Case: 21-60766 Document: 00517019541 Page: 1 Date Filed: 01/03/2024
United States Court of Appeals United States Court of Appeals
Fifth Circuit
for the Fifth Circuit FILED
____________ January 3, 2024
Lyle W. Cayce
No. 21-60766 Clerk
____________
Wages and White Lion Investments, L.L.C., doing business as
Triton Distribution,
Petitioner,
versus
Food & Drug Administration,
Respondent,
consolidated with
_____________
No. 21-60800
_____________
Wages and White Lion Investments, L.L.C., doing business as
Triton Distribution; Vapetasia, L.L.C.,
Petitioners,
versus
Food & Drug Administration,
Respondent.
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______________________________
Appeal from the Food & Drug Administration
Agency Nos. 21 USC 3871, PM0003531
______________________________
Before Richman, Chief Judge, and Jones, Smith, Stewart, Elrod,
Southwick, Haynes, Graves, Higginson, Willett, Ho,
Duncan, Engelhardt, Oldham, Wilson, and Douglas, Circuit
Judges.*
Andrew S. Oldham, Circuit Judge, joined by Richman, Chief Judge,
and Jones, Smith, Elrod, Willett, Ho, Duncan, Engelhardt,
and Wilson, Circuit Judges:
Over several years, the Food and Drug Administration (“FDA”) sent
manufacturers of flavored e-cigarette products on a wild goose chase.
First, the agency gave manufacturers detailed instructions for what
information federal regulators needed to approve e-cigarette products. Just
as importantly, FDA gave manufacturers specific instructions on what
regulators did not need. The agency said manufacturers’ marketing plans
would be “critical” to the success of their applications. And the agency
promulgated hundreds of pages of guidance documents, hosted public
meetings, and posted formal presentations to its website—all with the (false)
promise that a flavored-product manufacturer could, at least in theory, satisfy
FDA’s instructions. The regulated manufacturers dutifully spent untold
millions conforming their behavior and their applications to FDA’s say-so.
Then, months after receiving hundreds of thousands of applications
predicated on its instructions, FDA turned around, pretended it never gave
anyone any instructions about anything, imposed new testing requirements
without any notice, and denied all one million flavored e-cigarette
_____________________
*
Judge Ramirez joined the court after this case was submitted and did not
participate in the decision.
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applications for failing to predict the agency’s volte face. Worse, after telling
manufacturers that their marketing plans were “critical” to their
applications, FDA candidly admitted that it did not read a single word of the
one million plans. Then FDA denied that its voluminous guidance
documents and years-long instructional processes meant anything. Why?
Because, the agency said, it always reserved the implied power to ignore
every instruction it ever gave and to require the very studies it said could be
omitted, along with the secret power to not even read the marketing plans it
previously said were “critical.” It was the regulatory equivalent of Romeo
sending Mercutio on a wild goose chase—and then admitting there never was
a goose while denying he even suggested the chase. Cf. William
Shakespeare, Romeo and Juliet act 2, sc. 4.
FDA justifies its behavior with two principal arguments. First, FDA
argues that its years’ worth of regulatory guidance was not worth the paper it
was printed on because it was hedged with cautious qualifiers and never
guaranteed that any particular submission would be granted. Second, and
most disturbingly, FDA argues that its capriciousness should be forgiven as
harmless because the agency promises to deny petitioners’ applications even
if we remand to make the agency follow the law.
Today we reject both propositions. As the Supreme Court recently
reminded us: “If men must turn square corners when they deal with the
government, it cannot be too much to expect the government to turn square
corners when it deals with them.” Niz-Chavez v. Garland, 593 U.S. 155, 172
(2021). No principle is more important when considering how the unelected
administrators of the Fourth Branch of Government treat the American
people. And FDA’s regulatory switcheroos in this case bear no resemblance
to square corners. As for the agency’s harmless-error argument, the Supreme
Court recently, unanimously, and summarily rejected it. Calcutt v. FDIC, 598
U.S. 623 (2023) (per curiam). We do the same here with the expectation that
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FDA will give petitioners the benefit of a full and fair regulatory proceeding
on remand, notwithstanding its prior promises to reject their applications no
matter what.
I.
A.
In 2009, Congress enacted the Family Smoking Prevention and
Tobacco Control Act (“TCA”) to regulate tobacco products. See 21 U.S.C.
§§ 387 et seq. The TCA prohibits manufacturers from selling any “new
tobacco product” without authorization from FDA. See id. § 387j(a); id.
