On November 15, 2011, Zuffa, LLC, which owns the Ultimate Fighting Championship (“UFC”) brought suit against New York Attorney General Eric Schneiderman and Manhattan District Attorney Cyrus Vance Jr. seeking a declaration that New York’s ban on live mixed martial arts (“MMA”) events is unconstitutional. More specifically, the complaint, which was filed in the United States District Court for the Southern District of New York, alleges that enforcement of the ban violates UFC’s and its “performers’” free speech rights protected under the First Amendment. A copy of the UFC’s complaint can be read here.

Generally speaking, attempts by the regulate speech fall into two broad categories: 1) “content-neutral” regulations, and 2) “content-based” regulations. The government’s attempts to regulate the “time, place, and manner” of the expression or speech at issue, and not the message of the speech, are known as “content-neutral” speech regulations. In order for a “time, place, and manner” regulation to be found constitutional, it must: 1) be content neutral; 2) be narrowly tailored to achieve a significant government interest; and 3) the regulation must leave open alternative channels for communicating the information, i.e. other methods to communicate the same message still exist.

On the other hand, “content-based” regulations which attempt to regulate protected forms of expression are presumed to be unconstitutional. In order for a “content-based” regulation to be found constitutional it must pass strict scrutiny, i.e. the regulation must: 1) serve a compelling government interest which is 2) necessary to achieve this interest and for which there are no less restrictive means that would accomplish the government’s goals just as well. It should be noted that all expression is protected unless it falls into one of five categories: 1) obscenity; 2) fraudulent misrepresentation; 3) defamation; 4) advocacy of imminent lawless behavior; or 5) “fighting words.” Speech in these five categories is considered “unprotected speech” and thus may be regulated by the government without violating the First Amendment.

In its complaint, UFC alleges that N.Y. Unconsol. Law § 8905-a (2) (hereinafter “Live MMA Ban”), is an improper “content-based” law and thus violates the UFC’s and its performers’ freedom of expression. The UFC has alleged that, although the law has the appearance of a safety regulation, the legislative history of the Live MMA Ban reveals that the ban was implemented to restrict MMA’s misperceived message of violence.

On November 7, 2011, Judge Richard Leon of the United States District Court for the District of Columbia granted a preliminary injunction on behalf of five tobacco companies challenging the implementation of the FDA’s new graphic cigarette warning labels. As a result of the injunction, the FDA’s new cigarette labeling requirements, which were scheduled to take effect in September 2012, are now blocked from taking effect until fifteen months after resolution of the plaintiffs’ claims on the merits. A copy of the Court’s opinion can be read here.

As we previously reported, on June 21, 2011, pursuant to the authority granted to it by the Family Smoking Prevention and Tobacco Control Act to regulate tobacco, the FDA released nine new graphic warning labels that were required to appear on every pack of cigarettes sold in the US and in every cigarette advertisement starting no later than September 2012. In response to the FDA’s new rule, five tobacco companies (R.J. Reynolds Tobacco Company, Lorillard Tobacco Company, Commonwealth Brands, Inc., Liggett Group LLC, and Santa Fe Natural Tobacco Company, Inc.) filed a complaint in the United States District Court for the District of Columbia alleging that the FDA’s new cigarette labeling rules violated the First Amendment and the Administrative Procedure Act.

The five companies also sought an injunction to prohibit the rules from going into effect until fifteen months after a final decision has been rendered on the merits of their case. More background information involving this case can be read in our prior report here. In order for a court to grant a preliminary injunction, it must determine the following: 1) whether there is a substantial likelihood of success on the merits for the moving party; 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. See Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1066 (D.C. Cir. 1998). However, “the party seeking a preliminary injunction need not prevail on each factor.” R.J. Reynolds Tobacco Company, Inc. v. U.S. Food and Drug Administration, 11-1482, at 9 (November 7, 2011 D.D.C.). Rather, the court “appl[ies] the factors on a sliding scale.” Id. As a result, “if the arguments for one factor are particularly strong, an injunction may issue even if the arguments in the other areas are rather weak.” Id.

