Tobacco Documents Online

N FRE5ENTED Does the Food and Drug Administration have statutorv jurisdiction to regulate all tobacco products as drugs or devices under the Federal Food, Drug and Cosmetic Act of 1938" a~2~2828

No, 98-1152 In the Oupreuut Tuuxt of the 3ituitel O'.tut,es FOOD AND DRUG ADMINISTRATION, et al-, Petitioners, V. BROWN AND WILLIAMSON TOBACCO CORP., et al., Respondents. On Writ of Certiorari to the United States Court af Appeais for the Fourth Circuit BRIEF AMICUS CURIAE OF PACIFIC LEGAL FOUNDATION IN SUPPORT OF AFFIRMANCE ANNE M. HAYFS Counsel ofRecvrd M. REED Htlpp6n Pacific Lcgal Fcmrnlaiiun 10360 Old Placerville Rnad, Suite Htll Sacramenlu, California 95827 TelePlame: (9lfi17fi2-2Na3 Facsimile: (91fi)362-2932 Cnmnsrl for Amica.a Curiar Pocifu ~ Legal 6ounda+Gm 828

iii TABLE OF CONTENTS Page QUESTION PRESENTED . . . . . . . . . ....... . . . . . . . . . i TABLE OF AUTHORITIES. . . . . . . . . . . . . ........ . . iv INTEREST OF AMICUS CURIAE ....... . ....... . . I STATEMENT OF THE CASE . . . . . . ...... . . . . . . . . . 2 SUMMARY OF ARGUMENT ..................... 2 ARGUMENT ...................... ............ 3 1. THE SIGNIFICANT ECONOMIC AND PUBLIC HEALTH IMPACTS OF TOBACCO DEMONSTRATE, BY THEMSELVES, THAT TOBACCO REGULATION IS A MATTER OF NATIONAL POLICY THAT MUST BE ESTABLISHED BY CONGRESS, NOT THROUGH THE UNILATERAL DECISION OF FDA ....... . . . . . . . . . ......... . . ... . . . . 3 II. IN ADOPTING REGULATIONS GOVERNING TOBACCO PRODUCTS, FDA HAS ACTED l iLTRA 17RF.S BY UNREASONABLY EXERCISING AUTHORITY BEYOND THE BOUNDS OF ITS LEGISLATED DELEGATION .......... . 10 A, FDA's Reliance upon Chevron Is Misplaced, Because Congress Did Not Delegate the Authority to FDA to Regulate Tobacco Products in the Food, Drug and Cosmetic Act . 12 TABLE OF CONTENTS-Cnntinued Page B. Even lf the Terms "Drug" or "Device" Within Food, Drug and Cosmetic Act Were Ambiguous, the Chevron Doctrine Does Not Necessarily Entitle FDA to Define the Limits of Its Own Jurisdiction ........ . .... 16 1. f'hrvron Does not Apply to Every Agency Determination . . . . . . ....... . . 16 2. Even If the ('herran Doctrine Required This Court to Defer to an Ascency's Determination of Its Own Jurisdiction, Deference Is Not Owed to an Agency's Change of Position Where the Change Is Unreasonable .... . . . . . . . . . . . . . . . . 20 CONCLUSION ..... . . . ........ . . . . ....... . .... 25 I. f7ZVrGQ22

vi TABLE OF AUTNORJTIES-Caatinued Page llniled S'tates tt N'iLsat, 133 F.3d 251 (4th Cir. 1997) ..................................... 19 Zuher v. Al1en, 396 U.S. 168 (1969) . ...... . . . ...... 23 Federal Stututes 15 U.S.C.§ 1331...~ ........................... 13 ,1,'~4401,elseq . .............................. 13 21 U.S.C. 301, etsey . ......................... . . . 3 § 321(&xl)(C) .............................. 21 4 321(h)(3) ........ . ..... ................ 21 Federal Regulations 60Fed-Refx.41,313(1995) ............ ..~,....... 4-7 61 Fed. Reg. 44, 395 (1996) ............ .......... 2 61 Fed. Rey. 44,396-45,318 (1996) . . . . . . . . . . . . . . . . 8 Rules Supreme Court Rule 37 ........................... 1 Rule37.6 ............ ..... .............. . 1 Miscellaneous Kenneth Culp Davis and Richard J. Pierce, Jr., Adndnislratiiti± Lnn• '1'reati.ce, Vol. I § 3.4 (3rd ed.1994) ............................... 17 2VLW'w.8Zo I INTEREST OF AMICUS CURIAE Pursuant to Supreme Court Rule 37, consent to file this brief was received from all parties and lodged with the Clerk of this Court.' Pacific Legal Foundation is the largest and most experienced nonprofit public interest law foundation of its kind in America, Founded in 1973, PLF provides a voice in the courts for mainstream Atuericans who believe in limited government, private property rights, individual freedom, and free enterprise. PLF litigates nationwide in state and federal courts with the support of thousands of citizens from coast to coast. PLF is headquartered in Sacramento. California, and has offices in Miami, Florida; Honolulu, Hawaii; E3ellevue, Washington; and