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From Products Liability Law Daily, November 2, 2016

State laws regulating e-cigarettes preempted by new FDA regulations

By Georgia D. Koutouzos, J.D.

Claims in a lawsuit against tobacco products manufacturers under the consumer-protection laws of California, Illinois, and New York asserted by five individuals on behalf of a class of similarly situated consumers of e-cigarettes were preempted by regulations governing those devices promulgated in May 2016 by the U.S. Food and Drug Administration, a California federal court ruled, dismissing all but one of the putative class representatives’ claims (In re Fontem US, Inc. Consumer Class Action Litig., November 1, 2016, Selna, J.).

A group of individuals purporting to represent similarly situated consumers of e-cigarettes filed suit against various tobacco products manufacturers, alleging state consumer-protection violations under the laws of California, Illinois, and New York. The tobacco company’s motion to dismiss on primary jurisdiction grounds initially was denied without prejudice, with the court at that time contemplating the possibility that the U.S. Food and Drug Administration would issue regulations ultimately precluding the plaintiffs’ claims.

Thereafter, FDA promulgated a final rule in May 2016 which concluded that e-cigarettes are deemed to be "tobacco products" and fall under the agency’s authority to regulate tobacco products. As of the rule’s August 8, 2016 effective date, the newly deemed tobacco products—including e-cigarettes—are subject to certain Food, Drug, and Cosmetic Act requirements related to cigarettes and other tobacco products, as well as "additional provisions" such as a minimum-age-for-purchase requirement, a prohibition (subject to certain conditions) on vending-machine sales, and a requirement for health warnings for product packages and advertisements.

The final rule also addresses preemption. During the comment period on the proposed regulations, competing comments sought an explicit statement by the FDA that the regulations’ warning requirements did, or did not, preempt state and local warning requirements. The agency declined to make such a comment, but did state that "[n]o State or local laws in effect at the close of the public comment period were identified that FDA determined would be preempted by this final rule."

The parties’ contentions. The tobacco companies argued that by deeming e-cigarettes a "tobacco product," FDA made e-cigarettes subject to the Family Smoking Prevention and Tobacco Control Act’s ("TCA") provision regarding the preemption of state requirements pertaining to tobacco products. The preemption provision draws a bright line around activity that can be performed by the agency alone, the companies asserted, adding that the specific prohibition of state requirements different from or in addition to requirements relating to "tobacco product standards" and "labeling" meant that all claims in the putative class members’ complaint are preempted by federal law.

The class representatives countered that controlling authorities’ analysis of similar preemption provisions, the TCA’s preservation and savings clause, and FDA’s analysis of its own regulation mandated a conclusion that the federal statute and the FDA regulations do not preempt state-law warning requirements and, as such, the tobacco companies’ motion to dismiss should be denied.

Preemption. The clear and unambiguous language of the TCA’s preemption provision bars states from requiring any particular "labeling" of tobacco products. According to the definitions used throughout the Federal Food, Drug, and Cosmetic Act, "labeling" means "all labels and other written, printed, or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article." Moreover, the term "label" means "a display of written, printed, or graphic matter upon the immediate container of any article; and a requirement made by or under authority of this chapter that any word, statement, or other information appear on the label shall not be considered to be complied with unless such word, statement, or other information also appears on the outside container or wrapper, if any there be, of the retail package of such article, or is easily legible through the outside container or wrapper."

In its May 2016 action, FDA promulgated a "labeling" requirement for e-cigarettes. The agency’s required warning statement regarding addictiveness of nicotine specifically says that the required warning statement must be on the package label. The final rule also prescribes visibility, font, and size requirements for the warning. In that regard, the types of requirements contained in the regulation are very similar to the warning requirements for cigarettes and smokeless tobacco. As such, state labeling requirements applicable to e-cigarettes that are "different from, or in addition to" FDA’s requirements are preempted.

TCA savings clause. Furthermore, there was no merit to the class representatives’ argument that the claims were exempted from preemption because they were based on use or exposure. While any requirement relating to "labeling" is preempted by the TCA, but requirements relating to "exposure to" or "use of" tobacco products are exempted from preemption under the Act’s savings clause, the case at bar was not solely about exposure to, or use of, tobacco products. Each of the seven counts in the amended complaint related to disclosure of information about, rather than the use of, tobacco products, and the class representatives’ efforts to argue that the state consumer-protection statutes regarding representations and omissions on labels actually were claims regarding the use of exposure to tobacco products wholly ignored the very nature of those claims.

California Proposition 65-based claim. That said, the claim for violation of unfair competition law premised on violations of California’s Proposition 65 warranted further consideration because relevant precedent from the U.S. Court of Appeals for the Ninth Circuit specifically held that the warning requirements of Proposition 65 do not necessarily constitute additional labeling. Consequently, the claim premised on Proposition 65 was not preempted, because there are methods of compliance with Proposition 65 that do not constitute "labeling" as the term is used in the TCA.

Finally, contrary to the class representatives’ argument that FDA had expressly determined that the TCA and the agency’s May 2016 regulations do not preempt warning requirements such as the claims of their complaint, the agency’s answer to comments requesting a statement regarding preemption merely referred back to the TCPA, stated that a state or local statute is facially preempted only if no set of circumstances exists under which the statute would be valid, and that no state or local laws were identified that FDA determined would be preempted by the final rule. As contended by the tobacco companies, this amounted to a statement that FDA did not find preemption or non-preemption—which was consistent with the finding that the Proposition 65 claim was not preempted.

Accordingly, with the exception of the claim for a violation of the UCL by virtue of violation of Proposition 65, all of the putative class representatives’ claims were dismissed with prejudice as preempted by the FDA final rule and the TCA.

The case are Nos. SACV 15-01026 JVS (RAOx) and SACV 15-02018 JVS (RAOx).

Attorneys: Brian D. Chase (Bisnar Chase Personal Injury Attorneys) for Larry Diek. Allan Gabriel (Dykema Gossett LLP) for LOEC Inc., Fontem US, Inc. and Fontem Holdings 4 BV.

Companies: LOEC Inc.; Fontem US, Inc.; Fontem Holdings 4 BV

MainStory: TopStory PreemptionNews TobaccoProductsNews CaliforniaNews

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