#147  

 June 1996




New FDA Tobacco Regulations Raise Constitutional and Economic Questions

by Nate Stewart

 

The Food and Drug Administration has recently proposed some new tobacco and advertising regulations that invoke serious constitutionalas well as practical questions. The new regulations have the full endorsement of the Clinton Administration, which has championed and campaigned on their behalf. While the FDA's proposals might sound innoculous and play well to "feel-good" politics, a careful and thorough look into their constitutional and practical ramifications is required. The directors and administrators inside the FDA are unelected public servants, not subject to voter scrutiny, but are nonetheless bound by the provisions and protections of the Constitution -- no matter how well-intentioned their regulations may be.

 

The FDA Regulations and the Constitution

Regulations on Advertising

Perhaps the section of the FDA's proposed regulations posing the greatest constitutional concern are the FDA's efforts to ban all outdoor tobacco advertisements within 1,000 feet of any playground, elementary or secondary schools [897.30(b)], and the limiting of all other advertising to black text on a white background [897.32(a)]. This is a regulation covering advertisers and store owners more than it is a regulation on the tobacco industry. The proposed regulation is sought under the authority of the Commerce Clause of the U.S. Constitution. This position argues that the FDA may regulate advertising near schools because advertisements affect students and students are being trained to participate in the country's interstate commerce and their mental and physical condition will affect United States commerce.

In the recent Supreme Court case United States v. Lopez, (April 26, 1995), the U.S. government made similar arguments regarding the Gun-Free School Zones Act of 1990 (which banned guns within 1,000 feet of any school) contending that "the presence of guns in schools poses a substantial threat to the educational process by threatening the learning environment. A handicapped educational process, in turn, will result in a less productive citizenry." The FDA's argument for its proposed regulations must follow a very similar line of logic. The FDA must see the presence of tobacco advertisements near schools as a substantial threat to the health of America's youth, and a "handicapped" or unhealthy youth population results in a less productive citizenry.

But the U.S. Supreme Court did not accept the government's contention in Lopez and ruled the Gun-Free School Zones Act unconstitutional. The reasoning of the Court is extremely pertinent to the proposed FDA provisions. Much of what Chief Justice Rehnquist wrote in the opinion of the Court should be considered carefully when looking at the FDA's advertising regulations. Rehnquist argued:

"We start with first principles. The Constitution creates a Federal Government of enumerated powers. See U.S. Constitution, Article I. Sect. 8. As James Madison wrote, 'the powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the state governments are numerous and indefinite.'

"Under the theories that the government presents... it is difficult to perceive any limitation on federal power, even in areas... where states historically have been sovereign. Thus, if we were to accept the government's arguments, we are hard-pressed to posit any activity by an individual that Congress is without power to regulate.

"For instance, if Congress can, pursuant to its Commerce Clause power, regulate activities that adversely affect the learning environment, then, a fortiori, it also can regulate the educational process directly. Congress could determine that a school's curriculum has a 'significant' effect on the extent of classroom learning. As a result, Congress could mandate a federal curriculum for local elementary and secondary schools because what is taught in local schools has a significant 'effect on classroom learning,' and that, in turn, has a substantial effect on interstate commerce."

If adopted and permitted to stand, the FDA's proposed regulations could result in Congress' authority to regulate "any activity by an individual" including advertising firms or sign makers. If the FDA or Congress can regulate tobacco advertisements "within 1,000 feet of schools" what prevents them from regulating any other type of advertisement or written text, picture, graphic, book, magazine, or any visual image deemed a threat to the well-being of American students? Tobacco advertisements are the target of the day, but there seems to be nothing preventing Congress or bureaus like the FDA from prohibiting other products or ideas from being advertised within one-fifth of a mile from a school or playground in the future.

An advertisement is a finished, manufactured product, and part of interstate commerce only to the extent that the producer of the advertisement and the purchaser of the advertisement reside in different states and engage in trade. The transaction of the ad crossing state lines may be regulated under the Commerce Clause, but once the advertisement has been purchased it becomes the private property of the purchaser and can no longer be regulated as interstate commerce.

In his concurring Lopez opinion Justice Clarence Thomas opined:

"At the time the original Constitution was ratified, 'commerce' consisted of selling, buying, and bartering, as well as transporting for these purposes. See 1 S. Johnson, A Dictionary of the English Language 361 (4th ed. 1773) (defining commerce as 'Intercourse; exchange of one thing for another; interchange of any thing; trade; traffick')."