a liaison office in Anchorage, Alaska. PLF has participated in numerous cases copcernin8 the scope of federal agency authority. For example, PLF participated as amicus curiae before this Court in Babbitt v. Sweet Home C'hapter qf C'wnmtrrtiries, for a Greater Oregon, 515 U.S. 687 (1995); and Chevrun, (I,S.A., Inc•, r. Natural Resources Ckferrse C'ourcil, hw., 467 U.S. 837 (1984); and before the United States Courts of Appeals in National Mining Association v. Uirrled SYate.c Army Corps r?f IsirRineer.e, 145 F.3d 1399 (D.C. Cir. 1998). PLF seeks to augment the arguments of Respondents by elucidating the limitations on federal agency power under administrative law principles. PLF believes its public policy perspective and litigation experience dealing with administrative law issues will provide an additional viewpoint on the legal issues presented. ' Pursuant to Supreme Court Rule 37.6. Amicus Curiae Pacific Legal Foundation affirms that no counsel for am, party in this case authored this brief in whole or in part: and, furthermore. that no person or entitN has madc a monetar< contribution specifically for the preparation or submission of this brief

7 Id As a result, [t]he recent and very large increase in the use of smokeless tobacco products by young people and the addictive nature of these products has persuaded the agency that these products must be included in any regulatory approach that is designed to help prevent future generations of young people from becoming addicted to nicotine-containing tobacco products. Irld at 41,318. Despite FDA's recognition of the fact that Congress had taken afftrtnative steps to curb the use of smokeless tobacco by young people, FDA was'"persuaded" that Congress' efforts were not having as dramatic an impact as its own regulations would Without any prior history of regulating smokeless tobacco or cigarettes, FDA developed what it believed were more effective regulatory means to reduce tobacco use by young people, even though no congressional legislation had delegated any such authority to FDA. FDA's avowed purpose for its rule was to meet the goals announced in a Department of Health and Human Services Report,'"Healthy People 2q00": The objective of the proposed rule is to meet the goal of the report "Healthy People 20Qp" by reducing roughly by half children's and adolescents' use of tobacco products. lfthis objective is not met within seven years of the date of publication of the final nule, the agency will take additional measures to help achieve the reduction in the use of tobacco products by young people. hl at 41,314. The Proposed Rule specifically stated that the Rule'"would not restrict the use of tobacco products by adults" Id As conceded by FDA, the primary impetus for the rule was not the implementation of the Food, Drug and Cosmetic Act (the purpose of which is to regulate drugs as a whole, and does 9tzV22S_'8 not specify that the agency's mandate has any special force with respect to young people), but to meet the "outcome-based" quantitative health goals outlined in an executive agency report. Id, at 41,314. Thus, even though Congress created the Substance Abuse and Mental Health Services Administration to carry out a program of state-operated regulatory programs, FDA argued: FDA strongly supports the basic ohjecrnv~c of this program, but believes that their flall achievemena would demand a broad arsenal of controls; including industry programs to complement and fortify the new State inspectional programs. Id. at 41,362 (emphasis added). FDA's language indicated that it had concluded that the means chosen by the congressional scheme were inadequate to meet the goals of'"Healthy People 20bo." Consequently, FDA felt it incumbent upon itself to "complement" Congress' work by embarking upon a more comprehensive regulatory program: FDA believes that, if aggressively implemented and supported by both industry and public sector entities, comprehensive programs designed to discourage youthful tobacco consumption could reasonably achieve the'"Healthy People 2000" goal. Id. In the end, FDA's decision to regulate tobacco products was tantamount to treating "Healthy People 2000" as independent or supplemental authorization to embark upon tobacco regulation. That is, since congressional action would not achieve the goals of that report, FDA decided it would achieve them by agency flat. But [f]ormulation of policy is a legivlanira'.c primary responsibility, entrusted to it by the electorate... "Without explicit action by law-makers, decisions of

