By C. Ryan Barber, From The National Law Journal

Decision lifts injunction on the FDA’s use of Committee’s Menthol Report

Almost two years ago, the U.S. Food and Drug Administration’s ability to use a controversial report on menthol cigarettes nearly disappeared like a puff of smoke.

In a Washington federal district court, Judge Richard Leon found that three members of the scientific advisory committee responsible for the report had conflicts of interest against the tobacco industry. He ordered that the three members be removed over their financial relationships with pharmaceutical companies and their history of giving expert testimony against tobacco manufacturers. And he barred the government from using the report, handing a victory to two major tobacco companies that were challenging the FDA’s Tobacco Products Scientific Advisory Committee.

As a Justice Department lawyer would later write, the July 2014 ruling was a “ unique judicial venture” into an area typically left to an agency’s discretion—the handling of a conflict of interest or the appearance of one.

But this month, the U.S. Court of Appeals for the D.C. Circuit overturned Leon’s order, finding that R.J. Reynolds Tobacco Co. and Lorillard Tobacco Co.’s alleged injuries “are too remote and uncertain” for the two to have standing in the case. The decision lifted the injunction on the FDA’s use of the menthol report.

In a patch of largely unfamiliar legal territory, the decision also clarified that a claim against an advisory committee should come after an agency’s final action.

But the ruling otherwise raises questions—and risks—for both sides.

The FDA was required to create the Tobacco Products Scientific Advisory Committee under the 2009 law that empowered the agency to regulate the tobacco industry. The committee’s first order of business was to report on how menthol cigarettes were affecting public health.

For the tobacco industry, the stakes were high. The report, approved unanimously by the committee’s nine voting members, advised that “removal of menthol cigarettes from the marketplace would benefit public health in the United States.” The companies alleged that the three members’ financial interests created a heightened risk of adverse regulations on menthol tobacco products, but the D.C. Circuit noted that “it remains unclear whether the FDA will issue a final rule, and what it would say.”

“Ripeness concerns underscore this point: part of the reason the injury is too remote is that, if the FDA chooses not to issue a rule, this case ‘may not require adjudication at all,’ ” wrote Circuit Senior Judge Stephen Williams.

But the opinion was silent on what a plaintiff must prove, even after showing that a committee is tainted, to have an agency’s action thrown out.

“That’s the $100 million question in this case for the tobacco companies,” said Scott Nelson, an attorney at the Washington-based Public Citizen Litigation Group, who filed an amicus brief supporting the government in district court. (The brief was filed on behalf of the American Heart Association, the American Cancer Society and other public health groups.)

Leon noted in his decision that the three challenged committee members—Dr. Neal Benowitz of the University of California, San Francisco; Dr. Jack Henningfield of Pinney Associates; and Dr. Jonathan Samet of the University of Southern California’s Keck School of Medicine—were designated to testify in nearly 1,000 pending tobacco cases as of June 30, 2010. Benowitz and Henningfield also had financial interests in smoking-cessation products, according to the ruling.

The FDA argued that it checked each advisory committee member for possible conflicts of interest before appointing them to the panel and before every meeting. In March 2015, seven months after Leon’s ruling, the agency announced that three other committee members were leaving the committee after being rescreened under the expanded conflict of interest criteria.

An FDA spokesman said the agency is still reviewing the D.C. Circuit’s decision but is “very pleased with the outcome.” Williams & Connolly lawyer Richard Cooper, a former chief counsel of the FDA who represented R.J. Reynolds, could not be reached for comment. Greenberg Traurig represented Lorillard, which R.J. Reynolds’ parent company purchased in 2014.

While the D.C. Circuit found that the case was not ripe, it did not undermine the district court’s finding that the advisory committee was operating with “flagrant violations” of the conflict of interest law, said Richard Samp, chief counsel of the Washington Legal Foundation, who filed an amicus brief supporting R.J. Reynolds and Lorillard in the D.C. Circuit. “Obviously that holding is no longer a current holding, but I would hope it gives federal regulators pause,” Samp said.

It also poses a risk to the agency, Nelson said. “The decision, like a lot of decisions based on standing, kind of punts,” Nelson told The National Law Journal. “It does suggest that, at least up until the time an agency does something with an advisory committee report, the composition of the advisory committee is going to be potentially immune from review. It’s sort of like the nuclear option. The opportunity that you have for review could potentially be the time when the review has the most damage to what the agency has done.”

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