United States: Court Dismisses Challenge To TTB's Rejection Of Health Claims On Vodka

Last Updated: September 9 2019
Article by Marc E. Sorini

In August, the US District Court for the District of Columbia issued its final decision in Bellion Spirits, LLC v. United States, Civ. No. 17-2538 (JEB). The Bellion case was brought by spirits company Bellion Spirits after the Alcohol and Tobacco Tax and Trade Bureau (TTB) refused to approve a series of health claims advanced by Bellion in connection with its vodka products. According to Bellion, the infusion of its vodka with a compound called NTX will mitigate the damage alcohol inflicts on human DNA.

In 2016, Bellion petitioned TTB to approve eight specific claims related to the NTX-infused vodka. After consulting with the federal Food & Drug Administration (FDA), in 2017 TTB rejected all eight claims. Bellion then brought suit, arguing that TTB's actions with respect to two of its claims were illegal and unconstitutional. Bellion's complaint advanced four counts alleging that:

  1. TTB impermissibly delegated authority to FDA by consulting with FDA during the petition process;
  2. TTB's rejection amounted to the suppression of "commercial speech" in violation of the First Amendment;
  3. TTB's process amounted to an unconstitutional prior restraint on speech in violation of the First Amendment; and
  4. TTB's health claims regulation was impermissibly vague in violation of the Due Process requirement of the Fifth Amendment.

The District Court's August 2019 opinion granted summary judgement in favor of TTB. The lengthy and entertaining opinion makes a number of important points, summarized below:

  1. On the all-important issue of the standard of review, the court acknowledged that while it reviews questions of law de novo, it would review TTB's factual determinations under the deferential "substantial-evidence" standard. Under this standard, the court does not re-weigh the evidence but upholds an agency's factual determination if substantial evidence supports that determination.
  2. TTB's relative lack of expertise on public health issues—like the health effects of alcohol—and its decision to seek assistance from FDA do not alter the deferential review given to TTB's factual determinations.
  3. The court rejected Bellion's claim that TTB impermissibly delegated its authority under the Federal Alcohol Administration Act to FDA by consulting with and relying on FDA's evaluation of Bellion's scientific evidence. It explained that although TTB cannot delegate its decision-making to FDA, it did not do so here. TTB merely consulted with a fellow agency to obtain more information and insight in making its own final determination on Bellion's petition.
  4. Applying the four-part Central Hudson (S.Ct. 1980) test for evaluating challenges to government restrictions on commercial speech, the court agreed with TTB's conclusion that Bullion's claims were inherently misleading. As such, the speech in question would not receive any First Amendment protection.
  5. The court evaluated numerous challenges to TTB's conclusion that Bullion's claims were misleading, examining various studies Bellion submitted to the agency. The court ultimately agreed that TTB's decisions to reject and/or discount various studies were reasonable and supported by substantial evidence.
  6. The court also rejected Bellion's argument that TTB needed to produce surveys or similar evidence in order to find that Bellion's claims made a misleading link between consumption of Bellion's NTX compound with better liver and brain health.
  7. In the alternative, the court reasoned that even if Bullion's claims about its NTX-infused vodka were not inherently misleading, TTB's actions would pass muster under Central Hudson. Among other things, even if denying Bullion's petition would not advance consumer health, it would directly advance the alternative goal of avoiding consumer deception—a substantial governmental interest on its own.
  8. The court further held that TTB acted reasonably in finding that Bullion's disclaimers would not cure the misleading nature of its claims, and that the First Amendment did not require TTB to evaluate every disclaimer possible in connection with Bullion's claims.
  9. While Bellion did not submit the COLA applications for its vodkas to TTB (its co-packer did), it had standing to challenge TTB's COLA process as an unconstitutional prior restraint on speech in violation of the First Amendment. Nevertheless, "it seems reasonably clear that the prior-restraint doctrine does not even apply to commercial speech." Even if the prior restraint doctrine were to apply, the court held that TTB's COLA scheme would pass constitutional muster.
  10. The court rejected TTB's argument that Bullion could not challenge TTB's health statements regulations on Fifth Amendment vagueness grounds. Significantly, the court explained that dismissal of an application (like a COLA application) is a sufficient sanction to trigger Due Process fair notice requirements.
  11. On the merits of Bullion's Fifth Amendment vagueness argument, the court found that TTB's regulations provide adequate notice of how applications will be treated and the substantive criteria for approval of health claims. In particular, the regulations' requirement that claims be "adequately substantiated" provides specific enough notice to allow interested persons to understand what the regulations require.

So, for the second time this summer, a TTB action (and the COLA process) survives First Amendment scrutiny. The opinion does, however, highlight some pitfalls to avoid should a future plaintiff seek to challenge a TTB labeling decision on constitutional grounds. For the moment, though, we should not expect to see the marketing of "DNA-healthy" alcohol beverages anytime soon.

Court Dismisses Challenge To TTB's Rejection Of Health Claims On Vodka

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions