MO v. FDA: DEFENDANTS’ REPLY IN SUPPORT OF THEIR MOTION TO DISMISS, OR IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT, Feb 10, 2016

February 12, 2016 10:36 am by Gene Borio

The PDF is Here

EXCERPT:

Plaintiffs’ pre-enforcement, facial challenges to a guidance document issued by the United States Food and Drug Administration (FDA) are not ripe because the guidance document does not represent final agency action and Plaintiffs have not shown that they will suffer significant hardship if review is withheld. Even if Plaintiffs’ claims are ripe for review, the Court should grant summary judgment to Defendants. The guidance document sets forth reasonable interpretations of the Family Smoking Prevention and Tobacco Control Act (“TCA”), which harmonize the TCA’s structure and text and further its core purposes. Because the guidance does no more than advise the public of the agency’s interpretation of the statute it administers, it is not a substantive rule, and Plaintiffs’ procedural challenges to it are meritless. Finally, Plaintiffs’ constitutional challenges to the FDA’s interpretation of the TCA regarding label changes that render a product distinct should be rejected because the agency’s interpretation of the statute does not violate the First or Fifth Amendment. For all of these reasons, the government’s Motion to Dismiss, or in the Alternative, For Summary Judgment should be granted.

. . .

Finally, the government previously explained that FDA has not pursued a single civil or criminal enforcement action related to distribution of a new tobacco product without premarket review, has not issued a Warning Letter to any of the Plaintiffs related to any issue addressed in the Guidance, and, under the agency’s regulatory enforcement policy, ordinarily gives firms the opportunity to correct violations voluntarily “prior to the initiation of enforcement action.” Plaintiffs respond only that the fact that FDA “may choose to exercise its discretion to give manufacturers a chance to correct violations does not mean that FDA will always do so or that the threat of enforcement is any less real.” But Plaintiffs have offered no basis for presuming, on a facial challenge, that FDA will depart from its ordinary practices and policies.

CONCLUSION

For the reasons set forth above and in our opening brief, Defendants’ Motion to Dismiss, or in the Alternative, for Summary Judgment should be granted, and Plaintiffs’ Motion for Summary Judgment should be denied.

END EXCERPT

FULL TEXT:

Case 1:15-cv-01590-APM Document 38 Filed 02/10/16 Page 1 of 31

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

PHILIP MORRIS USA INC.,

et al.,

Plaintiffs,

v.

UNITED STATES FOOD AND DRUG ADMINISTRATION, et al.,

Defendants.

Case No. 1:15-cv-01590

DEFENDANTS’ REPLY IN SUPPORT OF THEIR MOTION TO DISMISS, OR IN THE ALTERNATIVE, FOR SUMMARY JUDGMENT

Case 1:15-cv-01590-APM Document 38 Filed 02/10/16 Page 2 of 31

TABLE OF CONTENTS

TABLE OF AUTHORITIES …… ii

INTRODUCTION ………… 1

I. PLAINTIFFS’ CLAIMS ARE NOT RIPE …………. 1

A. Plaintiffs’ Claims Are Not Fit for Judicial Review ………. 2

B. Plaintiffs Have Not Shown Significant Hardship From Withholding Review ……… 5

II. PLAINTIFFS’ CHALLENGES TO FDA’S INTERPRETATIONS OF THE TCA SHOULD BE REJECTED …….. 6

A. The Court Should Uphold FDA’s Interpretation of the Statute Regarding Label Changes …… 7

B. The Court Should Uphold FDA’s Interpretation of the Statute Regarding Changes in Product Quantity …… 12

III. PLAINTIFFS’ HAVE NOT SHOWN THAT FDA ACTED ARBITRARILY IN ISSUING THE GUIDANCE ………… 15

A. The Guidance Is Not a Substantive Rule ………….. 15

B. Plaintiffs Have Not Shown that FDA Failed to Explain Its Reasoning or Consider Reasonable Alternatives …….. 17

IV. THE GUIDANCE DOES NOT VIOLATE THE FIRST AMENDMENT ………… 19

A. The Guidance Does Not Impinge Upon Any First Amendment Right ……… 19

B. The Guidance Does Not Impose an Unconstitutional Restriction on Commercial Speech …… 20

C. The Guidance Is Not an Unlawful Prior Restraint of Commercial Speech ………… 22

V. THE GUIDANCE’S INTERPRETATION OF THE TCA REGARDING LABEL CHANGES IS NOT IMPERMISSIBLY VAGUE ……… 23

CONCLUSION ….. 25

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TABLE OF AUTHORITIES

Cases

*Abbott Labs. v. Gardner, 387 U.S. 136 (1967) ……. 2

Am. Meat Inst. v. USDA, 760 F.3d 18 (D.C. Cir. 2014) ………… 22

Appalachian Power Co. v. EPA, 208 F.3d 1015 (D.C. Cir. 2000) ……. 16

Arrow Air, Inc. v. Dole, 784 F.2d 1118 (D.C. Cir. 1986) ………….. 17, 18

Ass’n of Flight Attendants-CWA, AFL-CIO v. Huerta, 785 F.3d 710 (D.C. Cir. 2015) …………. 16

*Ass’n of Private Sector Colleges & Univs. v. Duncan, 681 F.3d 427 (D.C. Cir. 2012) ……. 23, 24

BBK Tobacco & Foods, LLP v. FDA, 672 F. Supp. 2d 969 (D. Ariz. 2009) ………… 3

Beaulieu v. City of Alabaster, 454 F.3d 1219 (11th Cir. 2006) ………….. 5

Bennett v. Spear, 520 U.S. 154 (1997) ….. 2, 16

*Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n, 447 U.S. 557 (1980)………….. 20, 22

Chamber of Commerce of U.S. v. FEC, 69 F.3d 600 (D.C. Cir. 1995) ………… 5

Cnty. of LA v. Shalala, 192 F.3d 1005 (D.C. Cir. 1999) ………….. 9

CropLife Am. v. EPA, 329 F.3d 876 (D.C. Cir. 2003) ….. 16

CSI Aviation Servs., Inc. v. Dept. of Transp., 637 F.3d 408 (D.C. Cir. 2011) ……….. 4

Ctr. for Auto Safety v. NHTSA, 452 F.3d 798 (D.C. Cir. 2006) ………. 16

Dada v. Mukasey, 554 U.S. 1(2008) ….. 9

Dillmon v. NTSB, 588 F.3d 1085 (D.C. Cir. 2009) …………. 18, 19

Edwards v. District of Columbia, 755 F.3d 996 (D.C. Cir. 2014) …….. 24

Elec. Privacy Info. Ctr. v. U.S. Dept. of Homeland Sec., 653 F.3d 1 (D.C. Cir. 2011) ……. 4

Flytenow, Inc. v. FAA, 808 F.3d 882 (D.C. Cir. 2015) ………….. 20

Gen. Elec. Co. v. EPA, 290 F.3d 377 (D.C. Cir. 2001) ………….. 16

Holistic Candlers and Consumers Ass’n v. FDA, 664 F.3d 940 (D.C. Cir. 2012) …………. 16

MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007) ……… 6

Nutritional Health Alliance v. Shalala, 144 F.3d 220 (2d Cir. 1998) ……. 22, 23

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Peachlum v. City of York, 333 F.3d 429 (3d Cir. 2003) ………….. 6

