Amicus Curiae Brief — FDA v. Brown & Williamson Tobacco Corp.

No. 98-1152 —

In the

Supreme Court of the United States

+

FOOD AND DRUG ADMINISTRATION, e7 ai.,

Petitioners,

v.

BROWN AND WILLIAMSON TOBACCO CORP., et ai.,

Respondents.

+

On Writ of Certiorari to the United States

Court of Appeals for the Fourth Circuit

>

BRIEF AMICUS CURIAE OF PACIFIC LEGAL

FOUNDATION IN SUPPORT OF AFFIRMANCE

+

ANNE M. HAYES

Counsel of Record

M. REED HOPPER

Pacific Legal Foundation

10360 Old Placerville Road.

Suite 100

Sacramento, California 95827

Telephone: (916) 362-2833

Facsimile: (916) 362-2932

Counsel for Amicus Curiae

Pacific Legal Foundation

QUESTION PRESENTED

Does the Food and Drug Administration have statutory

junsdiction to regulate all tobacco products as drugs or devices

under the Federal Food, Drug and Cosmetic Act of 1938”

TABLE OF CONTENTS

Page

QUESTION PREGENTEO . 6. i ia eae i

TABLE GF AUTHORS 6.66 ast Cae ae IV

INTEREST OF AMICUS CURIAE ................. |

STATEMENT OF T9Ge CARS. 8 ee a Ai 2

SUMMARY OF ARGUMENT ..................... 2

‘ARGUMENT vis hk kw REAR ee ee Ce 3

1 THE SIGNIFICANT ECONOMIC AND

PUBLIC HEALTH IMPACTS OF TOBACCO

DEMONSTRATE, BY THEMSELVES, THAT

TOBACCO REGULATION IS A MATTER

OF NATIONAL POLICY THAT MUST BE

ESTABLISHED BY CONGRESS, NOT

THROUGH THE UNILATERAL DECISION

COP FRA oki s < b:clw-oieipun a wae ee ae a 3

ll. IN ADOPTING REGULATIONS

GOVERNING TOBACCO PRODUCTS, FDA

HAS ACTED ULTRA VIRES BY

UNREASONABLY EXERCISING

AUTHORITY BEYOND THE BOUNDS OF

ITS LEGISLATED DELEGATION ........... 10

A. FDA’s Reliance upon Chevron Is

Misplaced, Because Congress Did Not

Delegate the Authority to FDA to Regulate

Tobacco Products in the Food, Drug and

Cosmete AGt. oc. 0s veucwees alee is 12

TABLE OF CONTENTS—C ontinued

Page

B. Even If the Terms “Drug” or “Device”

Within Food, Drug and Cosmetic Act Were

Ambiguous, the Chevron Doctrine Does

Not Necessarily Entitle FDA to Define the

Limits of Its Own Jurisdiction |. 16

1. Chevron Does not Apply to Every

Agency Determination ) 16

2. Even If the Chevron Doctrine Required

This Court to Defer to an Agency's

Determination of Its Own Jurisdiction,

Deference Is Not Owed to an Agency's

Change of Position Where the Change

Is Unreasonable ae ) 20

CONCLUSION ....... : 3 | | 25

IV

TABLE OF AUTHORITIES

Page

Cases

A.L.A. Schechter Poultry Corporation v. United

States, 295 U.S. 495 (1935) 18, 24

Addison v. Holly Hill Fruit Products, 32° © §

607 (1944) | | kbs

Arizona v. Califorma, 373 U.S. 546 (1963) 7 9-10

Babbitt v. Sweet Home Chapter of Communities

for a Greater Oregon, 515 US. 687 (1995) l

Bowen v. Georgetown U/niversity Hospital,

488 U.S. 204(1988) .......... ick eee

Brown & Williamson Tobacco Corp. v. kood

& Drug Administration, 153 F.3d 155

(4th Cir. 1998) Ter ete

Brown-lorman Distillers Corp. v. Mathews,

435 F. Supp. 5(W_D. Ky. 1976) ..... 14-15, 17,19

Chevron, U/.S.A., Inc. v. Natural

Resources Defense Council, Inc..

467 U.S. 837(1984) .......... .. 1,3, 11-12, 16-17

Coyne Beahm, Inc. v. United States Food and

Drug Adminstration, 966 F. Supp. 1374

GR Pe ch cash ipa ue ebrs caee bikin ate

Davis v. United States, 495 U.S. 472 (1990)... 22

Dole v. United Steelworkers of America, 494 US

er ee Gy Pe ey et ern es. 17

lederai Maritime Commission v. Seatrain Lines.

Inc., 411 U.S. 726 (1973) _.

v

TABLE OF AUTHORITIES—C ontinued

Page

kederal Trade Commission v. Ruberoid,

Co ee es SED. a wb dk ose secu: i

Flood v. Kuhn, 407 U.S. 258 (1972) ..._........... 23-24

General Electric Co. v. Gilbert, 429 U.S

EES REE SA is a ee . 22-23

Good Samaritan Hospital v. Shalala,

I foes So ee rs oa 22

INS v. Cardoza-F onseca, 480 U.S. 421 (1987) _....... 17

Industrial Union Department, AFL-CIO v.

American Petroleum Institute, 448 US. 607

GR a 54 Sette a bce oe aonb ively ace _ 3-4, 10

Morton v. Mancari, 417 U.S. §35(1974) ............ 14

National Labor Relations Board v. Brown,

Sa PD 6 Es oS ckwwedhs 3 18

National Mining Association v. U/nited States

Army Corps of Engineers, 145 F 3d 1399

NR a ee i ee, 1,19

Securities and Exchange Commission v. Sloan.

RH Sn, CC Oe Se 20

Social Security Board v. Nierotko, 327 U.S.

RRR E SS IRR apne ee Sip eee ee a 18

United States v. Alabama G.S.R. Co..

