R.J. REYNOLDS TOBACCO COMPANY et al v. UNITED STATES FOOD AND DRUG ADMINISTRATION et al

Filing 11

MOTION for Preliminary Injunction by COMMONWEALTH BRANDS INCORPORATED, LIGGETT GROUP LLC, LORILLARD TOBACCO COMPANY, R.J. REYNOLDS TOBACCO COMPANY, SANTA FE NATURAL TOBACCO COMPANY, INC. (Attachments: # 1 Declaration of David D. Depalma, # 2 Declaration of Stephen Klepper, # 3 Declaration of Victor D. Lindsley, III, # 4 Declaration of William Melton, # 5 Declaration of J. Brice O'Brien, # 6 Declaration of Gregory A. Sulin)(Francisco, Noel)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
R.J. REYNOLDS TOBACCO COMPANY,
LORILLARD TOBACCO COMPANY,
COMMONWEALTH BRANDS, INC.,
LIGGETT GROUP LLC, and SANTA FE
NATURAL TOBACCO COMPANY, INC.,

Civil Action No. 11-01482 (RCL)

Plaintiffs,
v.
UNITED STATES FOOD AND DRUG
ADMINISTRATION, MARGARET
HAMBURG, Commissioner of the United
States Food and Drug Administration, and
KATHLEEN SEBELIUS, Secretary of the
United States Department of Health and
Human Services,
Defendants.
PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
[ORAL ARGUMENT REQUESTED]
On June 22, 2011, the Food and Drug Administration (“FDA”) published a Final Rule
implementing Section 201 of the Family Smoking Prevention and Tobacco Control Act, Pub. L.
No. 111-31, 123 Stat. 1776 (2009) (the “Act”). See FDA, Required Warnings for Cigarette
Packages and Advertisements, 76 Fed. Reg. 36,628 (June 22, 2011) (“the Rule”). The Rule
requires that Plaintiffs radically change all of their cigarette packaging and advertising, so as to
prominently display nine new textual warnings along with disturbing and emotionally-charged
graphic images. These graphics, which include images of a body on an autopsy table and of
diseased body parts, are designed to shock, disgust, and frighten adult consumers of cigarettes.
The new warnings also include a telephone hotline reference that directly admonishes smokers to

“QUIT-NOW” and must occupy the top 50% of the front and back panels of each and every
package and the top 20% of all printed advertising.
The new warnings regime imposed by the Rule crosses the line into anti-smoking
advocacy. The purpose and effect of the warnings is to drown out Plaintiffs’ own
constitutionally protected speech about their lawful products and replace it with the
Government’s emotionally-charged anti-smoking message. FDA’s reasoning in support of the
selected warnings, moreover, is illogical, not supported by the record, and contradictory, and
ignores less intrusive but equally effective alternatives. Finally, FDA failed to provide sufficient
notice to allow meaningful comment on the Rule. Accordingly, Plaintiffs in the above-captioned
case have challenged the Rule as a violation of their rights under the First Amendment and the
Administrative Procedure Act (“APA”), 5 U.S.C. §§ 553(b)(3), 705, 706(2)(A).
The Act also imposes a related set of labeling requirements. These requirements
(hereafter the “Related Requirements”) require that cigarette packaging display:
1. “the name and place of business of the tobacco product manufacturer, packer, or
distributor,” see Act § 101(b) (inserting Food, Drug, and Cosmetic Act (“FDCA”)
§ 903(a)(2)(A)), 21 U.S.C. § 387c(a)(2)(A);
2. “an accurate statement of the quantity of the contents in terms of weight, measure,
or numerical count,” see Act § 101(b) (inserting FDCA § 903(a)(2)(B)), 21 U.S.C.
§ 387c(a)(2)(B);
3. “an accurate statement of the percentage of the tobacco used in the product that is
domestically grown tobacco and the percentage that is foreign grown tobacco,”
see Act § 101(b) (inserting FDCA § 903(a)(2)(C)), 21 U.S.C. § 387c(a)(2)(C);
and
4. where applicable, “the statement ‘Sale only allowed in the United States,’” see
Act § 301, FDCA § 920(a), 21 U.S.C. § 387t(a).
The Act likewise mandates changes to the substantive content of the text of the warnings. See
Act § 201, 123 Stat. at 1842-43 (listing nine new textual warnings).

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The Act provides for a 15-month implementation period following the issuance of the
Rule. Consequently, the new textual and graphic warnings and Related Requirements will
currently become effective for all cigarette packages manufactured on or after September 22,
2012, and introduced into commerce on or after October 22, 2012. See Act § 201(b), 15 U.S.C §
1333, note (setting effective date of new textual and graphic warnings required by sections 4(a)
and 4(d) of the Federal Cigarette Labeling and Advertising Act (“FCLAA”)); Act § 103(q)(5), 21
U.S.C. § 387c, note (setting same effective date for the Related Requirements of FDCA §
902(a)(2)(A)-(C)); Act § 301, 21 U.S.C. § 387t (setting same effective date for the Related
Requirement of FDCA § 920(a)).
Congress’s use of a single implementation date for the new textual and graphic warnings
and the Related Requirements demonstrates an intent that manufacturers not be subjected to
multiple, costly packaging overhauls. The length of this implementation period, moreover,
reflects Congress’s recognition that it will take Plaintiffs a substantial amount of time to overhaul
completely all of their cigarette packaging. Congress’s assessment was accurate: it will take
more than a year of vigorous efforts to implement the Rule, at a cost of tens of millions of dollars.
See Declaration of J. Brice O’Brien; Declaration of Stephen Klepper; Declaration of Victor D.
Lindsley, III; Declaration of William Melton; Declaration of Gregory A. Sulin; Declaration of
David D. Depalma.
If the new warnings required by the Rule were to be struck down or modified in any
material respect, however, Plaintiffs’ costly and time-consuming implementation process would
have to begin anew and the costs already incurred to comply with the current Rule would
constitute irreparable injury. Accordingly, Plaintiffs respectfully move this Court pursuant to 5
U.S.C. § 705, Rule 65 of the Federal Rules of Civil Procedure, and this Court’s Local Rule 7, for

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entry of a preliminary injunction postponing the effective date of the new textual and graphic
warnings and Related Requirements in order to preserve the status quo pending judicial review
of the Rule. In support of this Motion, Plaintiffs are filing a Memorandum of Points and
Authorities, along with six Declarations and a Proposed Order. Plaintiffs request oral argument
on this Motion.
As explained more fully in the supporting Memorandum filed herewith, Plaintiffs satisfy
the standard for preliminary relief under 5 U.S.C. § 705 and Rule 65.
1.