Shalala v. Guernsey Memorial Hosp., 514 U.S. 87 (1995) …….. 15

Skidmore v. Swift & Co., 323 U.S. 134 (1944) …….. 6

Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) …….. 2

Syncor Int’l Corp. v. Shalala, 127 F.3d 90 (D.C. Cir. 1997) …… 16

United States v. Gonzales, 520 U.S. 1 (1997) …….. 14

United States v. Lane Labs-USA, Inc., 324 F. Supp. 2d 547 (D.N.J. 2004) ………… 19

United States v. Mead Corp., 533 U.S. 218 (2001) ………… 6

United States v. Monsanto, 491 U.S. 600 (1989) …………. 14

Whitaker v. Thompson, 353 F.3d 947 (D.C. Cir. 2004) …………. 19

Wisconsin v. Mitchell, 508 U.S. 476 (1993) ………. 20

Statutes

21 C.F.R. § 10.115 ………… 4

21 C.F.R. § 10.115(d) ……. 4

21 C.F.R. § 10.115(g) ……….. 7, 18

21 U.S.C. § 321(rr) ……… 15

21 U.S.C. § 371(h) ………… 4, 7, 18

21 U.S.C. § 387 ……. 1

21 U.S.C. § 387b ……… 2, 12

21 U.S.C. § 387c ……. 2, 8, 9

21 U.S.C. § 387d …………. 11

21 U.S.C. § 387e ………….. 3, 13-15

21 U.S.C. § 387j ……. passim

5 U.S.C. § 553(b)&(c)….. 17

Other Authorities

J. Belluzzi, et al, Acetaldehyde Enhances Acquisition of Nicotine Self-Administration in Adolescent Rats, Neuropsychopharm 30, 705-12 (2005) ……. 11

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R. Talhout et al. Role of Acetaldeyde in Tobacco Smoke Addiction, Eur. Neuropsychopharm 17 (2007) …… 11

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INTRODUCTION

Plaintiffs’ pre-enforcement, facial challenges to a guidance document issued by the United States Food and Drug Administration (FDA) are not ripe because the guidance document does not represent final agency action and Plaintiffs have not shown that they will suffer significant hardship if review is withheld. Even if Plaintiffs’ claims are ripe for review, the Court should grant summary judgment to Defendants. The guidance document sets forth reasonable interpretations of the Family Smoking Prevention and Tobacco Control Act (“TCA”), Pub. L. No. 111-31, 123 Stat. 1776 (codified at 21 U.S.C. §§ 387 et seq.), which harmonize the TCA’s structure and text and further its core purposes. Because the guidance does no more than advise the public of the agency’s interpretation of the statute it administers, it is not a substantive rule, and Plaintiffs’ procedural challenges to it are meritless. Finally, Plaintiffs’ constitutional challenges to the FDA’s interpretation of the TCA regarding label changes that render a product distinct should be rejected because the agency’s interpretation of the statute does not violate the First or Fifth Amendment. For all of these reasons, the government’s Motion to Dismiss, or in the Alternative, For Summary Judgment should be granted.

I. PLAINTIFFS’ CLAIMS ARE NOT RIPE

As detailed in our opening brief, in September 2015, FDA issued a guidance document titled Demonstrating the Substantial Equivalence of a New Tobacco Product: Responses to Frequently Asked Questions (Edition 2) (AR 001-037) (hereafter, Guidance), which sets forth the agency’s current thinking on whether and when a change to a tobacco product’s label or product quantity in the package renders that product a new tobacco product subject to review under the premarket review provisions of the TCA. Plaintiffs do not allege that FDA has applied the Guidance to them or has threatened them with any type of enforcement action. Plaintiffs have

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failed to meet their burden1 of showing that their claims are fit for judicial review or that they will suffer significant hardship if review is withheld. See Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967). As a result, Plaintiffs’ Complaint should be dismissed as unripe.

A. Plaintiffs’ Claims Are Not Fit for Judicial Review

Plaintiffs have failed to show that the Guidance represents “final agency action,” a requirement for establishing that their claims are fit for judicial review. Abbott Labs., 387 U.S. at 149. To be considered “final,” an agency action must both “mark the consummation of the agency’s decision-making process”2 and “be one by which rights or obligations have been determined, or from which legal consequences will flow.” Bennett v. Spear, 520 U.S. 154, 17778 (1997) (internal citations and quotations omitted). Plaintiffs cannot show that the Guidance determines rights or obligations or that legal consequences flow from it because the Guidance does nothing more than describe FDA’s “current thinking” regarding the interpretation of certain provisions of the TCA and offer manufacturers the opportunity to submit streamlined versions of substantial equivalence reports (SE Reports), if they so choose.

Notwithstanding Plaintiffs’ pervasive mischaracterization of the Guidance as a “Directive” and their oft-repeated mistaken assertions (e.g., Pls’ Reply at 5) that “failure to comply with” the Guidance “would subject Plaintiffs to serious legal repercussions,” the source of the premarket review requirement for new tobacco products is the TCA, not the Guidance. See 21 U.S.C. §§ 387j, 387b(6)(A), 387c(a)(6). Similarly, the Guidance does not “establish[] the

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1 Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 104 (1998) (“the party invoking federal jurisdiction bears the burden of establishing . . . [the] existence” of a case or controversy).

2 FDA plans to issue a regulation that would establish the format and content of reports intended to demonstrate substantial equivalence and also provide information as to how the Agency will review and act on those submissions. See www.reginfo.gov/public/do… Rule?pubId=201510&RIN=0910-AG96. The agency is targeting publication of the proposed rule in July 2016.

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obligation to submit two new types of” SE Reports. See Pls’ Reply at 6 (emphasis in original). Instead, the obligation to submit an SE Report for a new tobacco product derives solely from the TCA. The statute outlines the contents of the SE Report, 21 U.S.C. § 387e(j), and the showing that must be made for the agency to determine whether the product is substantially equivalent to a predicate, 21 U.S.C. § 387j(a)(3). In 2011, FDA issued guidance with recommendations on the information it believes a typical SE Report may need to include to demonstrate substantial equivalence. See AR 459, 468-474 (Guidance for Industry: Section 905(j) Reports: Demonstrating Substantial Equivalence for Tobacco Products). The Guidance at issue here simply describes the agency’s current thinking on the contents of an SE Report for certain situations – streamlined SE Reports as an alternative to what the agency typically recommends. See AR 004, 011, 021-22. Manufacturers remain free to submit whatever SE Report they so choose, as long as it meets the statute’s requirement for what it must contain and for what it must show to support a substantial equivalence finding. See 21 U.S.C. § 387e(j)(1)(A). Thus, Plaintiffs cannot show that the Guidance imposes any obligations on them. 3

For the same reasons, the interim enforcement policy FDA articulated in May 2015 does not aid Plaintiffs’ position. As discussed in our opening brief (Defs’ MTD/MSJ at 6), after issuing an iteration of the Guidance in March 2015, FDA announced that while the agency considered whether to issue a revised guidance, it would not

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3 BBK Tobacco & Foods, LLP v. FDA, 672 F. Supp. 2d 969 (D. Ariz. 2009), mirrors the facts presented here. In BBK, the court held that a challenge to an FDA guidance document interpreting that TCA was not ripe, explaining “Any action taken against BBK, or any other such company, cannot be premised upon the FDA’s guidance documents” because such “documents do not provide any legal basis from which the FDA can institute civil or criminal legal proceedings.” Id. at 975. Instead, “[t]he FDA can only premise such proceedings upon the [TCA] itself . . . .” Id. So too here, as Plaintiffs demonstrate by quoting the Guidance’s reference to the statutory terms “misbranded and adulterated” from the Guidance’s overview of the TCA’s premarket review requirements. See Pls’ Reply at 7 (quoting AR 004).

