Thursday, May 31, 2018

Not close, no cigar: larger warnings on cigar packages and ads ok, court rules

Cigar Ass’n of Am. v. U.S. Food & Drug Admin., 2018 WL 2223653, -- F. Supp. 3d ---, No. 16–cv–01460 (APM) (D.D.C. May 15, 2018)

Cigar makers sued to invalidate a forthcoming warning requirement for cigars (which the FDA is currently seeking more information on; the court thought it was “grossly unfair” that the FDA didn’t agree to freeze this expensive regulation if it’s considering not imposing it at all, but concluded that it had no authority to direct the FDA to do otherwise). The new warnings, replacing warnings done pursuant to a consent agreement with the FTC, would take up 30 percent of the principal panels of a cigar product package and 20 percent of a cigar product ad.

The challenged disclosures were purely factual and there was no dispute about their accuracy. A disclosure is “controversial” when it is “subject to misinterpretation by consumers,” or “inflammatory.” The textual warnings here, unlike the visual warnings previously invalidated by the DC Circuit, were unambiguous and unlikely to be misinterpreted by consumers.  However, the cigar makers argued that the large size of the warnings made Zauderer inapplicable, arguing that the warnings crossed a line where “the compulsion to speak becomes more like a speech restriction than a disclosure” because the warnings “assault ... customers’ senses” with “blaring government pronouncements” on advertisements, and impose on the historically “distinctive, artistic, aesthetically pleasing” cigar packaging the “jarring juxtaposition” of the warning statements in black, bold font on a white background.

Nope.  The new warnings were “large[r] and stark[er]” than those required under FTC consent orders, and the FDA’s regime compelled use of a larger percentage of ads, but sellers retained sufficient space in which to communicate their messaging: 70% of cigar packages and 80% of ads. Being compelled to provide warnings in larger text on a greater surface area “than they might otherwise be inclined to present” was not enough to constitute suppression of speech.  

And under Zauderer, this was an easy case. A “purely factual” and “uncontroversial” disclosure requirement satisfies the First Amendment so long as it is (1) “reasonably related” to the government’s interest and (2) not “unjustified or unduly burdensome.”

Plaintiffs argued that the government didn’t identify a “substantial” government interest, which I find jawdropping but the DC Circuit has previously invited by expressing uncertainty whether decreasing demand for a lawful product can be a substantial interest.  I note that Central Hudson itself is about decreasing demand for a lawful product (energy consumption) and that the Supreme Court easily found that to be a substantial government interest, and the Court did likewise in Rubin v. Coors (alcohol content).  Here, the court accepted that the government had substantial interests in “‘help[ing] consumers better understand and appreciate the risks and characteristics of tobacco products’ ” and “help[ing] correct current misperceptions” about cigars—there was evidence that youth and adult cigar smokers mistakenly believe that cigars are less addictive, more natural, and less harmful than cigarettes. Likewise, as in AMI, health warning requirements for tobacco have a long history, and there’s a real health concern given that “tobacco products are dangerous to health when used in the manner prescribed.” Thus, the court rejected plaintiffs’ claim that the only legitimate interest relates to decreasing underage tobacco consumption.

Plaintiffs further argued that the goal of improving “information” and “consumer understanding” was not substantial.  In previous cases, when FDA argued that it had a substantial interest in “effectively communicating health information regarding the negative effects of cigarettes,” the DC Circuit said that was “merely a description of the means by which it plans to accomplish its goal of reducing smoking rates, and not an independent interest.”  But here, the FDA’s stated interest was in “actually” communicating health risks, not “effectively” communicating them, and the former was “decidedly” objective. [Um, ok.]  The risk that the DC Circuit saw, which was that an indeterminate interest in “effective communication” would allow the government to define its goal however it saw fit, wasn’t present here.  Also, the FDA wasn’t arguing that the particular formatting specifications it selected here constituted, in and of themselves, a substantial government interest, but rather argued that they were a means by which to “accomplish its goal” of providing accurate health information to the public.  And here, the interest in disclosure was based on far more than mere consumer curiosity; the information to be disclosed “bears on a reasonable concern for human health or safety.”

The warning requirements were also reasonably related to the government’s substantial interest. While the government would have to provide evidence of a measure’s effectiveness to satisfy Central Hudson, “such evidentiary parsing is hardly necessary” under Zauderer. Thus, plaintiffs’ argument that the FDA didn’t examine whether the existing FTC warning scheme was insufficient to communicate health risks of cigars before promulgating the new rules was irrelevant.  As the Sixth Circuit has written, “constitutionality under [Zauderer ] does not hinge upon some quantum of proof that a disclosure will realize the underlying purpose. A common-sense analysis will do. And the disclosure has to advance the purpose only slightly.” Here, the record evidence included academic studies and international consensus “all supporting the commonsense notion that ‘[u]sers are more likely to recall warnings that are a larger size and that appear on the front/major surfaces of the tobacco product package.’” Thus, the size, format, and other design features of the warning statements were reasonably related to the government’s goal of providing accurate information about, and curing misperceptions regarding, the health consequences of cigar use.

Finally, the warnings weren’t so unduly burdensome as to chill protected speech. The disclosures weren’t so lengthy or cumbersome as to effectively rule out speech or “nullify” the message meant to be communicated. Cigar sellers could still “effectively communicate their desired message—whether that be the sense of the product’s ‘luxury and distinction’ through its ‘designs, symbols, and trademarks’ or information about the product’s ‘country of origin, seed varietal, [or] process of manufacture’” on the remaining 70% of cigar packaging and 80% of ads.

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