More specifically, the tobacco companies alleged that the requirement to place graphic images on its labels unconstitutionally compels speech. Generally speaking, compelled speech is presumptively unconstitutional and will only be upheld if it passes “strict scrutiny,” i.e.: 1) the government has a compelling interest it seeks to protect; and 2) the regulation is narrowly tailored to achieve that interest. However, as explained by the Court, narrow exceptions apply in the area of commercial speech. The government may require disclosure of only “purely factual and uncontroversial information” to protect consumers from “confusion or deception,” unless such a disclosure is “unjustified or unduly burdensome.” A lower level of scrutiny applies in cases where government- compelled speech meets this narrow exception.

In this case, the Court determined that the FDA’s rule did meet the narrow exception for compelled commercial speech for several reasons. First, the Court found that the images could not be considered purely factual because must were either digitally enhanced or manipulated to depict the negative consequences of smoking. Second, the Court found that the FDA’s argument that the images chosen by the rule were uncontroversial and purely factual was undermined by the fact that the FDA’s selected graphic images were designed to evoke viewers emotions. Finally, the Court found that when the graphic images were combined with the textual warnings and the mandatory display of the 1-800-QUIT-NOW smoking cessation hotline, the goal was to induce the viewer to quit or never start smoking. Thus, the Court found that the FDA’s labels were neither purely factual nor uncontroversial. Therefore, strict scrutiny and not a lower, more-deferential level of scrutiny applied.

In evaluating whether the FDA’s labeling rule passed constitutional muster, the Court found that regardless of whether the government’s interest in providing information to consumers is compelling, the FDA’s rule is not narrowly tailored to achieve such a purpose. The Court noted that the size and display requirements of the rule — the top 50% of the front and back panels of all cigarette packages and the top 20% of printed advertising — is not narrowly designed to achieve an informative purpose. Rather, the Court found that such dimensions promote a government sponsored anti-smoking message. Additionally, the Court found that the graphic warnings when combined with the textual messages and the 1-800 number result in the FDA “conscript[ing] tobacco manufacturers into an anti-smoking brigade.” Thus, the Court found that the tobacco manufacturers have a substantial likelihood of success on the merits because the FDA’s labeling requirements are likely to be found violative of the First Amendment.

The Court also found that the plaintiffs satisfied the other prongs necessary to be granted a preliminary injunction. The Court found that because of the plaintiffs’ likelihood of success on the merits and the fact that litigation would likely continue well beyond the September 2012 effective date, the plaintiffs would suffer irreparable harm if an injunction was not issued. Additionally, the Court found that injunctive relief would not harm any interested third parties because, based on the record, Congress did not demonstrate that such rules were urgent. In so finding, the Court noted that the Tobacco Act established a mutli-stage timeline in which the FDA was given two years to promulgate a Final Rule and a 15 month implementation period before the Final Rule took effect. Therefore, the Court found no prejudice to other third parties. Finally, the Court found that the “public interest will be served by ensuring that plaintiffs’ First Amendment rights are not infringed before the constitutionality of the regulation has been definitively determined.” As such, the Court granted the tobacco companies injunction.

Although the preliminary injunction is effective as of the Court’s order, the government does have the ability to file an interlocutory appeal challenging the Court’s decision. If the government does appeal and is successful, then the District Court’s preliminary injunction will be vacated. A similar situation arose in Sherley v. Sebelius, a case involving a challenge to federal funding for stem cell research. In that case, the plaintiffs were granted a preliminary injunction to prevent the NIH funding guidelines from taking effect. However, as we previously reported, the D.C. Circuit vacated the preliminary injunction on appeal and remanded the case to the district court for resolution on its merits.

The practical effect of a successful government appeal would be that, although tobacco companies would still be able to challenge the FDA’s rule on the merits, the companies would still have to comply with the FDA’s new labeling requirements starting September 2012.

Fuerst Ittleman will continue to monitor the progress of this lawsuit and the FDA’s regulation of tobacco products and advertising. For more information, please contact us at contact@fuerstlaw.com.

On October 17, 2011, the Seventh Circuit Court of Appeals affirmed a district court ruling dismissing a state law consumer fraud claim, finding that it was preempted by the Federal Food, Drug and Cosmetic Act (FD&C). The suit alleged that General Mills, Inc. and Kellogg Co. failed to disclose pertinent information concerning their “Fiber Plus” chewy bars.

