Friday, December 16, 2005

The Implications of the Price Decision -- POST II: The Debate over FDA Tobacco Legislation

I have argued that a major lesson from the Price decision is that it reminds us of the degree to which the courts take seriously federal efforts to address regulation of consumer products. When the federal government asserts jurisdiction over an aspect of a product's regulation, that action may be interpreted broadly as a specific authorization for corporate behavior regarding the product, and due to the nature of many state consumer protection laws, that authorization may exempt the companies from claims brought under those laws.

In Price, the Court interpreted a consent agreement entered into by the Federal Trade Commission (FTC) as essentially giving specific authorization to all cigarette companies (even those not a part of the agreement) to use the term "low-tar" in their advertising, assuming certain conditions were met.

"We conclude that the specific authorization required to trigger the exemption of section 10b(1) does not require formal rulemaking or official definitions. ... It is sufficient if the authorization proceeds from regulatory activity, including the resolution of an enforcement action by means of a consent order. ... a consent order entered into by the FTC with one member of a regulated industry, which is published pursuant to statute, provides implied authority for other members of the regulated industry to engage in the same conduct. ... The necessary degree of specificity is provided by the language of the consent orders and by the FTC'’s long-standing use, if not formal adoption, of the definition of 'low tar' as meaning 15 milligrams or less of tar per cigarette."

Thus, the simple fact that the FTC had provided a definition of "low-tar" was interpreted as a specific enough authorization of the term "low-tar" so as to satisfy the statutory requirements for an exemption under the Illinois consumer protection law.

This decision has, I think, profound implications for the proposed FDA tobacco legislation currently before Congress.

With FTC, we have a very narrow area of federal activity regarding a narrow area of tobacco product advertising: namely, the tar and nicotine content of cigarettes and implied health claims related thereto.

But with the proposed FDA legislation, we have an incredibly broad area of federal activity regarding an incredibly broad area of tobacco product manufacturing, advertising, marketing, content, ingredients, constituents, safety, labeling, and sale.

Remember that the proposed legislation states: "no State or political subdivision of a State may establish or continue in effect with respect to a tobacco product any requirement which is different from, or in addition to, any requirement under the provisions of this chapter relating to tobacco product standards, premarket approval, adulteration, misbranding, labeling, registration, good manufacturing standards, or modified risk tobacco products."

This is clearly a broad scope of tobacco product regulation over which FDA would be asserting jurisdiction.

And if the Price decision teaches us anything, it is that this sweeping assertion of regulatory authority over most aspects of tobacco products would likely be interpreted by the courts as specifically authorizing tobacco company activity within these areas.

It will become difficult, if not impossible, to bring any successful claims in the courts against the tobacco companies if the FDA legislation becomes law.

The bottom line is that the proposed FDA tobacco legislation would essentially provide immunity to the tobacco companies for the damages caused by their products. We would be taking away the legal rights of American citizens to hold the companies accountable for the harmful effects of their products.

And this is not something that I think we should be doing unless the regulating agency were to be given unfettered authority over the regulation of the product.

With the truck-size loopholes in the FDA legislation currently on the table, the FDA's regulation of tobacco products would hardly be unfettered. In fact, it would be highly politicized -- placed largely in the hands of a political body (the Congress) -- rather than in the hands of a regulatory agency, and would be guided largely by politics, rather than by science.

In fact, there is serious question right now as to whether even unfettered authority of the FDA over tobacco products would result in a regulatory process that is driven by science, rather than by politics.

I have previously commented that: "the proposed legislation would indeed grant the tobacco companies immunity from liability based on many of the major causes of action that have been brought to bear against the companies so far, and many which might be brought to bear in the future." This conclusion is based, in part, on the fact that the courts have established that the type of preemption of state and local regulation found in the proposed FDA legislation applies not only to legislation (i.e., laws passed by the state) but that it is broad enough to also preempt litigation (i.e., common law claims brought by citizens against the companies).

For example, in Mitchell v. Collagen, the 7th Circuit Court of Appeals ruled that an almost identical clause in the FDCA did preclude common law causes of action: "Our first task is to determine whether the phrase 'any requirement' encompasses state common law causes of action. Collagen submits that the Supreme Court's decision in Cipollone v. Liggett Group, Inc., 505 U.S. 504 , 112 S. Ct. 2608 (1992), makes clear that Congress' preemption of state 'requirements' encompasses common law causes of action. ... A majority of the Justices agreed that the phrase 'no requirement or prohibition' sweeps broadly and suggests no distinction between positive enactments and common law; to the contrary, those words easily encompass obligations that take the form of common law rules." ... Cipollone suggests that 21 U.S.C. sec. 360k(a)'s preemption of state 'requirements different from, or in addition to,' those of the MDA is broad enough to include state common law causes of action."

There is also little question, I believe, that the proposed FDA legislation would provide tobacco companies with immunity in the area in which they most desire it: the production, marketing, and sale of potentially reduced-exposure products (PREPs). The only thing really holding the major companies back from marketing such products, which could have a devastating effect on the public's health if consumers are misled to believe that these products would be safer but in fact they are not, is the threat of liability claims.

By regulating the introduction and marketing of PREPS, including the conditions regarding the cigarette companies' ability to make various types of health claims, the proposed FDA legislation would preempt any claims against the industry related to PREPS, and would therefore effectively provide immunity for them, allowing them to proceed with the widespread introduction of PREPS into the market, both nationally and internationally.

In fact, it is the absence of FDA regulation that is in fact holding up what could be the most devastating expansion of the cigarette market ever, and the first significant expansion of the market in more than 30 years.

The most important lesson from the Price decision, then, is that incomplete federal regulation of tobacco products is a disaster for both the public's health and for the opportunity for citizens to pursue justice in this country for damages caused by the nation's deadliest product. Unless federal regulation of tobacco products were to be unfettered, and to be protected from political interference (which the current FDA legislation most certainly does not provide), it is not a good thing, but a bad thing, and post-Price, the idea should be quashed immediately.

To protect the legal rights of American citizens to pursue justice against the tobacco companies, to ensure that tobacco companies are not provided with special protections that immunize them for the damages caused by their deadly products, and to protect the public's health and ensure that state and local efforts and common law claims can continue, the proposed FDA legislation should be quashed immediately by public health and tobacco control groups and advocates.

Otherwise, we will one day be saying that the Federal Cigarette Labeling and Advertising Act of 1970 was second to the FDA Tobacco Legislation as the most devastating and damaging federal tobacco legislation ever enacted.

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