December 01, 1998
For 58 of the past 60 years, since Congress passed the 1938 Food, Drug and Cosmetic Act (FDCA), the Food and Drug Administration (FDA) denied that the Act granted it jurisdiction over tobacco products. Then two years ago, riding a wave of anti-tobacco sentiment, the agency suddenly changed its mind. In August 1996, the FDA issued its "Regulations Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco to Protect Children and Adolescents." Supported by an activist president and energized by its anti-tobacco chairman, David A. Kessler, the agency shocked many observers -- especially those who assumed that FDA jurisdiction was a matter for Congress to decide.
The new regulations ordered merchants to place tobacco products behind the sales counter, barred cigarettes in most vending machines, demanded proof of age for cigarette buyers under 26, banned tobacco advertising on billboards near schools, forbade the use of color in most magazine ads, outlawed Joe Camel and the Marlboro Man, shut down tobacco sponsorship of sporting events, and prohibited giveaways of merchandise containing tobacco logos. By any reckoning, that's sweeping authority for an agency in the throes of reinventing itself after six decades.
Eight months later, in April 1997, a federal court in North Carolina, the nation's biggest tobacco-growing state, handed the FDA a major, if temporary, victory. District Judge William L. Osteen held for the first time that the FDCA empowers the FDA to regulate the sale of tobacco products.1
He added, however, that the Act does not authorize the FDA to regulate industry advertising practices. Under that mixed ruling, restrictions on nicotine content, vending machine access, and sales to minors were sustained; but proposed FDA limitations on billboards, ad colors and content, distribution of clothing with tobacco logos, and sponsorship of sporting events did not survive.
Osteen's holding on advertising came as no surprise. Indeed, even if he had decided that the FDA had statutory authority to regulate tobacco ads, it is doubtful that the proposed FDA restrictions would have passed constitutional muster.2
More problematic for the industry was the determination by Osteen that the FDA had jurisdiction over the sale of tobacco products. According to attorney Matthew Myers of the Campaign for Tobacco-Free Kids, Osteen's decision was "the single most devastating loss the tobacco industry has ever suffered in the courts of the United States." Former commissioner Kessler was only slightly less gushy. "It's a great victory for the country, for public health, for the president. . . . It is a landmark decision, it is historic."3
Under the FDCA, the manufacturer’s "intended use" of a product determines whether the FDA can regulate it as a drug. If tobacco companies intended that nicotine in cigarettes be sold to "affect the structure or function of the body," then the FDA would clearly have jurisdiction. Osteen conceded, however, that "no court has ever found that a product is 'intended for use' or 'intended to affect' within the meaning of the [Act] absent manufacturer claims as to that product's use." Not even the FDA asserts that tobacco companies made such claims.
But Osteen went a step further. He held that the industry’s public pronouncements regarding intended use do not necessarily govern the classification of tobacco under the Act. Instead, he sifted through internal company memoranda and other recently disclosed documents, and he considered whether tobacco companies might have foreseen that nicotine would have a pharmacological effect on smokers. Osteen concluded that the FDA could reasonably characterize nicotine as a drug with the "intended use" of ingestion into the human body. The "blend, filter, and ... ventilation system" of tobacco products are, therefore, a drug delivery device.
To the great relief of the industry, that holding has now been overturned. On August 14, 1998, the U.S. Court of Appeals for the Fourth Circuit, in an opinion by Judge H. Emory Widener, joined by Senior Judge M. Blane Michael, over a dissent by Senior Judge Kenneth K. Hall, reversed the district court and ruled that the FDCA did not authorize the FDA to regulate tobacco products.4 As Widener put it, " This is not a case about whether additional or different regulations are needed to address legitimate concerns about the serious health problems related to tobacco use . . . . At its core, this case is about who has the power to make this type of major policy decision."
The lower court had framed the issue as "whether Congress has evidenced its clear intent to withhold from the FDA jurisdiction to regulate tobacco products." According to Widener, that mischaracterization of the question pervaded the district court's analysis. He reframed the question as "whether Congress intended to delegate such jurisdiction to the FDA." Widener's answer: a resounding no. He took a "holistic" approach to statutory construction, looking beyond the literal FDCA definition of a drug to take into account both the structure and the context of the Act and "whether tobacco products fit into the overall regulatory scheme created by Congress."
For starters, observed Widener, under the FDCA drugs must be proven safe and effective before they can be sold. Yet the FDA had found that "tobacco use is the single leading cause of preventable death in the United States. More than 400,000 people die each year from tobacco-related illnesses." How then could the agency justify anything other than outright prohibition of so dangerous a drug? To circumvent that question, the FDA first classified cigarettes as a "combination" product, then chose to regulate them as a delivery device rather than a drug. In Widener's view, "This transparent action by the FDA, obvious sophistry, taken in order to avoid the . . . drug provisions of the Act, reinforces the conclusion that regulation of tobacco products under the Act was not intended by Congress." In short, he maintained, "Congress did not equip the FDA with tools appropriate for the regulation of tobacco because it had no intention that the Act apply to tobacco products."
