October 1998
Volume 25
Number 5

Both Decisions to be Appealed, But Trend Reveals Flaws in Government's War

by Craig Diamond

During the past year, the tobacco industry has found itself continually vilified by the media and constantly under attack by federal legislators. But this summer, it seems Big Tobacco was able to win a few rounds in the ongoing tobaccos wars with two major court decisions decided in its favor.

First, on July 17, a federal judge vacated the EPA's 1993 report linking secondhand smoke and lung cancer due to procedural and scientific mistakes made by the agency. Then, on August 14, a Federal appeals court ruled that the FDA does not have the authority to regulate cigarettes and smokeless tobacco. The August decision reversed a U.S. District Court Judge's 1997 ruling that gave the FDA regulatory jurisdiction over tobacco.

In 1993, the EPA released what was then considered a landmark report which concluded that Environmental Tobacco Smoke (ETS), commonly known as secondhand smoke, is a hazardous carcinogen. The report found that ETS causes 3,000 cancer deaths among non-smokers each year and should be listed as a Class A carcinogen. The report helped trigger a wave of regulations by many state and local governments prohibiting smoking in areas such as offices, stadiums, and restaurants. From a legal standpoint, it also opened up a new set of problems by enabling non-smokers to sue tobacco companies and conceivably win large settlements.

In the July ruling, which vacated the bulk of the report, Judge William Osteen of the U.S. District Court in Greensboro, North Carolina, stated that the EPA report's conclusions were based on inadequate testing and disregarded important procedural requirements required by the 1986 Radon Gas and Indoor Air Quality Research Act. The agency also made findings on selective information, disregarded its own Risk Assessment Guidelines, and failed to disclose important findings and reasoning; and left significant questions without answers.

"EPA's conduct left substantial holes in the administrative record," Osteen wrote in the judgment. "While in so doing, EPA produced limited evidence, then claimed the weight of the agency's research evidence demonstrated ETS causes cancer."

In addition, the judgement said, "The EPA publicly committed to a conclusion before research had begun; excluded the industry by violating the Act's procedural requirements; adjusted established procedure and scientific norms to validate the Agency's public conclusion, and aggressively utilized the Act's authority to disseminate findings to establish a de facto regulatory scheme intended to restrict Plaintiffs' products and to influence public opinion ... Using its normal methodology and its selected studies, EPA did not demonstrate a statistically significant association between (secondhand smoke) and lung cancer."

In 1996, after several years of Congressional hearings and collecting information, the FDA declared that it had regulatory jurisdiction over tobacco products. The agency issued regulations that restricted the sale of tobacco products to minors and limited advertising and marketing by tobacco companies. The tobacco industry challenged the FDA's authority to make such regulations and argued that nicotine did not fit the legal definition of a drug.

In April of 1997, Judge Osteen ruled that the FDA could regulate nicotine as a drug and regulate cigarettes as drug-delivery devices under the Food, Drug, and Cosmetic Act. In addition, the court upheld all restrictions involving youth access and labeling. But, Osteen's ruling denied the agency authority to control cigarette advertising.

The ruling was appealed by Big Tobacco and was finally overturned by the recent decision. A three-judge panel of the U.S. Fourth Circuit Court of Appeals in Richmond, Virginia, voted 2-1 to overturn Osteen's ruling. In the decision, the panel's majority wrote that there was "strong evidence that Congress has reserved for itself the regulation of tobacco products rather than delegating that regulation to the FDA." In addition, the appeals court said that ever since the passing of the Food, Drug, and Cosmetic Act in 1938, the FDA "has repeatedly informed Congress that cigarettes marketed without therapeutic claims do not fit within the scope" of the FDA's authority.

The Clinton administration plans to appeal to the U.S. Court of Appeals for the Fourth Circuit on the EPA decision. In September, the Justice Department asked for a review of the FDA decision by the full Fourth Circuit Court. Until each is resolved, it seems not much will really change.

According to antismoking advocates, as well as industry officials, Osteen's ruling on the EPA report is likely to have little impact on the laws banning smoking indoors. It does not immediately alter any laws because present regulations have been enacted by local governments and legislatures rather than the EPA. But the future impact and implication of the ruling could be broad.

The FDA decision will have no immediate effect on Federal efforts to regulate tobacco because it will be stayed pending appeal. Until the court has the opportunity to rule on the government's request, parts of the FDA tobacco program will remain in effect. This includes adhering to the national minimum age requirements set forth by the FDA for sales of tobacco and checking IDs when selling tobacco products.

SMOKESHOP - August 98