Opinion ID: 3066450
Heading Depth: 1
Heading Rank: 3

Heading: Evaluating the Graphic Warnings Under

Text: Intermediate Scrutiny Under Central Hudson, the government must first show that its asserted interest is “substantial.” 447 U.S. at 566.11 If so, the Court must determine “whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.” Id. The party seeking to uphold a restriction on commercial speech bears the burden of justifying it. Edenfield v. Fane, 507 U.S. 761, 770-71 (1993). Because this case involves a challenge to final agency action, the Administrative Procedure Act governs our review of the record. See 5 U.S.C. § 706(2)(B) (providing that the APA applies to allegations that agency action is “contrary to constitutional right, power, privilege, or immunity”). The APA requires us to “hold unlawful and set aside agency action, findings, and 11 Central Hudson also provides that commercial speech only receives First Amendment protection if it is a lawful activity and is not misleading or fraudulent. 447 U.S. at 566. Neither party seriously disputes that the cigarette packaging and advertisements regulated by the Act satisfy this threshold requirement. 23 conclusions found to be . . . unsupported by substantial evidence.” 5 U.S.C. § 706(2). Unlike rational-basis review, the Central Hudson standard does not permit this Court to “supplant the precise interests put forward by [FDA] with other suppositions.” Edenfield, 507 U.S. at 768. We thus begin by identifying FDA’s asserted interests. A review of the statute and the administrative record makes clear that the graphic warnings are intended to encourage current smokers to quit and dissuade other consumers from ever buying cigarettes. One of the Act’s many stated purposes is “promot[ing] cessation to reduce disease risk and the social costs associated with tobaccorelated diseases.” Act § 3.9. The only explicitly asserted interest in either the Proposed or Final Rule is an interest in reducing smoking rates. The Proposed Rule states in its preamble that the government has a “substantial interest in reducing the number of Americans, particularly children and adolescents, who use cigarettes and other tobacco products.” Proposed Rule at 69,525. And the preamble to the Final Rule reiterates the same interest. Final Rule at 36,629.12 Although 12 Moreover, the Institute of Medicine Report, on which FDA relies for some of its evidence supporting the Rule, states unequivocally that “the primary objective of tobacco regulation is not to promote informed choice but rather to discourage consumption of tobacco products . . . as a means of reducing tobacco-related death and disease.” Institute of Medicine, Ending the Tobacco Problem: A Blueprint for the Nation 291 (2007), available at http://www.nap.edu/catalog.php?record_id=11795. The Report goes on to state that “[e]ven though tobacco products are legally available to adults, the paramount public health aim is to reduce the number of people who use and become addicted to these products, 24 counsel attempted to disclaim this interest at oral argument, the administrative record shows otherwise: the primary objective of the Rule was “both to discourage nonsmokers from initiating cigarette use and to encourage current smokers to consider quitting.” Id. at 36,630. Assuming FDA’s interest in reducing smoking rates is substantial,13 we next evaluate whether FDA has offered substantial evidence showing that the graphic warning requirements “directly advance[] the governmental interest asserted,” Cent. Hudson, 447 U.S. at 566, to a “material degree,” Fl. Bar v. Went For It, Inc., 515 U.S. 618, 626 (1995). The government bears the burden of justifying its attempt to restrict commercial speech, Edenfield, 507 U.S. at 770, and its burden is not light. A restriction that “provides only ineffective or remote support for the government’s purposes,” id. at 770, is not sufficient, and the government cannot satisfy its burden “by mere speculation or conjecture.” Rubin v. Coors Brewing Co., 514 U.S. 476, 487 (1995). The requirement that a restriction directly advance the asserted interest is “critical,” because without it, the government “could [interfere with] commercial speech in the service of other objectives that could not themselves justify a burden on commercial expression.” Id. through a focus on children and youths,” and recommends that the “warnings must be designed to promote this objective.” Id. 13 Like the district court, we are skeptical that the government can assert a substantial interest in discouraging consumers from purchasing a lawful product, even one that has been conclusively linked to adverse health consequences. Nonetheless, the Supreme Court has at least implied that the government could have a substantial interest in reducing smoking rates because smoking poses “perhaps the single most significant threat to public health in the United States.” FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 161 (2000). 