Plaintiffs’ challenge to the Rule has a high probability of success on the merits.

The Rule infringes Plaintiffs’ right to engage in free speech, including commercial speech with
lawful adult customers, under the First Amendment. The Rule is also arbitrary and capricious
within the meaning of 5 U.S.C. § 706(2)(A), in that FDA justified the warnings it selected on
grounds that were illogical, not supported by the record, and contradictory, and ignored less
intrusive but equally effective alternatives. Moreover, the Rule was promulgated without
sufficient notice and opportunity for comment, in violation of 5 U.S.C. § 553(b)(3). The merits
of Plaintiffs’ First Amendment and APA claims are set forth in detail in their Motion for
Summary Judgment and Permanent Injunction, filed herewith.
2. Absent preliminary relief, Plaintiffs will suffer immediate and irreparable harm.
Plaintiffs must immediately begin, and indeed have already begun, the process of implementing
the changes needed to comply with the current Rule by the effective date. Those substantial
expenditures will have been wasted if this Court should hold the Rule to be invalid in whole or in
part. Plaintiffs can be protected from such irreparable injury only by the issuance of injunctive
relief postponing the effective date of the new warnings regime and the Related Requirements
until 15 months after the validity of the Rule has been determined by this Court. Congress

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intended that Plaintiffs have 15 months to produce new labels after they knew what the Rule
would require, and that is all Plaintiffs are seeking.
3. The equities clearly favor the grant of injunctive relief in this case. Postponing the
effective date of the new warnings and Related Requirements to preserve the status quo until
after this Court has ruled on the merits of Plaintiffs’ claims would harm neither Defendants nor
the public. FDA itself has conceded that its estimates of the Rule’s impact on smoking rates are
“in general not statistically distinguishable from zero.” 76 Fed. Reg. at 36,776. Moreover, FDA
has demonstrated no urgency in promulgating the Rule, and the Act itself provided for a
relatively lengthy rulemaking and implementation period. Moreover, prior to implementation of
any new warnings, all cigarette packaging and advertising will continue to bear the current health
warnings which, combined with the vast array of other information available, have produced
effectively universal awareness of the health risks of smoking. A short additional postponement
of the effective date allowing Plaintiffs to continue using their current packaging and advertising
until 15 months following a decision by this Court would thus have no material adverse impact
from a public health perspective.
4. The relief Plaintiffs seek is in the public interest as it would further both core First
Amendment principles and the due process principle of permitting parties to obtain judicial
review of unlawful regulations before being injured by them.
Plaintiffs therefore respectfully request that the Court grant this Motion and enter an
order (a proposed order is attached), pursuant to 5 U.S.C. § 705 and Rule 65 of the Federal Rules
of Civil Procedure, containing the following injunction:
1.

That Defendants are enjoined from enforcing against Plaintiffs in this case, until
15 months after a Final Judgment from this Court addressing Plaintiffs’ claims,

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the effective date of the new textual and graphic warnings implemented by the
regulation published at 76 Fed. Reg. 36,628 (June 22, 2011) and required by
Section 201(a) of the Tobacco Control Act;
2.

That Defendants are enjoined from enforcing against Plaintiffs in this case, until
15 months after a Final Judgment from this Court addressing Plaintiffs’ claims,
the effective date of the following statutory provisions, which impose the stated
labeling requirements:
(a) “the name and place of business of the tobacco product manufacturer,
packer, or distributor,” see Act § 101(b) (inserting FDCA § 903(a)(2)(A)),
21 U.S.C. § 387c(a)(2)(A);
(b) “an accurate statement of the quantity of the contents in terms of weight,
measure, or numerical count,” see Act § 101(b) (inserting FDCA §
903(a)(2)(B)), 21 U.S.C. § 387c(a)(2)(B);
(c) “an accurate statement of the percentage of the tobacco used in the product
that is domestically grown tobacco and the percentage that is foreign
grown tobacco,” see Act § 101(b) (inserting FDCA § 903(a)(2)(C)), 21
U.S.C. § 387c(a)(2)(C); and
(d) where applicable, “the statement ‘Sale only allowed in the United States,’”
see Act § 301, FDCA § 920(a), 21 U.S.C. § 387t(a); and

3.

That Plaintiffs in this case are permitted to continue using their current cigarette
packaging and advertising until 15 months after a Final Judgment from this Court
addressing Plaintiffs’ claims.

Plaintiffs have conferred with defendants on this motion. See LCvR 7(m). Defendants
do not agree to the relief sought herein. The parties have also conferred regarding the
appropriate briefing schedule. Under the Local Rules, Defendants have 7 days to oppose
Plaintiffs’ motion for a preliminary injunction. LCvR 65.1(c). Plaintiffs offered to extend the
deadline for Defendants’ opposition from 7 days to 21 days, with Plaintiffs reply brief due 14
days thereafter. Defendants stated that such schedule would be insufficient. However, as
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Plaintiffs explained to Defendants, and as the accompanying memorandum (pp. 21-24) makes
clear, in order to avoid having to expend significant amounts of money necessary for them to
comply with the current effective date, Plaintiffs would need this Court to resolve the
preliminary injunction motion by the end of October 2011. Therefore, a reasonably expeditious
briefing schedule is necessary. To avoid unnecessary motion practice concerning the schedule,
Plaintiffs respectfully request that the Court hold a short conference at its earliest convenience to
set a briefing schedule on this motion.

