCA if it is safe and effective

for its intended use, and the FDA had “exhaustively

documented” that tobacco products are unsafe for any

pharmacological use. Id. at 133-35. Second, the Court found

that Congress had “foreclosed the removal of tobacco products

from the market” through “tobacco-specific legislation” passed

subsequent to the FDCA. Id. at 137, 143. Thus, the Court

concluded: “If they cannot be used safely for any therapeutic

4

purpose, and yet they cannot be banned, they simply do not fit”

within the FDCA’s regulatory scheme. Id. at 143.

Neither premise holds true for pure nicotine or for a

tobacco-free product that delivers nicotine. First, unlike

products containing tobacco, which the FDA has found to be

associated with “cancer, respiratory illnesses, and heart disease,”

529 U.S. at 134-35, the FDA has not found that nicotine or

tobacco-free products that deliver nicotine are inherently unsafe.

To the contrary, the FDA has approved several such products

marketed with therapeutic claims, determining that they satisfy

the FDCA safety requirements that Brown & Williamson

determined “tobacco products” could not meet. See FDA Br. 16

(noting that the FDA has approved nicotine gums and

transdermal patches). Indeed, the FDA states that “it may well

be possible for a manufacturer of ‘electronic cigarettes’ . . . to

satisfy the FDCA’s safety, effectiveness, and labeling

requirements and obtain FDA approval.” Id.

Second, the “tobacco-specific legislation” the Court found

dispositive in Brown & Williamson simply does not address

products that deliver nicotine but contain no tobacco. As the

Court explained, Congress had “directly addressed the problem

of tobacco and health through legislation on six occasions since

1965.” 529 U.S. at 137.2 Those statutes impose labeling and

2

The Court listed the following six statutes: “Federal Cigarette

Labeling and Advertising Act (FCLAA), Pub. L. 89-92, 79 Stat. 282;

Public Health Cigarette Smoking Act of 1969, Pub. L. 91-222, 84 Stat.

87; Alcohol and Drug Abuse Amendments of 1983, Pub. L. 98-24, 97

Stat. 175; Comprehensive Smoking Education Act, Pub. L. 98-474, 98

Stat. 2200; Comprehensive Smokeless Tobacco Health Education Act

of 1986, Pub. L. 99-252, 100 Stat. 30; Alcohol, Drug Abuse, and

Mental Health Administration Reorganization Act, Pub. L. 102-321,

§ 202, 106 Stat. 394.” 529 U.S. at 137-38.

5

advertising requirements that “create a distinct regulatory

scheme for cigarettes and smokeless tobacco.” Id. at 155; see id.

at 143-44, 148-49. Moreover, Congress has declared that “[t]he

marketing of tobacco constitutes one of the greatest basic

industries of the United States,” id. at 137 (quoting 7 U.S.C.

§ 1311(a)), making it “highly unlikely” that the legislature would

have subjected the industry to a regulatory regime that could

substantially or entirely shut it down, id. at 160. “[T]he

collective premise of these statutes,” the Court said, is “that

cigarettes and smokeless tobacco will continue to be sold in the

United States.” Id. at 139.

This “collective premise” does not extend to products, like

electronic cigarettes, that contain only nicotine. None of the

statutes the Court referenced regulate such products, and the

statutory labeling requirements and advertising restrictions the

Court cited do not apply to electronic cigarettes. See FDA Br.

10, 13-14. Nor can it be said that FDA regulation of a novel

product like electronic cigarettes would threaten the health of the

American tobacco industry. As NJOY avers, it “imports one

hundred percent of its supply of E-cigarettes from overseas

manufacturers, and, upon information and belief, there is no

domestic manufacturer of E-cigarettes or their component parts.”

NJOY Compl. ¶ 18 (J.A. 40).