§ 387a(b) (delegating to FDA the authority to determine what constitutes
new tobacco products). In 2016, FDA deemed e-cigarettes and their
component parts1 to be “new tobacco products.” Deeming Tobacco
Products To Be Subject to the Federal Food, Drug, and Cosmetic Act, 81
Fed. Reg. 28,973 (May 10, 2016) (“Deeming Rule”). The upshot: E-cigarette
manufacturers had to submit premarket tobacco applications (“PMTAs”)
for FDA approval to sell their products. See id. at 28,977.
The TCA directs FDA to review the PMTAs to determine whether
“permitting such tobacco product to be marketed would be appropriate for
the protection of the public health.” 21 U.S.C. § 387j(c)(2)(A). In making
this determination, FDA must consider “the risks and benefits to the
population as a whole.” Id. § 387j(c)(4). This includes considering (1) the
“increased or decreased likelihood that existing users of tobacco products
will stop using such products” and (2) “the increased or decreased likelihood
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1
The briefs and record materials in this case use a dizzying array of different terms
to refer to e-cigarettes and their component parts: electronic cigarettes, e-cigarettes,
electronic nicotine delivery devices (“ENDS”), nicotine cartridges, vaping products, vape
pens, e-liquids, e-juice, and others. Unless context dictates otherwise, we refer to this list
collectively as “e-cigarettes” throughout this opinion.
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that those who do not use tobacco products will start using such products.”
Id. § 387j(c)(4)(A)–(B).
FDA then undertook to clarify these standards. The agency first
announced that it would extend the PMTA compliance deadlines for several
years so the agency could promulgate application instructions and the
manufacturers could comply with them. See FDA, Guidance for
Industry, Extension of Certain Tobacco Product
Compliance Deadlines Related to the Final Deeming
Rule 5–11 (Aug. 10, 2017), https://perma.cc/WC42-ALYD (“Deadline
Guidance”).2
FDA provided its instructions on five relevant occasions. Warning:
the detail that follows might be mind-numbing. But FDA’s detailed
instructions are important to explain what e-cigarette manufacturers
understood FDA would require of them. These details are important to
understand why every single e-cigarette manufacturer in the entire Nation
behaved just as petitioners did. And these details are important to explain
why FDA cannot now pretend that it gave the regulated community fair
notice of the PMTA requirements.
1. First, at a public meeting in October 2018, FDA stated in a
formal presentation still available for download on the agency’s website: “No
specific studies are required for a PMTA; it may be possible to support a
marketing order for an ENDS product without conducting new nonclinical
or clinical studies given other data sources can support the PMTA.” FDA,
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2
FDA originally set the PMTA deadline as August 8, 2022. See Deadline Guidance
at 8. A district court in Maryland ordered FDA to shorten it. FDA complied with that
order, later extended the deadline because of COVID, and eventually settled on a PMTA
deadline of September 9, 2020. See Vapor Tech. Ass’n v. FDA, 977 F.3d 496, 497–502 (6th
Cir. 2020) (summarizing shifting deadlines).
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Premarket Tobacco Product Application Content
Overview 26 (Oct. 23, 2018), https://perma.cc/BV8D-HR7H (“October
2018 Guidance”) (emphasis added). FDA recommended that applicants
“[c]ompare the new tobacco product to a representative sample of tobacco
products on the market (i.e., either grandfathered or with marketing
authorization)” and “[i]nclude justification for why using evidence or data
from other products is appropriate.” Id. at 11. And regarding the question of
youth use, FDA published this slide:
Id. at 18.
2. Second, in June 2019, FDA promulgated a 52-page, single-
spaced guidance document entitled “Premarket Tobacco Product
Applications for Electronic Nicotine Delivery Systems: Guidance for
Industry.” A.284 (“June 2019 Guidance”). In it, FDA assured
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manufacturers that they need not perform long-term studies or submit long-
term data in their PMTAs: “Given the relatively new entrance of [e-
cigarettes] on the U.S. market . . . limited data may exist from scientific
studies and analyses. . . . Nonetheless, in general, FDA does not expect that
applicants will need to conduct long-term studies to support an application.”
A.298–99 (emphasis added) (footnote omitted); see also A.317 (same).
Rather, FDA specifically pointed to surveys as the kind of data that
could support PMTAs: “Although randomized clinical trials could address
cessation behavior of users of tobacco products, FDA believes this would also
be true for observational studies (perception, actual use, or both) examining
cessation behaviors.” A.324. “Observational studies” include surveys.
Petrs’ EB Br. 9.
