696 F.3d 1205 (D.C. Cir. 2012)
The FDA’s Graphic Warning Rule Struck Down
The Tobacco Control Act requires the FDA to establish a rule requiring tobacco manufacturers to place warning labels that cover 50 percent of the surface of the front and rear of cigarette packages, as well as warning labels covering 20 percent of the area of cigarette advertisements.1 The Act requires that the warnings include color graphics, to be determined by the FDA, “depicting the negative health consequences of smoking.”2 The FDA released the final rule governing the new graphic warnings in June 2011 and scheduled the regulation to take effect in September 2012.
On August 16, 2011, five tobacco manufacturers (R.J. Reynolds, Lorillard, Commonwealth Brands, Liggett Group, and Santa Fe Natural) filed suit against the FDA in the U.S. District Court for the District of Columbia, challenging the FDA’s graphic warning rule. The companies argued that the rule violated their First Amendment rights and that the warning requirements should have been put on hold until the case was fully resolved.
The District Court’s Decision
The district court granted the tobacco companies’ request to bar the rule from taking effect pending resolution of the case.3 Additionally, on February 29, 2012, the district court held that the graphic warning rule violated the tobacco companies’ First Amendment rights.4 The FDA appealed this decision to the U.S. Court of Appeals for the D.C. Circuit.
The Court of Appeals’ Decision
On August 24, 2012, a divided Court of Appeals affirmed the district court judgment striking down the FDA’s graphic warning rule. In a 2-1 ruling, the Court of Appeals agreed with the district court that the requirements violated the tobacco companies’ free speech rights guaranteed by the First Amendment.5
In determining that the graphic warning rule violated the First Amendment, the district court had applied a stringent standard, called “strict scrutiny,” for analyzing the constitutionality of the rule. On appeal, the FDA challenged the district court’s use of this standard. The Court of Appeals agreed with the FDA that the district court was incorrect in analyzing the graphic warning rule under the strict scrutiny standard, and instead the majority applied the more permissive Central Hudson standard.6 Under this standard, a law or regulation restricting speech does not violate the First Amendment if the government can show that the law or regulation directly advances a substantial government interest, and the law is no more restrictive than is necessary to achieve the government’s goal.7
In applying the Central Hudson standard, the majority found that the government’s primary goal in adopting the graphic warning rule was to “discourage nonsmokers from initiating cigarette use and to encourage current smokers to consider quitting.”8 Although the majority conceded that the government’s goal may be “a substantial interest,” the court held that the rule was ultimately unconstitutional because the FDA failed to show that the graphic warning rule would directly advance this interest. The majority concluded that the FDA did not provide “a shred of evidence” that the graphic warnings would actually lower smoking rates.9 That is, the court found that the FDA did not show “substantial evidence” that the graphic warnings would “directly” reduce smoking rates by a “material degree.”10It found that there was “no evidence showing that [graphic] warnings have directly caused a material decrease in smoking rates in any of the countries that now require [large graphic warnings].”11 Additionally, while “[s]ome Canadian and Australian studies indicated that large graphic warnings might induce individual smokers to reduce consumption, or to help persons who have already quit smoking remain abstinent,” the studies “did not purport to show that the implementation of large graphic warnings has actually led to a reduction in smoking rates.”12
It is important to note that the Court of Appeals decision was not unanimous. The dissenting judge would have upheld the rule under a different standard, the Zauderertest, which applies to compelled commercial speech, rather than using the Central Hudson standard, which applies to restrictions on commercial speech. The dissenting judge also disagreed with the majority’s articulation of the government interest in the rule, finding that the real primary purpose of the graphic warning rule was to effectively communicate the negative health consequences of smoking to consumers.
On October 9, 2012, the FDA filed a petition for a rehearing en banc (a rehearing before all of the judges of the U.S. Court of Appeals for the D.C. Circuit, instead of a three-judge panel), which was denied on December 5, 2012.
On March 15, 2013, Attorney General Eric Holder sent a letter to Speaker of the House John Boehner, advising that the U.S. government would not seek Supreme Court review of the Court of Appeals’ decision, effectively ending this litigation. The FDA instead plans to develop and propose a new graphic warning rule.13 Since then, a new study has been published suggesting that the FDA’s analysis of the impact of graphic warning labels on smoking rates in Canada—an analysis that was important to the Court of Appeals’ decision—vastly underestimated the likely impact of graphic warning labels on smoking rates in the U.S.14
1 Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, § 201(a), 123 Stat. 1776, 1842–44 (amending 15 U.S.C. § 1333(a)-(b) (2006)).
2 Id. § 201(a), 123 Stat. at 1845 (amending 15 U.S.C. § 1333(d) (2006)).
3 R.J. Reynolds Tobacco Co. v. U.S. Food & Drug Admin., 823 F. Supp. 2d 36, 53 (D.D.C. 2011).
4 R.J. Reynolds Tobacco Co. v. U.S. Food & Drug Admin., 845 F. Supp. 2d 266, 277 (D.D.C. 2012).
5 R.J. Reynolds 696 F.3d 205. Dissenting Judge Rogers concluded that the graphic warnings, except the requirement that they include “1-800-QUIT-NOW,” were constitutional. Id. at 1223.
6 Id. at 1217.
7 For more information about the Central Hudson standard, refer to Tobacco Control Legal Consortium, Regulating Tobacco Marketing: "Commercial Speech" Guidelines for State and Local Governments 5–6 (2010), available at http://publichealthlawcenter.org/sites/default/files/resources/tclc-guidelines-speech-2010.pdf.
8 R.J. Reynolds, 696 F.3d at 1218 (quoting Required Warnings for Cigarette Packages and Advertisements, 76 Fed. Reg. 36,628 (June 22, 2011)).
9 Id. at 1219.
10 Id. at 1219–20.
11 Id. at 1219.
13 For a more in-depth examination of the distinctions between Discount Tobacco and R.J. Reynolds and the FDA’s options for implementing a graphic warning rule, see Tobacco Control Legal Consortium, Cigarette Graphic Warnings and the Divided Federal Courts (2013) available here.
14 Jidong Huang, Frank Chaloupka & Geoffrey T. Fong, Cigarette Graphic Warning Labels and Smoking Prevalence in Canada: A Critical Examination and Reformulation of the FDA Regulatory Impact Analysis, 23 suppl. 1 Tobacco Control i7 (2014). For a summary of the study and its implications for the FDA’s implementation of graphic warnings, see Campaign for Tobacco Free Kids, New Study: FDA Vastly Underestimated How Much Graphic Cigarette Warnings Would Reduce Smoking in U.S: Statement of Matthew L. Myers President, Campaign for Tobacco-Free Kids (Nov. 25, 2013), http://www.tobaccofreekids.org/press_releases/post/2013_11_25_warnings.