14 FDA's authority to regulate tobacco products under its general authority over drugs and devices. A basic rule of statutory construction to be applied to resolve a conflict between two different enactments each of whose literel terms cover a specific subject is that "where there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one. . . ." Itrtmir-Frrrmar Dr.rrillers Oryrx rt Marheus, 435 F. Supp. 5, 13 (W.D. Ky. 1976) (citing Marl(mt e Mrrincari, 417 (1.5. 535, 550-51 (1974)) ("Whcxe there is no clear intention otherwise, a specific statute will not be controlled or nullified by a general one, regardless of the priority of enactment.") Thus, even if FDA correctly concluded that tobacco products are drugs or devices within the general terms of the Food, Drug and Cosmetic Act, they could not be understood to override the terms ofCongress' more specific tobacco legislation. In Brrnvn-Fnrmcur pisrillers, a federal district court the FDA's assertion ofjurisdiction under circumstances remarkably similar to those presented here. In that case, FDA, for the first time in its history, promulgated regulations in 1475 governing alcoholic beverage labeling. Brnuvr-Formarr 1)i.ciillers, 435 F. Supp. at 7. However, FDA's regulations conflicted with regulations promulgated by the Bureau of Alcohol, Tobacco and Firearms, which consistently had been exercising its authority over alcohol labeling according to specific legislation enacted in 1935. Id, at 7-8. E3rown-Forman Distillers brought suit for declaratory and injunctive relief, asking the Court to determine whose regulations governed. Id. at 9, The Court found against FDA, despite its conclusion that the "plain language" of the Food, Drug and Cosmetic Act's definition of "food" gave FDA jurisdiction over alcoholic beverages, lol. at 12. The Court's reasoning as it applies to OrJX.~2S&S 15 alcoholic beverage labeling is equally well-suited to FDA's regulation oftobacco: In so holding we specifically refitse to accept the defendants' contention that Congress' failure to exclude specifically the labeling of alcoholic beverages from the provisions of the 1938 Act _.. was a dispositive indication of Congress' intention to include labeling authority over alcoholic beverages within the jurisdiction of the FDA. Although such an explicit statement would have been simple for Congress to include within the Act, its failure to do so is not dispositive given the fact that (1) legislative history ... demonstrates that Congress did not believe the 1938 legislation included labeling authority over alcoholic beverages; and, (2) three years prior to the 1938 Act Congress had previously passed legislation related directly to alcoholic beverages which included a speciBc and compre- hensive section on labeling of such beverages .. . To accept the defendants' argument we would have to believe that Congress intended to inflict upon the alcoholic beverage industry conflicting labeling requirements. We refuse to make such an assumption. Id- at 16. In the present case, the history of FDA's position and federal tobacco policy in general, demonstrate that the Food, Drug and Cosmetic Act's failure to exclnde tobacco from FDA jurisdiction is not a significant indicator of congressional intent In the face of FDA's consistent and repeated claims that it had no jurisdiction over tobacco, it would have been rather remarkable for Congress to go to the trouble of stating the fact explicitly, particularly when Congress had manifestly chosen to regulate tobacco directly. Congressional silence in the Food.

