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Case 4:18-cv-00028-ALM-KPJ Document 55 Filed 07/02/18 Page 1 of 7 PageID #: 1523




Plaintiffs, §
§ Civil Action No.: 4:18-cv-00028
v. §


This case was referred to the undersigned pursuant to 28 U.S.C. § 636, the Local Rules of

Court for the Assignment of Duties to United States Magistrate Judges, and the applicable Referral

Order, for all pretrial proceedings. On May 22, 2018, the Court entered an order (the “May 22

Order”) (Dkt. 35) denying Defendants’ Motion to Transfer (the “Motion to Transfer”) (Dkt. 18).

Defendants filed objections (the “Objections”) (Dkt. 40), to which Plaintiffs filed a reply (Dkt.

42). In light of the arguments presented in the Objections, and upon further review of the

proceedings in Cigar Ass’n of Am. v. U.S. Food & Drug Admin., No. 1:16-CV-01460 (APM), 2018

WL 2223653, at *1 (D.D.C. May 15, 2018), the Court hereby WITHDRAWS the May 22 Order

(Dkt. 35), and finds that Defendants’ Motion to Transfer (Dkt. 18) is GRANTED, as set forth



On May 10, 2016, the U.S. Food and Drug Administration (the “FDA”) published a final

rule “deeming” cigars, pipe tobacco, and certain other products (e.g., e-cigarettes) subject to the

federal Food, Drug, and Cosmetic Act (the “FD&C Act”), 21 U.S.C. §§ 301, et seq., as amended

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by the Family Smoking Prevention and Tobacco Control Act of 2009 (the “TCA”). Known as the

“Deeming Rule,” the FDA’s action subjects these newly “deemed” products to comparable

statutory and regulatory requirements already imposed on cigarettes, cigarette tobacco, roll-your-

own tobacco, and smokeless tobacco. See 81 Fed. Reg. 28,974, 28,976 (May 10, 2016) (codified

at 21 C.F.R. pts. 1100, 1140, 1143).

The Deeming Rule sets forth comprehensive warning statement requirements for both cigar

product packaging and advertisements. By August 10, 2018, cigar product packages must display

one of six health warning statements on a rotating basis. The Deeming Rule also specifies the

placement and size of the required health warnings. With respect to packaging, each warning

statement must “appear directly on the package” and must be “located in a conspicuous and

prominent place on the two principal display panels of the package,” comprising “at least 30

percent of each of the principal display panels.” Id. § 1143.5(a)(2). For cigars that are sold

individually and not in a product package, the health warning statements must be posted at the

retailer’s point-of-sale on an 8.5 by 11-inch “clear, legible, and conspicuous” sign. Id. §

1143.5(a)(3). As to print and other visual advertisements, the warning statement must be located

in the “upper portion of the area of the advertisement” and occupy “at least 20 percent of the area

of the advertisement.” Id. § 1143.5(b).

It is these warning requirements that are at issue in the present lawsuit. See generally Dkt.

1. Plaintiff En Fuego Tobacco Shop LLC (“En Fuego”) is a premium cigar retailer; Plaintiff Cuba

Libre Enterprises LLC, (“Cuba Libre”) is a manufacturer of handmade premium cigars; and

Plaintiff Texas Cigar Merchants Association (“TCMA”) is a Texas not-for-profit association

representing premium cigar manufacturers and retailers in the state of Texas. See Dkt. 1 at ¶¶ 16-

18. En Fuego, Cuba Libre, and TCMA are referred to hereinafter as “Plaintiffs.” Plaintiffs’

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complaint (the “Complaint”) alleges that the Deeming Rule violates Plaintiffs’ First Amendment

rights under the Constitution, as well as the TCA and the Administrative Procedures Act (the

“APA”). Plaintiffs seek declaratory and injunctive relief to prevent implementation and

enforcement of the Deeming Rule. See Dkt. 1.

Defendants seek to transfer this case to the United Stated District Court for the District of

Columbia for consolidation with Cigar Association. Case No. 1:15-cv-1460. See Dkt. 18.

Defendants point to the “first-to-file” rule and the potential for inconsistent judgments as the basis

for their Motion to Transfer. Id. at 9-12. Plaintiffs counter that the first-to-file rule is inapplicable

in this case, and even it were to apply, Defendants have not shown that the cases are substantially

similar. See generally Dkt. 23.


The first-to-file rule is a discretionary doctrine that permits a federal district court to decline

jurisdiction over an action when a complaint involving the same parties and issues is pending in

another federal court. See Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 183-84

(1952). “Under the first-to-file rule, when related cases are pending before two federal courts, the

court in which the case was last filed may refuse to hear it if the issues raised by the cases

substantially overlap.” Cadle Co. v. Whataburger of Alice, Inc., 174 F.2d 599, 603 (5th Cir. 1999)

(citations omitted).

The rule’s foundation is based on principles of comity and sound judicial administration.

Id. “The concern manifestly is to avoid the waste of duplication, to avoid rulings which may trench

upon the authority of sister courts, and to avoid piecemeal resolution of issues that call for a

uniform result.” Id. (quoting West Gulf Maritime Ass’n v. ILA Deep Sea Local 24, 751 F.2d 721,

729 (5th Cir. 1985)). Accordingly, the second-filed court limits its analysis to whether there is a

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likelihood of substantial overlap between the two cases, and if so, whether to dismiss, stay, or

transfer the second case. See Universal Prot. Servs. v. Thornburg, 2016 WL 4523905, at *2 (N.D.

Tex. 2016). Absent “compelling circumstances,” the court that initially obtains the controversy

should decide how or whether to try substantially similar issues. See Goldstein v. Dickinson, 1999

WL 47240, at *2 (N.D. Tex. 1999).