Respectfully Submitted,

Dated: August 19, 2011

/s/ Noel J. Francisco________________
Noel J. Francisco (D.C. Bar No. 464752)
Geoffrey K. Beach (D.C. Bar No. 439763)
Warren Postman (D.C. Bar No. 995083)

Floyd Abrams (pro hac vice application pending)
Joel Kurtzberg (pro hac vice application pending)
Kayvan Sadeghi (pro hac vice application pending)

JONES DAY
51 Louisiana Avenue, NW
Washington, D.C. 20001-2113
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]

CAHILL GORDON & REINDEL LLP
80 Pine Street
New York, NY 10005-1702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
-and-

Counsel for Plaintiff R.J. Reynolds and
Santa Fe Natural Tobacco Company
Philip J. Perry (D.C. Bar No. 434278)
LATHAM & WATKINS LLP
555 11th Street, NW, Suite 1000
Washington DC 20004-1304
Telephone: [phone]
Facsimile: [phone]
[e-mail]

Counsel for Plaintiff Commonwealth Brands,
Inc.

Patricia A. Barald (D.C. Bar No. 218016)
Scott D. Danzis (D.C. Bar No. 481426)
COVINGTON & BURLING LLP
1201 Pennsylvania Avenue, NW
Washington, DC 20004-2401
Telephone: [phone]
Facsimile: 202.662.6291
[e-mail]
[e-mail]
Counsel for Plaintiff Lorillard
Tobacco Company

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Jonathan D. Hacker (D.C. Bar No. 456553)
O’MELVENY & MYERS LLP
1625 Eye Street, NW
Washington, D.C. 20006-4061
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Counsel for Plaintiff Liggett Group LLC

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
R.J. REYNOLDS TOBACCO COMPANY,
LORILLARD TOBACCO COMPANY,
COMMONWEALTH BRANDS, INC.,
LIGGETT GROUP LLC, and SANTA FE
NATURAL TOBACCO COMPANY, INC.,

Civil Action No. 11-01482 (RCL)

Plaintiffs,
v.
UNITED STATES FOOD AND DRUG
ADMINISTRATION, MARGARET
HAMBURG, Commissioner of the United
States Food and Drug Administration, and
KATHLEEN SEBELIUS, Secretary of the
United States Department of Health and
Human Services,
Defendants.

MEMORANDUM IN SUPPORT OF
PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
Noel J. Francisco (D.C. Bar No. 464752)
Geoffrey K. Beach (D.C. Bar No. 439763)
Warren Postman (D.C. Bar No. 995083)

Floyd Abrams (pro hac vice application pending)
Joel Kurtzberg (pro hac vice application pending)
Kayvan Sadeghi (pro hac vice application pending)

JONES DAY
51 Louisiana Avenue, NW
Washington, D.C. 20001-2113
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]

CAHILL GORDON & REINDEL LLP
80 Pine Street
New York, NY 10005-1702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]

Counsel for Plaintiff R.J. Reynolds and \
Santa Fe Natural Tobacco Company

-and-

Philip J. Perry (D.C. Bar No. 434278)

Patricia A. Barald (D.C. Bar No. 218016)
Scott D. Danzis (D.C. Bar No. 481426)

LATHAM & WATKINS LLP
555 11th Street, NW, Suite 1000
Washington DC 20004-1304
Telephone: [phone]
Facsimile: [phone]
[e-mail]

COVINGTON & BURLING LLP
1201 Pennsylvania Avenue, NW
Washington, DC 20004-2401
Telephone: [phone]
Facsimile: 202.662.6291
[e-mail]
[e-mail]

Counsel for Plaintiff Commonwealth Brands,
Inc.

Counsel for Plaintiff Lorillard
Tobacco Company

Jonathan D. Hacker (D.C. Bar No. 456553)
O’MELVENY & MYERS LLP
1625 Eye Street, NW
Washington, D.C. 20006-4061
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Counsel for Plaintiff Liggett Group LLC

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BACKGROUND
For more than 45 years, cigarettes sold in the United States have been accompanied by
various Surgeon General’s Warnings, and Plaintiffs have never challenged any of them. On June
22, 2011, the Food and Drug Administration (“FDA”) published a Final Rule requiring that
manufacturers of cigarette products, including Plaintiffs, radically change all of their cigarette
packaging and advertising, so as to prominently display nine new textual warnings along with
disturbing and emotionally-charged graphic images. These graphics, which include images of a
body on an autopsy table and of diseased body parts, are designed to shock, disgust, and frighten
adult consumers of cigarettes. The new graphic warnings also include a telephone hotline
reference that directly admonishes smokers to “QUIT-NOW” and must occupy the top 50% of
the front and back panels of each and every package and the top 20% of all printed advertising.
See FDA, Required Warnings for Cigarette Packages and Advertisements, 76 Fed. Reg. 36,628
(June 22, 2011) (“the Rule”).1

1

The new warnings must be placed on any “Package,” which the Rule defines to include “a pack, box,
carton, or container of any kind in which cigarettes are offered for sale, sold, or otherwise distributed to consumers.”
76 Fed. Reg. at 36, 753. Thus, for a manufacturer like R.J. Reynolds, the Rule requires changes to no fewer than
480 distinct package designs. See Declaration of J. Brice O’Brien ¶ 5.