Thomas added:

"Moreover, interjecting a modern sense of commerce into the Constitution generates significant textual and structural problems. For example, one cannot replace 'commerce' with a different type of enterprise, such as manufacturing. When a manufacturer produces a car, assembly cannot take place 'with a foreign nation' or 'with the Indian Tribes.' Parts may come from different states or other nations and hence may have been in the flow of commerce at one time, but manufacturing takes place at a discrete site. Agriculture and manufacturing involve the production of goods; commerce encompasses traffic in such articles."

Advertisements posted on a billboard or window cannot be defined as "traffic," "intercourse," or an "exchange of one thing for anther." Their "parts may [have come] from different states or other nations... but [their manufacture took] place at a discrete site," thus, they may not be regulated by Congress under the Commerce Clause.


Regulations Nationalizing Age Restrictions on Tobacco Access

A second facet of the new FDA regulations seeks to ensure that no one under the age of 18 may purchase cigarettes or smokeless tobacco [897.14(b)]. An obvious attempt at a nationalized age restriction already enforced individually by all fifty states, the FDA presumes that the states do not enforce their age restrictions adequately and now require federal supervision and enforcement. This poses the constitutional question of whether Congress or any federal bureau has the authority to establish a national minimum age requirement. When the Congressional Research Service was asked to look into the proposed regulations it cautioned that such a provision could exceed the federal government's authority and would most likely be found unconstitutional. Without attaching such a restriction to federal funds or other federal benefits to states, the federal government has been historically unable to impose regulations essentially overriding state authority.


Regulations Requiring Inspections of Retail Stores

Additionally, there are provisions requiring tobacco manufacturers to inspect retail stores carrying their products or other tobacco "marketing products," and to remove from those retail stores any advertisements, self service displays, or other non-tobacco products deemed to be in non-compliance with the new regulations [897.12(a)]. This provision essentially establishes tobacco manufacturers as enforcement agencies for federal regulations. In addition to obligating manufacturers to confiscate any retailers' property in violation of the regulation, the provision makes manufacturers liable for the retailers' non-compliance. This provision obviously gives manufacturers incentive to inspect and confiscate retailers' non-compliant property, a practice which could violate the Fourth and Fifth Amendments of the Constitution. Because these regulations are federal their enforcement could constitute federal law enforcement and the Fourth and Fifth Amendments, if shown to be violated, would undoubtedly apply.

The Fourth Amendment clearly stipulates that all searches and seizures must be warranted. Any search or seizure of property conducted by any tobacco manufacturer, the FDA, or the Bureau of Alcohol, Tobacco, and Firearms (BATF), must be accompanied by a warrant. It does not appear that the FDA has the authority to issue search and seizure warrants to tobacco manufacturers to enforce FDA restrictions. Given that such searches and seizures must be warranted by a judge it is unreasonable for the FDA to hold manufacturers liable for something which they have no legal ability to control.

Fourthly, if the Fourth Amendment was disregarded by the courts, the confiscation of property by tobacco manufacturers still seemingly violates the Due Process Clause of the Fifth Amendment, which explicitly provides that no person may be deprived of their property without the due process of law. It reasonably may be argued that such confiscation violates this Fifth Amendment protection.


Regulations on the Use of Tobacco Brand Names on Other Products

A fifth FDA provision raising a number of constitutional questions is the banning of tobacco brand names on non-tobacco products such as caps, gym bags, shirts, and lighters [897.34(a)]. This provision not only appears to violate the First Amendment, but it fails to achieve the FDA goal of curbing teen smoking. There is virtually no connection between these items and youth access to tobacco. It is the "harmful" tobacco which the FDA clearly seeks to regulate; however, unless caps, gym bags, and shirts can be shown to be an explicit danger to consumers or should otherwise not be manufactured, the federal government does not have the authority to ban them outright simply because of labeling. A logical connection must be shown between the finished non-tobacco products and youth access to tobacco.


The Nicotine "Drug" and the Americans with Disabilities Act

In addition to the constitutional issues, the proposed regulations raise some practical and economical solicitudes warranting consideration.

With the implementation of the Food and Drug Administration's proposed tobacco restrictions, classifying nicotine as a drug and tobacco as a "drug delivery device" [897.32(b)], the FDA is in danger of creating a new class of "drug" addict. The administration has long argued that cigarettes, because of their nicotine content, are highly addictive, cause some neurological disorders, and should therefore be regulated as a drug delivery device. If the FDA maintains this position, and the proposed regulations are passed and enforced, smokers claiming to be victims of nicotine addiction may soon be able to claim a new, legally-protected status.

The Americans with Disabilities Act (ADA) grants legal protection from discrimination to, among other persons, "drug addicts and alcoholics" [H.R. Rep. No. 485, 101st Cong., 2d Sess. 51 (1990)]. According to Mark Pugsley, writing in the Duke Law Journal (v. 43, Mar. 1994, p. 1104), "The legislative history of the ADA lists a variety of conditions that qualify as physical or mental impairments....[including] cerebral palsy, cancer, HIV infection, learning disabilities, drug addiction, and alcoholism." Claims by the FDA that nicotine is a drug capable of causing psychological or physiological addiction, coupled with a smoker's claim that he/she is chemically addicted to the nicotine in tobacco, could place such a person under the protection of the ADA.

In order to be protected by the ADA one must show that a disability or impairment "substantially limit[s] one or more of the major life activities" [42 U.S.C. sec. 12102(2)(A)], which include "caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working" [H.R. Rep. No. 485 (1990)]. Smoking, presumably without argument from the FDA, is believed to cause cancer, impair breathing and cause other respiratory and cardiac problems which "substantially limit...major life activities." Of course, it may be argued that it is not the nicotine which causes such problems, rather it is the smoke from the tobacco, and therefore the ADA should not apply. This argument, however, must then also apply to alcohol, drug addiction and, it may be argued, HIV infection. It is not the addiction to alcohol which causes slurred speech, or walking, seeing, and manual tasks to be impaired, it is, in fact, the alcohol itself. Likewise, it is not the addiction to a prescribed drug which causes physical or mental impairments, but the effects (excluding addiction) of the drug itself. What is true of these two ADA protected conditions must then also be true of the nicotine addict's condition -- they are federally protected from social or employment-related discrimination.

Under Title I of the ADA,

"No covered entity shall discriminate against a qualified individual with a disability because of the disability of such an individual in regard to job application procedures, the hiring advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment," (Sec. 102. [42 U.S.C. 12112(a)).

With this provision, the 46.8 million Americans who currently smoke and the 43.4 million former smokers will be elevated to the status of governmentally protected members of society, and granted additional privileges for their smoking habit. The recent passage of legislation ensuring that the United States government abides by all ADA and other federal regulations places smokers in a protected category in the hiring practices of the federal government, and prohibits the government from encouraging non-smoking among its employees. Title III of the ADA in conjunction with the FDA regulations eventually will result in the private and federal subsidization of the very "habit" or "addiction" that the FDA is seeking to discourage.

It should also be noted that nicotine treatment devices, classes, and costs could potentially be covered as medical expenditures and may not be discriminated against by employers. While such treatments may be encouraged by employers, it is now guaranteed that smoking employees may not be asked to quit smoking, or perhaps even that smoking off-the-job could be discouraged by the employer.


The FDA Regulations and Health Insurance

According to The Bureau of National Affairs' EEOC: Interim Policy Guidance on ADA and Health Insurance,

"The coverage of an employee's dependents under an employer provided insurance plan is a benefit available to the employee by virtue of employment. Consequently, insurance terms, provisions, and conditions concerning dependent coverage are subject to the same ADA standards including the application of section 501(c) to disability-based distinctions...."

This provision would allow for the same employer-paid health coverage for the perhaps under-aged smokers in any employee's family. While the FDA seeks to reduce teenage smoking, its provisions actually offer no economical incentive for the employee to curb the smoking habits of his/her under-age smoking dependent. If, however, employers and insurers were able still to adjust their health coverage rates based upon the number of smokers in a family, both employers and employees would have the economic incentive to reduce the number of smoking dependents. This is again a form of subsidizing smoking.

Additionally, the FDA provisions creating the smokers' legally protected status will lead to an increased uncertainty in providing health benefits to employees and their dependents. Title III of the ADA states that an insurer "may not refuse to insure, or refuse to continue to insure, or limit the amount, extent, or kind of coverage available to an individual, or charge a different rate for the same coverage solely because of [an individual's] physical or mental impairment..." [H.R. Rep. No. 485, part 2 supra note 1, at 137], and any time that laws are changed, especially in such a way as to change the legal status of citizens, legal uncertainty generally follows. There are always financial costs associated with legal uncertainty, whether they fall to businesses, workers, consumers, taxpayers, or any combination of the four, the uncertainty in the minds of employers and insurers will have financial impacts.

In order to avoid problems with the EEOC, employers could begin compensating for their legal uncertainty in any number of ways. For example, businesses could begin hiring defense attorneys to defend against possible suits brought by the EEOC, or to investigate for loopholes in the law or specific cases in their own company records which might prove damaging. Companies may begin to seek new health care coverage, coverage that may be more expensive but would grant them protection from nicotine addict suites. Both of these options are plausible and would need to be compensated for in other areas, i.e. wages, bonuses, other benefits, prices, shareholder dividends, etc. Of course, the EEOC also would not be without expense. Its attorneys would work to enforce the new regulations and study any number of cases brought by the newly ADA qualified 90.2 million smoking or former smoking Americans. The efforts of the EEOC are the burden of the taxpayers, and the financial costs of the EEOC engaging in lengthy litigation with large and powerful companies over this issue are unnecessary at best.


