Texas Lawsuit

  • Name: En Fuego Tobacco Shop et al. v. United States Food and Drug Administration et al.
  • Filed: January 2018
  • Location: U.S. District Court for the Eastern District of Texas

In early 2018, a second lawsuit was filed against FDA regarding the deeming regulations, this time in Texas and by three Texas-based businesses.

The plaintiffs in this case are:

  • En Fuego Tobacco Shop — A Dallas-area chain of family-owned, retail tobacco stores;
  • El Cubano Cigars — A League City-based cigar manufacturers, which makes and sells its own cigars;
  • Texas Cigar Merchants Association — The Texas cigar retailer's association;

Of note, the lead attorney for this lawsuit is the same as the D.C.-based lawsuit, meaning there is some (presumed) coordination between the two suits.

The Two Differences Between the D.C. & Texas Cases

The biggest difference between the two lawsuits is the question of premium cigars.

One of the plaintiffs in the D.C. case is the Cigar Association of America, which represents both premium cigar manufacturers as well as machine-made cigar companies. Because of that, the previous question about whether premium cigars should be treated differently from all other cigars is part of the D.C. lawsuit.

However, in the Texas case, those arguments are made. Among them are:

  • Whether FDA has evidence that premium cigars are dangerous?
  • Whether FDA has evidence that premium cigars are consumed by minors?
  • Whether FDA has evidence that premium cigars are a gateway to cigarette use?
  • Whether FDA correctly evaluated if premium cigars should be treated differently?

That last question is a central point of the lawsuit. In short, the Texas case has argued that FDA failed to meet the legal requirements set forth by something known as the APA when it comes to evaluating whether premium cigars should be treated differently. The APA requires agencies like FDA to study the impact of regulations on the public and business before enacting them.

The plaintiffs have argued that FDA opened the door to having to answer these questions in two different ways: 1. by asking for public comment on Option 1 versus Option 2 in 2014; 2. by asking for public comment in 2018 on whether premium cigars should be treated differently.

This case was filed in the Eastern District of Texas | United States District Court, a court best known for its extensive patent litigation. It's also a court that is considered to be more friendly to business in regards to lawsuits against the government.

Shortly after it was filed, FDA tried to move the case from Texas to D.C., arguing many of the issues were the same and that the parties were the same. The Texas court originally rejected FDA's petition, but after oral arguments were heard the court changed its mind and moved the case to D.C. The reason behind this change was due to an appeal in the D.C. case, which the Texas court determined would resolve the issues brought about in the Texas case.

To Texas We Go

Jan. 11, 2018

On Jan. 11, 2018, a third lawsuit was filed by the premium cigar industry against the U.S. Food & Drug Administration (FDA), this one with much less fanfare than the prior two. The lawsuit was filed by En Fuego Tobacco Shop, a Dallas area retailer; El Cubano Cigars, a League City-based manufacturer and retailer, and the Texas Cigar Merchants Association (TXCMA), a state retailer’s association, in the U.S. District Court for the Eastern District of Texas.

While the lead attorney on the complaint is Michael Edney, the same lead attorney for the D.C. case, this lawsuit was notably different in some areas. It argued that these particular plaintiffs—Texas-based premium cigar businesses—were being unfairly targeted. In addition to arguing many of the same constitutional claims as the D.C. case, it argued that FDA had overstepped Congressional intent by subjecting premium cigars to the same regulations as machine made cigars.

The Texas lawsuit argues that not only are the warning labels unconstitutional because they fail a variety of legal tests set up by the court, but that it destroys the value of the luxury cigar boxes all without providing any evidence as to why premium cigars should be treated the same. In addition, this lawsuit is the first time that an argument is made about the unique restrictions on advertising, particularly the 12-month warning plan.

FDA petitioned to have the Texas lawsuit combined with the D.C. lawsuit. It argued that many of the issues were identical, the lead attorneys for the plaintiffs were identical and that all three plaintiffs had connections to the plaintiffs in the D.C. case.

Magistrate Judge Kimberly C. Priest Johnson rejected these arguments, acknowledging some overlaps but siding with the plainitffs arguments that the Texas case was different because it dealt with the question of premium cigars.

Oral Arguments Heard

June 26, 2018

The Texas lawsuit moved quickly and less than six months later, the two sides met in court.

Even before the oral arguments began, there was already an added layer of intrigue as the Supreme Court ruled in National Institute of Family and Life Advocates v. Becerra. That case involved a group of crisis pregnancy centers, pro-life clinics, who sued California over the state's regulations about messages that it would be forced to display. The Supreme Court ruled that the California warnings had gone too far, which the plaintiffs believed would play a big role in the Texas case.

U.S. Magistrate Judge Kimberly Priest Johnson was definitive in her belief that a decision would need to be made soon given the Aug. 10, 2018 deadline for warning labels went into effect. She also seemed less than thrilled about FDA's overall approach to regulations, including why smaller warning labels wouldn't work and how the agency got to this point without clear ideas of regulation.

In a rather surprising turn of events, Priest Johnson reversed her earlier ruling and moved the Texas case to D.C.

The decision seemed largely based on the idea that the plaintiffs in the D.C. case had filed an appeal and Priest Johnson believed that the appeal would adjudicate the issues brought up on the Texas lawsuit. While the warning label deadline would be delayed just two days later, moving the Texas case was largely seen as a win for FDA particularly given Priest Johnson's skepticism towards FDA's arguments in June.

Last Updated: May 23, 2019.