In the same guidance document, FDA also directed manufacturers to
produce copious data about their marketing plans. As one of many examples
of FDA’s marketing-plan directives, the agency said:
FDA also recommends sharing your marketing plan to enable
FDA to better understand the potential consumer
demographic. In addition, and if the product is currently
marketed, FDA recommends sharing sales data broken down
by population demographics and tobacco use status. Sales data,
if available, should be analyzed in regular (preferably 4-week or
monthly) intervals and should include:
• The Universal Product Code that corresponds to the
product(s) identified in the PMTA;
• Total U.S. sales reported in dollars, units, and volume
with breakdowns by U.S. census region, major retail
markets, and channels in which the product is sold (e.g.,
convenience stores, food and drug markets, big box retailers,
internet/online sales, tobacco specialty shops) [sic]
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promotional discounts (e.g., buy-one-get-one free or
percentage discount);
• Demographic characteristics of product(s) purchasers,
such as age, gender, and tobacco use status; and
• Information on top selling brands as a comparison for all
recommended information, if available, so FDA can assess
the market for the PMTA product to better estimate the
potential impact on public health.
A.325 (quotation omitted) (footnote omitted).
3. Third, at a public meeting in October 2019, FDA again
published a formal presentation. Again, the presentation remains available on
FDA’s website. FDA, Premarket Tobacco Product
Application (PMTA) Review Pathway 20 (Oct. 28–29, 2019),
https://perma.cc/9S7Z-JQX8 (“October 2019 Guidance”). In that
presentation, FDA told e-cigarette manufacturers how the agency intended
to review and act upon PMTAs. Among other things, FDA stated:
Id. at 20. And FDA assured manufacturers that “[a] decision w[ould] be
made on each specific product, not the submission” as a whole. Id. at 21. At
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the same meeting, FDA again told manufacturers what it expected to see
regarding youth vaping: Manufacturers should “address how they are going
to restrict youth access and youth use. . . . [W]hat are their marketing plans[?]
What are the age verification plans[?] I mean these are some of the kinds of
things that you might want to take time to describe in your application to
ensure to FDA that your product will not . . . exacerbate the current situation
in methods to curb and improve limiting youth access.” A.347.
4. Fourth, in September 2019, FDA issued a proposed rule
governing PMTAs that reiterated that FDA did “not expect that long-term
clinical studies (i.e., those lasting approximately 6 months or longer) [would]
need to be conducted for each PMTA.” Premarket Tobacco Product
Applications and Recordkeeping Requirements, 84 Fed. Reg. 50,566, 50,619
(Sept. 25, 2019) (“PMTA Proposed Rule”).
Instead, FDA said that manufacturers’ “marketing plans” were
“critical” to the success of their PMTAs. Id. at 50,581 (emphasis added).
And FDA focused manufacturers’ attention on those plans in painstaking
detail:
The applicant’s marketing plans will help FDA determine
whether permitting the marketing of the new tobacco product
would be APPH [“appropriate for the protection of public
health,” 21 U.S.C. § 387j(c)(2)(A)] because they will provide
input that is critical to FDA’s determination of the likelihood
of changes in tobacco product use behavior, especially when
considered in conjunction with other information contained in
the application. FDA will review the marketing plan to evaluate
potential youth access to, and youth exposure to the labeling,
advertising, marketing, or promotion of, a new tobacco
product. For example, heavy use of online social media to
promote a tobacco product without access restrictions, as
opposed to actions such as paper mailings directed only to
current smokers of legal age, indicates the potential for youth
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to be exposed to the promotion of the product. This
information would help FDA make its APPH determination by
showing whether a PMTA fully or accurately accounts for the
likelihood of changes in tobacco product use behavior that may
occur as a result of marketing the new tobacco product. For
example, if the PMTA does not address youth access to the
product, youth exposure to the product’s labeling, advertising,
marketing, and promotion, and youth initiation, such as
describing how it proposes to restrict the sale or distribution of
its product to limit potential youth access to the product (e.g.,
selling the tobacco product in adult-only establishments) or
exposure to advertising (e.g., using age verification controls for
digital advertising), FDA may be unable to determine that the
applicant has made a showing that permitting the marketing of
the new tobacco product would be APPH.
Id. at 50,581.
5. Fifth, in January 2020, FDA issued a 30-page, single-spaced
enforcement guidance document entitled “Enforcement Priorities for
Electronic Nicotine Delivery Systems (ENDS) and Other Deemed Products
on the Market Without Premarket Authorization.” A.185 (“2020
Enforcement Guidance”).3 In this guidance document, FDA stated that after
the PMTA deadline in September 2020, it would prioritize enforcement
resources against “flavored, cartridge-based ENDS products (other than a
tobacco- or menthol-flavored ENDS product).” A.186.
