Briefing Report: Laptops, Cell Phones, and... E-Cigarettes?

Wednesday, February 3, 2010

Introduction

While it may not have been introduced with the fanfare of the iPhone, the latest gadget available to consumers is the electronic cigarette (E-cigarette). According to the U.S. Food and Drug Administration (FDA), E-cigarettes are battery-operated devices that generally contain cartridges filled with nicotine, flavor, and other chemicals. The E-cigarette turns nicotine, which is highly addictive, and other chemicals into a vapor that is inhaled by the user.1

Regulators, legislators, and distributors have had differing opinions regarding how, or even if, E-cigarettes should be regulated. However, a recent development in a federal court case challenging the FDA’s ability to regulate E-cigarettes sheds some light on this question.

Background

On April 28, 2009, Smoking Everywhere, Inc. (SE), a distributor that imports E-cigarettes from overseas manufacturers, filed suit in U.S. District Court against the FDA and the U.S. Department of Health and Human Services seeking “to stop the FDA from improperly exceeding its delegated authority by attempting to regulate electronic cigarettes – electronic products that are derived from tobacco and allow a user to inhale a liquid nicotine vapor for the purpose of ‘smoking’ pleasure. The FDA has further exceeded its improperly delegated authority by adding, without opportunity for public notice and comment, electronic cigarettes to an FDA ‘import alert,’ which alerts FDA field offices and the United States Customs and Border Protection (USCBP) to the attempted entry of certain products into the United States. The FDA’s conduct is ultra vires of its authority under the Food, Drug, and Cosmetic Act (FDCA), and by failing to engage in mandatory public notice and opportunity for comment, the FDA’s conduct further violates the notice and comment procedures [of the Administrative Procedures Act (APA)].”2

SE’s action arises from the FDA’s decision to detain multiple inbound shipments of E-cigarettes belonging to SE and another distributor. In SE’s case, the FDA issued a hold on two shipments that arrived at Los Angeles International Airport in late September 2008. On October 29, 2008, the FDA issued notices of detention on the grounds that the shipments appeared to be adulterated, misbranded, or otherwise in violation of the FDCA. After an exchange of information about the shipments between the FDA and SE, FDA issued correspondence dated December 23, 2008 stating its conclusion that the E-cigarettes and their component parts appear to be intended to affect the structure or function of the body, and to prevent, mitigate, or treat the withdrawal symptoms of nicotine addiction. Thus, according to the FDA, the product appears to be an unapproved drug-device combination under the FDCA. Based on this conclusion, the FDA issued “Refusal of Admission” notices on March 16, 2009 that directed the products to be either exported or destroyed within 90 days. A short time later, the FDA added E-cigarettes manufactured by three Chinese companies to an “Import Alert,” a directive that authorizes FDA district offices to detain any unapproved and/or misbranded drug listed on the alert.3

As the lawsuit was moving forward, an important related development occurred. On June 22, 2009, President Obama signed the Family Smoking Prevention and Tobacco Control Act of 2009 (Tobacco Act). The legislation gives FDA the authority to regulate tobacco products. At the signing ceremony, the president stated, “This legislation will not ban all tobacco products, and it will allow adults to make their own choices. But it will also ban tobacco advertising within a thousand feet of schools and playgrounds. It will curb the ability of tobacco companies to market products to our children by using appealing flavors. It will force these companies to more clearly and publicly acknowledge the harmful and deadly effects of the products they sell. And it will allow the scientists at the FDA to take other common-sense steps to reduce the harmful effects of smoking.”4

Decision

On January 14, 2010, U.S. District Judge Richard J. Leon granted a preliminary injunction, pending a final disposition of the case, ordering the FDA to “not detain or refuse admission into the United States Smoking Everywhere’s electronic cigarette products on the ground that those products are unapproved drugs, devices, or drug-device combinations under the Food, Drug, and Cosmetic Act.”5

In the memorandum opinion accompanying the order, Judge Leon states, “FDA says that the electronic cigarettes marketed by plaintiffs are a drug-device combination and should therefore be excluded from the Tobacco Act’s definition of ‘tobacco product’ because the labeling and promotional materials ‘represent and suggest that the product will provide the same drug effects as cigarettes.’ Because plaintiff’s electronic cigarettes are to be used, like conventional cigarettes, as a means for delivering nicotine and because consumers and scientists widely believe that nicotine has drug-like effects, FDA contends that plaintiffs’ electronic cigarettes are intended to affect the structure or function of the body.6 As a result, they qualify as a drug-device combination, not as a tobacco product. Put simply, this argument is bootstrapping run amok...”

