LORILLARD v FDA: DOJ RESPONSE TO PETITION FOR REHEARING EN BANC, APR 15, 2016

April 15, 2016 4:39 pm by Gene Borio

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EXCERPT:

The Family Smoking Prevention and Tobacco Control Act of 2009 directed the Food and Drug Administration to establish the Tobacco Products Scientific Advisory Committee to provide advice to the agency, including, as its first order of business, preparation of a report addressing the impact of menthol cigarettes on tobacco use. FDA established the committee pursuant to the Federal Advisory Committee Act, and, in 2011, the unanimous committee issued its Menthol Report.

Plaintiffs are cigarette manufacturers who claim that FDA should have determined that three committee members had conflicts of interest. A panel of this Court concluded that plaintiffs lack Article III standing because they failed to produce evidence of an imminent and non-speculative injury-in-fact. The panel applied settled standing principles to the summary judgment record in this case and did not speculate whether other private parties may bring suits of this kind.

The panel decision was correct and does not conflict with any decision of the Supreme Court, this Court, or any other court of appeals. Indeed, plaintiffs identify no case in which a private party has sought to enforce the federal ethics rules. No further review is warranted.

END EXCERPT

FULL TEXT:

USCA Case #14-5226 Document #1608921 Filed: 04/15/2016 Page 1 of 18

No. 14-5226

IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

LORILLARD, INC, et al.,

Plaintiffs-Appellees,

v.

UNITED STATES FOOD AND DRUG ADMINISTRATION, et al.,

Defendants-Appellants.

On Appeal from the United States District Court for the District of Columbia

RESPONSE TO PETITION FOR REHEARING EN BANC

BENJAMIN C. MIZER

Principal Deputy Assistant Attorney General

CHANNING D. PHILIPS

United States Attorney

MARK B. STERN

ALISA B. KLEIN

PATRICK G. NEMEROFF

(202) 305-8727

Attorneys, Appellate Staff

Civil Division, Room 7217

U.S. Department of Justice

950 Pennsylvania Ave., N.W.

Washington, DC 20530 USCA Case #14-5226 Document #1608921 Filed: 04/15/2016 Page 2 of 18

TABLE OF CONTENTS

Page(s)

INTRODUCTION AND SUMMARY ……………… 1

BACKGROUND ……………………. 1

DISCUSSION ………………………… 6

CONCLUSION ……………………. 12

CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 32(a) CERTIFICATE OF SERVICE

USCA Case #14-5226 Document #1608921 Filed: 04/15/2016 Page 3 of 18

TABLE OF AUTHORITIES

Cases: Page(s)

Arpaio v. Obama, 797 F.3d 11 (D.C. Cir. 2015) ……………………….. 5, 7

Atlantic States Legal Foundation v. EPA, 325 F.3d 281 (D.C. Cir. 2003) ………………………. 10

Center for Law & Educ. v. Department of Educ., 396 F.3d 1152 (D.C. Cir. 2005) …………………….. 11

Florida Audobon Soc’y v. Bentsen, 94 F.3d 658 (D.C. Cir. 1996) ………………………….. 4

*Metcalf v. National Petroleum Council, 553 F.2d 176 (D.C. Cir. 1977) ………………………. 10

NRDC v. Pena, 147 F.3d 1012 (D.C. Cir. 1998) ………………. 10, 12

Statutes:

Family Smoking Prevention and Tobacco Control Act,

21 U.S.C. § 387 et seq. …………… 1

21 U.S.C. § 387g(a)(3) ………. 2

21 U.S.C. § 387g(a)(3)(B) ….. 9

21 U.S.C. § 387g(b) ………….. 9

21 U.S.C. § 387g(c) …………… 9

21 U.S.C. § 387g(d)(1) ………. 2

21 U.S.C. § 387g(e)(1) ………. 2

21 U.S.C. § 387g(e)(3) ………. 2

21 U.S.C. § 387q(c) …………… 2

5 U.S.C. § 706(2)(A) ………………… 3

18 U.S.C. § 202(a) ……………………. 3

18 U.S.C. § 208(a) ……………………. 3

* Authorities upon which we chiefly rely are marked with asterisks. ii

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18 U.S.C. § 208(b)(3) ……. 7, 11, 12

18 U.S.C. § 1905 …………………. 5, 7

21 U.S.C. § 331(j) …………………….. 7

21 U.S.C. § 379d-1 …………………… 3

Regulations:

