[00:00:00] Speaker 04: Case number 23-5220, Cigar Association of America, EDAL, versus United States Food and Drug Administration, EDAL, at balance. [00:00:09] Speaker 04: Ms. [00:00:10] Speaker 04: Powell for the at balance. [00:00:11] Speaker 05: Mr. Ebony for the at balance. [00:00:14] Speaker 05: Good morning, Your Honors. [00:00:15] Speaker 05: May it please the court, Lindsay Powell for the government. [00:00:17] Speaker 05: I'd like to reserve three minutes for rebuttal. [00:00:21] Speaker 05: As part of its public health analysis, FDA expressly acknowledged in this rule that patterns of less frequent cigar use [00:00:30] Speaker 05: result in less risk for many users. [00:00:33] Speaker 05: And it explained why regulation was nevertheless warranted. [00:00:36] Speaker 05: And I want to be clear in what the rule says about this. [00:00:40] Speaker 05: So if you look at page 2920 of the Federal Register and the final rule, it says cigar smokers generally smoke at a lower frequency and tend not to inhale the smoke, thus reducing but not eliminating their exposure to its toxic substances. [00:00:55] Speaker 05: That's what plaintiffs say that the [00:00:56] Speaker 05: of the agency failed to consider. [00:00:58] Speaker 05: And it is right there in the rule, not just in this reference, but also others. [00:01:02] Speaker 05: And it's an observation made with respect to premium cigars in particular. [00:01:05] Speaker 05: The district court in fine. [00:01:08] Speaker 04: Could you elaborate on that? [00:01:09] Speaker 04: How is that an observation about premium cigars? [00:01:11] Speaker 04: Because from what I reviewed, it seemed that there were a lot of general statements about cigar use. [00:01:18] Speaker 04: But there's a subset of cigars which are premium cigars which have an even different pattern of use, which is even less frequent. [00:01:26] Speaker 05: So two things, Your Honor. [00:01:28] Speaker 05: One, as FDA also notes on page 2920, there is sort of some trickiness with the terminology. [00:01:34] Speaker 05: Premium cigars are not a widely acknowledged class of cigars. [00:01:38] Speaker 05: They're not defined that way. [00:01:38] Speaker 05: And in the scientific literature, the studies aren't broken out that way. [00:01:42] Speaker 05: So as FDA notes, again, at page 29. [00:01:44] Speaker 04: In the Quarry study, they are broken out that way. [00:01:46] Speaker 05: But not in the Monograph 9 study, for example. [00:01:49] Speaker 05: But if I may. [00:01:50] Speaker 04: You would have to address the Quarry study. [00:01:53] Speaker 05: The point that I was making about FDA acknowledging infrequent use with premium cigars is where it makes statements, for example, at 2920, that some premium cigar smokers might smoke such products infrequently does not negate the adverse health effects or show that cigars do not cause secondhand smoke related disease. [00:02:10] Speaker 05: So the point here is this is not a rule where FDA is saying there are no patterns of infrequent use or that patterns of infrequent use don't have an effect on the resulting rate of disease. [00:02:20] Speaker 03: Those statements [00:02:21] Speaker 03: were already in the NPRM. [00:02:25] Speaker 03: And nonetheless, the agency said, we would like to know about relative arm for premium cigars. [00:02:36] Speaker 03: Your terminology. [00:02:38] Speaker 03: and asked for data on that and asked about the term relative to other forms of tobacco intake and asked should some different regulatory measures be adopted. [00:02:55] Speaker 03: So it wasn't all or nothing. [00:02:59] Speaker 03: And so it was an inquiry using the premium cigar language [00:03:05] Speaker 03: So we can't beg off that there's no definition on that. [00:03:10] Speaker 03: And looking for relative information, relative comparisons for premium cigars and other things as to health issues and to regulatory need and regulatory measures. [00:03:23] Speaker 03: So I don't understand how those general statements are responsive to what the FDA expressly put on the table. [00:03:31] Speaker 05: So again, in terms of what [00:03:33] Speaker 05: what data was then available in the final rule. [00:03:36] Speaker 05: I want to be clear about this, because there are two studies that the district court and the plaintiff say that FDA did not adequately consider. [00:03:41] Speaker 05: One of them is monograph 9, and that's not specific to premium cigars. [00:03:45] Speaker 05: That's also noted in the notice of proposed rulemaking. [00:03:49] Speaker 05: It's expressly acknowledged by FDA page 2924. [00:03:51] Speaker 05: So again, this is not something the agency overlooked. [00:03:54] Speaker 05: It's right there. [00:03:55] Speaker 05: It's acknowledged, not specific to premium cigars. [00:03:58] Speaker 05: The query study is specific to premium cigars, and again, the agency [00:04:02] Speaker 05: did discuss it for the very significant point that a full third, over a third, of premium cigar users also smoke cigarettes, which undersource the complexity of these tobacco use issues and the attendant public health consequences. [00:04:15] Speaker 05: It is true that FDA did not cite the particular Quarry study finding, did not spell it out, that only about 3.5% of premium cigar smokers use these products on a daily basis. [00:04:27] Speaker 05: But it doesn't follow that FDA overlooked [00:04:31] Speaker 05: that frequency of use issue, it says, we know that these products are often used less frequently and that infrequent use [00:04:38] Speaker 05: entails less risk. [00:04:40] Speaker 05: That's the fundamental public health point. [00:04:42] Speaker 03: There's an analysis of, which the NPRM also asked for, of what the implications of that markedly less frequent use are for appropriate regulation and combine that with the evidence of this product's not being marketed to youth. [00:05:03] Speaker 03: So you asked for, should there be adjustments to the regulatory regime? [00:05:06] Speaker 03: And then instead, they were just shoved in, including all these advertising restrictions that are aimed at protecting youth that are just not relevant on the record, or haven't been shown to be relevant on this record to premium cigars. [00:05:19] Speaker 05: Well, several points in response, Your Honor. [00:05:22] Speaker 05: One is just briefly taking a step back. [00:05:25] Speaker 05: This is quite broad. [00:05:28] Speaker 05: tobacco product regulation and premium cigars are not the only products that are used infrequently that are Thought to what is the premium cigar? [00:05:37] Speaker 05: That's a great question honor. [00:05:39] Speaker 05: It is not defined at federal law. [00:05:41] Speaker 05: It is not a Clearly defined category, which is one of the reasons we're having so much trouble implementing this user fee scheme on remand but in general it is [00:05:52] Speaker 05: a larger cigar that is made solely of tobacco. [00:05:56] Speaker 05: There's a seven part definition that the district court set forth for purposes of this case. [00:06:02] Speaker 05: But the products like hookahs and pipe tobacco are also used infrequently by many users. [00:06:08] Speaker 02: There's still a definition in a notice of proposed rulemaking. [00:06:12] Speaker 02: What is that definition? [00:06:13] Speaker 05: I have that here. [00:06:19] Speaker 05: I don't think, apart from the administration of the user fees scheme, I don't think a lot turns on this definition. [00:06:25] Speaker 05: But in the notice of proposed rulemaking, it's wrapped in whole tobacco leaf, contains 100% leaf tobacco binder, contains primarily long filler tobacco, is made by combining manually the wrapper filler and binder, has no filter tip or non-tobacco mouthpiece, and is kept by hand, has a retail price of no less than $10 per cigar. [00:06:44] Speaker 05: That term is not in the district court's definition. [00:06:46] Speaker 05: Price and adjustment. [00:06:48] Speaker 05: Inflation adjusted, does not have a characterizing flavor other than tobacco. [00:06:51] Speaker 02: $10, Judge Metta did not put that in his definition, right? [00:06:55] Speaker 02: Correct, Your Honor. [00:06:58] Speaker 02: Correct. [00:06:59] Speaker 