What is a “flavored” e-cigarette product? As used in FDA’s guidance
documents and the parties’ briefs, “flavored” e-cigarettes have flavors like
blueberry, strawberry, and cherry, as well as various branded flavors like
“Kauai Kolada,” “Margarita Mixer,” and “Mandarin Mint.” E.g., A.247.
_____________________
3
FDA issued this guidance in January 2020 and revised it in April 2020 due to the
extension of the PMTA submission deadline. See Petrs’ EB Br. 12 n.3; supra n.2.
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The term “flavored” does not include e-cigarettes that taste like tobacco or
menthol. A.186.
What is a “cartridge-based” product? As used in FDA’s guidance, a
“cartridge-based” product “consists of, includes, or involves a cartridge or
pod that holds liquid that is to be aerosolized through product use. For
purposes of this definition, a cartridge or pod is any small, enclosed unit
(sealed or unsealed) designed to fit within or operate as part of an electronic
nicotine delivery system.” A.192. These include e-cigarettes commonly
known as “vape pens.” The pen holds a small cartridge or pod, which is often
but not always disposable, with a nicotine solution that a user vaporizes and
inhales. Designs and styles vary, but cartridge-based products are generally
smaller and lighter than open tank products that must be refilled with
nicotine liquid by the user. See, e.g., CDC, E-Cigarette, or Vaping,
Products Visual Dictionary 9–12, https://perma.cc/5QD9-52NQ
(last visited Dec. 21, 2023) (“CDC Visual Dictionary”).
In its 2020 Enforcement Guidance, FDA explained in detail why it
was focused on cartridge-based e-cigarettes. FDA stated:
Of particular concern are the design features that appear to
make the cartridge-based products so popular with young
people. Attributes typically present in cartridge-based
products include a relatively small size that allows for easy
concealability, and intuitive and convenient features that
facilitate ease of use, including draw activation, prefilled
cartridges or pods, and USB rechargeability.
A.199. FDA explained that cartridge-based products are small, and hence can
be more easily concealed at school or in social circumstances where youth
need to hide them. See ibid. And many popular cartridge-based vaping pens
have batteries that are recharged via USB ports and hence “blend in with
other equipment” that youth might innocently possess. Ibid. Moreover,
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cartridge-based products are ready for immediate use, have no settings to
adjust, have no tanks that need to be refilled, and require little or no
assembly—all design features that make them more attractive to youth
vapers. See A.199–200. Open tank systems, by contrast, are bigger, harder to
conceal, less innocuous in appearance if found by a parent or teacher, not
ready for immediate use, more complicated to adjust or assemble, require
constant refilling with nicotine liquids, and generally cannot be recharged by
plugging into a USB port. See A.200.
CDC Visual Dictionary at 10, 12 (cartridge-based vaping pen with USB-
rechargeable battery on the left; open tank systems on the right).
FDA said it was important to issue the 2020 Enforcement Guidance
because the agency had not previously distinguished between cartridge-based
and tank-based e-cigarettes—a distinction it thought important because the
former are comparatively more attractive to youth. See A.202. FDA’s
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previous enforcement guidance also did not include mint-flavored e-
cigarettes as “flavored” products—an omission it thought necessary to
correct, again, based on comparative attractiveness to youth. Ibid. So FDA
provided notice to the regulated industry about its then-current thinking,
based on the then-existing data, so everyone was on fair notice that flavored
(including mint-flavored) cartridge-based e-cigarettes were particularly
attractive to youth users. FDA thus announced that it had “recalibrated its
balancing of public health considerations in light of the public health threats
and the significant new evidence described above.” A.204.
* * *
The dizzying detail in the foregoing introduction has an important
point: Never in this long, winding, and byzantine regulatory process of
meetings, PowerPoint decks, proposed rules, comment periods, guidance
documents, and enforcement priorities did FDA ever say that it was
contemplating an across-the-board ban on flavored products. It emphasized
all sorts of relatively minor distinctions—including whether mint is a flavor,
the size difference between vape pens and tanks, and age-access restrictions
for online ads. And FDA conspicuously announced when and how—
supported by data and reasoned analysis—it “recalibrated” its
understanding of public health to focus on nicotine cartridges as opposed to
nicotine e-liquids. But at no point did the agency ever say that it was
contemplating a categorical ban on flavored e-cigarettes.
