The US Food and Drug Administration issued a rule extending its regulatory authority under the Tobacco Control Act to all tobacco products, including premium cigars. This extension would subject premium cigars to various requirements, including health warning requirements. Three cigar industry trade associations challenged the extension of the rule, arguing that it was arbitrary and capricious as applied to premium cigars. The district court agreed.

The Court of Appeals held that the agency acted arbitrarily and capriciously. The court held that the agency's stated rationale rested on a false premise, because it asserted that no evidence had been submitted on whether premium cigars carry different health impacts when two studies had in fact been submitted to address that question, but were not considered. 

The Court of Appeals affirmed the lower court’s decision to vacate the rule as it applied to premium cigars and remanded the case to the lower court only to determine the appropriate definition of “premium cigars” before entering the final order.