Cigar Industry, FDA Meet in Court Ahead of September Substantial Equivalence Deadline

Attorneys for the cigar industry and the U.S. Food & Drug Administration (FDA) were back in federal court to present arguments about whether part or all of FDA’s deeming regulations should be thrown out or modified.

Technically, they weren’t in a courthouse. Due to the coronavirus COVID-19 pandemic, the hearing in front of Judge Amit P. Mehta of the U.S. District Court for the District of Columbia was done via videoconference. And the two-hour hearing was almost exclusively over the substantial equivalence process—a much-debated product approval process that is set to begin Sept. 9—and sometimes the minutia got as specific as a debate about the definitions of the words may and shall, specifically in context to one another.

It’s part of the ongoing Cigar Association of America et al. v. United States Food and Drug Administration et al. case that Mehta has been presiding over since 2016 shortly after the regulations took effect. In previous rulings, Mehta has thrown out the requirements for warning labels for premium cigars—an appeals court recently expanded that to all cigars—while siding with FDA on most other topics.

Today’s hearing dealt with substantial equivalence, expected to be the main approval process for cigars once FDA’s regulations are fully in effect. In short, a manufacturer would argue that its product is substantially equivalent to an already approved or grandfathered product, and as such poses no additional health risks and does not market towards children.

Cigar manufacturers are required to either file for substantial equivalence or grandfather status by the deadline—currently set for Sept. 9—in order for their cigars to stay on the market. If they fail to do so, that product must be removed from sale in the U.S. and will not be able to be sold until FDA approves the report.

Before the main part of the hearing got started, Mehta asked the two sides if they had any update to a previous request to delay the deadline again because of the coronavirus COVID-19 pandemic. FDA has previously said it would not. Garrett Coyle, an attorney for the Department of Justice, indicated that the agency has not yet reached a final decision on the matter—it previously said it was not planning on doing so—but that if it were, it’s likely considering a two-month extension to the Sept. 9 date.

Perhaps more curiously, Coyle indicated that FDA was “actively considering the comments that it received on the ANRPM docket,” a reference to a 2018 process where the agency sought public comment on whether it should exempt premium cigars from regulation or modify the rules for premium cigars. Some in the premium cigar industry had thought FDA was no longer considering the ANPRM.

Coyle indicated that “no final decisions (have) been reached” and that the agency received more than 30,000 comments as part of that process.

The bulk of the hearing focused on whether FDA has acted properly when it comes to substantial equivalence, specifically, arguments over whether or not the agency is required to provide more guidance.

At times it was an incredibly nuanced argument, such as whether there is a difference between Congress’ use of the words may and shall in the bill that authorized FDA to regulate cigars and other tobacco products. Depending on the definition of shall, the FDA is either required to provide further guidance or Congress gave it the option to provide further guidance.

The cigar industry is arguing that the guidance FDA has provided so far is neither sufficient to what it is required to provide under law nor in practical application when cigar manufacturers go through the product approval process. In response, FDA is arguing that it indicated it might provide additional guidance but has ultimately met the legal requirements.

FDA has also previously stated that it was looking into completely redoing the substantial equivalence process for tobacco products, something that wasn’t mentioned much in today’s hearing.

Mehta pushed Michael Edney, the attorney for the cigar industry—more specifically the three cigar trade groups who brought the lawsuit—on how the court would go about ruling against FDA. Edney provided a variety of options from simply forcing FDA to change the deadline for substantial equivalence to throwing out the law in its entirety. It also led to questions for both sides about whether FDA could enact modified regulations for the cigar industry, summed up as regulation light, an idea that the FDA once considered prior to drafting the regulations.

As part of another line of questioning, Mehta asked Edney whether the industry had previously asked to be exempted from the premarket review process, i.e. product approval. That led to a lengthy discussion over the 2014 proposed deeming regulations, Edney pointed out that at the time the industry was not being regulated so asking to be exempt from just one part of new rules didn’t make a ton of sense.

It was one of a number of topics in the first part of the hearing where Mehta didn’t seem particularly compelled by some of Edney’s thinking. Given the nature of the hearing, Edney is trying to find relief through multiple different legal arguments, meaning some of them are likely stronger than others.

