UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA


)
TOTALLY WICKED-E.LIQUID (USA), INC.,)
4907 14th Street West)
Bradenton, Florida 34207,)
)
Plaintiff, )
)
v. )CASE NO.
)
U.S. FOOD AND DRUG ADMINISTRATION, )
MARGARET A. HAMBURG, M.D., )
Commissioner for Food and Drugs, )
10903 New Hampshire Avenue, )
Silver Spring, Maryland 20903,)
)
and)
)
U.S. DEPARTMENT OF HEALTH AND)
HUMAN SERVICES,)
KATHLEEN SEBELIUS, Secretary of Health)
and Human Services,)
200 Independence Avenue, S.W.,)
Washington, D.C. 20201,)
)
Defendants.)
)

VERIFIED COMPLAINT
(TEMPORARY RESTRAINING ORDER REQUESTED)

Plaintiff Totally Wicked-E.Liquid (USA), Inc. ("TWI"), for its Verified Complaint against the United States Food and Drug Administration, Margaret A. Hamburg, Commissioner for Food and Drugs (collectively, "FDA"), the United States Department of Health and Human Services, and Kathleen Sebelius, Secretary of Health and Human Services (collectively, "HHS"), hereby states as follows:

NATURE OF THE ACTION
1.This is an action for declaratory and temporary and permanent injunctive relief pursuant to 28 U.S.C. § 2201 and 5 U.S.C. § 702, et seq., to bar the FDA from exceeding its statutory authority by improperly attempting to regulate TWI's electronic cigarettes and accessories as drugs, devices, or drug-device combination products under the federal Food, Drug, and Cosmestics Act ("FDCA"), 21 U.S.C. § 301, et seq., and to prohibit the FDA from barring the importation of TWI's electronic cigarettes into the United States.
PARTIES
2.Plaintiff TWI is a privately held Florida corporation with its principal place of business located at 4907 14th Street West, Bradenton, Florida 34207. TWI is an importer and distributor of electronic cigarettes and electronic cigarette accessories.
3.Defendant United States Food and Drug Administration is a division of Defendant Department of Health and Human Services. FDA has responsibility, inter alia, for ensuring that certain defined medical devices and medical products sold within the United States are safe and effective. The headquarters and principal place of business of the FDA is 10903 New Hampshire Avenue, Silver Spring, Maryland 20903. The headquarters and principal place of business of Defendant HHS is at 200 Independence Avenue, S.W., Washington, D.C. 20201.
JURISDICTION AND VENUE
4.This Court has original subject matter jurisdiction over this matter pursuant to 28 U.S.C. § 1331, 28 U.S.C. § 2201, and 5 U.S.C. § 706.
5.This Court has personal jurisdiction over Defendants FDA, HHS, Commissioner Hamburg, and Secretary Sebelius in their official capacities, as each is an agency or official of the United States.
6.Venue is proper in this Court pursuant to 28 U.S.C. § 1391(e) because Defendant HHS resides within this district.
FACTUAL ALLEGATIONS
A.TWI's Electronic Cigarettes
7.TWI, a Florida corporation, is a business that is fully dedicated to the importation and distribution of electronic cigarettes in the United States. During the period between its founding in early 2009 and the detention of its products in October 2010, TWI imported and sold approximately 60,000 electronic cigarette kits in the United States.
8.An electronic cigarette is an alternative to traditional smoked tobacco products and is designed to replicate the adult experience of smoking without combustion or the inhalation of the cancerous byproducts that results from smoking traditional cigarettes. Electronic cigarettes function by vaporizing a liquid nicotine mixture that, in the case of TWI's product, is naturally derived from tobacco plants. Once the nicotine mixture is vaporized, the user may inhale the nicotine vapor in a manner similar to that of inhaling actual tobacco smoke, but without the fire, flame, tar, carbon monoxide, ash, known carcinogenic byproducts, or smell found in traditional cigarettes.
9.Electronic cigarettes are composed of three basic parts: the cartridge, the heating element (also called the "atomizer"), and the battery and electronics. The cartridge is a disposable plastic container that contains liquid nicotine and serves as the mouthpiece of the electronic cigarette. The heating element serves to vaporize the naturally derived nicotine that is ultimately inhaled by the user. Finally, the battery and electronics power the heating element and monitor air flow. On many of the models imported and distributed by TWI, each of the parts of an electronic cigarette is designed to look like an actual cigarette, thereby further mimicking the traditional smoking experience.
10.When a user inhales on an electronic cigarette, the air flow is detected by the device's electronics and the heating element is activated, vaporizing the natural liquid nicotine. The user then inhales the nicotine vapor, which contains a flavoring designed to stimulate the flavor and feel of smoking a traditional cigarette.
11.TWI does not, and has never, marketed or advertised its electronic cigarettes for any therapeutic purpose, as a smoking cessation aid, or as a product designed to affect the structure or function of the body of man. Instead, TWI markets, labels, and sells its electronic cigarette products and accessories solely to provide adult consumers with an alternative smoking experience that excludes many of inconveniences and negative externalities associated with smoking traditional cigarettes.
12.TWI imports one hundred percent of its supply of electronic cigarettes from overseas manufacturers and is not aware of any domestic manufacturer of electronic cigarettes or their component parts. The liquid nicotine cartridges imported and distributed by TWI are of pharmaceutical-grade quality and are produced in Ireland.
B.FDA's Attempted Regulation of Electronic Cigarettes as Unauthorized Drugs, Devices, or Drug-Device Combination Products.

