Court Opinion

ID: 4638440
Source: CourtListenerOpinion
Date Created: 2020-12-01 16:00:40.7175+00
Date Added: 2024-06-11T07:58:48.555602
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 23, 2020         Decided December 1, 2020

                        No. 20-5048

                   MOOSE JOOCE, ET AL.,
                      APPELLANTS

                             v.

          FOOD & DRUG ADMINISTRATION, ET AL.,
                     APPELLEES

            Consolidated with 20-5049, 20-5050

        Appeals from the United States District Court
                for the District of Columbia
                    (No. 1:18-cv-00203)
                    (No. 1:18-cv-01615)
                    (No. 1:19-cv-00372)

     Jonathan Wood argued the cause for appellants. With him
on the briefs were Damien M. Schiff and Oliver Dunford.

    Lindsey Powell, Attorney, U.S. Department of Justice,
argued the cause for appellees. With her on the brief were
Mark B. Stern and Joshua Revesz, Attorneys, Robert P.
Charrow, General Counsel, U.S. Department of Health and
                               2
Human Services, and Peter G. Dickos, Associate Chief
Counsel, Food and Drug Administration.

   Before: ROGERS and PILLARD, Circuit Judges, and
SENTELLE , Senior Circuit Judge.

    Opinion of the Court by Circuit Judge ROGERS.

     ROGERS, Circuit Judge: Less than a year ago, the court
rejected three challenges by an e-cigarette manufacturer and
distributor, and an e-cigarette industry group to a rule deeming
e-cigarettes to be “tobacco products” subject to regulation
under the Family Smoking Prevention and Tobacco Control
Act, Pub. L. No. 111-31, 123 Stat. 1776 (2009) (“the Act”). In
Nicopure Labs, LLC v. FDA, 944 F.3d 267, 271 (D.C. Cir.
2019), the court held that it was “entirely rational and
nonarbitrary [for the Food and Drug Administration (“FDA”)]
to apply to e-cigarettes the Act’s baseline requirement that,
before any new tobacco product may be marketed, its
manufacturer show the FDA that selling it is consistent with
the public health.” The court also rejected First Amendment
objections to the Act’s barring of claims that e-cigarettes are
safer than existing products absent such a demonstration and
ban on the distribution of free e-cigarette samples. Id. at 272.
Now other e-cigarette manufacturers and retailers, and a
nonprofit organization focused on tobacco harm reduction raise
two constitutional challenges to the rule. Under this court’s
precedents, their Appointments Clause challenge lacks merit
and their First Amendment challenge is foreclosed.
Accordingly, we affirm the grant of summary judgment to the
FDA.
                               3
                               I.
     The Act authorizes the Secretary of the Department of
Health and Human Services to regulate the manufacture, sale,
and distribution of tobacco products. It permits the Secretary
to deem products to be “tobacco products” subject to the Act’s
requirements. 21 U.S.C. § 387a(b) (2018). One such
requirement is the preclearance pathway for manufacturers
seeking to market a “modified risk tobacco product,” defined
as “any tobacco product that is sold or distributed for use to
reduce harm or the risk of tobacco-related disease associated
with commercially marketed tobacco products.”                Id.
§ 387k(b)(1). Under the Act, a modified risk tobacco product
may be commercially marketed only if the Secretary
determines that the manufacturer has demonstrated that the
product, as actually used by consumers, meets two
requirements. Id. § 387k(g)(1).          First, the product will
“significantly reduce harm and the risk of tobacco-related
disease to individual tobacco users.” Id. § 387k(g)(1)(A).
Second, it will “benefit the health of the population as a whole
taking into account both users of tobacco products and persons
who do not currently use tobacco products.” Id.
§ 387k(g)(1)(B).

     The Secretary of the Department delegated rulemaking
authority to the FDA Commissioner. See, e.g., FDA Staff
Manual Guide § 1410.10 (Aug. 26, 2016); id. § 1410.10 (Nov.
17, 2015). The FDA Commissioner, in turn, redelegated
rulemaking authority to the FDA Associate Commissioner for
Policy. See id. § 1410.21(1)(G) (July 5, 2012). According to
the 2012 FDA Staff Manual Guide, the Associate
Commissioner for Policy had the authority to “perform any of
the functions of the Commissioner with respect to the issuance
of [Federal Register] notices and proposed and final regulations
of the Food and Drug Administration.” Id.
                               4
     In April 2014, the FDA published a proposed rule to deem
e-cigarettes, among other items, “tobacco products” under the
Act. See 79 Fed. Reg. 23,142, 23,143 (Apr. 25, 2014). The
comment period was extended until August 8, 2014. See id. at
35,711 (June 24, 2014). After considering comments, FDA
Associate Commissioner for Policy Leslie Kux promulgated a
rule in May 2016 that deemed e-cigarettes to be “tobacco
products” subject to the Act’s requirements. See Deeming
Products To Be Subject to the Federal Food, Drug, and
Cosmetic Act, as Amended by the Family Smoking Prevention
and Tobacco Control Act, 81 Fed. Reg. 28,974, 28,976 (May
10, 2016) (codified at 21 C.F.R. §§ 1100, 1140, 1143)
(“Deeming Rule”).

     On January 30, 2018, appellants sued the FDA challenging
the Deeming Rule under the Appointments Clause and the First
Amendment of the Constitution. The district court, exercising
its discretion to consider the Appointments Clause challenge
even though it was not raised during the rulemaking, granted
summary judgment to the FDA. Appellants appeal, and our
review is de novo, see Mayo v. Reynolds, 875 F.3d 11, 19 (D.C.
Cir. 2017).

                              II.

    The Appointments Clause requires that “all . . . Officers of
the United States” be appointed by the President “by and with
the Advice and Consent of the Senate.” U.S. CONST. art. II, §
2, cl. 2. “This requirement is the ‘default manner of
appointment,’ Edmond v. United States, 520 U.S. 651, 660, 117
S. Ct. 1573, 137 L.Ed.2d 917 (1997), with the only exception
being that Congress may vest the appointment of ‘inferior
Officers’ in ‘the President alone,’ ‘Courts of Law,’ and ‘the
Heads of Departments,’ U.S. CONST . art. II, § 2, cl. 2.” Guedes
                                5
v. Bureau of Alcohol, Tobacco, Firearms & Explosives, 920
F.3d 1, 11 (D.C. Cir. 2019).

     Appellants contend that the position of Associate
Commissioner for Policy may be filled by only a properly
appointed officer of the United States, and that Kux was not
appointed as either an inferior or principal officer. They
maintain that Kux’s issuance of the Deeming Rule was
consequently in violation of the Appointments Clause and void
ab initio. See Appellants’ Br. 49–60. The FDA rejects the
challenge to Kux’s authority and points further to ratifications
of the Deeming Rule by FDA Commissioners Robert Califf
and Scott Gottlieb. Either ratification, it maintains, suffices to
render the Rule constitutional. See Appellees’ Br. 16–27, 31–
38.

      “Ratification occurs when a principal sanctions the prior
actions of its purported agent.” Doolin Sec. Sav. Bank, F.S.B.
v. Office of Thrift Supervision, 139 F.3d 203, 212 (D.C. Cir.
1998) (citing RESTATEMENT (SECOND ) OF AGENCY § 82
(1958)), superseded by statute on other grounds, Federal
Vacancies Reform Act of 1998, Pub. L. No. 105-277, 112 Stat.
2681 (1998) (codified at 5 U.S.C. §§ 3345 to 3349d), as this
court recognized in Guedes, 920 F.3d at 13. This court has
repeatedly recognized that ratification can remedy a defect
arising from the decision of an improperly appointed official,
such as the alleged defect arising from the issuance of the
Deeming Rule by Associate Commissioner for Policy Kux.
Wilkes-Barre Hosp. Co., LLC v. NLRB, 857 F.3d 364, 371
(D.C. Cir. 2017) (citing Intercollegiate Broad. Sys., Inc. v.
Copyright Royalty Bd., 796 F.3d 111, 117–21, 124 (D.C. Cir.
2015)). Even assuming for purposes of argument, as appellants
object, that Kux’s issuance of the Deeming Rule violated the
Appointments Clause and that Commissioner Califf’s general
ratification of prior actions by the FDA as part of an agency
                               6
reorganization was invalid, Commissioner Gottlieb’s
ratification cured any Appointments Clause defect.