SA aa iy eee a aaa 22

United States v. Riverside Bayview Homes, Inc..

i RRS EE A a 19, 23

United States v. Robel, 389 U.S. 258 (1967) ...._.... 4,8

vi

TABLE OF AUTHORITIES—Continued

l/nited States v. Wilson, 133 F.3d 251 (4th Cir.

1997)

Zuber v. Allen, 396 U.S. 168 (1969)

Federal Statutes

ISU SC. § 1331

§ 4401, ef seq

21 U S.C. 301, ef seg

§ 321(gK IMC)

§ 321(h\3) .

Federal Regulations

60 Fed. Reg 41,313 (1995)

61 Fed. Reg. 44, 395 (1996) _..

61 Fed. Reg. 44,396-45,318 (1996) |.

Rules

Supreme Court Rule 37... _..

Rule 376 _.

Miscellaneous

Kenneth Culp Davis and Richard J. Pierce, Jr..

Administrative Law Treatise, Vol. | § 3.4

(3rd ed. 1994)..........

Page

ee

23

INTEREST OF AMICUS CURIAE

Pursuant to Supreme Court Rule 37, consent to file this

brief was received from all parties and lodged with the Clerk of

this Court.’

Pacific Legal Foundation is the largest and most

experienced nonprofit public interest law foundation of its kind

in America. Founded in 1973, PLF provides a voice in the

courts for mainstream Americans who believe in limited

government, private property nghts, individual freedom, and

free enterprise. PLF litigates nationwide in state and federal

courts with the support of thousands of citizens from coast to

coast. PLF is headquartered in Sacramento, California, and has

offices in Miami, Florida, Honolulu, Hawai, Bellevue,

Washington, and a liaison office in Anchorage, Alaska.

PLF has participated in numerous cases concerning the

scope of federal agency authority For example, PLF

participated as amicus curiae before this Court in Babbitt v.

Sweet Home Chapter of Communities for a Greater Oregon,

515 U.S. 687 (1995), and Chevron, U.S.A. Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837 (1984), and

before the United States Courts of Appeals in National Mining

Association v. United States Army Corps of Engineers,

145 F.3d 1399 (DC. Cir. 1998).

PLF seeks to augment the arguments of Respondents by

elucidating the limitations on federal agency power under

sealetsaiatiet: tm, cnteadiinn S68 Oil on able ol

law issues will provide an additional viewpoint on the legal

issues presented.

' Pursuant to Supreme Court Rule 37.6. Amicus Curiae Pacific Legal

Foundation affirms that no counsel for any party in this case authored

this brief in whole or in part: and. furthermore. that no person or entity

has made a monetary contribution specifically for the preparation or

submission of this bref.

2

STATEMENT OF THE CASE

On August 28, 1996, the Food and Drug Administration

(FDA) published a final rule in the Federal Register.

“Regulations Restricting the Sale and Distribution of Cigarettes

and Smokeless Tobacco to Protect Children and Adolescents,”

61 Fed. Reg. 44,395 (1996). Subsequently, the Respondents

filed this suit challenging FDA’s exercise of jurisdiction over

tobacco products. The United States District Court for the

Middle District of North Carolina reyected the challenge, finding

that Congress did not intend “to withhold from FDA” the

authority to regulate tobacco. Coyne Beahm, Inc. v. United

States ood and Drug Administration, 966 F. Supp. 1374, 1387

(M.D. N.C. 1997). The United States Court of Appeals for the

Fourth Circuit reversed. Brown & Williamson Tobacco Corp. v.

ood & Drug Administration, 153 F.3d 155 (4th Cir. 1998).

The Fourth Circuit’s opinion was based on two rationales.

First, notwithstanding the provisions of the Food, Drug and

Cosmetic Act (Act) defining “drugs” and “devices,” FDA’s

regulation was inconsistent with the Act as a whole. Because

FDA did not and could not comply with the statutory mandates

of the Act in its treatment of tobacco, Congress could not have

intended that Act, or FDA’s administration of it, to apply to

tobacco products. Second, FDA's assertion of jurisdiction

could not be meshed with congressional intent as to the Act, or

with the regulatory scheme created by Congress through

Statutes directed specifically at tobacco products) FDA

petitioned for a writ of certiorari to resolve this important

question, which this Court granted.

SUMMARY OF ARGUMENT

As FDA and its Amici ably illustrate, the importance of

national tobacco policy is difficult to understate. The produc-

tion, sale, and export of tobacco products has significant

impacts on our national economy and on the health of American

citizens. But it is the very significance of the issue that

ee

3

demonstrates that national tobacco policy properly belongs in

the open halls of a democratically elected Congress. FDA's

interjection of itself into this issue of broad national policy

intrudes into an area Congress reserved to itself, FDA's role is

limited to the application of congressional policy, it has no

power to establish it.

FDA’s decision to recast the contours of its own

jurisdiction under an existing federal statute is entitled 10 no

deference. FDA's arguments to the contrary not only rely upon

a crabbed interpretation of this Court’s decision in Chevron,

U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837, but also utterly ignore this Court's repeated

pronouncements that an agency’s determination of its own juris-

diction is not entitled to deference, particularly where, as here,

the agency redrafts its jurisdiction in a way that upsets long-

settled agency practice without sufficient reason.

ARGUMENT

I

THE SIGNIFICANT ECONOMIC AND PUBLIC

HEALTH IMPACTS OF TOBACCO

DEMONSTRATE, BY THEMSELVES, THAT

TOBACCO REGULATION IS A MATTER OF

NATIONAL POLICY THAT MUST BE

ESTABLISHED BY CONGRESS, NOT THROUGH

THE UNILATERAL DECISION OF FDA

As comprehensively demonstrated by FDA, national

tobacco policy plays a major role in the economic life and

physiological welfare of United States citizens. Consequently,

the issue in this case is not, as FDA would have it, whether

tobacco products are “drugs” or devices” within the meaning of

the Food, Drug and Cosmetic Act, 21 U.S.C. 301, ef seg. The

issue in this case is whether national policy on a matter of such

obvious public importance ought to be dictated by FDA, or

should instead emanate from Congress, “the governmental body

4

best suited and most obligated to make the choice confronting

us in this litigation.” /ndustrial Union Department, AFL-CIO vy.