13.Throughout most of the FDA's history, the FDA explicitly and repeatedly disclaimed the authority and jurisdiction to regulate tobacco products as nicotine delivery mechanisms. Prior to 2009, Congress, on several occasions, debated whether to extend FDA's jurisdiction to include tobacco products. Each time, however, Congress concluded that FDA should not have jurisdiction over tobacco products.
14.In approximately 1995, the FDA changed its historic position and asserted for the first time that it had jurisdiction to regulate cigarettes and tobacco products as a nicotine delivery device. FDA then proposed and adopted binding regulations relating to the marketing and sale of cigarettes and tobacco products.
15.Each of the major tobacco companies brought suit against the FDA, alleging that the newly promulgated regulations were ultra vires and that the FDA had no authority to regulate tobacco products as nicotine delivery devices.
16.In 2000, the Supreme Court, in Food and Drug Administration v. Brown and Williamson Tobacco Corporation, 529 U.S. 120 (2000), held that Congress did not intend the FDCA to grant the FDA jurisdiction to regulate cigarettes or tobacco products as nicotine delivery devices.
17.While thwarted by the Supreme Court in its initial attempts to regulate cigarettes and tobacco products, beginning in approximately 2008 and up to the present, FDA began to take an increased interest in the importation, distribution, and sale of electronic cigarettes in the United States. The electronic cigarette industry remains in its infancy, as the creation of electronic cigarettes was only recently made possibly by advances in micro-atomizer technology. Indeed, the FDA's regulatory interest in electronic cigarettes has coincided with a period of exponential growth in the electronic cigarette industry in the United States.
18.FDA's interest in electronic cigarettes led to the apparent adoption of a new internal FDA policy that includes the classification of electronic cigarettes and accessories as unapproved new drugs, devices, and/or drug-device combination products based on the inherent characteristics of electronic cigarettes and their accessories. In 2009, the FDA made repeated public statements that it now considered electronic cigarettes to be drug-device combination products that fell within the FDA's regulatory purview under Chapter V of the FDCA.
19.Upon information and belief, in early 2009, the FDA added electronic cigarettes to Import Alert 66-41 and thereby directed U.S. Customs and Border Protection to reject the entry of electronic cigarettes and their accessories into the United States. An import alert advises FDA field offices of potential issues relating to particular products. Specifically, Import Alert 66-41 stated that electronic cigarettes were unapproved drugs and/or misbranded drugs. FDA's action in this respect constitutes a substantive, binding regulation.
20.Upon information and belief, at no time before the FDA added electronic cigarettes and accessories to Import Alert 66-41 was the proposed action published in the Federal Register. Neither was TWI or any other manufacturer, importer, or distributor of electronic cigarettes allowed to participate in FDA's rulemaking process by submitting its written views or being allowed to make oral arguments before the FDA. With the exception of the litigation described below, no such opportunity has ever formally been afforded any such entity since the addition of electronic cigarettes to the FDA's import alerts.
21.Following several seizures of its products on grounds that they constituted unapproved new drugs and/or devices, on April 28, 2009, Smoking Everywhere, Inc., another importer and distributor of electronic cigarettes, filed a lawsuit, Smoking Everywhere, Inc. v. Food and Drug Administration, Case No. 1:09-cv-771 (RJL), in this Court. Smoking Everywhere's action sought a declaratory judgment and a preliminary and permanent injunction against FDA's misclassification and repeated seizures of its products. The undersigned attorneys for TWI represented Smoking Everywhere in that action.
22.While Smoking Everywhere's motion for preliminary injunction against the FDA was pending, on June 22, 2009, the Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, 123 Stat. 1776 ("Tobacco Act"), was enacted. The Tobacco Act amended the FDCA to explicitly grant to the FDA for the first time statutory authority to regulate "tobacco products" and the advertising and promotion of such products. The Tobacco Act defines "tobacco product" in relevant part as "any product made or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product." 21 U.S.C. § 321(rr)(1). The term "tobacco product" thus encompasses electronic cigarettes, such as those imported and distributed by TWI, that contain nicotine naturally derived from tobacco leaves. The term "tobacco product" explicitly excludes "an article that is a drug under [21 U.S.C. § 321(g)(1)], a device under [21 U.S.C. § 321(h)], or a combination product described in [21 U.S.C. § 321(g)]."
23.The Tobacco Act explicitly provides that "tobacco products" are to be regulated by the FDA under the new Chapter IX of the FDCA and "shall not be subject to the provisions" of Chapter V ("Drugs and Devices"). 21 U.S.C. § 387a(a). Further, the FDA is explicitly prohibited from "banning all cigarettes, all smokeless tobacco products, all little cigars, all cigars other than little cigars, all pipe tobacco, or all roll-your-own tobacco products" and from "requiring the reduction of nicotine yields of a tobacco product to zero." 21 U.S.C. § 387g(d)(3).
24.Following the enactment of the Tobacco Act, this Court granted a preliminary injunction in the action brought by Smoking Everywhere. In its opinion, the Court observed as follows:
FDA says that the electronic cigarettes marketed by plaintiffs are a drug-device combination and should therefore be excluded from the Tobacco Act's definition of "tobacco product" because the labeling and promotional materials "represent and suggest that the product will provide the same drug effects as cigarettes." . . . Because plaintiffs' electronic cigarettes are to be used, like conventional cigarettes, as a means for delivering nicotine and because consumers and scientists widely believe that nicotine has drug-like effects . . . , FDA contends that plaintiffs' electronic cigarettes are intended to affect the structure or function of the body . . . . As a result, they qualify as a drug-device combination, not as a tobacco product. Put simply, this argument is bootstrapping run amuck.

That electronic cigarettes are devices for delivering nicotine and are intended to have the same effect on the structure and function of the body as cigarettes is hardly a basis for classifying electronic cigarettes as a drug-device combination, thereby excluding them from the definition of "tobacco product." If it were, then traditional cigarettes would be excluded as well. Indeed, any tobacco product containing nicotine and claiming to have some pharmacological effect would be excluded. Because this result would effectively dismantle the existing regulatory wall Congress erected between tobacco products and drug-device combinations, I can easily infer that Congress did not intend tobacco products to be drugs merely because they deliver nicotine.

. . . .

. . . FDA does not contend that the electronic cigarettes marketed by plaintiffs are intended to affect the structure or function of the body in any way materially different from traditional cigarettes. Indeed, by FDA's own admission, Smoking Everywhere markets its product as providing "the same drug effects on the structure and function of the human body as cigarettes." . . . Likewise, NJOY markets its product as providing "all the pleasures of smoking." . . . Because plaintiffs sell their electronic cigarette products for customary recreational use, those products (just like traditional cigarettes) are properly excluded from the meaning of drug or device under the FDCA.

Smoking Everywhere, Inc. v. FDA, 680 F. Supp. 2d 62, 69-70, 73 (D.D.C. 2010).
25.The District Court went on to note:
In sum, absent substantial evidence of the manufacturer's objective intent that its electronic cigarettes affect the structure or function of the body in a way distinguishable from "customarily marketed" tobacco products or that its electronic cigarettes have the therapeutic purpose of treating nicotine withdrawal, there is no basis for FDA to treat electronic cigarettes, as they are marketed by the plaintiffs in this case, as a drug-device combination when all they purport to do is offer consumers the same recreational effects as a regular cigarette. Thus, the plaintiffs are substantially likely to succeed on their claim that FDA cannot regulate and thereby exclude their electronic cigarettes from the United States on the basis that those products are an unapproved drug-device combination under the FDCA.

. . . .

This case appears to be yet another example of FDA's aggressive efforts to regulate recreational nicotine products as drugs or devices under the FDCA. Ironically, notwithstanding that Congress has now taken the unprecedented step of granting FDA jurisdiction over those products, FDA remains undeterred. Unfortunately, its tenacious drive to maximize its regulatory power has resulted in its advocacy of an interpretation of the relevant law that I find, at first blush, to be unreasonable and unacceptable.

Id. at 75, 78.

26.Following the District Court's granting of a preliminary injunction in the Smoking Everywhere action, the FDA appealed. The United States Court of Appeals for the District of Columbia Circuit affirmed the District Court's decision on December 7, 2010, holding that, "[t]ogether, Brown & Williamson and the Tobacco Act establish that the FDA cannot regulate customarily marketed tobacco products under the FDCA's drug/device provisions." Sottera, Inc. v. FDA, 627 F.3d 891, 2010 U.S. App. LEXIS 24883, at *18 (D.C. Cir. 2010).
C.FDA's Seizure of TWI's Electronic Cigarettes and Accessories
27.Despite the resounding refutation of the FDA's policy with regard to electronic cigarettes by both this Court and the Court of Appeals for the District of Columbia Circuit, the FDA has continued its unlawful seizures of imported electronic cigarettes on the grounds that these products constitute drugs, devices, or combination products subject to FDA regulation under Chapter V of the FDCA.
28.On or about October 8, 2010, at the direction of the FDA, U.S. Customs and Border Protection detained a shipment of electronic cigarettes and accessories being imported into the United States through Miami International Airport by TWI.
29.On or about October 26, 2010, TWI received a "Notice of FDA Action" relating to the shipment that advised that the electronic cigarettes contained in the shipment were "subject to refusal" pursuant to the FDCA because they appeared to be misbranded drugs or devices in violation of FDCA Section 502(o) [21 U.S.C. § 352(o)] and because they appeared to be unapproved new drugs in violation of FDCA Section 505(a) [21 U.S.C. § ]. (A true and correct copy of the Notice of FDA Action is attached hereto as Exhibit A.)
30.On November 29, 2010, TWI submitted a formal response to the Notice of FDA Action. In its response, TWI noted that both its product packaging and labeling state that its electronic cigarettes and accessories are "an alternative to smoking a traditional tobacco based cigarette" and do not constitute a nicotine replacement therapy. TWI also emphasized that the bottom of every page on TWI's website contains the following disclaimer:
WARNING: the electronic cigarette will not cure a smoker's addiction to nicotine; the electronic cigarette serves the same purpose as a tobacco cigarette—it delivers its user nicotine. If you do suffer from the disease of Tobacco/Nicotine Dependence Syndrome and want to take steps to give up smoking or cut down the quantity of cigarettes you currently smoke[, w]e recommend you visit your health care provider to discuss NRT (Nicotine Replacement Therapy) or a nicotine harm reduction program.

(A true and correct copy of the November 29, 2010 Letter from Jason Cropper, TWI's Managing Director, to Magda M. Karlsen, FDA Complaince Officer, is attached hereto as Exhibit B.)
31.In its submission, TWI also requested that, to the extent that FDA contends that its decision is based on any particular claims or representations made by TWI with respect to its products, the FDA enumerate those claims so that could be modified or eliminated by TWI, as appropriate.
32.Within hours of TWI's transmittal of its response letter to FDA, FDA Compliance Officer Magda Karlsen forwarded an analysis of the shipment that had been performed by the FDA's Center for Drugs. In its analysis of TWI's products, the Center for Drugs concluded that TWI's products constitute drugs and devices under the FDCA:
The labeling claims . . . for the "totally wicked" products indicate that they are intended to affect the structure or function of the body and to mitigate, treat, or prevent disease. They suggest that "totally wicked" products are substitutes for traditional cigarettes and that they are capable of delivering nicotine, which is recognized by the scientific community as a pharmacological agent and is understood by consumers to have drug-like effects. . . .The including of labeling claims stating that the "totally wicked" products will deliver a vapor or mist for inhalation by the user, which may or may not include nicotine; that these articles replicate the physical pleasures of smoking; and satisfy cravings for nicotine establish that the articles are intended to affect the structure or function of the body and to mitigate, treat, or prevent disease. Moreover, the marketing of these articles targets the knowledge and expectations of conventional tobacco users that these articles are suitable for these uses when one cannot, or chooses not to, smoke. The scientific and medical communities have determined that nicotine addiction is a disease and that nicotine withdrawal is itself a recognized medical condition. Thus, these labeling claims fit within the "drug" and "device" definitions in the Act.

(A true and correct copy of the November 29, 2010 Email from Magda Karlsen, FDA Compliance Officer, to Jason Cropper, TWI Managing Director, is attached hereto as Exhibit C.)
33.Following its receipt of the Center for Drugs' analysis, on or about December 1, 2010, TWI sent further correspondence to the FDA requesting direction as to any further action that TWI could take with respect to its labeling, advertising, or website that could lead the FDA to conclude that TWI's products do not fall with the definition of drugs, devices, or combination products. TWI also asked for guidance on whether there was any other FDA department or official to which the Center for Drugs' analysis could be appealed. (A true and correct copy of the December 1, 2010 letter from Jason Cropper, TWI Managing Director, to Magda Karlsen, FDA Compliance Officer, is attached hereto as Exhibit D.)
34.Despite the December 1, 2010 letter and several follow-up emails that have since been sent to Compliance Officer Karlsen, TWI has received no further communications from FDA regarding the possibility of appealing the Center for Drugs' analysis or steps TWI may take to avoid further rejections of its imports by FDA.
35.Upon information and belief, the FDA did not publish in the Federal Register its proposed decision to classify electronic cigarettes as a new drug, device, or drug-device combination and it did not give TWI notice of the proposed action.
36.Upon information and belief, the FDA will continue to order that all overseas shipments of TWI's electronic cigarettes be denied entry into the United States until such time as TWI's electronic cigarettes have been approved by the FDA as a new drug within the meaning of Section 201 of the FDCA. [21 U.S.C. § 321(p)]
37.The FDA's addition of electronic cigarettes to Import Alert 66-41 is a final decision by the FDA that electronic cigarettes are a drug-device combination product. Furthermore, the FDA, in repeated and public statements, has declared that it considers electronic cigarettes to be within the agency's jurisdiction because electronic cigarettes are a drug-device combination product.
38.FDA's rejection of TWI's electronic cigarettes and accessories and its continued policy of classifying electronic cigarettes as drugs, devices, or drug-device combination products under the FDCA directly threatens the continued viability of TWI as an ongoing business. One hundred percent of TWI's revenues are obtained from the importation and distribution of electronic cigarettes and accessories and, absent a reversal of FDA's policy, TWI will remain unable to import any electronic cigarette products into the United States. TWI's current stocks of electronic cigarettes are already nearly exhausted, and TWI will be required to close its doors in the immediate future in the event that it is unable to obtain further shipments of electronic cigarettes. Further, as part of its distribution network, TWI has binding contracts with overseas suppliers and manufacturers of electronic cigarettes and their component products. In the event that TWI is not soon able to re-commence its importation of electronic cigarettes into the United States, TWI will be forced to breach many of these contracts.
39.No avenue for redress is available to TWI other than review of FDA's actions in this Court and the granting of declaratory and injunctive relief. TWI's attempts to obtain internal administrative review of the decision by the FDA's Center for Drugs have gone unacknoweldged.
40.FDA's actions in barring TWI's imports of electronic cigarettes and the analysis conducted by FDA's Center for Drugs directly contradict the binding authority established by this Court and the Court of Appeals for the District of Columbia Circuit. FDA's actions in barring TWI's imports, in addition to being ultra vires, are thus the very definition of "arbitrary and capricious."
41.TWI seeks a temporary restraining order, preliminary injunction, and permanent injunction that: (a) enjoin Defendants from enforcing any import ban on TWI's electronic cigarettes and accessories arising out of their purported classification as a drug, device, or drug-device combination product under the FDCA, or from enforcing Import Alert 66-41 with respect to TWI's electronic cigarettes and accessories; (b) declare that Defendants are without statutory authority to regulate TWI's electronic cigarettes and accessories as a drug, device, or drug-device combination product under the FDCA; and (c) order the release of any of TWI's electronic cigarettes and electronic cigarette accessories currently detained by the United States.
COUNT I
(Declaratory Judgment)
42.TWI incorporates by reference the allegations of paragraphs 1 - 41, above, as if fully set forth herein.
43.Defendants' classification of TWI's electronic cigarettes and accessories as drugs, devices, and/or drug-device combination products under the FDCA is ultra vires and unlawful. Defendants' actions are, therefore, "arbitrary and capricious," "not in accordance with law," and "in excess of statutory jurisdiction, authority, and limitations." 5 U.S.C. § 706(2)(A), (C). The Court must, therefore, set aside the FDA's actions undertaken pursuant to its erroneous findings.
44.Defendants' actions are egregiously arbitrary and capricious in so much as they run directly contrary to the ruling of this Court in Smoking Everywhere, Inc. v. FDA, 680 F. Supp. 2d 62 (D.D.C. 2010), and the ruling of the Court of Appeals for the District of Columbia Circuit in Sottera, Inc. v. FDA, 627 F.3d 891, 2010 U.S. App. LEXIS 24883 (D.C. Cir. 2010).
45.TWI has been seriously injured and faces the immediate threat of future irreparable harm as a direct and proximate result of Defendants' unlawful acts.
46.TWI has already been seriously harmed in that one shipment of electronic cigarettes and accessories has been detained and denied entry into the United States based on the FDA's erroneous interpretation of its authority. TWI continues to face the threat of irreparable harm in that: (a) TWI receives 100 percent of its revenue from imported electronic cigarettes and does not have a domestic supplier currently available to it; (b) TWI will lose its ability to fulfill its contractual obligations with its overseas suppliers in the event that it is not permitted to continue importing electronic cigarettes in the near future; (c) the FDA's import ban threatens the continued viability of SE, which will be forced to close its doors in the immediate future in the event that it is not able to resume importing electronic cigarettes and accessories.
47.TWI requests that the Court: (1) declare that the actions of the FDA as set forth herein are unlawful, contrary to binding precedent, arbitrary and capricious, and ultra vires; (2) enter a judgment in favor of TWI; and (3) enjoin and prohibit FDA from detaining or refusing admission into the United States of TWI's electronic cigarettes and electronic cigarette accessories on the ground that those products constitute unapproved drugs, devices, or drug-device combination products under the FDCA.
COUNT II
(Violation of Administrative Procedures Act)
48.TWI incorporates by reference the allegations of paragraphs 1-47, above, as if fully set forth herein.
49.As a federal agency, the FDA is required to follow and apply all laws, rules, and regulations in a uniform manner and in such a way as to provide for due process for citizens of the United States.
50.FDA is charged by Congress with enforcing the FDCA and several other public health laws. Congress has permitted the FDCA to be implemented and applied through the lawfully promulgated regulations of the Code of Federal Regulations. Any final rule or regulation issued by an administrative agency that effects a substantive change in the law must be adopted pursuant to the required notice and comment procedures of the Administrative Procedures Act ("APA"). 5 U.S.C. § 553, et seq.
51.Import Alert 66-41, which, inter alia, directed U.S. Customs and Border Protection to reject the entry of "Electronic Cigarettes and Electronic Cigarette Components," is a binding, substantive rule that imposes obligations on other parties and significantly affects the interests of TWI and others in the electronic cigarette industry.
52.The FDA did not provide opportunity for notice and comment pursuant to the APA before classifying electronic cigarettes as a new drug, device, or drug-device combination. The FDA neither published notice of the new rule in the Federal Register nor served personal notice on the parties affected by the un-promulgated rule.
53.The FDA's failure to comply with the observance of the procedures required by law is a violation of the APA and thus renders the FDA's actions unlawful. 5 U.S.C. § 706(2)(D).
54.In addition, the FDA has not established a rational nexus between the addition of electronic cigarettes to Import Altert 66-41 and the Congressional mandate empowering the FDA to ensure that medical devices and medical products sold within the United States are safe and effective.
55.Prior to 2009, the FDA had a custom and practice of not interfering with the importation of electronic cigarettes and other tobacco products as customarily marketed. With its addition of electronic cigarettes to Import Alert 66-41, the FDA has departed from precedent without cause, good reason, or notice.
56.The FDA's addition of electronic cigarettes to Import Alert 66-41 is an arbitrary and capricious agency action because it departs from precedent without benefit of notice, public hearing, and good cause.
57.The FDA's addition of electronic cigarettes to Import Alert 66-41 is an arbitrary and capricious agency action because it seeks to treat the use of nicotine for non-therapeutic uses differently than for uses associated with traditional tobacco products.
58.The FDA's addition of electronic cigarettes to Import Alert 66-41 and, upon information and belief, the failure to remove electronic cigarettes from Import Alert 66-41, is an arbitrary and capricious agency action that is in excess of statutory jurisdiction, authority, and limitations because the FDA's interpretation of its authority over electronic cigarettes has been explicitly been held unlawful both by this Court and the Court of Appeals for the District of Columbia Circuit.
59.The FDA's arbitrary and capricious conduct has both directly and proximately caused, and is continuing to threaten, substantial and irreparable injury to TWI.
60.TWI has already been seriously harmed in that one shipment of electronic cigarettes and accessories has been detained and denied entry into the United States based on the FDA's erroneous interpretation of its authority. TWI continues to face the threat of irreparable harm in that: (a) TWI receives 100 percent of its revenue from imported electronic cigarettes and does not have a domestic supplier currently available to it; (b) TWI will lose its ability to fulfill its contractual obligations with its overseas suppliers in the event that it is not permitted to continue importing electronic cigarettes in the near future; (c) the FDA's import ban threatens the continued viability of SE, which will be forced to close its doors in the immediate future in the event that it is not able to resume importing electronic cigarettes and accessories.
61.Consequently, the FDA's issuance of Import Alert 66-41 must be enjoined pursuant to 5 U.S.C. § 706(2)(A) and (D).
COUNT III
(Injunction)
62.TWI incorporates by reference the allegations of paragraph 1 - 61, above, as if fully set forth herein.
63.Defendants' classification of TWI's electronic cigarettes and accessories as drugs, devices, and/or drug-device combination products under the FDCA is ultra vires and unlawful. Defendants' actions are, therefore, "arbitrary and capricious," "not in accordance with law," and "in excess of statutory jurisdiction, authority, and limitations." 5 U.S.C. § 706(2)(A), (C). The Court must, therefore, set aside the FDA's actions undertaken pursuant to its erroneous findings.
64.Defendants' actions are egregiously arbitrary and capricious in so much as they run directly contrary to the ruling of this Court in Smoking Everywhere, Inc. v. FDA, 680 F. Supp. 2d 62 (D.D.C. 2010), and the ruling of the Court of Appeals for the District of Columbia Circuit in Sottera, Inc. v. FDA, 627 F.3d 891, 2010 U.S. App. LEXIS 24883 (D.C. Cir. 2010), and so must be enjoined.
65.TWI has been seriously injured and faces the immediate threat of future irreparable harm as a direct and proximate result of Defendants' unlawful acts.
66.TWI has already been seriously harmed in that one shipment of electronic cigarettes and accessories has been detained and denied entry into the United States based on the FDA's erroneous interpretation of its authority. TWI continues to face the threat of irreparable harm in that: (a) TWI receives 100 percent of its revenue from imported electronic cigarettes and does not have a domestic supplier currently available to it; (b) TWI will lose its ability to fulfill its contractual obligations with its overseas suppliers in the event that it is not permitted to continue importing electronic cigarettes in the near future; (c) the FDA's import ban threatens the continued viability of SE, which will be forced to close its doors in the immediate future in the event that it is not able to resume importing electronic cigarettes and accessories.
67.TWI requests that the Court: (1) declare that the actions of the FDA as set forth herein are unlawful, contrary to binding precedent, arbitrary and caprcious, and ultra vires; (2) enter a temporary restraining order and preliminary injunction against Defendants that prohibits them from detaining or refusing admission into the United States of TWI's electronic cigarettes and electronic cigarette accessories on the ground that those products constitute unapproved drugs, devices, or drug-device combination products under the FDCA; and (3) enter a permanent injunction against Defendants that prohibits them from detaining or refusing admission into the United States of TWI's electronic cigarettes and electronic cigarette accessories on the ground that those products constitute unapproved drugs, devices, or drug-device combination products under the FDCA.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff respectfully requests that this Court:
A.Enter a temporary restraining order, a preliminary injunction, and a permanent injunction that enjoins Defendants from enforcing any import ban on TWI's electronic cigarettes arising out of their purported classification as a drug, device, or drug-device combination product under the FDCA, or from enforcing Import Alert 66-41 with respect to TWI's electronic cigarettes and electronic cigarette accessories;
B.Enter a declaratory judgment that Defendants are without statutory authority to regulate TWI's electronic cigarettes and accessories as a drug, device, or drug-device combination product under the FDCA, and that the addition of electronic cigarettes to Import Alert 66-41 is invalid, unlawful, and ultra vires of Defendants' authority; and
C.Order the release of any of TWI's electronic cigarettes and electronic cigarette accessories currently detained or seized by the United States pursuant to the FDA's unlawful declaration that it has jurisdiction over electronic cigarettes and electronic cigarette accessories under the FDA's authority to regulate drugs, devices, and drug-device combination products;