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The Act also contains a related set of labeling requirements (hereafter the “Related
Requirements”), which require that cigarette packaging display:
1. “the name and place of business of the tobacco product manufacturer, packer, or
distributor,” see Act § 101(b) (inserting FDCA § 903(a)(2)(A)), 21 U.S.C. §
387c(a)(2)(A);
2. “an accurate statement of the quantity of the contents in terms of weight, measure,
or numerical count,” see Act § 101(b) (inserting FDCA § 903(a)(2)(B)), 21 U.S.C.
§ 387c(a)(2)(B);
3. “an accurate statement of the percentage of the tobacco used in the product that is
domestically grown tobacco and the percentage that is foreign grown tobacco,”
see Act § 101(b) (inserting FDCA § 903(a)(2)(C)), 21 U.S.C. § 387c(a)(2)(C);
and
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4. where applicable, “the statement ‘Sale only allowed in the United States,’” see
Act § 301, FDCA § 920(a), 21 U.S.C. § 387t(a).
Likewise, the Act mandates changes to the substantive content of the text of the warnings. See
Act § 201, 123 Stat. at 1842-43 (listing nine new textual warnings).
The Act provides for a 15-month implementation period. See Act § 201(b), 15 U.S.C §
1333, note (setting effective date of new textual and graphic warnings required by FCLAA §§
4(a), (d)); Act § 103(q)(5), 21 U.S.C. § 387c, note (setting same effective date for the Related
Requirements of FDCA § 902(a)(2)(A)-(C)); Act § 301, 21 U.S.C. § 387t (setting same effective
date for the Related Requirement of FDCA § 920(a)). And FDA has agreed that this 15-month
implementation period is necessary. See 76 Fed. Reg. at 36,703. Consequently, the new
warnings and Related Requirements will currently become effective for all cigarette packages
manufactured on or after September 22, 2012, and introduced into commerce on or after October
22, 2012.
The new “warnings” imposed by the Rule are unprecedented. They do not convey purely
factual and uncontroversial information to assist consumers in making informed decisions.
Instead, the “warnings” are unbridled advocacy, plainly intended to drown out Plaintiffs’ speech
about their products with the Government’s message: “Don’t Buy This Product.” Indeed, even
FDA concedes that the Rule will ensure that “every single pack of cigarettes in our country will
in effect become a mini-billboard” for the Government’s anti-smoking message.2 Or, as HHS
Secretary Sebelius phrased it, the warnings effectively “rebrand[] our cigarette packs.”3 This is

2

FDA, Tobacco Strategy Announcement (Nov. 10, 2010), appearing at
htttp://www.fda.gov/TobaccoProducts/NewsEvents/ucm232556.htm.
3

Press Briefing by Press Secretary Jay Carney, Secretary of Health and Human Services Kathleen Sebelius,
and FDA Commissioner Margaret Hamburg (June 21, 2011) (“Press Briefing”), http://www.whitehouse.gov/thepress-office/2011/06/21/press-briefing-press-secretary-jay-carney-secretary-health-and-human-ser.

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precisely the type of compelled speech that the First Amendment prohibits. See, e.g., Wooley v.
Maynard, 430 U.S. 705, 715 (1977) (holding that the State may not use another person’s
“personal property as a ‘mobile billboard’ for the State’s ideological message”). Moreover, FDA
justified the warnings it selected on grounds that were illogical, not supported by the record, and
contradictory, and ignored less intrusive but equally effective alternatives. Finally, FDA failed
to provide sufficient notice to allow meaningful comment on the Rule. Plaintiffs have therefore
challenged the Rule as violative of their rights under the First Amendment and as arbitrary and
capricious under the Administrative Procedure Act (“APA”), 5 U.S.C. § 705, § 706(2)(A).
It will take Plaintiffs more than a year of vigorous efforts, at a cost of tens of millions of
dollars, to redesign, order, install and test equipment capable of printing the new warnings in the
colors and styles required by the Rule. See Declaration of J. Brice O’Brien ¶ 8; Declaration of
Stephen Klepper ¶ 20; Declaration of William Melton ¶¶ 9-12; Declaration of Gregory A. Sulin
¶ 7; Declaration of David D. Depalma ¶ 12. All of this money will be irretrievably lost if, as
Plaintiffs believe, the Rule is invalid. Plaintiffs therefore seek preliminary injunctive relief to
preserve the status quo pending the Court’s review of the challenged Rule, so as to enable the
judicial process to move forward without causing irreparable injury to Plaintiffs. Specifically,
Plaintiffs request that the Court postpone the effective date of the new warnings and Related
Requirements until fifteen months after the Court has ruled on Plaintiffs’ challenge, to ensure
that Plaintiffs’ redesign and implementation of new packaging and advertising requirements
reflect the requirements of the Rule as reviewed and upheld or modified by the Court.
A short additional postponement of the effective date would have no material adverse
impact from a public health perspective. FDA has demonstrated no urgency, promulgating the
Rule as late as was permissible under the Act’s relatively lengthy rulemaking and

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implementation period. And FDA’s own estimate of the impact of the Rule on smoking
prevalence is “in general not statistically distinguishable from zero.” 76 Fed. Reg. at 36,776.
Moreover, during the period of review by this Court, all cigarette packaging and advertising will
continue to bear the current health warnings which, combined with the vast array of other
information available, have produced effectively universal awareness of the health risks of
smoking.
Accordingly, Plaintiffs seek preliminary injunctive relief under the APA and Federal
Rule 65 to preclude enforcement of the new warnings and Related Requirements and allow
Plaintiffs to continue using their current packaging and advertising until 15 months following a
decision by this Court.
ARGUMENT
It has long been recognized that, where a party challenges the validity of a law before its
enforcement, courts have the power to issue a preliminary injunction suspending enforcement of
the law, so that a plaintiff with a colorable claim can avoid irreparable injury pending judicial
review. Fed. Trade Comm’n v. Weyerhaeuser Co., 665 F.2d 1072, 1084 (D.C. Cir. 1981) (noting
that the power to issue preliminary injunctive relief preserving the status quo derives from
“‘equity practice with a background of several hundred years of history’” (quoting Hecht Co. v.
Bowles, 321 U.S. 321, 329 (1944))). Moreover, the Administrative Procedure Act (“APA”)
affirms that, in light of the complexity of modern regulatory requirements, this traditional power
is available to toll the commencement of regulations that are not yet effective pending judicial
review. Specifically, § 705 of the APA provides that:
On such conditions as may be required and to the extent necessary
to prevent irreparable injury, the reviewing court . . . may issue all
necessary and appropriate process to postpone the effective date of