American Petroleum Institute, 448 U.S. 607, 672 (1980)

(Rehnquist, J . concurring in the judgment).

Congress has the resources and the power to

inform itself, and is the appropriate forum where the

conflicting pros and cons should have been presented

and considered.

(/nited States v. Robel, 389 U.S. 258, 276 (1967) (Brennan, J..

concurring in the result). Instead, the pros and cons of national

tobacco policy have been weighed here by FDA, an

administrative agency that has suddenly decided to redefine its

Statutory jurisdiction under a federal law in which the

junsdictional provisions have remained more or less fixed since

1938

FDA admits that it sought to interject itself into national

tobacco policy through the implementation of the regulations at

issue because the agency believed that the country, as a whole,

needed a more forceful anti-tobacco policy:

The [FDA] is proposing new regulations __ . in order

to address the serious public health problems caused

by the use of and addiction to [tobacco] products.

60 Fed. Reg. 41,313, 41,314 (1995).

FDA's Proposed Rule repeatedly manifested the agency’s

perception that existing state and federal regulations were not

effective enough in curbing tobacco use by youths. For

example, it acknowledged that “all States prohibit the sale of

tobacco products to persons under the age of 18,” id at 41,315,

consistent with the Alcohol, Drug Abuse and Mental Health

Administration Reorganization Act, id. at 41,323, but contended

that such state laws were not being effectively enforced, id

at 41,315. It elsewhere indicated that existing federal laws

already addressed tobacco product advertising, and even that its

Se ee ote

5

own regulations encountered preemption issues and potential

conflict problems from other federal acts, id. at 41,314, 41,319,

but the agency proceeded to propose advertising regulations.

Id. at 41,315. In general, FDA indicated its awareness of other

tobacco-specific legislation by asserting that the Proposed Rule

was arrived at after FDA “examined many domestic and foreign

tobacco control statutes, regulations, and legislation.” /d.

at 41,315. FDA nevertheless concluded:

The agency has examined many options for

reducing tobacco use by children and adolescents,

and believes that an effective program must address

the following two areas: (1) Restrictions on cigarette

and smokeless tobacco sales that will make these

products less accessible to young people, and

(2) restrictions on labeling and advertising to help

reduce the appeal of tobacco products to young

people along with requirements for a manufacturer-

funded national education campaign aimed at those

under 18 years of age to help reduce the products’

appeal to these young people.

Id.

For example, FDA acknowledged that Congress had

specifically enacted the Comprehensive Smokeless Tobacco

Health Education Act to discourage young people from using

smokeless tobacco. And even though it stated that there were

3 million users under the age of 21 of smokeless tobacco in

1986 when Congress passed that legislation, id. at 41,317, and

1 million adolescent males who used smokeless tobacco today,

id. at 41,314 (use of smokeless tobacco by girls is not extensive,

id. at 41,341), it concluded that Act was not achieving its goal:

Despite the Smokeless Act and State laws prohibiting

sales to minors, a high percentage of persons under

the age of 18 use smokeless tobacco products.

Id. Asa result,

[t]he recent and very large increase in the use of

smokeless tobacco products by young people and the

addictive nature of these products has persuaded the

agency that these products must be included in any

regulatory approach that is designed to help prevent

future generations of young people from becoming

addicted to nicotine-containing tobacco products.

Id. at 41,318. Despite FDA’s recognition of the fact that

Congress had taken affirmative steps to curb the use of

smokeless tobacco by young people, FDA was “persuaded” that

Congress’ efforts were not having as dramatic an impact as its

own regulations would.

Without any prior history of regulating smokeless tobacco

or cigarettes, FDA developed what it believed were more

effective regulatory means to reduce tobacco use by young

people, even though no congressional legislation had delegated

any such authority to FDA. FDA’s avowed purpose for its rule

was to meet the goals announced in a Department of Health and

Human Services Report, “Healthy People 2000”:

The objective of the proposed rule is to meet

the goal of the report “Healthy People 2000” by

reducing roughly by half children’s and adolescents’

use of tobacco products. If this objective is not met

within seven years of the date of publication of the

final rule, the agency will take additional measures to

help achieve the reduction in the use of tobacco

products by young people.

Id at 41,314. The Proposed Rule specifically stated that the

Rule “would not restrict the use of tobacco products by adults.”

Id. As conceded by FDA, the primary impetus for the rule was

not the implementation of the Food, Drug and Cosmetic Act

(the purpose of which is to regulate drugs as a whole, and does

7

not specify that the agency’s mandate has any special force with

respect to young people), but to meet the “outcome-based”

quantitative health goals outlined in an executive agency report.

Id. at 41,314. Thus, even though Congress created the

Substance Abuse and Mental Health Services Administration to

Carry out a program of state-operated

a | regulatory programs,

FDA strongly supports the basic objectives of this

program, but believes that their full achievement

would demand a broad arsenal of controls; including

industry programs to complement and fortify the new

State inspectional programs.

Id. at 41,362 (emphasis added). FDA’s language indicated that

it had concluded that the means chosen by the congressional

scheme were inadequate to meet the goals of “Healthy People

2000." Consequently, FDA felt it incumbent upon itself to

“complement” Congress’ work by embarking upon a more

comprehensive regulatory program:

FDA believes that, if aggressively implemented and

supported by both industry and public sector entities,

comprehensive programs designed to discourage

youthful tobacco consumption could reasonably

achieve the “Healthy People 2000” goal.