04: So what about the statements about there being no data, no data provided to support the premise that there are different patterns of use of premium cigars? [00:07:09] Speaker 04: Yes, Your Honor. [00:07:10] Speaker 04: There's four different statements to that effect, but there was data. [00:07:13] Speaker 04: It was the Corey study. [00:07:14] Speaker 05: So these statements need to be considered in context and also [00:07:18] Speaker 05: I think parsed very specifically. [00:07:19] Speaker 05: So there are five of these statements in total. [00:07:22] Speaker 05: Two of them, if you look at them on their own, it does make it sound like perhaps there was no evidence in here at all about patterns of use or the effect that infrequent use has on harm. [00:07:34] Speaker 05: But as I've been talking about, we know that's not true. [00:07:37] Speaker 05: Because FDA says over and over again, we know that less frequent use decreases risk. [00:07:42] Speaker 05: We know more frequent use increases risk. [00:07:44] Speaker 05: That's fair. [00:07:46] Speaker 05: a mystery. [00:07:46] Speaker 05: It wasn't a secret. [00:07:47] Speaker 05: It wasn't something the agency overlooked. [00:07:49] Speaker 05: And it also acknowledged that many cigar smokers, including premium cigar smokers, are smoking less frequently. [00:07:55] Speaker 05: And so you have to take these statements in that context when you're trying to figure out, did the agency actually overlook part of the problem? [00:08:01] Speaker 05: Three of these statements say something a little different. [00:08:04] Speaker 05: They don't say there was no data about patterns of use or the harms of infrequent use. [00:08:09] Speaker 05: They say that there wasn't data to support the conclusion that these patterns [00:08:15] Speaker 05: avoid the risk of disease and addiction in premium cigar smokers. [00:08:19] Speaker 05: And that's a very different thing. [00:08:20] Speaker 05: That really gets to part of the core of this public health inquiry is [00:08:25] Speaker 05: What are the other risks that we're worried about? [00:08:28] Speaker 04: There is the risk of- If you combine the Cori study and Monograph 9, isn't that evidence that there is no public health problem with premium cigars? [00:08:37] Speaker 04: Or at least there's data to that effect. [00:08:39] Speaker 04: I'm not saying that that's true. [00:08:41] Speaker 04: But the Cori study says it's very, very infrequent. [00:08:45] Speaker 04: Only 3% do it daily, and most people do it very infrequently. [00:08:48] Speaker 04: And then the Monograph 9 says, [00:08:51] Speaker 04: If you smoke one to two a day, I'm surprised this is true. [00:08:55] Speaker 04: There's no health impact for people who don't smoke at all. [00:09:01] Speaker 04: So that's data that there's no health impact based on smoking premium cigars. [00:09:08] Speaker 04: The agency said there's no data. [00:09:11] Speaker 05: So that's not what Monograph 9 says. [00:09:13] Speaker 05: There is a finding based in all likelihood on the extremely small sample size that the findings of the increase in all-cause mortality were not statistically significant. [00:09:23] Speaker 05: That's not the same as a finding that one to two daily cigars are safe by any means. [00:09:29] Speaker 03: The same study also finds that... That's a good explanation, but I didn't see that in the final rule. [00:09:34] Speaker 05: The same study also finds that the risk of aortic aneurysm is about doubled on that same frequency of use, and backing up to the sort of introductory statements. [00:09:44] Speaker 03: But is the other stuff you just said, including statistically insignificant sample, was that in the final rules explanation? [00:09:51] Speaker 05: It's not in the final rules explanation. [00:09:53] Speaker 05: And again, this is in the course of a much broader rulemaking, where the standard that we bring to these agencies' decisions is not [00:10:02] Speaker 05: you know, an impeccable explanation of each of these points. [00:10:04] Speaker 05: Did it consider that less frequent use of these products might reduce risk? [00:10:10] Speaker 04: And it did. [00:10:10] Speaker 04: So if we think that that's not adequate, a general statement that less frequent use reduces risk, if we think that based on this case, given what the NPRM said, the focus on premium cigars, that subset, if we think that that's inadequate and you lose, because you're relying only on [00:10:30] Speaker 04: the fact that general statements about cigar use and less use is adequate. [00:10:35] Speaker 04: If we don't agree with you, you lose, right? [00:10:37] Speaker 05: No, Your Honor. [00:10:37] Speaker 05: So the point I've been focusing on is trying to underscore that this was not the agency emphatically didn't overlook this question of infrequent use, but it also abundantly explained why a number of considerations in conjunction with this frequency consideration [00:10:55] Speaker 05: Warrant regulation and it's it's important to think of recall that the deeming rules and on off switch. [00:11:01] Speaker 05: If premium cigars are carved out from regulation, they are not subject to any of these FDA authorities any of these provisions, you can then have you know people handing out free samples and putting them in vending machines and the federal minimum age of sale rules don't apply it's. [00:11:14] Speaker 05: It's a fundamental question about regulation. [00:11:16] Speaker 03: Your NPRM asked about, should there be adjustments to the regulatory scheme given, if you ask for information about different risks and it's shown, should there be adjustments to the regulatory scheme? [00:11:28] Speaker 03: Is there something in the law that would prevent the FDA from saying, hypothetically premium cigars, okay, they don't need to have these, you're not so worried about the marketing to youth? [00:11:39] Speaker 03: Because by definition, they're not flavored and they aren't sold in a way that's marketed to youth. [00:11:45] Speaker 03: But we're still concerned about health risks. [00:11:47] Speaker 03: And so we will have a modified regulatory regime as to them. [00:11:51] Speaker 03: Is there anything in the law that prevents the FDA from doing that? [00:11:54] Speaker 05: The way Congress wrote the Tobacco Control Act, there are certain provisions that either apply or do not based on operation of the deeming decision. [00:12:02] Speaker 05: And again, none of them apply if they aren't deemed. [00:12:05] Speaker 05: So that deeming decision, which is all that's at issue here, should they be deemed, [00:12:09] Speaker 05: is the threshold inquiry for any of it to apply. [00:12:12] Speaker 05: There is then some room for FDA to make product by product considerations. [00:12:18] Speaker 05: But in addition to frequency here. [00:12:20] Speaker 04: But it just seems to me that the things that you're saying we should be worried about probably are not really worrisome. [00:12:26] Speaker 04: Like nobody's handing out $10 cigars as samples. [00:12:29] Speaker 04: They're not selling premium cigars at a vending machine. [00:12:32] Speaker 04: Because it's been illegal to do so until now. [00:12:34] Speaker 04: If you make these products, the only products that are not regulated. [00:12:37] Speaker 04: They're not luxury products. [00:12:40] Speaker 04: You think that there are people who want to sell some of these cigars are really expensive, but you want to buy them from a vending machine. [00:12:48] Speaker 05: FDA predicted that if these products are singled out from regulation, that they are the only tobacco product out there that are not regulated, that a number of things will happen. [00:12:58] Speaker 05: Patterns of use will change. [00:13:00] Speaker 05: People will [00:13:01] Speaker 05: get the message that these products are relatively safe, which they are not. [00:13:04] Speaker 05: These are inherently dangerous products. [00:13:06] Speaker 05: They cause laryngeal, pharyngeal, oral, esophageal, stomach cancer. [00:13:10] Speaker 05: They cause aneurysm. [00:13:11] Speaker 03: They cause heart disease. [00:13:12] Speaker 03: What stops the FDA from saying, you did a whole other ANPRM in 2018 to