Texas Court Denies Appeal of Decision to Merge FDA Cigar Cases

Earlier this month, a federal court in Texas abruptly changed an earlier decision and opted to move a lawsuit regarding the U.S. Food & Drug Administration’s (FDA) regulation of cigars to a court in Washington D.C., effectively merging it with another lawsuit over the regulation of cigars.

Yesterday, a judge denied an appeal of that decision.

The lawsuit in Texas was filed in January by En Fuego, a Dallas area cigar shop, El Cubano Cigars of League City and the Texas Cigar Merchants Association. From the onset, attorneys for FDA had argued that the Texas lawsuit was no different than a lawsuit filed in 2016 by the Cigar Association of America (CAA), Cigar Rights of America (CRA) and the International Premium Cigar & Pipe Retailers Association (IPCPR).

FDA argued that because the two lawsuits were, in its eyes, the same, the lawsuits should be combined. In May, U.S. Magistrate Judge Kimberly Priest Johnson ruled against FDA on a motion to combine the lawsuits.

The Texas lawsuit then began oral arguments in June and was progressing, just as the D.C.-based lawsuit was beginning to go through an appeals process. In early July, Priest Johnson—who seemed rather friendly towards arguments being made by the cigar industry—abruptly changed her decision and issued a new ruling, stating that the court did believe there was substantial overlap between the two cases and as such, granted FDA’s motion.

Priest Johnson’s reversal was due to arguments being made in the appeal of the D.C. case, namely, that a court was going to have to rule on an injunction of warning label requirements, which at the time were set to go into effect on Aug. 10, and whether FDA had failed in its decision to not regulate premium cigars differently than other cigars. FDA itself had appealed Priest Johnson’s ruling, however, the judge’s motion granting the move cited the D.C. appeal.

Four days later, the D.C. court granted an injunction on the warning labels until after the appeals process of the D.C. lawsuit is finished.

Still, attorneys for the parties in the Texas lawsuit appealed.

District Judge Amos L. Mazzant rejected their claims.

One of the claims the plaintiffs made was the timing of the July reversal was uniquely damaging due to the Aug. 10 deadline. Mazzant was not persuaded by that argument.

“The Court here was confronted with evidence indicating the likelihood that the issues in the present lawsuit and in Cigar Association would substantially overlap,” wrote Mazzant. “Based on the foregoing, and in the absence of any countervailing authority from Plaintiffs, the Court is persuaded that it is the ‘likelihood of substantial overlap’ between the suits, not the timing of the transfer decision, that controls.”

Mazzant then pointed out that those claims were “effectively resolved” due to the injunction.

He went onto further write that the early parts of the appeals process show the overlap—particularly a recent Supreme Court decision restricting the nature of how government can force businesses to display warning messages—is likely to be substantial.

A source close to the plaintiff’s legal team told halfwheel no decision has been made yet as to the future of the Texas lawsuit.

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.