UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TEXAS No. 6:20-cv-00176 R.J. Reynolds Tobacco Co. et al., Plaintiffs, v. U.S. Food & Drug Administration et al., Defendants.
OPINION AND ORDER Plaintiffs challenge an FDA rule that requires cigarette pack- aging and advertising to bear health warnings that have both graphical and textual components. Tobacco Products; Required Warnings for Cigarette Packages and Advertisements, 85 Fed. Reg. 15,638 (Mar. 18, 2020). Plaintiffs raise the following claims: (1) the warnings go beyond purely factual, uncontroversial mat- ters of the sort that the First Amendment allows the government to compel in private speech; (2) the FDA lacked statutory author- ity to change the Tobacco Control Act’s nine warnings into the rule’s eleven warnings, to change the wording of the Act’s warn- ings, or to take either step when it did; (3) the FDA’s choice of wording and graphics for the rule is arbitrary, capricious, or an abuse of discretion within the meaning of the Administrative Pro- cedure Act (APA); and (4) the FDA’s notice-and-comment pro- cess fell short of the APA’s procedural requirements. Doc. 1. The court entered summary judgment for plaintiffs on their First Amendment challenge to the rule. Doc. 106. But the Fifth Circuit reversed that judgment and remanded for this court’s con- sideration of the APA claims (which include the statutory-author- ity claims). 96 F.4th 863, 868 (5th Cir. 2024). On remand, the court has received plaintiffs’ motion for interim relief on the re- manded claims and defendants’ motion for summary judgment on them. Docs. 122, 126.
Analysis Plaintiffs argue that, absent prompt interim relief, the rule’s looming effective date will cause plaintiffs to incur costs that can- not be reimbursed (due to sovereign immunity) if plaintiffs ulti- mately prevail in a final judgment. The court credits plaintiffs’ ev- idence of those imminent, irreparable costs absent judicial relief. The court also finds that the burden to defendants of interim re- lief and the public interest do not significantly counterbalance those irreparable costs because the rule’s only goal is achieving more information in the abstract, not achieving a real-world change in behavior (an interest that the rule disclaims). So the three equitable factors bearing on issuance of a preliminary in- junction or 5 U.S.C. § 705 interim relief favor plaintiffs. The question thus reduces to whether plaintiffs have a sub- stantial likelihood of success on the merits of their pending claims. They do as to the claim of a lack of statutory authority. The court thus enters a preliminary injunction and postpones the rule’s effective date pursuant to 5 U.S.C. § 705. I. Statutory authority for the challenged rule Plaintiffs argue that the FDA lacked authority under the To- bacco Control Act to compel the warnings in the rule. The defense of res judicata does not apply to this claim. The D.C. Circuit’s 2012 decision addressed only the challengers’ First Amendment claim. R.J. Reynolds Tobacco Co. v. FDA, 696 F.3d 1205 (D.C. Cir. 2012). Moreover, the prior rule vacated there required only nine graphic warnings with the statutory text, not this rule’s eleven warnings with mostly different text. Id. at 1208. A. Statutory background The relevant statutory authority rests in 15 U.S.C. § 1333. Af- ter the Tobacco Control Act’s amendments, it reads in full: § 1333. Labeling (a) Label requirements (1) In general It shall be unlawful for any person to manu- facture, package, sell, offer to sell, distribute, or import for sale or distribution within the United States any cigarettes the package of which fails to bear, in accordance with the require- ments of this section, one of the following la- bels: WARNING: Cigarettes are addictive. WARNING: Tobacco smoke can harm your children. WARNING: Cigarettes cause fatal lung dis- 6a.8e. WARNING: Cigarettes cause cancer. WARNING: Cigarettes cause strokes and heart disease. WARNING: Smoking during pregnancy can harm your baby. WARNING: Smoking can kill you. WARNING: Tobacco smoke causes fatal lung disease in nonsmokers. WARNING: Quitting smoking now greatly re- duces serious risks to your health. (2) Placement; typography; etc. Each label statement required by paragraph (1) shall be located in the upper portion of the front and rear panels of the package, directly on the package underneath the cellophane or other clear wrapping. Each label statement shall comprise the top 50 percent of the front and rear panels of the package. The word ‘“WARN- ING" shall appear in capital letters and all text shall be in conspicuous and legible 17-point type, unless the text of the label statement would oc- cupy more than 70 percent of such area, in which case the text may be in a smaller conspicuous and legible type size, provided that at least 60 percent of such area is occupied by required text. The text shall be black on a white back- ground, or white on a black background, in a manner that contrasts, by typography, layout, or color, with all other printed material on the package, in an alternating fashion under the plan submitted under subsection (c).