25 FDA has not provided a shred of evidence—much less the “substantial evidence” required by the APA—showing that the graphic warnings will “directly advance” its interest in reducing the number of Americans who smoke. FDA makes much of the “international consensus” surrounding the effectiveness of large graphic warnings, but offers no evidence showing that such warnings have directly caused a material decrease in smoking rates in any of the countries that now require them. While studies of Canadian and Australian youth smokers showed that the warnings on cigarette packs caused a substantial number of survey participants to think— or think more—about quitting smoking, Proposed Rule at 69,532, and FDA might be correct that intentions are a “necessary precursor” to behavior change, Final Rule at 36,642, it is mere speculation to suggest that respondents who report increased thoughts about quitting smoking will actually follow through on their intentions. And at no point did these studies attempt to evaluate whether the increased thoughts about smoking cessation led participants to actually quit. Another Australian study reported increased quit attempts by survey participants after that country enacted large graphic warnings, but found “no association with short-term quit success.” Proposed Rule at 69,532. Some Canadian and Australian studies indicated that large graphic warnings might induce individual smokers to reduce consumption, or to help persons who have already quit smoking remain abstinent. See id. But again, the study did not purport to show that the implementation of large graphic warnings has actually led to a reduction in smoking rates. FDA’s reliance on this questionable social science is unsurprising when we consider the raw data regarding smoking rates in countries that have enacted graphic warnings. FDA claims that Canadian national survey data 26 suggest that graphic warnings may reduce smoking rates. But the strength of the evidence is underwhelming, making FDA’s claim somewhat misleading. In the year prior to the introduction of graphic warnings, the Canadian national survey showed that 24 percent of Canadians aged 15 or older smoked cigarettes. In 2001, the year the warnings were introduced, the national smoking rate dropped to 22 percent, and it further dropped to 21 percent in 2002. Id. at 69,532. But the raw numbers don’t tell the whole tale. FDA concedes it cannot directly attribute any decrease in the Canadian smoking rate to the graphic warnings because the Canadian government implemented other smoking control initiatives, including an increase in the cigarette tax and new restrictions on public smoking, during the same period. Id. Although FDA maintains the data “are suggestive” that large graphic warnings “may” reduce smoking consumption, id., it cannot satisfy its First Amendment burden with “mere speculation and conjecture.” Rubin, 514 U.S. at 487. FDA’s Regulatory Impact Analysis (“RIA”)14 essentially concedes the agency lacks any evidence showing that the graphic warnings are likely to reduce smoking rates. One way in which the RIA analyzed the expected benefits of the Rule was by comparing the impact of similar warnings introduced in Canada in 2000. See Final Rule at 36,719-20. It (1) analyzed the change in smoking trends in Canada before and after 2000; (2) assumed any difference in the post-2000 change between Canada and the United States was solely attributable to the introduction of graphic warnings; and (3) 14 Such an analysis is required under Executive Order 12866, 58 Fed. Reg. 51,735 (Sept. 30, 1993), which directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select the approach that maximizes net benefits. 27 assumed similar warnings would have an identical impact on U.S. smoking rates. See id. at 36,755. Describing its approach as “rudimentary,” FDA acknowledged that apart from differences in cigarette taxes, the RIA “d[id] not account for potential confounding variables,” id. at 36,720-21, such as the introduction of more stringent smoking bans and advertising restrictions in Canada during the relevant time period, or the fact that Canadian cigarette prices are generally higher than U.S. prices. Plaintiffs’ Comment Letter on Proposed Rule (Jan. 11, 2010) and Statement of Robert S. Maness. Logic dictates that these procedural shortcuts would, if anything, lead to an overly optimistic prediction of the efficacy of the proposed graphic warnings. Not so. The RIA estimated the new warnings would reduce U.S. smoking rates by a mere 0.088%, Final Rule at 36,721, a number the FDA