collect more information, from saying, from looking at that, either reopening this record or using that new one, however you want to do it, collecting information again, [00:13:31] Speaker 03: making a judgment again about regulation, dealing with the data, and making a decision that wrestles with the data that's provided, and making a regulatory decision that deals with whatever bad problems emerge in this period or have emerged maybe already since the rule has been vacated. [00:13:53] Speaker 03: And by the way, in the process defining premium cigar, however you all think is appropriate based on the record. [00:14:00] Speaker 05: So when FDA [00:14:01] Speaker 05: withdrew the ANPRM from the Unified Agenda in 2021, it explained, based on the evidence available at that point, that its decision to regulate, that the decision to deem was amply supported by the evidence available, and it expressly acknowledged. [00:14:15] Speaker 03: That has now been overturned by the district court. [00:14:17] Speaker 03: And so what what I mean, you haven't done a new rulemaking based on that. [00:14:23] Speaker 05: No, but this is reflecting FDA's thinking about the then current evidence as of 2021. [00:14:27] Speaker 05: So just a couple of years ago. [00:14:28] Speaker 03: So go forward and make the problem here wasn't that the district court found you lack statutory authority to regulate premium cigars. [00:14:37] Speaker 03: It was a breakdown in the rulemaking process. [00:14:40] Speaker 03: And we have your arguments about that. [00:14:43] Speaker 03: I'm just assuming, if those aren't accepted, you're talking about all these harms, and it's an in or out thing. [00:14:51] Speaker 03: But it's not permanent, is it? [00:14:53] Speaker 03: There's nothing that stops you from doing the rulemaking, again, in a way that would be consistent with what the district court's concerns were. [00:15:02] Speaker 05: that's absolutely true and if the court were to to remand without vacating it would be all the easier this FDA absolutely can further explain this if needed but the explanation really is there and in addition to remand without vacating you can't consider the information you gathered from the 2018 process or later judgment correct but as FDA explained in 2021 the information doesn't doesn't change [00:15:24] Speaker 05: Its view, it was aware of infrequency then, it's aware of infrequency now, but I do want to- You guys can fix the problems, right? [00:15:31] Speaker 03: You guys can deal with this going forward. [00:15:34] Speaker 03: It's just a question of what the judgment is that needs to be done. [00:15:38] Speaker 05: It's a question about what process would be required for it, but these, I do want to be clear that these are [00:15:44] Speaker 05: incredibly dangerous products. [00:15:45] Speaker 05: A single one of these large cigars contains the same tobacco. [00:15:48] Speaker 04: Wasn't that the question you were supposed to answer? [00:15:50] Speaker 04: Are these dangerous products? [00:15:51] Speaker 04: Maybe they're not because of their patterns of use. [00:15:53] Speaker 04: Your argument assumes the answer to the question you were supposed to answer that you didn't answer. [00:15:59] Speaker 05: Well, in the final rule, though, and FDA does answer it, it explains why these are dangerous [00:16:05] Speaker 05: And so if you have a product. [00:16:07] Speaker 04: But if based on the patterns of use, people use them very, very infrequently, they don't have the same dangers. [00:16:14] Speaker 04: But that was the whole question that has not been answered. [00:16:17] Speaker 04: So I don't think you can rely on that answer and assume that it's true. [00:16:21] Speaker 05: FDA acknowledged in the rule that people who use these products less are exposed to less harm. [00:16:26] Speaker 05: That is in there. [00:16:27] Speaker 05: That was part of what it considered. [00:16:30] Speaker 05: It doesn't cite the core study number, but it considered that. [00:16:32] Speaker 05: It also considered [00:16:33] Speaker 04: Right, right. [00:16:34] Speaker 04: But I'm just saying that I don't think you can sit here and argue relying on the fact that these are incredibly dangerous. [00:16:39] Speaker 04: That's not. [00:16:40] Speaker 04: That's too simplistic, given the record here. [00:16:43] Speaker 04: Do you want to move on to the vacator versus no vacator? [00:16:47] Speaker 05: I'd like to take one more stab at this, if it's OK, because this is in the final rule. [00:16:51] Speaker 05: And it is much of what justifies FDA's decision. [00:16:54] Speaker 05: So it's not just them saying these are dangerous. [00:16:55] Speaker 04: I just think it's a circular argument, because the question is whether that's supported. [00:16:59] Speaker 04: The question is whether you took into account all the data. [00:17:02] Speaker 04: So I don't think you can stand on that. [00:17:10] Speaker 05: What FDA took into account, which includes that these are the equivalent of an entire pack of cigarettes, that by the Quarry Study's own information, you have over 120,000 people smoking them every day, that you have secondhand smoke exposures, which are [00:17:24] Speaker 05: how much smoke I'm exposed to is not affected by other people's frequency of smoking. [00:17:29] Speaker 05: If I'm working in an establishment where people are- But everything that you're saying is not in the rule. [00:17:33] Speaker 05: That is in the rule. [00:17:33] Speaker 05: These things are in the rule. [00:17:35] Speaker 04: The fact that this is equivalent to a pack a day and that- No, but it didn't account for what's in the Corey study that you just relied on. [00:17:44] Speaker 05: The one thing that is not expressly spelled out in the rule is that the 3% figure- I know, I'm just saying that you were just relying on that. [00:17:54] Speaker 05: ancillary point. [00:17:56] Speaker 03: Well, you did ask about relative harms. [00:17:57] Speaker 03: I think that's what Judge Penn is referencing here. [00:17:59] Speaker 03: And that spoke to relative harm and the final rule. [00:18:04] Speaker 03: And I'm. [00:18:04] Speaker 03: To get to the, because we're over time, to get to, I think you're looking at remedy questions. [00:18:11] Speaker 03: And Judge Randolph had alluded to that as well. [00:18:16] Speaker 03: You've made arguments about the definition of premium cigar objecting to the district courts. [00:18:21] Speaker 03: definition, but you didn't raise that before the district court. [00:18:25] Speaker 03: So how could we consider it now? [00:18:28] Speaker 05: We as part of our broader objection to Baker of the decision explained the difficulty of implementing the definition in the context of this user fee scheme. [00:18:43] Speaker 05: And it was very much an open regulatory question in the final rule. [00:18:46] Speaker 05: It's a fairly extraordinary thing to judicially define this category. [00:18:51] Speaker 05: of products when that definition doesn't come from. [00:18:56] Speaker 03: He used an FDA definition. [00:18:58] Speaker 05: from another context and not the one in the proposed rule. [00:19:00] Speaker 03: And it's been a great argument to present to the district court. [00:19:04] Speaker 03: I'm just trying to struggle with the rationale for us being able to entertain that argument. [00:19:09] Speaker 03: I understand the concerns about it. [00:19:12] Speaker 03: He didn't pick the one from the NPRM. [00:19:14] Speaker 03: I don't know why. [00:19:14] Speaker 03: And it's your wheelhouse to define what we think. [00:19:20] Speaker 03: But he wasn't overreaching in the sense that he made up his own. [00:19:23] Speaker 03: He picked an FDA definition. [00:19:27] Speaker 03: and got no objections on that ground from the FDA. [00:19:31] Speaker 03: So I'm just not sure what we can do about it at this stage. [00:19:34] Speaker 05: There are the broader concerns about vacater with any of these definitions. [00:19:40] Speaker 05: I mean, this is a zero-sum user fee scheme that is proving extremely hard to administer and untangle the definitions that Congress provided when it expressly contemplated that cigars, including all cigars, there's no carve out for premium