Court Rules FDA Cannot Regulate Tobacco as Drug

WASHINGTON —  A federal appeals court dealt a crushing blow Friday to the Food and Drug Adminstration, ruling that it has no authority to regulate nicotine as a drug and cigarettes as drug-delivery devices.

The 2-1 ruling by a three-judge panel of the U.S. 4th Circuit Court of Appeals, which reversed a lower court decision, represents a major setback for the administration’s efforts to restrict tobacco use by children.

“We do not dispute that Congress has charged the FDA with protecting the public health and that tobacco products present serous health risks for the public,” wrote Judges H. Emory Widener and James Michael.

However, they added, “based on our review of the record, the FDA lacks jurisdiction to regulate tobacco products [and] all of the FDA’s regulation of tobacco products are invalid.”

The ruling dealt another setback to high-profile efforts by the Clinton administration to curb teen smoking. In June, Congress defeated sweeping legislation that would have regulated the tobacco industry, raised the price of cigarettes and undertaken a comprehensive public health campaign to stop children from smoking.

But the administration said that it would ask for a rehearing of the case before the full 4th Circuit Court in Richmond, Va.

“Our commitment for this issue is for the long term,” said Elena Kagan, deputy domestic policy advisor to President Clinton.

“We will take however long it takes us in the courtroom, however long it takes us in Congress. We will continue to fight for the measures that reduce youth smoking,” Kagan said.

The voluminous FDA regulation overturned by the court required people under age 27 to present photo identification when buying cigarettes and prohibited the sale of cigarettes to anyone under 18. The rule also called for a ban on cigarette vending machines, except in places such as bars, and broad restrictions on tobacco advertising and promotion.

Despite Friday’s ruling, the limits on youth access to tobacco will remain in effect at least through the administration’s appeal to the full circuit court. Other restrictions had not yet been implemented.

The tobacco industry applauded the ruling.

“We are pleased by the court’s ruling that the FDA does not have authority to regulate tobacco products and that the agency’s 1996 tobacco rule is invalid,” said Scott Williams, a spokesman for the five major tobacco manufacturers.

But anti-smoking advocates in Congress and the public health community said that the decision would inspire them to new efforts.

“The appeals court decision today makes it even more imperative that Congress pass comprehensive legislation to address the problem of youth tobacco use and addiction,” said Sen. John McCain (R-Ariz.), who led the Senate effort to pass comprehensive tobacco legislation.

The FDA rule, announced in August 1996, was the first major attempt by the federal government to regulate tobacco and was promoted primarily as a measure to reduce youth smoking. Three thousand children begin smoking every day and about one-third of them die prematurely of tobacco-related diseases.

The regulation was heralded by Clinton as “historic action” that would “put Joe Camel and the Marlboro Man out of our children’s reach forever.” Clinton had hoped that strict tobacco controls aimed at children would be a major part of his presidential legacy.

Last year, when a federal judge upheld the crucial part of the rule granting the FDA authority to regulate tobacco products as a drug, opponents of the industry viewed it as a landmark decision and a major victory for public health.

Now the issue is likely to be fought for years in the courts and, barring a reversal by the full Appeals Court or the Supreme Court, none of the restrictions will remain in effect.

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That would force the FDA to go back to Congress for legislation authorizing it to regulate tobacco. Such provisions were included in the massive tobacco bill that was killed by the Senate in June. An aggressive lobbying campaign by the tobacco industry and reluctance by public health groups to compromise on key provisions, such as capping the industry’s liability in future lawsuits, contributed to the bill’s demise.

Friday’s ruling continued a winning streak for the tobacco industry, which has seen a dramatic reversal of its fortunes since just a year ago, when it faced massive lawsuits by the states and an unfriendly Congress.

All that has changed in recent months. Three weeks ago, the industry scored its biggest success yet in the numerous lawsuits filed by states to recover their tobacco-related health care costs. A judge in Indiana threw out that state’s case in its entirety.

Cigarette manufacturers also recently won dismissal of several class-action suits filed on behalf of tens of thousands of allegedly addicted smokers in several states as well as by labor union health care funds that have sought reimbursement for the costs of treating sick smokers.

But the industry’s most stunning victory was the complete collapse of legislation in Congress to regulate tobacco and limit its use by children.

Anti-smoking advocates lamented Friday’s ruling. “Today’s decision is a victory for Big Tobacco’s lawyers over America’s families and their children,” said William D. Novelli, president of the Campaign for Tobacco-Free Kids.

“We are deeply disappointed with today’s decision. We believe that FDA’s oversight is critical to protecting the American public, and especially children, from tobacco products,” Novelli said. “We expect this ruling to be appealed and overturned.”

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Yet the cigarette manufacturers’ victories effectively strengthen their hand in their dealings with the states, which are trying to negotiate a similar but more limited settlement than the one proposed a year ago. It would also likely mean a smaller payout by the cigarette industry.

With the FDA’s marketing and advertising regulations in limbo as a result of Friday’s ruling, any marketing curbs to which industry agrees would be purely a concession.

“The tide has turned and this strengthens the industry’s hand,” said Gary Black, a tobacco analyst with Sanford Bernstein & Co., a Wall Street investment firm.

The decision’s effect on Congress is more difficult to assess. In the nearly 35 years since the surgeon general’s report found that cigarette smoking is a health hazard, Congress has imposed almost no tough regulation on the tobacco industry. The single exception was the smoking ban on airline flights--which benefited members of Congress, who are frequent fliers.

“This has got to be a wake-up call for the public health community and the Clinton administration,” said Black. “Congress said no to passing tough tobacco regulations, the courts said no. So they have one more shot at this and it’s through the settlement with the attorneys general.”

But the prospects for compromise are dim at best. The public health community remains adamantly opposed to accepting less than a comprehensive regulatory bill that forces the industry to pay hundreds of billions of dollars and submit to stringent marketing and advertising limits.

“I don’t think the public health forces will be very moved by this to compromise. And given that it doesn’t soften people, it’s not likely to prompt legislation,” said Richard Daynard, a law professor at Northeastern University and head of the Tobacco Products Liability Project.

Still, some analysts predict that court action might force a reevaluation of the need to take up comprehensive tobacco legislation next year. There is virtually no time left this year for Congress to revive a measure as complex as the tobacco bill.

“If this was the final decision, it would give the industry tremendous negotiating leverage,” conceded Daynard. “But it’s not and nobody thinks it is. This is simply a way station to the Supreme Court.”

Indeed, many legal analysts said that the court’s decision did not take into account the massive record that the FDA built on the deleterious health effects of tobacco.

“I am confident . . . that the Department of Justice will vigorously appeal this case,” said Walter Dellinger, the former solicitor general and now a law professor at Duke University.

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Indeed, the dissenting opinion by the court emphasized that the FDA had attempted to take into account a growing body of evidence about the dangers of smoking and as the only regulatory public health agency with authority to regulate drugs, to keep the public as safe as possible.

“After years of considering an array of evidence, much of it only recently brought to light, the FDA decided to regulate a product that is estimated to cause some 400,000 deaths a year,” wrote Judge Hall in his dissent.

“Inasmuch as cigarettes and smokeless tobacco are responsible for illness and death on a vast scale, FDA regulations aimed at curbing tobacco use by children cannot possibly be contrary to the general intent of the Food Drug and Cosmetic Act to protect the public health,” he said.