Brown and Williamson v. FDA

(August 14, 1998)

U.S. COURT OF APPEALS, FOURTH CIRCUIT

 

WIDENER, Circuit Judge:

On August 28, 1996, the Food and Drug Administration (FDA) published a final rule entitled “Regulations Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco to Protect Children and Adolescents.” 61 Fed. Reg. 44,396 (1996) (to be codified at 21 C.F.R. pt. 801, et al.). In general, this rule set out regulations restricting the sale and distribution of cigarettes and smokeless tobacco (collectively referred to as tobacco products) to minors and limiting the advertising and promotion of tobacco products. Plaintiffs (cigarette and smokeless tobacco manufacturers, convenience store retailers, and advertisers) filed these consolidated actions in federal district court, challenging the FDA’s jurisdiction over tobacco products and seeking declaratory and injunctive relief.

Plaintiffs filed motion for summary judgment in the district court, alleging that, as a matter of law: (1) Congress has withheld from the FDA the jurisdiction to regulate tobacco products as marketed by plaintiffs; and (2) the Federal Food, Drug, and Cosmetic Act (Act) does not permit the FDA to regulate tobacco products either as drugs or as devices. In denying plaintiffs’ motion for summary judgment in part and granting the motion in part, the district court held that Congress did not “[intend] to withhold from FDA” the jurisdiction to regulate tobacco products. The district court also concluded that the FDA had authority to regulate tobacco products under the device provision of the Act, but disapproved the FDA’s restrictions on advertising as inconsistent with its statutory authority. Finally, the district court stayed implementation of the majority of the FDA’s regulations pending appeal.

Because this case arises from a motion for summary judgment, we review the judgment of the district court de novo. For purposes of these appeals, plaintiffs do not dispute the factual findings of the FDA. Based on our review of the record and the relevant legal authorities, we are of opinion that the FDA lacks jurisdiction to regulate tobacco products. For the reasons set forth below, all of the FDA’s August 28, 1996 regulations of tobacco products are thus invalid. Accordingly, we reverse the judgment of the district court.

We begin with the basic proposition that agency power is “not the power to make law. Rather, it is ‘the power to adopt regulations to carry into effect the will of Congress as expressed by the statute.’” Thus, our initial inquiry is whether Congress intended to delegate to the FDA authority to regulate tobacco products as “customarily marketed.”

Under Chevron U.S.A. v. Natural Res. Def. Council, 467 U.S. 837 (1984) we first consider the intent of Congress because “[i]f 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.” It is only if the intent of Congress is ambiguous that we defer to a permissible interpretation by the agency. And we note, with emphasis, that the Supreme Court has stated that “[a] precondition to deference under Chevron is a congressional delegation of administrative authority.”  Accordingly, no deference is due the FDA’s construction of the Act unless it is acting within the bounds of its congressionally-established authority. If the court can ascertain Congress’ intent on a particular question by applying the traditional rules of statutory construction, then it must give effect to that intent.

We also note that ascertaining congressional intent is of particular importance where, as here, an agency is attempting to expand the scope of its jurisdiction.

Although the task of statutory construction generally begins with the actual language of the provision in question, the inquiry does not end there. The Supreme Court has often emphasized the crucial role of context as a tool of statutory construction.

Thus, the traditional rules of statutory construction to be used in ascertaining congressional intent include: the overall statutory scheme, “the history of evolving congressional regulation in the area,” and a consideration of other relevant statutes. With these general principles in mind, we begin our inquiry into the issue of whether Congress intended to delegate jurisdiction over tobacco products to the FDA.

… “[A] fundamental precept of drug and device regulation in this country is that these products must be proven safe and effective before they can be sold.” During its rulemaking, the FDA found that tobacco products are “dangerous,” “unsafe,” and the cause of “great pain and suffering from illness such as cancer, respiratory illnesses, and heart disease.”  Yet, the FDA has proposed to regulate tobacco products under a statutory provision that requires conditions on sale and distribution which provide a reasonable assurance of safety. According to the FDA, a  determination of safety under the Act requires consideration of the risks of a product compared to the “countervailing effects of use of that product, including the consequences of not permitting the product to be marketed.”  Thus, the FDA concluded that withdrawal of tobacco from the market poses significant health risks to addicted adults which outweigh the risks of leaving tobacco products on the market.