The FDA's Jurisdiction

There are still other issues and impacts the FDA should consider before implementing its regulations, even if the constitutional and economic liabilities are disregarded.

If implemented, this new federal measure would clearly involve federal enforcement, which raises some question as to which bureau claims jurisdiction for the enforcement of the regulation. Would federal agents from the Bureau of Alcohol, Tobacco, and Firearms enforce the measure, or would agents from the FDA? In either case it seems that any attempt to enforce this regulation federally and adequately would demand a large increase in the budget, manpower, and jurisdiction of the selected bureau. With all fifty states already enforcing the age restriction it seems best, both constitutionally and economically, to leave age regulations to the states.


The Impact on Small Business

The proposed regulations ban the use of all tobacco self-service displays [897.14(a)], and all cigarette vending machine sales [897.16(c)]. Both of these regulations will have a far greater economic impact on small business retailers and vending machine companies than they will on the tobacco manufacturers. Preventing youth access to tobacco products, if achievable through bureaucratic regulation, justifies proof of age from potential buyers and face-to-face point of purchase, and proper supervision of vending machines, but properly supervised vending machines in places only frequented by adults should not come under a ban aimed at curbing youth access to tobacco. Such a ban could prove immeasurably harmful to small business owners and vending machine manufacturers and distributors. The ban on self-service displays likewise could place an undue and heavy burden on the small business retailer. This provision requires physical renovations on the part of the store owner to place all tobacco displays behind the counter. It should be noted that this provision seems irrelevant in light of the restrictions requiring proof of age identification. With a restriction already requiring all purchasers to be at least 18 years of age, the clerk is the key to keeping tobacco out of the mouths and lungs of children, not countertops and display cases.


A Matter of Priority?

It is somewhat understandable that the FDA seeks to curb underage smoking, but the FDA should consider that according to the U.S. Department of Health and Human Services, youth smoking has been declining steadily for the past twenty years. According to the HHS, the number of smokers aged 12-17 declined from 25% in 1974 to 10% in 1993. Contrastly, the use of marijuana and crack cocaine has risen by 144% and 133% respectively, among eighth grade students. These statistics are far more ominous and worthy of federal attention than youth smoking's declination. Health and Human Services recently released the findings of a survey showing the use of marijuana increased among 8th, 10th, and 12th graders and anti-drug attitudes deteriorated over the past year. According to Health and Human Services, "The survey, which is funded by HHS' National Institute on Drug Abuse, found that among 1994's high school seniors, 30.7% said they had tried marijuana at least once in the past year, compared to 26% of 1993's seniors and 21.9% of 1992's."

The possession and use of marijuana and other narcotics is already a federal crime, already within the power of Congress to regulate. With child drug experimentation on the rise and anti-drug attitudes declining, the FDA and other federal bureaus should concern themselves more with America's war on drugs than a war on billboards, self-serve dispensers, or vending machines. Both time and federal money will be wasted battling over the FDA's new restrictions at a time when both should be spent combating drug pushers and importers.

With regard to the FDA's severe restrictions on tobacco advertising and marketing, these restrictions lend themselves to the presumption that advertising is one of the leading causes of smoking. Despite this presumption, there is a great deal of uncertainty among economists, sociologists, and marketers as to how much, if any, effect advertising has on the consumer. The FDA should not consider it a foregone conclusion that advertising has a direct and proportional correlation to the consumption of tobacco, especially by underage smokers. What has been shown, however, is that family structure, or the lack thereof, is a strong contributor to teenage smoking. According to a 1989 study of 4,932 middle class eighth graders by the University of Southern California, "latchkey children" -- youths left unsupervised after school -- showed a greater propensity toward substance use by a 2-1 margin. This finding is supported by Dr. Murray Jarvik, professor of Psychiatry and Behavioral Science at the UCLA School of Medicine, who cites poor family structure, drug-filled environments, and the absence of a desirable role model, as chief contributing factors to adolecent smoking and drug experimentation.

Even if the proposed FDA tobacco regulations are found to be constitutional, and one should anticipate challenges to that effect, the FDA should reconsider its proposed regulations and re-examine its priorities in protecting America's youth. The States should continue to regulate youth access to tobacco and local ordinances regarding advertising and vending machines. In light of the Supreme Court's Lopez decision the regulations may very well prove unconstitutional, and considering the findings of HHS, they may be misguided.

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Nate Stewart is a staff writer with The National Center for Public Policy Research.



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