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an agency action or to preserve status or rights pending conclusion
of the review proceedings.
5 U.S.C. § 705.
As this Court has explained:
The factors that the Court must consider in determining whether to
grant relief under 5 U.S.C. § 705 are the same as those considered
in whether to grant injunctive relief under Fed. R. Civ. P. 65.
These factors are: (1) whether there is a substantial likelihood of
success on the merits; (2) whether the movant will suffer
irreparable harm if the injunction is not granted; (3) whether the
injunction will substantially injure other interested parties; and (4)
whether the public interest would be furthered by the injunction.
Ivax Pharms., Inc. v. FDA, No. 04-1603, 2004 U.S. Dist. LEXIS 29233, at *1-2 (D.D.C. Sept. 17,
2004) (citing Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C. Cir. 1998)); see also
Affinity Healthcare Servs., Inc. v. Sebelius, 720 F. Supp. 2d 12, 15 n.4 (D.D.C. 2010) (“Motions
to stay agency action pursuant to these provisions are reviewed under the same standards used to
evaluate requests for interim injunctive relief.”).
Courts typically apply the foregoing factors on a “sliding scale.” Davis v. Pension
Benefit. Guar. Corp., 571 F.3d 1288, 1291 (D.C. Cir. 2009). That is, “if the movant makes a
very strong showing of irreparable harm and there is no substantial harm to the non-movant, then
a correspondingly lower standard can be applied for likelihood of success.” Id. at 1292.
Likewise, “a greater likelihood of the [the movant’s] success will militate for a preliminary
injunction unless particularly strong equities favor the [non-moving] parties.” FTC v. Whole
Foods Mkt, Inc., 548 F.3d 1028, 1035 (D.C. Cir. 2008); see also Morgan Stanley DW Inc. v.
Rothe, 150 F. Supp. 2d 67, 72-73 (D.D.C. 2001) (same). Of course, since preliminary injunctive
relief is by definition provisional, “the court is not required to find that ultimate success by the
movant is a mathematical probability, and indeed, the court may grant an injunction even though

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its own approach may be contrary to the movants’ view of the merits.” Id. at 72 (internal
quotation marks omitted).
Here, Plaintiffs have a high likelihood of prevailing on the merits and preliminary
injunctive relief would prevent irreparable injury to them while leaving unharmed the interests of
Defendants and the public. As discussed at length in Plaintiffs’ Memorandum in Support of their
Motion for Summary Judgment, the Rule constitutes a singular and unprecedented intrusion on
Plaintiffs’ First Amendment rights to communicate with adult customers about lawful tobacco
products. FDA has failed to demonstrate that the Rule will further any government interest,
much less that they are narrowly tailored to further a compelling interest. Indeed, FDA’s
justifications for the selected warnings find so little support in the record or reason that the Rule
is arbitrary and capricious in violation of the APA.
Moreover, a short injunction postponing implementation of the new warnings and
Related Requirements will harm neither FDA nor the public. The Act itself provided for a
relatively lengthy rulemaking and implementation period, and FDA has demonstrated no urgency
in promulgating the Rule. Presumably, this pace of rulemaking reflects the fact that the current
warning and labeling regime, which has produced effectively universal awareness of the health
risks of smoking, will remain fully operative until the new Rule goes into effect. Indeed, FDA
itself has acknowledged that the estimated benefits from the Rule in terms of decreased smoking
rates are “in general not statistically distinguishable from zero.” 76 Fed. Reg. at 36,776.
Fundamentally, all Plaintiffs seek is adequate time—which Congress and FDA have both
recognized would be needed—to come into compliance with such new warnings and Related
Requirements as this Court may hold to be required following judicial review of Plaintiffs’
challenge to the Rule. Injunctive relief postponing the effective date of the new warnings and

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allowing Plaintiffs to continue using their current packaging and advertising until 15 months
following a decision by this Court is plainly appropriate under 5 U.S.C. § 705 and Federal Rule
of Civil Procedure 65.
I.

THERE IS A (MORE THAN) SUBSTANTIAL LIKELIHOOD THAT THE RULE
VIOLATES THE FIRST AMENDMENT AND THE APA.
As discussed in Plaintiffs’ Motion for Summary Judgment and supporting Memorandum

(“SJ Mem.”), the Rule violates both the First Amendment and the APA. Plaintiffs will not
belabor these arguments here.
In short, the Rule violates the First Amendment under any standard of review. First, by
confiscating the top 50% of both the front and back panels of Plaintiffs’ cigarette packages and
the top 20% of cigarette advertisements to display non-factual and highly controversial graphic
warnings designed to disgust, frighten and revolt, the Rule seeks to promote the Government’s
anti-smoking message and to drown out plaintiffs’ own speech promoting their lawful products
to adult customers. The Rule is therefore subject to, and cannot survive, strict scrutiny under the
First Amendment, pursuant to which it is presumptively unconstitutional. See SJ Mem. at 17-31;
Wooley, 430 U.S. at 714; Hurley v. Irish-Am. Gay, Lesbian & Bisexual Grp. of Boston, Inc., 515
U.S. 557, 573-74 (1995).
Unlike normal product warnings, the graphic “warnings” required by the Rule do not fit
within the limited exception to strict scrutiny that allows the Government to compel disclosure of
“purely factual and uncontroversial” information. See Zauderer v. Office of Disciplinary
Counsel, 471 U.S. 626, 651 (1985). The new graphic warnings are manifestly not “purely
factual and uncontroversial.” But even if they were, they would still be unconstitutional under
the First Amendment because even purely factual and uncontroversial disclosure requirements
cannot be “unjustified [and] unduly burdensome.” See id. Yet FDA has conceded that the
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estimated impact of the Rule on smoking rates is “in general not statistically distinguishable from
zero,” 76 Fed. Reg. at 36,776, and the confiscation of half of both sides of cigarette packaging
and one fifth of all cigarette advertising for the Government’s anti-smoking message imposes
obvious and substantial burdens on Plaintiffs. It is therefore difficult to conceive of warnings
that are more clearly “unjustified [and] unduly burdensome.” See SJ Mem. at 31-35.
The Rule also unconstitutionally burdens Plaintiffs’ right to engage in protected
commercial speech, while failing to directly advance any legitimate governmental interest. The
Rule thus fails the test applied to restrictions on commercial speech as set forth in Central
Hudson Gas & Electric Corp. v. Pub. Serv. Comm’n, 447 U.S. 557, 564 (1980). See SJ Mem. at
35-37.
Were similar warnings required on other lawful products disfavored by the Government,
the infringement on First Amendment rights would be readily apparent. For example, it could
not seriously be suggested that the Government could require images of grossly obese
individuals or bodies on autopsy tables to be displayed on fast food packages because the
Government disfavors obesity, or images of diseased livers or crying children to be displayed on
wine bottles to discourage adult consumption. If the Rule is constitutional, however, then so
would be the warnings set forth below:

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The Rule’s imposition of comparable “warnings” is equally unlawful here. There is no “‘vice’
exception” to the First Amendment. 44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 513-14
(1996) (plurality opinion).
Finally, in promulgating the Rule, FDA also violated the APA. FDA acted arbitrarily and
capriciously by selected warnings based on reasoning that was illogical, not supported by the
record, and contradictory, and ignored less intrusive but equally effective alternatives. See SJ
Mem. at 37-41. And FDA also failed to provide sufficient notice to allow meaningful comment
on the Rule. See SJ Mem. at 41-43.
Accordingly, there is more than a “substantial likelihood,” Davis, 571 F.3d at 1291, that
Plaintiffs will ultimately prevail in their challenge to the Rule.
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II.

PLAINTIFFS WILL SUFFER IRREPARABLE INJURY ABSENT
PRELIMINARY RELIEF.
The new warnings and Related Requirements cannot be implemented without extensive

advance preparation and expenditures. Congress and FDA recognized as much and therefore
provided for a 15-month implementation period. See 123 Stat. 1845; see also 76 Fed. Reg. at
36,703 (“The Tobacco Control Act specifies a 15-month implementation period for cigarette
manufacturers to include required warnings on their packages and for all cigarette advertisements
to comply with this rule. We agree this is an appropriate amount of time for implementation of
the rule.”); id. at 36716 (explaining that the agency included “10 percent rush charges” in
calculating the cost of the rule because “[r]esources are scarce and a large number of labeling
changes [would have to be] simultaneously rushed” to meet the 15-month deadline).
It is likewise clear that Plaintiffs cannot risk disregarding the Rule until there is greater
legal certainty about its validity. As a practical matter, this means that Plaintiffs cannot wait for
this Court to rule on their summary judgment motion before beginning to prepare their new
packaging. Therefore, unless the effective date of the new warnings is enjoined until 15 months
after this Court rules on the merits of Plaintiffs’ claims—the compliance period that Congress
and FDA determined was necessary here—Plaintiffs will be forced to spend millions of dollars
and thousands of employee-hours to comply with a regulation despite the substantial chance that
the regulation is constitutionally invalid. These costs are detailed at greater length in the
accompanying affidavits, but they are considerable. For example:
•

Plaintiff R.J. Reynolds Tobacco (“RJRT”) would be forced to modify
approximately 480 distinct package designs. See Affidavit of J. Brice O’Brien ¶ 5.

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•

RJRT has therefore already purchased blank metal printing cylinders, which will
be engraved and used to apply the ink on the new cigarette packaging, at a cost of
$1.5 million. Id. ¶ 8.

•

RJRT has hired a graphics design firm to design the new labeling; the firm has
already begun this work, which will result in approximately $0.5 million in costs
from late June through mid-December 2011. Id. ¶ 9.

•

RJRT will soon need to begin the internal approval process for the new package
designs in September 2011. The approval process will be extensive given the
nature of the label changes and the number of individual designs. Numerous
departments—including Consumer Marketing, Corporate Relations, Legal,
Manufacturing, Operations Strategy and Innovations, Procurement, Product
Services, Tax, and Trade Marketing—will need to review and approve
approximately 490 individual designs. RJRT’s Product Integrity team will also
undertake a detailed review and approval of each pack and carton. On average,
this review will require approximately 6 hours per design. Id. ¶ 10.

•

RJRT will have to contract with its third-party design firm to engrave
approximately 2,500 printing cylinders with the new packaging designs beginning
in November 2011. The cost of this engraving will be approximately $3.8 million.
Id. ¶ 11.

•

RJRT will also have to order new embossing for its Pall Mall and Camel
packaging in December 2011 at a cost of $0.2 million and for its Camel
packaging at a cost of $0.5 million in January 2011. Id. ¶ 12.

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•

RJRT will need to provide the engraved cylinders to its third-party packaging
manufacturer and contract for the production of new packaging by March 2012.
The manufacturer must begin production in March because it will need to produce
the new packaging while still producing RJRT’s current packaging. The
manufacturer will therefore not have its full manufacturing capacity available for
the new packaging. The cost of producing the new packaging will be
approximately $5.0 million. Id. ¶ 13.

•

In addition to the monetary costs described above, the foregoing tasks will occupy
over 4,000 hours of RJRT employee time. Id. ¶ 14.

Plaintiffs Lorillard Tobacco Company, Commonwealth Brands, Inc., and Liggett Group
LLC, each must also bear substantial costs. See generally Declaration of Stephen Klepper;
Declaration of Victor D. Lindsley, III; Declaration of William Melton; Declaration of Gregory A.
Sulin; Declaration of David D. Depalma.
Plaintiffs will not be able to recoup these costs if (as is likely) this Court ultimately
concludes that the new warnings are unconstitutional in whole or in part, or violate the APA.
Where, as here, economic losses are not recoverable later through compensatory damages, courts
in this circuit have regularly held that such costs constitute “irreparable injury” justifying
preliminary equitable relief. See Smoking Everywhere, Inc. v. FDA, 680 F. Supp. 2d 62, 77 n. 19
(D.D.C. 2010) (holding that economic injury caused by APA violation by the FDA is irreparable
“because plaintiffs cannot recover money damages against FDA.”); see also Bracco Diagnostics,
Inc. v. Shalala, 963 F. Supp. 20, 29 (D.D.C. 1997) (“While the injury to plaintiffs is ‘admittedly
economic,’ there is ‘no adequate compensatory or other corrective relief’ that can be provided at
a later date, tipping the balance in favor of injunctive relief.” (quoting Hoffmann-Laroche Inc. v.