Next, Widener pointed to the FDA's unwavering 80-year record -- beginning with its predecessor agency in 1914, continuing through the 1930s when the FDCA was enacted, and extending to the agency's change of heart in 1996 -- of denying that it had authority to regulate tobacco. Typical is this statement from a 1963 FDA Bureau of Enforcement guideline: "The statutory basis for the exclusion of tobacco products from the FDA's jurisdiction is the fact that tobacco marketed for chewing or smoking without accompanying therapeutic claims, does not meet the definitions in the Food, Drug, and Cosmetic Act for food, drug, device or cosmetic."
Finally, Widener examined tobacco-specific congressional action, and inaction, since passage of the FDCA. He noted that members of Congress were "well aware of the dangers of tobacco products and of the FDA's consistent position that it had no jurisdiction." Some members wanted to remedy that situation, so they introduced 15 different bills designed to bring tobacco products under FDA control. None of those bills passed. And when Congress did move to regulate tobacco -- enacting numerous statutes and amendments over the past 60 years -- it took no steps to overturn the FDA's interpretation of the Act.
Thus, based on the text and context of the FDCA, on congressional action and inaction regarding the regulation of tobacco products, and on contemporaneous and subsequent interpretations of the statute by the FDA, Widener concluded that Congress did not mean for "cigarettes to be included as an article 'intended to affect the functions of the body of man' or in any other definition of 'drug.'"
That brings us to Judge Hall's vigorous dissent. Ironically, he focused on the text of the FDCA -- an approach usually employed by conservative jurists to rein in what they perceive to be abuses of government power. In this instance, Hall's textual argument would have the effect of expanding the FDA's jurisdiction. He wrote, "As a matter of simple English, the resultant effect on the body -- nicotine addiction -- is intended when the manufacturer . . . deliberately designs the product to have that effect." In regard to the absence of medical claims by tobacco manufacturers, Hall commented:
Products deliberately designed to create and sustain addiction are not likely to be marketed as such . . . . It strikes me as patently absurd to contend that cigarettes and smokeless tobacco, products that are . . . actually designed to exert powerful and quintessentially drug-like effects on the users, should escape FDA regulation because the products are marketed as essential accoutrements of a more exciting or more sophisticated lifestyle.
On the repeated disclaimers of jurisdiction by the FDA, Hall stated simply that the agency is entitled to change its mind in response to new facts. And he noted that "[n]o other court . . . has been confronted with the type and quantity of evidence collected during the rulemaking process in this case."
On the question of whether Congress meant for tobacco to be covered by the FDCA, Hall agreed with the district court: "Rather than itemize each product . . . Congress defined these categories broadly." He added, "No one contends that Congress foresaw in 1938 that tobacco was or might someday be included as a 'drug' . . . . When the early tobacco-specific statutes were being debated in Congress, the essential link between tobacco and illness had not yet been proven to the satisfaction of all."
That final issue is the essence of the case. Hall concluded that Congress had spoken plainly: tobacco products can be regulated as a drug by the FDA if, in the words of the FDCA, they are "intended to affect the structure or function of the body." He further concluded that the rulemaking record contained sufficient evidence to support the FDA's claim of jurisdiction. Still, conceded Hall, "whether the language is plain is 'determined by reference to the language itself, the specific context in which the language is used, and the broader context of the statute as a whole."5 But in this situation he found that "the context does not command a result contrary to the plain meaning."
A different construction of the FDCA is certainly imaginable. Perhaps if tobacco products were promoted for medical purposes, public claims by the manufacturers would resolve any ambiguity as to "intent." Without those claims, however, industry intentions are more difficult to fathom. To be sure, new documents have become available. But how many documents are necessary to establish a corporation's intent? Who must have authored the documents? What must they have said? To whom and in what forum? How should contrary statements be weighed? Why should Congress have assumed that the FDA has unique expertise to judge intent? And given the well-known hazards of smoking, why should the new documents have caused the FDA to alter its assessment of the addictive quality of cigarettes?
Throughout this century, incessant warnings about the danger of tobacco have come from doctors, public health sources, and thousands of scientific and medical publications. By the 1920s, 14 states had prohibited the sale of cigarettes. A warning has appeared on every pack of cigarettes lawfully sold in the United States for over 30 years. Nicotine content by brand has been printed in every cigarette ad since 1970. Statistics released by the Federal Trade Commission show that nicotine content per cigarette declined by 33 percent from 1968 through 1994. During the 1960s and 1970s, public health authorities pushed for high-nicotine, low-tar cigarettes. In fact, the Department of Agriculture and the National Cancer Institute sponsored a program to develop strains of tobacco with a higher nicotine content.