Id.

In the end, FDA’s decision to regulate tobacco products

was tantamount to treating “Healthy People 2000” as

independent or supplemental authorization to embark upon

tobacco regulation. That is, since congressional action would

not achieve the goals of that report, FDA decided it would

achieve them by agency fiat. But

[formulation of policy is a /egislature's primary

responsibility, entrusted to it by the electorate. __

“Without explicit action by law-makers, decisions of

great constitutional import and effect would be

relegated by default to administrators who, under our

system of government are not endowed with

authority to decide them.”

Robel, 389 U.S. at 276 (Brennan, J., concurring in the result)

(emphasis added, citation omitted). FDA’s decision to regulate

tobacco to achieve the goals of “Healthy People 2000” is one

that FDA simply did not have the authority to make.

The sheer number of comments received in response to

FDA’s Proposed Rule,’ the contentiousness of the current

litigation, and the bald fact that tobacco products are manifestly

marketable to a profitable proportion of American citizens,

attests to the fact that a sizeable segment of the United States

population has a stake in national tobacco policy. FDA's

perception that our nation’s tobacco policy has failed to

promote what is best for the American people’s health may

indicate that direct congressional legislation has been ineffective

or inefficient in addressing problems related to the use of

tobacco products. But the failure of Congress to establish or

implement a forceful national policy is not a legal ground for the

extra-democratic exercise of power being flexed here by FDA.

Acquiescence to administrative action in this case would amount

to sanctioning a system in which our government is made up of

one branch--the executive--whose intentions may be

unimpeachable, but whose practices are nonetheless unsuited to

a democratic republic.

In kederal Trade Commission v. Ruberoid Co., 343 U.S.

470 (1952), Justice Jackson, in dissent, exclaimed:

- The comments were so numerous that the Final Rule consumed

922 pages of the Federal Register. and the FDA addressed matters

ranging far outside of its expertise. including the nondelegation

doctrine. federal preemption doctrine, the First Amendment, and the

Fifth Amendment's Takings Clause. 61 Fed. Reg. 44,396-45.318

(1996).

Oe

9

The rise of administrative bodies probably has

been the most significant legal trend of the last

century and perhaps more values today are affected

by their decisions than by those of all the courts,

review of administrative decisions apart. They also

have begun to have important consequences on

personal nghts. They have become a veritable fourth

branch of the Government, which has deranged our

three-branch legal theories. .. .

Federal Trade Commission, 343 U.S. at 487. While Justice

Jackson decried the rise of the administrative state,

administrative agencies are a fact of modern life. And what

keeps administrative agencies from devolving into Justice

Jackson’s distrusted “fourth branch” are the checks placed upon

agency power by the actions of the three constitutionally

sanctioned branches: agency power is limited by legislative

delegations, executive discretion, and judicial review. In short,

administrative agencies do not upset our three-branch system

precisely because they can be maintained within the

constitutional system of checks and balances.

But FDA’s unprecedented foray into the area of tobacco

regulation upsets this balance. FDA’s decision amounts to one

of establishing national tobacco policy, rather than merely

applying it through a valid legislative delegation. The task of

establishing national policy on a matter as politically and

economically charged as tobacco is not one that can be assumed

by an executive agency in isolation. Rather it is a task that

properly belongs in Congress.

The principle that authority granted by the legislature

must be limited by adequate standards serves two

primary functions vital to preserving the separation of

powers required by the Constitution. First, it insures

that the fundamental policy decisions in our society

10

will be made not by an appointed official but by the

hody immediately responsible to the people.

Arizona v. California, 373 U.S. 546, 626 (1963) (Harlan, J.,

dissenting) (emphasis added).

When Congress enacted the Food, Drug and Cosmetic

Act, it made laws, not legislators. See /ndustrial Union,

448 US. at 673 (Rehnquist, J., concurring in the judgment).

National tobacco policy is of tremendous importance to many

American citizens politically, economically, and personally. It

cannot be credibly contended that Congress committed this

policy to the jurisdiction of FDA in the absence of any language

whatsoever specifying that authority. “It is the hard choices,

and not the filling in of the blanks, which must be made by the

elected representatives of the people.” /d. at 687 (Rehnquist, J.,

concurring in the judgment). Because policy matters of this scale

must be made by Congress, and may not be made by

administrative agencies, this Court should affirm the decision of

the Court below that FDA has no authority to regulate tobacco

products

IN ADOPTING REGULATIONS GOVERNING

TOBACCO PRODUCTS, FDA HAS ACTED ULTRA

VIRES BY UNREASONABLY EXERCISING

AUTHORITY BEYOND THE BOUNDS OF

ITS LEGISLATED DELEGATION

FDA’s recent change of position leading to its decision to

exercise jurisdiction over tobacco products should not be given

“controlling weight” under Chevron. Brief for the Petitioners

at 17. The rationale announced in Chevron, though well-suited

to the issue in that case, does not carry as much force in other

contexts. As explained below, one of those contexts is in the

area of determining agency jurisdiction.

;

The Chevron doctrine is not a blanket doctrine of

deference to administrative agency determinations. Instead, its

holding is rather specific. Chevron dealt with a regulation

promulgated by the Environmental Protection Agency to

implement the Clean Air Act Amendments of 1977. Chevron,

467 U.S. at 840-4]. EPA was charged with establishing

standards for a state permitting program to regulate “new or

modified major stationary sources” of air pollution. /d_ at 840.

In implementing the Act, EPA adopted a regulation which

defined “stationary source” to mean an entire plant, rather than

each emitting device within a plant. /d By defining “stationary

source” in this manner, which was dubbed the “bubble” concept,

an industrial facility could modify one or another of its emitting

devices and, so long as the total plant’s emissions remained

below requisite levels, it would fall under the same permit. /d

The Natural Resources Defense Council challenged the EPA’s

regulation. /d.

