According to the DC Circuit “FDA cannot get around the First Amendment by pleading incompetence…”

The D.C. Circuit rejects compelled government speech requiring graphic cigarette ads

In R.J. Reynolds v FDA, cigarette manufacturers alleged that government compelled graphic images on cigarette packages violated the First Amendment and the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 553(b)(3), 705, 706(2)(A). 845 F. Supp. 2d 266 (D.D.C. 2012). The Family Smoking Prevention and Tobacco Control Act (“Act” or “the Act”), Pub. L. No. 111-31, 123 Stat. 1776 (2009), gave FDA the authority to regulate the manufacture and sale of tobacco products and directed the FDA to “issue regulations that require color graphics depicting the negative health consequences of smoking.” See Pub. L. No. 111-31, § 201 (a) (amending 15 U.S.C. § 1333(d)) and required cigarette packages bear explicit textual warnings.

In June 2011, the FDA published its Final Rule requiring (among other things) the display of nine new textual warnings and the nine graphic images’ such as diseased lungs and a cadaver bearing chest staples on an autopsy table- on the top 50% of the front and back panels of every cigarette package manufactured and distributed in the United States on or after September 22, 2012. See, FDA, Required Warnings for Cigarette Packages and Advertisements, 76 Fed. Reg. 36,628 (June 22, 2011) (“the Rule”) Final Rule Required Warnings for Cigarette Packages.

FDA proposed a dramatic expansion of the existing health warnings, which it justified based on scientific literature and a “strong worldwide consensus” regarding a great number of countries/jurisdictions that have implemented pictorial warning requirements for tobacco packaging compared to the text-only warnings the United States currently requires. R.J. Reynolds Tobacco Co. v. FDA, No. 11-5332, 2012 U.S. App. LEXIS 17925 at fn3 (D.C. Cir. Aug. 24, 2012) (the “Circuit Court”).

The Circuit Court recognized the general rule “that the speaker has the right to tailor the speech[] applies not only to expressions of value, opinion, or endorsement, but equally to statements of fact the speaker would rather avoid.” R.J. Reynolds, 2012 U.S. App. LEXIS 17925 at *13 (quoting Hurley v. Irish-Am. Gay, Lesbian & Bisexual Grp. of Bos., 515 U.S. 557, 573-74 (1995)). This holds true whether individuals, or corporations are being compelled to speak. See Pac. Gas & Elec. Co. v. Pub. Utils. Comm’n, 475 U.S. 1, 16 (1986) (plurality opinion); W. Va. State Bd. of Educ. v. Barnette, 319 U.S. 624, 642 (1943).

The manufacturers contended that, to the extent the graphic warnings go beyond the textual warnings to shame and repulse smokers and denigrate smoking as an antisocial act, the message is ideological and not informational:

[B]y effectively shouting well-understood information to consumers, they explain, “FDA is communicating an ideological message, a point of view on how people should live their lives: that the risks from smoking outweigh the pleasure that smokers derive from it, and that smokers make bad personal decisions, and should stop smoking.” In effect, the graphic images are not warnings, but admonitions: “[D]on’t buy or use this product.”

R.J. Reynolds, 2012 U.S. App. LEXIS 17925 at *14.

In agreeing with the manufacturers that the images were ideological messages and not informational disclosures, the Circuit Court stated:

No one doubts the government can promote smoking cessation programs; can use shock, shame, and moral opprobrium to discourage people from becoming smokers; and can use its taxing and regulatory authority to make smoking economically prohibitive and socially onerous… But this case raises novel questions about the scope of the government’s authority to force the manufacturer of a product to go beyond making purely factual and accurate commercial disclosures and undermine its own economic interest—in this case, by making “every single pack of cigarettes in the country [a] mini billboard” for the government’s anti-smoking message.

Id. at *14-15.

Significantly, the Court sidestepped the threshold question of whether the packaging and branding even constitutes commercial speech but, for the purposes of its holding, assumed it was commercial speech to address the more salient issue:

Even assuming the Companies’ marketing efforts (packaging, branding, and other advertisements) can be properly classified as commercial speech, and thus subject to less robust First Amendment protections, a thorny question remains: how much leeway should this Court grant the government when it seeks to compel a product’s manufacturer to convey the state’s subjective—and perhaps even ideological—view that consumers should reject this otherwise legal, but disfavored, product?

Id. at *16.

The Circuit Court rejected the FDA’s attempt to rely on Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1986) to support requiring the proposed graphic images stating: “But by its own terms, Zauderer’s holding is limited to cases in which disclosure requirements are “reasonably related to the State’s interest in preventing deception of consumers.” Id. at *19 (quoting 471 U.S. at 651). Zauderer “carries no authority for a mandate unrelated to the interest in avoiding misleading or incomplete commercial messages.” Id. at *19 (quoting Glickman v. Wileman Bros. & Elliot, Inc., 521 U.S. 457, 491 (1996) (Souther, J., dissenting).