In the district court case, the Plaintiff claimed that while the labeling of the product declared fiber to be 35% of the daily recommended value, this information was misleading to consumers. Because the fiber found in the product was allegedly a “non-natural,” processed fiber, providing fewer benefits than consumption of natural fiber, the Plaintiff argued that the manufacturers of Fiber Plus should have declared the origins of this fiber in labeling.

Found here, the Seventh Circuit’s Opinion discusses how state law labeling requirements may not exceed those found in the FD&C. In particular, 21 U.S.C. § 343-1(a)(5) provides that no state may establish “any requirement respecting any claim of the type described in section 403(r)(1) made in the label or labeling of food that is not identical to the requirement of section 403(r). . . .” 21 U.S.C. § 403(r) gives the U.S. Food and Drug Administration (FDA) authority to regulate nutrition labeling and related claims for food products. Taken together, these provisions prevent states from imposing and enforcing requirements that are additional to or different from those set forth by the FDA. In this case, 21 C.F.R. § 101.54(d), the FDA regulation pertaining to nutrient content claims for food, provides the requirements that manufacturers must comply with when making “fiber claims.” Reasoning that the regulation does not require a declaration of the origins of fiber in food labeling, the Seventh Circuit ultimately found the plaintiff’s state law claim preempted.

For more information regarding the labeling of food products, contact us at contact@fuerstlaw.com.

On October 14, 2011, Par Pharmaceutical, Inc. (Par Pharma) brought suit against the U.S. Food and Drug Administration (FDA) challenging the Agency’s rules that restrict claims made in marketing pharmaceutical products. Filed in the U.S. District Court in Washington D.C., the suit seeks a declaratory judgment and an injunction against the Agency’s enforcement of the speech restrictions. Found here, the Complaint alleges that FDA’s rules prevent Par Pharma from promoting its drug for both approved and unapproved uses.

Par Pharma’s drug, Megace ES, was approved by the FDA in 2005 for the treatment of anorexia and cachexia, an AIDS-related wasting syndrome. Since its approval, the drug has been prescribed by doctors to treat other, related disorders, a practice known as “off-label” use. However, the FDA prohibits companies from promoting drugs for off-label uses, and it regularly enforces against companies which do so. For instance, the pharmaceutical manufacturer Allergan has been targeted for utilizing off-label marketing in the past. For more information regarding the Allergan suit, see our previous report here.

The FDA’s jurisdiction to restrict off-label use is a contentious issue. While the FDA currently prohibits manufacturers from marketing FDA-regulated products for unapproved uses, the agency does not have the authority to prevent doctors from issuing prescriptions for off-label uses. Rather, the latter fits squarely within the practice of medicine, an area traditionally regulated by the states. Even where the FDA only attempts to restrict manufacturers without encroaching on the practice of medicine, FDA’s efforts relating to off-label use are often viewed as hindering innovation inasmuch as manufacturers and doctors are prevented from discussing new, alternative uses for FDA-approved drugs and devices.

Although Par Pharma challenges the FDA’s restrictions on off-label marketing, its suit also alleges that the Agency is unlawfully prohibiting the marketing of its drug for its approved uses. Specifically, Par Pharma claims that FDA is encroaching on its First Amendment rights by preventing the company from marketing its drug for its approved uses to physicians who are likely to prescribe the drug off-label. While this issue is slightly different than that regarding the promotion of off-label uses, it will be interesting to see who ultimately prevails.

For more information on FDA regulations and acceptable pharmaceutical marketing practices please contact us at contact@fuerstlaw.com.

On September 28, 2011, Florida’s Second District Court of Appeal (“2nd DCA”) asked the Florida Supreme Court to rule on the constitutionality of Florida’s Drug Abuse Prevention and Control law, § 893.13 Fla. Stat. in the case of State v. Adkins. A copy of the 2nd DCA’s opinion can be read here. As we previously reported, on July 27, 2011, Judge Mary Scriven of the United States District Court for the Middle District of Florida declared the law unconstitutional under the United States Constitution as a violation of due process because it eliminated mens rea as an element of felony delivery of a controlled substance thus making the law a strict liability offense.