In upholding EPA’s regulation, this Court announced a test

to determine the validity of agency regulations:

First, always, is the question whether Congress has

directly spoken to the precise question at issue If

the intent of Congress is clear, that is the end of the

matter, for the court, as well as the agency, must give

effect to the unambiguously expressed intent of

Congress. If, however, the court determines

Congress has not directly addressed the precise

question at issue, the court does not simply impose

its Own construction on the statute, as would be

necessary in the absence of an administrative inter-

pretation. Rather, if the statute is silent or

ambiguous with respect to the specific issue, the

question for the court is whether the agency's answer

is based on a permissible construction of the statute

12

Id_ at 842-43. Thus, this Court cast the analysis as one in which

a court resolves two questions: (1) has Congress resolved the

issue through its statute, and (2) is the agency’s construction of

the statute permissible. If the answer to the first is no and the

second yes, then the Court must defer to the agency’s

There are problems with applying this test to FDA's

tobacco regulation in the way FDA suggests. First, FDA jumps

right to answering question two--that is, they argue that their

interpretation is reasonable--without sufficiently resolving the

first question’ whether Congress has spoken to the question at

issue. Second, even if the Food, Drug and Cosmetic Act could

be understood to have left this matter to the agency’s discretion,

the doctrine of deference does not necessarily apply to an

agency’s interpretation of its own jurisdiction.

A. FDA's Reliance upon Chevron |s Misplaced,

Because Congress Did Not Delegate the Authority

to FDA to Regulate Tobacco Products in the Food,

Drug and Cosmetic Act

Of course, Congress did not specifically state in the Food,

Drug and Cosmetic Act that FDA did not have jurisdiction over

tobacco products. However, the record is clear that, until 1996,

this Jack of congressional specificity had been consistently

interpreted by FDA to preclude its jurisdiction over tobacco.

directly, without reference to FDA. Thus, deference to FDA’s

otal ses alt lon ttt in cel ts

From 1914 until FDA’s tobacco rule in 1996, FDA

repeatedly and consistently maintained that it did not have

jurisdiction over tobacco products. Brown & Williamson,

153 F.3d at 168. And even though the term “drug” has been

part of FDA’s jurisdictional mandate since 1906, and the term

“device” has been part of the jurisdictional mandate since 1938,

FDA “repeatedly informed Congress that cigarettes marketed

13

without therapeutic claims do not fit within the scope of the

Act.” Jd Indeed, FDA refused to exercise jurisdiction over

cigarettes in 1977 partly on the basis that

“Congress, had the matter been considered, would

not have intended cigarettes to be included as an

article ‘intended to affect the functions of the “body

of man” or in any other definition of “drug.”””

Jd. at 169 (citations omitted). FDA's new position contends

these earlier pronouncements are irrelevant’ congressional

silence amounts to an agency license, rather than a limitation.

But, though Congress may have been siletit in the Act,

Congress was not silent as a general matter Congress

repeatedly considered delegating authority to FDA to regulate

tobacco--and repeatedly rejected it. See id at 170-73. Instead,

Congress regulated tobacco products directly--even to the point

of specifically addressing some of the same concerns that appear

to have motivated FDA in this case. /d at 175. Thus, this is

not a case in which “congressional inaction demonstrates

‘unawareness, preoccupation, or paralysis’” Brown &

Williamson, 153 F.3d at 170-71 (citation omitted).

Congress specifically addressed tobacco regulation in the

Cigarette Labeling and Advertising Act, 15 USC. § 1331,

stating

It is the policy of the Congress, and the purpose

of this chapter, to establish a comprehensive Federal

program to deal with cigarette labeling and

advertising with respect to any relationship between

smoking and health.

1S USC. § 1331. Congress also enacted the Comprehensive

Smokeless Tobacco Health Education Act, 15 U.S.C. § 4401,

et seq, to address health effects and labeling requirements for

smokeless tobacco. These congressional actions specifically

regulating tobacco products are relevant to the question of

14

FDA’s authority to regulate tobacco products under its general

A basic rule of statutory construction to be applied to

resolve a conflict between two different enactments

each of whose literal terms cover a specific subject is

that “where there is no clear intention otherwise, a

specific statute will not be controlled or nullified by

a general one... ~

Brown-Forman Distillers Corp. v. Mathews, 435 F. Supp. 5, 13

(W.D. Ky. 1976) (citing Morton v. Mancari, 417 U.S. 535,

$50-51 (1974)) (“Where there is no clear intention otherwise. a

specific statute will not be controlled or nullified by a general

one, regardless of the priority of enactment.”) Thus, even if

FDA correctly concluded that tobacco products are drugs or

devices within the general terms of the Food, Drug and

Cosmetic Act, they could not be understood to override the

terms of Congress’ more specific tobacco legislation.

In Brown-Forman Distillers, a federal district court

reyected the FDA’s assertion of jurisdiction under circumstances

remarkably similar to those presented here. In that case, FDA.

for the first time in its history, promulgated regulations in 1975

governing alcoholic beverage labeling § Brown-Forman

Distillers, 435 F. Supp. at 7. However, FDA’s regulations

conflicted with regulations promulgated by the Bureau of

Alcohol, Tobacco and Firearms, which consistently had been

exercising its authority over alcohol labeling according to

specific legislation enacted in 1935. /d. at 7-8. Brown-Forman

Distillers brought suit for declaratory and injunctive relief.

asking the Court to determine whose regulations governed. /d

at 9. The Court found against FDA, despite its conclusion that

the “plain language” of the Food, Drug and Cosmetic Act’s

definition of “food” gave FDA jurisdiction over alcoholic

beverages. /d at 12. The Court’s reasoning as it applies to

15

alcoholic beverage labeling is equally well-suited to FDA's

regulation of tobacco:

In so holding we specifically refuse to accept

the defendants’ contention that Congress’ failure to

exclude specifically the labeling of alcoholic

beverages from the provisions of the 1938 Act .

was a dispositive indication of Congress’ intention to

include labeling authority over alcoholic beverages

within the jurisdiction of the FDA. Although such an

explicit statement would have been simple for

Congress to include within the Act, its failure to do

so is not dispositive given the fact that (1) legislative

history . . . demonstrates that Congress did not

believe the 1938 legislation included labeling

authority over alcoholic beverages, and, (2) three

years prior to the 1938 Act Congress had previously

passed legislation related directly to alcoholic

beverages which included a specific and compre-

hensive section on labeling of such beverages... _ .