lo will be made rrot h,v an a)r,rx>irrted qfficinl brN by the hrxh, immediately re.yxxrsible tr~ the people. Ari:r.na v, ('alifirrnia, 373 U.S. 546, 626 (1963) (Harlan, J., dissenting) (emphasis added). When Congress enacted the Food, Drug and Cosmetic Act, it made laws, not legislators. &e Irulusrrial llnirur, 448 U.S. at 673 (Rehnquist, J„ concurring in the judgment). National tobacco policy is of tremendous importance to many American citizens politically, economically, and personally. It cannot be credibly contended that Congress committed this policy to the jurisdiction of FDA in the absence of any language whatsoever specifying that authority. "It is the hard choices, and not the filling in of the blanks, which must be made by the elected representatives of the people." hi, at 687 (Rehnquist, J., concurring in the judgment). Because policy matters of this scale must be made by Congress, and may not be made by administrative agencies, this Court should affirm the decision of the Court below that FDA has no authority to regulate tobacco products. 11 IN ADOPTING REGULATIONS GOVERNING TOBACCO PRODUCTS. FDA HAS ACTED ULIY7A VIRES BY UNREASONABLY EXERCISING AUTHORITY BEYOND THE BOUNDS OF ITS LEGISLATED DELEGATION FDA's recent change of position leading to its decision to exercise jurisdiction over tobacco products should not be given "controlling weight" under ('hetrulr. Brief for the Petitioners at 17. The rationale announced in ('hevrar, though well-suited to the issue in that case, does not carry as much force in other contexts As explained below, one of those contexts is in the area of determining agency jurisdiction_ 11 The ('herrar doctrine is not a blanket doctrine of deference to administrative agency determinations. Instead, its holding is rather specific. ('herron dealt with a regulation promulgated by the Environmental Protection Agency to implement the Clean Air Act Amendments of 1477. ('herron, 467 U.S, at 840-41. EPA was charged with establishing standards for a state permitting program to regulate "new or modified major stationary sources" of air pollution. Id, at 840. 1n implementing the Act, EPA adopted a regulation which defined "stationary source " to mean an entire plant, rather than each emitting device within a plant. Jd By defining "stationary source' in this manner, which was dubbed the "bubble' concept, an industrial facility could modify one or another of its emitting devices and, so long as the total plant's emissions remained below requisite levels, it would fall under the same permit- !d. The Natural Resources Defense Council challenged the EPA's regulation. id. In upholding EPA's regulation, this Court announced a test to determine the validity of agency regulations: First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative inter- pretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute 0G~Z82i7

12 Id at 842-43. Ttws, this Court cast the analysis as one in which a court resolves two questions: (1) has Congress resolved the issue through its statute; and (2) is the agency's construction of the statute pemtissible, If the answer to the first is no and the second yes, then the Court must defer to the agency's determination• There are problems with applying this test to FDA's tobacco regulation in the way FDA suggests. First, FDA jumps right to answering question two--that is, they argue that their interpretation is reasonable--without sufficiently resolving the first question: whether Congress has spoken to the question at issue. Second. even if the Food, Urug and Cosmetic Act could be understood to have IeR this matter to the agency's discretion, the doctrine of deference does not necessarily apply to an agency's interpretation of its own jurisdiction. A. FUA's (tdiance upon Cbevron Is Misplaced, Bccause Congress pid Not Delegate the Authority to FDA to Regulate Tobacco Products in the Food. Drug and Cosmetic Act Of course, Congress did not specifically state in the Food, Dntg and Cosmetic Act that FDA did rrar have jurisdiction over tobacco products. However, the record is clear that, until 1996, this lack of congressional specificity had been consistently interpreted by FDA to preclude its jurisdiction over tobacco. Accordingly, Congress has consistently regulated tobacco directly, without reference to FDA. Thus, deference to FDA's new interpretation of its jurisdiction is not appropriate. From 1914 until FDA's tobacco rule in 1996. FDA repeatedly and consistently maintained that it did not have jurisdiction over tobacco products, Brown & Williamsan, 153 F3d at 168. And even though the term "drug" has been part of FDA's jurisdictional mandate since 1906, and the term "device" has been pan of the jurisdictional mandate since 1938, FDA "repeatedly informed Congress that cigarettes marketed 13 without therapeutic claims do not fit within the scope of the Act " 1d_ Indeed, FDA refused to exercise jurisdiction over cigarettes in 1977 partly on the basis that "Congress, had the matter been considered, would not have intended cigarettes to be included as an article 'intended to affect the functions of the "body afman" or in any other definition of"drul,;.""' lulJ at 169 (citations ornitted). FDA's new position contends these earlier pronouncements are irrelevant: congressional silence amounts to an agency license, rather than a limitation. 