The first legal challenge from the tobacco business against the U.S. Food and Drug Administration (FDA)’s recent final Deeming Rule on Tobacco has been filed. On Thursday May 26 2016, Altria filed a lawsuit in U.S. Federal Court in Washington DC over the FDA’s recent ban on the use of the word “Mild” on the company’s “Black and Mild” products.’
This lawsuit is a direct challenge to one of the expanded regulations issued by the FDA on May 10th. One the regulations indicates that Modified Risk Products, for which the FDA defines as those being described as “light”, “low”, and “mild” now requires FDA approval. This was a previously a restriction on cigarette products, but when the new regulations extended FDA’s authority to all tobacco products, it now put products like “Black and Mild” under risk.
The lawsuit was filed by John Middleton Company LLC. Middleton is a company focused on the manufacture of machine-made cigar and pipe products. It was acquired by Altria in 2007. The Black and Mild product was marketed for pipe tobacco back in 1977 and for pipe tobacco cigars in 1980 – long before the Altria acquisition.
A brand name change could have significant effects on Middleton. The company assesses Black and Mild to be the second largest selling machine-made cigar. Middleton says they have a 27.3% share of this segment of the market.
In the lawsuit, Middleton states that the Tobacco Control Act does not authorize a complete ban on the word “mild” in cigar and pipe tobacco marketing, but specifically when used as descriptor of a “modified risk” to the product. In other words Middleton assesses the word “mild” does not imply a less health risk. In addition the lawsuit sites a violation of the First and Fifth Amendments of the U.S. Constitution (Freedom of speech and protection from the government from taking private property without public use without just compensation).
The outcome of a lawsuit like this could have a ripple effect in terms of branding across the whole tobacco industry – including premium hand-made cigars. While this is the first lawsuit from a tobacco company since the final regulations were issued, this is not expected to be focus of the premium hand-made cigar industry’s response to the regulations. At press time, the hand-made segment has not indicated a plan to challenge the rulings – although this past Friday the three major trade associations representing the premium cigar industry pledged unity in their approach.