Leon continues, “…Against this backdrop, the Tobacco Act reflects Congress’s intent to undo what it had earlier ratified. No longer will FDA lack jurisdiction over tobacco products as customarily marketed. Congress enacted the Tobacco Act to confer FDA jurisdiction over any tobacco product – whether traditional or not – that is sold for customary recreational use, as opposed to therapeutic use. As such, the Tobacco Act, in effect, serves an implicit acknowledgement by Congress that FDA’s jurisdiction over drugs and devices does not, and never did, extend to tobacco products, like electronic cigarettes, that are marketed in customary fashion for purely recreational purposes.”

The judge concludes, “This case appears to be yet another example of FDA’s aggressive efforts to regulate recreational tobacco products as drugs or devices under the FDCA. Ironically, notwithstanding that Congress has now taken the unprecedented step of granting FDA jurisdiction over those products, FDA remains undeterred. Unfortunately, its tenacious drive to maximize its regulatory power has resulted in its advocacy of an interpretation of the relevant law that I find, at first blush, to be unreasonable and unacceptable.”7

Reaction

The FDA issued a brief statement in response to the judge’s decision, declaring, “The public health issues surrounding electronic cigarettes are of serious concern to the FDA. The agency is reviewing Judge Leon’s opinion and will decide the appropriate action to take.”8

The Campaign for Tobacco-Free Kids added, “If upheld, Judge Leon’s decision opens a gaping loophole in the protection FDA has provided against the sale and distribution of non-tobacco products that a manufacturer laces with unregulated quantities of nicotine. For years, the FDA has stringently regulated all products containing nicotine when sold to consumers in any form other than a traditional tobacco product because of nicotine’s dangerous and addictive impact.”9

Ray Story, vice president of SE, said the ruling was a victory for smokers who want a safer cigarette. “The public will have a much less harmful alternative to tobacco products. Wherever they’re sold, we are going to be sold.”10

California Actions

Following the regulatory pattern of the FDA, the California Legislature has attempted to impose its own brand of restrictions on E-cigarettes. Last year, Senator Ellen Corbett (D-San Leandro) introduced SB 400, which sought to classify E-cigarettes as a drug for purposes of regulation under California’s Sherman Food, Drug, and Cosmetic Law. Governor Schwarzenegger vetoed the bill, stating, “I cannot sign a measure that also declares them a federally regulated drug when the matter is currently being decided through pending litigation. Items defined as ‘tobacco products’ are legal for anyone over the age of 18. If adults want to purchase and consume these products with an understanding of the associated health risks, they should be able to do so unless and until federal law changes the legal status of these tobacco products.”11

On January 14, 2010, Senator Corbett introduced SB 882, a bill virtually identical to SB 400.

California Attorney General Jerry Brown (AG) has also sought to halt the sale of E-cigarettes. On January 13, 2010, the AG filed a lawsuit against SE which “seeks to prevent the company from selling its products until there is evidence to substantiate its claims that they are safe. The lawsuit will also require the products to display the state-mandated Proposition 65 warnings of ingredients known to cause cancer or reproductive harm and seeks to prevent the company from making false and misleading claims and promoting the products to minors.”12

At this point it is unclear what impact Judge Leon’s ruling will have on the AG’s lawsuit. However, Ray Story of SE believes that the ruling should render this lawsuit moot. Story further stated he believes all laws barring the sale of cigarettes to minors also apply to E-cigarettes.13

Conclusion

As they consider SB 882 and any other legislation that attempts to regulate E-cigarettes, legislators may wish to consider the result of the Smoking Everywhere case as they determine whether legislation is necessary and, if it is, how to craft a bill that isn’t preempted under federal law.

 

Endnotes:

1 FDA news release, July 22, 2009.
2 SE Verified Complaint for Declaratory and Injunctive Relief, April 28, 2009.
3 Memorandum Opinion, Smoking Everywhere, Inc. v. U.S.F.D.A., et al., January 14, 2010.
4 White House press release, June 22, 2010.
5 Order, Smoking Everywhere, Inc. v. U.S.F.D.A., et al., January 14, 2010.
6 This phrase is an essential component of the definition of “drug” contained in the FDCA.
7 Memorandum Opinion, Smoking Everywhere, Inc. v. U.S.F.D.A., et al., January 14, 2010.
8 New York Times, January 15, 2010.
9 Campaign for Tobacco-Free Kids press release, January 14, 2010.
10 New York Times, January 15, 2010.
11 Governor’s veto message for SB 400, October 12, 2009.
12 Attorney General News Release, January 13, 2010.
13 Fresno Bee, January 14, 2010.

For more information on this report or other Health issues , contact Joe Parra, Senate Republican Office of Policy at 916/651-1501.