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(3) Does not apply to foreign distribution The provisions of this subsection do not apply to a tobacco product manufacturer or distribu- tor of cigarettes which does not manufacture, package, or import cigarettes for sale or distri- bution within the United States. (4) Applicability to retailers A retailer of cigarettes shall not be in viola- tion of this subsection for packaging that— (4) contains a warning label; (B) is supplied to the retailer by a license- or permit-holding tobacco product manufac- turer, importer, or distributor; and (C) is not altered by the retailer in a way that is material to the requirements of this subsection. (b) Advertising requirements (1) In general It shall be unlawful for any tobacco product manufacturer, importer, distributor, or retailer of cigarettes to advertise or cause to be adver- tised within the United States any cigarette unless its advertising bears, in accordance with the requirements of this section, one of the la- bels specified in subsection (a). (2) Typography, etc. Hach label statement required by subsection (a) in cigarette advertising shall comply with the standards set forth in this paragraph. For press and poster advertisements, each such state- ment and (where applicable) any required state- ment relating to tar, nicotine, or other constit- vent (including a smoke constituent) yield shall comprise at least 20 percent of the area of the advertisement and shall appear in a conspicu- ous and prominent format and location at the top of each advertisement within the trim area. The Secretary may revise the required type siz- es in such area in such manner as the Secre- tary determines appropriate. The word ‘‘WARN- ING" shall appear in capital letters, and each label statement shall appear in conspicuous and legible type. The text of the label statement
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shall be black if the background is white and white if the background is black, under the plan submitted under subsection (c). The label state- ments shall be enclosed by a rectangular border that is the same color as the letters of the state- ments and that is the width of the first down- stroke of the capital ‘"W"’ of the word “WARN- ING’" in the label statements. The text of such label statements shall be in a typeface pro rata to the following requirements: 45-point type for a whole-page broadsheet newspaper advertise- ment; 39-point type for a half-page broadsheet newspaper advertisement; 3o-point type for a whole- page tabloid newspaper advertisement; 27-point type for a half-page tabloid newspaper advertise- ment; 31.5-point type for a double page spread magazine or whole-page Magazine advertisement; 22.5-point type for a 28 centimeter by 2 column advertisement; and 15-point type for a 20 centi- meter by 2 column advertisement. The label state- ments shall be in English, except that— (A) in the case of an advertisement that ap- pears in a newspaper, magazine, periodical, or other publication that is not in English, the atatements shall appear in the predominant language of the publication; and (B) in the case of any other advertisement that is not in English, the statements shall appear in the same language as that princi- pally used in the advertisement. (3) Matchbooks Notwithstanding paragraph (2), for matchbooks (defined as containing not more than 20 matches) customarily given away with the purchase of tobacco products, each label statement required by subsection (a) may be printed on the inside cover of the matchbook.
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(4) Adjustment by Secretary The Secretary may, through a rulemaking un- der section 553 of title 5, adjust the format and type sizes for the label statements required by this section; the text, format, and type sizes of any required tar, nicotine yield, or other con- stituent Gincluding smoke constituent) disclosures; or the text, format, and type sizes for any other disclosures required under the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 301 et seq.J]. The text of any such label statements or disclosures shall be required to appear only within the 20 percent area of cigarette advertisements pro- vided by paragraph (2). The Secretary shall pro- mulgate regulations which provide for adjust- ments in the format and type sizes of any text required to appear in such area to ensure that the total text required to appear by law will fit within such area. (c}) Marketing requirements (1) Random display The label statements specified in subsection (a1) shall bé randomly displayed in each 12- month period, in as equal a number of times as is possible on each brand of the product and be randomly distributed in all areas of the United States in which the product is marketed in ac- cordance with a plan submitted by the tobacco product manufacturer, importer, distributor, or retailer and approved by the Secretary. (2) Rotation The label statements specified in subsection (a1) shall be rotated quarterly in alternating sequence in advertisements for each brand of cigarettes in accordance with a plan submitted by the tobacco product manufacturer, importer, distributor, or retailer to, and approved by, the peecretary, (3) Review The Secretary shall review each plan submit- ted under paragraph (2) and approve it if the plan—
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(A) will provide for the equal distribution and display on packaging and the rotation re- quired in advertising under this subsection; and (B) assures that all of the labels required under this section will be displayed by the to- bacco product manufacturer, importer, distrib- utor, or retailer at the same time. (4) Applicability to retailers This subsection and subsection (b) apply to a retailer only if that retailer is responsible for or directs the label statements required under this section except that this paragraph shall not re- lieve a retailer of liability if the retailer dis- plays, in a location open to the public, an ad- yvertisement that does not contain a warning la- bel or has been altered by the retailer in a way that is material to the requirements of this subsection and subsection (b). (d) ' Graphic label statements Not later than 24 months after June 22, 2009, the Secretary shall issue regulations that require col- or graphics depicting the negative health conse- quences of smoking to accompany the label state- ments specified in subsection (a)(1). The Secre- tary may adjust the type size, text and format of the label statements specified in subsections (4)(2) and (b)\(2) as the Secretary determines appropri- ate so that both the graphics and the accompany- ing label statements are clear, conspicuous, leg- ible and appear within the specified area, (d) ' Change in required statements The Secretary through a rulemaking conducted under section 553 of title 5 may adjust the format, type size, color graphics, and text of any of the label requirements, or establish the format, type size, and text of any other disclosures required under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 901 et seq.), if the Secretary finds that such a change would promote greater public un- derstanding of the risks associated with the use of tobacco products. 160 in original, There are two subaece. designated (d).