The Circuit Court noted that the proposed graphic images could not be justified on other grounds, such as a remedial measure for prior misleading claims, stating:

FDA does not frame this rule as a remedial measure designed to counteract specific deceptive claims made by the Companies, nor did it offer a remedial justification for the graphic warnings during the rulemaking proceeding… FDA has not shown that the graphic warnings were designed to correct any false or misleading claims made by cigarette manufacturers in the past. Nor did it show that absent disclosure, consumers would likely be deceived by the Companies’ packaging in the future. Rather, FDA framed the warnings as general disclosures about the negative health effects of smoking. The warnings thus represent an ongoing effort to discourage consumers from buying the Companies’ products, rather than, as in Warner-Lambert, a measure designed to combat specific deceptive claims.

R.J. Reynolds, 2012 U.S. App. LEXIS 17925 at *26-27.

According to the Circuit Court, the “FDA’s images are a much different animal. FDA concedes that the images are not meant to be interpreted literally, but rather to symbolize the textual warning statements, which provide ‘additional context for what is shown’…” Id. at *28. “They are unabashed attempts to evoke emotion (and perhaps embarrassment) and browbeat consumers into quitting. See Final Rule at 36,697 (“[R]isk information is most readily conveyed by warnings that elicit . . . strong emotional and cognitive reactions . . . .”). Id. at *30. “While none of these images are patently false, they certainly do not impart purely factual, accurate, or uncontroversial information to consumers.” Id.

The Circuit Court recognized that under Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980) the government must show that its asserted interest is “substantial” that the regulation “directly advances the governmental interest asserted,” and that “it is not more extensive than is necessary to serve that interest.” Id. (quoting 447 U.S. at 566). The Circuit Court assumed that the FDA’s interest in reducing smoking rates was substantial, but found that

FDA has not provided a shred of evidence—much less the “substantial evidence” required by the APA—showing that the graphic warnings will “directly advance” its interest in reducing the number of Americans who smoke.”… it is mere speculation to suggest that respondents who report increased thoughts about quitting smoking will actually follow through on their intentions…. Although FDA maintains the data “are suggestive” that large graphic warnings “may” reduce smoking consumption, id., it cannot satisfy its First Amendment burden with “mere speculation and conjecture.”

Id. at *36-37 (quoting Rubin, 514 U.S. at 487).

Highlighting the lack of evidence by the FDA, the Circuit Court noted “FDA could not even reject the statistical possibility that the Rule would have no impact on U.S. smoking rates.” Id. at *40. In its rulemaking FDA had estimated that with the enhanced warnings “the U.S. smoking rate will decrease by 0.212 percentage points” [an amount later reduced to .088] 75 Fed. Reg. 69,543. The FDA admitted the expected “decrease” was “in general not statistically distinguishable from zero.” Id. at 69,546. The Circuit Court further rejected FDA attempts to rehabilitate its findings by noting the analysis made only the “unremarkable point” that it is “difficult [to] determine with statistical precision the relative causal impact of the relevant contributing factors,” particularly given the very small data sets to which FDA had access” stating:

But FDA cannot get around the First Amendment by pleading incompetence or futility. Because FDA bears the burden of justifying its proposed restraint on speech, it cannot claim–rather perversely–that its own analysis was irrelevant because it lacked precision and was based on insufficient data. Central Hudson requires FDA to find and present data supporting its claims prior to imposing a burden on commercial speech.

Id. at *41-42

The Circuit Court was unconvinced by the government’s attempt to reformulate its interest as purely informational, and that the FDA interest in “effective” communication was too vague. In this regard, the Circuit Court stated:

Indeed, the government’s chosen buzzwords, which it reiterates through the rulemaking, prompt an obvious question: “effective” in what sense? Allowing FDA to define “effectiveness” however it sees fit would not only render Central Hudson’s “substantial interest” requirement a complete nullity, but it would also eviscerate the requirement that any restriction “directly advance” that interest. See 447 U.S. at 566….. As such, FDA’s interest in “effectively communicating” the health risks of smoking is merely a description of the means by which it plans to accomplish its goal of reducing smoking rates, and not an independent interest capable of sustaining the Rule.

R.J. Reynolds, 2012 U.S. App. LEXIS 17925 at *43-44.

Since the Supreme Court began shaping its commercial speech doctrine in the 1970s, the courts have slowly moved towards extending First Amendment protections to businesses. The tide is advancing, particularly on the FDA and its ability to both limit what manufacturers may say and, as demonstrated in R.J. Reynolds, what manufacturers are compelled to say.