A Big Win For The Cigar Industry

Last week a very important court ruling took place in the Cigar Association of America et al. v. United Stated Food and Drug Administration et al lawsuit. As we have covered in the past here this lawsuit could potentially have a dramatic impact on the future of the cigar industry. This lawsuit was in response to the FDA’s Deeming Regulations from 2016.

In the most recent ruling, Judge Amit P. Mehta ruled that the FDA did not properly follow the requirements of the Administrative Procedures Act (that govern how the FDA creates new regulations). This is because the FDA simply ignored the fact that there was data to be examined in regards to Premium Cigar usage.  After ignoring this data, they chose to regulate all cigars the same (despite having the option to treat premium cigars differently).

Judge Mehta wrote in his ruling:

“In the end, instead of addressing the relevant data before it, the agency resorted to a common refrain to obscure the issue: “[T]here were no data provided to support the premise that there are different patterns of use of premium cigars and that these patterns result in lower health risks.” 81 Fed. Reg. at 29,020. That statement was not accurate then, and despite litigation counsel’s efforts, it is not accurate now. Where, as here, an agency speaks in absolute terms that there is no evidence, it acts arbitrarily and capriciously when there is in fact pertinent record evidence and the agency ignores or overlooks it.”

The most factor in this lawsuit is that Judge Mehta agreed that the FDA never seriously considered the option of regulating premium cigars differently than other cigars despite having data that demonstrated there were significant differences. However, it was not a clean sweep for the Cigar Industry…Judge Mehta did rule that the FDA was not required to do a specific cost-benefit analysis of premium cigars differently.

What does it mean?

As of right now, nothing changes. Neither side had prepared briefs on what should happen next, and Judge Mehta has asked the two sides to meet at a future time to discuss what the future looks like. The most important next step will be to define what a “premium cigar” is. In the past Judge Mehta has referenced a definition proposed by the FDA that would include almost all cigars currently in our humidor (but not flavored cigars). However, this does not ensure that this will be the case moving forward.

As we have covered, recent studies have shown a significant difference in premium cigars when compared to cigarettes and other forms of tobacco use. This most recent ruling builds even more momentum for the cigar industry. While he has a few options, Judge Mehta might decide that the FDA must rewind and consider regulating “premium cigars” differently or he might throw out the deeming rules for premium cigars all together. This would by and large deregulate premium cigars, clearing the way for investment into new brands and new cigar releases.

With the evidence on their side, things are looking up for the future of the cigar industry!