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(e) Tar, nicotine, and other smoke constituent disclosure (1) In general The Secretary shall, by a rulemaking conduct- ed under section 553 of title 5, determine (in the Secretary's sole discretion) whether cigarette and other tobacco product manufacturers shall be required to include in the area of each ciga- rette advertisement specified by subsection (b) of this section, or on the package label, or both, the tar and nicotine yields of the advertised or packaged brand. Any such disclosure shall be in accordance with the methodology established under such regulations, shall conform to the type size requirements of subsection (b) of this section, and shall appear within the area speci- fied in subsection (b) of this section. (2) Resolution of differences Any differences between the requirements es- tablished by the Secretary under paragraph (1) and tar and nicotine yield reporting require- ments established by the Federal Trade Com- mission shall be resolved by a memorandum of understanding between the Secretary and the Federal Trade Commission, (3) Cigarette and other tobacco product con- stituents In addition to the disclosures required by para- graph (1), the Secretary may, under a rulemak- ing conducted under section 553 of title 5, pre- scribe disclosure requirements regarding the lev- el of any cigarette or other tobacco product constituent including any amoke constituent. Any such disclosure may be required if the Secre- tary determines that disclosure would be of ben- efit to the public health, or otherwise would in- crease consumer awareness of the health con- sequences of the use of tobacco products, ex- cept that no such prescribed disclosure shall be required on the face of any cigarette package or advertisement. Nothing in this section shall prohibit the Secretary from requiring such pre- acribed disclosure through a cigarette or other tobacco product package or advertisement in- aert, or by any other means under the Federal Food, Drug, and Cosmetic Act [21 U.5.C. 301 et seq.]. (4) Retailers This subsection applies to a retailer only if that retailer is responsible for or directs the la- bel statements required under this section. -8-
15 U.S.C. § 1333 (2018). The first subsection (d) is cited as (d)[1], with the second cited as (d)[2]. To review, the Tobacco Control Act itself defines many spe- cifics about the new cigarette warnings. The Act’s “label require- ments” for cigarette packaging include: • Stating one of nine, listed warnings. Id. § 1333(a)(1). • Displaying such a “label statement” in the top half of the front and back of the package. Id. § 1333(a)(2). • Capitalizing the word “WARNING.” Id. • Placing the label statement in 17-point font unless an ex- ception is met. Id. • Displaying the text of the label statement as black on a white background or vice versa. Id. The “advertising requirements” of subsection (b) are similar to subsection (a)’s requirements for packages. Advertising must dis- play “one of the labels specified in subsection (a),” using specified typography, label sizes, and text colors. Id. § 1333(b)(1)–(2). The FDA is then given regulatory authority as follows: • Under § 1333(b)(2), the agency may (but need not) “revise the required type sizes” for advertising warnings. • Under § 1333(b)(4), the agency may (but need not) adjust: o “the format and type sizes” (but not the text) of the label statements required “by this section,” i.e., as to both packaging and advertising; o “the text, format, and type sizes of any required tar, nicotine yield, or other constituent” disclo- sures (which may be required under § 1333(e)(1)); o “the text, format, and type sizes” for any disclo- sures required under the Federal Food, Drug, and Cosmetics Act, 21 U.S.C. § 301 et seq. • Under § 1333(b)(4), the agency shall issue regulations for adjusting the format and type sizes of any warnings required for advertising, to ensure that the total text re- quired will fit within an advertisement’s 20-percent area. • Under § 1333(c), the agency shall review each manufac- turer’s plan for rotating among “[t]he label statements specified in subsection (a)(1)” and shall approve the plan if, among other things, it assures that “all of the labels re- quired under this section” will be displayed across differ- ent products and locations at the same time. o In other words, all nine warnings must, at the same time, be on display somewhere by a manufacturer or one of its importers, distributors, or retailers. • Under § 1333(d)[1], the agency shall issue regulations that require color graphics “to accompany the label statements specified in subsection (a)(1).” • Under § 1333(d)[1], the agency may (but need not) “adjust the type size, text and format of the label statements spec- ified in subsections (a)(2) and (b)(2)” if a certain finding is made about clarity and legibility. o Recall that, whereas subsection (a)(1) specifies the text of the warnings, subsections (a)(2) and (b)(2) specify the type size of the text, what foreground and background color the text must appear in, and the size and location of the entire label statement. Subsection (a)(2) is thus titled “Placement; typog- raphy; etc.” Subsection (b)(2) is similarly titled “Typography, etc.” • Under § 1333(d)[2], the agency may (but need not) “adjust the format, type size, color graphics, and text of any of the label requirements” and may (but need not) “establish the format, type size, and text of any other disclosures re- quired under the Federal Food, Drug, and Cosmetic Act [21 U.S.C. 301 et seq.].” o Either authority may be exercised, by rulemaking, only upon finding that “such a change would promote greater public understanding of the risks associated with the use of tobacco products.” o The cited Food, Drug, and Cosmetic Act itself au- thorizes the agency to require packaging or adver- tising disclosures regarding tar, nicotine, and other constituents of tobacco products or smoke. E.g., 21 U.S.C. § 387o. That Act does not define the text of any such required disclosures. • Under § 1333(e)(1), the agency shall determine whether the warnings must also include tar and nicotine yields of a tobacco product. • Under § 1333(e)(3), the agency may (but need not) require disclosure of the level of any constituent of a tobacco product or its smoke, if it would benefit public health or otherwise increase consumer awareness of the health con- sequences of the use of tobacco products. Two of § 1333’s new subsections took effect immediately. Sec- tions 202(b) and 206 of the Tobacco Control Act enacted 15 U.S.C § 1333(d)[2] and (e) without a delayed effective date. Pub. L. No. 111-31, 123 Stat. 1776, 1842–50. But the rest of the amendments to § 1333 were not effective immediately. Those amendments were made in § 201(a) of the To- bacco Control Act. And Congress directed that those amendments “shall take effect 15 months after the issuance of the regulations required by subsection (a)” of § 201. Id. § 201(b), 123 Stat. at 1845. Read literally, that provision creates a circularity. There are no regulations required by § 201(a) until § 201(a) takes effect. But the parties agree that “required by” should be read as meaning some- thing like “required by § 201(a) were it in effect.” See Doc. 30 at 4 n.1 (joint motion). The court agrees and adopts that reading to avoid absurdity. The parties also agree to another implied qualification: the 15- month countdown clock to the effectiveness of § 201(a)’s statu- tory amendments runs only if the contemplated regulations not just are issued but also keep their effectiveness throughout the countdown period. Thus, the parties agree that the Act’s new warning requirements are “tied to the effective date of the graphic- warnings Rule,” which a court may postpone. Id. (citations omit- ted; emphasis added). On that view, judicial postponement of the effective date of the rule for a certain period also postpones for the same period the 15-months-after-rulemaking effective date of (i) the Tobacco Control Act’s amendment to § 4 of the Labeling Act and (ii) related Tobacco Control Act provisions, namely, 21 U.S.C. §§ 387c(a)(2), 387t(a). See id. The court previously ac- cepted the parties’ joint understanding of the effective date of the statutory provisions, acting on that understanding in postponing the effective date of the challenged rule. Doc. 33; see Doc. 106. Because plaintiffs’ statutory-authority challenge has merit, the court now again postpones the effective date of the rule. B. The rule’s warnings versus the Act’s warnings Whereas the Tobacco Control Act requires one of nine warn- ings on cigarette packaging and advertising, the FDA’s final rule requires one of eleven warnings. Plaintiffs contest the FDA’s au- thority to require a different number of warnings than nine. Plain- tiffs also contest the FDA’s authority under § 1333(d)[2] to sub- stantively depart from the Act’s warnings. Lastly, even if the FDA’s § 1333(d)[2] authority extends to both of those steps, plain- tiffs argue that it cannot be exercised until after the effective date of initial regulations issued under § 1333(d)[1]. The FDA admits that, of the rule’s warnings, only two use the exact text of the Act’s warnings. And the FDA acknowledges that, of the rule’s remaining warnings, only five mention a specific health risk from the Act’s warnings. That leaves four of the rule’s eleven warnings without any recognizable cognate in the Act’s warnings. That state of affairs is shown in the chart below: Tobacco Control Act: Final Rule: WARNING: Cigarettes are (none) addictive. WARNING: Tobacco smoke can harm your children. WARNING: Tobacco BW. *exact wording in final rule smoke Can 2. = harm your iz children. <<"
WARNING: Cigarettes cause ; fatal lung disease. WARNING: Smoking causes COPD, a lung disease thatcan Fo) = be fatal. “oh a ln
WARNING: Cigarettes cause . cancer. WARNING: Smoking Te causes bladder L cancer, which Tamu can lead to bloody urine. WARNING: 2” Smoking = causeshead -J andneck (4 = r | cancer. =
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WARNING: Cigarettes cause □ strokes and heart disease. WARNING: □□ Smoking can A cause heart Ss disease and strokes by clogging arteries.
WARNING: Smoking during pregnancy can harm your baby. Ga G ; (ot) = WARNING: Smoking during pregnancy stunts fetal growth.
WARNING: Smoking can kill —_ (none) you. WARNING: Tobacco smoke causes fatal lung disease in WARNING: a nonsmokers. Tobacco ‘ a smoke causes sas) *exact wording in final rule fatal lung disease in nonsmokers.
WARNING: Quitting smoking (none) now greatly reduces serious risks to your health.
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(none) WARNING: Smoki ng reduces blood flow, which can cause erectile dysfunction.
(none) WARNING: Smoking causes type 2 diabetes, which raises blood Aan sugar. (
(none) ud
WARNING: Smoking reduces blood flow to the limbs, which can require amputation.
mone WARNING: pm a Smoking [f causes cataracts, which can lead \ fs==) to blindness. ad
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Before moving on to analyze the remanded APA claims, the court pauses to note one claim that it does not understand to be posed here: the constitutionality of the Act’s compelled warnings, as opposed to the rule’s warnings. Plaintiffs do challenge the con- stitutionality of both. Doc. 1 at 47–48. And if the FDA lacked stat- utory authority to substantively depart from the Act’s warnings, the constitutionality of the Act’s warnings would seem presented. But the court of appeals remanded only for consideration of “the APA challenge,” which of course focuses on agency action as op- posed to congressional action. 96 F.4th at 888. So the Act’s con- stitutionality appears to be outside the scope of remand. In the alternative, in case that claim is within the scope of re- mand, the court addresses it now in the interest of promoting ef- ficient appellate review. Even then, the claim would fail under the Fifth Circuit’s view of Zauderer review. To be sure, the D.C. Cir- cuit vacated the prior rule as outside of Zauderer’s protection in part because it compelled “admonitions” to behave in a desired way. 696 F.3d at 1211. The D.C. Circuit singled out the “1-800- QUIT-NOW” warning as an impermissible attempt to “browbeat consumers into quitting.” Id. at 1216–17. Analogously, the Act’s compelled statement that “Quitting smoking now greatly reduces serious risks to your health” could flunk review under that princi- ple by referencing quitting, not just disclosing the health risks. In- deed, that could explain why the agency omitted that statement in the final rule here. But this court is bound by the Fifth Circuit, not the D.C. Cir- cuit. And the Fifth Circuit, in contrast, does not identify a Zau- derer problem simply because compelled statements advocate for the government’s view of the “optimal . . . response” to a given product’s harms. 96 F.4th at 886. Under that circuit precedent, this court would deny relief on the constitutional challenge to the Act even if it were within the scope of remand. C. Statutory authority to increase the number of warnings The final rule compels the use of one of eleven statements on every cigarette package. The Act itself makes it unlawful only for packages to stray from one of nine statements. The first question is whether the agency has authority to increase the number of compelled warnings from nine to eleven. As the court reads the Act, Congress did not give the agency that authority. At the outset, the court notes that its analysis proceeds with- out any deference to the agency’s view. The APA “makes clear that agency interpretations of statutes—like agency interpreta- tions of the Constitution—are not entitled to deference.” Loper Bright Enters. v. Raimondo, 603 U.S. 369, 392 (2024). It “remains the responsibility of the court to decide whether the law means what the agency says.” Id. (quotation marks omitted). Even after Chevron’s overruling, “the longstanding practice of the government—like any other interpretive aid—can inform a court’s determination of what the law is.” Id. at 386 (quotation marks omitted). Of course, the FDA’s initial rulemaking in 2011 can hardly be described as longstanding. But even that rulemaking stayed within the limit now argued by plaintiffs. It selected only nine images, each matching to one of the Act’s nine compelled statements. Required Warnings for Cigarette Packages and Adver- tisements, 76 Fed. Reg. 36,628, 36,648–57 (June 22, 2011). So the agency’s claim of authority to compel more warnings is not aided by its prior practice, longstanding or otherwise. Turning to the merits, the numerosity issue can be isolated conceptually by imagining that the final rule simply repeats the Act’s nine required statements verbatim (rather than changing their wording) and then adds two new ones. That alone would ex- ceed the agency’s statutory authority. The Act declares that it “shall be unlawful” to distribute cig- arette packaging that does not carry “one of the following labels” and then lists nine, specific statements. 15 U.S.C. § 1333(a)(1). If the agency had authority to add two more statements to the Act’s list of nine rotating statements, then 18% (2/11) of the statements required by rule would be unlawful under § 1333(a)(1). Likewise with § 1333(b)(1)’s declaration that it is unlawful to advertise cig- arettes without “one of the labels specified in subsection (a).” No provision of the Act mentions a power to lift or modify subsection (a)(1)’s and (b)(1)’s prohibition on omitting one of nine warnings. The agency says that a power to compel additional statements is implied in subsection (d)[2]. But the language upon which the agency relies allows it, with the appropriate finding and proce- dure, to “adjust the format, type size, color graphics and text of any of the label requirements.” 