Bellion Spirits, LLC v. United States

335 F. Supp. 3d 32
CourtCourt of Appeals for the D.C. Circuit
DecidedSeptember 27, 2018
DocketCivil Action No. 17-2538 (JEB)
StatusPublished
Cited by13 cases

This text of 335 F. Supp. 3d 32 (Bellion Spirits, LLC v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bellion Spirits, LLC v. United States, 335 F. Supp. 3d 32 (D.C. Cir. 2018).

Opinion

MEMORANDUM OPINION

JAMES E. BOASBERG, United States District Judge *36A vodka maker's hopes of advertising the health benefits of its product were thwarted when a federal administrative agency found the claims to be unsubstantiated. This vodka maker, which is actually two entities - Plaintiffs Bellion Spirits, LLC and Chigurupati Technologies Private Ltd. (jointly, "Bellion") - then filed suit in this Court against the administrative agency - the Alcohol and Tobacco Tax and Trade Bureau (TTB) - and a host of other governmental entities. Bellion asserts claims under the Administrative Procedure Act and the First and Fifth Amendments to the U.S. Constitution. In this litigation's first volley, Plaintiffs seek to supplement the record with two peer-reviewed scientific articles and three declarations. Finding that this case does not present one of the narrow circumstances in which a party can supplement an administrative record on judicial review, the Court will deny the Motion.

I. Background

Given the early stage of this litigation, a cursory rehearsal of the facts will do. Bellion Spirits is an independent distributor of Bellion Vodka, which is infused with NTX, a proprietary blend of ingredients developed by Chigurapati Technologies. See ECF No. 16 (Am. Compl.), ¶¶ 15-16. Plaintiffs sought approval to add eight claims espousing the health benefits of NTX to the label of Bellion Vodka. These statements included, among other things, that NTX reduces "alcohol-induced oxidative damage to the liver," "helps maintain normal liver enzyme production and function," "helps protect DNA from alcohol-induced damage," and "reduces alcohol-induced DNA damage." Id., ¶ 24. Under the applicable regulatory regime, Bellion first had to pass through TTB's administrative process before printing these claims, as the agency's governing regulations prohibit health-related claims that are false or misleading. See 27 C.F.R. § 5.42(b)(8)(ii)(A). A sub-category of such statements - those that make a "specific health claim" - must also be "adequately substantiated by scientific or medical evidence," among other additional requirements. Id. § 5.42(b)(8)(ii)(B)(2) ; see also id. §§ 4.39(a)(1), 7.29(a)(1).

Bellion thus filed a petition with TTB, which sought the Food and Drug Administration's counsel in evaluating the health claims. See ECF No. 22 (Pl. Motion) at 4; ECF No. 23 (Def. Opp.) at 4. After receiving and reviewing a memorandum from the FDA memorializing its findings, TTB denied Bellion's petition. It found that "none of the eight claims is adequately substantiated" and their inclusion on a label would "create a misleading impression as to the effects on health consumption of alcoholic beverages infused with NTX." Pl. Motion, Exh. F (Petition Response Letter) at 35.

Bellion, dissatisfied with TTB's ruling, filed this suit against the agency and a number of other governmental entities, which the Court will collectively refer to as "TTB." Plaintiffs challenge TTB's denial of Bellion's two claims concerning NTX's effect on DNA, but raise no opposition to TTB's denial of the other six here. See Am. Compl., ¶¶ 1, 24. Plaintiffs bring both statutory and constitutional causes of action. In their statutory count, Bellion contends *37that, by relying on the FDA's advice, TTB acted beyond its authority and thus ran afoul of the APA (Count III). See 5 U.S.C. § 706(2)(C) ; Am. Compl., ¶¶ 89-101. Only TTB, and not the FDA, Plaintiffs posit, may regulate the sale of alcohol. See Am. Compl., ¶¶ 93-94.

Bellion also advances three constitutional claims, two of which arise under the First Amendment. In one (Count I), Plaintiffs take issue with TTB's conclusion that Bellion's health claims are not substantiated by credible scientific evidence. They allege various errors in TTB's conclusion and assert that, because Bellion's claims are in fact supported by credible evidence, barring them violates Plaintiffs' First Amendment rights. Id., ¶¶ 71-79. Bellion's second First Amendment claim (Count II) takes a categorical shot at TTB's procedures. Plaintiffs contend that the applicable regulations amount to an unconstitutional prior restraint because they lack definite standards for approving a label's health-related claims and do not impose on the agency any timeframe for responding to a petitioner's request, thus granting the agency "unbridled discretion." Id., ¶ 86. In a similar vein, Bellion's last constitutional cause of action asserts that TTB regulations are unconstitutionally vague. They thus bring a "facial and as-applied challenge" under the Fifth Amendment's Due Process Clause (Count IV). Id., ¶ 103.

Before any briefing on the merits of the parties' dispute has occurred, Bellion now moves to supplement the administrative record with five documents and the testimony of two live witnesses. The first two documents are peer-reviewed studies that, Plaintiffs say, support their claims about NTX's effect on alcohol-induced DNA damage. See Pl. Motion at 10-11. TTB, however, did consider these studies before their publication in peer-reviewed literature, and those earlier versions are indeed part of the administrative record. Plaintiffs thus seek only to add to the record the fact of peer review. Id.

Bellion also wishes to submit three declarations and in-court testimony of two of those declarants. The first declaration, from Dr. Jeffrey Blumberg, concludes that credible scientific studies support Bellion's health claim and criticizes FDA's memorandum finding the contrary. Id. at 12-13. Plaintiffs also ask that Dr. Blumberg be permitted to testify at a hearing. In the second declaration, Plaintiffs attack what they see

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Bluebook (online)
335 F. Supp. 3d 32, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bellion-spirits-llc-v-united-states-cadc-2018.