WASHINGTON, Dec 8 (Reuters Legal) - The Food and Drug Administration can only regulate "e-cigarettes" as tobacco products and not as drugs, and thus cannot block their import, a federal appeals court ruled on Tuesday.
The ruling by three judges of the U.S. Court of Appeals for the D.C. Circuit infuriated tobacco activist groups and will allow e-cigarette maker Sottera Inc to start importing its NJOY products.
"Electronic cigarettes are battery-powered products that allow users to inhale nicotine vapor without fire, smoke, ash, or carbon monoxide," the court said in its ruling. "The liquid nicotine in each e-cigarette is derived from natural tobacco plants," the court noted.
Congress gave the FDA authority to regulate tobacco products -- but not to ban them -- in 2009.
The ruling affirms a lower court decision from January. "The FDA's refusal to admit NJOY's products into the United States obviously destroyed the firm's ability in the United States to cover its costs for purchase or production of e-cigarettes," the appeals court said.
Sottera Inc, which markets NJOY products as an alternative to cigarettes, welcomed the ruling.
"The ultimate impact of this court decision will be to lift the current import restrictions on NJOY electronic cigarettes and provide a regulatory framework for NJOY to make progress on its mission to be the most responsible electronic cigarette manufacturer on the market," the company said in a statement.
Matthew Myers, president of the Campaign for Tobacco-Free Kids, said it would take time for the FDA to assert its jurisdiction over e-cigarettes as tobacco products.
"This decision will allow any manufacturer to put any level of nicotine in any product and sell it to anybody, including children, with no government regulation or oversight at the present time," Myers said in a statement.
"We urge the government to appeal this ruling."
In September, the FDA sent warnings to five makers of electronic cigarettes, saying they were marketing them illegally as stop-smoking aids, and said it intended to regulate the products as drugs.
In October e-cigarette maker Smoking Everywhere Inc settled a civil suit brought by California by agreeing not to target sales and advertising to minors or to claim that its products are safe alternatives to tobacco. Sales of Smoking Everywhere products are banned outright to anyone under 18 years of age as part of the settlement.
The current case is Sottera Inc v. Food & Drug Administration, U.S. Court of Appeals, District of Columbia Circuit (Washington), No. 10-5032. The lower-court case was Smoking Everywhere Inc v. U.S. Food and Drug Administration, U.S. District Court, District of Columbia (Washington), No. 09-cv-00771. Gregory Garre of Latham & Watkins in Washington, D.C. argued the case for Sottera Inc before the court of appeals and was accompanied on the briefs by Richard Bress, John Manthei and Jessica Phillips of the same firm. Justice Department attorney Alisa Klein argued the case for the FDA before the court of appeals, accompanied on the briefs by U.S. Attorney Ronald Machen; Justice Department attorneys Mark Stern and Samantha Chaifetz; Chief Counsel Ralph Tyler of the FDA; Deputy Chief Counsel Eric Blumberg of the FDA; and Associate Chief Counsel Karen Schifter of the U.S. Department of Health and Human Services.
The California case against Smoking Everywhere that settled was People of the State of California v. Smoking Everywhere et al, California Superior Court, Alameda County, No. RG10493637.
(Reporting by Maggie Fox of Reuters; Additional reporting by Terry Baynes of Reuters Legal)