cigars. [00:19:55] Speaker 05: Again, that's not [00:19:56] Speaker 05: something to find a federal law, that it would be tied to excise tax data that doesn't, it can't be parsed this way. [00:20:03] Speaker 05: And so FDA now has over 175 pending fee disputes that it has to consider individually. [00:20:09] Speaker 03: And so this, if you look at- A good reason to hurry up and do your rulemaking on premium cigars. [00:20:13] Speaker 03: I know rulemaking on premium cigars. [00:20:15] Speaker 05: Indeed, the rule was only vacated a year ago. [00:20:19] Speaker 05: The clock has not been ticking for all that long. [00:20:22] Speaker 05: And again, we do think it was, [00:20:25] Speaker 05: not a fair characterization of the rulemaking to say that FDA didn't consider. [00:20:29] Speaker 04: We're reviewing for abusive discretion, and vacator is the default remedy. [00:20:34] Speaker 04: And the other side says that there are no precedents reversing a district court for granting this default remedy of vacator. [00:20:42] Speaker 04: Are you aware of any precedents where we reversed under those circumstances? [00:20:47] Speaker 05: No, but it clearly is. [00:20:52] Speaker 05: An option, if you look at Standing Rock, for example, when the court- It's an option, but it's an abusive discretion standard. [00:20:57] Speaker 04: So even if both options are reasonable, we can't reverse them if this one is. [00:21:03] Speaker 05: Sorry, I mean that under the abusive discretion standard, it is an option to conclude that it was an abusive discretion. [00:21:10] Speaker 05: Of course it is. [00:21:11] Speaker 05: Yes. [00:21:12] Speaker 05: So I am not aware of an example, but the way the court engages the analysis, it is certainly [00:21:20] Speaker 05: available for the court to find that. [00:21:21] Speaker 05: And this is the quintessential case where a number of things make clear that FDA would reach the same conclusion if given the opportunity to explain more. [00:21:31] Speaker 05: There are all sorts of other products that in one way or another present less risk. [00:21:34] Speaker 04: But why is it clear, given that there is ongoing rulemaking going on to examine this issue? [00:21:38] Speaker 04: Why is it clear that you can see? [00:21:40] Speaker 05: There isn't ongoing rulemaking. [00:21:41] Speaker 05: The FDA has withdrawn the ANPRM from the regulatory notice. [00:21:45] Speaker 05: It's not ongoing. [00:21:46] Speaker 05: It has said that it [00:21:48] Speaker 05: the current evidence supports the decision made. [00:21:52] Speaker 05: But there's also this broader context where you have e-cigarettes that present less risk, that may present a public health benefit. [00:21:59] Speaker 05: You have hookahs that are used less frequently. [00:22:00] Speaker 05: You have pipe tobacco used less frequently. [00:22:02] Speaker 05: And FDA deemed them all. [00:22:04] Speaker 05: It is clear that in this broader public health inquiry, which absolutely applies to cigars, it's not just a question. [00:22:10] Speaker 05: Does less frequent use [00:22:13] Speaker 05: Decrease risk there can be decreased risk and still an ample basis for regulation and FDA explained that ample basis here were explained in very specific ways the harms of these products the way premium cigar users again over a third of them are also smoking cigarettes, which dramatically increases their risk of harm and demonstrates the complexity of this issue. [00:22:31] Speaker 05: People are misled about the safety of cigars. [00:22:34] Speaker 03: No one's asking for refunds past fees pay, correct? [00:22:37] Speaker 03: This is all prospective? [00:22:39] Speaker 05: That's unclear. [00:22:40] Speaker 05: That's unclear whether they will be. [00:22:41] Speaker 03: You said you've got these disputes. [00:22:43] Speaker 03: Has anyone asked for refunds? [00:22:44] Speaker 05: So the disputes have to do with figuring out these. [00:22:48] Speaker 03: Has anyone asked for refunds? [00:22:50] Speaker 05: Essentially, yes. [00:22:52] Speaker 05: What we haven't gotten into is whether past year refunds would be on the table. [00:22:56] Speaker 03: That's what I meant. [00:22:58] Speaker 05: Yeah. [00:22:58] Speaker 05: So with the current disputes, that is absolutely they are asking. [00:23:01] Speaker 05: Their FDA sends in the quarterly [00:23:04] Speaker 05: amount and they say we don't think we owe this amount. [00:23:06] Speaker 05: And so then there's a dispute about what amount they should pay. [00:23:10] Speaker 05: Or withholding the amount while it's being considered case by case. [00:23:13] Speaker 03: That's very different from what I'm trying to ask is, is anyone asking for a refund of fees that were paid before the district board's vacancy order? [00:23:21] Speaker 05: They have not, but I'm not sure that's a closed question. [00:23:26] Speaker 05: I'm not sure whether. [00:23:28] Speaker 03: I assume the FDA's position would be. [00:23:30] Speaker 03: Well, yes. [00:23:31] Speaker 03: Closed, because that would be a very different type of district court order if it were to, if the vagabond were read to do that, that would be something very different. [00:23:39] Speaker 03: One could certainly ask the district court for clarification, I suppose. [00:23:43] Speaker 03: But that would be an extraordinary exercise of the district court's power that our precedent has said would be cutting, or could very well be cutting into abusive discretion. [00:23:54] Speaker 03: So we shouldn't read it to [00:23:56] Speaker 03: to do that. [00:23:59] Speaker 05: I agree, Your Honor. [00:24:02] Speaker 05: It is just not entirely clear to me how others might read it. [00:24:09] Speaker 03: Thank you very much. [00:24:10] Speaker 03: We'll give you some time for rebuttal. [00:24:37] Speaker 00: Thank you, Your Honor, and may it please the Court. [00:24:39] Speaker 00: My name is Michael Edney, and I'm here on behalf of the premium cigar manufacturers, retailers, and consumers. [00:24:46] Speaker 00: The judge made it correctly held that the FDA's decision to regulate premium cigars was arbitrary and capricious. [00:24:52] Speaker 00: And I want to jump directly into the questions that the Court was asking of opposing counsel in this matter. [00:25:01] Speaker 00: The issue here is a finding regarding the specific differences between premium cigars and other cigars. [00:25:08] Speaker 00: And that's something that is entirely absent from the final rule. [00:25:13] Speaker 00: And to the extent it was made, it was made erroneously. [00:25:16] Speaker 00: There are two key conclusions on this point. [00:25:19] Speaker 00: One's at 29,020. [00:25:21] Speaker 00: And this is the conclusion that there was no data presented [00:25:25] Speaker 00: of different patterns of use of premium cigars, and that those patterns result in lower health risks. [00:25:31] Speaker 00: And the next one's at 29022. [00:25:33] Speaker 00: That's where the FDA- One at a time. [00:25:37] Speaker 03: So on that one, they backed up that there's not lower health risks. [00:25:41] Speaker 03: Maybe different health risks, but it's not lower. [00:25:44] Speaker 03: They backed that up. [00:25:46] Speaker 03: They said the data shows that there are these [00:25:49] Speaker 03: They still have terrible risks of cancer in the mouth and laryngeal, or maybe less in the lungs. [00:25:58] Speaker 03: So that part of it was addressed in the final. [00:26:02] Speaker 00: No, Your Honor, I don't believe that's right. [00:26:07] Speaker 00: FDA at that passage at 29,022 is 020, I'm sorry, is having a discussion regarding the surgeon, and this also happens at 022, is having the discussion regarding the Surgeon General's report. [00:26:25] Speaker 00: And the Surgeon General is saying, look, cigars have [00:26:30] Speaker 00: lesser health effects than cigarettes because they are smoked less frequently and there's some suggestion of lack of inhalation. [00:26:39] Speaker 00: That's a comparison. [00:26:40] Speaker 02: They're not generally inhaled. [00:26:42] Speaker 00: That's right. [00:26:43] Speaker 03: On 2920, they say there's no data as discussed in Section 7C. [00:26:53] Speaker 03: That's right. [00:26:54] Speaker 03: 7C lays