The Deeming Rule is at issue in both cases; however, the parties disagree regarding the

extent to which the issues in this lawsuit and the issues in Cigar Association substantially overlap.

Defendants argue the case should be transferred because Plaintiffs here: (1) are all members or

affiliates of International Premium Cigar and Pipe Retailers Association (“IPCPR”), a plaintiff in

Cigar Association; (2) are represented by the same attorneys who represent IPCPR in Cigar

Association, and (3) present claims identical to those currently pending in Cigar Association. See

Dkt. 18 at 6-8. The Court agrees with Defendants’ argument that the fact the parties here are not

formally identical1 to those in Cigar Association does not bar transfer. See Dkt. 40 at 3-4; see also

Save Power, 121 F.3d at 951. However, Fifth Circuit case law instructs that regardless of the extent

of overlap of the parties, the two actions must involve closely related questions, common subject

matter, or core issues that substantially overlap. See, e.g., Tex. Instruments v. Micron

Semiconductor, Inc., 815 F. Supp. 994, 997 (E.D. Tex. 1993). Upon consideration, the Court finds

that Defendants have established the requisite commonality of questions, subject matter, and core

issues. See Texas Instruments, 815 F. Supp. at 997.

The Court notes that Defendants’ Objections supplement their argument regarding the overlap of the parties. See
Dkt. 40 at 4. For example, Defendants point out that: (1) TCMA is the official “State Association” of IPCPR; (2)
IPCPR defines TCMA’s eligibility requirements; and (3) IPCPR pays for up to seventy percent of TCMA’s lobbying
activities. Id. Defendants also assert that Plaintiffs En Fuego and El Cubano were listed on IPCPR’s “member” website
at the time this lawsuit was filed, and although their memberships “lapsed” at the end of 2017, they were members of
IPCPR in 2016 and 2017, when Cigar Association was filed, briefed, and argued. Id.

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The primary issue in the present lawsuit is the FDA’s handling of the warning requirements

with respect to the premium cigar industry. See generally Dkt. 1. In advance of the health warnings

requirement’s effective date of August 10, 2018, the FDA issued an Advance Notice of Proposed

Rulemaking (“ANPRM”), “seeking comments, data, results or other information that may inform

regulatory actions FDA might take with respect to premium cigars.” 83 Fed. Reg. at 12,901. Some

of the information the ANPRM seeks directly concerns the health warnings mandate. For example,

the ANPRM asks for “[s]tudies or information on the required warning statements, . . . which will

be required to appear on cigar packaging and advertising in the near future.” Id. at 12,904. The

agency also seeks studies or information regarding “consumer perceptions of the health risks of

premium cigars when compared to other tobacco products, including cigars,” and “consumer

perceptions of the addictiveness of premium cigars, especially compared and contrasted with

perceptions for other cigars.” Id.

In Count V of the complaint in Cigar Association, the plaintiffs complain about the FDA's

justification for subjecting premium cigars to the same regulatory regime as other tobacco

products, i.e. the Deeming Rule. See Case No. 1:15-cv-1460, Dkt.1 at 32-33. As explained above,

it is the Deeming Rule that sets forth the comprehensive warning statement requirements that are

the issue in the present case. In ruling on cross-motions for partial summary judgment in Cigar

Association, District Judge Amit P. Mehta noted that the FDA’s rulemaking concerning premium

cigars was not before the court. See Cigar Association, 2018 WL 2223653, at *8. However, as

Defendants point out, the court in Cigar Association did not carve out an exception to the health

warning requirements for premium cigars, not because the issue had not been raised, but because

the plaintiffs asked the court to defer resolution of those issues. See Dkt. 40 at 4.

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In a Joint Status Report dated September 5, 2017, the Cigar Association parties explained

that, as a result of the FDA’s announcement, they had agreed to defer resolution of certain of the

plaintiffs’ challenges to the Deeming Rule. Specifically, the parties agreed that the plaintiffs’

challenges relating to the premarket review process, the FDA’s decision to deem premium cigars

subject to regulation, and the agency’s cost-benefit analysis underlying the Deeming Rule—claims

asserted in Counts I, IV, and V of the plaintiffs’ complaint—“should await the further regulatory

action that the FDA has announced it intends to pursue, because those announced regulatory

actions may materially change the regulatory scheme underlying these claims.” Cigar Association,

1:16-cv-01460, Dkt. 51 at 2. The court agreed to defer resolution of those issues. See Cigar

Association, 2018 WL 2223653, at *8.

The record in Cigar Association reveals that the plaintiffs have since filed an appeal of the

final judgment in favor of the defendants on Counts VI and VII (see Dkt. 102), and have also filed

a motion to stay or motion for injunction pending appeal or resolution of Count V (see Dkt. 95).

That motion appears to be fully briefed and ripe for decision before the court. Thus, the crux of

the present lawsuit—the FDA’s failure to treat premium cigars differently from other cigars and

to exempt premium cigars from the warnings requirement—is squarely before the court in Cigar

Association. The Court, therefore, finds that the present lawsuit and Cigar Association involve

common subject matter and core issues that substantially overlap. See Texas Instruments, 815 F.

Supp. at 997.


Based on the foregoing, the Court finds that in the interest of justice, this case should be

transferred to the United States District Court for the District of Columbia.

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IT IS THEREFORE ORDERED that Defendants’ Motion to Transfer (Dkt. 18) is

GRANTED, and this case is hereby transferred to the United States District Court for the District

. of Columbia.

IT IS FURTHER ORDERED that Defendants’ Motion to Stay Briefing (Dkt. 28) is



SIGNED this 2nd day of July, 2018.