D.Award TWI its costs and expenses, including reasonable attorneys' fees; and
E.Award such other and further relief as is necessary and appropriate.

THOMPSON HINE LLP


Dated:February ___, 2011 By:
Kip Schwartz (D.C. Bar No. 444650)
Eric N. Heyer (D.C. Bar No. 500095)
1920 N Street, N.W., Suite 800
Washington, D.C. 20036
Telephone: (202) 331-8800
Fax: (202) 331-8330
kip.schwartz@thompsonhine.com
eric.heyer@thompsonhine.com


VERIFICATION
I verify under penalty of perjury under the laws of the United States of America that the facts set forth in the foregoing Verified Complaint are true and correct.


Jason Cropper
Managing DirectorTotally Wicked-E.Liquid (USA), Inc.

Executed this ____ day of February, 2011

COUNT I
(Declaratory Judgment)
42.TWI incorporates by reference the allegations of paragraphs 1 - 41, above, as if fully set forth herein.
43.Defendants' classification of TWI's electronic cigarettes and accessories as drugs, devices, and/or drug-device combination products under the FDCA is ultra vires and unlawful. Defendants' actions are, therefore, "arbitrary and capricious," "not in accordance with law," and "in excess of statutory jurisdiction, authority, and limitations." 5 U.S.C. § 706(2)(A), (C). The Court must, therefore, set aside the FDA's actions undertaken pursuant to its erroneous findings.
44.Defendants' actions are egregiously arbitrary and capricious in so much as they run directly contrary to the ruling of this Court in Smoking Everywhere, Inc. v. FDA, 680 F. Supp. 2d 62 (D.D.C. 2010), and the ruling of the Court of Appeals for the District of Columbia Circuit in Sottera, Inc. v. FDA, 627 F.3d 891, 2010 U.S. App. LEXIS 24883 (D.C. Cir. 2010).
45.TWI has been seriously injured and faces the immediate threat of future irreparable harm as a direct and proximate result of Defendants' unlawful acts.
46.TWI has already been seriously harmed in that one shipment of electronic cigarettes and accessories has been detained and denied entry into the United States based on the FDA's erroneous interpretation of its authority. TWI continues to face the threat of irreparable harm in that: (a) TWI receives 100 percent of its revenue from imported electronic cigarettes and does not have a domestic supplier currently available to it; (b) TWI will lose its ability to fulfill its contractual obligations with its overseas suppliers in the event that it is not permitted to continue importing electronic cigarettes in the near future; (c) the FDA's import ban threatens the continued viability of SE, which will be forced to close its doors in the immediate future in the event that it is not able to resume importing electronic cigarettes and accessories.
47.TWI requests that the Court: (1) declare that the actions of the FDA as set forth herein are unlawful, contrary to binding precedent, arbitrary and capricious, and ultra vires; (2) enter a judgment in favor of TWI; and (3) enjoin and prohibit FDA from detaining or refusing admission into the United States of TWI's electronic cigarettes and electronic cigarette accessories on the ground that those products constitute unapproved drugs, devices, or drug-device combination products under the FDCA.
COUNT II
(Violation of Administrative Procedures Act)
48.TWI incorporates by reference the allegations of paragraphs 1-47, above, as if fully set forth herein.
49.As a federal agency, the FDA is required to follow and apply all laws, rules, and regulations in a uniform manner and in such a way as to provide for due process for citizens of the United States.
50.FDA is charged by Congress with enforcing the FDCA and several other public health laws. Congress has permitted the FDCA to be implemented and applied through the lawfully promulgated regulations of the Code of Federal Regulations. Any final rule or regulation issued by an administrative agency that effects a substantive change in the law must be adopted pursuant to the required notice and comment procedures of the Administrative Procedures Act ("APA"). 5 U.S.C. § 553, et seq.
51.Import Alert 66-41, which, inter alia, directed U.S. Customs and Border Protection to reject the entry of "Electronic Cigarettes and Electronic Cigarette Components," is a binding, substantive rule that imposes obligations on other parties and significantly affects the interests of TWI and others in the electronic cigarette industry.
52.The FDA did not provide opportunity for notice and comment pursuant to the APA before classifying electronic cigarettes as a new drug, device, or drug-device combination. The FDA neither published notice of the new rule in the Federal Register nor served personal notice on the parties affected by the un-promulgated rule.
53.The FDA's failure to comply with the observance of the procedures required by law is a violation of the APA and thus renders the FDA's actions unlawful. 5 U.S.C. § 706(2)(D).
54.In addition, the FDA has not established a rational nexus between the addition of electronic cigarettes to Import Altert 66-41 and the Congressional mandate empowering the FDA to ensure that medical devices and medical products sold within the United States are safe and effective.
55.Prior to 2009, the FDA had a custom and practice of not interfering with the importation of electronic cigarettes and other tobacco products as customarily marketed. With its addition of electronic cigarettes to Import Alert 66-41, the FDA has departed from precedent without cause, good reason, or notice.
56.The FDA's addition of electronic cigarettes to Import Alert 66-41 is an arbitrary and capricious agency action because it departs from precedent without benefit of notice, public hearing, and good cause.
57.The FDA's addition of electronic cigarettes to Import Alert 66-41 is an arbitrary and capricious agency action because it seeks to treat the use of nicotine for non-therapeutic uses differently than for uses associated with traditional tobacco products.