5 C.F.R. pt. 2635 ……………………… 3

§ 2635.703 ……………………….. 7, 8

§ 2635.106(c) ……………………… 11

§ 2635.801(d) ……………………….. 5

5 C.F.R. pt. 2640 ……………………… 3

21 C.F.R. § 14.5(b)…………………… 2

Other Authorities:

Menthol in Cigarettes, Tobacco Products; Request for Comments, 78 Fed. Reg. 44,484 (July 24, 2013) ………………… 3

iii

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INTRODUCTION AND SUMMARY

The Family Smoking Prevention and Tobacco Control Act of 2009 directed the Food and Drug Administration to establish the Tobacco Products Scientific Advisory Committee to provide advice to the agency, including, as its first order of business, preparation of a report addressing the impact of menthol cigarettes on tobacco use. FDA established the committee pursuant to the Federal Advisory Committee Act, and, in 2011, the unanimous committee issued its Menthol Report.

Plaintiffs are cigarette manufacturers who claim that FDA should have determined that three committee members had conflicts of interest. A panel of this Court concluded that plaintiffs lack Article III standing because they failed to produce evidence of an imminent and non-speculative injury-in-fact. The panel applied settled standing principles to the summary judgment record in this case and did not speculate whether other private parties may bring suits of this kind.

The panel decision was correct and does not conflict with any decision of the Supreme Court, this Court, or any other court of appeals. Indeed, plaintiffs identify no case in which a private party has sought to enforce the federal ethics rules. No further review is warranted.

BACKGROUND

A. The Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) provided FDA with authority to regulate tobacco products, and USCA Case #14-5226 Document #1608921 Filed: 04/15/2016 Page 6 of 18

authorized FDA to issue regulations that are “appropriate for the protection of the

public health.” 21 U.S.C. § 387g(a)(3).

The Act directed FDA to establish the Tobacco Products Scientific Advisory

Committee (TPSAC) to assist FDA by providing “advice, information, and

recommendations.” 21 U.S.C. § 387q(c). Among other responsibilities, TPSAC was

required to provide FDA advice on the impact of menthol cigarettes and the impact

of dissolvable tobacco products, see id. § 387g(e)(1).

In July 2011, the committee voted unanimously to adopt the Menthol Report,

and presented the final report to FDA. See AR 21453-83 (TPSAC’s July 21, 2011

meeting). The report concluded that the presence of menthol cigarettes in the

marketplace harms the public health, but expressly declined to provide “specific

suggestions for follow-up by FDA to this recommendation.” AR 19660.

The Tobacco Control Act does not direct FDA to defer to the committee’s recommendations on menthol, see 21 U.S.C. § 387g(d)(1), (e)(3); see also 21 C.F.R. § 14.5(b), and FDA has not proposed any regulatory action in reliance on the committee’s Menthol Report. In July 2013, FDA released its own independent preliminary scientific evaluation of menthol in cigarettes and, in an advance notice of proposed rulemaking, it sought public comment on that evaluation and on broad questions regarding possible approaches to regulating menthol and other additives. See Menthol in Cigarettes, Tobacco Products; Request for Comments, 78 Fed. Reg.

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44,484 (July 24, 2013). FDA has taken no further action with respect to menthol in cigarettes.

B. Plaintiffs allege that three committee members—Drs. Neal Benowitz, Jack Henningfield, and Jonathan Samet—had conflicts of interest with respect to TPSAC’s work on menthol and dissolvable tobacco products. JA 39-47 (Third Am. Compl.). The alleged conflicts arise from their consulting work for pharmaceutical companies and from their work as expert witnesses for litigants suing tobacco companies. Plaintiffs claim that FDA’s appointment of those three TPSAC members was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), because the three members had financial conflicts of interest or the appearance of conflicts of interest, in violation of 18 U.S.C. §§ 202(a), 208(a); 21 U.S.C. § 379d-1; and 5 C.F.R. pts. 2635,
2640. JA 81-83. In addition to their conflict of interest claims, plaintiffs also asserted various claims under the Federal Advisory Committee Act. JA 83-103. The district court granted plaintiffs’ motion for summary judgment. JA 120-54. In a footnote, the court concluded that plaintiffs had Article III standing to challenge the composition of TPSAC. JA 139-40 n.18.