it out more and gives all the context to that no data statement. [00:26:59] Speaker 00: Right. [00:27:00] Speaker 00: Right. [00:27:00] Speaker 00: I think it does. [00:27:01] Speaker 00: And then I would direct the court to 29022. [00:27:06] Speaker 00: This is the next specific statement. [00:27:09] Speaker 03: Well, there's one more in that same column, which I think was the other one you referenced, which doesn't have the cross-reference to 7C. [00:27:16] Speaker 03: Moreover, there were no data provided to support the premise that there are different patterns of use and that these patterns result in lower health risks. [00:27:24] Speaker 03: That's right. [00:27:25] Speaker 03: I was just responding to the second half of that, that they result in lower health risks. [00:27:31] Speaker 00: Right. [00:27:31] Speaker 03: They addressed that and said, here's what our data shows about the health risks of these. [00:27:37] Speaker 00: Well. [00:27:38] Speaker 03: So it's really only the patterns of use part that. [00:27:42] Speaker 00: But this addressing that's going on regards the difference between cigars and cigarettes, not between regular cigars and premium cigars. [00:27:54] Speaker 00: And I think the key context is at 29,000. [00:27:57] Speaker 03: Why is that? [00:27:59] Speaker 03: Their NPRM is saying, look, here's the things we're already rating. [00:28:04] Speaker 03: Cigarettes being the big one. [00:28:07] Speaker 03: And we're interested in knowing about how these risks compare to things that we are already regulating, not just to cigars, to the health risks of things that we are already regulating. [00:28:18] Speaker 03: So it seems perfectly legitimate in Section 7C to have made those types of comparisons. [00:28:25] Speaker 03: We don't fly-spec agency explanations. [00:28:30] Speaker 03: Right they've said look here's why we're going with option one danger danger danger harmful harmful harmful and. [00:28:39] Speaker 03: The data that they talk about they talk about a lot of data. [00:28:43] Speaker 03: Not the stuff that you want them to do, but they talk about a lot of data and a lot of studies and say. [00:28:51] Speaker 03: the health risk is still substantial and warrants regulation. [00:28:56] Speaker 03: And so why isn't that those explanations for why we're going with option one do not implicitly answer the question of why we're not going with option two? [00:29:13] Speaker 00: I would put it in a different way. [00:29:15] Speaker 00: If we go back to the proposed rule, [00:29:18] Speaker 00: There were premises of the proposed rule that were beyond dispute. [00:29:22] Speaker 00: We are going to regulate cigars, most cigars, right? [00:29:26] Speaker 00: Nobody was contending to the contrary. [00:29:28] Speaker 00: There was no challenges to that. [00:29:32] Speaker 00: There were really no commenters asking, you know, mass-produced cigars to be excluded from regulation. [00:29:37] Speaker 00: That wasn't on the table at all. [00:29:39] Speaker 00: It was the FDA that set up this option two. [00:29:42] Speaker 00: Option two was we're going to define the category of premium cigars because perhaps they're used in different ways and those different ways have lower health risks than other cigars, not than cigarettes, than other cigars. [00:29:56] Speaker 03: Well, they want to know if they have lower health risks. [00:29:58] Speaker 00: That's right. [00:29:59] Speaker 03: That's right. [00:30:00] Speaker 00: And then when we get to the final rule, what the FDA is saying is, look, cigars in general have health risks. [00:30:09] Speaker 00: That's what we knew when we proposed the rule. [00:30:12] Speaker 00: We gave these guys, we gave all these participants in the marketplace an opportunity to come to us with some real hard data about the specific patterns of use of premium cigars. [00:30:23] Speaker 00: And then they say, nobody showed up, right? [00:30:28] Speaker 00: Nobody showed up with cigars. [00:30:29] Speaker 00: premium cigar specific data. [00:30:31] Speaker 00: It's just one big giant ball here. [00:30:34] Speaker 00: And I think that's where the FDA really drives it home at 29,022. [00:30:38] Speaker 03: When you read the final rule, what they're saying is, here's a bunch of data that shows there are still material health risks, significant health risks, even with premium cigars that warrant regulation. [00:30:56] Speaker 00: Your Honor, I think the reason why they reached that conclusion is because of what they said at 29,022 is that we asked commenters to come up with premium cigar specific data regarding their patterns of use. [00:31:11] Speaker 00: And no such data was presented that showed that they had lower health risks. [00:31:15] Speaker 00: What they're saying is what we got was a bunch of assertions about [00:31:18] Speaker 03: how premium cigars were used we have we found no lower health risk it's a different health risk it may show up in different parts of the body but there's still health risk there from smoking cigars it may not be the all mortality one but it is mouth laryngeal esophageal cancers the fda found health risks with regard to cigars in general and they found it in the proposed rule and it was really beyond dispute and [00:31:48] Speaker 00: the final rule when they explained why they were finding no lower health risk with regard to premium cigars and therefore no need [00:31:57] Speaker 00: to explore the situation of whether a different regulatory scheme is appropriate for them. [00:32:02] Speaker 00: They said that whereas no data presented that premium cigars have different patterns of use that result in lower health effects. [00:32:09] Speaker 00: What they were saying is, look, all we got is a bunch of studies about cigars, and we didn't get anything serious about premium cigars. [00:32:18] Speaker 00: That is not true, though. [00:32:20] Speaker 00: The record did have [00:32:22] Speaker 00: An FDA-sponsored spot. [00:32:24] Speaker 03: Quite what they said, and they did talk about it. [00:32:26] Speaker 03: I guess what I'm trying to ask is which studies show that they were wrong to think that there are risks. [00:32:38] Speaker 03: It may be a small portion of the population, but there are still substantial risks of cigar-specific cancers or premium cigars. [00:32:51] Speaker 00: The FDA never made that conclusion specifically with regard to premium cigars because it said the reason for its conclusion regarding premium cigars is that there was no data presented of different patterns of use between premium cigars and other cigars and the attendant lower health risks of those different patterns. [00:33:09] Speaker 03: Everything turns on the health risk. [00:33:12] Speaker 03: They wouldn't care about the pattern of use unless the pattern of use reduced health risk or marketing to children, which I don't think they dispute is not an issue. [00:33:21] Speaker 02: The notice of proposed rulemaking recognized that all cigar smoking is potentially harmful. [00:33:29] Speaker 02: And I thought the rulemaking was to determine whether there was a significant difference in the harm between regular cigars and premium cigars. [00:33:39] Speaker 02: And the FDA said, we have no data on it. [00:33:45] Speaker 02: But in fact, they did. [00:33:47] Speaker 00: That's exactly right, Your Honor. [00:33:49] Speaker 00: I mean, I think we need, and I think Judge Bader explained this very well, we need to explain, we need to consider the final rule in the context of what was said in the proposed rule. [00:33:58] Speaker 03: I understand that, but what I'm trying to, and if I've just missed this in the record, please tell me. [00:34:02] Speaker 03: I recall the evidence that was submitted about all mortality risk for premium cigars being, I think, I think there was no difference for [00:34:13] Speaker 03: uh the norm of premium cigar users the ones who don't use it regularly as to all mortality risk as compared to non-smokers is that correct remembering that correctly as to all mortality risk premium cigars [00:34:29] Speaker 03: the vast majority of the 97% who use it infrequently, there is no increase in all mortality risk, correct? [00:34:36] Speaker 00: So the evidence in the