The Food and Drug Administration recently announced a series of strict regulations that threatens the livelihood of cigar companies, and now the industry is fighting back.
Early this morning, the three major lobbying groups that represent the cigar and pipe industries filed a joint lawsuit against the FDA in the U.S. District Court for the District of Columbia. These groups—Cigar Association of America, International Premium Cigar and Pipe Retailers, and Cigar Rights of America—are challenging the FDA's Final Rule, claiming it "violates numerous federal statutes as well as the federal rulemaking process."
The FDA's strict new rules include quarterly user fees, pre-market approval for new products and more stringent packaging/warning label guidelines. Many cigar companies believe adhering to these new rules will be both costly as well as time consuming.
"After a thorough and detailed legal review, we are challenging this unlawful regulatory action in federal court to protect the statutory and constitutional rights of our industry and its members. The fact that all three of our organizations are acting in one voice speaks to the urgency and seriousness of this action," said Mark Pursell, chief executive officer of the International Premium Cigar and Pipe Retailers association.
The lawsuit is asking the court for a declaratory injunction to "vacate, set aside and enjoin the enforcement of the Final Rule."
Specifically, the lawsuit challenges the following:
- FDA's improper application of the February 15, 2007 grandfather date to cigars and pipe tobacco, which subjects those products to more intrusive regulations than cigarettes and smokeless tobacco;
- FDA's impermissible assessment of a tax in the form of user fees, and its allocation of these user fees only to cigars and pipe tobacco and not to other newly deemed products (Edit note: such as e-cigarettes);
- FDA's failure to perform an adequate cost-benefit analysis to take into account the effects of the Final Rule on small businesses as is required by the Regulatory Flexibility Act;
- FDA's unjustified decision to require cigar health warning labels to be 30 percent of the two principal display panels of packages;
- FDA's unlawful designation of tobacconists who blend finished pipe tobacco or create cigar samplers of finished cigars as "manufacturers," which subjects those businesses to greater regulation than if they were "retailers";
- FDA's incorrect decision to regulate pipes as "components" or "parts" rather than as "accessories."
"The FDA ignored the law to craft these expansive and sweeping regulations and cannot justify many of the arbitrary and capricious regulations it purports to enact," said Glynn Loope, executive director of Cigar Rights of America. "This lawsuit is a specific and detailed challenge to the FDA's unprecedented assertion of rulemaking authority."
Craig Williamson, president of the Cigar Association of America, said: "We all worked in good faith to inform and educate the FDA on the unique nature of our industry, its members and our consumers. We hoped the FDA would craft a flexible regulatory structure that accounted for the uniqueness of our industry. Instead, we got a broad, one-size-fits-all rule that fails to account for how cigars and premium cigars are manufactured, distributed, sold and consumed in the United States."