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issue any warning letters or take steps to initiate any judicial or administrative adversarial proceedings for marketing a new tobacco product without the required premarket authorization under Section 910 [of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 387j] where the new tobacco product is a modification of an appropriate predicate product and the only modification made to the product is (1) a label change that creates a distinct product with identical characteristics to the predicate product; or (2) a change in product quantity . . . .

AR 040 (emphasis added). The interim enforcement policy made clear that the source of any legal obligation was statutory (specifically, section 910 of the TCA) and thus merely reflected the agency’s approach to enforcing the TCA’s premarket review provisions while FDA was reconsidering its interpretation of those provisions. It does not suggest the agency believed its Guidance had any binding effect. See Pls’ Reply at 6; see also 21 C.F.R. § 10.115(d).

Plaintiffs rely on Elec. Privacy Info. Ctr. v. U.S. Dept. of Homeland Sec., 653 F.3d 1, 7 (D.C. Cir. 2011), to show that it is “enough” for the Guidance to “‘purport to bind’ those subject to it, that is, to be cast in ‘mandatory language’ so the ‘affected private parties’” would “believe that failure to conform” would lead to “adverse consequences.” But, consistent with the FDCA and FDA regulations, the Guidance expressly states it does “not establish legally enforceable responsibilities,” “is not binding on FDA or the public,” contains “nonbinding recommendations,” and “should be viewed only as recommendations.” See AR 003-04; 551-52; see also 21 U.S.C. § 371(h); 21 C.F.R. § 10.115. It also states that manufacturers “can use an alternative approach if it satisfies the requirements of the applicable statutes . . . .” AR 003; 552. CSI Aviation Servs., Inc. v. Dept. of Transp., 637 F.3d 408 (D.C. Cir. 2011), likewise fails to support Plaintiffs’ claim that the Guidance is final agency action. There, after reviewing information submitted by the plaintiff, the Department of Transportation sent a letter to the plaintiff asserting that it was operating in violation of the law and threatening enforcement action, a position that DOT reiterated after the plaintiff protested and again in response to a separate exemption request the plaintiff filed. Id. at 410-12. In sharp contrast, FDA has not sent

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a warning letter threatening action against any Plaintiff or any other manufacturer based on any issue addressed in the Guidance. See Defs’ Ex. 1 (Simoneau Dec.) ¶ 5.

For all of these reasons, Plaintiffs have not shown that their claims are fit for review.

B. Plaintiffs Have Not Shown Significant Hardship From Withholding Review

Plaintiffs also have failed to meet their burden of showing significant hardship from withholding consideration of their claims. In our opening brief, the government explained that the Guidance does not threaten manufacturers with enforcement action, FDA ordinarily gives manufacturers an opportunity to voluntarily take appropriate action to correct violations of the statute prior to the initiation of enforcement action, FDA has not issued a Warning Letter to any of the Plaintiffs (or any other manufacturer) threatening an enforcement action related to any of the issues discussed in the Guidance, and FDA has not pursued any civil or criminal enforcement actions related to distribution of a new tobacco product without premarket review. Defs’ MTD/MSJ at 14; Ex. 1 (Simoneau Decl.) ¶¶ 3-5. Plaintiffs do not dispute any of those facts.

In the absence of a “credible threat of enforcement,” Plaintiffs’ cannot demonstrate significant hardship simply by alleging a First Amendment violation. See Pls’ Reply at 8.4 Even though courts may apply a more permissive standard for ripeness when violations of the First Amendment are alleged, a “credible threat of prosecution” remains essential, as illustrated by even the political speech cases on which Plaintiffs rely. See, e.g., Chamber of Commerce of U.S. v. FEC, 69 F.3d 600, 603-04 (D.C. Cir. 1995) (regulation restricted political speech and statute permitted “political competitors” to initiate litigation challenging the legality of plaintiffs’ actions as contrary to the regulation). Indeed, Beaulieu v. City of Alabaster, 454 F.3d 1219 (11th Cir. 2006), emphasized that courts may not “disregard [the ripeness requirement] altogether,”

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4 Plaintiffs’ claims regarding product quantity do not involve the First Amendment and thus must

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even though it is applied more permissively when First Amendment rights are at issue, and distinguished cases analyzing the ripeness issue in the context of commercial speech, the only type of speech at issue here. Id. at 1228-30 (challenge to sign restriction preventing advertising candidacy for political office was ripe where candidate had received written notice of violation threatening further legal action). See also Peachlum v. City of York, 333 F.3d 429, 431, 432 n.5, 434 (3d Cir. 2003) (First Amendment facial challenge to sign ordinance was “subject to a relaxed ripeness standard” in case where for “nearly ten years, the City had repeatedly cited” the plaintiff for “numerous separate violations of” the challenged sign ordinance; however, court explained that “commercial speech may be subject to a stricter ripeness test than non-commercial speech”).5 Plaintiffs’ claims here involve only commercial speech, and Plaintiffs lack any comparable basis for alleging a credible threat of enforcement.

For all of these reasons, Plaintiffs’ claims are not ripe and should be dismissed.

II. PLAINTIFFS’ CHALLENGES TO FDA’S INTERPRETATIONS OF THE TCA SHOULD BE REJECTED

As a preliminary matter, FDA’s interpretations of ambiguous statutory language in the TCA are owed considerable deference under Skidmore v. Swift & Co., 323 U.S. 134, 139-40 (1944).6 The Guidance reflects the agency’s interpretation of interrelated statutory provisions in a “highly detailed” regulatory scheme. United States v. Mead Corp., 533 U.S. 218, 235 (2001). The agency has interpreted the statute in a way that harmonizes the statute’s text, structure, and broad remedial purpose of reducing the death, disease, and dependency caused by tobacco use be evaluated against the traditional standard for ripeness.

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5 MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 128-29 (2007), is not to the contrary. FDA’s issuance of a guidance document explaining its interpretation of the TCA is not equivalent to a “threatened action by government” against any of the Plaintiffs.

6 Because FDA’s interpretations are owed considerable deference under Skidmore, it is not necessary for the Court to resolve whether FDA’s interpretations of the TCA set forth in the

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and has developed those interpretations through a thorough administrative process that included solicitation and consideration of comments. See AR 061, 083, 478 & 546; 21 U.S.C. § 371(h)(1); 21 C.F.R. § 10.115(g).

Plaintiffs’ arguments against giving “any deference” to the Guidance are baseless. Plaintiffs suggest (Pls’ Reply at 10) that FDA lacks “peculiar insights into the meaning of ‘new tobacco product,’” ignoring that, in charging FDA with implementation of the TCA, Congress expressly recognized FDA’s expertise “as the primary Federal regulatory authority with respect to the manufacture, marketing, and distribution of tobacco products,” TCA § 3(1), as well as its expertise in “identify[ing] harmful substances in products to which consumers are exposed” and “mak[ing] decisions about whether and how products may be marketed in the United States.” Id. § 2(44). Moreover, the meaning of “new tobacco product” is central to the premarket review function Congress assigned to FDA. Plaintiffs also weakly argue that FDA’s interpretation of the TCA has not been consistent, even though FDA has consistently viewed changes to a product’s brand name as potentially triggering the TCA’s premarket review requirement. See AR 090. As discussed infra at18-19, Plaintiffs’ argument rests upon the senseless position that FDA should be faulted for issuing a draft Guidance for the purpose of obtaining public comment and then making changes to the final Guidance based on the comments.

Accordingly, the Court should defer to FDA’s interpretations of the TCA.

A. The Court Should Uphold FDA’s Interpretation of the Statute Regarding Label Changes

Plaintiffs’ arguments that the statutory interpretation set forth in the Guidance conflicts with the statute’s structure and text are incorrect.