record under monograph nine is for those who use two or fewer cigars per day, there's no evidence of a statistically significant increase in all mortality risk. [00:34:48] Speaker 03: That's great. [00:34:48] Speaker 03: But no, that's all mortality risk. [00:34:52] Speaker 03: But what they cite in the final rule is specific types of cancer. [00:34:57] Speaker 03: that cigars have a particularly increased prospect of causing. [00:35:07] Speaker 03: Was there a study that you guys submitted that said that may be for your run of the mill cigars, but premium cigars do not? [00:35:19] Speaker 03: pause those cancers, or have a, not do not, that might be too hard to show, but are not associated with that higher risk of those specific mouth, esophageal, whatever other parts of the bodies are here, in sort of the neck and above cancers. [00:35:40] Speaker 00: Your honor, I think what you see in the proposal in the final rule where it discusses monograph nine and other studies is that cigars in general can cause these other cancers. [00:35:49] Speaker 00: What you don't see anything of. [00:35:52] Speaker 03: I'm asking you what your clients or others put in to show that premium cigars are different than regular cigars when it comes to those specific forms of cancer, not all mortality risk. [00:36:04] Speaker 00: And what we put in is at JA529, this is the Cigar Rights of America comment, that says, look, when you look at premium cigars, our consumers, especially in particular, 97% of them are using the product less than daily. [00:36:24] Speaker 00: And remember, the threshold for all-cause mortality is fewer than two cigars per day. [00:36:30] Speaker 00: So even the smaller. [00:36:31] Speaker 02: It would have been two or two. [00:36:33] Speaker 02: Two or fewer. [00:36:34] Speaker 00: Two or fewer, that's right. [00:36:36] Speaker 00: Two or fewer, Your Honor, exactly right. [00:36:39] Speaker 03: This might be my confusion. [00:36:41] Speaker 00: Yes. [00:36:42] Speaker 00: Okay. [00:36:42] Speaker 03: As to what all-cause mortality means. [00:36:45] Speaker 03: I had thought all-cause mortality was all tobacco-related mortality. [00:36:53] Speaker 03: But then within that would be a subset of the particular cancers [00:36:58] Speaker 03: a sub mortality set of the particular cancers associated with cigars. [00:37:03] Speaker 03: And that's what my question is about. [00:37:05] Speaker 03: I give you that you guys put in the information or somebody put in the information about the comparison of all mortality risk. [00:37:14] Speaker 03: I'm asking about this subset of cigar peculiar cancers, whether mortal or quite disabling, [00:37:27] Speaker 00: All right, and the answer to that question, I will direct the court to Judge Maeda's answer to that question at Jay 26 through 28, and I'll try to provide that answer myself. [00:37:41] Speaker 00: But I think what we're getting confused about here a little bit is that- I'm getting confused. [00:37:46] Speaker 00: No, you're not. [00:37:46] Speaker 00: No, no, no. [00:37:47] Speaker 00: It is confusing, right? [00:37:48] Speaker 00: And I think that's one of the problems with the final rule. [00:37:51] Speaker 00: It shouldn't be confusing. [00:37:52] Speaker 00: We should have a clear explanation. [00:37:56] Speaker 00: opposing counsel said below is hey listen even with regard to this cohort of people that use two or fewer cigars per day it's not just all course mortality you know they can there's these other bad things that can happen even to them they have slightly elevated risks right that analysis is absolutely nowhere in the final nowhere right and I think I think judge made a march through this and said that's a that's a convenient post hoc explanation about saying [00:38:25] Speaker 00: Premium cigar consumers, 97% of them at least. [00:38:29] Speaker 03: I'm asking was there evidence in the record that showed that as to those concerns that are definitely flagged in the final rule for cigars? [00:38:40] Speaker 03: As to premium cigars, there's evidence they do not contribute or do not contribute at the same level as other cigars or other tobacco products to those specific cancers. [00:38:53] Speaker 03: That's the narrow question I'm asking. [00:38:55] Speaker 00: Your Honor, we need to take the FDA seriously in what they said. [00:38:58] Speaker 03: No, I'm asking you what you all said. [00:39:01] Speaker 03: I'm asking whether they ignored that particular information or your concern on health risks is that they ignored the study about all mortality. [00:39:13] Speaker 00: Yes, they ignored that. [00:39:15] Speaker 00: And they did not say that what they didn't say is for these infrequent users, whatever increased risks there are of these other health side effects, those are important enough and significant enough to justify this massive regulatory scheme. [00:39:29] Speaker 00: They didn't say that, right? [00:39:31] Speaker 00: What they said in the final rule was, [00:39:33] Speaker 00: cigars cause these other types of health effects. [00:39:37] Speaker 00: But what they didn't analyze, what the FDA didn't analyze in the final rule is for these two and fewer cigar per day folks, is the increase of these other health effects, is that enough to justify the regulation? [00:39:53] Speaker 00: That's an analysis that came post hoc in the district court. [00:39:57] Speaker 03: That's not ignoring data, that's just a gap in explanation. [00:40:01] Speaker 03: But you're talking about now, because they didn't make that separate sentence. [00:40:04] Speaker 03: That's not what Judge Meadow was relying on at all. [00:40:07] Speaker 00: Well, no, I think he did. [00:40:09] Speaker 03: That's not those no data. [00:40:10] Speaker 00: No, I think he was relying on the lack of that explanation. [00:40:13] Speaker 00: But I think he was. [00:40:14] Speaker 03: I read that his decision, and certainly his vacature decision, was very much based on what you all were pressing hard. [00:40:21] Speaker 03: And I understand why were these no data comments, not just one gap. [00:40:25] Speaker 03: And they could easily be discerned from the final rule. [00:40:28] Speaker 03: They just didn't spell out one more [00:40:30] Speaker 03: sentence that here's this terrible risk from cigars. [00:40:34] Speaker 03: Here's the terrible health consequences. [00:40:37] Speaker 03: And it is bad enough. [00:40:40] Speaker 03: And without evidence that premium cigars are different as to those specific cancers, they might be better for all mortality, but not as to those specific cancers. [00:40:48] Speaker 03: We don't think it's it's we can take them out of the final regulation. [00:40:52] Speaker 03: That's just a that's an ordinary sort of [00:40:57] Speaker 03: fill-in gap issue and agency explanations that would not warrant the type of response we got from Judge Meda here. [00:41:05] Speaker 00: Your Honor, what Judge Meda held, I believe, is that the FDA told us what it was doing. [00:41:14] Speaker 00: It said we have all these concerns about cigars. [00:41:17] Speaker 00: We had them in the proposed rule. [00:41:19] Speaker 00: We gave people an opportunity to come up with premium cigar-specific evidence, and they flubbed that opportunity. [00:41:26] Speaker 00: They didn't provide us any studies regarding the health risks specific to premium cigars, and we did. [00:41:32] Speaker 00: We provided a study that they didn't deal with that specifically determined that premium cigars are smoked [00:41:39] Speaker 00: by those who use them, 97% of them smoke fewer than one per day. [00:41:46] Speaker 00: That's far away from some of the most serious health consequences. [00:41:50] Speaker 02: And remember, the proposed rule- What percentage of the adult population smokes premium cigars? [00:41:58] Speaker 00: I believe the studies say somewhere around 11% of the adult population [00:42:02] Speaker 00: smoke them at all. [00:42:04] Speaker 00: Any premium cigars. [00:42:08] Speaker 00: And cigars more generally is a little bit higher. [00:42:10] Speaker 02: Miners are concerned? [00:42:12] Speaker 00: The evidence in the record is that that number is statistically indistinguishable from zero. [00:42:19] Speaker 02: One tenth of one percent smoke any cigars. [00:42:24] Speaker 00: no smoke any premium cigars so what the the FDA cobbled together uh this it's got to be rich kids i mean yeah well i guess they're out there right but the thing on the remedy because i don't want to hold you up on time um i would have as much time as [00:42:44] Speaker 03: You don't read the district court's order as authorizing retroactive refunds of user fees paid. [00:42:52] Speaker 03: There's fights about refunds since the date of the vacatur order, but we have said that vacatur may very well be inappropriate if it's going to take money out of the government's pocket. [00:43:03] Speaker 03: Or do you read it that way? [00:43:07] Speaker 00: The judge may have correctly held that in 2016, the FDA acted illegally when regulating premium cigars. [00:43:16] Speaker 00: I'm aware of that. [00:43:17] Speaker 03: I'm trying to get an answer to my question about refunds prior to 2023, when the rule was vacated. [00:43:25] Speaker 00: I think that the logical consequence of the vacator ruling is that the regulation of premium cigars was improper from the beginning, and refunds would be potentially appropriate. [00:43:36] Speaker 03: Has anybody asked for refunds? [00:43:38] Speaker 00: Not to my knowledge, Your Honor. [00:43:39] Speaker 03: They sure will now that you've said they can or that you're... Nobody follows my advice all the time. [00:43:45] Speaker 00: How much money are we talking about if we want to be refunded? [00:43:48] Speaker 00: Almost nothing, Judge. [00:43:49] Speaker 03: So if you look at Section 919... Your government definition of almost nothing and my almost nothing were probably very different numbers. [00:43:58] Speaker 00: Well, no. [00:43:59] Speaker 00: We have to look in orders of magnitude. [00:44:01] Speaker 00: So if you look at Section 919 of the Act... [00:44:03] Speaker 00: We are talking millions of dollars, but on a relative basis. [00:44:08] Speaker 00: How many? [00:44:09] Speaker 00: The evidence in the record is that premium cigar manufacturers are paying $15 to $20 million a year in user fees. [00:44:15] Speaker 00: That's of $712 million as of last year. [00:44:17] Speaker 00: So annually, the FDA is bringing in... That's not almost nothing in my view. [00:44:23] Speaker 00: But it is 2.5% of the annual. [00:44:24] Speaker 03: That's a very different thing. [00:44:26] Speaker 03: But I don't see anywhere in Judge Meadow's vacature analysis the type of analysis that we would expect. [00:44:32] Speaker 03: And our precedent requires if a court is entering an order that allows retroactive payments of money out of the US treasure. [00:44:40] Speaker 03: Can you point me where he analyzed that aspect? [00:44:43] Speaker 00: He did not analyze it. [00:44:44] Speaker 00: And it was not before him. [00:44:45] Speaker 00: That's exactly right. [00:44:47] Speaker 00: OK. [00:44:48] Speaker 00: That's right. [00:44:49] Speaker 00: It was not before him. [00:44:50] Speaker 00: The issue wasn't ripe. [00:44:52] Speaker 03: It's not a question of ripeness. [00:44:53] Speaker 03: It's very ripe. [00:44:54] Speaker 03: If in fact, that's the effect of his vacatur order, it was very ripe. [00:44:59] Speaker 00: Well, Your Honor, I'm pretty sure. [00:45:03] Speaker 00: And I may be wrong about this and I don't want to go too far down this road because but but I don't think I could have asked judge made it for a refund. [00:45:12] Speaker 00: I think that I think that that jurisdiction is probably down the street at the Court of Federal Claims if anybody wanted to bring those under the under the Tucker Act and other other revenue related. [00:45:23] Speaker 03: I asked when you can ask him whether he whether his vacant show order had that effect and he did not analyze it as having that effect. [00:45:30] Speaker 03: He hadn't analyzed it as sort of a purely prospective [00:45:33] Speaker 00: Exactly. [00:45:34] Speaker 00: And the issue wasn't presented that the issue at that time was what should be the remedy should be vacature or remand without a payment scheme. [00:45:44] Speaker 03: And he talked about the user fees scheme. [00:45:46] Speaker 00: That's right. [00:45:48] Speaker 00: And he talked about the burden of having, for premium scars manufacturers, effectively having to pay for the regulation of other products. [00:45:58] Speaker 00: I think this is an important point, Judge. [00:46:03] Speaker 00: We're in a situation here where litigation counsel for the FDA is arguing that [00:46:10] Speaker 00: that obviously the FDA, if it had mentioned this study, it would have come out in the same place, but there's a huge divorce here between what litigation counsel is arguing and the FDA policy makers. [00:46:22] Speaker 00: In a formal release, and you can find this at A41, they came out and said, look, we need more information on these patterns of use and the type of information that would be really important. [00:46:32] Speaker 03: It's outside this record. [00:46:33] Speaker 00: Well, it is, but it isn't because [00:46:37] Speaker 03: It is, it was after the rule-making record closed, correct? [00:46:41] Speaker 03: It was after the rule-making record closed. [00:46:42] Speaker 00: That's correct. [00:46:43] Speaker 00: But Judge Millett, opposing counsel is asking this court to kind of supply missing reasoning in the final rule, okay? [00:46:53] Speaker 00: And I don't think this court should do that at all. [00:46:55] Speaker 03: I think they're doing that at all. [00:46:56] Speaker 03: I think they're saying, if this is just the dispute between you, they think we gave enough reasoning, and you say they didn't, and Judge Millett agreed with you. [00:47:03] Speaker 04: So can I ask, it seems to me that [00:47:06] Speaker 04: In reviewing what the agency did, we can only look at what was in the record. [00:47:11] Speaker 04: But can we, when we're looking at whether vacator was appropriate or not, and we're thinking, is the agency going to just do what it did before? [00:47:18] Speaker 04: That's a factor in whether or not you vacate or not. [00:47:21] Speaker 04: Can we consider the fact that, well, they've shown that they've had some second thoughts about this. [00:47:25] Speaker 04: They did go back and start [00:47:29] Speaker 04: relooking at this data that ultimately withdrew that. [00:47:31] Speaker 04: But is that something we can consider in evaluating whether the district court abused its discretion and ordering a vacator? [00:47:38] Speaker 00: Absolutely, Your Honor. [00:47:39] Speaker 00: Generally, I don't think it applies to the selection of the remedy. [00:47:42] Speaker 00: And there is this allied signal, this progeny is asking for this predictive judgment. [00:47:47] Speaker 00: Is the agency just going to back all this up and come out with the same result? [00:47:52] Speaker 00: The record shows that that is absolutely not [00:47:55] Speaker 00: foregone conclusion are really very much in the cards. [00:47:59] Speaker 00: And again, I think that we should proceed on just the final rule record. [00:48:05] Speaker 00: But if we're going back and trying to supply reasoning for the FDA about what we kind of thought they were thinking, this certainly indicates that the Quarry study and that type of data about different patterns of use with regard to frequency [00:48:17] Speaker 00: is super important to the FDA and may have counseled a different result. [00:48:22] Speaker 00: And it has led to a cascade of consequences. [00:48:24] Speaker 00: They've designated these products as their lowest priority for enforcement. [00:48:30] Speaker 00: I think you can look at JA 638. [00:48:32] Speaker 00: This is in the supplemental appendix. [00:48:35] Speaker 00: The definition for that lowest category of enforcement that the judge made it adopted, that's right out of the FDA. [00:48:41] Speaker 00: The FDA came up with that at JA 638. [00:48:46] Speaker 03: Any more questions? [00:48:50] Speaker 03: All right. [00:48:50] Speaker 03: You had a sentence. [00:48:51] Speaker 03: Sounds like you have a sentence. [00:48:52] Speaker 03: One sentence. [00:48:54] Speaker 00: Just one more. [00:48:55] Speaker 00: If you look at that same site