C. A unanimous panel of this Court reversed, holding that plaintiffs lack Article III standing. The panel recognized that plaintiffs assert three injuries arising from TPSAC’s membership composition: “(1) an increased risk that the FDA will regulate menthol tobacco products adversely to plaintiffs’ interests; (2) access by the

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challenged Committee members to plaintiffs’ confidential information, with a probability of their using the information to plaintiffs’ detriment; and (3) the shaping of the menthol report to support the challenged members’ consulting and expert witness businesses.” Op. 4. The panel concluded “that all three are too remote and uncertain, or, to put the same thing another way, insufficiently imminent.” Op. 4-5.

Addressing first plaintiffs’ alleged risk of injury due to future FDA regulation, the panel assumed without deciding that plaintiffs had asserted a procedural injury warranting “relaxation of the causation element” of standing. Op. 5. The panel explained that, “despite this relaxation, the plaintiff must still demonstrate ‘a distinct risk to a particularized interest.’” Id. (quoting Florida Audobon Soc’y v. Bentsen, 94 F.3d 658, 664 (D.C. Cir. 1996) (en banc)). It concluded that plaintiffs could not satisfy that requirement, because “the appointment of the challenged committee members by no means rendered the risk of eventual adverse FDA action substantially probable or imminent.” Op. 6. “It remains unclear whether the FDA will issue a final rule” regulating menthol, and “in any such rulemaking, the extent to which the FDA would be persuaded by the content of the Committee’s report is quite speculative.” Id. The panel further noted that even “[i]f the report influences a proposed rule to plaintiffs’ detriment in the way they anticipate, they will have an opportunity to raise concerns about the report’s scientific claims, including assertions of bias.” Op. 6-7. It explained that “any claims that the (still hypothetical) rule was in excess of statutory authority or arbitrary and capricious would proceed along conventional lines.” Op. 7.

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The panel therefore found “the alleged increased risk of an FDA rule on menthol cigarettes too uncertain for standing.” Op. 8.

The panel also rejected the claim of injury resulting from the challenged members’ access to confidential information, explaining that “plaintiffs have not set forth by affidavit or other evidence specific facts suggesting that the challenged members have made or will make improper use of confidential information.” Op. 8. To the contrary, “[t]here is considerable reason to believe that the challenged members will not disclose such information,” because “[d]isclosure would subject them to criminal and civil penalties.” Id. (citing 18 U.S.C. § 1905; 5 C.F.R. § 2635.801(d)); see also Op. 9 (noting that this Court has “rejected assertions of imminent injury where the prospective injury depends on future illegal activity.” (citing Arpaio v. Obama, 797 F.3d 11, 22 (D.C. Cir. 2015)).

The panel concluded that “[p]laintiffs’ evidence that they have been injured by any shaping of the report by the challenged Committee members to support their expert testimony is similarly weak.” Op. 9. Plaintiffs were able to identify “only a handful of mentions of the menthol report in challenged members’ testimony” and only “two cases that involved a menthol smoker,” and “their examples of such testimony do not support their contention that the shaping of the report caused any injury.” Id. The panel similarly found no evidence that plaintiffs faced “imminent reputational injury” resulting from TPSAC’s menthol report, and it observed that

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plaintiffs “presented no facts supporting their contention that the challenged

members shaped the report to support their testimony.” Op. 10.

Because plaintiffs “have not demonstrated that any of their three injuries is

sufficiently imminent to confer standing,” the panel “vacate[d] the judgment of the

district court for lack of jurisdiction and dissolve[d] its injunction.” Op. 10-11.

DISCUSSION

Plaintiffs describe the issue of exceptional importance presented by the panel

opinion as “whether a private party can have standing to challenge . . . participation by

advisory committee members in particular matters as to which they have unwaived

conflicting interests.” Pet. 1. But the panel did not speculate as to whether a private

party can ever have standing to raise such a claim. It concluded, based on a thorough

review of the summary judgment record, that the plaintiffs in this case have failed to

demonstrate an imminent injury arising from the unwaived conflicts of three

committee members. Plaintiffs quarrel with the panel’s assessment of the facts. The

panel’s analysis was correct, and, in any event, disputes of this kind do not warrant en

banc review.

Moreover, although plaintiffs describe the issue presented in terms of unwaived

conflicts, they concede that their asserted injuries would not be redressed by conflict-

of-interest waivers. See Pet. 1-2 n.1 (“Waivers may remove the unlawfulness of the

participation by committee members who have conflicting interests, but do not

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palliate the injuries that result from that participation.”) (plaintiffs’ emphases).1 And, notwithstanding their assertion of the importance of the issue presented, plaintiffs identify no case in which a court has entertained a challenge of the kind presented here.

