Tobacco manufacturers and importers challenged the methodology in which the Food and Drug Administration calculated taxes under the Fair and Equitable Tobacco Reform Act (FETRA). Both parties sought summary judgment. The court upheld the FDA's method of levying taxes because it was not arbitrary nor unreasonable.
Philip Morris USA, Inc. v. Vilsack, No. 3:11CV87-HRH (E.D. Va. 2012).
United States
Oct 9, 2012
United States District Court for the Eastern District of Virginia
Tobacco companies or front groups may challenge any legislative or regulatory measure that affects their business interests. Unlike public interest litigation, these cases seek to weaken health measures. These cases frequently involve the industry proceeding against the government. For example, a group of restaurant owners challenging a smoke free law as unconstitutional.
Subsequent regulations exceed the scope of the originating law.
Type of Tobacco Product
None
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
"The Defendants, USDA and the Cigar Association of America, on the other hand, point out that FETRA requires the USDA to adjust assessments periodically based on changes in gross domestic volume, not fluctuations in federal excise tax. They correctly note that the Step A methodology or mechanics of calculation were developed by USDA based on clearly discernible guidance from the statute. See 70 Fed. Reg. 7007 (2005). Defendants further stress that the periodic adjustment requirement was clearly intended to reflect changes in domestic volume. As to the use of the 2005 FET as a constant in the Step A FETRA equation, and gross domestic volume as the variable factor, the extent of congressional direction becomes a bit less clear. The Defendants observe that FETRA contains no clear congressional directive prohibiting the Secretary of Agriculture from using 2005 FET as a constant conversion factor in the algorithm. Furthermore, the Defendants hasten to add that despite Plaintiff's contentions, no subsequent congressional enactments, or failure to act, provides direction to the contrary. At core, it is Defendants' position that while FETRA provides specific guidance as to the computational framework for assessments, the mechanics of calculation reside within the purview of the Secretary of Agriculture under § 519a(a). With respect to this facet of the Chevron analysis, the Defendants seem to hold the stronger hand."
Limitations regarding the use of quotes The quotes provided here reflect statements from a specific decision. Accordingly, the International Legal Consortium (ILC) cannot guarantee that an appellate court has not reversed a lower court decision which may influence the applicability or influence of a given quote. All quotes have been selected based on the subjective evaluations undertaken by the ILC meaning that quotes provided here may not accurately or comprehensively represent a given court’s opinion or conclusion, as such quotes may have originally appeared alongside other negative opinions or accompanying facts. Further, some quotes are derived from unofficial English translations, which may alter their original meaning. We emphasize the need to review the original decision and related decisions before authoritatively relying on quotes. Using quotes provided here should not be construed as legal advice and is not intended to be a substitute for legal counsel on any subject matter in any jurisdiction. Please see the full limitations at https://www.tobaccocontrollaws.org/about.
Tobacco manufacturers and importers challenged the methodology in which the Food and Drug Administration calculated taxes under the Fair and Equitable Tobacco Reform Act (FETRA). Both parties sought summary judgment. The court upheld the FDA's method of levying taxes because it was not arbitrary nor unreasonable.