6ut, though Congress may have been silent in the Act, Congress was not silent as a general matter. Congress repeatedly considered delegating authority to FDA to regulate tobacco--and repeatedly rejected it. tiee idr at 170-73. Instead, Congress regulated tobacco products directly--even to the point of specifically addressing some of the same concerns that appear to have motivated FDA in this case. Id. at 175. Thus, this is not a case in which "congressional inaction demonstrates 'unawareness, preoccupation, or paralysis."' Krokw ~Y Williamson, 153 F.3d at t 70-71 (citation omitted). Congress specifically addressed tobacco regulation in the Cigarette Labeling and Advertising Act, 15 U.S.C. § 1331, stating: It is the policy of the Congress, and the purpose of this chapter, to establish a crrmprehensive I,eJeraC program to deal with cigarette labeling and advertising with respect to any relationship between smoking and health. I S U.S.C. § 1331. Congress also enacted the Comprehensive Smokeless Tobacco Health Education Act, 15 U.S-C. § 4401, er sey., to address health effects and labeling requirements for smokeless tobacco. These congressional actions specifically regulating tobacco products are relevant to the question of O~trr8~~

4 best suited and most obligated to make the choice confronting us in this litigation." hufrrsrriul l/nicur Llelrarrmeni, AI Z-('IU v. Americart Petroleum brsrirrsle, 448 U.S, 607, 672 (19811) (Rehnquist, l, concurring in the judgment). Congress has the resources and the power to inform itself, and is the appropriate forum where the conflicting pros and cons should have been presented and considered, t/rMred Srnres tc Rohel, 389 U.S. 258, 276 (1967) (Brennan, J_, concurring in the result). Instead, the pros and cons of national tobacco policy have been weighed here by FDA, an administrative agency that has suddenly decided to redefine its statutory jurisdiction under a federal law in which the jurisdictional provisions have remained more or less fixed since 1938 FDA admits that it sought to interject itself into national tobacco policy through the implementation of the regulations at issue because the agency believed that the country, as a whole, needed a more forceful anti-tobacco policy: The [FDA] is proposing new regulations... in order to address the serious public health problems caused by the use of and addiction to [tobacco] products. 60 Fed. Reg. 41,313, 41,314 (1995). FDA's Proposed Rule repeatedly manifested the agency's perception that existing state and federal regulations were not effective erxmgh in curbing tobacco use by youths. For example, it acknowledged that "all States prohibit the sale of tobacco products to persons under the age of 18;" id at 41,315, consistent with the Alcohol, Drug Abuse and Mental Health Administration Reorganization Act, id at 41,323, but contended that such state laws were not being effectively enforced, id, at 41,315. It elsewhere indicated that existing federal laws already addressed tobacco product advertising, and even that its 5 own regulations encountered preemption issues and potential conflict problems from other federal acts, id, at 41,314, 41,319, but the agency proceeded to propose advertising regulations. 1d at 41,31 S. In general, FDA indicated its awareness of other tobacco-specific legislation by asserting that the Proposed Rule was arrived at after FDA "examined many domestic and foreign tobacco control statutes, regulations, and legislation." Id. at 41,315, FDA nevertheless concluded- The agency has examined many options for reducing tobacco use by children and adolescents, and helieues that nrt eflecrive program mnsr addrexs the following two areas: (1) Restrictions on cigarette and smokeless tobacco sales that will make these products less accessible to young people; and (2) restrictions on labeling and advertising to help reduce the appeal of tobacco products to young people along with requirements for a manufacturer- fimded national education campaign aimed at those under 18 years of age to help reduce the products' appeal to these young people. Id. For example, FDA acknowledged that Congress had specifically enacted the Comprehensive Smokeless Tobacco Health Education Act to discourage young people from using smokeless tobacco. And even though it stated that there were 3 million users under the age of 21 of smokeless tobacco in 1986 when Congress passed that legislation, id, at 41,317, and I million adolescent males who used smokeless tobacco today, id, at 41,314 (use of smokeless tobacco by girls is not extensive, id. at 41,341), it concluded that Act was not achieving its goal_ Despite the Smokeless Act and State laws prohibiting sales to minors, a high percentage of persons under the age of 18 use smokeless tobacco products.