58.The FDA's addition of electronic cigarettes to Import Alert 66-41 and, upon information and belief, the failure to remove electronic cigarettes from Import Alert 66-41, is an arbitrary and capricious agency action that is in excess of statutory jurisdiction, authority, and limitations because the FDA's interpretation of its authority over electronic cigarettes has been explicitly been held unlawful both by this Court and the Court of Appeals for the District of Columbia Circuit.
59.The FDA's arbitrary and capricious conduct has both directly and proximately caused, and is continuing to threaten, substantial and irreparable injury to TWI.
60.TWI has already been seriously harmed in that one shipment of electronic cigarettes and accessories has been detained and denied entry into the United States based on the FDA's erroneous interpretation of its authority. TWI continues to face the threat of irreparable harm in that: (a) TWI receives 100 percent of its revenue from imported electronic cigarettes and does not have a domestic supplier currently available to it; (b) TWI will lose its ability to fulfill its contractual obligations with its overseas suppliers in the event that it is not permitted to continue importing electronic cigarettes in the near future; (c) the FDA's import ban threatens the continued viability of SE, which will be forced to close its doors in the immediate future in the event that it is not able to resume importing electronic cigarettes and accessories.
61.Consequently, the FDA's issuance of Import Alert 66-41 must be enjoined pursuant to 5 U.S.C. § 706(2)(A) and (D).
COUNT III
(Injunction)
62.TWI incorporates by reference the allegations of paragraph 1 - 61, above, as if fully set forth herein.
63.Defendants' classification of TWI's electronic cigarettes and accessories as drugs, devices, and/or drug-device combination products under the FDCA is ultra vires and unlawful. Defendants' actions are, therefore, "arbitrary and capricious," "not in accordance with law," and "in excess of statutory jurisdiction, authority, and limitations." 5 U.S.C. § 706(2)(A), (C). The Court must, therefore, set aside the FDA's actions undertaken pursuant to its erroneous findings.
64.Defendants' actions are egregiously arbitrary and capricious in so much as they run directly contrary to the ruling of this Court in Smoking Everywhere, Inc. v. FDA, 680 F. Supp. 2d 62 (D.D.C. 2010), and the ruling of the Court of Appeals for the District of Columbia Circuit in Sottera, Inc. v. FDA, 627 F.3d 891, 2010 U.S. App. LEXIS 24883 (D.C. Cir. 2010), and so must be enjoined.
65.TWI has been seriously injured and faces the immediate threat of future irreparable harm as a direct and proximate result of Defendants' unlawful acts.
66.TWI has already been seriously harmed in that one shipment of electronic cigarettes and accessories has been detained and denied entry into the United States based on the FDA's erroneous interpretation of its authority. TWI continues to face the threat of irreparable harm in that: (a) TWI receives 100 percent of its revenue from imported electronic cigarettes and does not have a domestic supplier currently available to it; (b) TWI will lose its ability to fulfill its contractual obligations with its overseas suppliers in the event that it is not permitted to continue importing electronic cigarettes in the near future; (c) the FDA's import ban threatens the continued viability of SE, which will be forced to close its doors in the immediate future in the event that it is not able to resume importing electronic cigarettes and accessories.
67.TWI requests that the Court: (1) declare that the actions of the FDA as set forth herein are unlawful, contrary to binding precedent, arbitrary and caprcious, and ultra vires; (2) enter a temporary restraining order and preliminary injunction against Defendants that prohibits them from detaining or refusing admission into the United States of TWI's electronic cigarettes and electronic cigarette accessories on the ground that those products constitute unapproved drugs, devices, or drug-device combination products under the FDCA; and (3) enter a permanent injunction against Defendants that prohibits them from detaining or refusing admission into the United States of TWI's electronic cigarettes and electronic cigarette accessories on the ground that those products constitute unapproved drugs, devices, or drug-device combination products under the FDCA.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff respectfully requests that this Court:
A.Enter a temporary restraining order, a preliminary injunction, and a permanent injunction that enjoins Defendants from enforcing any import ban on TWI's electronic cigarettes arising out of their purported classification as a drug, device, or drug-device combination product under the FDCA, or from enforcing Import Alert 66-41 with respect to TWI's electronic cigarettes and electronic cigarette accessories;
B.Enter a declaratory judgment that Defendants are without statutory authority to regulate TWI's electronic cigarettes and accessories as a drug, device, or drug-device combination product under the FDCA, and that the addition of electronic cigarettes to Import Alert 66-41 is invalid, unlawful, and ultra vires of Defendants' authority; and
C.Order the release of any of TWI's electronic cigarettes and electronic cigarette accessories currently detained or seized by the United States pursuant to the FDA's unlawful declaration that it has jurisdiction over electronic cigarettes and electronic cigarette accessories under the FDA's authority to regulate drugs, devices, and drug-device combination products;


D.Award TWI its costs and expenses, including reasonable attorneys' fees; and
E.Award such other and further relief as is necessary and appropriate.