After roughly 45 minutes, Edney’s portion concluded and Mehta called for a five-minute break before Coyle responded.

Coyle began with an opening statement but pretty quickly was answering questions from Mehta regarding the ability for the agency to set effective dates and compliance dates and why they are different, another area of legal minutia. Coyle argued that there was no evidence in the deeming rule that suggested that FDA couldn’t change the compliance date at a later date or that the two dates were attached.

He also argued that a variety of Edney’s arguments led to scenarios that didn’t seem plausible.

In much more practical matters, Edney returned to bring up what might take place under a worst-case scenario under the current regulations. Specifically, the deeming regulations would require that any product that is submitted for product approval be removed one year after submission if a manufacturer doesn’t hear back from FDA.

This leads to questions over whether FDA could handle the thousands of submissions in a short period of time—and now in the face of a global health crisis—but also whether the lack of clarity regarding the substantial equivalence process would lead to substantial harms for cigar companies.

Coyle responded by pointing out that the deeming regulations give a manufacturer at least 30 additional days from the time of rejection—or in this case, from the expiration of the one-year period—to file for judicial review. This would allow a manufacturer to go before a court to determine whether FDA acted appropriately.

Not surprisingly, Edney pointed out that that relief would be a rather expensive process and that—while he loved the federal court system—getting a court to act within 30 days was not reasonable.

At both the beginning and end, Edney brought up HPHCs, harmful and potentially harmful constituents. This is the actual testing of products, something that is indefinitely delayed as of March 2019. Edney argued that there is not the equipment capable of doing the test for premium cigars, something that is likely disputed by FDA; it’s likely a stronger argument that there is no reliable process to produce usable data for premium cigars, something that FDA would presumably need to play a major role in creating.

Edney brought up in an interesting argument in regards to HPHC testing—though it was likely intended to be more directed to the conversation about the substantial equivalence date—that FDA repeatedly said it could not change the grandfather date, but that in some cases—like HPHC testing—the agency has independently changed the deadlines to the point where certain things are indefinitely delayed.

In his conclusion, Edney pointed out that Mehta has previously denied his requests for a preliminary injunction—a process where the court would suspend the regulations until after it decides the legal matter—but that in the D.C. Circuit injunctions are judged on a sliding scale. Edney said he liked his chances for one now given the upcoming deadline, the fact that the Sept. 9 deadline was a date that was set by another court because FDA lost a separate lawsuit and perhaps most importantly, with the coronavirus COVID-19 pandemic still ongoing.

At around the two-hour mark, Mehta seemed ready to call an end to the hearing, an audible lightning strike led to him suggesting that a “higher power” had decided it was time to end the hearing, but not before Edney and Coyle could argue about one last thing.

As part of his final rebuttal, Coyle brought up that more than 1,000 manufacturers had successfully gotten substantial equivalence reports approved. Coyle likely misspoke and meant that 1,000 substantial equivalence reports had been approved. Regardless, Edney pointed out that was disingenuous because almost none of them were for cigar products and instead were for products for which there is already a more established approval process.

Mehta—who has regularly shown a deep understanding of the issues at play—quickly piped in and said that he only recalled seeing one approval report for cigars in the last 18 months, specifically for a Black & Mild product, before one of the attorneys mentioned that there had been 13 approvals for cigars, various iterations of Black & Mild.

For the second time in five minutes, Mehta started his conclusion by assuring everyone he understood the importance of timeliness with the upcoming Sept. 9 deadline and that he would work quickly to provide clarity before that.

Charlie Minato

I am an editor and co-founder of halfwheel.com/Rueda Media, LLC. I previously co-founded and published TheCigarFeed, one of the two predecessors of halfwheel. I have written about the cigar industry for more than a decade, covering everything from product launches to regulation to M&A. In addition, I handle a lot of the behind-the-scenes stuff here at halfwheel. I enjoy playing tennis, watching boxing, falling asleep to the Le Mans 24, wearing sweatshirts year-round and eating gyros. echte liebe.