PHILIP MORRIS v FDA: PLAINTIFFS’ NOTICE OF SUPPLEMENTAL AUTHORITY, Jun 7, 2016

June 7, 2016 4:49 pm by Gene Borio

The PDF is Here

EXCERPT:

Plaintiffs respectfully submit this Notice regarding U.S. Army Corps of Engineers v. Hawkes Co., No. 15-290, 578 U.S. __ (May 31, 2016) . . .

In Hawkes, the U.S. Supreme Court held that a jurisdictional determination by the U.S. Army Corps of Engineers that property contains “waters of the United States”—and is therefore subject to the Clean Water Act—constitutes reviewable “final agency action” under the Administrative Procedure Act (“APA”). . .

So too, here, where the Second SE Directive warns manufacturers that they must undergo premarket review before implementing label changes that, in FDA’s view, render a product “distinct” or changing the quantity in which the product is marketed. If a manufacturer implements such changes without premarket review, it faces significant criminal and civil penalties for marketing misbranded and adulterated products. Hawkes thoroughly refutes FDA’s position that, as an alternative to review of the Second SE Directive, Plaintiffs could simply implement a label or product-quantity change without premarket review and then wait for FDA either to initiate an enforcement action or exercise its prosecutorial discretion not to bring such an action. The Court in Hawkes emphasized that regulated entities “need not assume” the risk of criminal and civil penalties “while waiting for [the agency] to ‘drop the hammer’ in order to have their day in court.” FDA, however, would require tobacco product manufacturers either to incur the risks of an enforcement action, or comply with the unlawful regulatory requirements and endure a prior restraint of speech imposed by the Second SE Directive by delaying their label and product-quantity changes at least 90 days (and indefinitely for non-provisional products) while the agency conducts premarket review. The APA does not impose such an untenable choice on regulated parties.

END EXCERPT

FULL TEXT:

Case 1:15-cv-01590-APM Document 40 Filed 06/07/16 Page 1 of 5

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.

Civil Action No. 1:15-cv-1590

PLAINTIFFS’ NOTICE OF SUPPLEMENTAL AUTHORITY

Plaintiffs respectfully submit this Notice regarding U.S. Army Corps of Engineers v. Hawkes Co., No. 15-290, 578 U.S. __ (May 31, 2016) (Ex. A). Hawkes underscores that parties need not run “the risk of ‘serious criminal and civil penalties’” before challenging agency action and that the Second SE Directive is therefore ripe for judicial review. Id. at 8.

In Hawkes, the U.S. Supreme Court held that a jurisdictional determination by the U.S. Army Corps of Engineers that property contains “waters of the United States”—and is therefore subject to the Clean Water Act—constitutes reviewable “final agency action” under the Administrative Procedure Act (“APA”). The Court reiterated that it has “long taken” a “‘pragmatic’ approach” to finality, Hawkes, slip op. at 7, and held that the Corps’ jurisdictional determinations “give rise to ‘direct and appreciable legal consequences.’” Id. at 6 (quoting Bennett v. Spear, 520 U.S. 154, 178 (1997)). Even though “no administrative or criminal proceeding can be brought for failure to conform to the approved [jurisdictional determination] itself,” the agency action has legal consequences because it “warns [regulated entities] that if

Case 1:15-cv-01590-APM Document 40 Filed 06/07/16 Page 2 of 5

they discharge pollutants onto their property without obtaining a permit from the Corps, they do so at the risk of significant criminal and civil penalties.” Id. at 8.