24 that professional baseball constituted interstate commerce, in circumstances such as this, the reasonable course is to adhere to precedent: We continue to be loath, 50 years after Federal Baseball and almost two decades after TrxrLunt, to overturn those cases judicially when Congress, by its posiriw rrtacliau, hac allowed those a'ecisiats tr) statnf fi)r so larq atxi, ,jar hevrNtd mere Irorettce ratd im)rlicatiat, has clearlV evinced a desire rtot to dien7.rprave them legfslaliMely. Accordingly, we adhere once again to Federal Baseball and 7baGsr»t and to their application to professional bascball.... lf there is any inconsis- tency or illogic in all this, it is an inconsistency and illogic of long standing that is to be remedied by the Congress and not by this Court. F)rxxf, 407 U-S. at 283-84 (emphasis added). If the judiciary is so bound by precedent as to require it to refer the revision of longstanding policy to Congress, an executive agency such as FDA is no less so. The modern administrative state could not long survive if agencies could upset long-settled constructions of law, merely because a problem appeared in t>eed of a solution. FDA was not created to be a "roving commission to inquire into evils and upon discovery correct them." A.L.A. Schechler Poultry, 295 U.S. at 551 (Cardozo, J., concurring). Rather, its mandate is more limited and, at this time, it is confined to the jurisdictional °canals" that have long guided its statutory mission. Id. This Court should affirm the decision of the court below and hold that FDA lacks the authority to regulate tobacco products. 25 CONCLUSION FDA's assertion of authority to regulate tobacco products on the bare claim that such products may be shoehorned into FDA's delegated authority to regulate "drugs' and "devices" is dubious. The agency's determination is diametrically opposed to the position it took in 1914, and adhered to until 1996, that these terms did not include tobacco products. Not only did FDA make its views on this point known to the public, it made them known to Congress. And Congress relied upon these assertions in formulating national tobacco policy. It implemented this policy through the enactment of tobacco- specific legislation--without delegating further authority to FDA to implement that legislation. Under these circumstances, FDA's attempt to expand dramatically its power to dictate national social policy is not entitled to judicial deference. FDA is not free to expand its mandate in the absence of congressional action. For the foregoing reasons, Amicus respectfully requests this Court to affirm the decision of the court below. DATEp! September, 1999. Respectfi,lly submitted. ANNr tvt. I IAYI?S t'aunuef n,fHecnrd tv1. ILzrn I krrtm I'ar.i6c lApul Poundaiiim 10360 U Uld t'law`rcille konJ. Nuitc 11Mi Sacramento, Cali/imiia 9?8.7 'IelophutN:' f0IG13G2-2Sll 110c"imila- f411+13n3-2932 t'muevr! fi~r,luvirrrs Cnrinr l'uc f c Laga/ I•L u ndattnn SS2b2828