First Amendment Ban of FDA’s Graphic Cigarette Label Warnings Upheld by the D.C. Circuit

On August 24, 2012, a divided D.C. Court of Appeals (2 to 1) held that the FDA’s proposed label warnings on cigarette packages, which included color graphics depicting the negative consequences of smoking, violated the First Amendment rights of five complaining tobacco companies.  In affirming the decision of the D.C. District Court to grant summary judgment to the tobacco companies, Circuit Judge Brown wrote that the FDA failed to present a shred of evidence, much less “substantial evidence,” showing that their graphic warnings would “directly advance” their asserted goal of  reducing smoking rates among Americans, particularly children and adolescents.  The divided panel, along with differing opinions from the district court and the dissent as to the appropriate level of scrutiny will likely result in en banc and Supreme Court review.

Statutory and Regulatory Background

The Family Smoking Prevention and Tobacco Control Act (FSPTCA), Pub. L. No. 111-31, 123 Stat. 1776 (2009), enacted June 22, 2009, directed the HHS Secretary to issue regulations requiring all cigarette packages manufactured or sold in the United States to bear one of nine new textual warnings, as well as “color graphics depicting the negative health consequences of smoking.” Pursuant to this authority, the FDA initiated a rulemaking proceeding through which it selected the nine graphic images that would accompany the statutorily prescribed warnings.  

In addition to requiring cigarette packages and advertisements to bear one of nine new warning statements, the FSPTCA mandated that the new warning labels comprise the top 50 percent of the front and rear panels of cigarette packages and 20 percent of the area of each cigarette advertisement. Pursuant to the FSPTCA directive, the FDA issued a Proposed rule seeking comment on 36 potential images for the new graphic warning labels.

The Proposed rule asserted the government’s “substantial interest in reducing the number of Americans, particularly children and adolescents, who use cigarettes and other tobacco products in order to prevent the life-threatening health consequences associated with tobacco use.” The FDA’s Final rule promulgated the final set of nine images—one for each warning statement. The FDA also required each graphic image to bear the phone number of the National Cancer Institute’s “Network of Tobacco Cessation Quitlines,” which uses the telephone portal “1-800-QUIT-NOW.”

District Court Action

After the FDA issued the Final rule, the Companies filed suit in the district court, claiming the cigarette warnings required under the FSPTCA and FDA’s implementing regulations violated the First Amendment. The district court granted the Companies’ motion for a preliminary injunction and subsequently granted their motion for summary judgment. The Companies did not dispute Congress’s authority to require health warnings on cigarette packages, nor did they challenge the substance of any of the nine textual statements mandated by the FSPTCA. Their only challenge was whether the FDA’s promulgation of the graphic warning labels violated the First Amendment.

What is the Proper Level of Scrutiny?

The D.C. Circuit began its analysis by noting that the U.S. Supreme Court has previously held that any attempt by the government to compel individuals to express certain views or subsidize speech to which they object is subject to strict scrutiny. The court, however, also noted that there are two primary exceptions to strict scrutiny in the commercial speech context.  First, in Zauderer v. Office of Disciplinary Council, the U.S. Supreme Court held that ”purely factual and uncontroversial” disclosures are permissible if they are “reasonably related to the State’s interest in preventing deception of consumers,” provided the requirements are not “unjustified or unduly burdensome.”

Secondly, in Central Hudson Gas & Elec. Corp., v. Public Service Commission, the Supreme Court held that restrictions on commercial speech are subject to less stringent review than restrictions on other types of speech. Under Central Hudson, for a statute burdening commercial speech to survive, the government must affirmatively prove that (1) its asserted interest is substantial, (2) the restriction directly and materially advances that interest, and (3) the restriction is narrowly tailored. According to the court, while this Central Hudson test is not quite as demanding as strict scrutiny, it is significantly more stringent than Zauderer’s rational-basis standard.

The district court concluded the graphic warnings were “not the type of purely factual and uncontroversial” disclosures reviewable under the less stringent Zauderer standard. Applying strict scrutiny, the district court held that the FDA failed to satisfy its burden of demonstrating that the Final rule was narrowly tailored to achieve a compelling government interest. The FDA argued that the district court erred in finding the Zauderer standard inapplicable. Alternatively, it contended that the district court erred by failing to apply the intermediate-level scrutiny under Central Hudson.

D.C. Circuit’s Analysis

The D.C. Circuit quickly dismissed application of the Zauderer standard of scrutiny, stating “while none of the graphic images are patently false, they certainly do not impart purely factual, accurate, or uncontroversial information to consumers.”  The D.C. Circuit, however, also chose to ignore the contrary views of other circuits and found that the district court erred in applying strict scrutiny, finding the intermediate standard of scrutiny in Central Hudson applicable.  Assuming that the FDA’s asserted interest in reducing smoking rates was substantial, the court found that the FDA had not provided a shred of evidence — much less “substantial evidence” showing that the graphic warnings would “directly advance” their asserted interest. While Canadian and Australian studies relied on by the FDA showed that graphic warnings on cigarette packs caused a substantial number of youths to think about quitting smoking, this data was mere speculation without evidence that they would actually follow through on their thoughts.

Dissenting View

Circuit Judge Rogers dissented, arguing that the panel failed to give sufficient consideration to the FDA’s informational interest (i.e., volumes of FDA evidence purportedly showed that warnings combined with graphic pictures would best inform consumers) and that the compelled speech, with the exception of the inclusion of the toll-free number “1-800-QUIT-NOW,” satisfied both the rational basis standard under Zauderer or intermediate scrutiny under Central Hudson.

R.J. Reynolds Tobacco Company v. FDA, D.C. Cir., August 24, 2012.