Nor did FDA ever give fair notice that flavored product manufacturers
had to submit robust scientific studies on flavored e-cigarette products. To
the contrary, the entirety of FDA’s pre-decisional guidance was premised on
these facts:
Limited scientific data exists for ENDS products generally (flavored
or unflavored). See A.298–99, A.317 (June 2019 Guidance).
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Flavored PMTAs could and should include existing data regarding
unflavored products generally to make inferences about the public
health benefits of flavored products generally. See A.300 (June 2019
Guidance); October 2018 Guidance at 11–17.
FDA did not expect flavored product manufacturers to conduct new,
long-term, scientific studies that directly measured the behaviors of
people who use Triton’s and Vapetasia’s flavored products
specifically. A.299, A.317 (June 2019 Guidance).
And FDA expected that flavored product manufacturers would
submit observational studies, which include surveys. A.324 (June
2019 Guidance); see also October 2018 Guidance at 16–17 (discussing
acceptable consumer perception data without any reference to
conducting such surveys over time).
B.
1. Wages and White Lion Investments, LLC, doing business as
Triton Distribution and Vapetasia, LLC (collectively “petitioners”)
manufacture bottles of flavored nicotine liquids. Vapers use such nicotine
liquids to refill their tank systems and other e-cigarette products. Petitioners
do not make e-cigarettes, vape pens, vape pods, vape cartridges or any other
vaping device covered by the 2020 Enforcement Guidance. Petitioners bottle
only the liquid, and hence it is common ground that FDA’s 2020
Enforcement Guidance did not apply to petitioners or their liquids.
On September 9, 2020, approximately eight months after FDA issued
its 2020 Enforcement Guidance, petitioners timely filed PMTAs for their
flavored nicotine liquids. “Triton’s bundled PMTA was nine gigabytes in
size, consisting of hundreds of individual files, including the marketing and
sales-access restriction plans containing the measures described above to
limit youth access and use of its products.” Petrs’ EB Br. 15. Petitioners
submitted long-term, controlled, and peer-reviewed studies to show that e-
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cigarettes generally cause smokers to switch to vaping and thus save lives.
See, e.g., A.369–70, A.431. Petitioners also included observational studies in
the form of cross-sectional surveys. See, e.g., A.384, A.403, A.407, A.438. But
in accordance with FDA’s pre-decisional guidance, petitioners did not
conduct new scientific studies on their specific flavored PMTA products.
And petitioners did point to robust, reliable, and peer-reviewed scientific
studies involving unflavored products to draw inferences about flavored
products (including at least one study that reviewed randomized controlled
trials and longitudinal cohorts to show the net public health benefits of e-
cigarettes). See, e.g., A.369–71 (collecting studies), A.431 (citing, inter alia,
Riccardo Polosa et al., The Effect of E-cigarette Aerosol Emissions on Respiratory
Health: A Narrative Review, 13 Expert Rev. of Respiratory Med.
899 (2019)).
In accordance with FDA’s instructions that manufacturers should
focus on measures to restrict youth access, petitioners offered lengthy
explanations for their marketing plans:
Triton’s bottled e-liquids are only sold in age-restricted vape
and tobacco-specialty shops and through age-restricted online
sales to customers who can show they are at least 21 years old.
None of Triton or Vapetasia’s ENDS products have been sold
in convenience stores or other general retail outlets. Retailers
selling the e-liquids must verify photo IDs of anyone who is 27
or younger before entering the establishment, immediately
respond to and remedy any violations, actively display signs
indicating that the products are not for sale to minors and that
minors are not allowed on the premises, and are subject to
contractual penalties if they fail to do so. Triton and its
customers screen retailers before establishing or renewing
distribution agreements and require retailers to develop
internal compliance check programs, such as mystery shopper
programs.
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Petrs’ EB Br. 16 (quotation omitted). Petitioners also implemented third-
party verification services to ensure only adults could purchase the products
online; voluntarily increased the minimum age for customers to 21 before it
was legally required; imposed volume limits on purchases; limited labeling to
exclude cartoons or childish images or vivid colors; limited online marketing
to exclude human models; and limited other marketing to age-restricted
channels. See id. at 16–18. Petitioners also included a survey to show that
more than two-thirds of their customers are over the age of 35. See id. at 18.