1. FDA’s interpretation of new tobacco product does not conflict with 21 U.S.C. Guidance also merit Chevron deference.

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§ 387c(b). Section 387c(b) authorizes FDA to require, by regulation, “prior approval of statements made on the label of a tobacco product to ensure that such statements do not violate” the TCA’s misbranding provisions and otherwise comply with the statute. Submission of an SE Report (either a full SE Report or the streamlined Same Characteristics SE Report offered in the Guidance) for a product rendered distinct by a label change does not conflict with section 387c(b) because FDA’s Guidance does not require submission of copies of the product’s label for either type of report. See AR 015 FAQ#8; AR 012-14, 035-36; AR 469-72.

Plaintiffs do not dispute that fact, but attempt to manufacture a structural conflict by claiming that the Guidance “requires7 that . . . a manufacturer submit a Same Characteristics SE Report containing ‘[f]ull identification’ of the ‘new tobacco product,’ including information regarding ‘its different name, logo, packaging font or color.’” Pls’ Reply at 11-12 (citing AR
012). The Guidance states that the report should include “[f]ull identification of [the] new tobacco product,” which includes its “unique name (i.e., brand name/subbrand or other commercial name used in commercial distribution)” and “any other information needed to uniquely identify the new tobacco product.” AR 012. The language Plaintiffs quote (Pls’ Reply at 11-12) regarding “different name, logo, packaging font or color” appears in a footnote explaining which product is the “new tobacco product,” and is not part of the contents of an SE Report. AR 012 n.9.

In any event, giving the full identification of a product, such as its “unique name,” is not the same thing as requiring its label, and reading section 387c(b) to bar FDA from obtaining information necessary to identify a product in an SE Report would be counterproductive, at best. By Plaintiffs’ logic, submission of any SE Report for any new tobacco product, including

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7 The Guidance is not binding and does not “require” anything, as discussed supra at 2-3.

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changes unrelated to the product’s label, would run afoul of section 387c(b), because including the new product’s name in the report would be a “label pre-approval procedure” without notice and comment. Yet it is difficult to imagine how FDA could perform a substantial equivalence review or keep track of which products the agency has found substantially equivalent if the manufacturers do not include sufficient information to uniquely identify the new and predicate products in their SE Reports. Thus, Plaintiffs’ claim of a structural conflict should be rejected.

2. Contrary to Plaintiffs’ assertion (Pls’ Reply at 12), FDA’s interpretation of the TCA regarding label changes that render a product distinct engages the “plain meaning” of the statutory text, and does so, as it must, by considering the statute as a whole.8 As detailed in our opening brief (Defs’ MTD/MSJ at 21-28), “new tobacco product” and “substantial equivalence” are interrelated concepts that are located in the same section of the TCA. FDA reasonably interpreted “same characteristics” to mean that the new and predicate products must have identical physical attributes. Plaintiffs argue (Pls’ Reply at 13) that it is “stated nowhere in the Act” that new and predicate products with the “same characteristics” must be “identical.” But the statute expressly provides that products cannot have the “same characteristics,” unless they have the same materials, same ingredients, same design, same composition, same heating source, and the same “other features.” 21 U.S.C. § 387j(a)(3)(A)(i)&(3)(B). Plaintiffs do not argue that FDA’s interpretation of the language is impermissible or even unreasonable. They do not dispute that the statute must be read in a way that harmonizes both concepts. Nor do they claim that “same characteristics” is capable of only one interpretation.

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8 See, e.g., Dada v. Mukasey, 554 U.S. 1, 16 (2008) (“In reading a statute we must not look merely to a particular clause, but consider in connection with it the whole statute”) (internal quotation marks omitted); Cnty. of LA v. Shalala, 192 F.3d 1005, 1014 (D.C. Cir. 1999)(“to prevent statutory interpretation from degenerating into an exercise in solipsism, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole

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See Pls’ Reply at 13. Instead, they offer an alternate reading: “A product that is not ‘identical’ in all respects to a single predicate may . . . satisfy the ‘same characteristics’ test if its characteristics are the same as the characteristics of a single predicate or a range of predicate products.” Id. That interpretation is not a reasonable reading of the statutory language.

Plaintiffs’ “range of predicates” interpretation of “same characteristics” undermines the statute’s purpose.9 As discussed (Defs’ MTD/MSJ at 30), under Plaintiffs’ interpretation, a manufacturer could demonstrate that a new tobacco product is “substantially equivalent” to “the predicate” under the “same characteristics” prong even though it designed the new product by mixing the characteristics of an unlimited number of other predicate products (e.g., the filter of Brand A, cigarette paper of Brand B, design of Brand C, and blend composition of Brand D). And the manufacturer could market this composite tobacco product without having to show that such a product “does not raise different questions of public health.” Yet Congress intended manufacturers of products with different characteristics to have to demonstrate to FDA that their products do not raise different questions of public health before they can be found substantially equivalent. See 21 U.S.C. § 387j(a)(3)(A)(ii).10 Moreover, Plaintiffs’ broad reading of “same law.”) (internal quotation omitted).

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9 Plaintiffs note that FDA has previously stated that multiple predicates could be cited in an SE Report (Pls’ Reply at 13 n.3), although, as a general matter, the agency has interpreted the statute to permit use of only a single predicate. See, e.g., AR 465 (Guidance on SE Reports) (“a single predicate tobacco product should be used for comparison purposes”); FDA Q&A: Substantial Equivalence Tobacco Products (“FDA interprets a predicate product to mean a single tobacco product that the manufacturer will compare to its new tobacco product.”) (available at www.fda.gov/TobaccoProduc… Equivalence/ucm304517.htm#3). The agency believes there may be limited circumstances in which multiple predicates may be used when a manufacturer seeks to establish substantial equivalence under the “different characteristics” prong, 21 U.S.C. § 387j(a)(3)(A)(ii), but not under the “same characteristics” prong. The references to multiple predicates in the FDA slide presentations Plaintiffs cite were not intended to refer to the “same characteristics” prong.

10 Creating a new tobacco product from a range of predicate tobacco products can raise different questions of public health beyond those questions raised by the individual predicates because of

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characteristics” would render the “different characteristics” prong virtually superfluous. If a product can be “substantially equivalent” to a “range of predicates,” then the only products that would come to market under the “different characteristics” prong would be those to which a modification has been made that was not present in any other valid predicate. Plaintiffs’ interpretation is therefore not a reasonable reading of the statute.11

3. Plaintiffs’ contention (Pls’ Reply at 14) that FDA’s interpretation of the TCA does not further its purpose is flawed for several reasons. Plaintiffs’ assumption (Pls’ Reply at
14) that a tobacco product with a different label but identical physical characteristics already “will have undergone premarket review when the product was commercially introduced with the predecessor label (or will have qualified for ‘grandfathered’ status)” is incorrect. As Plaintiffs’ statement concedes, the predicate product may be a grandfathered product, and grandfathered the way the various additives and other features of a tobacco product interact to impact how chemicals are handled by the body. Some of the ways chemicals can interact is to alter how they are absorbed into the body, metabolized by the body, or how they bind to receptors in the body. For example, acetaldehyde when present at a level that is below its independent reinforcing effect could boost the reinforcing effect of nicotine, the primary addictive substance in tobacco, beyond what it would be without acetaldehyde present or the sum of the two independent effects.

R. Talhout et al., Role of Acetaldeyde in Tobacco Smoke Addiction, Eur. Neuropsychopharm 17, 627-36 (2007); J. Belluzzi, et al., Acetaldehyde Enhances Acquisition of Nicotine Self- Administration in Adolescent Rats, Neuropsychopharm 30, 705-12 (2005). If a component from one predicate that contains nicotine is mixed with a component from another predicate that contains acetaldehyde, the synergistic effect of this mixture could raise different questions of public health beyond the separate predicates, because the addictiveness of the product could be greater than either independently or the sum of the two predicate products alone and may reduce cessation and increase initiation, thereby impacting public health.

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11 Plaintiffs concede (Pls’ Reply at 14) that a change in brand name “triggers” the manufacturer’s obligation to “update ingredient and [harmful and potentially harmful constituent (HPHC)] reports” but claim this means “Congress knew how to establish requirements that apply to products with new brand names and elected not to do so with respect to premarket review.” The TCA requires firms to report ingredient and HPHC information by brand/subbrand, 21 U.S.C. § 387d(a)(1), (3). But that is not what triggers ingredient and HPHC reporting for new products. Ingredient and HPHC reporting for new products (when the new product is not an additive modification) is triggered by introducing a product into interstate commerce that was “not on the market,” id. § 387d(c)(1), which is very similar to the trigger for premarket review in section

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products are not subject to premarket review. See Defs’ MTD/MSJ at 3 n.8. Moreover, as the Guidance explains, a product that is distinct from a predicate product, such as by having a different name, but that is physically identical to the predicate, has not been “commercially marketed” under section 387j(a)(1)(A) and is subject to premarket review. See AR 007; 21 U.S.C. § 387j(a)(2)(A); Defs’ MTD/MSJ at 22. In addition, as explained (Defs’ MTD/MSJ at 16-28; AR 011), subjecting these products to premarket review furthers the TCA’s objectives, because it ensures FDA can determine whether a product that appears in the marketplace (e.g., marketed under a new brand name) is substantially equivalent to a valid predicate or is otherwise lawfully on the market. Lastly, review of an SE Report (whether full or Same Characteristics) and issuance of a substantial equivalence order includes a “compliance with the Act” review pursuant to section 387j(a)(2)(A)(i) ). (For example, a new tobacco product is not in compliance with the Act if its manufacturer failed to pay its user fees, 21 U.S.C. § 387b(4).) While the government could take action against a violative product once it is on the market, the “compliance with the Act” review explicitly authorizes the agency to address violations of the TCA prior to marketing. FDA’s interpretation thus serves many purposes of the TCA.

B. The Court Should Uphold FDA’s Interpretation of the Statute Regarding Changes in Product Quantity

In their reply, Plaintiffs do not dispute that the core purposes of the TCA include preventing initiation of tobacco use by children and adolescents and reducing dependence on tobacco use, or the Guidance’s position that “[c]hanges in product quantity can affect initiation and cessation, such as by affecting consumer harm perceptions, use intentions, and use behavior.” See Defs’ MTD/MSJ at 31 (citing TCA § 3(2)&(9)); AR 020; Pls’ Reply at 14-15. Nor do they question FDA’s assertion that product “quantity changes directly affect the death, 387j(a)(1)(A).

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disease, and dependence burden of tobacco use.” See Defs’ MTD/MSJ at 31-32; Pls’ Reply at 14-15. Instead, Plaintiffs’ cryptic defense of their position on product quantity is limited to two flawed arguments regarding the construction of the TCA.

1. Plaintiffs’ contention (Pls’ Reply at 15) that FDA’s product quantity interpretation is “inconsistent with the structure of the [TCA]” misses the mark. Plaintiffs once again urge (Pls’ Reply at 15) that FDA cannot consider information on the behavioral aspects of tobacco use under the “different characteristics” prong of substantial equivalence because the TCA only specifically refers to such information regarding premarket tobacco applications (PMTAs) and “modified risk” products. Plaintiffs do not dispute that Congress delegated to FDA the authority to determine what information should be included in an SE Report. See 21 U.S.C. § 387e(j)(1) (“in such form and manner as the Secretary shall prescribe”). They object instead that FDA’s interpretation of the statute is “open-ended” and would permit the agency to require SE Reports to include “the full set of extensive information” Congress specified should be included in PMTA applications. Pls’ Reply at 15. Not so.

FDA is not seeking “boundless regulatory power” but rather requesting information that is directly relevant to the statutory standard and in furtherance of one of the core purposes of the TCA. A new tobacco product can be found substantially equivalent under the “different characteristics” prong only if the agency determines that “it is not appropriate to regulate the product under [section 387j, i.e., a PMTA] because the product does not raise different questions of public health.” 21 U.S.C. § 387j(a)(3)(A)(ii). In determining whether a product “raise[s] different questions of public health,” FDA considers public health attributes such as potential impacts on initiation and cessation. See, e.g., AR 473 (SE Report Guidance) (for products with different characteristics, FDA may request data comparing consumer perceptions with respect to new and predicate products that could affect initiation and cessation, etc.). This analysis is

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conducted in accordance with the TCA and is consistent with Congress’ charge to prevent initiation of tobacco use by children and “promote cessation to reduce the disease risk” of tobacco, TCA § 3(2)&(9). Rather than forecasting an exercise of “boundless regulatory power,” the information requested is closely tethered to the statutory standard and necessary for FDA to fulfill the statutory purpose. Thus, Plaintiffs have not identified a structural conflict.

2. Plaintiffs’ second argument fares no better. Congress defined “new tobacco product” to include, among other things, “any modification” of a tobacco product “where the modified product was commercially marketed in the United States after February 15, 2007.” 21 U.S.C. § 387j(a)(1)(B) (emphasis added).12 Plaintiffs do not dispute that “any modification” should be read broadly, but instead contend that changing the quantity of product in a package is not a modification of the product because “a tobacco product has the same ingredients, materials, and other features whether sold in large or small quantities.” Pls’ Reply at 14-15. This argument fails because “any modification” includes a change in the amounts of the ingredients and materials in the tobacco product, even if the ingredients and materials have not changed in relative proportion to one another.

FDA’s reading of “any modification” in section 387j(a)(1)(B) to include changes in the amounts of ingredients in the tobacco product is confirmed by section 387e(j)(3). In that section, Congress established a third pathway for authorization through premarket review (in addition to a PMTA and a substantial equivalence order): a request for an exemption from substantial equivalence. In describing the ways a tobacco product may be “modified” but seek an exemption from substantial equivalence, Congress included “increasing or decreasing the

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12 The term “any” is to be read expansively. See United States v. Gonzales, 520 U.S. 1, 5 (1997) (“Read naturally, the word ‘any’ has an expansive meaning, that is, ‘one or some indiscriminately of whatever kind.’”); United States v. Monsanto, 491 U.S. 600, 607 (1989).

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quantity of an existing tobacco additive.” (emphasis added). If changes to the quantities of ingredients in a tobacco product do not fall within “any modification” in section 387j(a)(1)(B)’s definition of “new tobacco product,” Congress would have had no reason for including “increasing or decreasing the quantity of an existing additive” in section 387e(j)(3). Thus, Plaintiffs’ suggestion that a “tobacco product has the same ingredients, materials, and other features whether sold in large or small quantities” 13 mistakes the relevant inquiry.

III. PLAINTIFFS’ HAVE NOT SHOWN THAT FDA ACTED ARBITRARILY IN ISSUING THE GUIDANCE

A. The Guidance Is Not a Substantive Rule

FDA issued the Guidance to “to advise the public of the agency’s construction of the statute[] . . . it administers,” and thus it is an interpretive rule for which notice and comment are not required. See Shalala v. Guernsey Memorial Hosp., 514 U.S. 87, 99 (1995). Plaintiffs argue

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13 Alternatively, Plaintiffs may be arguing that “tobacco product” must be read narrowly as a single unit (e.g., a single cigarette or a single snus pouch) rather than the whole product (e.g., a pack of cigarettes or a tin of loose tobacco), but they offer no argument in support of such a narrow reading. The TCA defines “tobacco product” as “any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product . . . .” 21 U.S.C. § 321(rr). This definition does not specify whether “tobacco product” refers to individual product units (e.g., a cigarette or pouch of loose tobacco) or whole products (e.g., a package of 20 cigarettes or a 2 ounce tin of loose smokeless tobacco), but for some tobacco products (e.g., loose tobacco or smokeless tobacco not sold in pouches), there are no individual product units. Thus, tobacco product is more logically read to encompass the whole product.

Moreover, reading “tobacco product” in section 387j to encompass the whole product furthers the fundamental purposes of the TCA to reduce dependence on tobacco by decreasing initiation among youths and encouraging cessation. TCA § 3(2)&(9). Plaintiffs do not question FDA’s assertion that product “quantity changes directly affect the death, disease, and dependence burden of tobacco use.” See Defs’ MTD/MSJ at 31-32; Pls’ Reply at 14-15. If “tobacco product” were just some unit, as Plaintiffs seem to suggest, then the product quantity changes that Plaintiffs do not deny can affect initiation and cessation would escape premarket review. Thus, FDA’s interpretation of “any modification . . . of a tobacco product” to include any modification of the whole product, not just (where applicable) the individual units, furthers core purposes of the TCA and is a reasonable interpretation of ambiguous statutory language.

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(Pls’ Reply at 18) that the Guidance is a rule based on its alleged “practical consequences,” but they fail to cite any case holding that factor dispositive of whether a rule is substantive rather than interpretive. To the contrary, the “most important factor” in distinguishing substantive rules from policy statements and interpretive rules is “the actual legal effect (or lack thereof) of the agency action in question.” Ass’n of Flight Attendants-CWA, AFL-CIO v. Huerta, 785 F.3d 710, 717 (D.C. Cir. 2015) (internal citation omitted) (emphasis added); see Bennett, 520 U.S. at 177 78 (“from which legal consequences will flow”); Ctr. for Auto Safety v. NHTSA, 452 F.3d 798, 811 (D.C. Cir. 2006) (“The flaw in appellants’ argument is that the ‘consequences’ to which they allude are practical, not legal.”); see also Holistic Candlers and Consumers Ass’n v. FDA, 664 F.3d 940 (D.C. Cir. 2012) (“‘practical consequences . . . are insufficient to bring an agency’s conduct under our purview.’”) (citation omitted).14

Next, Plaintiffs cite (Pls’ Reply at 19) FDA’s interim enforcement policy in a flawed attempt to show that they must “conform” to the Guidance and that failure to do so will result in adverse consequences. As discussed in our opening brief (Defs’ MTD/MSJ at 6) and supra at 3

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14 The cases cited by Plaintiffs do not hold that “practical consequences” distinguish interpretive from substantive rules. In Gen. Elec. Co. v. EPA, 290 F.3d 377, 383 (D.C. Cir. 2001), the court explained that “an agency pronouncement will be considered binding as a practical matter if it either appears on its face to be binding, Appalachian Power Co. v. EPA, 208 F.3d 1015, 1023 (D.C. Cir. 2000) (‘The entire Guidance, from beginning to end … reads like a ukase. It commands, it requires, it orders, it dictates.’), or is applied by the agency in a way that indicates it is binding . . . .” (citation omitted). See also CropLife Am. v. EPA, 329 F.3d 876, 883 (D.C. Cir. 2003) (same, quoting Gen. Elec. v. EPA). Here, the Guidance does not “command” anything, and Plaintiffs have offered no evidence that FDA has applied the Guidance in a way that indicates it is binding.

Syncor Int’l Corp. v. Shalala, 127 F.3d 90 (D.C. Cir. 1997), is inapposite. There, an agency notice announcing a different position on how radiopharmaceuticals “should” be regulated was not an interpretive rule because it “does not purport to construe any language in any relevant statute or regulation; it does not interpret anything.” Id. at 95. Instead, the notice “uses wording consistent only with the invocation of [the agency’s] general rulemaking authority . . . .” Id. In contrast, the Guidance identifies and discusses the statutory provisions it is interpreting and does not invoke rulemaking authority. See, e.g., AR 007-09, 018-19.

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4, the interim enforcement policy reflected FDA’s approach to enforcing the statute’s premarket review provisions while the agency was reconsidering its interpretation of those provisions. See AR 040 (explaining that FDA does not intend to take steps to initiate any “judicial or administrative adversarial proceedings for marketing a new tobacco product without required premarket authorization under Section 910 [of the FDCA, 21 U.S.C. § 387j]” under specified circumstances) (emphasis added). Because Plaintiffs cannot show that FDA’s announcement of its interpretations of the TCA in the Guidance establishes new rights and obligations or has legal consequences, their claim that the Guidance is a substantive rule should be rejected.

B. Plaintiffs Have Not Shown that FDA Failed to Explain Its Reasoning or Consider Reasonable Alternatives

Plaintiffs assert that FDA acted arbitrarily in issuing the Guidance for two reasons, neither of which has merit.

1. As part of Plaintiffs’ attempt to transform the process of issuing a guidance document interpreting the TCA into rulemaking in accordance with 5 U.S.C. § 553(b)&(c), Plaintiffs object (Pls’ Reply at 16) that the Guidance fails to adequately articulate the agency’s consideration of “alternative approaches,” but their citation to Arrow Air, Inc. v. Dole, 784 F.2d 1118 (D.C. Cir. 1986) does not support their argument. There, the D.C. Circuit explained that the challenged interpretive rule was “not required to comply with 5 U.S.C. § 553(b) and (c).” Id. at 1128. Although the agency was required to provide a “reasoned explanation” for its interpretation, it was sufficient that the rule “identifies and quotes the provision interpreted, identifies what it regards as the main purpose of the regulations . . . , and clearly defines the obligation involved . . . .” Id. The court also rejected the plaintiff’s argument that the agency should have “addressed all relevant contentions in” a related docket, noting that it had “plainly addressed a sufficient number of the commentors’ contentions for its purpose here,” and “[m]ore

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to the point” the interpretive rule “is not a substantive rulemaking to which the ‘hard look’ doctrine applies.” Id. Thus, the absence of a “more complete explanation” was “irrelevant.” Id.

As in Arrow and contrary to Plaintiffs’ assertion, FDA identified the statutory provisions the agency is interpreting and explained the reasons for its interpretations of the TCA, including the statutory purposes furthered by those interpretations. See AR 007-27. Likewise, the agency considered the comments received, as shown by its decision to include two types of streamlined SE Reports and separate queues for reviewing those reports, as well as the agency’s revision of its position regarding whether a “label” is “part” of a tobacco product. See Defs’ MTD/MSJ at 21-22.15 This is “not a substantive rulemaking,” Arrow, 784 F.2d at 1128, and nothing more was required. 16

2. Plaintiffs assert (Pls’ Reply at 17-18) that FDA acted arbitrarily because it did not adequately explain its reason for changing the position it initially took in the draft Guidance on whether a “label” is “part” of a tobacco product. FDA clearly stated that “[a]fter reviewing the comments” submitted on the draft Guidance, it had “reconsidered its interpretation and concluded that a label is not ‘part’ of the tobacco product.” AR 006; AR 065.

Citing Dillmon v. NTSB, 588 F.3d 1085, 1089-90 (D.C. Cir. 2009), Plaintiffs assert (Pls’ Reply at 18) that FDA is required to provide “‘reasoned analysis’ . . . [when it] departs from a previous position.” That is not what Dillmon said, however. Dillmon’s demand for “reasoned

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15 Neither the FDCA nor FDA’s good guidance practice regulations require FDA to include in the final Guidance its responses to comments received. See 21 U.S.C. § 371(h); 21 C.F.R. § 10.115(g)(1)(iv)(A).

16 Plaintiffs fault FDA (Pls’ Reply at 17) for “no[t] mention[ing]” the “alternatives” they proposed, including a “notice requirement.” But Plaintiffs are still unable to explain how “notice” to FDA that they are marketing products is an appropriate alternative for premarket review. The Guidance explains FDA’s thinking: an “SE submission and an SE order enable FDA to determine whether the product is lawfully on the market.” AR 011. This explanation easily meets the agency’s obligations under the arbitrary and capricious standard.

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analysis” referred to an agency “depart[ure] from its precedent.” 588 F.3d at 1089 (emphasis added); id. at 1089-90 (referring to “departure from established precedent.”) (emphasis added). The draft guidance was not “precedent” in any sense of the word. It was prominently marked a “draft” that was “being distributed for comment purposes only.” AR 083. Each page was marked “Not for Implementation.” AR 085-95; see also AR 085 (“This draft guidance, when finalized, will represent [FDA’s] current thinking on this topic.”) (emphasis added). Thus, Dillmon provides no support for Plaintiffs’ fanciful argument that an elaborate explanation is required, where an agency articulates a position in a draft guidance, solicits comments, and changes the interpretation in response to comments.17

For all of these reasons, Plaintiffs’ claim that FDA acted arbitrarily must fail.

IV. THE GUIDANCE DOES NOT VIOLATE THE FIRST AMENDMENT

A. The Guidance Does Not Impinge Upon Any First Amendment Right

The Guidance recognizes that a change in a product’s label may result in a distinct product, which may then trigger the need to file an SE Report with FDA. This evidentiary use of speech, in the form of the product’s label, to establish that a product is subject to certain set of regulatory authorities, is commonplace. For example, a food may become a drug or dietary supplement based on the types of claims in the labeling, and this evidentiary use of speech is “constitutionally permissible.” See Whitaker v. Thompson, 353 F.3d 947, 952-53 (D.C. Cir.
2004); see also, e.g., United States v. Lane Labs-USA, Inc., 324 F. Supp. 2d 547, 566 (D.N.J.
2004) (“[I]f this Court finds Defendants, in the process of marketing BeneFin, MGN-3 and SkinAnswer, limited their claims to permissible structure-function claims, and those claims are

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17 If the court were to conclude that the agency must provide a greater explanation for the choices it made in issuing the Guidance, the Court should remand the matter to FDA, not declare the Guidance unlawful. See Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985).

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truthful and not misleading, this Court may consider Defendants’ argument that the Products are [dietary] supplements. . . . If, however, this Court finds Defendants made claims that the Products diagnose, mitigate, treat, cure, or prevent a specific disease or class of diseases, the Products must be considered drugs under the FDCA.”).

Plaintiffs acknowledge (Pls’ Reply at 20-21) that FDA may “consider a manufacturer’s speech for its evidentiary value,” but then assert that such use is limited to establishing either that the speech is misleading or a manufacturer’s intent. They cite no authority for that limitation. Indeed, the Supreme Court’s articulation of the evidentiary use of speech doctrine is not so proscribed. Wisconsin v. Mitchell, 508 U.S. 476, 489 (1993) (“The First Amendment . . . does not prohibit the evidentiary use of speech to establish the elements of a crime or to prove motive or intent.”). See also Flytenow, Inc. v. FAA, 808 F.3d 882 (D.C. Cir. 2015) (upholding “us[e of] speech (postings on Flytenow.com) as evidence that pilots are offering service that exceeds the limits of their certifications”).

B. The Guidance Does Not Impose an Unconstitutional Restriction on Commercial Speech

On reply, Plaintiffs do not dispute the government has a substantial interest in performing oversight over the tobacco industry through the TCA’s premarket review procedure for new tobacco products, which they admit is a “central feature” of the TCA. See Pls’ MSJ at 4; Pls’ Reply at 23. Instead, they claim that FDA has not met its burden under Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n, 447 U.S. 557 (1980), of showing that the statutory interpretation set forth in the Guidance “directly advances” the government’s interest in a way that is “no more extensive than necessary,” focusing exclusively on what they claim is an available alternative: “contemporaneous notice [to FDA] of label changes.” See Pls’ Reply at 23-24. As discussed below, Plaintiffs have not identified an alternative that would actually

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achieve FDA’s interest because Plaintiffs’ approach does not enable the agency to perform premarket review, including a determination of whether distinct products (e.g., two versions of a product with different brand names) have the same characteristics before they are commercially distributed to consumers. Thus, Plaintiffs’ supposed alternative does not show that FDA’s approach is more extensive than necessary.

As recommended in the Guidance, submission of a Same Characteristics SE Report directly advances the government’s interest because it would enable FDA to determine whether a distinct product meets the standard for issuance of a substantial equivalence order before the product is commercially marketed to consumers. If all recommended information is included, the report would uniquely identify both products and include a certification that would enable FDA to conclude that the products have the “same characteristics.” AR 011-14. The Same Characteristics SE Report would also contain additional information necessary for the agency to ensure the product meets the standard for issuance of an order under section 387j(a)(2)(A)(i), such as the Health Information Summary mandated by section 387j(a)(4) and a statement of actions taken to comply with any applicable tobacco product standard. AR 012-14.

Plaintiffs’ proposed “contemporaneous notice of a label change” approach is not an acceptable “alternative” because it would not include the information necessary to confirm that the new tobacco product meets the standard for issuance of a substantial equivalence order. Plaintiffs’ approach would require FDA to assume that the new tobacco product is substantially equivalent to a valid predicate and is otherwise in compliance with the Act. But FDA’s concern that the new and predicate products will not actually be substantially equivalent is based on its experience in reviewing SE Reports. The agency has previously reported that common defects in SE Reports included manufacturers claiming the new and predicate products have the same characteristics even though they have different product composition and design, and identifying

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a product as a predicate that cannot serve as a valid predicate. See, e.g., Reports on Substantial Equivalence (905(j)(1)(A)(i) Reports): One Year Later (Apr. 24, 2012) at pages 22 & 36 (available at www.fda.gov/downloads/tob… ucm316450.pdf). Moreover, even if Plaintiffs’ approach enabled adequate review, that review would take place after Plaintiffs commence marketing the new product. Thus, the supposed “alternative” is at odds with the TCA’s mandate of premarket review of new tobacco products.

Because FDA’s approach directly advances the government’s interest and does so with a reasonable fit between means and ends, it easily withstands review under Central Hudson. See Am. Meat Inst. v. USDA, 760 F.3d 18, 26 (D.C. Cir. 2014) (en banc).

C. The Guidance Is Not an Unlawful Prior Restraint of Commercial Speech

Plaintiffs have not shown the prior restraint doctrine applies to commercial speech. Indeed, they have yet to identify a single case involving purely commercial speech where a court applied strict scrutiny to an analogous system of premarket review. See Pls’ MSJ at 35-36; Pls’ Reply at 21-22.18 Even if the prior restraint doctrine applies here, it requires only that a restraint be a narrowly tailored means of advancing a substantial governmental interest. See Nutritional Health Alliance v. Shalala, 144 F.3d 220, 227-28 (2d Cir. 1998). The approach set forth in the Guidance meets this standard for the reasons discussed above and in our opening brief.