But that test is contrary to the statute. The statutory provision, provides that safety and effectiveness are to be determined by “weighing any probable benefit to health from the use of the device against any probable risk of injury or illness from such use.” The FDA’s obligation is to strike a balance between the risks and benefits of the use of a certain product, not to weigh the risks of leaving a product on the market against the risks of taking a product off the market. The FDA is unable to state any real health benefit derived from leaving tobacco products on the market. This is not to say that there are not other public policy reasons, such as impact on the national economy and the potential for a black market, weighing against a ban on 21 tobacco products. However, this type of decision involving countervailing national policy concerns is just the type of decision left for Congress.

But because an absolute ban falls outside the scope of congressional intent, construing the Act to cover tobacco products would be inconsistent with the will of Congress. As demonstrated by the examples provided above, the FDA’s need to maneuver around the obstacles created by the operative provisions of the Act reflects congressional intent not to include tobacco products within the scope of the FDA’s authority. The FDA argues that even if it has misapplied the Act, this error does not bear on the jurisdictional issue. However, the point is not merely that the FDA misapplied the Act, but these examples demonstrate the FDA’s need to ignore and misapply the operative provisions of the Act before it can attain its end, not the end contemplated by Congress.

Pursuant to Chevron’s instruction to employ the traditional tools of statutory construction, we now examine the events surrounding the 1938 passage of the Act as well as subsequent statements and actions by Congress and the FDA. These individual events are like pieces of a puzzle in that no single event is outcome determinative. However, when viewed as a whole, it is clear that Congress did not intend to give the FDA jurisdiction over tobacco products in 1938 when it passed the Act.

From 1914 until the present rulemaking attempt, the FDA had consistently stated that tobacco products were outside the scope of its jurisdiction. And, as early as 1898, the Supreme Court of Tennessee acknowledged the dangerous nature of tobacco products, characterizing cigarettes as “wholly noxious and deleterious to health,” “inherently bad, and bad only,” and “widely condemned as pernicious altogether.” Yet, the statute preceding the Act, the Pure Food and Drugs Act of 1906, did not mention tobacco. As early as 1914, the FDA’s predecessor agency stated that it had authority to regulate tobacco products if their labeling indicated use for “the cure, mitigation, or prevention of a disease,” but not if labeled or used for “smoking or chewing or as snuff and not for medicinal purposes.”

Enacted in 1938, the present Act expanded the definition of drug from the definition provided in the Pure Food and Drugs Act of 1906 and also granted the FDA new authority to regulate devices.” However, neither the Act nor its legislative history mention tobacco products. In the 60 years following the passage of the Act, the FDA has repeatedly informed Congress that cigarettes marketed without therapeutic claims do not fit within the scope of the Act. Ever since its beginning in the 1930s, the FDA has taken the position and made statements indicating that the Act did not apply to cigarettes marketed without specific health claims. Again, in 1963, an FDA Bureau of Enforcement Guideline stated that “[t]he statutory basis for the exclusion of tobacco products from FDA’s jurisdiction is the fact that tobacco marketed for chewing or smoking without accompanying therapeutic claims, does not meet the definitions in the Food, Drug, and Cosmetic Act for food, drug, device or cosmetic.”

When Congress later examined the issue of the FDA’s jurisdiction during its consideration of tobacco-specific legislation, FDA Commissioner Charles Edwards testified regarding the FDA’s lack of authority over cigarettes and stated that” if cigarettes were to be classified as drugs, they would have to be removed from the market because it would be impossible to prove they were safe for their intended [use].”

In 1977, Action on Smoking and Health (ASH), a public health group, petitioned the FDA to regulate cigarettes. ASH claimed that cigarettes were drugs because they contain nicotine which produces addiction in many smokers, and particularly in youth. In rejecting ASH’s petition, the FDA cited a 1953 Second Circuit opinion, FTC v. Liggett & Myers Tobacco Co. (1953), for the proposition that cigarettes marketed without health claims by the vendor are not within the FDA’s jurisdiction.

In 1978, ASH filed a second petition, claiming that cigarettes were devices under the Act and thus were within the scope of the FDA’s jurisdiction. Citizen Petition, FDA Docket No. 78P-0338 (Oct. 2, 1978). After reviewing the legislative history of the Act, the FDA stated that “[i]nsofar as rulemaking would relate to cigarettes or attached filters as customarily marketed, we have concluded that FDA has no jurisdiction under [the definition of device].