On what possible basis, asks tobacco critic Richard Kluger, can we "justify a claim that the cigarette makers had massively imposed an intentionally addicting product on an innocent public that had little knowledge or choice in the matter?"6 Kluger continues:
While new evidence had emerged showing that Philip Morris and B&W, among others, had done research on the addictive nature of nicotine and had neither disclosed it to the public nor warned against the addicting potency, many similar findings by investigators outside the industry had long since been made and published. Public-health advocates, moreover, had for years advised that nicotine was as addicting as heroin and cocaine.... [W]hether one categorized smoking as a practice, a habit, an indulgence, a vice, a dependency, or an addiction, it was commonly known -- and had been for decades -- to be hard to stop once begun.
Those facts hardly suggest that the FDA learned something that it did not previously know from the new documents. Nor do the events establish that the meaning of "intent" in the FDCA is clear on its face, or that Congress would have looked to the FDA to resolve any uncertainty or imprecision. Indeed, Judge Widener in his majority opinion reminds us that "[n]o deference is due the FDA's construction of the Act unless it is acting within the bounds of its congressionally-established authority." Quoting a 1973 Supreme Court case, he cautions that "an agency may not bootstrap itself into an area in which it has no jurisdiction."7
And citing a 1981 Third Circuit case, Widener submits that "[t]he more intense scrutiny that is appropriate when the agency interprets its own authority may be grounded in the unspoken premise that government agencies have a tendency to swell, not shrink, and are likely to have an expansive view of their mission."8
That proposition will likely be put to the test as the Clinton administration seeks Supreme Court review of the jurisdictional issue. Meanwhile, it's worth noting, if only in passing, that this complex litigation would not be before us if the Court had not abandoned the non-delegation doctrine -- moribund since 1936. Today, instead of asking whether Congress intended to delegate legislative authority to the FDA, we should be asking whether Congress is permitted to relinquish its constitutionally delegated lawmaking responsibilities on a massive scale to unelected administrative agencies.
Federal power to regulate the health implications of tobacco -- if it exists at all -- is vested in Congress. When Congress transfers its authority outside the legislative branch, it debases the doctrine of separation of powers, a centerpiece of the Constitution. As a result, an administrative agency, the FDA, might well function as lawmaker, enforcer, and judge -- controlling how consenting private parties transact with one another -- with near-boundless discretion, minimal accountability, and insufficient safeguards against violations of individual liberty. Instead, the FDA’s role might be better limited to the gathering and disseminating of information on safety and efficacy of food and pharmaceutical products, although private companies could do the job still better. Then we could each make voluntary and informed decisions about what we eat and drink and what drugs we buy.
Constrained by Supreme Court precedent, the Fourth Circuit did not revisit the non-delegation doctrine. But if it accepts the government's appeal in this case, the Supreme Court will itself have an opportunity to restore some semblance of separation of powers. Is the Court prepared to harness the administrative state? Hope springs eternal.
1. Coyne Beahm, Inc. v. Food & Drug Admin., 966 F. Supp. 1374 (M.D.N.C. 1997).
2. Regulation of non-misleading commercial speech about a lawful activity must directly advance a substantial governmental interest in a manner no more extensive than necessary to achieve the desired objective. Central Hudson Gas & Electric Corp. v. Public Service Comm'n, 447 U.S. 557 (1980). See also Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 73-74 (1983) (ad restrictions may not "reduce the adult population . . . to reading only what is fit for children"); and 44 Liquormart, Inc. v. Rhode Island, 116 S. Ct. 1495 (1996) (rejecting a lesser standard of protection for "vice" products).
3. "Judge Rules FDA Can Regulate Tobacco, but Not Advertising," Associated Press, April 25, 1997.
4. Because the appellate court overturned Judge Osteen on the threshold jurisdictional question, it did not address his conclusion that FDA authority to regulate tobacco sales did not include authority to regulate advertising.
5. Quoting Robinson v. Shell Oil Co., 519 U.S. 337, ___, 117 S. Ct. 843, 846 (1997).
6. Richard Kluger, Ashes to Ashes: America's Hundred-Year Cigarette War, the Public Health, and the Unabashed Triumph of Philip Morris (New York: Alfred A. Knopf, 1996), p. 760.
7. Federal Maritime Comm'n v. Seatrain Lines, Inc., 411 U.S. 726, 745 (1973).
8. Hi-Craft Clothing Co. v. NLRB, 660 F.2d 910, 916 (3d Cir. 1981).
Robert A. Levy is Senior Fellow in Constitutional Studies at the Cato Institute.