Premium Cigars Are No Longer Regulated by the FDA

It's time to break out the cigars. The premium cigar industry has won a legal battle against the U.S. Food and Drug Administration. The Cigar Association of America contested the FDA’s application of the "Deeming Rule" to premium cigars. The United States Court of Appeals for the District of Colombia sided with the Cigar Association in its decision, meaning the FDA will have less oversight over the sale and distribution of premium cigars.

What Is the Deeming Rule?

The Deeming Rule is an extension of the authority granted by the Family Smoking Prevention and Tobacco Control Act. It allows the FDA to regulate a wider array of tobacco products to further protect public health.

This 2016 regulation extended the FDA's oversight to include all tobacco products, including cigar products. It also includes other previously unregulated products such as e-cigarettes, pipe tobacco, hookah tobacco, and others.

D.C. Circuit: Sometimes A Cigar Is Just a Cigar

The U.S. Court of Appeals for the District of Columbia Circuit upheld the district court's decision in this case. The Court found the FDA acted arbitrarily in regulating premium cigars under the Deeming Regulation. The Court found the FDA should have considered evidence that such cigars are used less frequently and pose lower health risks.

The court's opinion reviews the FDA's rulemaking process under the Administrative Procedure Act (APA). The APA mandates that courts set aside agency actions deemed arbitrary, capricious, or not in accordance with the law. After the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, the D.C. Circuit Court of Appeals was not required to defer to the FDA's findings in its decision.

In the rulemaking process, The FDA sought comments on whether premium cigars should be treated differently. Different treatment was considered due to cigars' potentially lower health risks. The FDA asserted that no evidence was provided to support a different treatment for premium cigars. The court disagreed, finding that the FDA received studies indicating that premium cigar use might pose less of a health risk.

The court found the FDA's final rule arbitrary and capricious for two main reasons:

1. Factually Incorrect Rationale: The FDA's conclusion that no evidence was provided was incorrect. Substantial evidence was available and presented.
2. Failure to Examine Relevant Data: The FDA did not adequately consider the relevant data.

Now What?

The case has been remanded to the district court to determine the appropriate definition of "premium cigar." This decision will affect which cigars are exempt from the TCA.

There is also the matter of user fees. The FDA collects fees from tobacco companies to fund its regulation activities. These fees are part of a detailed plan set by Congress. Normally, courts don't like to cancel rules if doing so would mess up existing financial arrangements, like these user fees. Doing so could involve complicated adjustments to past transactions. In this case, the court found that canceling the rule for premium cigars wouldn’t cause problems. This is because the decision only stops future fees on premium cigars and doesn’t require changes to fees that were already collected in the past.

This case is a big win for Cigar Rights of America, the Cigar Association of America, and Cigar Smokers who don’t want the FDA regulating their goods. Looking forward, the Court highlighted the importance of evidence-based rulemaking. It also underlined the need for the FDA to consider all relevant data and public comments. The ruling does not prevent the FDA from initiating a new rulemaking process to define "premium cigar" or regulate them under the TCA in the future.

Definition of Premium Cigars

Premium cigars are handmade using whole tobacco leaves. They are generally larger than regular cigars, without filters or tips. Unlike mass-produced cigars, they are meant to be used occasionally and socially, although they contain as much or more nicotine as cigarettes, an addictive chemical. Given premium cigars newfound exemption, defining premium cigars will have serious implications.

Cigar makers, cigar manufacturers, and cigar company representatives, like J.C. Newman, have tried to influence tobacco regulations. They have argued that premium cigars should be treated differently from other tobacco products. Through lobbying and public comments, they’ve pushed for premium cigars to be differentiated from regular cigars. Now, in the eyes of the FDA, they have.

Financial and Health Implications

Financially, premium cigar manufacturers stand to benefit from this decision. By exempting premium cigars from FDA regulations, manufacturers are relieved from a host of compliance obligations that can be both costly and time-consuming. These regulations often require substantial administrative effort, including detailed reporting, testing, and labeling requirements, all of which can strain resources, particularly for smaller businesses. With this exemption, manufacturers can allocate more of their resources toward product development and market expansion.

There are concerns about public health, however. Health effects include concerns about usage patterns and increased consumption without regulatory oversight. Premium cigar smoking is often seen as less appealing to young adults and minors than, for instance, vaping or cigarette smoking. However, the lack of regulation might impact patterns of use. This could interfere with public health efforts aimed at reducing tobacco use and exposure.

Future Regulatory Actions

This new development in tobacco regulation could spark action. The FDA Center for Tobacco Products may consider new rules. It could initiate notice of proposed rulemaking to address the regulation of premium cigars. These actions would involve a careful assessment of public health impacts. The FDA would need to weigh the unique characteristics of premium cigars against broader tobacco control goals.

As for future regulatory actions, there may be a focus on refining premarket regulations. This could involve developing clearer standards for premarket tobacco product applications (PMTAs). Clear guidelines would ensure that the evaluation process is thorough but also streamlined.

The influence of smokeless tobacco, tobacco leaf, and filler may be factors in future regulation.

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