A federal court has dismissed a case challenging the FDA’s allowance of the word “natural” in Natural American Spirit’s (“NAS”) product packaging and labeling. The Plaintiff lacks standing to sue under Article III, § 2, of the U.S. Constitution, which limits federal courts to deciding actual “cases” or “controversies.”

The case is Sproule v. U.S. Food & Drug Administration, et al., No. 9:17‑cv‑80709 (S.D. Fla.), and the standing decision is significant in outlining limits on the ability to litigate over regulatory inaction.

Background

The Plaintiff in the case was a self-professed smoker of NAS cigarettes. He challenged a Memorandum of Agreement (“MOA”) between the FDA and Reynolds American Services Co./Santa Fe Natural Tobacco Co, Inc. (collectively, “Santa Fe”) related to the uses of the words “natural” and “additive free” in NAS labeling and advertising.

The MOA had been reached in settlement of an FDA Warning Letter (the “Warning Letter”) challenging the use of these words. According to the Warning Letter, these words rendered the cigarettes modified risk tobacco products (“MRTPs”). The Tobacco Control Act prohibits the sale of MRTPs without first obtaining an appropriate marketing order. See 21 U.S.C. § 387k(a).

Santa Fe disputed the Warning Letter, ultimately leading to a resolution in the form of the MOA. Under the MOA, Santa Fe would phase out NAS’s use of the phrase “additive free,” and Santa Fe could continue to use the word “natural” in NAS brand names and trademarks.

On June 6, 2017, the Plaintiff flied his Complaint in the U.S. District Court for the Southern District of Florida. In short, he complained that the FDA’s entry into the MOA constituted a departure from the required MRTP procedures and, therefore, violated the Tobacco Control Act and the Administrative Procedure Act.

Lack of Standing

The FDA promptly moved to dismiss the Plaintiff’s complaint, and the Court granted the motion on account of Plaintiff’s failure to establish standing.

As recognized by the Court, “[t]o satisfy [the] case-or-controversy requirement and establish standing to sue, Plaintiff must show: (1) [he] has suffered an injury in fact that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.”

Significant to the Plaintiff’s theory of standing, the contents of an MRTP application are made available to the public. See 21 U.S.C. § 387k(e). Thus, the Plaintiff asserted that Santa Fe’s failure to submit an MRTP application deprived him of NAS information that he otherwise would have been able to access. This argument did not suffice, as the Court held that the Plaintiff’s alleged “informational injury” failed the second and third prongs of the standing inquiry: causation and redressability.

On the causation requirement, the Court recognized that “Plaintiffs cannot rely on speculation about the unfettered choices made by independent actors not before the court.” (Quoting Clapper v. Amnesty Int’l USA, 568 U.S. 398, 414 n.5 (2013)). The Court held that the Plaintiff’s argument did just that in speculating about what unfettered choices Santa Fe (an independent actor not before the Court) might have made absent the MOA. There were “any number of choices in response to the Warning Letter,” including “submit[ing] an application for a [MRTP order],” “chang[ing] [the] labeling and advertising to avoid the application process and to avoid penalties,” “tak[ing] no action at all, in response to which the FDA may or may not have initiated an enforcement action or pursued other penalties,” and, even if “the FDA initiated an enforcement action, Santa Fe may have chosen to contest such action rather than submit an application or change its labeling and advertising.”

For similar reasons, the Plaintiff failed to establish sufficient redressability – which required “a substantial likelihood that the relief requested will redress the injury claimed.” (Quoting I.L. v. Alabama, 739 F.3d 1273, 1279 (11th Cir. 2014).) Given the range of options available to Santa Fe in response to the Warning Letter, there was insufficient likelihood that setting aside the MOA would result in Santa Fe’s filing of an MRTP application.

The Plaintiff’s failure to establish requisite causation and redressability ended the inquiry. The Court avoided the issue of whether the alleged “informational injury” constituted a sufficient “injury in fact,” instead, assuming as much “for the sake of argument.” And the Court did not have occasion to consider the FDA’s alternative ground for dismissal – that the Plaintiff had failed to state a claim.

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The immediate significance of Sproule is that (barring an appeal) the attack on the MOA is over. Relatedly, the Plaintiff’s challenge to the MOA also came up in other litigation (in which the Plaintiff is one of multiple class representatives), and it remains to be seen how the standing decision might affect any aspect of that case. Cf. generally In re: Santa Fe Natural Tobacco Co. Marketing & Sales Practices & Products Liability Litigation, No. 1:16-md-02695 (D.N.M.).

More broadly, it is important to recognize that Sproule involved a litigant’s attempt to use the courts to force regulatory action. The Court recognized this and quoted at length from an opinion of Justice Scalia, speaking to such a situation. In sum, “when the plaintiff is not himself the object of the government action or inaction he challenges, standing is not precluded, but it is ordinarily substantially more difficult to establish.” (Quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 562 (1992).)