The federal court’s decision has opened the floodgates to litigation in pending drug cases in Florida and has led to uncertainty for criminal defendants for two main reasons. First, because the United States and Florida are separate sovereigns, the rulings of federal courts other than the U.S. Supreme Court are generally not binding on state courts. Second, because neither the Florida Supreme Court nor any District Court of Appeal has ruled on the constitutionality of § 893.13, the Circuit Courts of Florida (the tribunals responsible for adjudicating felony criminal cases) have no binding precedent to rely upon in determining whether § 893.13 is constitutional.

As a result, the Circuit Courts have split on the issue as to whether § 893.13 violates the 14th Amendment. In fact, as noted in the 2nd DCA’s Certification Order, in certain circuits, such as the Eleventh Judicial Circuit in Miami-Dade County, conflict exists within the different felony divisions with some judges adopting Judge Scriven’s opinion and declaring the statute unconstitutional while others finding the Middle District of Florida’s rationale unpersuasive because the precedent relied upon by that court was distinguishable.

In certifying the question of whether § 893.13 is constitutional, the 2nd DCA stated that because it would be the only district court of appeals to have ruled on the constitutionality of the drug law, its “decision would be binding statewide and could affect literally thousands of past and present prosecutions throughout the state.” The 2nd DCA noted that while the Florida Supreme Court prefers to resolve cases after multiple district courts have issued opinions, given the volume of the cases involved and the fact that the issue has been “fully briefed and thoroughly discussed” in trial court proceedings, it would be appropriate for the Supreme Court to decide this issue.

Although the 2nd DCA certified the question to the Supreme Court as one of ”great public importance” pursuant to Fla. R. App. P. 9.125, it should be noted that because the Florida Supreme Court is a court of limited jurisdiction, the Court can choose not to decide the issue under  Article V § 3 of the Florida Constitution as jurisdiction over such certified questions is not mandatory.

Fuerst Ittleman will continue to track the progress of this matter with a keen eye as its final resolution could affect all strict liability offenses. The white collar criminal defense lawyers at Fuerst Ittleman are experienced in handling even the most complex cases where clients are facing allegations of criminal actions. The attorneys of Fuerst Ittleman have defended clients in cases involving numerous general intent and strict liability offenses including money laundering violations found at 18 U.S.C. § 1957, the operation of unlicensed money transmitting businesses found at 18 U.S.C. § 1960, and violations of the FDCA under 21 U.S.C. §§ 331 and 333 as well as prosecutions of corporate officials for FDCA violations under the Park Doctrine. For more information regarding Fuerst Ittleman’s white collar criminal defense practice, contact an attorney today at contact@fuerstlaw.com.

On September 19, 2011, two scientists who have been challenging government funding of human embryonic stem cell (hESC) research filed their Notice of Appeal in the U.S. Court of Appeals for the District of Columbia Circuit, seeking relief from the District Court’s July 27, 2011 Order dismissing their complaint and attempting to revive their case to block federal funding of hESC research.

As previously reported, the District Court granted the government’s Motion for Summary Judgment in July. In granting summary judgment and dismissing the Plaintiffs’ claims, the Court found that the National Institute of Health (NIH) Guidelines, which permit federal funding for hESC research, did not violate federal law. While the Plaintiffs argued that the Guidelines violated the 1996 Dickey-Wicker Amendment, which prohibits funding for “research in which a human embryo or embryos are destroyed,” the Court found that the NIH Guidelines do not violate this mandate because embryos are not actually subject to destruction during such research. Found here, the Court reasoned as follows:

The NIH reasonably concluded that the Dickey-Wicker Amendment prohibited federal funding for research projects “in which” human embryos are knowingly subjected to risk, such as preimplantation genetic diagnosis, but did not prohibit research projects, such as embryonic stem cell research, that do not involve embryos and so cannot knowingly subject them to risk “in” the research.

Because the Court found that the Guidelines promulgated by NIH were a permissible interpretation of the Dickey-Wicker Amendment, the Court concluded that the Guidelines did not contravene federal law and dismissed the Plaintiffs’ claims. While it is yet to be seen what the plaintiffs in the case will argue its appeal, Fuerst Ittleman will continue to closely monitor the progress in this case, as well as other issues pertaining to stem cell research.

If you have any questions pertaining to NIH Guidelines, or stem cell funding issues generally, contact Fuerst Ittleman PL at contact@fuerstlaw.com.

