Emergency Request Letter

UNITED STATES OF AMERICA

Federal Trade Commission
WASHINGTON, D.C. 20580

Bureau of Consumer Protection

Richard Revesz
Administrator
Office of Information and Regulatory Affairs
Office of Management and Budget
725 17th Street, NW
Washington, DC 20503
Re: Emergency Clearance Request under the Paperwork Reduction Act
Dear Mr. Revesz:
I am the Associate Director for the Division of Advertising Practices at the Federal Trade
Commission (“FTC”), and I oversee the FTC’s responsibilities under the Federal Cigarette
Labeling and Advertising Act (“Act”). The FTC is submitting an emergency clearance request
for authority under the Paperwork Reduction Act to collect information from manufacturers or
importers of cigarettes in accordance with the Act. See 15 U.S.C. § 1333(c)(1) (2006 ed.). The
Act tasks the FTC with reviewing the statutorily mandated rotation of warnings on cigarette
labels and advertising, and requires the FTC to collect certain information.
The Act sets forth certain warnings that are required to appear on cigarette packaging and
advertising.1 See 15 U.S.C. § 1333. The Act requires cigarette manufacturers and importers to
rotate these warnings on a quarterly basis. See id. However, under certain circumstances,
manufacturers and importers with sales below a specified threshold can apply for equalization
with respect to the rotation of the warnings on their packaging—meaning that they only need to
display the statutorily prescribed warnings an equal number of times over the course of a year—
instead of rotation “with respect to a brand style of cigarettes.” See 15 U.S.C. § 1333(c)(1) and
(c)(2). Regardless of whether a manufacturer or importer chooses to apply for equalization, it
must submit a plan, which is subject to the FTC’s approval and must establish how the
manufacturer or importer plans to comply with the statutory labeling and advertising (if it intends
to engage in advertising) requirements. See 15 U.S.C. § 1333(a).
Manufacturers and importers may apply for equalization if “(i) the number of cigarettes
of such brand style sold in the fiscal year of the manufacturer or importer preceding the
submission of the application is less than one-fourth of 1 percent of all the cigarettes sold in the
United States in such year, and (ii) more than one-half of the cigarettes manufactured or
imported by such manufacturer or importer for sale in the United States are packaged into brand
styles which meet the requirements of clause (i).” See 15 U.S.C. § 1333(c)(2)(A). Additionally,

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The Act distinguishes between outdoor billboards and other advertising, with slightly different wording for the
required warning statements. Compare 15 U.S.C. § 1333(b), with 15 U.S.C. § 1333(c).

as part of this application, the manufacturer or importer must include “a plan describing how the
manufacturer plans to achieve equalization within the twelve-month period.” See 15 U.S.C.
§ 1333(c)(2)(B). If the FTC approves the application for equalization, that approval is valid for
one year from the date of the approval. See 15 U.S.C. § 1333(c)(2)(C). A manufacturer or
importer that has received approval for quarterly rotation of the warnings on its packages does
not need further approval from the Commission unless it intends to add new brands or brand
styles to its previously-approved plan. Similarly, approval for an advertising plan does not
expire, although the manufacturer or importer will need additional approval for new brands,
types of advertising, or sizes of advertising formats.
We recently became aware that the FTC never obtained OMB clearance for this
statutorily prescribed information collection. However, we believe that, in this instance, the
FTC’s failure to obtain PRA clearance is of no consequence. First, since there is a statutory
provision that requires the collection of the information, a failure to obtain PRA clearance does
not preclude the assessment of a penalty under the statute. See 5 C.F.R. § 1320.6(e). Second, for
the same reason, the failure to obtain a PRA clearance does not excuse noncompliance with the
requirement. See e.g., U.S. v. Ionia Management S.A., 498 F. Supp. 2d 477, 489 (D. Conn.
2007).
Nonetheless, the FTC requests a 180-day emergency clearance to be able to continue to
collect the information pursuant to the FTC’s statutory mandate. During the 180-day emergency
clearance period, the FTC will work to establish a regular clearance submission. Because, as
described above, the FTC’s failure to obtain PRA clearance for this statutorily mandated
information collection is of no consequence, and any delay preventing the agency from
collecting the information could have a detrimental impact on national health and safety, the
FTC is also seeking OMB’s approval to waive the need for the Federal Register Notices
otherwise required by 5 C.F.R. §§ 1320.5(a)(l)(iv) and 1320.13(d) prior to publication and
implementation of this disclosure.
Special circumstances exist that require an emergency clearance pursuant to 5 C.F.R.
§ 1320.13(a). First, without the information, the FTC is unable to determine whether cigarette
manufacturers and importers are complying with the statutory requirements for cigarette
packaging. For this reason, any interruption in the FTC’s ability to carry out its statutory
mandate will likely result in public harm. See 5 C.F.R. § 1320.13(a)(2)(i). Second, because the
FTC is already collecting the information in accordance with its statutory mandate, “[t]he use of
normal clearance procedures is reasonably likely to . . . disrupt the collection of information.”
See 5 C.F.R. § 1320.13(a)(2)(iii). Finally, the collection of information is needed prior to the
expiration of established time periods and is essential to the mission of the agency. See 5 C.F.R.
§ 1320.13(a)(1).

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Please feel free to contact Franziska Schroder at (202) 660-8508 or via email at
fschroder@ftc.gov if you have any questions.
Respectfully,

Serena Viswanathan
Associate Director

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