So too, here, where the Second SE Directive warns manufacturers that they must undergo premarket review before implementing label changes that, in FDA’s view, render a product “distinct” or changing the quantity in which the product is marketed. If a manufacturer implements such changes without premarket review, it faces significant criminal and civil penalties for marketing misbranded and adulterated products. See Pls. Reply Br. 5-6. Hawkes thoroughly refutes FDA’s position that, as an alternative to review of the Second SE Directive, Plaintiffs could simply implement a label or product-quantity change without premarket review and then wait for FDA either to initiate an enforcement action or exercise its prosecutorial discretion not to bring such an action. The Court in Hawkes emphasized that regulated entities “need not assume” the risk of criminal and civil penalties “while waiting for [the agency] to ‘drop the hammer’ in order to have their day in court.” Slip op. at 9. FDA, however, would require tobacco product manufacturers either to incur the risks of an enforcement action, or comply with the unlawful regulatory requirements and endure a prior restraint of speech imposed by the Second SE Directive by delaying their label and product-quantity changes at least 90 days (and indefinitely for non-provisional products) while the agency conducts premarket review. The APA does not impose such an untenable choice on regulated parties.

Nor is it a response that, if FDA had not promulgated the Second SE Directive, Plaintiffs would be unable to challenge the agency’s extension of premarket review requirements to label and product-quantity changes until FDA had initiated an enforcement action. “[S]uch a ‘count your blessings’ arguments,” the Court made clear in Hawkes, “is not an adequate rejoinder to the assertion of a right to judicial review under the APA.” Slip op. at 10.

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Case 1:15-cv-01590-APM Document 40 Filed 06/07/16 Page 3 of 5

Dated: June 7, 2016 Respectfully Submitted,

/s/ Miguel A. Estrada

Miguel A. Estrada (D.C. Bar No. 456289)

Amir C. Tayrani (D.C. Bar No. 490994)

GIBSON, DUNN & CRUTCHER LLP

1050 Connecticut Avenue, NW

Washington, DC 20036-5306

Telephone: (202) 955-8500

Fax: (202) 530-9016

MEstrada@gibsondunn.com

ATayrani@gibsondunn.com

Robert N. Weiner (D.C. Bar No. 298133)

Anthony J. Franze (D.C. Bar No. 461023)

ARNOLD & PORTER LLP

555 Twelfth Street, NW

Washington, DC 20004-1206

Telephone: (202) 942-5000

Fax: (202) 942-5999

robert.weiner@aporter.com

anthony.franze@aporter.co…

Counsel for Plaintiffs Philip Morris USA Inc. and

U.S. Smokeless Tobacco Company LLC

Noel J. Francisco (D.C. Bar No. 464752)

Ryan J. Watson (D.C. Bar No. 986906)

JONES DAY

51 Louisiana Avenue, NW

Washington, DC 20001

Telephone: (202) 879-3939

Fax: (202) 626-1700

njfrancisco@jonesday.com

rwatson@jonesday.com

Counsel for Plaintiffs R.J. Reynolds Tobacco Co., American Snuff Company, and Santa Fe Natural Tobacco Company, Inc.

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Case 1:15-cv-01590-APM Document 40 Filed 06/07/16 Page 4 of 5

Mark S. Brown (D.C. Bar No. 455359)

Ashley C. Parrish (D.C. Bar No. 464683)

KING & SPALDING LLP

1700 Pennsylvania Avenue, NW

Washington, DC 20006

Telephone: (202) 737-0500

Fax: (202) 626-3737

mbrown@kslaw.com

aparrish@kslaw.com

Counsel for Plaintiffs R.J. Reynolds Tobacco Co.,

American Snuff Company, and Santa Fe Natural

Tobacco Company, Inc.

Mark H. Lynch (D.C. Bar No. 193110)

Scott D. Danzis (D.C. Bar No. 481426)

Benjamin C. Block (D.C. Bar No. 479705)

COVINGTON & BURLING LLP

One City Center

850 Tenth Street, NW

Washington, DC 20001-4956

Telephone: (202) 662-6000

Fax: (202) 662-6291

mlynch@cov.com

bblock@cov.com

sdanzis@cov.com

Counsel for Plaintiff ITG Brands LLC

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Case 1:15-cv-01590-APM Document 40 Filed 06/07/16 Page 5 of 5

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 7th day of June, 2016, I caused the foregoing Notice of Supplemental Authority to be filed and served via the Court’s CM/ECF filing system.

/s/ Miguel A. Estrada

Miguel A. Estrada (D.C. Bar No. 456289)

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