On September 13, 2011, the United States District Court for the Middle District of Pennsylvania issued its decision finding that the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA) exceeded Congress’s authority under the Commerce Clause and therefore is unconstitutional. As discussed in a recent Forbes article, this decision is merely one in a long line of District and Circuit opinions on the constitutionality of the PPACA. Ultimately, the individual mandate provision the PPACA’s constitutionality will turn on the interpretation of two bedrocks of Commerce Clause precedent, Wickard v. Filburn, 317 U.S. 111 (1942) and Gonzales v. Raich, 545 U.S. 1 (2005). A copy of the Forbes article can be read here.

Generally speaking, Congress’s power under the Commerce Clause extends to three broad categories. First, Congress may regulate the channels of interstate commerce. Second, Congress may regulate and protect the instrumentalities of interstate commerce. Finally, Congress may regulate activities that have a substantial effect on interstate commerce. See United States v. Lopez, 514 U.S. 549, 558 (1995). It is within this third category that Congress’s Commerce Clause authority is pressed to its “outer limits” and is often the subject of judicial challenge. See Id. at 557. Such is the case with the PPACA.

In Wickard, the Supreme Court held that Congress could regulate the production of home grown wheat meant solely for personal use under its Commerce Clause power. In so holding, the Court found that although Filburn’s activities were entirely local, such activities, when taken in the aggregate, had a substantial effect on the national market for wheat. In the annals of Commerce Clause jurisprudence, Wickard v. Filburn represents the high-water mark for Congressional power.

More than 60 years later,    in Gonzales v. Raich, the Supreme Court upheld Congress’s authority under the Commerce Clause to prohibit the possession of home-grown marijuana intended solely for personal use, even when such possession was allowed by state law. Similar to the Court’s rationale in Wickard, the Raich Court found that the production of marijuana substantially affects supply and demand in the national market; therefore the regulation was “squarely within Congress’ commerce power.” The Court went on to hold that “Congress can regulate purely intrastate activity that is not itself ‘commercial’ . . . if it concludes that failure to regulate that class of activity would undercut the regulation of the interstate market in that commodity.” Raich, at 18. Both Raich and Wickard stand for an expansive and broad reading of Congress’s power under the Commerce Clause.

In finding that the PPACA’s individual mandate was unconstitutional, Judge Conner distinguished the mandate from the economic regulations at issue in Wickard and Raich. The Court found that unlike the laws at issue in Wickard  and Raich, which allowed people to not engage in regulated conduct and thereby stay beyond the reach of the statute, PPACA’s mandate requires people to become active participants in the health insurance market regardless of whether heath services will be used. As explained by Judge Conner:

Congress can reach the personal production of wheat – a clear activity affecting the interstate market – in an effort to stabilize the wheat market. Congress cannot, however, in order to stabilize that market, force the purchase of wheat by individuals who decide to forego wheat or wheat products, even if Congress legitimately determines that an individual’s decision not to purchase wheat or wheat products inhibits the government’s ability to regulate or stabilize the wheat market. Similarly, Congress may lawfully regulate the interstate market for health insurance and health services, but Congress cannot require individuals who choose not to purchase health insurance or individuals who are not currently seeking or receiving services in the health care market to purchase health insurance in order to stabilize the health insurance market. Congress cannot mandate or regulate in anticipation of conduct that may or may not occur.

Bachman v. U.S. Department of Health and Human Service, et. al., at 36.

The Court went on to find that an uninsured individual’s conduct has no effect on conduct Congress sought to regulate under the Commerce Clause until such time that: 1) the individual obtains health care services; and 2) the individual does not pay for the services received. The Court stated that “the mere status of being without health insurance, in and of itself, has absolutely no impact on interstate commerce . . . at least not any more so than the status of being without any particular good or service.” Id. at 38. As a result, “current Commerce Clause precedent does not permit Congress to reach a pre-transaction stage in anticipation of participation in a market. . . .”Id. at 40.

Ultimately, it is likely that the final decision as to the constitutionality of the individual mandate of the PPACA will be made by the Supreme Court. Such a decision has the potential to reshape Congress’s power to regulate individuals and businesses under the Commerce Clause regardless of its outcome. Fuerst Ittleman will continue to monitor the litigation challenging the PPACA and its effects on Commerce Clause jurisprudence. For more information, please contact us at contact@fuerstlaw.com.

