e-cigarette sellers must substantiate greater population-level safety to make “safer” claims

Nicopure Labs, LLC v. Food & Drug Admin., No. 17-5196
(D.C. Cir. Dec. 10, 2019)
In the Tobacco Control Act, Congress gave the FDA additional
authority to regulate tobacco because previous measures “failed adequately to
curb tobacco use by adolescents.” Congress made a lot of findings about the
addictiveness of tobacco and its dangers to children. Instead of banning
tobacco and suffering the resulting black market, Congress took the
then-current market as a baseline for improvement. The TCA grandfathered
products that were on the market as of February 15, 2007. New products require
premarket authorization, requiring the FDA to assess their health effects on
the population as a whole in view of both the “likelihood that existing users
of tobacco products will stop using such products,” and the “likelihood that
those who do not use tobacco products will start.” Authorization shall be
denied if, among other things, there’s no showing that permitting the new
product would be appropriate for public health; the proposed labeling is false
or misleading; or the new product deviates from an existing tobacco product
standard without adequate information to justify the deviation.
Anything marketed as safer than existing tobacco products
(“modified risk” tobacco products) has to meet more stringent public-health
standards. A modified risk tobacco product is a product whose “label, labeling,
or advertising … represents explicitly or implicitly that … the tobacco product
presents a lower risk of tobacco-related disease or is less harmful than one or
more other commercially marketed tobacco products; … contains a reduced level
of a substance or presents a reduced exposure to a substance; or … does not
contain or is free of a substance”; or a product whose label, labeling, or
advertising uses “light,” “mild,” or “low” or similar descriptors; or whose
manufacturer “has taken any action directed to consumers through the media or
otherwise, other than by means of the tobacco product’s label, labeling, or
advertising . . . respecting the product that would be reasonably expected to
result in consumers believing that the tobacco product or its smoke may present
a lower risk of disease or is less harmful than one or more commercially
marketed tobacco products, or presents a reduced exposure to, or does not
contain or is free of, a substance or substances.” There’s a statutory
exemption allowing the use of “smokeless tobacco,” “smoke-free,” and similar
defined terms for chewing tobacco.
The marketing of a modified risk product must “enable the
public to comprehend the information concerning modified risk and to understand
the relative significance of such information in the context of total health
and in relation to all of the diseases and health-related conditions associated
with the use of tobacco products.” A product may be marketed as presenting a
lower risk only if “the applicant has demonstrated that such product, as it is
actually used by consumers,” will both significantly reduce harm/risk to
individual tobacco users and benefit the health of the population as a whole,
taking into account current users and current non-users. 
There’s a special rule with “a less demanding and more
targeted standard” for the subset of modified risk products that purport to
contain a reduced level or none of an identified substance (e.g., “no
diacetyl”). Such products aren’t required to “significantly” reduce harm or
risk to the individual user and must be only “expected” to benefit the health
of the population as a whole. Also, the substance identified as reduced or
absent must actually be harmful; the reduction must be substantial and accurate
as labeled; the product must not expose the consumer to increased levels of
other harmful substances; and consumer perception testing must show that
consumers will not misinterpret a specific claim as an assurance of relative
overall safety. A user of this rule must also “conduct postmarket surveillance
and studies” and submit the results to the FDA annually to allow it to
“determine the impact of the order on consumer perception, behavior, and health
and to enable the Secretary to review the accuracy of the determinations on
which the order was based.”
Smoking cessation products have to meet even more exacting
standards for a new drug or device. No e-cigarette has yet sought and received
clearance from the FDA under any of the three pathways. The industry didn’t
challenge either the new tobacco product or new smoking cessation product
approval pathways. It wanted to make health claims with fewer restraints than
those afforded by the modified risk pathway.
Nicopure, an e-cigarette manufacturer and distributor, and
an e-cigarette industry group, argued that the FDA violated the APA by not
providing an easier premarket authorization pathway for e-cigarettes. It didn’t
and I will say no more.  They also
challenged two provisions of the Tobacco Control Act as violating the First
Amendment: (1) the premarket review standards applicable to modified risk
tobacco products allegedly impermissibly burdened truthful, nonmisleading
statements about e-cigarettes and (2) the ban on distribution of free samples
of tobacco products, including e-cigarettes allegedly suppressed expressive
conduct. Both challenges failed.
Although the court mostly discusses the evidence in the
context of the APA challenge, it’s clearly relevant that both the numbers of
young users and adverse reactions to e-cigarettes are rising sharply. While the
evidence is insufficient about whether e-cigarettes reduce conventional
smoking—and some evidence suggests they’re a gateway for some users—the
industry wasn’t seeking approval of e-cigarettes as smoking cessation products,
nor was it instructing users on how to stop using nicotine.  “But e-cigarette manufacturers nonetheless
have actively marketed their products as if they were a safer, healthier
substitute for conventional cigarettes.” We just don’t yet know the long-term
impact on the general population.
