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On July 2, 2018, United States Magistrate Judge Kimberly Priest Johnson issued an Order
(the “July 2 Order”) (Dkt. #55), sua sponte withdrawing her Order issued on May 22, 2018 (the
“May 22 Order”) (Dkt. #35) and granting Defendants’ Motion to Transfer (Dkt. #18). The May 22
Order had denied Defendants’ Motion to Transfer (Dkt. #18), which sought to transfer this case
to the United Stated District Court for the District of Columbia for consolidation with Cigar
Ass’n of Am. v. FDA, Case No. 1:15-cv-1460 (D.D.C.). The Motion to Transfer argued that
Plaintiffs’ claims in the present lawsuit are identical to those presented in Cigar Association. See
Dkt. #18 at 1-2. On July 5, 2018, Plaintiffs filed “Plaintiffs’ Emergency Appeal of the Magistrate
Judge’s July 2, 2018 Order Sua Sponte Reversing the Denial of Transfer” (the “Appeal”) (Dkt.
In the July 2 Order, the Magistrate Judge concluded that because the present lawsuit and
Cigar Association both concern the FDA’s failure to treat premium cigars differently from other
cigars and to exempt premium cigars from the FDA’s warnings requirement, the two cases involve
common subject matter and core issues that substantially overlap. See Dkt. #55 at 6 (citing Tex.
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Instruments v. Micron Semiconductor, Inc., 815 F. Supp. 994, 997 (E.D. Tex. 1993). The July 2
Order explains that in light of the arguments asserted in Defendants’ objections to the May 22
Order (Dkt. #40), and upon further review of the entire record in Cigar Association, the Magistrate
Judge determined that the May 22 Order denying transfer should be withdrawn and transfer should
I. BACKGROUND
On May 10, 2016, 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 by the Family Smoking Prevention and
Tobacco Control Act of 2009 (the “Tobacco Control Act”). Known as the “Deeming Rule,” the
FDA’s action subjects these newly “deemed” products to comparable statutory and regulatory
smokeless tobacco. See 81 Fed. Reg. 28,974, 28,976 (May 10, 2016) (codified at 21 C.F.R. pts.
The Deeming Rule sets out 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. §
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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
Plaintiffs’ complaint alleges that the warning requirements set forth in the Deeming Rule
violate Plaintiffs’ First Amendment rights under the Constitution, as well as the Tobacco Control
Act 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
point to the “first-to-file” rule and the potential for inconsistent judgments as the basis for their
Motion to transfer. See Dkt. 18at 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
Federal law affords a Magistrate Judge broad discretion in the resolution of nondispositive
pretrial matters, such as a motion to transfer. See FED. R. CIV. P. 72(a); 28 U.S.C. § 636(b)(1)(A).
Under Rule 72(a), “[w]hen a pretrial matter not dispositive of a party’s claim or defense is referred
to a magistrate judge to hear and decide, the magistrate judge must promptly conduct the required
proceedings and, when appropriate, issue a written order stating the decision.” The Court may
modify or set aside a Magistrate Judge’s order only if it is clearly erroneous or contrary to law.
Castillo v. Frank, 70 F.3d 382, 385 (5th Cir. 1995). “A finding is ‘clearly erroneous’ when
although there is evidence to support it, the reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been committed.” United States v. U.S. Gypsum
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III. DISCUSSION
Plaintiffs’ primary complaint involves the timing of the July 2 Order. As explained above,
the Magistrate Judge initially denied Defendants’ Motion to Transfer (see Dkt. #35), and then on
July 2, 2018, sua ponte withdrew that Order and issued the Order (Dkt. #55) to which Plaintiffs
now object. In the July 2 Order, the Magistrate Judge makes clear that her reversal was based on
Plaintiffs argue that the timing of the decision to grant Defendants’ Motion to Transfer is
contrary to the interests of justice because it substantively denies Plaintiffs’ request for an
injunction before regulation becomes effective on August 10, 2018. However, Plaintiffs fail to
explain how the July 2 Order is clearly erroneous and cite no case law or other legal authority
Unlike the venue statute, which permits transfers for “the convenience of parties and
witnesses, in the interest of justice,” 28 U.S.C. § 1404(a), the “first-to-file rule is grounded in
principles of comity and sound judicial administration.” Save Power Ltd. v. Syntek Finance Corp.,
121 F.3d 947, 948 (5th Cir. 1997). Under the first-to-file rule, “[o]nce the likelihood of substantial
overlap between the two suits ha[s] been demonstrated, it [i]s no longer up to the [second-filed
court] to resolve the question of whether both should be allowed to proceed.” Mann Mfg. Inc. v.
Hortex, 439 F.2d 403, 407 (5th Cir. 1971). Rather, “the ultimate determination of whether there
actually [i]s a substantial overlap . . . belong[s] to the [first-filed court],” id., which “may decide
whether the second suit filed must be dismissed, stayed, or transferred and consolidated.” Sutter
Corp. v. P&P Indus., Inc., 125 F.3d 914, 920 (5th Cir. 1997). Furthermore, the cases need not be
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identical to be duplicative. See Superior Sav. Ass’n v. Bank of Dallas, 705 F. Supp. 326, 329 (N.D.
