Over the past two years, at least 15 states have enacted laws requiring manufacturers of electronic nicotine delivery systems (ENDS) to certify the status of their federal premarket tobacco product applications (PMTAs) in order to be sold in the state. This year, several of these laws have been challenged, and a clear split is beginning to emerge among state courts regarding whether the state laws are enforceable.
Background
State ENDS directory laws have emerged as an effort to clear retail store shelves of ENDS products that are not in compliance with Food and Drug Administration (FDA) premarket authorization requirements.
Although FDA has stepped up its enforcement efforts against such products, the ENDS market remains filled with products that lack premarket authorization, and there is a lack of transparency regarding which products are subject to timely submitted PMTAs that remain under FDA review. The state directory laws seek to fill these gaps.
To that end, the directory laws follow a similar pattern. In order to sell an e-cigarette product in a state, these laws typically require e-cigarette manufacturers to annually certify that the products either (1) have received a marketing granted order from FDA; or (2) were on the market as of August 8, 2016, and are subject to a PMTA that was submitted to FDA on or before September 9, 2020, where the PMTA either remains under FDA review or has received a marketing denial order that has been stayed, rescinded, or vacated by FDA or a court. This latter option is consistent with FDA’s original enforcement guidance for ENDS. Although FDA has backed away from saying that it exercises enforcement discretion for products subject to timely, pending PMTAs, it appears the agency continues to adhere to this enforcement policy in practice.
In addition, the laws typically require a state agency, such as the Department of Revenue or the state attorney general’s office, to publish a list of products that satisfy these criteria, and only those products included on the directory can be sold in the state. Otherwise, manufacturers, distributors, and retailers face steep penalties.
Litigation and Court Split
So far, court decisions in cases challenging state ENDS directory laws have fallen within three categories.
First, some federal court decisions have cast doubt on whether companies that market ENDS without FDA marketing authorization have standing to challenge state directory laws.
In January, the U.S. District Court for the Eastern District of Kentucky in Vapor Technology Association v. Taylor dismissed a lawsuit challenging a Kentucky law that required ENDS retailers to obtain certifications from manufacturers certifying that the manufacturers have obtained FDA marketing granted orders or have timely pending PMTAs in order to sell ENDS in the state. To have standing, the court reasoned that the plaintiffs must have suffered an “injury in fact,” which requires a determination that they have suffered “an invasion of a legally protected interest.” The court said there was no “legally protected interest” in selling ENDS that lack FDA marketing authorization because such products cannot lawfully be sold under the Federal Food, Drug, and Cosmetic Act (FDCA). On appeal, the Sixth Circuit was inclined to agree and denied the plaintiffs’ motion for preliminary injunction for this reason, among others. Thereafter, the parties stipulated to dismissal of the lawsuit.
Second, at least one federal court has determined that such laws are likely preempted.
As our team wrote in May, the U.S. District Court for the Southern District of Iowa preliminarily enjoined Iowa’s directory law in Iowans for Alternatives to Smoking & Tobacco, Inc. v. Iowa Department of Revenue after finding that the challengers were likely to succeed on their argument that the law was impliedly preempted by the FDCA. Specifically, the court determined that the law effectively creates a state-level enforcement framework for federal premarket authorization requirements, allowing the state to substitute its enforcement discretion for FDA’s enforcement discretion, which violates the FDCA’s reservation of enforcement authority to the federal government. The court emphasized that while states have broad police powers to regulate tobacco sales, they cannot enforce the FDCA or condition market access on compliance with federal authorization standards in a way that transfers FDA’s enforcement discretion to states. Iowa appealed the court’s order to the Eighth Circuit, and the appeal remains pending.
Third, another federal court has found that the directory laws are likely not preempted.
In June, the U.S. District Court for the Eastern District of North Carolina denied motions for preliminary injunction and a temporary restraining order in a challenge to North Carolina’s directory law in Vapor Technology Association v. Wooten. The court disagreed that the FDCA impliedly preempts the state directory law because the FDCA expressly preserves the right of states to restrict tobacco product sales. In the court’s view, the North Carolina directory law does not directly enforce FDA premarket review requirements, but rather enforces a state retail sales restriction. Specifically, the court observed that North Carolina is only enforcing the requirement that products (some FDCA-compliant and some not) be listed on the state directory in order to be sold in the state. The plaintiffs appealed the court’s order to the Fourth Circuit, and the appeal remains pending.
More decisions are on the way, including in Wisconsin.
Why It Matters
Ineffective federal enforcement is a major motivator for state legislatures and regulators. So long as FDA continues to struggle in its effort to clear retail store shelves of noncompliant ENDS products, we anticipate that states will continue to seek ways to take enforcement into their own hands. The outcome in the cases above will help determine whether state ENDS directory laws are a viable way to achieve that end.
