We previously wrote about this case last January, here and here, when Iowans for Alternatives to Smoking & Tobacco, Inc., Global Source Distribution, LLC, and others filed a complaint and motion for a preliminary injunction in federal district court against the Iowa Department of Revenue (the Department), challenging Iowa House File 2677 (HF 2677), a law imposing certification and directory requirements on vapor products sold in Iowa. On May 2, the court granted plaintiffs’ motion for preliminary injunction and enjoined the Department from implementing and enforcing HF 2677’s vapor product directory provisions. The court held that the Department could, however, continue to enforce the provisions of HF 2677 requiring nonresident vapor product manufacturers not registered to do business in the state as a foreign corporation or business entity to appoint and continually engage an agent for service of process. The parties have a status conference before the court scheduled for May 29.

Background and Legal Challenge

House File 2677, enacted by the Iowa Legislature in 2024, aims to create a registry of permissible vapor products and authorize state enforcement actions against noncompliant manufacturers and retailers. The law mandates that vapor products sold in Iowa must either have U.S. Food and Drug Administration (FDA) marketing authorization or have been on the market as of August 8, 2016, and have had a premarket tobacco product application (PMTA) filed with FDA by September 9, 2020, that remains under FDA review or is the subject of ongoing litigation.

Plaintiffs argued that the law is preempted by the Federal Food, Drug, and Cosmetic Act (FDCA), which grants FDA exclusive authority to regulate tobacco products. They contended that Iowa’s law effectively enforces federal requirements, infringing on FDA’s discretion, and creating an obstacle to federal objectives.

Plaintiffs also claimed the law violates constitutional equal protection guarantees by treating tobacco-derived and synthetic nicotine products differently without a rational basis.

Court’s Analysis and Decision

The court found that House File 2677 is impliedly preempted by the FDCA. It determined that the law effectively creates a state-level enforcement framework for federal premarket authorization requirements, allowing the state to substitute its enforcement discretion for FDA’s enforcement discretion, which violates the FDCA’s reservation of enforcement authority to the federal government. The court emphasized that while states have broad police powers to regulate tobacco sales, they cannot enforce the FDCA or condition market access on compliance with federal authorization standards in a way that transfers FDA’s enforcement discretion to states.

Regarding plaintiffs’ equal protection claim, the court concluded that the differential treatment of tobacco-derived and synthetic nicotine products satisfies rational basis review. The Iowa Legislature could rationally perceive synthetic nicotine products as posing unique risks, particularly to youth, justifying more stringent regulation.

Why It Matters

The court’s decision underscores the delicate balance between state and federal regulatory authority, particularly between the FDCA and areas traditionally occupied by state police powers. While states can regulate tobacco sales, they must do so without encroaching on federally reserved regulatory and enforcement authorities.

The preliminary injunction prevents the Department from enforcing the vapor products directory provisions of House File 2677 but allows certain consumer protection measures to remain in effect. The injunction, however, only temporarily prevents the Department from taking these actions while the litigation proceeds, so the story is not over.

The court’s ruling highlights the ongoing legal complexities surrounding vapor product regulation and the interplay between state and federal oversight. Over the last couple of years, we have seen several states pass substantially similar legislation, which we have previously written about here and here. This litigation is worth monitoring as similar laws continue to be passed in other states, threatening the continued operation of manufacturers of vapor products that have not received FDA authorization and are operating outside of FDA’s enforcement discretion policies.