15 U.S.C. § 1333(d)[2] (emphases added). Even accepting for argument’s sake the agency’s view of what it means to “adjust . . . the text” of a label requirement (i.e., completely rewrite it), this power is limited to acting on one or more things in a statutory list of nine. The word “the” before “text” is a definite article referring to the singular text of a label requirement. It does not convey an au- thority to add alternative texts to “the label requirement” at issue. Neither does the phrase “any of the” before “label require- ments.” The word “any” means “one or some indiscriminately of whatever kind.” United States v. Gonzalez, 520 U.S. 1, 5 (1997) (quoting Webster’s Third New International Dictionary 97 (1976)). The word “of” indicates “the component material, parts, or elements or the contents.” Of, Merriam-Webster Online Dic- tionary, https://www.merriam-webster.com/dictionary/of. And the word “the” before “label requirements” is again a definite ar- ticle, referring to the nine specific statements in subsection (a)(1). Putting those together, the agency has authority to adjust “the” singular text of any one or more of the items in the statute’s list of nine required statements. Even if “adjusting the text” means changing words—not just the visual presentation of the words— the agency has not been given authority to add to the number of warnings by creating new ones. At bottom, the agency questions why Congress would not have granted that power. The fact that Congress “happened” to choose nine warnings is not dispositive, the agency says, especially since eleven warnings are not too much more burdensome than nine. But what Congress “happens” to do is the law. Courts are not free to second-guess policy decisions expressed in the plain text of the congressional enactments. Nor is the absurdity canon implicated here. The agency does not dispute that manufacturers face a material, additional cost in incorporating and printing each additional required warning. De- signers must perform more work. More printing cylinders must be engraved. A rotation plan must include more steps. Congress thus faced a policy choice about the desired cost to impose on manufacturers. And it struck that balance with a rule of nine, al- lowing the agency only to adjust the text of any of those nine la- bels. With that matter of interpretation settled in plaintiffs’ favor, the question becomes the proper remedy for the rule’s lack of au- thority to require eleven warnings. The rule has a broad severabil- ity clause, as does the Act itself. 85 Fed. Reg. at 15,695–97 (quot- ing the Act’s clause). The problem in applying that clause here, however, is that the agency has not yet made, through APA procedure, the choice of what nine graphic warnings should be required. If the rule had an- nounced a choice that two specific warnings should be severed and vacated if the agency lacked authority to require more than nine, then such a clause would control here. But the rule makes no such choice. Alternatively, if the rule announced that the agency would need to reconsider all eleven graphics anew to arrive at a final set of nine, if that is the limit of its authority, the court would respect that policy choice. But the rule does not say that either. As all parties agreed at oral argument, if this challenge to stat- utory authority succeeds, that choice belongs to the agency. The court cannot itself make that policy call. See SEC v. Chenery, 318 U.S. 80, 87–88 (1943) (courts cannot uphold an agency’s action simply because it might have made certain required decisions). So the severability clauses do not allow any aspect of the rule to sur- vive this meritorious claim of lack of statutory authority. As such, and because the equitable factors support interim re- lief as noted above, the court postpones the effective date of the rule until the court enters final judgment. This relief is entered as a preliminary injunction as to plaintiffs pursuant to the court’s in- herent equitable power. And this relief is entered as to all whom the rule would otherwise govern pursuant to 5 U.S.C. § 705. If the court’s final judgment departs from this analysis and ultimately favors defendants, the final judgment will specify the remaining time until the effectiveness of the rule and the associated Tobacco Control Act provisions. Defendants argue that any § 705 relief should be limited to plaintiffs. But the Fifth Circuit has settled the question in this cir- cuit, holding that the APA’s text and longstanding administrative- law principles do not require a court “to limit any relief to the named parties.” Career Colls. & Schs. of Tex. v. U.S. Dep’t of Educ., 98 F.4th 220, 255 (5th Cir. 2024), cert. granted, No. 24-413 (U.S. Jan. 10, 2025). The Fifth Circuit further holds that “the scope of preliminary relief under Section 705 aligns with the scope of ulti- mate relief under Section 706, which is not party-restricted.” Id. (emphasis added); see Braidwood Mgmt., Inc. v. Becerra, 104 F.4th 930, 951 (5th Cir. 2024) (holding that the statutory remedy of “setting aside agency action under § 706 has ʻnationwide effect,’ is ʻnot party-restricted,’ and ʻaffects persons in all judicial dis- tricts equally’”) (citations omitted), cert. granted, No. 24-316 (U.S. Jan. 10, 2025). Because § 706 relief is universal and not party-restricted, the court’s § 705 relief must have the same scope under Career Colleges. In the alternative, if the court had discretion but not an obli- gation to make § 705 relief universal, the court would exercise that discretion here. The public interest could be harmed by a world in which some cigarettes bear the new warnings but plaintiffs’ ciga- rettes do not, suggesting that they do not in fact bear the same health risks. Nor does the rule even claim that the new warnings will cause a real-world reduction in smoking behavior. D. Statutory authority to rewrite the warnings Plaintiffs also dispute whether § 1333(d)[2] includes authority to rewrite the Act’s warnings by editing any words at all or, at the least, by changing the substantive content of the warnings. The court finds that plaintiffs have some, substantial likelihood of suc- cess on this claim, justifying interim relief given that the equities strongly tilt in plaintiffs’ favor, but that defendants also have a substantial likelihood of ultimate success after further analysis. For the purposes of analyzing this argument, the court pro- ceeds as if the agency first issued valid regulations under subsec- tion (d)[1] specifying graphics for the Act’s nine statements and now invokes subsection (d)[2] to completely rewrite those label statements, finding that doing so would promote greater public understanding of health risks. That analytical assumption isolates this specific argument by filtering out plaintiffs’ first statutory- authority argument (the numerosity issue) and their third statu- tory-authority argument (the timing issue). On this challenge, the statutory text is more supportive of the FDA’s claimed authority. Subsection (d)[2] speaks of adjusting the “text” of any of the label requirements. And “text” has the natural meaning of the “words and form” of a printed work. Text, Merriam-Webster’s Online Dictionary, https://www.merriam- webster.com/dictionary/text; see 85 Fed. Reg. at 15,642 (noting some commenters’ concession that “text” “refers to both ʻwords and form,’ not merely the latter”). Moreover, subsection (d)[2] itself uses “change” to describe what it means to “adjust” the text, undercutting the idea that “adjust” means something less than any change. Yet the statute gives some indication that it uses the phrase “adjust the . . . text” in a more specialized sense. Subsection (d)[1] gives the agency authority, in issuing its initial regulations, to “adjust the type size, text and format” of the label statements as specified in subsections (a)(2) and (b)(2). Yet the two cited sub- sections specify only the form and placement of the text, not the words of it. The agency conceded as much in the rulemaking. 85 Fed. Reg. at 15,642 (in discussing subsection (d)[1]’s reference to subsections (a)(2) and (b)(2), stating: “the adjustments author- ized by [subsection (d)[1]] focus on placement, typography, clar- ity, conspicuousness, and legibility—changes that go to the visual presentation of cigarette warnings”). So at least subsection (d)[1] uses the phrase “adjust the . . . text” to refer to adjusting the visual presentation of the text alone, not to changing the words of the text. That is some support for plaintiffs’ argument that subsection (d)[2] uses the same phrase to mean adjusting the visual presentation of the text, not changing its words. Nor would plaintiffs’ meaning make meaningless subsection (d)[2]’s requirement that its authority requires a finding that an adjustment would promote greater public understanding of health risks. Greater public understanding could flow from changing the visual presentation of text, as subsection (d)[1] confirms. It would thus be coherent for Congress to have written the Act such that the subsection (d)[1] and (d)[2] authority to “adjust the . . . text” of a given warning refers to the same, limited power to change its visual presentation, but exercised at different times: initially un- der (d)[1] versus later under (d)[2]. At the same time, plaintiffs have not identified a plausible rea- son why Congress would have used the phrase “adjust the text” in that limited way in subsection (d)[2] while requiring that the adjustment promote greater public understanding of health risks. If the point of a (d)[2] adjustment is merely to further clean up visual presentation after a (d)[1] initial decision on visual presen- tation, the (d)[2] trigger would be expected to just repeat the (d)[1] trigger: a finding of greater clarity, conspicuousness, and legibility. For those reasons, plaintiffs have some substantial likelihood of success on this claim, although questions of interpretation re- main. Given the strong tilt of equitable factors in plaintiffs’ favor, as discussed above, interim relief on this claim is also warranted. E. Statutory authority to rewrite warnings initially Finally, plaintiffs argue that the agency does not have the au- thority under subsection (d)[2] to adjust the text of the Act’s statements (whatever that means) without first implementing the Act’s warnings in a rulemaking under subsection (d)[1]. But if the agency’s reading of the breadth of its subsection (d)[2] authority to “adjust the . . . text” of warnings is correct, then the court sees nothing in the Act requiring that authority to be exercised only after the effective date of a subsection (d)[1] rulemaking promul- gating color graphics to accompany the Act’s original warnings. Subsection (d)[2] was enacted by § 202(b) of the Act and took effect immediately, so there is no concern with the (d)[2] author- ity itself having a delayed effective date. And no text in the To- bacco Control Act requires a subsection (d)[2] rulemaking to take effect any amount of time after a subsection (d)[1] rulemaking. The court sees no reason why the two rulemakings could not pro- ceed on a parallel track, with a single proposed and final rule spec- ifying that the subsection (d)[2] adjustment took effect one nano- second after the subsection (d)[1] rulemaking took effect (15 months after its issuance without postponement). So this claim seems to do no work. See 5 U.S.C. § 706 (rule of prejudicial error). The same is true for color graphics. Although graphics are not specified in the Act, the court sees no reason why the subsection (d)[2] power to adjust any set of graphics issued under subsection (d)[1] could not take effect only a nanosecond after the effective date of the subsection (d)[1] regulations. For that reason, the court does not find a substantial likelihood of plaintiffs’ success on their third claim of lack of statutory authority. II. Arbitrary, capricious, or abuse of discretion claim Plaintiffs allege that the rule must be set aside as arbitrary, ca- pricious, or an abuse of discretion within the meaning of 5 U.S.C. § 706. Although plaintiffs may develop that argument in further briefing, the court does not currently conclude that, under bind- ing precedent, the agency’s use of data or choice of images meets that standard for vacatur. Agency action does not violate that APA standard if it is “reasonable and reasonably explained,” or if the agency acts “within a zone of reasonableness and . . . has reason- ably considered the relevant issues and reasonably explained the decision.” BNSF Ry. Co. v. Fed. R.R. Admin., 62 F.4th 905, 910 (5th Cir. 2023) (citing FCC v. Prometheus Radio Proj., 592 U.S. 414, 423 (2021)). The APA “imposes no general obligation on agencies to con- duct or commission their own empirical or statistical studies,” so imperfect empirical or statistical data is not fatal to an agency’s rulemaking. Prometheus, 592 U.S. at 427–28. But an agency must defend a rule on the bases it chooses, and a rule is arbitrary and capricious if: the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, of- fered an explanation for its decision that runs coun- ter to the evidence before the agency, or is so im- plausible that it could not be ascribed to a differ- ence in view or the product of agency expertise. BNSF Ry. Co., 62 F.4th at 910 (quoting Motor Veh. Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)). 1. Plaintiffs first advance several reasons why the rule fails to rationally make the Act’s required finding that the rewritten warn- ings “promote greater public understanding of the risks associ- ated with the use of tobacco products.” They first contend that the effect on actual smoking rates must at least be considered as part of the issue, even if that is not the ultimate finding required by statute. But, on appeal here, the Fifth Circuit accepted that a purely informational interest in increasing public understanding of the risks of smoking, without regard to any effect on smoking rates, is a valid and legitimate state interest for purposes of deferential Zauderer review. 