Tex. 1989) (quoting Mann, 439 F .2d at 407, 408 n. 6). It is enough that the “overall content of
each suit is not very capable of independent development, and will be likely ‘to overlap to a
In Mann, the Fifth Circuit vacated a temporary injunction and ordered dismissal or transfer
of the case, requiring the plaintiff to instead seek relief in the first-filed court, id. at 405, explaining
that “the court initially seized of a controversy should be the one to decide whether it will try the
case.” Id. at 408. Similar to Mann, the Court here was confronted with evidence indicating the
likelihood that the issues in the present lawsuit and in Cigar Association would substantially
overlap. Id. Based on the foregoing, and in the absence of any countervailing authority from
Plaintiffs, the Court is persuaded that it is the “likelihood of substantial overlap” between the suits,
not the timing of the transfer decision, that controls. See Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d
Plaintiffs’ timing concerns. On July 5, 2018, that court entered an injunction pending appeal of its
May 15, 2017, decision upholding the warning requirements, noting that the plaintiffs had raised
“serious legal questions.” The District of Columbia court “enjoined [the FDA] from enforcing the
health warnings requirements for cigars and pipe tobacco set forth in 21 C.F.R. §§ 1143.3 and
[p]laintiffs’ appeal” to the D.C. Circuit. Id. at *5. Thus, Plaintiffs face no imminent, irreparable
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Plaintiffs also argue that the Magistrate Judge “misapplied” the first-to-file rule. See Dkt.
#56 at 4. Focusing on the Magistrate Judge’s reliance on Count V in Cigar Association, Plaintiffs
argue that the present case challenges a separate regulatory decision (i.e., the FDA’s decision to
impose warnings on several tobacco products, including premium cigars), while Count V in Cigar
Association focuses on the overarching deeming decision. See Dkt. #46 at 3-5. Plaintiffs also argue
that the Magistrate Judge “misunderstands” the structure of the Tobacco Control Act and the
regulatory action challenged in Count V of Cigar Association. As explained below, the Court finds
Under the first-to-file rule, it is not any particular claim but “the overall content of each
suit” that controls, Mann, 439 F.2d at 407, requiring review of the full set of claims raised in the
complaint. First, Counts VI and VII in Cigar Association—now on appeal—deal specifically with
the warning requirements. See Dkt. #55 at 6. Furthermore, Count V in Cigar Association subsumes
Plaintiffs’ challenge to the warning requirements with respect to premium cigars because if
premium cigars were not properly deemed, they could not be subject to any regulation under the
Tobacco Control Act, including the warning requirements. See 21 U.S.C. § 387a(b). And although
the court in Cigar Association declined to carve out an exception to the health warning
requirements for premium cigars (as Plaintiffs here likewise request), the Magistrate Judge noted
in the July 2 Order that this was not because such a claim had not been raised, but rather, it was
because the plaintiffs themselves had asked the court to defer resolution of the issue. See Dkt. #55
at 5–6.
Plaintiffs also contend that because they assert a first amendment claim—a claim not raised
in Cigar Association—that distinction is sufficient to support a finding that the two cases are not
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substantially similar. The Magistrate Judge concluded otherwise, and Plaintiffs fail to make a
credible argument that this conclusion was clearly erroneous or contrary to law.
Plaintiffs also lament that the transfer will double the effort of the federal court system,
because the Cigar Association court “will need to start from the beginning” to become familiar
with Plaintiffs’ first amendment claims. See Dkt. #56 at 4. However, it is unlikely that the Cigar
Association court will need to start from the beginning, since Plaintiffs’ first amendment claim
will be evaluated using the same body of evidence as the other claims in Cigar Association,
particularly the voluminous administrative record, and such claims typically do not present any
novel or unique issues. It is also notable that, in evaluating the Cigar Association plaintiffs’
likelihood of success on the merits of their request for injunctive relief, Judge Amit P. Mehta
concluded that the Supreme Court's recent decision in National Institute of Family and Life
Advocates v. Becerra, ––– U.S. ––––, 2018 WL 3116336 (2018), “only adds to the substantiality
of the issues Plaintiffs intend to raise on appeal” and “makes clear that Plaintiffs’ appeal raises
serious legal questions.” Cigar Association, No. 1:16-CV-01460, 2018 WL 3304627, at *4. The
fact that Plaintiffs here have also asserted Becerra in support of their first amendment arguments
(see, e.g., Dkt. #56 at 4) further supports the propriety of granting a transfer.
Based on the foregoing, the Court finds no error in the Magistrate Judge’s conclusion that
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” (Dkt. #55 at 6), and thus, the two cases are likely to overlap to a substantial
degree.
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IV. CONCLUSION
Having considered Plaintiffs’ Emergency Appeal of the Magistrate Judge’s July 2 Order
Sua Ponte Reversing the Denial of Transfer (Dkt. #56), the Court finds that the Magistrate
. Judge’s Order is not clearly erroneous or contrary to law. FED. R. CIV. P. 72(a).
Accordingly, the July 2 Order (Dkt. #55) is AFFIRMED, and this case
is hereby TRANSFERRED to the United States District Court for the District of Columbia.
IT IS SO ORDERED.
SIGNED this 30th day of July, 2018.
___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE