Tobacco Documents Online

TJNPl'ID STATES DISTRICT COURT MIDDLE DISTRICT OF NORTH CAROLBIA!-~ GREENSBORO DIVISION ~ Civil Action No. Unittd States Tobacco Com,a 95`J yoo s iJ ) Brown & Williamson Tobacco ) Corporation, ) ) Conwood Company, L.P., ) ) National Tobacco Company, L.P., ) ) ) Tht Pinkerton Tobacco Company, ) Swisher International, Inc., ) ) Central Carolina Grocm, Inc., ) ) J.T. Davenport, Inc., ) and ) ) North Carolina Tobacco ) CONIPLAIlNT FOR DECLARATORY DSatributors C=mdttL% Lsc., ) JUDGIIENT AND IlV.TUNCTIVE ) RE1-JEF Plalntliis, ) ) T. ~ ) ) Food and Drug AdminiStration, ) ) and ) ) David A. Sztsler, M.D., ) Commisstoner of Food ) and Drnp, ) ) Deter 3ants. )

United States Tobacco Company, Brown &'RI'illiamson Tobacco Corporation, Conwood Company, L.P., National Tobacco Company, L.P., The Pinkarton Tobacco Company, Swisher International, Inc., Central Carolina Grocers, Inc., J.T. Davenport„ Inc., and North Carolina Tobacco Distributors Committee, Inc. (referred to hereinafter colkcavely as •pIaintiff8") seek t dec2aratory judgment that the Food and Drug Administration (•FD,v) and its Commissioner, David A. K,essler, M.D. ("Dr. Kessler"), lack jurisdiction to regulate unoYelesa tobacco products, and also seek approprfate in junctive relief. FAS= 1. United States Tobacco Company is a Delaware corporation based in Greenwich, Connecticut. Founded in 1911, United Statra Tobacco Company is the nation's largest muiufacturar of amolceless tobacco products, including moist snuff, with annual sales approximating $1 billion. United Statr,s Tobecco Company's smokeless tobacca products are mld ia t}tis districL 2. Brown & Williamson Tobacco Corporation is a Delaware corporation with major facifities in Rockingham and Forsyth Counties, North Carolina. Brown & Williamson Tobacco Corporation purchases substantial quantities of tobacco in this district, manufactures tobacco products at its lgcilitief in Roefthaiti and Fotsyth Counties, and sells and distributes finished smokeless tobacco products in this district. 3. Conwood Company, L.P. is a limited partnership organized under the laws of the State of Delaware and is qualified to do business In the State of North Caroliaa. Conwood Company, L.P. manufactures smokeless tobacco products, Including moist snuff, which are sold 2

in this district and maintains manufacturing and processing facilidcs located in Forsyth and Lx Counties. 4. National Tobacco Company, L.P. is a limited paroni:rship organized under the laws of the State of Delaware. National Tobacco Company, L.P. manufactures smolceless tobacco products which are sold in this district. 5. The Pinkerton Tobacco Company Is a Delaware corporation with a principal place of business in Virginia. The Pinkerton Tobacco Company mnufacture,s and distributes smokeless tobacco products, including chewing tobacco and moist snuff. The Pinloatton Tobacco Company's smokeless tobacco products are sold in this district. 6. Swisher International, Inc. is a Delaware corporation writh its principal place of business in Jacksonville, Florida. Swishet International, Inc. mar.ufactrea and distributes smokeless tobacco products, including moist snuff and chewing tobaoeo. Swisher International, Inc.'s smokeless tobacco productt are sold iA this district. 7. Central Carolina Grocers, Inc. is a North Carolina corrOration with its principal place of business in Forsyth County, North Carolina. Central Carolina Grocers, Inc. is a wholesale distributor of smokeless tobacco products throughout the we of North Carolina. 8. J.T. Davenport, Inc. is a North Carolina corporanon with a principal place of business in Lee County, North Carolina. J.T. Davenport, Inc. is a wholesale distributor of smoketess tobacco products throughout the state of North Camlina. 9. North Carolina Tobacco Distributon Committee, Inc. is a not-for-profit North Carolina corporation with its principaI place of business in Raleigh, North Carolina. North ' 00 cd 3- ~ ~ ~ N

Carolina Tobacco Distributors Committee, Inc. is an association of North Carolina wholesalers who distribute tobacco products, including smokeless tobacco products. 10. The FDA is a federal agency of the United States within the Department of Health and Human Services ("DHHS'). The FDA is responsible for approving or disapproving and otherwise regulating drugs and devices, as defined by the Federal Food, Drug, and Cosmetic Act ("FDC Act"), 21 U.S.C. § 301 Z M., to be marketed in the United States. The FDA has no responsibility for regulating tobacco products. 11. David A. Kessler, M.D., is Commissioner of and administers the FDA. Dr. Kessler is sued in his official capacity. AWSDIC'I~ON AND VENUE 12. This action arises under the FDC Act, the Administrative Procedure Act, 5 U.S.C. $$ 551-559, 701 ii ug,,, and the Declaratory Judgment Act, 28 U.S.C. i$ 2201-2202. There exists betwEmn plaintiffs and defendants an actual and justiciable controversy for which plaintiffs require a declaration of their rights by this Court, as well as injunctive relief to prevent defendants from iuTeparabIy harming plaintiffs' businesses. 13. This Court has jurisdiction under 28 U.S.C. $ 1331 (federal question) and / 28 U.S.C. § 1337 (interstate commerce). 14. Vzru:e is proper in this district pursuant to 28 U.S,C. 1139 1(e). PRODUCT 15. Smokeless tobacco products - snuff and chewing tobaceo - unlike cigarettes, cigars, and pipe tobacco, are not smoked but instead are placed in the mouth and chewed or passively enjoyed. 4

16. The use of smokeless tobacco has boen a tradition in the United States since the 18th century, predating branded cigarettes by over a hundred years. For example, United States Tobacco Company's Copenhagen brand moist snuff was introduced in 1822, and the oldest United States trademark in continuous use is owned by Conwood Company, L,P. and appears on its Garrett snuff product. Smokeless tobacco dominated the American tobacco market until the early 20th century, when cigarettes and other lighted forms of the leaf began to win wide public acceptance. Today, smokeless tobacco products are consumed throughout the United States. IDA'S AC=NS 17. Throughout its history, the FDA consistently ruled that it had no authority under the FDC Act and predecessor statutes to regulate tobacco products for which no therapeutic claims are made. Neverthekss, in 1994, Dr. Kessler embarYad on a crusade against tobacco products. He fust sought guidance from Congress, but fgiled to obtain legislative uzthorization for the FDA to regulate tobacco products. Nevertheless, following a series of anti-tobacco speeches by Dr. Kessler and at President Clinton's direction, the FDA took jurisdiction and issued proposed regulations on August 11, 1995. 18. D,r. Kessler's actions subject tobacco products to FDA jurisdiction supposedly as "drug delivery devices," i.y., combination products that are composed of a'd:ug" and a "device." "Drugs' and 'devices" are therapeutic products over which the agency unquestionably has jurisdiction uader the FDC Act. But tobacco products are not 'drugs' or 'devices,' and therefore cannot be regulated by the FDA. 5

19. FDA's declaration of jurisdiction over tobacco products and FDA's consequent proposed regulai:Ions are ujtrg yL= and contrary to law. Not only does the FDA lack jurisdiction over tobacco products, it lacks the power to impose the restrictions in question on those "drug" andlor "device` products that gM within the agency's jurisdiction. 20. T1he FDA's declaration of jurisdiction is definitive and final. Dr. Kessler has made the decision that the FDA can regulate smokeless tobacco. Throughout both the proposed rule and accompanying final report entitled "Analysis Regarding the Food and Drug Administration's Jurisdictioa over Nicotine.Containing Cigarettes and Smokeless Tobacco Products," the FDA repeatedly states that It has found that (a) the nicotine in commercial smokeless tobacco products is a drug subject to FDA regulation and (b) smokeless tobacco products are themselves combination drug and drug delivery devices also subject to FDA jurisdiction. In announcing the FDA's actions, President Clinton likewiso commented that he was taldng "broad executive action" and that such "action' *will restrict sharply the advertising, promotion, distribution and marketing of" cigarettes and smokeless tobacco products. Pi.A_jNIIEF'$' ENTITL,F.I= TO REL.T_FF 21. Tobacco products are subject,to specific federal statutes. Those statutes provide no authority to the FDA to regulate tobacco products. The FDC Act, on which Dr. Kessler purports to rely in asserting jurisdiction of the FDA to regu2ate tobacco products, does not authorize the FDA to regulate tobacco products. The FDC Act only grants autharity to regulate a product as a"drug" or a"device." To be a drug or a devicx, a product must be 'intended for" a therapeutic use. "Intended use" is determined only by the representations made in connection with the sale of the product. Because plaintiffs do not make therapeutic claims for 6

their tmokeless tobaxo products, the FDA is acting illegally by seeking to reguulate their products as drugs or devices. - 22. The courts have held that a product is a drug or a deviu: only if therapcutic claims are made for it. In addition, Congress has affmed the FDA's 1ac1c of 'authority over tobaa:o pMdu= by MmtedY r1electing PrOPOW 1*31ation that would ttave givea the FDA such authority, and has chosat to empower other federal agencies to regulaLs these products. Finally, and until recently, the FDA itself has repeatodly and consistently acknowledged that it is without authority to regulate tobacco products for which ao therapeutic claiza,i are made. 23. In addition, even if the FDA had authority to regulate tubacco products - which it clesrly does not - the FDA has no statutory authority to impose evm on true drugs or devices the types of restrictions and penalties on manufacturers that are ticluded in its proposed regulations. Such measures inctude: a. Imposing a $150 million tax on manufacturets. b. Holding manufacturers liable for any sale to minors by rataikrs who are in no way subject to the authority or control of die manufwturers. c. Banning various forms of advertising. .1 d. Destroying property intarests in registered trademarks by placing federal limits on brand advertising. a Precluding sponsorship of artistic, cultural or spmting events. CON TRESSiONAL R-rin• ON OF TOBA_CCO MODUCTS 24. Congress has continually and extensively regulated tobmxo products. Among other actiona, in 1965, Congress enacted the Federal Cigarette Labelinl; and Advertising Act 0D ~ 7- ~ OD tn