1. Plaintiffs first assert (Pet. 5-10) that committee members may use or disclose confidential information about their products in ways that may harm plaintiffs. The panel found that “plaintiffs have not set forth by affidavit or other evidence specific facts suggesting that the challenged members have made or will make improper use of confidential information.” Op. 8. The disclosure of confidential information by TPSAC members is prohibited by law, see 5 C.F.R. § 2635.703, and 21 U.S.C. § 331(j) and 18 U.S.C. § 1905 also provide criminal penalties for federal employees who make trade-secret information public. This Court has “rejected assertions of imminent injury where the prospective injury depends on future illegal activity,” Op. 9 (citing Arpaio v. Obama, 797 F.3d 11, 22 (D.C. Cir. 2015)), and, as the panel explained, “[t]here is considerable reason to believe that the challenged members will not disclose such information.” Op. 8. In any event, a conflict-of-interest waiver would not have an effect on a committee member’s access to confidential information.

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1 An agency may waive even a substantial conflict of interest in the case of advisory committee members. See 18 U.S.C. § 208(b)(3). (In this case FDA had no occasion to consider issuance of a waiver because it found that no conflict existed.) The panel understood plaintiffs to argue that conflict-of-interest waivers would have at least “palliated their injuries,” Op. 3, but plaintiffs now disavow that position.

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Plaintiffs urge that their “theory of injury does not depend on unlawful disclosure of the confidential information, but, rather, on its influence on the challenged members’ consulting advice and testimony, even without disclosure.” Pet. 6. They do not, however, identify any evidence that such an injury has occurred, nor do they describe with any detail even a hypothetical injury. In any case, federal law not only prohibits improper disclosure of confidential information, but more generally forbids “the improper use of nonpublic information to further [one’s] own private interest or that of another.” 5 C.F.R. § 2635.703.2

2. Plaintiffs next assert (Pet. 10-13) that committee members shaped the (unanimous) menthol report to support future expert testimony. Despite having access to thousands of pages of records documenting the work of TPSAC and its menthol report subcommittee, plaintiffs “presented no facts supporting their contention that the challenged members shaped the report to support their testimony.” Op. 10 (Court’s emphasis). Plaintiffs cite two instances in which Dr. Henningfield mentioned the menthol report in testimony. But Dr. Henningfield did not participate in the drafting of TPSAC’s menthol report; his participation was limited to public TPSAC meetings and minor editorial suggestions. See JA 2533-2627. Moreover, he

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2 Plaintiffs also failed to substantiate other aspects of their theory of standing, including their assertions (Pet. 3) that nicotine-replacement-therapy products compete with dissolvable tobacco products and that sales of smoking-replacement products would increase if sales of menthol cigarettes or dissolvable tobacco products were restricted or banned.

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confirmed that his passing reference to the menthol report was not meant “to give any specific testimony on the impact of menthol” on the plaintiff in that litigation. JA 2461. As the panel found, plaintiffs were able to identify “only a handful of mentions of the menthol report in challenged members’ testimony” and only “two cases that involved a menthol smoker,” and “their examples of such testimony do not support their contention that the shaping of the report caused any injury.” Op. 9. And, as the panel observed, if there is future testimony in which a committee member actually relies on the menthol report, plaintiffs’ allegations of bias can be aired through the usual mechanism of cross examination. See Op. 10.

3. Plaintiffs’ third injury (Pet. 13-15) is the allegedly increased risk that FDA will take regulatory action against their products. But “the appointment of the challenged committee members by no means rendered the risk of eventual adverse FDA action substantially probable or imminent.” Op. 6. If FDA determines to undertake regulatory action with respect to menthol cigarettes or dissolvable tobacco products, it will be required to act on the basis of its own scientific assessment, see 21 U.S.C. § 387g(a)(3)(B), (b), and, if it decides to promulgate a product standard, it will be required to engage in notice and comment rulemaking, see id. § 387g(c). Plaintiffs declare that “FDA generally follows its advisory committees’ advice,” Pet. 14, but they cite statistics involving matters that generally do not involve notice and comment rulemaking, see 21 U.S.C. § 387g(a)(3)(B), (b). In any event, “[i]f the report influences a proposed rule to plaintiffs’ detriment in the way they anticipate,

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they will have an opportunity to raise concerns about the report’s scientific claims, including assertions of bias,” and “any claims that the (still hypothetical) rule was in excess of statutory authority or arbitrary and capricious would proceed along conventional lines.” Op. 6-7. Moreover, conflict-of-interest waivers would not affect the content of the committee’s reports or prevent the agency from considering those reports.