On August 29, 2011, Del Monte began taking steps to sue the State of Oregon’s Public Health Authority (PHA) and one of its senior officials. After suing the FDA last week, the company filed a notice to sue letter, alerting the State that it will be pursuing legal action in relation to allegations of tainted cantaloupes. According to Del Monte, Oregon’s PHA and its officials had insufficient evidence to link Del Monte cantaloupes to an outbreak of Salmonella Panama.

We previously reported on Del Monte’s suit challenging an import alert issued by U.S. Food and Drug Administration (FDA). According to Del Monte, the FDA placed an Import Alert on all cantaloupes being imported from Guatemala because of the possible link to a salmonella outbreak earlier this year. As alleged by Del Monte, the Import Alert was unlawful because the Agency had insufficient evidence that the cantaloupes imported from Guatamala were contaminated. While Del Monte’s arguments against the State of Oregon are expected to be similar to those made against the FDA, the notice to sue letter is just the first step in what could become a long legal battle concerning the allegedly tainted fruit.

For more information on FDA enforcement measures or import compliance, please contact us at contact@fuerstlaw.com.

On August 22, 2011, Del Monte Fresh Produce N.A., Inc. (Del Monte) brought suit against the U.S. Food and Drug Administration (FDA), seeking to invalidate an import alert the agency placed on cantaloupes imported from Guatemala. The challenged Import Alert, found here, was issued after the FDA concluded that cantaloupes being imported from Guatemala were the source of a Salmonella Panama outbreak that left several people ill. In its complaint, Del Monte alleges the FDA had insufficient evidence that Del Monte’s cantaloupes were the source of this outbreak.

Under the Food, Drug and Cosmetic Act (FDCA), the FDA has the authority to inspect various types of goods being offered for import into the United States. While routine inspections may provide a basis for imported goods to be detained and even refused entry into the country, an import alert, like the one challenged by Del Monte, can cause goods to be detained without having to undergo any inspection at all.

Because import alerts can prevent shipments from entering the country without an allegation that the specific goods are unsafe, it is not uncommon for companies to challenge the bases for these alerts. For example, we previously reported on a case brought by Seagate, in which we successfully challenged the legality of an import alert. As in the case of Del Monte, FDA detained a series of Seagate’s shipments without alleging that the specific products were contaminated. In that case the FDA released the detained products soon after we filed suit. In this case, however, it is unclear how the FDA will proceed.

For more information on FDA enforcement measures or import compliance, please contact us at contact@fuerstlaw.com.

On August 15, 2011, Facebook changed its policy regarding public comments on the Walls of pharmaceutical companies’ Facebook pages. In the past, Facebook granted pharmaceutical companies the privilege of disabling comment Walls on their company pages, which prevented the public from posting or viewing comments. The new policy, however, no longer allows companies to hide public comments. This change applies to pharmaceutical company pages and company-sponsored pages that are geared toward a specific disease or patient community. The new Facebook policy, however, does not apply to any pages dedicated to a specific prescription product.

Many pharmaceutical companies did not join the Facebook community until the social-networking site granted them the special privilege of disabling comment Walls. This change in Facebook’s policy has raised concerns among pharmaceutical companies because it permits the public to make comments that may not be favorable to drug makers. Under the new policy, the public can comment about adverse side effects, promote off-label uses, or make inappropriate statements about pharmaceutical products. Companies fear that comments about adverse reactions or negative experiences could inevitably force them to file adverse event reports with the U.S. Food and Drug Administration (FDA). For these reasons, pharmaceutical companies are worried that Facebook’s new Wall policy will attract unwanted attention from government regulators.

Facebook’s new Wall policy has received a mixed response from pharmaceutical companies. Concerns over risks associated with an open Wall and the possible added expense of policing their own Facebook pages has led some drug companies to completely shut down their pages. For example, AstraZeneca, the producer of a major antidepressant, Seroquel, shut down a page dedicated to depression. Some companies have announced new public commenting guidelines, while others have expressed intent to increase monitoring of their company pages.

Fuerst Ittleman will continue to monitor issues facing the pharmaceutical industry. For more information, please contact us at contact@fuerstlaw.com.