2. On August 26, 2021, FDA issued a press release to announce
the en masse denial of 55,000 flavored e-cigarette applications. See FDA,
FDA Denies Marketing Applications for About 55,000 Flavored E-Cigarette
Products for Failing to Provide Evidence They Appropriately Protect Public Health
(Aug. 26, 2021), https://perma.cc/LCD8-VWGQ (“August 2021 press
release”). In that press release, FDA announced for the first time that, for
flavored e-cigarette applications, the agency would require “a randomized
controlled trial,” a “longitudinal cohort study,” or some other scientific
study that was comparably “robust and reliable.” Ibid. FDA said nothing to
acknowledge that its new requirement for scientific studies conflicted with
its previous guidance. Rather, using its new scientific-studies-or-bust
standard announced in the press release, FDA denied 946,000 flavored-
product applications in just over two weeks. See FDA, FDA Makes
Significant Progress in Science-Based Public Health Application for Review,
Taking Action on Over 90% of More than 6.5 Million ‘Deemed’ New Tobacco
Products Submitted (Sept. 9, 2021), https://perma.cc/4F69-MRUB. As of
today, FDA has not approved a single PMTA for a single one of the more
than 1,000,000 flavored e-cigarette products submitted to the agency.
Immediately after receiving the new scientific-studies-or-bust
requirement in the August 2021 press release, petitioners asked FDA for time
to perform the newly required studies. Without acknowledging that request,
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on September 14 and 16, 2021, FDA issued marketing denial orders
(“MDOs”) to Triton and Vapetasia, finding that their PMTAs failed to
include the once-optional-but-now-required scientific studies. Specifically,
FDA stated:
All of your PMTAs lack sufficient evidence demonstrating that
your flavored [ENDS] will provide a benefit to adult users that
would be adequate to outweigh the risks to youth . . . . This
evidence could have been provided using a randomized
controlled trial and/or longitudinal cohort study that
demonstrated the benefit of your flavored [ENDS] products
over an appropriate comparator tobacco-flavored [ENDS].
Alternatively, FDA would consider other evidence but only if
it reliably and robustly evaluated the impact of the new flavored
vs. Tobacco-flavored products on adult smokers’ switching or
cigarette reduction over time.
A.57. FDA also stated that it refused even to read petitioners’ marketing
plans. See A.93 n.xix; A.145 n.xix.
3. Petitioners timely moved to stay their marketing denial orders
pending review in our court. A unanimous motions panel granted that
motion, concluding that Triton was likely to succeed on the merits. See Wages
& White Lion Invs., LLC v. FDA, 16 F.4th 1130 (5th Cir. 2021) (“Stay Op.”).
Subsequently, a divided merits panel nonetheless rejected the petitions for
review. Wages & White Lion Invs., LLC v. FDA, 41 F.4th 427 (5th Cir. 2022)
(“Panel Op.”). In dissenting from the panel opinion, Judge Jones
described FDA’s actions as “a mockery of ‘reasoned’ administrative
decision-making.” Id. at 442 (Jones, J., dissenting). Specifically, Judge
Jones explained:
The majority’s analysis of these MDOs looks almost
exclusively at the bottom-line result of FDA’s decisions and
finds nothing to criticize. But the facts recited above speak for
themselves. FDA refused to review petitioners’ marketing
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restrictions, which it had repeatedly stated were key to
discouraging youthful use of the products and were thus critical
components of the PMTAs. FDA repeatedly counselled
applicants that long term studies were likely unnecessary and it
said nothing about comparative efficacy studies—until the
PMTA deadline was long gone; and then it refused petitioners
the opportunity to conduct such studies. Finally, FDA’s
defense against petitioners on the merits of their applications is
loaded with post hoc rationalizations. Any of these errors is a
“fatal flaw.” Taken together, they are mortal wounds.
Id. at 446. We granted rehearing and vacated the panel opinion. 58 F.4th 233
(5th Cir. 2023) (mem.).
II.
The first question is whether FDA acted arbitrarily and capriciously
in rejecting petitioners’ PMTAs. It did. Four well-established and
longstanding principles of administrative law independently require that
result: (A) An agency cannot invent post hoc justifications for its decision in
court and outside the administrative record. (B) An agency must provide fair
notice before it deprives a citizen of property. (C) When an agency changes
its position, it must display awareness of the change and explain it. And
(D) even when an agency acknowledges and explains a change in its position,
it cannot fault a regulated entity for relying in good faith on the previous one.
A.
First, the prohibition on post hoc rationalizations. This rule is even
older than the Administrative Procedure Act of 1946, 5 U.S.C. §§ 551–559
(“APA”). It dates back at least to the first decision in Chenery, where the
Court said: “The grounds upon which an administrative order must be
judged are those upon which the record discloses that its action was based.”