To accept the defendants’ argument we would have

to believe that Congress intended to inflict upon the

requirements. We refuse to make such an

assumption.

Id. at 16.

In the present case, the history of FDA’s position and

federal tobacco policy in general, demonstrate that the Food,

Drug and Cosmetic Act’s failure to exc/ude tobacco from FDA

jurisdiction is not a significant indicator of congressional intent.

In the face of FDA’s consistent and repeated claims that it had

no jurisdiction over tobacco, it would have been rather

remarkable for Congress to go to the trouble of stating the fact

explicitly, particularly when Congress had manifestly chosen to

regulate tobacco directly. Congressional silence in the Food,

16

Drug and Cosmetic Act, under these circumstances, means that

Congress did not recognize a need to exclude tobacco products

from FDA’s jurisdiction because it was generally understood

that the Act did not give FDA jurisdiction over them.

B. Even If the Terms “Drug” or “Device”

Within Food, Drug and Cosmetic Act

Were Ambiguous, the Chevron Doctrine

Does Not Necessarily Entitle FDA to

Define the Limits of Its Own Jurisdiction

As explained above, Chevron dealt with a relatively narrow

agency determination, specifically, whether the statutory term

“stationary source” could reasonably be interpreted by EPA to

include an entire plant for the purposes of establishing

regulatory permit standards. But not all agency interpretations

of statutes they are charged with administering have the same

narrow policy implications that were at stake in Chevron.

There, several factors militated in favor of a policy of deference.

First, the best means by which to regulate emissions sources was

a matter that EPA, given its experience and expertise, could

resolve better than Congress, particularly for the purpose of

establishing a workable and enforceable regulatory scheme.

Deference is owed particularly where

“the statutory policy in the given situation has

depended upon more than ordinary knowledge

respecting the matters subjected to the agency

Chevron, 467 U.S. at 844 (citation omitted). Second, requiring

judicial deference to the agency’s determination in that context,

rather than allowing the various state and federal courts to

interpret statutory language anew, advanced the overall federal

goal of establishing consistent national standards upon which

individuals and states could justifiably rely. See, Kenneth Culp

17

Davis and Richard J. Pierce, Jr., Administrative Law Treatise,

Vol. 1 § 3.4, at 116-18 (3rd ed. 1994). As the Court in

Chevron explained,

In these cases, the Administrator’s interpretation

represents a reasonable accommodation of manifestly

competing interests and is entitled to deference: the

regulatory scheme is technical and complex, the

agency considered the matter in a detailed and

reasoned fashion, and the decision involves

ling conflicti licies.

Chevron, 467 U.S. at 865. Here, these factors which made

Chevron’s doctrine of deference compelling are absent. The

question of whether tobacco is a “drug” or “device” is not a

question on which FDA can bring some special knowledge not

within the sphere of Congress’ own expertise. Further, FDA

has not reached its conclusion in a detailed or reasoned fashion,

nor has its policy decision dispelled policy conflicts. Instead,

FDA’s decision has served to exacerbate such conflicts. See,

e.g., Brown-Forman Distillers, 435 F. Supp. at 14.

Despite the cautionary language in Chevron, it is not

always obvious under what circumstances Chevron’s deferential

standard should apply. See, e.g., JNS v. Cardoza-konseca,

480 U.S. 421 (1987); Dole v. United Steelworkers of America,

494 U.S. 26 (1990) (In both cases, justices disagreed as to the

applicability of Chevron deference to an administrative agency

determination.) Deference is most suited to those situations in

which the agency’s determinations relate to matters that fall

within an agency’s particular expertise or where statutory

ambiguities unmistakably manifest Congress’ intent that the

agency resolve policy questions within a narrow set of

parameters. It is inappropriate where deference would result in

an inconsistent and unworkable federal regulatory scheme.

Here, if substantial deference were given to FDA’s deter-

minations of its own jurisdiction, the result would be “delegation

running not,”--Congress abdicating its responsibility to resolve

an important question of national policy and the judiciary

sanctioning a “roving commission.” A.L.A. Schechter Poultry

Corporation v. United States, 295 U.S. 495, 551, 553 (1935)

(Cardozo, J., concurring).

[W]here, as here, the review is not of a question of

fact, but of a judgment as to the proper balance to be

struck between conflicting interests, “(t)he deference

owed to an expert tribunal cannot be allowed to slip

into a judicial inertia which results in the unauth-

orized assumption by an agency of major policy

decisions properly made by Congress.”

National Labor Relations Board v. Brown, 380 U.S. 278, 292

(1965) (citation omitted). “It is axiomatic that an administrative

agency 's power to promulgate legislative regulations is limited

to the authority delegated by Congress.” Bowen v. Georgetown

University Hospital, 488 U.S. 204, 208 (1988). This Court has

emphasized that “[a]n agency may not finally decide the limits

of its statutory power. That is a judicial function.” Socia/

Security Board v. Nierotko, 327 U.S. 358, 369 (1946). Thus,

[t]he determination of the extent of authority given to

a delegated agency by Congress is not left for the

decision of him in whom authority is vested

Addison v. Holly Hill Fruit Products, 322 U.S. 607, 616 (1944)

(emphasis added).