96 F.4th at 883. First Amendment compliance is at least as important as APA compliance. So the court does not understand how reliance on that abstract interest, without more, could be a valid and legitimate basis for state action under the First Amendment yet be arbitrary and capricious under the APA’s deferential standard. The agency’s failure to conduct any cost–benefit analysis other than as required by executive order is likely excused for the same reason. If a valid state interest underlying the rule’s com- pelled disclosures is the abstract, informational interest in pro- moting public understanding without any change in real-world be- havior, as the Fifth Circuit held, it is hard to see how that interest can be assigned a dollar amount in a cost–benefit analysis. 2. Plaintiffs argue that the warnings are misleading and con- fusing. The court previously considered each of these eleven warnings and concluded that “each of the graphic warnings” had a capacity for multiple reasonable interpretations whose truth was not established by the record. Doc. 106 at 31. The court stands by its view, which considered both the text and graphics of each warning. But the court is bound by the Fifth Circuit’s contrary view that “when each image is paired with a fact-based, textual warning, any reasonable viewer interprets the image in light of the words” in a way that removes any impermis- sible ambiguity or misrepresentation. 96 F.4th at 880–81. The Fifth Circuit also saw no problem with the compelled warnings depicting side effects or manifestations of conditions that are rare or uncommon. Id. (“[W]e uncover no caselaw requiring the gov- ernment to choose only the most common side-effect or conse- quence of the disease or injury discussed in a warning.”). Given that ruling, this court does not perceive that plaintiffs have a sub- stantial likelihood of success in convincing the Fifth Circuit that the images flunk APA rationality review. 3. On several matters concerning the agency’s studies under- lying the rulemaking, plaintiffs raise criticisms that the Fifth Cir- cuit did expressly carve out and decline to address. Id. at 885. First, plaintiffs question whether the metrics used in the second quantitative study adequately demonstrate greater public under- standing of health risks. They also note that the rule’s warnings score poorly on the “believability” metric for the first quantita- tive study, so much so that the FDA dropped the metric for the second quantitative study. The rule determines that two metrics, “new information” and “self-reported learning,” are “predictive for promoting under- standing of the risks associated with cigarette smoking.” 85 Fed. Reg. at 15,649. In doing so, the FDA relied on guidance from “communication and social science research” in selecting these two metrics as proxies for greater understanding. Id. at 15,664. And peer reviewers endorsed that reliance. See, e.g., Admin R. 54097 (Doc. 71-25 at 193) (“[G]iven the outcomes listed in the original legislation, the outcomes chosen are appropriate.”); Ad- min. R. 54105 (Doc. 71-25 at 201) (“The rationale for the new knowledge, learning and health beliefs is clear, but I would have liked to have seen some more rationale for including thinking about the risks, believability, and factuality.”). Regardless of whether use of those two metrics is analytically and statistically perfect in this court’s opinion, the court must in good faith defer to the agency’s choices rather than second-guess them. The agency’s use of two metrics that provide early indica- tors of greater public understanding appears to place the rule out- side the realm of purely arbitrary or capricious agency action. The agency notes an inverse relationship between levels of novelty and levels of perceived factualness or believability. It appears within the “zone of reasonableness” for the agency to conclude that its two primary metrics are predictive of future understanding caused by the warning labels. 4. Plaintiffs contend that the sample of survey respondents is not nationally representative. The rule itself acknowledges this, stating that the study was “not conducted with a nationally repre- sentative sample” and that the findings cannot be extrapolated to the generalized U.S. population. 85 Fed. Reg. at 15,660. The rule then states that its effect is still “valid and reliable.” Id. at 15,663. It seems likely that a study can still “promote greater public un- derstanding” (untethered to any concrete change in behavior) even if that “understanding” is not equally distributed nationally. Further, one peer reviewer’s acknowledgements that the study’s participants were still “diverse” and “appropriate to address the research questions” reduce those concerns. At least one peer re- viewer determined that these shortcomings made the studies “deeply flawed.” But again, the FDA is not required to “have per- fect empirical or statistical data” to implement Congress’s com- mand. Prometheus, 592 U.S. at 427. 5. Perhaps the strongest of plaintiffs’ criticisms is that the second quantitative study compared the rule’s warnings with the original Surgeon General’s warnings as the control condition. If that were the only study and if the rule rested on studies alone, as opposed to normative judgments, the choice of control other than the Tobacco Control Act’s warnings could well be arbitrary and capricious. But the first quantitative study did include compari- sons between the Act’s warnings and the rule’s warnings. That study may have its own flaws in plaintiffs’ view, but it did correctly include the Act’s warnings as a control. Nor does it appear that the rule rested on studies alone. 6. Plaintiffs then argue that the rule is arbitrary and capri- cious because it ignored less-burdensome alternatives to the rule’s provocative graphic warnings. If that complaint is about the vis- ceral graphics chosen as compared to other graphics, it seems weakened significantly by the circuit’s endorsement of the graphics together with the text as “incidental to [viewers’] reten- tion of information about the health risks.” 