THOMPSON HINE LLP


Dated:February ___, 2011 By:
Kip Schwartz (D.C. Bar No. 444650)
Eric N. Heyer (D.C. Bar No. 500095)
1920 N Street, N.W., Suite 800
Washington, D.C. 20036
Telephone: (202) 331-8800
Fax: (202) 331-8330
kip.schwartz@thompsonhine.com
eric.heyer@thompsonhine.com

32.Within hours of TWI's transmittal of its response letter to FDA, FDA Compliance Officer Magda Karlsen forwarded an analysis of the shipment that had been performed by the FDA's Center for Drugs. In its analysis of TWI's products, the Center for Drugs concluded that TWI's products constitute drugs and devices under the FDCA:
The labeling claims . . . for the "totally wicked" products indicate that they are intended to affect the structure or function of the body and to mitigate, treat, or prevent disease. They suggest that "totally wicked" products are substitutes for traditional cigarettes and that they are capable of delivering nicotine, which is recognized by the scientific community as a pharmacological agent and is understood by consumers to have drug-like effects. . . .The including of labeling claims stating that the "totally wicked" products will deliver a vapor or mist for inhalation by the user, which may or may not include nicotine; that these articles replicate the physical pleasures of smoking; and satisfy cravings for nicotine establish that the articles are intended to affect the structure or function of the body and to mitigate, treat, or prevent disease. Moreover, the marketing of these articles targets the knowledge and expectations of conventional tobacco users that these articles are suitable for these uses when one cannot, or chooses not to, smoke. The scientific and medical communities have determined that nicotine addiction is a disease and that nicotine withdrawal is itself a recognized medical condition. Thus, these labeling claims fit within the "drug" and "device" definitions in the Act.

(A true and correct copy of the November 29, 2010 Email from Magda Karlsen, FDA Compliance Officer, to Jason Cropper, TWI Managing Director, is attached hereto as Exhibit C.)
33.Following its receipt of the Center for Drugs' analysis, on or about December 1, 2010, TWI sent further correspondence to the FDA requesting direction as to any further action that TWI could take with respect to its labeling, advertising, or website that could lead the FDA to conclude that TWI's products do not fall with the definition of drugs, devices, or combination products. TWI also asked for guidance on whether there was any other FDA department or official to which the Center for Drugs' analysis could be appealed. (A true and correct copy of the December 1, 2010 letter from Jason Cropper, TWI Managing Director, to Magda Karlsen, FDA Compliance Officer, is attached hereto as Exhibit D.)
34.Despite the December 1, 2010 letter and several follow-up emails that have since been sent to Compliance Officer Karlsen, TWI has received no further communications from FDA regarding the possibility of appealing the Center for Drugs' analysis or steps TWI may take to avoid further rejections of its imports by FDA.
35.Upon information and belief, the FDA did not publish in the Federal Register its proposed decision to classify electronic cigarettes as a new drug, device, or drug-device combination and it did not give TWI notice of the proposed action.
36.Upon information and belief, the FDA will continue to order that all overseas shipments of TWI's electronic cigarettes be denied entry into the United States until such time as TWI's electronic cigarettes have been approved by the FDA as a new drug within the meaning of Section 201 of the FDCA. [21 U.S.C. § 321(p)]
37.The FDA's addition of electronic cigarettes to Import Alert 66-41 is a final decision by the FDA that electronic cigarettes are a drug-device combination product. Furthermore, the FDA, in repeated and public statements, has declared that it considers electronic cigarettes to be within the agency's jurisdiction because electronic cigarettes are a drug-device combination product.
38.FDA's rejection of TWI's electronic cigarettes and accessories and its continued policy of classifying electronic cigarettes as drugs, devices, or drug-device combination products under the FDCA directly threatens the continued viability of TWI as an ongoing business. One hundred percent of TWI's revenues are obtained from the importation and distribution of electronic cigarettes and accessories and, absent a reversal of FDA's policy, TWI will remain unable to import any electronic cigarette products into the United States. TWI's current stocks of electronic cigarettes are already nearly exhausted, and TWI will be required to close its doors in the immediate future in the event that it is unable to obtain further shipments of electronic cigarettes. Further, as part of its distribution network, TWI has binding contracts with overseas suppliers and manufacturers of electronic cigarettes and their component products. In the event that TWI is not soon able to re-commence its importation of electronic cigarettes into the United States, TWI will be forced to breach many of these contracts.
39.No avenue for redress is available to TWI other than review of FDA's actions in this Court and the granting of declaratory and injunctive relief. TWI's attempts to obtain internal administrative review of the decision by the FDA's Center for Drugs have gone unacknoweldged.
40.FDA's actions in barring TWI's imports of electronic cigarettes and the analysis conducted by FDA's Center for Drugs directly contradict the binding authority established by this Court and the Court of Appeals for the District of Columbia Circuit. FDA's actions in barring TWI's imports, in addition to being ultra vires, are thus the very definition of "arbitrary and capricious."
41.TWI seeks a temporary restraining order, preliminary injunction, and permanent injunction that: (a) enjoin Defendants from enforcing any import ban on TWI's electronic cigarettes and accessories arising out of their purported classification as a drug, device, or drug-device combination product under the FDCA, or from enforcing Import Alert 66-41 with respect to TWI's electronic cigarettes and accessories; (b) declare that Defendants are without statutory authority to regulate TWI's electronic cigarettes and accessories as a drug, device, or drug-device combination product under the FDCA; and (c) order the release of any of TWI's electronic cigarettes and electronic cigarette accessories currently detained by the United States.

WARNING: the electronic cigarette will not cure a smoker's addiction to nicotine; the electronic cigarette serves the same purpose as a tobacco cigarette—it delivers its user nicotine. If you do suffer from the disease of Tobacco/Nicotine Dependence Syndrome and want to take steps to give up smoking or cut down the quantity of cigarettes you currently smoke[, w]e recommend you visit your health care provider to discuss NRT (Nicotine Replacement Therapy) or a nicotine harm reduction program.

(A true and correct copy of the November 29, 2010 Letter from Jason Cropper, TWI's Managing Director, to Magda M. Karlsen, FDA Complaince Officer, is attached hereto as Exhibit B.)

30.On November 29, 2010, TWI submitted a formal response to the Notice of FDA Action. In its response, TWI noted that both its product packaging and labeling state that its electronic cigarettes and accessories are "an alternative to smoking a traditional tobacco based cigarette" and do not constitute a nicotine replacement therapy. TWI also emphasized that the bottom of every page on TWI's website contains the following disclaimer:

The parties are discussing whether this matter can be resolved without further litigation, and defendants hereby request a further extension of time to respond to plaintiff’s motion.