The judicial policy of not deferring to agency determi-

nations of their own jurisdiction is sound. Administrative

agencies must operate “canalized within banks that keep it from

overflowing,” A.L.A. Schechter Poultry, 295 U.S. at 55]

(Cardozo, J., concurring), and those “canals” are constructed by

Congress, not the agency itself. If an agency were capable of

reconfiguring the contours of its jurisdictional canals at will,

the enabling legislation would be rendered meaningless--

—"*

— ——~_

19

congressional enactments would serve as nothing more than

midwives to independent governing bodies. Thus, while it is

appropriate to defer to agency determinations of matters which

Congress has unequivocally placed into the hands of an

administrative agency (as was the case in Chevron), the

determination of an agency’s jurisdictional limits must remain a

judicial question, lest the agency “bootstrap itself into an area in

which it has no jurisdiction by repeatedly violating its statutory

mandate.” /ederal Maritime Commission v. Seatrain Lines,

Inc., 411 U.S. 726, 745 (1973).*

[T]he scope of the FDA’s authority does not rest on

its assertion of authority but on the actual jurisdiction

conferred upon it by Congress through legislative

enactment, as construed by the Courts.

Brown-Forman Distillers Corp., 435 F. Supp. at 17. Because,

ultimately, the question is one of judicial, rather than agency,

interpretation of statutes, Chevron deference does not apply.

Instead, this Court’s role is to examine whether Congress

conferred authority on FDA to regulate tobacco, regardless of

FDA’s assertions. Given the history of FDA’s administration of

the Act and Congress’ enactment of laws specifically regulating

tobacco products, the implications of reading a power to

regulate tobacco into FDA’s relatively vague statutory mandate

* United States v. Riverside Payview Homes, Inc.. 474 U.S. 121, 123

(1985), is not contrary authority. That case was a challenge to an as-

applied assertion of jurisdiction over wetlands adjacent to navigable

waters. This Court found that whether the particular waters in question

were “inseparably bound up with “waters” of the United States” was a

matter within the agencies “technical expertise.” Riverside Bayview.

474 US. at 134. But the Court specifically stated that its holding did

not address all of the agencies’ assertions of jurisdiction under the Act.

Id. at 131 n.8. See United States v. Wilson, 133 F.3d 251 (4th Cir.

1997). and National Mining Association v. United States Army Corps

of Engineers, 145 F 3d 1399 (cases holding that jurisdictional rules

adopted by EPA and Corps under Clean Water Act were ultra vires).

20

to regulate “drugs” or “devices” would resu': in an

unmanageable and inconsistent federal regulatory system in

which congressional policies established under its tobacco-

specific legislation could be undermined or contradicted by FDA

policy. This is a result that the Chevron doctrine was

specifically designed to discourage. This Court’s “clear duty in

such a situation is to reject the administrative interpretation of

the statute.” Securities and Exchange Commission v. Sloan,

436 U.S. 103, 119 (1978).

2. Even Ifthe Chevron Doctrine Required This

Court to Defer to an Agency’s Determination of

Its Own Jurisdiction, Deference ls Not Owed to

an Agency's Change of Position Where the

Change Is Unreasonable

One factor to be considered in giving weight to an

administrative ruling is “the thoroughness evident in

its consideration, the validity of its reasoning, its

consistency with earlier and later pronouncements,

and all those factors which give it power to persuade,

if lacking power to control.”

S.E.C. v. Sloan, 436 U.S. at 117-18 (citations omitted). FDA’s

current rule governing the sale and advertising of tobacco

products lacks these factors which suggest judicial deference.

In fact, administrative law principles favor FDA’s prior position.

In particular, the recent vintage of FDA’s new jurisdictional

determination renders its current arguments regarding interpre-

tation of its statutory delegation unpersuasive.

As mentioned above, Congress gave FDA jurisdiction over

“drugs” and “devices” in the Pure Food and Drugs Act of 1906

and the Food, Drug and Cosmetic Act of 1938. From 1914

until 1996, the FDA affirmatively denied jurisdiction over

tobacco products. Brown & Williamson, 153 F.3d at 168. The

Act’s definition of “drug,” which has remained relatively

unchanged through the years, includes “articles (other than

21

food) intended to affect the structure or any function of the

body of man or other animals.” 21 U.S.C. § 321(g)1)(C). The

Act’s definition of “device” includes a “contrivance . . . intended

to affect the structure of any function of the body.” 21 U.S.C.

§ 321(h\(3). As noted by the Court below, FDA derived its

former stance partly from the belief that these terms, particularly

given the phrase “intended to affect,” did not include articles

such as cigarettes so long as they were “marketed without health

claims.” Brown & Williamson, 153 F.3d at 169 (citation

omitted). In addition, the agency concluded that jurisdiction

over tobacco was inconsistent with congressional intent. /d

Now, however, FDA has changed its position. It claims that, in

order for an article to be classified as a “drug” or “device” it is

not necessary that the marketer make any specific health-related

claims for the article. Brief for the Petitioners at 19. Instead, it

is enough that the marketer “knows” that its product will have

a particular effect: tobacco

manufacturers market their products with claims that

they will provide “satisfaction,” a “code-word” for

the pharmacological effects of nicotine.

Id

This startlingly recent change in the agency’s position

should not be countenanced by this Court. Legislative

delegations are not unlimited grants of power that can be

stretched and compressed at the whim of an agency or as the

winds of political sensibilities shift. If any delegation was made

by Congress to FDA to regulate tobacco products, that

delegation had to have occurred in 1906 or 1938. It is rather a

late date for FDA to suddenly discover that those earlier

Congresses granted it extraordinarily broad powers that it has

heretofore overlooked.

This is not to say that an agency is always obliged to

adhere to one interpretation of a statute. This Court has

acknowledged that

22

“[a]n administrative agency is not disqualified from

changing its mind” ... [But] “[a]n agency

interpretation of a relevant provision which conflicts

with the agency’s earlier interpretation is ‘entitled to

considerably less deference’ than a consistently held

agency view.”

Good Samaritan Hospital v. Shalala, 508 U.S. 402, 417 (1993)

(citations omitted). An agency's change in position opens the

door to a more expanded and skeptical inquiry by this Court

and, in particular, this Court should disfavor changes which

result in upsetting long-settled expectations:

It is a settled doctrine of this court that in case of

ambiguity the judicial department will lean in favor of

a construction given to a statute by the department

charged with the execution of such statute, and, if

such construction be acted upon for a number of

years, will look with disfavor upon any sudden

change.

United States v. Alabama G.S.R. Co., 142 U.S. 615, 621

(1892). Thus, what is entitled to deference here is not the

agency's current interpretation of “drugs” and “devices,” but

FDA’s prior construction of the Act, acted upon for a number

of years, maintaining that these terms exclude tobacco products.

The agency’s former interpretation not only reflects the agency's

contemporaneous construction of its enabling statute, it is a

construction that the agency adhered to for 82 years. See

Alabama G.S.R. Co., 142 U.S. at 621; Davis v. United States,

495 U.S. 472, 484 (1990) (“[W]e give an agency’s interpre-

tations and practices considerable weight where they involve the

contemporaneous construction of a statute and where they have

been in long use.”) See also General Electric Co. v. Gilbert,

429 U.S. 125, 142 (1976) (Court rejected agency interpretation

where “[i}t is not a contemporaneous interpretation of Title VII,

23

since it was first promulgated eight years after the enactment of

that Title.”)

Further, the agency’s prior interpretation was not simply

a by-product of agency inaction or silence. On the contrary, the

FDA repeatedly and specifically asserted that it lacked

jurisdiction over tobacco products. Brown & Williamson,

153 F.3d at 168-70. What is more, this agency position was

conveyed to Congress, id. at 170. As this Court has stated:

Although we are chary of attributing significance to

Congress’ failure to act, a refusal by Congress to

overrule an agency’s construction of legislation is at

least some evidence of the reasonableness of that

construction, particularly where the administrative

construction has been brought to Congress’ attention

through legislation specifically designed to supplant

it.

Riverside Bayview Homes, 474 U.S. at 137 (citations omitted).

See also Zuber v. Allen, 396 U.S. 168, 192 (1969) (Agency

interpretation “carries most weight when the administrators . . .

directly made known their views to Congress in Committee

hearings.”). Congressional silence in the face of FDA’s long-

held and vocal position that it lacked authority over tobacco can

be cited, with considerable justification, for the proposition that

Congress acquiesced in FDA’s prior assertions that it lacked

authority to regulate tobacco.

Principles of administrative law do not grant FDA the

freedom to interpret afresh the Food, Drug and Cosmetic Act as

though Congress had enacted the law yesterday. Whatever may

have been the merits of interpreting “drug” or “device” to

include tobacco products in 1906 or 1938, the day is long past

when the agency could have justified its current rule under

ordinary principles of deference. As this Court recognized in

Flood v. Kuhn, 407 U.S. 258 (1972), when it refused to apply

anti-trust law to professional baseball despite its express holding

24

that professional baseball constituted interstate commerce, in

circumstances such as this, the reasonable course is to adhere to

precedent:

We continue to be loath, 50 years after Federal

Baseball and almost two decades after 7oolson, to

overturn those cases judicially when Congress, by its

positive inaction, has allowed those decisions to

stand for so long and, far beyond mere inference

and implication, has clearly evinced a desire not to

disapprove them legislatively.

Accordingly, we adhere once again to Kedera/

Baseball and Toolson and to their application to

professional baseball... . If there is any inconsis-

tency or illogic in all this, it is an inconsistency and

illogic of long standing that is to be remedied by the

Congress and not by this Court.

Flood, 407 U.S. at 283-84 (emphasis added). If the judiciary is

so bound by precedent as to require it to refer the revision of

longstanding policy to Congress, an executive agency such as

FDA is no less so.

The modern administrative state could not long survive if

agencies could upset long-settled constructions of law, merely

because a problem appeared in need of a solution. FDA was not

created to be a “roving commission to inquire into evils and

upon discovery correct them.” A.L.A. Schechter Poultry,

295 U.S. at 551 (Cardozo, J., concurring). Rather, its mandate

is more limited and, at this time, it is confined to the

jurisdictional “canals” that have long guided its statutory

mission. /d. This Court should affirm the decision of the court

below and hold that FDA lacks the authority to regulate tobacco

products.

25

CONCLUSION

FDA’s assertion of authority to regulate tobacco products

on the bare claim that such products may be shoehorned into

FDA's delegated authority to regulate “drugs” and “devices” is

dubious. The agency’s determination is diametrically opposed

to the position it took in 1914, and adhered to until 1996, that

these terms did not include tobacco products. Not only did

FDA make its views on this point known to the public, it made

them known to Congress. And Congress relied upon these

assertions in formulating national tobacco policy It

implemented this policy through the enactment of tobacco-

specific legislation--without delegating further authority to

FDA to implement that legislation.

Under these circumstances, FDA’s attempt to expand

dramatically its power to dictate national social policy is not

entitled to judicial deference. FDA is not free to expand its

mandate in the absence of congressional action.

For the foregoing reasons, Amicus respectfully requests

this Court to affirm the decision of the court below

DATED: September, 1999

Respectfully submitted.

ANNE M. HAYES

Counsel of Record

M. REED Hopper

Pacific Legal Foundation

10360 Old Placerville Road.

Suite 100

Sacramento, Califorma 95827

Telephone: (916) 362-2833

Facsumile: (916) 362-2932

Counsel for Amicus Curiae

Pacific Legal Foundation