As the panel observed, this Court has previously found insufficient alleged injuries in similar circumstances. The Court “held that plaintiffs in Metcalf v. National Petroleum Council, 553 F.2d 176, 184, 188 (D.C. Cir. 1977), lacked standing to challenge the composition of any advisory committee where, among other things, there was ‘no allegation that [the agency] took action based on’ one of the committee’s recommendations.” Op. 7; see also NRDC v. Pena, 147 F.3d 1012, 1026 n.8 (D.C. Cir.
1998) (“If a report produced in violation of FACA cannot be acted on by the agency without first undertaking a rulemaking or adjudication, the plaintiff may have difficulty showing the FACA violation is responsible for a concrete injury it has sustained or will sustain based on the administrative decisionmaking process.”). And, in Atlantic States Legal Foundation v. EPA, 325 F.3d 281, 284-85 (D.C. Cir. 2003), the Court “declin[ed] to hear a challenge to federal regulations that could adversely affect petitioners only after New York State adopted them through further notice-and comment rulemaking.” Op. 6.

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Plaintiffs argue that the panel failed to apply the “substantial probability” standard to their alleged injury, Pet. 4, 13-15, but the panel assumed that plaintiffs had alleged a procedural injury and nonetheless concluded that plaintiffs failed to satisfy even a relaxed standing requirement, Op 5. In any event, plaintiffs’ argument cannot be squared with this Court’s teaching that to establish a procedural injury, a plaintiff must show that “the procedures in question are designed to protect some threatened concrete interest of his that is the ultimate basis of his standing.” Center for Law & Educ. v. Department of Educ., 396 F.3d 1152, 1157 (D.C. Cir. 2005). The conflict of interest laws are contained in criminal statutes and in government ethics regulations that explicitly provide that they “do[] not create any right or benefit, substantive or procedural, enforceable at law by any person against the United States, its agencies, its officers or employees, or any other person.” 5 C.F.R. § 2635.106(c). Far from creating an individual procedural interest, the governing statute precludes any inference that an individual has a right to an advisory committee composed of members free of conflicts of interest, by authorizing agencies to appoint special government employees to advisory committees even if a conflict of interest exists. See 18 U.S.C. § 208(b)(3). Plaintiffs do not claim their alleged injuries would have been redressed had FDA chosen to apply section 208(b)(3) in this case. See Pet. 1-2 n.1. 3

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3 The district court’s order rested on multiple, independent errors that the panel had no occasion to address. For example, the district court gave no meaningful deference to FDA’s finding that the challenged members did not have conflicts of

Continued on next page.

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CONCLUSION

For the foregoing reasons, the petition for rehearing en banc should be denied.

Respectfully submitted,

BENJAMIN C. MIZER

Principal Deputy Assistant Attorney General

CHANNING D. PHILIPS

United States Attorney

MARK B. STERN

ALISA B. KLEIN

PATRICK G. NEMEROFF

(202) 305-8727

Attorneys, Appellate Staff

Civil Division, Room 7217

U.S. Department of Justice

950 Pennsylvania Ave., N.W.

Washington, DC 20530

APRIL 2016

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interest. The court ordered FDA to reconstitute TPSAC to exclude the three challenged members from participating in any matters that the committee may consider in the future even though the agency has authority to waive a committee member’s conflict of interest. See 18 U.S.C. § 208(b)(3). And the court barred FDA from considering the Menthol Report without regard to “the magnitude of the waste, the value of the committee’s work to the sponsoring federal agency and the effect of the . . . [asserted] violation on the committee’s findings.” Pena, 147 F.3d at 1026.

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CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 32(a)

I hereby certify that this brief complies with the requirements of Fed. R. App.

P. 32(a)(5) and (6) because it has been prepared in 14-point Garamond, a proportionally spaced font. I further certify that this response complies with the requirements of Fed. R. App. P. 35(b)(2) because it has been prepared in 14-point Garamond, a proportionally spaced font, and does not exceed 15 pages, excluding material not counted under Rule 32. /s/ Patrick G. Nemeroff

Patrick G. Nemeroff

USCA Case #14-5226 Document #1608921 Filed: 04/15/2016 Page 18 of 18

CERTIFICATE OF SERVICE

I hereby certify that on April 15, 2016, I electronically filed the foregoing brief with the Clerk of the Court for the United States Court of Appeals for the District of Columbia Circuit by using the appellate CM/ECF system.

/s/ Patrick G. Nemeroff

Patrick G. Nemeroff

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