A. The Deeming Rule is not exempt from judicial review, but rather is subject to “hard look” scrutiny under the APA

The Administrative Procedure Act (APA) “governs internal procedures of administrative agencies,” according to EPIC.org. The FDA contends that the deeming rule is exempt from APA review because FDA was granted authority to regulate tobacco products by Congress, and thus given discretion to choose how it does so. The plaintiffs counter that ” Courts have repeatedly held that APA review applies even when statutes use ‘deeming’ language.” They also note that “FDA does not cite a single case in which a court held that the content of a legislative rule is ‘committed to agency discretion.’”

B. The Deeming Rule fails APA review because it is internally inconsistent and contrary to the public health

“FDA seeks to justify the Deeming Rule on the ground that it will protect public health, despite repeatedly acknowledging that FDA does ‘not currently have sufficient data … to determine what effects e-cigarettes have on the public health,’” write the plaintiffs. “FDA seeks to sidestep its admissions by arguing that, regardless of vaping’s health effects, ‘regulation of [vaping products] will still benefit public health.’”

“FDA cannot escape this inherent and fundamental inconsistency by arguing for deference.
The Rule presents (repeatedly), FDA’s judgment that FDA does not know ‘what effects e-
cigarettes have on the public health.’ Having admitted that its scientific conclusion is that FDA does not know the public health effects of vaping, FDA cannot simultaneously argue for deference to its scientific expertise that regulation would benefit the public health.”

“Manufacturers…are barred from offering new products that pose reduced health risks.”

“Notwithstanding this evidence before it, FDA argues in its brief that there ‘is no evidence
that consumers would abandon e-cigarettes because of some reduction in product diversity.’ But that cannot be correct under a regime in which over 95 percent of the market will soon vanish, and FDA has already conceded the point by acknowledging that the Rule will result in ‘consumer costs for users of [vaping products] due to loss of product variety or higher prices.’”

“The Deeming Rule also frustrates the TCA’s purposes by cutting off innovation in the vaping market. As of the Rule’s August 8, 2016 effective date, new vaping products may be marketed only after FDA considers and approves a corresponding pre-market tobacco product application (“PMTA”). Given that FDA has approved only one PMTA since the TCA was enacted, that process will take years to complete. The upshot is that manufacturers cannot improve the safety of their products without first pulling them off the market for an extended period, and are barred from offering new products that pose reduced health risks. The crushing burden of PMTA review, in turn, provides a powerful disincentive for innovation into even safer vaping products.”

C. FDA failed to consider reasonable alternatives

The plaintiffs argue that the FDA could have collected data to prove whether vapor products represent a public health risk before imposing a regulatory regime that will destroy small businesses and send many vapers back to smoking. They could also have considered other approaches, such as the European Union’s.

The Small Business Administration challenged the FDA on this point in its comments in 2014, and was ignored.

“FDA justified the Deeming Rule on the ground that it will advance the public health,” they write, “so it has no choice but to explain how the Rule does so. Performing the sort of data collection advocated by Plaintiffs, which FDA could do without ‘deeming’ vaping products and subjecting them to the crushing burden of the PMTA process, would have enabled FDA to resolve that issue. FDA has no answer for this straightforward argument. ”

The plaintiffs note that the alternatives the FDA did consider would still have ignored the damage done to the small businesses bearing the brunt of the deeming rule. They remind the court that the Small Business Administration challenged the FDA on this point in its comments in 2014, and was ignored.

D. FDA failed to reconcile the Deeming Rule with the TCA’s structure

“In rejecting the various alternatives suggested by Plaintiffs and other commenters, FDA also fails to reconcile the significant impacts of the Deeming Rule on the vaping industry with the overall structure of the TCA. Contrary to FDA’s characterization of the statute, the TCA is not a one-sided affair aimed at eradicating tobacco use. Rather, Congress required the agency in addressing public health concerns to also ensure reasonable access to the marketplace for relatively safer tobacco products.”

“An agency may not shirk a statutory responsibility simply because it may be difficult.”

“Moreover, even if the Deeming Rule does not result in a de facto ban, Congress clearly did not envision a scenario in which the vast majority of vaping products would be forced from the marketplace even before their respective manufacturers have had a meaningful chance to apply
for pre-market authorization. Left unaddressed by FDA in its opening brief is any acknowledgment that the agency must ‘continue to permit the sale of tobacco products to adults’ and that, along these lines, the statute provides ‘flexible enforcement authority’ regarding the development, introduction, and promotion of ‘less harmful tobacco products.’”

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