concedes is “in general not statistically distinguishable from zero.” Id. at 36,776. Indeed, because it had access to “very small data sets,” FDA could not even reject the statistical possibility that the Rule would have no impact on U.S. smoking rates. Id. FDA has thus presented us with only two studies that directly evaluate the impact of graphic warnings on actual smoking rates, and neither set of data shows that the graphic warnings will “directly” advance its interest in reducing smoking rates “to a material degree.” Rubin, 514 U.S. at 487. And one of the principal researchers on whom FDA relies recently surveyed the relevant literature and conceded that “[t]here is no way to attribute . . . declines [in smoking] to the new health warnings.” David Hammond, Health Warnings Messages on Tobacco Products: A Review, 20 Tobacco Control 327, 331 (2011), available at http://tobaccocontrol.bmj.com/content/20/5/327.full.pdf. In 28 light of the number of foreign jurisdictions that have enacted large graphic warning labels, the dearth of data reflecting decreased smoking rates in these countries is somewhat surprising, and strongly implies that such warnings are not very effective at promoting cessation and discouraging initiation. While APA review of final agency action is deferential, it surely does not require us to accept a flawed interpretation of Canadian survey data or the agency’s own projected 0.088% decrease in the U.S. smoking rate as “substantial evidence” that its warnings will advance its stated interest. FDA attempts to downplay the significance of the RIA by explaining that it “must be included in all federal rulemaking to improve the internal management of the Federal Government,” and that it “was not intended to second-guess Congress’s judgment regarding the value of new health warnings.” Pet. Reply Br. at 15-16.15 FDA attempts to rehabilitate its findings by noting the analysis made only the “unremarkable point” that it is “difficult [to] determine with statistical precision the relative causal impact of the relevant contributing factors,” particularly given the very small data sets to which FDA had access. Id. at 16. But FDA cannot get around the First Amendment by pleading incompetence or 15 FDA also urges us to defer to Congress’s judgment regarding the efficacy of the graphic warnings. See Turner Broad. Sys., Inc. v. FCC, 520 U.S. 180, 196 (1997). But deference is only warranted where Congress “base[s] its conclusions upon substantial evidence,” id., and Congress’s predictive judgments are not “insulated from meaningful judicial review.” Turner, 512 U.S. at 666. Deference is not appropriate here, because we find little evidence showing that the graphic warnings will advance the stated purpose of the statute—“promot[ing] cessation to reduce disease risk and the social costs associated with tobacco-related diseases.” Act. § 3.9. 29 futility. Because FDA bears the burden of justifying its proposed restraint on speech, it cannot claim—rather perversely—that its own analysis was irrelevant because it lacked precision and was based on insufficient data. Central Hudson requires FDA to find and present data supporting its claims prior to imposing a burden on commercial speech. Alternatively, FDA asserts an interest in “effectively communicating health information” regarding the negative effects of cigarettes. Appellant’s Br. at 28. But as FDA concedes, this purported “interest” describes only the means by which FDA is attempting to reduce smoking rates: “[t]he goal of effectively communicating the risks of cigarette smoking is, of course, related to the viewer’s decision to quit, or never to start, smoking.” Id. at 47. The government’s attempt to reformulate its interest as purely informational is unconvincing, as an interest in “effective” communication is too vague to stand on its own. Indeed, the government’s chosen buzzwords, which it reiterates through the rulemaking, prompt an obvious question: “effective” in what sense? Allowing FDA to define “effectiveness” however it sees fit would not only render Central Hudson’s “substantial interest” requirement a complete nullity, but it would also eviscerate the requirement that any restriction “directly advance” that interest. See 447 U.S. at 566. In this case, both the statute and the Rule offer a barometer for assessing the effectiveness of the graphic warnings—the degree to which they encourage current smokers to quit and dissuade would-be smokers from taking up the habit. See Final Rule at 36,630, 36,707-08. As such, FDA’s interest in “effectively communicating” the health risks of smoking is merely a description of the means by which it plans to accomplish its goal of reducing smoking 30 rates, and not an independent interest capable of sustaining the Rule.16