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Califano, 453 F. Supp. 900, 903 (D.D.C. 1978))); Nat’l Med. Care v. Shalala, No. 95 Civ. 0860,
1995 U.S. Dist. LEXIS 10074, at *7 (D.D.C. June 6, 1995) (granting preliminary injunction
because costs of compliance with agency’s interpretation of Medicare billing requirement would
cause plaintiffs irreparable harm in the form of “more than 90,000 man hours of work and over
$ 1 million”; moreover, “[i]f the Court eventually decides in the Plaintiffs’ favor, all of these
efforts will have been rendered futile”). Accordingly, absent the relief sought here, Plaintiffs
will suffer irreparable harm even if the courts ultimately conclude that Plaintiffs are correct on
the merits.
This is precisely the situation that 5 U.S.C. § 705 and Rule 65 are intended to prevent.
As the plain text of § 705 provides, a reviewing court should “issue all necessary and appropriate
process” in order to “postpone the effective date of an agency action or to preserve status or
rights pending conclusion of the review proceedings” and should do so “to the extent necessary
to prevent irreparable injury.” 5 U.S.C. § 705 (emphasis added). Here, as explained above,
“postpon[ing] the effective date” of the new warnings and preserving the status quo is “necessary
to prevent irreparable injury.” Id.
For the same reasons, the Court should also postpone the effective dates of the Related
Requirements. Congress provided that the new warnings and the Related Requirements would
all become effective on the same date in order to avoid manufacturers having to undergo
multiple, costly packaging changes. See Act § 103(q)(5), 21 U.S.C. § 387c, note (stating that
FDCA § 902(a)(2) would be effective “15 months after the issuance of the [Rule]”); Act § 301,
21 U.S.C. § 387t (stating that FDCA § 920(a) would be effective “15 months after the issuance
of the [Rule]”). Ensuring that the new warnings and Related Requirements take effect together is
therefore necessary, as a construction of the Act in light of plain congressional intent, and to

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“prevent irreparable injury” and “preserve status or rights pending conclusion of the review
proceedings,” 5 U.S.C. § 705.
In short, Congress intended that Plaintiffs have 15 months after they knew what new
warnings would be required to implement all of the Act’s new cigarette labeling requirements,
and that is all Plaintiffs are seeking.
III.

ENJOINING THE EFFECTIVE DATE OF THE RULE WILL NOT PREJUDICE
THE INTERESTS OF FDA OR THE PUBLIC.
While Plaintiffs will necessarily and indisputably incur tens of millions of dollars in

unrecoverable costs if injunctive relief is not granted, FDA can show no meaningful harm to its
interests or the interests of the public from such interim relief. In the first instance, it is well
established that the Government’s interest in a particular regulation cannot override a party’s free
speech rights. Rather, “the interest of the public is in the protection of plaintiffs’ First
Amendment rights.” Christian Knights of KKK v. District of Columbia, 751 F. Supp. 212, 216
(D.D.C. 1990); see also, e.g., Stewart v. District of Columbia Armory Bd., 789 F. Supp. 402, 406
(D.D.C. 1992) (“Whatever public interest there may be in [implementing a regulation restricting
banners outside RFK Stadium], the public clearly has an interest in free speech. The public
interest in this case will be served by ensuring that plaintiffs’ First Amendment rights are not
infringed before the constitutionality of the regulation has been definitively determined.”);
O’Donnell Constr. Co. v. District of Columbia, 963 F.2d 420, 429 (D.C. Cir. 1992) (holding that
“issuance of a preliminary injunction [against a constitutionally suspect affirmative action plan]
would serve the public’s interest in maintaining a system of laws free of unconstitutional racial
classifications”). Indeed, this Court has stated categorically that “the public interest favors a
preliminary injunction whenever First Amendment rights have been violated.” People for the
Ethical Treatment of Animals v. Gittens, 215 F. Supp. 2d 120, 134 (D.D.C. 2002).
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Moreover, even if the Rule were held by the Court to be lawful, there would be no basis
for FDA to argue that the limited delay sought in implementing the Rule would cause harm to
the public interest.
First, the Act itself undermines any suggestion that the imposition of the new warnings
and Related Requirements is a matter of extreme urgency. Indeed, the Act provided FDA with
up to two years to finalize the warnings, and another 15 months before the new warnings and
Related Requirements would take effect. See supra at 9-10. These extended timelines belie any
suggestion that a short additional delay to preserve the status quo to allow meaningful judicial
review will detrimentally affect the Government or the public interest.
Second, FDA has also shown no urgency in promulgating the Rule. Because the Act ties
the effective date of the new warnings and Related Requirements to the publication date of the
Rule, FDA could have substantially advanced the date on which these requirements would
become effective by issuing the Rule promptly after the passage of the Act. However, FDA
instead waited the maximum two years allowed under the Act before publishing the Rule, thus
belying any claim that delaying the new warnings and the Related Requirements by a few more
months would harm the public interest.
Third, a short delay would not cause any cigarettes to be sold without adequate health
warnings or other labeling. Rather, the current Surgeon General’s warnings will continue to be
displayed on all cigarette packages and in all cigarette advertisements. Indeed, FDA itself
previously rejected a request for more expanded warnings precisely because it concluded that
“the current Surgeon General’s warnings are sufficient” as a means of conveying the “‘relevant
warnings, precautions, side effects, and contraindications’” of cigarettes. See Regulations
Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco to Protect Children

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and Adolescents, 61 Fed. Reg. at 44,521 (Aug. 28, 1996) (quoting 21 U.S.C. § 352(r)). Although
FDA now conclusorily asserts that the Surgeon General’s warnings “fail to convey relevant
information in an effective way,” Required Warnings for Cigarette Packages and Advertisements,
75 Fed. Reg. 69,524, 69,525 (Nov. 12, 2010), it has provided no reasoned or scientific basis for
this view. Moreover, available empirical evidence confirms that the Surgeon General’s warnings
have not only produced effectively universal awareness of the health risks of smoking, but that
most consumers in fact overestimate the seriousness of the health risks associated with smoking.
See SJ Mem. at 14-15.
Finally, as indicated above, FDA has cited no empirical evidence that the new warnings
set forth in the final Rule will in fact reduce consumption or change smoking behavior. To the
contrary, it has acknowledged that the opposite is true. FDA’s own study concluded that the
warnings imposed by the Rule will have no material effect on consumers’ understanding of the
risks of smoking or consumers’ intentions to smoke. See SJ Mem. 11-14. Consistent with this
finding, FDA’s own analysis estimated that the Rule’s impact on smoking rates would be “in
general not statistically distinguishable from zero.” See SJ Mem. 7-10. Thus, the Government’s
own findings suggest that the Rule would not prevent any material harm to the Government’s or
the public’s interests even if implemented permanently; a fortiori, a short delay in the
implementation of the Rule will not meaningfully affect those interests.
In short, given that Congress and FDA themselves acknowledged the propriety of a
lengthy implementation period, existing warnings that FDA previously found were sufficient will
continue to remain in force, and FDA itself found that the Rule will have essentially no material
effect on consumers’ understanding of the risks of smoking or consumers’ intentions to smoke, it
is clear that no substantial injury would be caused to FDA or the public by allowing Plaintiffs to

