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September 30, 2020
5 min to read

Federal Appeals Court Hears Deeming Rule Challenge

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Jim McDonald

A recent rulemaking policy change by the Trump administration may have been partially prompted by concern over a vaping industry lawsuit challenging the FDA Deeming Rule. That lawsuit is currently being appealed on the grounds that the old rulemaking procedure is unconstitutional.

If the vaping industry plaintiffs are successful, the case could open the floodgates for challenges to other rules issued by federal agencies.

Small vape businesses heard in federal appeals court

A federal appeals court heard online oral arguments last week in the appeal of Moose Jooce, et al v. Food and Drug Administration, which challenges the FDA Deeming Rule on grounds that it violates the Appointments Clause and First Amendment of the Constitution. The lawsuit, which consolidated three separate complaints by small vaping businesses, was decided in favor of the FDA in February by U.S. District Court Judge Christopher Cooper.

The vape industry plaintiffs claim that the Appointments Clause of the Constitution requires federal rules that carry the force of law (like the Deeming Rule) to be signed by officials who have been appointed by the President and approved by the Senate. The Deeming Rule was signed by a career civil servant, Associate FDA Commissioner Leslie Kux.

In February, District Judge Cooper had found against the plaintiffs, noting that regulations not signed by a Senate-confirmed officer can be constitutional if they are confirmed later by a Senate-confirmed official. Judge Cooper cited previous rulings that “consistently held that a rulemaking ‘that would otherwise be unlawful due to procedural or technical defects . . . can be cured through a subsequent lawful ratification of that action’.”

The judge said that two FDA commissioners ratified the Deeming Rule after it was issued, and that the D.C. Circuit Court of Appeals has “repeatedly” confirmed that “an agency’s ratification of a prior decision or action cures any potential Appointments Clause violation.”

"An FDA loss could also invalidate the Deeming Rule and force the agency to start the process of regulating vaping products from the beginning."


But last week a three-judge panel of the federal Circuit Court of Appeals in Washington D.C.—the same court cited by Judge Cooper—heard lawyers for the plaintiffs argue that Judge Cooper had been wrong, and they seemed to indicate they might agree.

“This court should absolutely be concerned about FDA’s whack-a-mole approach to the Appointments Clause,” attorney Jonathan Wood told the appeals court during oral arguments. Wood works for the Pacific Legal Foundation, the conservative/libertarian public interest law firm representing the Moose Jooce plaintiffs.

The circuit court judges seemed to concur, according to Courthouse News. All three questioned whether rules issued by officials not confirmed by the Senate were valid, with one even wondering whether the procedure of ratifying rules after the fact makes the Appointments Clause “something of a dead letter.”

The lawsuit (and appeal) also challenges the Deeming Rule on First Amendment grounds, asserting that communication by vape shop employees about vaping risks and benefits can’t be preemptively prohibited by limitations in the Deeming Rule.

"Should the circuit court panel overturn the original decision based on the Appointments Clause, it could open the federal government to an avalanche of lawsuits challenging other improperly issued rules."

On the First Amendment claim, Judge Cooper had said in February that he was bound by precedent set in the December 2019 U.S. Circuit Court of Appeals decision in the Nicopure Labs vs FDA appeal. In that case, a three-judge panel unanimously upheld the 2017 ruling against the vapor industry, issued by D.C. District Court Judge Amy Berman Jackson.

“The Circuit [Court of Appeals] quite clearly held that placing the burden on manufacturers to substantiate their marketing claims does not violate the First Amendment,” Judge Cooper wrote. “Bound by that precedent, the Court holds that the Tobacco Control Act’s premarket review provisions do not impermissibly burden speech.”

The appeal is likely to take months to be decided. Should the circuit court panel overturn the original decision based on the Appointments Clause, it could open the federal government to an avalanche of lawsuits challenging other improperly issued rules. An FDA loss could also invalidate the Deeming Rule and force the agency to start the process of regulating vaping products from the beginning.


HHS Secretary Azar changes rulemaking procedures

The Appointments Clause challenge in the Moose Jooce case, and other similar cases, may have pushed Health and Human Services Secretary Alex Azar to recently change the method by which HHS agencies like the FDA issue rules.

Sec. Azar issued a memo, just days before oral arguments in the vaping industry appeal were set to begin, saying that future rules by HHS agencies would be signed by the secretary himself, rather than agency employees. The announcement was interpreted by many in Washington as a power grab by Azar and the Trump administration, intended to prevent the FDA from issuing rules politically unpopular in the White House. But it may simply be a way for the HHS to protect itself from additional Appointments Clause lawsuits.

In any case, even if the Azar memo and Moose Jooce appeal puts previous HHS agency rules in jeopardy, challenging them would have to be done on a case-by-case basis. An appeals court decision against the FDA wouldn’t automatically invalidate every other previously issued rule by the FDA or other federal agencies.

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Jim McDonald

Vaping since: 12 years

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Favorite flavors: RY4-style tobaccos, fruits

Expertise in: Political and legal challenges, tobacco control haters, moral panics

Jim McDonald

Smokers created vaping without help from the tobacco industry or anti-smoking crusaders, and I believe vapers have the right to continue innovating to help themselves. My goal is to provide clear, honest information about the challenges vaping faces from lawmakers, regulators, and brokers of disinformation. I’m a member of the CASAA board, but my opinions aren’t necessarily CASAA’s, and vice versa. You can find me on Twitter @whycherrywhy

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