Finally, the Brown & Williamson Court also noted that, “[i]n

adopting each statute, Congress . . . acted against the backdrop

of the FDA’s consistent and repeated statements that it lacked

authority under the FDCA to regulate tobacco absent claims of

therapeutic benefit by the manufacturer.” 529 U.S. at 144

(emphasis added). “Under these circumstances,” the Court

concluded, “it is evident that Congress’ tobacco-specific

statutes . . . effectively ratified the FDA’s long-held position that

it lacks jurisdiction under the FDCA to regulate tobacco

6

products.” Id. (emphasis added). But the backdrop of pre-1996

statements to which the Court referred did not include statements

that the FDA lacked authority over a product like nicotine,

which is merely derived from tobacco. Rather, as the Court’s

citations make clear, the FDA’s statements to Congress referred

to its lack of jurisdiction either over “tobacco,” id. at 145, or

over specific products that plainly contain tobacco, like

cigarettes, id. at 145-46. See, e.g., id. at 145 (citing FDA

statement that “[t]obacco marketed for chewing or smoking

without accompanying therapeutic claims, does not meet the

definitions . . . for food, drug, device or cosmetic” in the FDCA).

And in fact, as noted above, in 1987 the FDA had asserted

authority to regulate a product that is materially

indistinguishable from electronic cigarettes -- the Favor

Smokeless Cigarette -- apparently without challenge.

In sum, I see nothing in the words, context, or rationale of

Brown & Williamson that supports interpreting that case as

barring the FDA from regulating electronic cigarettes under the

drug/device provisions of the FDCA. Although I agree with my

colleagues that these considerations do not justify reading Brown

& Williamson as merely a “carve-out from the FDCA for

cigarettes and smokeless tobacco,” Slip Op. at 10, they do justify

reading it as a carve-out only for products that contain tobacco.

See 529 U.S. at 144 (holding that Congress intended to

“preclude[] any role for the FDA” with respect to “tobacco

absent claims of therapeutic benefit” (emphasis added)). The

Supreme Court had no reason to opine on the status of a product

that contains no tobacco, and there is no indication in the

opinion that it meant to do so. As my colleagues’ opinion rests

on the supposition that it did, I cannot join their rationale.

7

II

But Brown & Williamson is not the end of the story. In

2009, Congress passed the Tobacco Control Act, which states:

“Tobacco products . . . shall be regulated by the Secretary under

this [Act] and shall not be subject to the provisions of [the

drug/device subchapter of the FDCA].” 21 U.S.C. § 387a(a).

Moreover, unlike Brown & Williamson, which used the term

“tobacco products” without defining it, the Tobacco Control Act

includes a definition: “The term ‘tobacco product’ means any

product made or derived from tobacco that is intended for

human consumption.” 21 U.S.C. § 321(rr)(1) (emphasis added).

Because the nicotine in NJOY’s electronic cigarettes is “derived

from” natural tobacco, NJOY Compl. ¶ 1, it appears that the

FDA may regulate it only pursuant to the provisions of the

Tobacco Control Act.

The FDA disagrees with this conclusion, contending that the

Tobacco Control Act does not narrow the FDA’s preexisting

authority under the FDCA. In support, agency counsel cites

another definitional provision of the Tobacco Control Act, which

states that “[t]he term ‘tobacco product’ does not mean an article

that is a drug . . . , a device . . . , or a combination product” under

the FDCA. 21 U.S.C. § 321(rr)(2). In the FDA’s view, this

provision preserves for regulation under the FDCA any product

“made or derived from tobacco” that Brown & Williamson did

not carve out of the FDCA’s coverage. And because Brown &

Williamson’s carve-out did not extend to nicotine-only products,

the agency maintains that such products are not necessarily

“tobacco products” within the meaning of the Tobacco Control

Act.3

3

Like the FDA, NJOY reads § 321(rr)(2) as leaving the boundary

between tobacco products and drugs where it was prior to the passage

8

There is no doubt that § 321(rr)(2) introduces a note of

ambiguity into the analysis. But it is a stretch to conclude that,

having just used one express statutory subsection to include

products “derived from” tobacco within the definition of

“tobacco product,” § 321(rr)(1), Congress then immediately

employed the next, ambiguous subsection to carve them out

again. Rather, it is more likely that § 321(rr)(2) is an expression

of Congress’ intent to preserve Brown & Williamson’s holding

that even a product made from tobacco -- for example, a

cigarette -- remains a drug, device, or drug/device combination

that can be regulated under the FDCA if it is marketed for

therapeutic purposes. Hence, the better reading is that

§ 321(rr)(2) simply makes clear that products made or derived

from tobacco that are marketed for therapeutic purposes are not

“tobacco products” within the meaning of the Tobacco Control

Act, and are therefore subject to regulation under the drug/device

provisions of the FDCA.