Plaintiffs incorrectly assert that FDA has not identified objective criteria “that will cabin its review of proposed label changes.” Pls’ Reply at 22. As noted, the Guidance does not recommend, let alone require, submission of copies of the products’ label in a Same

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18 Plaintiffs now (Pls’ Reply at 21-22) acknowledge that the Supreme Court has repeatedly questioned the applicability of the prior restraint doctrine to commercial speech. See Defs’ MTD/MSJ at 40-41. Plaintiffs’ suggestion (Pls’ Reply at 22 n.5) that the commercial speech of tobacco companies – as they revise their product labels to attract customers – is somehow entitled to greater protection than that of other businesses strains credulity. Likewise, this speech

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Characteristics SE Report. AR 015; AR 012-14, 035-36. Moreover, Plaintiffs offer no support for their contention that the Guidance “authorizes FDA to reject Same Characteristics SE Reports . . . for any reason or no reason at all.” See Pls’ Reply at 22. Under section 387j, the only requirements for issuance of a substantial equivalence order under the “same characteristics” prong are a showing that the new tobacco product has the same materials, ingredients, design, composition, heating source, and other features as the predicate, and that the new product is otherwise in compliance with the Act. 21 U.S.C. § 387j(a)(2)(A)(i), (3)(A)(i),&(3)(B). Plaintiffs have not identified any aspect of this standard that can sensibly be called “unfettered powers of censorship.” See Pls’ Reply at 22.

Finally, Plaintiffs again object (Pls’ Reply at 22) that the agency’s timetable for reviewing Same Characteristics SE Reports is “aspirational” and therefore “indefinite.” FDA’s goal of reviewing Same Characteristics SE Reports within 90 days of receipt is far shorter than the 540 day timeframe found permissible in Nutritional Health All., 144 F.3d at 228, and Plaintiffs’ exaggerated claim of potentially indefinite delays in reviewing such reports is contrary to their own experience. See Ex. 2 (Ashley Dec.) ¶ 4. Indeed, Plaintiffs have not claimed that FDA has exceeded its 90 day target for any Same Characteristics SE Report submitted by any plaintiff. Plaintiffs’ prior restraint claim should therefore be rejected.

V. THE GUIDANCE’S INTERPRETATION OF THE TCA REGARDING LABEL CHANGES IS NOT IMPERMISSIBLY VAGUE

Plaintiffs’ reply does not remedy the defects in their vagueness challenge. In order to prevail on a facial challenge to the Guidance on vagueness grounds, Plaintiffs must show that the Guidance is vague in all of its applications. Ass’n of Private Sector Colleges & Univs. v. Duncan, 681 F.3d 427, 442 (D.C. Cir. 2012) (to prevail in a “facial challenge” to regulations, the

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hardly rests “at the core of the First Amendment,” as Plaintiffs’ claim. See Pls’ Reply at 21.

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plaintiff “must establish that no set of circumstances exists under which the [regulations] would be valid. That is true as to both the constitutional challenges and the statutory challenge[s].”) (internal citations and quotations omitted).19 Yet, as the government’s opening brief stated (Defs’ MTD/MSJ at 43) and Plaintiffs’ silence on reply confirms, Plaintiffs do not argue that the Guidance is impermissibly vague with respect to new brand names or products manufacturers tout as “new.” Nor do they claim there are no circumstances in which it would be evident that changes to a product’s color, logo, font, and text had created a distinct product.20 See Pls’ Reply at 24 (claiming the Guidance leaves Plaintiffs “to guess” only regarding “whether particular changes to a label’s color, font, or text are sufficient to create a ‘distinct’ product”). Because Plaintiffs have not met their burden of showing that the Guidance is vague in all of its applications, their facial challenge should be rejected.

In addition, Plaintiffs object that they must “guess about whether particular changes . . . create a ‘distinct’ product” but ignore the Guidance’s suggestion that manufacturers contact FDA if they have questions about whether “certain modifications convert an existing product into a ‘new tobacco product . . . .” AR 030 at FAQ #31, cited in Defs’ MTD/MSJ at 44.21 Plaintiffs do

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19 In First Amendment challenges, courts “recognize[] a second type of facial challenge, under which a law may be invalidated as overbroad if a substantial number of its applications are unconstitutional, judged in relation to the statute’s plainly legitimate sweep.” Edwards v. District of Columbia, 755 F.3d 996, 1001 (D.C. Cir. 2014) (internal quotations and citations omitted). However, the overbreadth doctrine does not apply to commercial speech. Ass’n of Private Sector Colleges, 681 F.3d at 456.

20 Plaintiffs also do not claim that the Guidance is vague with respect to changes in product quantity in the package.

21 Plaintiffs disagree (Pls’ Reply at 24-25) with the suggestion that they also could use consumer testing to assess consumer perception about particular changes, citing a memo titled, “FDA Documentation for the Generic Clearance of Focus Groups (available at available at tinyurl.com/h7977bb). In that memo, FDA explains that “focus group findings” can be used by policymakers to test and refine ideas, but further research should be conducted before marking important decisions such as adopting new policies . . . .” Id. The memo does not support Plaintiffs’ contention that consumer testing is incapable of providing information to help

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not dispute that FDA has offered manufacturers the opportunity to consult the agency regarding such questions or claim that such a process would be inadequate in resolving their questions. Their vagueness challenge should be rejected for this reason also. See Defs’ MTD/MSJ at 44-45.

Finally, the government previously explained that FDA has not pursued a single civil or criminal enforcement action related to distribution of a new tobacco product without premarket review, has not issued a Warning Letter to any of the Plaintiffs related to any issue addressed in the Guidance, and, under the agency’s regulatory enforcement policy, ordinarily gives firms the opportunity to correct violations voluntarily “prior to the initiation of enforcement action.” Defs’ MTD/MSJ at 45 (citing Ex. 1 (Simoneau Dec.) ¶¶ 3-5). Plaintiffs respond only that the fact that FDA “may choose to exercise its discretion to give manufacturers a chance to correct violations does not mean that FDA will always do so or that the threat of enforcement is any less real.” Pls’ Reply at 25. But Plaintiffs have offered no basis for presuming, on a facial challenge, that FDA will depart from its ordinary practices and policies.

CONCLUSION

For the reasons set forth above and in our opening brief, Defendants’ Motion to Dismiss, or in the Alternative, for Summary Judgment should be granted, and Plaintiffs’ Motion for Summary Judgment should be denied.

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guide manufacturers’ judgment regarding changes that render a product distinct.

25

Case 1:15-cv-01590-APM Document 38 Filed 02/10/16 Page 31 of 31

Respectfully submitted,

Of Counsel:

WILLIAM B. SCHULTZ

General Counsel

BENJAMIN C. MIZER

Principal Deputy Assistant Attorney General

ELIZABETH H. DICKINSON

Associate General Counsel

Food and Drug Division

JONATHAN F. OLIN

Deputy Assistant Attorney General

PERHAM GORJI

Deputy Chief Counsel, Litigation

MICHAEL S. BLUME

Director

Consumer Protection Branch

PAIGE H. TAYLOR

Senior Counsel

Food and Drug Division, OGC

Office of the General Counsel

10903 New Hampshire Avenue

White Oak 32 Room 4380

Silver Spring, MD 20993-0002

(301) 796-8720

ANDREW E. CLARK

Assistant Director

/s/ James T. Nelson

JAMES T. NELSON

Consumer Protection Branch

Civil Division

U.S. Department of Justice

P.O. Box 386

Washington, D.C. 20044

(202) 616-2376

james.nelson2@usdoj.gov

Dated: February 10, 2016

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