at JTA 638, what the FDA said is that at this point, the data submitted both before and against regulation is insufficient to really make a determination with regard to what we should do with these projects. [00:49:11] Speaker 00: product. [00:49:11] Speaker 00: So I don't think that this court should be straining to save this, the FDA final rule explanation where I don't think the FDA itself is committed to it and they didn't supply the key reasoning, key reason that they have identified later, key reason that they identified in the proposed rule is important. [00:49:27] Speaker 03: Thank you very much. [00:49:28] Speaker 00: Thank you, Your Honor. [00:49:30] Speaker 03: All right. [00:49:30] Speaker 03: Ms. [00:49:30] Speaker 03: Pell will give you three minutes. [00:49:47] Speaker 05: Thank you, Your Honors. [00:49:49] Speaker 05: If the question is, did FDA overlook key evidence about premium cigar use in particular, there is exactly one piece of evidence that plaintiffs point to that FDA did not expressly cite in the rule or the proposition for which they offer it, which is the Cori study. [00:50:07] Speaker 05: Only about 3 and 1 half percent of premium cigar users are smoking on a daily basis. [00:50:11] Speaker 05: They did cite the Cori study. [00:50:13] Speaker 05: They did acknowledge that the- But they're not for the relevant point. [00:50:17] Speaker 05: Not for that. [00:50:17] Speaker 05: That statement that they say it needed to be cited for is, again, the sentiment is expressed in the rule more generally. [00:50:25] Speaker 05: And it appears two sentences before the point that FDA does cite it for in the context of this four-page study. [00:50:30] Speaker 05: I mean, there's no credible suggestion that FDA didn't know about this. [00:50:33] Speaker 05: This is a study undertaken by an FDA scientist that the agency is citing. [00:50:39] Speaker 05: And if you look at the broader context, there can be no real question that consideration of that one piece of data if FDA had spelled out in this final rule. [00:50:47] Speaker 05: Okay, so the precise number we have on hand about just how infrequent this use is, is that only about three and a half percent of these people are smoking daily. [00:50:56] Speaker 05: This, again, still means that we have well over 100,000 smoking these cigarette pack-sized products every single day. [00:51:04] Speaker 04: But isn't it incumbent on the agency then to say, despite the lower use for premium cigars, we still think that it has an impact on health because, and there's nothing like that in here. [00:51:14] Speaker 05: I think it is abundantly clear that spelling that out more would not have changed the outcome here. [00:51:21] Speaker 05: And there are many data points supporting that, both with respect to [00:51:26] Speaker 04: I'm not saying change the outcome. [00:51:27] Speaker 04: I'm saying you had to support the outcome with reasoning. [00:51:29] Speaker 05: Well, but this is subject to a harmless error inquiry. [00:51:32] Speaker 05: If the error, if there was one, was not prejudicial, then it doesn't get set aside under the plain terms of that APA. [00:51:42] Speaker 05: But we, of course, don't think that there was error. [00:51:45] Speaker 05: FDA explained why, notwithstanding infrequent use, there are abundant health harms that warrant regulation. [00:51:51] Speaker 05: And that's consistent with what it did in the broader rulemaking. [00:51:54] Speaker 05: This is not the only product where there's a question of lesser risk. [00:51:57] Speaker 05: You have infrequent use of pipes and hookahs. [00:52:00] Speaker 05: Those are deemed. [00:52:01] Speaker 05: Those are uncontroversially deemed. [00:52:03] Speaker 05: You have e-cigarettes, which are not used less frequently, but may present lesser risk in a significant way, unlike premium cigars. [00:52:10] Speaker 04: So I know it's not in the record that was before the agency, but it is your lowest priority enforcement. [00:52:16] Speaker 04: It's unlike e-cigarettes and hookahs. [00:52:19] Speaker 05: The document that they're referring to is a specific set of enforcement priorities in the context of the e-cigarette vaping epidemic that was addressing how to target issues of youth use of tobacco products. [00:52:34] Speaker 05: And so it is true and not inconsistent with anything in the rule that children are not overwhelmingly using these products in the way they use bubblegum flavored e-cigarettes. [00:52:43] Speaker 04: Can I just ask you to, like, [00:52:45] Speaker 04: In terms of the question of vacator, you forfeited the argument that the district court should have considered the fact that industry could ask for refunds of fees already paid because you never raised that before. [00:52:57] Speaker 04: Is that correct? [00:53:01] Speaker 05: I am not aware of either side specifically spelling out the vision for the availability of refunds, but certainly [00:53:11] Speaker 05: the complexity of this scheme and the echoes of the schemes in Allied Signal and American Great Lakes, where you are talking about the various ways in which, among users both before and not before the court, you might have to reallocate or untangle or potentially refund. [00:53:27] Speaker 05: Those are absolutely the types of concerns that were raised and that the government offered as a basis for needing to remand without vacant art. [00:53:36] Speaker 05: So you put these two things together. [00:53:37] Speaker 05: It is clear that FDA, [00:53:40] Speaker 05: would have reached the same conclusion if it had considered that one item from the Quarry study. [00:53:45] Speaker 05: This is not failure to consider an entire aspect of the question. [00:53:49] Speaker 05: It is a minor explanatory point. [00:53:51] Speaker 05: And if I can point you to page 18 of our brief. [00:53:53] Speaker 04: I mean, I don't want to belabor this, but it didn't the agency thereafter say, we are reconsidering this. [00:54:00] Speaker 04: I know you withdrew it, but based on information like in the Quarry study. [00:54:04] Speaker 05: So that's exactly what I wanted to talk about. [00:54:05] Speaker 05: So page 18 of our reply brief. [00:54:08] Speaker 05: We talked about what happens after the ANPRM. [00:54:11] Speaker 05: In the advance notice itself, the characterization that plaintiffs offer is not correct. [00:54:18] Speaker 05: FDA did not say, oh, there's a new Quarry study with the same data. [00:54:21] Speaker 05: We didn't realize this was there before, and it's very important. [00:54:23] Speaker 05: It cited that study as an example of a study published after the deeming rule was promulgated as new evidence in the sense of subsequently published. [00:54:33] Speaker 05: That's the extent of what it said about that Quarry study. [00:54:36] Speaker 05: But it says here in 2021 in withdrawing the notice from the Unified Agenda, even if there is significant occasional use of premium cigars, some premium cigar smokers have frequent use with significant exposure to harmful constituents that are known to increase the risk of oral, esophageal, laryngeal, and lung cancer, among other negative health consequences. [00:54:57] Speaker 05: Dual use of premium cigars with other tobacco products is also a significant concern. [00:55:01] Speaker 05: And that the evidence before the agency at that point [00:55:04] Speaker 05: which is really not different from the evidence before the agency in the final rule, supports regulation. [00:55:09] Speaker 05: Everything points to the fact that the agency, if required to explain more and to address this quarry finding more specifically, would reach the same conclusion. [00:55:19] Speaker 05: And again, considering it in the broader deeming context, the importance of this threshold decision to whether these products are subject to federal regulation under the scheme at all and the way it's treated e-cigarettes and pipes and hookahs [00:55:33] Speaker 05: This is a basic public health question that FDA amply answered describing the various and interrelated harms of using this category in this particular subcategory of tobacco products. [00:55:47] Speaker 03: Thank you very much, counsel. [00:55:48] Speaker 03: The case is submitted.