The FDA’s holdings and statements that the Act fails to provide “authority suitable to the regulation of cigarettes” are consistent that the Act’s regulatory scheme simply cannot accommodate tobacco products. Again in 1989, the FDA Commissioner stated that: “it doesn’t look like it is possible to regulate [tobacco products] under the Food, Drug and Cosmetic Act even though smoking, I think, has been widely recognized as being harmful to human health.”

The above statements evidence the FDA’s position from 1914 until the present rulemaking attempt that, as a matter of law, it did not have jurisdiction to regulate tobacco products as customarily marketed. The FDA’s public, consistent, and longstanding interpretation of the Act gains even more significance when viewed in conjunction with the actions of Congress during the same time period.

We recognize the general reluctance of courts to rely on congressional inaction as a basis for statutory interpretation. However, under certain circumstances, inaction by Congress may be interpreted as legislative ratification of or acquiescence to an agency’s position. We are of opinion that the matter before us presents an equally strong case of legislative acquiescence. As noted by the district court, Congress has introduced numerous bills that would have granted the FDA jurisdiction over tobacco products. However, none of these bills were enacted. On several occasions, Congress has enacted legislation to deal specifically with the dangers of tobacco products, but has never enacted legislation to overturn the FDA’s interpretation of its jurisdiction under the Act. Accordingly, this is not a case where congressional inaction demonstrates “unawareness, preoccupation, or paralysis.” We believe that the actions rejected and taken by Congress with respect to the regulation of tobacco provide strong evidence of congressional intent that it, and not the FDA, controls the regulation of tobacco products.

This is not a case about whether additional or different regulations are needed to address legitimate concerns about the serious health problems related to tobacco use, and particularly youth tobacco use, in this country. At its core, this case is about who has the power to make this type of major policy decision. As the Supreme Court has previously stated about a different agency and its enabling statute, neither federal agencies nor the courts can substitute their policy judgments for those of Congress. In rejecting the agency’s interpretation of its enabling statute, the MCI Court characterized the agency’s action as “effectively the introduction of a whole new regime of regulation . .. which may well be a better regime but is not the one that Congress established.” Accordingly, we do not, indeed cannot, pass judgment on the merits of the regulatory scheme proposed by the FDA. By its ultra vires action, the FDA has exceeded the authority granted to it by Congress, and its rulemaking action cannot stand. We are thus of opinion that Congress did not intend to delegate jurisdiction over tobacco products to the FDA.

Accordingly, the judgment of the district court is REVERSED.

 

HALL, Circuit Judge, dissenting:

The FDCA delegates to the FDA the duty of promulgating and enforcing regulations aimed at protecting the nation’s citizens from misbranded and unsafe drugs and food. After years of considering an array of evidence, much of it only recently brought to light, the FDA decided to regulate a product that is estimated to cause some 400,000 deaths a year. While not actually disputing that tobacco products deliver a drug, nicotine, into the body, the majority would deny to the FDA the authority to act to address this acknowledged health threat.

Tobacco products fit comfortably into the FDCA’s definitions of “drug” and “device.” Inasmuch as cigarettes and smokeless tobacco are responsible for illness and death on a vast scale, FDA regulations aimed at curbing tobacco use by children cannot possibly be contrary to the general intent of the FDCA to protect the public health. But even when we expand our search for legislative intent beyond the words of the statute, the evidence falls far short of demonstrating that Congress intended to deny or withdraw jurisdiction over tobacco from the FDA. Therefore, on the major question before us, I would affirm the district court’s denial of summary judgment to the companies to the extent such judgment turns on the issue of the FDA’s authority to regulate tobacco products.

As a consequence of this view, I must also reach those subordinate issues not discussed by the majority. I would affirm the denial of summary judgment to the companies on the issue of the FDA’s choice of the “combination-products” regulatory scheme. I believe, however, that the district court erred in ruling that the FDA cannot, as a matter of statutory law, restrict the advertising of tobacco pursuant to the agency’s authority to regulate the “sale” of such products.

[T]obacco is different from the run-of-the-mine drugs and devices in the FDA’s bailiwick, and the nature of the differences dictate new approaches to fight the dangers posed. Because the precise approach chosen might not have been considered by the drafters of the statute does not necessarily preclude it. The interpretation is a reasonable one and, therefore, we must defer to the agency.

I would affirm the district court’s judgment to the extent that it denies summary judgment to the tobacco companies on the issues of the FDA’s authority to regulate tobacco products under the FDCA and to regulate such products as “combination products.” I would vacate the judgment below to the extent it grants summary judgment to the companies on the issue of the FDA’s authority to regulate the advertising of tobacco products.