                               A.

     On April 3, 2019, noting that the “authority under which
the Deeming Rule was issued has been questioned in
litigation,” then-FDA Commissioner Scott Gottlieb stated: “To
resolve these questions, I hereby affirm and ratify the Deeming
Rule as of the date it was published in the Federal Register on
May 10, 2016, including all regulatory analysis certifications
contained therein.” Ratification of the Deeming Rule, 81 Fed.
Reg. 28,974 (May 10, 2016) (signed by Scott Gottlieb, M.D.,
on Apr. 3, 2019). He specified: “I undertake this action based
on my careful review of the rule, my knowledge of its
provisions, and my close involvement in policy matters relating
to this rule and its implementation, as well as its public health
importance.” Id.

     Appellants’ challenges to the effectiveness of
Commissioner Gottlieb’s ratification fail. They maintain that
Commissioner Gottlieb lacked the authority to ratify the
Deeming Rule after they filed suit in federal district court.
Even assuming this challenge is not forfeited by their failure to
raise it in the district court, see Salazar ex rel. Salazar v.
District of Columbia, 602 F.3d 431, 437 (D.C. Cir. 2010),
appellants fail to distinguish FEC v. Legi-Tech, Inc., 75 F.3d
704, 707–09 (D.C. Cir. 1996), where the court held that the
Federal Election Commission effectively ratified its prior
actions even though its ratification occurred after Legi-Tech
alleged an Appointments Clause violation.

    Appellants further maintain that “Commissioner Gottlieb
lacked the power to issue the Deeming Rule in April 2019
because to do so would have been arbitrary and capricious.”
                                7
Appellants’ Br. 28. In appellants’ view, for ratification to be
effective, a ratifying party “should be able not merely to do the
act ratified at the time the act was done, but also at the time the
ratification was made.” Id. (quoting FEC v. NRA Political
Victory Fund, 513 U.S. 88, 98 (1994)). Relying on Butte
County v. Hogen, 613 F.3d 190 (D.C. Cir. 2010), for the
proposition that administrative officials must consider new
evidence in order to make non-arbitrary, reasoned decisions,
appellants note that during the nearly three years between the
Deeming Rule’s issuance and Commissioner Gottlieb’s
ratification, “dozens of public comments submitted to FDA had
pointed the Commissioner to a wealth of new evidence
regarding the benefits of vaping to public health.” Appellants’
Br. 30. Butte County does not advance appellants’ position. In
that case, the agency failed to consider a report that was
submitted while the “issue was still pending before the
Secretary.” Butte County, 613 F.3d at 195. Here, the
rulemaking record closed in 2016 and consequently
Commissioner Gottlieb had no such obligation to consider new
evidence in 2019.          Therefore, it was not arbitrary and
capricious for him to ratify the Deeming Rule without
considering the new evidence that appellants reference.

     Furthermore, nothing in the record indicates that
Commissioner Gottlieb, when he ratified the Deeming Rule,
failed “to conduct an independent evaluation of the merits,”
Intercollegiate Broadcasting, 796 F.3d at 117, or to make “a
detached and considered judgment,” Doolin Sec., 139 F.3d at
213. Nor do appellants suggest that Commissioner Gottlieb
was “actually biased.” Legi-Tech, 75 F.3d at 709.

