WASHINGTON – On December 7, the U.S. Circuit Court of Appeals for the District of Columbia Circuit heard arguments in the case of Orton Oil v. U.S. Food and Drug Administration. The case came about after the FDA charged Orton with three violations of the law on retail sales of tobacco after only inspecting the retail location twice and only providing notices of violation twice. FDA’s practice of penalizing retailers for two violations of law during one inspection (and typically on only one sale in which no identification was checked and the sale was made) has been a recurring problem for NACS members.
Because of the widespread concern about FDA’s practice of charging retailers with two violations in one inspection/sale, NACS has funded this litigation challenge to FDA’s practices since the inception of the case in 2015. The legal challenge has two parts: First is that FDA charging retailers with two violations in one inspection/sale violated the terms of the law establishing FDA’s ability to regulate tobacco; and second is that FDA’s practice of not providing retailers with the opportunity to contest a first violation before getting a warning letter is also a violation of the law.
The case initially was contested in front of a FDA administrative law judge (ALJ). The ALJ ruled in favor of Orton that FDA’s two challenged practices both violated the law. FDA appealed that decision to a different FDA ALJ and managed to get a different decision. In the summer of 2016, the second ALJ ruled that FDA’s enforcement methods complied with the law.
Orton Oil, represented by NACS counsel Steptoe & Johnson, then appealed the case to the DC Circuit Court of Appeals. The arguments in the case lasted about twice as long as the court initially allotted. Each of the three Circuit Court judges had questions for the lawyers for FDA and Orton to probe the strengths and weaknesses of the case. The judges did not say anything about how they would rule in the case. They will publish a written opinion on the matter sometime next year.
NACS will keep its members informed on the outcome of this case as its impact will be significant for every retailer facing enforcement of the tobacco laws from FDA.