('FCLAA"). 15 U.S.C. ¢$ 1331-1341. Congress made clear that the FCLAA - not the FDC Act - established "a comDrehensive Federal program to deal with cigarette labeling and advertising with, respect to = relationship between smoking and health.' 15 U.S.C. 11331 (emphasis added). 25. Congress did not provide any role for the FDA in its "comprGhensive Federal program." To tlhe contrary, Congress =Uited any entity (including the FDA) from requiring any labels or wianings with respect to cigarettes other than those which Congress specifically set forth in the FCLAA. 15 U.S.C. § 1334. 26. Congressional consideration - and rejection - of proposals to have the FDA regulate cigarette:s have continued since the time of the enactment of the FCLAA: a. In 1977, 1978, and 1979, five different bilts were introduced in Congress to grant the FDA jurisdiction over cigarettes. None of them passed. b. In 1984, the House Committee on Energy and Commerce observed that "Federal Laws that protect the public from hazardous food, drugs and consumer products do not apply to cigarettes ...." H.R. Rep. No. 98-845, 98th Cong., 2d Sess. 12, =rinted ia 1984 U.S.C.C.A.N. 37}8, 3725. Nevertheless, no legislation was enacted. c. In 1987, H.R. 3294 was introduced to expand FDA j urisdiction by cstatinE a new regulatory category for tobacco products. The bi11 did not pstss. d. In 1989, H.R. 1494 and S. 769 were introduced to expand FDA jurisdiction by creating a new regulatory category for tobacco products. The bills did not pass. 8

e. Even Rep. Richard Durbin, a staunch critic of tobacco products, conceded in 1989 that the FDA's jurisdietion does not extend to tobacco: It would seem that if you looked at the spectrum of products sold in America, [tobacxo) stands out as an extraord'vnary exception to your mandate under the FDA ... .• .. There have been tests over the yean iu court as to whether or not tobacco is lnneluded in the Food, Drug and Cosmetics Act (sic], and the courts have generally concluded that it is not. In fact, I think they have concluded unanimously that It is nQ,l an ingested food, nor is it a drua ta en for AIL juttess or t.o change me t= of bodY structure. McaiIIII>;9 LMIDIC_II] •. . u u .1 a1Til9 i a ;fture and Related Agencies of the u,u Comm. on Anoropjkdons, 100th Cong. 2d &ss., patrt 8, at 408 (1989) (emphasis added). 27. Congress took the saau approach toward smokeless zbacco products as it did toward cigarettes. IA 1986, it enacted the Comprehensive Smokeless 'robacco Health Education Act ("CS"PHEA"). Pub. L. 99-252, Feb. 27, 1986, 100 Stat. 30; ,lS U.S.C. if 4401-4408. The CSTHEA was designed to impose a'com^nhensive," nationally imiform regulatory system on smokeless tobacco products without infringing the right to use thcm. The CSTHEA is the entire statemcnt of Congress's intention respecting federal regulation of smoYt.less tobacco with respect to health issues. 28. 'The CSTHEA: a. Requires the Secretary of Health and Human ;iervices to establish and maintain a public education program regarding smokeless tobacco. t5 U.S.C. ¢ 4401(a). 9

b. Makes it unlawful for any person to manuficttue, package, or import smokeless tobacco products unless the package beaxs required label warnings. 15 U.S.C. 14402. c. Mabes the Federal Trade Commission ("FTCnot the FDA, responsible for admiaistexing the label provisions. 15 U.S.C. 14404. d. Requires meaufacturers to submit to the Secretary of Health and Human Services au annual list of all ingredients added to tabacaa In the manufacture of smokeless tobacco products, and to specify the quantity of nicotine contained in each such product. 15 U.S.C. 14403. e. Expressty preempts any federal agency from req~siring label statements on smokeless tobacco products with respect to the use of smokr.2ess tobacco and health other -tan those mandated by the CSTHEA. 15 U.S.C. § 44061;a). The FDC Act has mandatory labeling requirements for drugs and devices; compfitnce with both statutes is impossible. f. Doe3 go giant the FDA Jurisdiction to regulate smokeless tobacco products. ~ 29. In the 1990s, Congress continued to confum that tha FDA has no role fn regulating tobacco products: a. In 1992, H.R. 4350 and S. 2298 were intraluced to expand FDA jurisdiction by creating a new regulatory category for tobacco products. In connection with that legislation, Rep. Mika Synar, a major opponent of a3bacco, conceded that, "While the FDA has jurisdiction to protect consumers from unsafe foods, drugs, -10-