96 F.4th at 880–81. If the complaint is about a failure to test smaller warnings, it seems more suited for a challenge under the First Amendment, which binds Congress as well as the agency. In contrast, the APA considers only the rationality of agency action. And the Act gives the agency specific directions on the required size and placement of the warnings. Likewise with the agency’s failure to test a pub- lic-information campaign. Although potentially a persuasive First Amendment criticism, such a campaign was outside the agency’s mandate under the Act. III. Notice-and-comment claim Plaintiffs next argue that the FDA failed to provide meaning- ful notice and a meaningful opportunity to comment. Each argu- ment is addressed separately. 1. Plaintiffs argue that the FDA did not release the data un- derlying the quantitative and qualitative studies that it relied upon and that it did not release the peer-review reports relating to two quantitative studies. The APA requires that agencies publish a “general notice of proposed rule making” that includes “a de- scription of the subjects and issues involved” in the proposed rule. 5 U.S.C. § 553(b)(3). Courts cannot require more than the APA provides for. Vt. Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 524 (1978). That notice must contain “sufficient factual detail and rationale for the rule to permit interested parties to comment meaning- fully.” Nat’l Lifeline Ass’n v. FCC, 921 F.3d 1102, 1115 (D.C. Cir. 2019). The touchstone of this inquiry is whether persons are “fairly appris[ed] . . . of the subjects and issues the agency [is] considering.” Huawei Techs. USA, Inc. v. FCC, 2 F.4th 421, 448 (5th Cir. 2021). The proposed rule listed fifteen warnings, ten of which end up in the final rule. 84 Fed. Reg. at 42,767–68. The eleventh warning (nonsmoker lung disease), which was not in the proposed rule, is unchanged from its original statement in the Act. The public, therefore, was given at least a general “description of the subjects . . . involved” in the final rule. 5 U.S.C. § 553(b)(3). The proposed rule surrounded its proposed warnings with context about the gaps in public understanding that could be improved with notice- able, color-graphic labels, thus giving a description of the issues involved. 84 Fed. Reg. at 42,762–63. And the proposed rule ad- dressed each textual warning and analyzed the statistics surround- ing each warning. Id. at 42,772–77. Plaintiffs argue that, even with access to the reports underly- ing the agency’s conclusions, they need access to the data under- lying the reports. The legal merits of that argument come down to a possible circuit split between the D.C. Circuit and the Fifth Circuit on the “every bit of information” principle. The D.C. Circuit holds that “[i]ntegral to the notice require- ment is the agency’s duty ʻto identify and make available technical studies and data that it has employed in reaching the decisions to propose particular rules. . . . An agency commits serious proce- dural error when it fails to reveal portions of the technical basis for a proposed rule in time to allow for meaningful commentary.’” Solite Corp. v. EPA, 952 F.2d 473, 485 (D.C. Cir. 1991) (citation omitted); see also United States v. Nova Scotia Food Prods. Corp., 568 F.2d 240, 251 (2d Cir. 1977) (“failure to disclose to interested persons the scientific data upon which the FDA relied was proce- durally erroneous”). That would seem to require disclosure of the study data here, unless it somehow does not qualify as “tech- nical.” On the other hand, the Fifth Circuit has held that the public “need not have an opportunity to comment on every bit of infor- mation influencing an agency’s decision.” Tex. Office of Pub. Util. Counsel v. FCC, 265 F.3d 313, 325–27 (5th Cir. 2001) (quoting Texas v. Lyng, 868 F.2d 795, 800 (5th Cir. 1989)). That supports the view that notice-and-comment procedure does not grant an interested party an informational right akin to discovery in litiga- tion. Cf. Exxon Mobil Corp. v. Mnuchin, No. 3:17-cv-01930, 2018 WL 4103724, at *2 (N.D. Tex. Aug. 29, 2018) (noting the standard for the administrative record is “all documents and materials di- rectly or indirectly considered by [the] agency”) (alteration in original). Under that more forgiving side of the “every bit of in- formation” split, plaintiffs have not persuaded this court of their substantial likelihood of success on this claim. 2. In contrast to their claim about release of underlying re- port data, plaintiffs also complain about the time within which they had to comment on certain qualitative reports: 15 days. Alt- hough a 60-day comment period has been recommended, the APA “does not specify a minimum time for submission of comments in an informal rulemaking.” Petry v. Block, 737 F.2d 1193, 1201 (D.C. Cir. 1984). Some opportunity to participate is all that the APA re- quires. Phillips Petrol. Co. v. EPA, 803 F.2d 545, 559 (10th Cir. 1986). The supplemental data released in the qualitative-study re- ports comprised only four new documents with hundreds, not thousands, of pages of scientific material. And plaintiff R.J. Reyn- olds, through RAI Services Company, managed to respond in the reopened comment period with a public comment. Even then, the qualitative studies were described in detail in the proposed rule. 84 Fed. Reg. at 42,765-72. The final rule then notes the limits of the qualitative studies—they were based on small sample sizes and do not yield data that can be generalized, lending those studies what the agency calls a limited role in its iterative process. 85 Fed. Reg. at 15,666. Given that at least one plaintiff filed a comment and that the studies’ limits were noticed by the agency, the court is unable to find a substantial likelihood of success in showing prejudicial error. Conclusion For the reasons given above, plaintiffs’ motion for interim re- lief on their APA claims (Doc. 122) is granted. The effective date of the challenged rule, Tobacco Products; Required Warnings for Cigarette Packages and Advertisements, 85 Fed. Reg. 15,638 (Mar. 18, 2020), is postponed for plaintiffs and all others whom it governs until the entry of final judgment in this case. Until that final judgment, defendants are preliminarily enjoined from en- forcing against plaintiffs the cited rule and the associated statu- tory provisions cited above, 15 U.S.C. § 1333(a)(1), (b)(1); 21 U.S.C. §§ 387c(a)(2), 387t(a). So ordered by the court on January 13, 2025. Coobake, —_fGebok BARKER United States District Judge
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