      Because Commissioner Gottlieb effectively ratified the
Deeming Rule, the court need not consider appellants’
Appointments Clause objections to Commissioner Califf’s
ratification or to Associate Commissioner for Policy Kux’s
                               8
issuance of the Rule. Given that the Act does not mandate
administrative exhaustion as a prerequisite to judicial review,
the court also need not address the FDA’s alternative
contention that appellants forfeited their Appointments Clause
claim by failing to raise it before the agency. See Darby v.
Cisneros, 509 U.S. 137, 147 (1993); 21 U.S.C. § 387l (2018).

                                   B.

      Notwithstanding Commissioner Gottlieb’s effective
ratification, appellants contend that Appointments Clause
violations are per se harmful, not curable by ratification, and
so the court should consider the merits of their challenge to the
Deeming Rule and the asserted “continuing prejudice” they
suffer. Appellants’ Br. 41–46. They suggest that a different
notice-and-comment process might “affect the contents or even
the existence of a new Deeming Rule” in view of the “new
evidence accumulated since the Deeming Rule’s issuance” and
the “FDA’s post-promulgation guidances . . . [that] have
effectively, though only informally, eased some of the original
Deeming Rule’s effects.” Id. at 42–45. In Legi-Tech, 75 F.3d
at 708–09, this court rejected the view that prejudice must be
presumed for Appointments Clause violations. Subsequently,
in Intercollegiate Broadcasting, 796 F.3d at 124, the court
emphasized that “not every possible kind of taint is fatal” and
that “speculative taint” such as the possibility that an invalid
action was subsequently affirmed “simply out of agency
solidarity” is insufficient.

    Appellants demonstrate no “continuing prejudice.” In the
preamble to the Rule, the FDA acknowledged that there was
uncertainty about the health effects of e-cigarettes, but
concluded that the regulation of e-cigarettes “will still benefit
public health” even if e-cigarettes “may eventually be shown
to have a net benefit on or harm to public health at the
                               9
population level.” Deeming Rule, 81 Fed. Reg. 28,974, 28,984
(May 10, 2016). Absent record evidence of continuing
prejudice, the court will take Commissioner Gottlieb’s
ratification “at face value and treat it as an adequate remedy.”
Wilkes-Barre Hosp., 857 F.3d at 372 (quoting Legi-Tech, 75
F.3d at 709).

      Contrary to appellants’ suggestion that ratification of an
action “merely moots an Appointments Clause claim, and the
voluntary cessation exception to mootness applies,”
Appellants’ Br. 46, this court has “repeatedly held that a
properly appointed official’s ratification of an allegedly
improper official’s prior action, rather than mooting the claim,
resolves the claim on the merits by ‘remedy[ing] [the] defect’
(if any) from the initial appointment.” Guedes, 920 F.3d at 13
(quoting Wilkes-Barre Hosp., 857 F.3d at 371). Commissioner
Gottlieb’s ratification, for the reasons discussed, cured any
potential Appointments Clause defect arising from Associate
Commissioner for Policy Kux’s issuance of the Deeming Rule.

                              II.

     Appellants further challenge the Act’s preclearance
pathway for modified risk tobacco products, which the
Deeming Rule makes applicable to e-cigarettes, as violative of
the First Amendment. This challenge is foreclosed by
Nicopure Labs, LLC, 944 F.3d 267. There, the court found
unpersuasive the objection that appellants make now, namely
that the Deeming Rule violates the First Amendment because
it places the burden on manufacturers to show that certain of
their marketing claims are truthful and not misleading before
they make them. See id. at 282–90; Appellants’ Br. 60–64.
The court sustained the preclearance pathway even when
applied to modified-risk statements that manufacturers insist
are “accurate” — such as claims that e-cigarettes contain less
                              10
of or are free of specified ingredients — because “modified risk
claims that might be technically accurate if viewed in isolation
are in fact often misunderstood by consumers.” Id. at 287.

     Accordingly, we affirm the grant of summary judgment to
the FDA.