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continue using their current packaging and advertising for the short period of additional time
necessary to allow for meaningful review of the legality of the Rule. In contrast, absent such
relief, the Rule will irreparably deprive Plaintiffs of both their First Amendment rights and the
millions of dollars necessary to assure compliance under the existing effective date.
CONCLUSION
For the foregoing reasons, in accordance with 5 U.S.C. § 705 and Federal Rule of Civil
Procedure 65, Plaintiffs request that this Court preliminarily enjoin the effective date of the new
warnings and Related Requirements and allow Plaintiffs to continue using their current
packaging and advertising until 15 months following a decision by this Court.

Respectfully Submitted,

Dated: August 19, 2011

/s/ Noel J. Francicco
Noel J. Francisco (D.C. Bar No. 464752)
Geoffrey K. Beach (D.C. Bar No. 439763)
Warren Postman (D.C. Bar No. 995083)

Floyd Abrams (pro hac vice application pending)
Joel Kurtzberg (pro hac vice application pending)
Kayvan Sadeghi (pro hac vice application pending)

JONES DAY
51 Louisiana Avenue, NW
Washington, D.C. 20001-2113
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]

CAHILL GORDON & REINDEL LLP
80 Pine Street
New York, NY 10005-1702
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
[e-mail]
-and-

Counsel for Plaintiff R.J. Reynolds and
Santa Fe Natural Tobacco Company

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Philip J. Perry (D.C. Bar No. 434278)

Patricia A. Barald (D.C. Bar No. 218016)
Scott D. Danzis (D.C. Bar No. 481426)

LATHAM & WATKINS LLP
555 11th Street, NW, Suite 1000
Washington DC 20004-1304
Telephone: [phone]
Facsimile: [phone]
[e-mail]

COVINGTON & BURLING LLP
1201 Pennsylvania Avenue, NW
Washington, DC 20004-2401
Telephone: [phone]
Facsimile: 202.662.6291
[e-mail]
[e-mail]

Counsel for Plaintiff Commonwealth Brands,
Inc.

Counsel for Plaintiff Lorillard
Tobacco Company

Jonathan D. Hacker (D.C. Bar No. 456553)
O’MELVENY & MYERS LLP
1625 Eye Street, NW
Washington, D.C. 20006-4061
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Counsel for Plaintiff Liggett Group LLC

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
R.J. REYNOLDS TOBACCO COMPANY,
LORILLARD TOBACCO COMPANY,
COMMONWEALTH BRANDS, INC.,
LIGGETT GROUP LLC, and SANTA FE
NATURAL TOBACCO COMPANY, INC.,

Civil Action No. 11-01482 (RCL)

Plaintiffs,
v.
UNITED STATES FOOD AND DRUG
ADMINISTRATION, MARGARET
HAMBURG, Commissioner of the United
States Food and Drug Administration, and
KATHLEEN SEBELIUS, Secretary of the
United States Department of Health and
Human Services,
Defendants.

[PROPOSED] ORDER GRANTING PRELIMINARILY INJUNCTIVE RELIEF
The Court having determined that Plaintiffs have demonstrated a substantial likelihood of
success on the merits, that Plaintiffs would suffer irreparable injury absent this order, and that
neither the Defendant nor the Public would suffer comparable injury from this order,
IT IS HEREBY ORDERED that Plaintiffs’ Motion For Preliminary Injunction is
GRANTED. Pursuant to 5 U.S.C. § 705 and Rule 65 of the Federal Rules of Civil Procedure,
the Court hereby ORDERS:
1.

Defendants are enjoined from enforcing against Plaintiffs in this case, until 15 months
after a Final Judgment from this Court addressing Plaintiffs’ claims, the effective date of
the new textual and graphic warnings implemented by the regulation published at 76 Fed.
Reg. 36,628 (June 22, 2011) and by Section 201(a) of the Tobacco Control Act.

2.

Defendants are enjoined from enforcing against Plaintiffs in this case, until 15 months
after a Final Judgment from this Court addressing Plaintiffs’ claims, the effective date of
the following statutory provisions, which impose the stated labeling requirements:
a. “the name and place of business of the tobacco product manufacturer, packer, or
distributor,” see Act § 101(b) (inserting FDCA § 903(a)(2)(A)), 21 U.S.C. §
387c(a)(2)(A);
b. “an accurate statement of the quantity of the contents in terms of weight, measure, or
numerical count,” see Act § 101(b) (inserting FDCA § 903(a)(2)(B)), 21 U.S.C. §
387c(a)(2)(B);
c. “an accurate statement of the percentage of the tobacco used in the product that is
domestically grown tobacco and the percentage that is foreign grown tobacco,” see
Act § 101(b) (inserting FDCA § 903(a)(2)(C)), 21 U.S.C. § 387c(a)(2)(C); and
d. where applicable, “the statement ‘Sale only allowed in the United States,’” see Act §
301, FDCA § 920(a), 21 U.S.C. § 387t(a).

3.

Plaintiffs in this case are permitted to continue using their current cigarette packaging and
advertising until 15 months after a Final Judgment from this Court addressing Plaintiffs’
claims.

It is SO ORDERED this _________ day of ____________, 2011.

_________________________
Hon. Richard J. Leon
United States District Judge

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