Note: the following discussion largely assumes some of the
analytical moves, which makes it just like every other commercial speech
case.  Key among them: Can the government
decide that the meaning of “safer” is “safer for the population as a whole,”
rather than “safer for you than smoking tobacco would be, holding constant your
likelihood of doing that instead”?  That’s
a far more significant move than the general substantiation requirement—which
is in theory applicable to all commercial advertising subject to the FTC’s
jurisdiction, and which is bolstered here by a well-known and appalling history
of deadly industry lies. The court gets to finesse the “safer” definition
question by focusing on the substantiation requirement.  And I have my doubts that the industry could
substantiate that its “safer for you” claims, and most crucially their
limitations, are understood by most reasonable consumers.  But in the theoretical situation that
consumers did understand “this is safer for me than tobacco, but I could easily
end up worse off by using it because I probably wouldn’t have smoked tobacco in the first
place,” can the government ban that marketing? I think the answer is yes,
especially given all the uncertainties, but that is the strongest case in conventional First Amendment terms.  (It thus matters a lot that this is not an
as-applied challenge, since no one in the industry appears ready to
substantiate that consumers receive that risk message.)
The court held: The FDA can constitutionally bar advertising
of e-cigarettes as safer than existing products until that safety benefit has
been shown. “That conclusion is amply supported by nicotine’s addictiveness,
the complex health risks tobacco products pose, and a history of the public
being misled by claims that certain tobacco products are safer, despite
disclaimers and disclosures.” Congress found that “modified risk tobacco
products may encourage new users to take up tobacco products, rather than
simply reduce risk to those who already use them.” Congress cited an FTC study
and found that advertisements that claim one tobacco product is less harmful than
another mislead consumers, even when the putatively less risky products contain
“disclosures and advisories intended to provide clarification.” It specifically
found that disclaimers and other “[l]ess restrictive and less comprehensive
approaches have not and will not be effective” in communicating risks
associated with tobacco products sold as safer. It concluded that “the only way
to effectively protect the public health from the dangers of unsubstantiated
modified risk tobacco products is to empower the Food and Drug Administration
to require that products that tobacco manufacturers s[ell] or distribute[] for
risk reduction be reviewed in advance of marketing, and to require that the
evidence relied on to support claims be fully verified.”
As an initial matter, the industry argued that the use of
advertising to identify what counts as a modified risk product burdened speech
in violation of the First Amendment.  Not
so.  “First, our precedent explicitly
approves the use of a product’s marketing and labeling to discern to which
regulatory regime a product is subject, and to treat it as unlawful insofar as
it is marketed under a different guise.” 
As with drug claims versus structure/function claims, or even whether
the FDA has any jurisdiction at all, how a product is marketed can tell you
what it is and therefore what regime applies to it. “Just as the government may
consider speech that markets a copper bracelet as an arthritis cure or a beach
ball as a lifesaving flotation device in order to subject the item to
appropriate regulation, so, too, the FDA may rely on e-cigarette labeling and
other marketing claims in order to subject e-cigarettes to appropriate
regulation.”
The industry wanted to pitch e-cigarettes as safer, arguing
that this would help current smokers who “routinely seek information that would
be helpful when attempting to move away from cigarettes and learn more about
the features of particular vapor products.”  But it wanted to do so without scrutiny based
on public health and without addressing the risk of greater uptake by current
nonsmokers. It argued that the FDA’s modified risk pathway regulated the
message itself, not the product.  But
that was wordplay. “Deliberately selling an e-cigarette as less risky without
going through the requisite regulatory review for reduced-risk tobacco products
renders the sale-as-labeled unlawful, just as selling saw palmetto extract as a
drug without FDA premarket approval was unlawful. It is well established that ‘commercial
speech related to illegal activity’ is not subject to constitutional protection.”
Even viewing the modified risk pathway as burdening speech,
it was a legitimate restriction on commercial speech. Manufacturers could make
accurate “less risky” claims, but only if substantiated with evidence of
overall public health effects and with evidence that consumers wouldn’t be
misled. “If a manufacturer shows its product is in fact safer, and shows that
consumer perception accurately grasps the nature and limits of any safety
claim, the product will be marketable. Because the Act withholds from market
only those tobacco product claims that, upon review, are found to be
misleading, it bars only commercial speech that by definition is unprotected by
the First Amendment.”
Under Central Hudson, the government had a
substantial interest in “ensuring that any modified risk statements are
accurate and non-misleading in order to protect consumers from buying a highly
addictive product with a false sense of the risks it presents,” before any
marketing began. This interest was especially powerful given the combination of
health risks and vulnerable young consumers.