SEC v. Chenery Corp. (Chenery I), 318 U.S. 80, 87 (1943). The agency is not
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free to defend its decision by supplying new, post hoc rationalizations for it
when sued. See, e.g., Burlington Truck Lines v. United States, 371 U.S. 156,
168–69 (1962); Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 419
(1971); Am. Textile Mfg. Inst., Inc. v. Donovan, 452 U.S. 490, 539 (1981); DHS
v. Regents of the Univ. of Cal., 140 S. Ct. 1891, 1908–09 (2020).
Consider for example the most significant case ever to elucidate the
arbitrary-and-capricious standard: Motor Vehicle Manufacturers Association of
the United States v. State Farm Mutual Auto Insurance Co., 463 U.S. 29 (1983).
In that case, the National Highway Traffic Safety Administration
(“NHTSA”) rescinded its safety regulation for passive restraints (automatic
seatbelts and airbags) in cars. Id. at 38. The agency reasoned that automatic
seatbelts were ineffective because owners could easily detach them, thus
reducing or eliminating the safety benefit. Id. at 39. At no point in the
administrative record, however, did the agency even consider the possibility
of mandating airbags—much less did the agency explain why an airbag
mandate was inadvisable. Id. at 48. When the case entered the courts, the
agency tried to provide the missing rationale. Specifically, its appellate
counsel pointed to “questions concerning the installation of airbags in small
cars” and “adverse public reaction” as reasons for the agency’s failure to
consider an airbag mandate. Id. at 50. The Supreme Court emphatically
rejected that lawyerly effort: “The short—and sufficient—answer to
petitioners’ submission is that the courts may not accept appellate counsel’s
post hoc rationalizations for agency action. It is well-established that an
agency’s action must be upheld, if at all, on the basis articulated by the agency
itself.” Ibid. (quotation omitted); accord, e.g., Int’l Union, United Mine
Workers of Am. v. Mine Safety & Health Admin., 626 F.3d 84, 94 (D.C. Cir.
2010) (rejecting statements at oral argument as prohibited post hoc
rationalizations); Conn. Dep’t of Pub. Util. Control v. FERC, 484 F.3d 558,
560 (D.C. Cir. 2007) (same).
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So too here. In its pre-MDO guidance to manufacturers, FDA said
that marketing plans were “critical” to the success of e-cigarette
applications. PMTA Proposed Rule, 84 Fed. Reg. at 50,581. It told
manufacturers to submit their marketing plans in mind-numbing detail—
including “sales data broken down by population demographics and tobacco
use status”; sales data broken down by Universal Product Code and four-
week intervals; sales data broken down “by U.S. census region, major retail
markets, and channels in which the product is sold (e.g., convenience stores,
food and drug markets, big box retailers, internet/online sales, tobacco
specialty shops) [sic] promotional discounts (e.g., buy-one-get-one free or
percentage discount”; and comparable information for “top selling brands as
a comparison” to the manufacturer’s product. A.325. FDA also requested
information on advertising, marketing strategies, point of sale restrictions,
social media restrictions, and many other details. Why? Because all of this
information was essential to “enable FDA to better understand the potential
consumer demographic.” Ibid.
In the MDOs, however, FDA explicitly stated that its instructions
were all for naught. First, FDA determined that the mere existence of flavor
was sufficient to justify denial of a PMTA because flavor standing alone was
enough to prove that youth would use the proposed product and that youth
use would outweigh any countervailing benefit to adults. Gone was any
suggestion that a manufacturer could do anything to limit youth access to its
products. And second, FDA stated that it did not even read the marketing
plans it previously said were critical: “For the sake of efficiency, the
evaluation of the marketing plans in applications will not occur at this stage
of review, and we have not evaluated any marketing plans submitted with these
applications.” A.145 n.xix (emphasis added).
At some point in this litigation, FDA’s very able counsel presumably
recognized that sentence spelled trouble for the agency. And as the Eleventh
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Circuit correctly held, FDA’s refusal even to read the once-“critical”
marketing plans constituted an arbitrary and capricious failure to consider
“an important aspect of the problem.” Bidi Vapor LLC v. FDA, 47 F.4th
1191, 1203 (11th Cir. 2022) (quoting State Farm, 463 U.S. at 43).
So at oral argument before the merits panel in our court, FDA’s
counsel flatly contradicted the administrative record and stated that FDA did
in fact look at “summar[ies]” of petitioners’ marketing plans. Panel Op., 41
F.4th at 441. This position cannot conceivably be characterized as
“[c]larifying what happened factually.” Id. at 441 n.17. The administrative
record says FDA did “not evaluate[] any marketing plans submitted with
these applications.” A.145 n.xix. At oral argument, FDA’s counsel said the
opposite. That is barred by the venerable prohibition on post hoc justifications
that federal courts have consistently applied since at least Chenery I.