In the usual circumstance, of course, a judge’s view of the

“better” reading of a statute administered by an agency is not

necessarily dispositive. “If a statute is ambiguous, and if the

implementing agency’s construction is reasonable, Chevron

requires a federal court to accept the agency’s construction of the

statute, even if the agency’s reading differs from what the court

believes is the best statutory interpretation.” Nat’l Cable &

Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980

(2005) (citing Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837,

843-44 & n.11 (1984)). In United States v. Mead Corp., 533

of the Tobacco Control Act. However, because NJOY reads Brown

& Williamson as having removed nicotine-only products from the

FDCA’s drug/device authority, it concludes that such products are

“tobacco products” under the Tobacco Control Act and so may not be

regulated under the FDCA.

9

U.S. 218 (2001), however, the Supreme Court held Chevron

deference appropriate only for statutory interpretations with the

“force of law,” id. at 229, and ruled that an agency’s litigation

briefs -- unlike, for example, its regulations -- do not warrant

such deference, id. at 238 n.19. See also Bowen v. Georgetown

Univ. Hosp., 488 U.S. 204, 212-13 (1988) (declining to accord

Chevron deference to “agency litigating positions”); Landmark

Legal Found. v. IRS, 267 F.3d 1132, 1135-36 (D.C. Cir. 2001)

(denying Chevron deference to an interpretation “developed in

litigation”).4

In this case, there is no agency pronouncement that calls for

Chevron deference. Other than its briefs, which do not qualify,

the only expression of the FDA’s view regarding electronic

cigarettes is the agency’s 2008 detention order barring the

importation of NJOY’s products. But that order was issued

before Congress passed the Tobacco Control Act in 2009 and

hence does not construe it at all. “Chevron being inapplicable

4

As the FDA observes, the Court has accorded deference to briefs

in which agencies interpret their own regulations. See Auer v.

Robbins, 519 U.S. 452 (1997). The Court, however, distinguishes

between agency interpretations of regulations and agency

interpretations of statutes. See Couer Alaska, Inc. v. Southeast Alaska

Conservation Council, 129 S. Ct. 2458, 2473 (2009) (finding

interpretive memo “not subject to sufficiently formal procedures to

merit Chevron deference” under Mead, but still entitled to deference

under Auer “because it interprets the agencies’ own regulatory

scheme”); see also Mead, 533 U.S. at 246 (Scalia, J., dissenting)

(noting and criticizing the distinction); John F. Manning,

Nonlegislative Rules, 72 GEO . WASH . L. REV . 893, 943-44 (2004)

(observing that Mead narrowed the range of agency

statutory interpretations that are entitled to Chevron deference, while

leaving “intact the related but freestanding principle” of Auer

deference).

10

here in light of Mead, [the court] must decide for [itself] the best

reading” of the Act. Landmark Legal Found., 267 F.3d at 1136.

And the best reading is to give full effect to the Tobacco Control

Act’s definition of “tobacco product” as “any product made or

derived from tobacco,” 21 U.S.C. § 321(rr)(1), as well as to its

injunction that “[t]obacco products . . . shall be regulated” under

that Act and “shall not be subject to the provisions” of the

FDCA, 21 U.S.C. § 387a(a).

III

In the absence of an authoritative agency interpretation, I

conclude that, unless a product derived from tobacco is marketed

for therapeutic purposes, the FDA may regulate it only under the

provisions of the Tobacco Control Act. Accordingly, because

NJOY’s electronic cigarettes are derived from tobacco, I join my

colleagues’ disposition. What the result would be were the FDA

to offer a contrary statutory interpretation in the form of a

regulation, I leave for the day the agency decides to take that

step.