FDA Lawsuit Update

Here is a quick update on the ongoing lawsuit involving the cigar industry's challenge to the FDA's regulation of premium cigars. 

Previously, Judge Mehta ruled in favor of the cigar industry, exempting premium cigars from certain FDA regulations such as testing requirements, user fees, and restrictions on retail promotions and charitable donations. This ruling was based on the finding that the FDA had not properly evaluated public comments before enacting the deeming rule.

Since then, the Department of Justice (DOJ), representing the FDA, has filed an appeal. This appeal does not dispute Judge Mehta’s core finding but focuses on two main arguments:

1. The FDA believes there is a public health justification for regulating premium cigars.

2. If the court finds flaws in the FDA's process, the appropriate remedy should be to remand the matter to the FDA without vacating the rule entirely, allowing the FDA to address the identified issues.

The appeal process has seen some delays. The District Court vacated the rule for premium cigars on Aug. 9, 2023 after which the government waited 50 days to announce its appeal. It then immediately requested an extension for its own filing, which was granted on Dec. 20, 2023. This was then followed by the cigar extension requesting and being granted an extension on its filing. 

Recently, the DOJ submitted its latest brief, which largely reiterates previous points and now accuses the cigar industry of misrepresenting the implications of overturning Mehta’s ruling, particularly regarding testing and manufacturing standards. It's important to note that while the FDA has delayed testing requirements for premium cigars, this delay was linked to the ongoing lawsuit.

If the FDA were to win the appeal, the proposed manufacturing standards wouldn't take effect immediately, as they are not finalized. These standards would apply to factories that produce both premium and non-premium cigars, such as La Aurora Cigar Factory and La Gran Fábrica Drew Estate. 

The next step in the law suit would be Oral Arguments. Oral arguments for this appeal have not been scheduled yet and are unlikely to take place before August due to the court's summer schedule.

This ongoing process highlights the type of uncertainty around the regulation of premium cigars. For now, premium cigars still remain exempt from certain FDA regulations thanks to Judge Mehta's ruling. Ultimately, the FDA has made clear that it plans on attempting to further regulate premium cigars at some point.

We will continue to monitor this case and provide updates as they become available.