And the modified risk product pathway directly advanced the
government’s substantial interest. Requiring a “significant[]” reduction of
harms and risks to individual users and a “benefit” to the population as a
whole directly advanced the government’s interests in accuracy and public
health. “Given that no tobacco product has ever been shown to be safe, Congress
ensured that the FDA will not lightly authorize the sale of tobacco products as
carrying reduced health risk.” The special rules for claims about specific
substances also directly advanced the government’s interest. “Each element of
the inquiry is targeted towards ensuring that any specific-substance claim that
consumers may understand as a relative safety claim is accurate and not
misleading.”
Finally, the regulation was “not more extensive than
necessary” to serve the government’s interest. In making a “fit” determination,
“the least restrictive means is not the standard; instead, the case law
requires a reasonable fit between the legislature’s ends and the means chosen
to accomplish those ends[.]” That standard was satisfied. Congress found that
“the only way to effectively protect the public health from the dangers of
unsubstantiated modified risk tobacco products is to empower the Food and Drug
Administration to require that products that tobacco manufacturers s[ell] or
distribute[] for risk reduction be reviewed in advance of marketing, and to
require that the evidence relied on to support claims be fully verified.”
And the rule for specific substances “reasonably tailors the
requisite substantiation to the type of product.” For products marketed as
generally less harmful, scientific studies must show that a “substantial
reduction in morbidity or mortality among individual tobacco users occurs” with
their use, whereas for those marketed only as less harmful because they contain
a reduced level of a substance, the manufacturer must show only that reduced
morbidity and mortality is “reasonably likely.”
The industry objected to premarket review because it
believed that its claims for healthfulness were accurate. “But modified risk
claims that might be technically accurate if viewed in isolation are in fact
often misunderstood by consumers. In particular, Congress specifically found
that consumers have been misled about the health consequences of claims that a
tobacco product did not contain or contained reduced level of a harmful
substance.” Just as with low tar and light cigarettes, “product labeling or
advertising that touts an e-cigarette as free of a specified ingredient may
mislead consumers to view the product as generally safer, even if other
chemicals it contains, such as formaldehyde, are equally or more harmful than
the disclaimed ingredient. The Industry’s claims of accuracy are
unsubstantiated, and it has yet to submit an application with appropriate
consumer-perception evidence.”
The court emphasized that misleadingness is based on the understanding
of a significant number of reasonable consumers, and not only on what is
explicitly said. Because the rationale supporting First Amendment protection of
commercial speech is “the informational function of advertising,” “[t]he
government may ban forms of communication more likely to deceive the public
than to inform it.” And, when the speech addresses matters on which the “public
lacks sophistication,” then “misstatements that might be overlooked or deemed
unimportant in other advertising may be found quite inappropriate.” That was
the case here: “Tobacco products are by definition harmful and addictive, and
choosing among them based on comparative safety is inherently risky and
complex, making the public especially susceptible to being misled and harmed.”
The court pointed to Congress’s knowledge of the sordid,
deadly history of tobacco marketing as strong support for premarket approval of
modified risk products. The FDA has already found similar problems with
e-cigarette marketing, especially to young people. “Consumers have frequently
and erroneously read narrow safety statements about an identified substance as
materially complete claims that the product is safe overall.” Thus, the
modified risk pathway could require the “testing of actual consumer perception”
to show that “consumers will not be misled into believing that the product . .
. is or has been demonstrated to be less harmful” more broadly.
The industry suggested a bunch of supposedly less
restrictive alternatives. The court found none convincing.  First, required disclaimers: Congress
considered and rejected them because they’d been ineffective to prevent
deceptive tobacco marketing in the past. “The risk of misinterpretation
regarding a highly addictive product supports the FDA’s choice of preclearance
over a disclaimer requirement.” Second, post-market enforcement, putting the
onus on the government. But that would require the FDA
to investigate the harms of an
open-ended litany of substances that might appear in e-cigarettes, and to
continually test products for their presence. Restricting the government’s
regulatory options in that way is inappropriate for products containing harmful
and addictive substances about which the public is known to be easily misled
and about which the manufacturer has superior information. The FDA has already
noted inaccuracies in claims made by various e-cigarettes about their nicotine
content, and significant variability between labeled and actual content of
various chemicals. Once inaccurate or misleading information influences people
to start using a powerfully addictive substance, damage has been done.
The court also rejected the industry’s appeal to Sorrell v.
IMS Health Inc., 564 U.S. 552 (2011), which unconstitutionally restricted
“sophisticated and experienced consumers,” namely prescribing physicians, from
accessing “truthful, nonmisleading advertisements.” The targets here were
ordinary laypeople, including adolescents. And, unlike Sorrell, the
modified risk pathway didn’t ban information going to one speaker while
allowing its dissemination to others (like researchers). Not only was there no
absolute ban here, as in Sorrell—only a substantiation requirement—but
there was no non-e-cigarette group authorized to make the same claims in
connection with a commercial transaction. [This mishmash of speaker/recipient
isn’t the DC Circuit’s fault; it’s an effect of Sorrell’s own
incoherence about what’s protected and why.]
Nor was the special treatment of chewing tobacco and “smokeless”
or “smoke free” claims arbitrary, even though e-cigarettes couldn’t use the
same terms without preclearance as a modified risk product. Congress relied on
decades of use of the term “smokeless” to distinguish chewing tobaccco from
loose smoking tobacco, a rationale inapplicable to e-cigarettes. Moreover,
chewing tobacco isn’t inhaled. “To the extent that consumers may view ‘smokeless’
as a claim about relative pulmonary risk, decades of experience supports the
FDA’s allowance of that claim for chewing tobacco whereas the FDA lacks any
similar track record regarding e-cigarettes.”
Separately, the ban on free samples didn’t violate the First
Amendment.  The industry argued that,
since free samples are a marketing technique, they constituted expressive
conduct, and that, since the reason Congress banned free samples was to
decrease uptake, it was regulating based on the expressive effect of the
conduct. 
The reason that Congress banned free samples was “to
eliminate an easily accessible source for youth that are especially vulnerable
to the risks of tobacco use and addiction.” The ban targeted conduct, not
speech, and it wasn’t obviously expressive conduct either.  The industry failed to identify its “entirely
unstated” message. The industry argued that free samples were “expressive”
because they “convey[] important information to smokers who want to switch to
vapor products, including key consumer information about different e-liquid
flavors and device performance characteristics.”
“This extraordinary argument, if accepted, would extend
First Amendment protection to every commercial transaction on the ground that
it ‘communicates’ to the customer ‘information’ about a product or service.”
The Supreme Court long ago rejected the idea that conduct carried out with the
intent of expressing an idea is therefore speech. “[T]he seller’s intention that
those experiences leave consumers with helpful information that encourages
future purchases does not convert all regulation that affects access to
products or services into speech restrictions subject to First Amendment
scrutiny.”
Even if there were an incidental burden on speech, the
restriction on conduct was imposed “for reasons unrelated to the communication
of ideas,” and thus unproblematic. The free sample ban wasn’t about
communication of information, it was about the products themselves and the well-documented
danger that children would obtain and use them via free samples, given the
greater price sensitivity of young consumers. Expressions Hair Design v.
Schneiderman, 137 S. Ct. 1144 (2017), “recently reaffirmed that ordinary price
regulation does not implicate constitutionally protected speech,” and the ban
here was an ordinary price regulation: e-cigarette sellers can’t charge zero
dollars.  
Since this is rational basis review, it doesn’t matter that
the TCA allows distribution of free samples of chewing tobacco at “qualified,
adult-only” facilities:
Anyone with even basic awareness of
e-cigarettes and chewing tobacco, and their differential health consequences
for and uptake by youth, will readily discern rational reasons to treat free samples
of chewing tobacco differently from free samples of e-cigarettes. E-cigarettes
are discreet and trendy in a way that chewing tobacco is not. Additionally,
Congress’ limited exemption for free samples of chewing tobacco in specified,
controlled circumstances reflects Congress’ knowledge of youth access and usage
derived from years of experience. As the Industry concedes, no comparable
information exists for e-cigarettes. Additionally, users of e-cigarettes inhale
into their lungs myriad potentially hazardous substances not limited to those
derived from tobacco. Congress’ decision to exempt chewing tobacco but not
e-cigarettes from the free sample ban readily survives rational basis review.
The Sixth Circuit previously characterized a free sample ban
as “an attempt to regulate the ‘communicative impact’ of the activity, not the
activity itself.” But that case “addressed a regulation covering a range of
clearly communicative promotional activities—including the distribution of
tobacco- branded merchandise (t-shirts, baseball caps, bobblehead dolls) and
event sponsorships—together with a prohibition on free product samples, and its
First Amendment analysis grouped them together as ‘marketing bans.’” That was
wrong, but even so, the Sixth Circuit concluded that any burden on the
expressive element of free samples was easily justified by the FDA’s
“overwhelming evidence” of the danger that free samples could fall into the
hands of young people.  The industry
argued that e-cigarettes were different because “consumers are searching for
truthful information regarding a novel and potentially life-saving product
category.” “Given the relatively unknown and potentially grave risks of
e-cigarettes to all users, and their extraordinary allure to middle and high
school students, we cannot agree.” [Also, trying an e-cigarette provides
exactly zero information to the user about whether they are better, healthwise,
than cigarettes.]

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