Moreover, even if we could look past the post hoc prohibition, FDA’s
post hoc statements underscore the agency’s arbitrariness. For example, in its
pre-MDO guidance documents, FDA excluded menthol-flavored e-
cigarettes from its definition of “flavored” products. See, e.g., A.186. And
presumably because of that exclusion, FDA has approved menthol-flavored
e-cigarette products notwithstanding its ban on “flavored” products. The
rationale? According to the 2020 Enforcement Guidance, menthol products
are less popular with youth than are flavored products. See, e.g., A.198
(collecting survey data and finding “youth use of menthol-flavored products
is not as high as that for mint- and fruit- flavored products.”). Yet in its en
banc brief before the court, FDA makes a post hoc invocation of “recent data
[that purportedly] demonstrate ‘prominent menthol e-cigarette use’ among
middle- and high-school e-cigarette users.” FDA EB Br. 23. And FDA makes
no attempt to explain why, if that’s true, it approved menthol products. Or
more to the point, how it could rationally approve menthol products while
denying petitioners’ flavored products.
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The dissent by Judge Haynes disagrees. Judge Haynes
believes “the FDA clarified at oral argument that it did review summaries of
Petitioners’ marketing plans contained within their PMTAs” and that this is
the “type of factual clarification we seek at oral argument.” Post, at 79
(Haynes, J., dissenting). For this proposition, the dissent first cites Cooper
Cameron Corp. v. U.S. Dep’t of Lab., OSHA, 280 F.3d 539, 542 (5th Cir.
2002). Although that case has an agency as a party in the caption, it is not an
administrative law case. Nor does it implicate Chenery I. The dissenting
opinion cannot point to a single case where we allowed an administrative
agency to defend its action by countermanding an express statement in the
administrative record. Cf. Schofield v. Saul, 950 F.3d 315, 322 (5th Cir. 2020)
(holding an agency can waive an argument in its favor but saying nothing
about an agency’s ability to countermand its record statements). Or any
authority that allows agencies to rehabilitate deficiencies in the
administrative record solely by answering friendly questions at oral
argument.
We instead underscore our agreement with Judge Graves on this
point:
[T]his court may, and often does, seek clarification at oral
argument. But the FDA’s statement does not clarify. Among
other things, the statement raises the question of why, if the
FDA did review the summaries, it told Petitioners that it had
“not evaluated any marketing plans.” As it stands, the FDA’s
statement at oral argument is at odds with the record. For that
reason alone, the court should disregard it.
Post, at 83 (Graves, J., dissenting).
B.
Second, the fair notice doctrine. It is common ground between the
parties that the fair notice doctrine applies. Petitioners repeatedly invoked it
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at the stay stage, before the panel, and in their en banc brief. And FDA has
never disputed its applicability. FDA’s only contention is that it satisfied the
doctrine when it “gave fair notice of the analysis the agency would perform”
in adjudicating e-cigarette applications. FDA EB Br. 37 (quotation omitted).
We therefore (1) begin with the fair notice doctrine and then (2) explain
FDA’s violation of it. Finally, we (3) reject FDA’s attempts to find fair notice
in the pre-decisional guidance documents that omitted it.
1.
The fair notice doctrine is a well-established principle of
administrative law. See Rollins Env’t Servs. (NJ) Inc. v. EPA, 937 F.2d 649,
654 n.1, 655 (D.C. Cir. 1991) (Edwards, J., concurring in part and dissenting
in part) (fair notice doctrine is “basic hornbook law in the administrative
context” and a “simple principle of administrative law”). At its core, the
doctrine requires administrative agencies to give the public fair notice of their
rules before finding a violation of them. As we explained the doctrine in one
of the canonical fair notice cases:
The respondents contend that the regulations should be
liberally construed to give broad coverage because of the intent
of Congress to provide safe and healthful working conditions
for employees. An employer, however, is entitled to fair notice
in dealing with his government. Like other statutes and
regulations which allow monetary penalties against those who
violate them, an occupational safety and health standard must
give an employer fair warning of the conduct it prohibits or
requires . . . .
If a violation of a regulation subjects private parties to criminal
or civil sanctions, a regulation cannot be construed to mean
what an agency intended but did not adequately express . . . .
[T]he Secretary as enforcer of the Act has the responsibility to
state with ascertainable certainty what is meant by the
standards he has promulgated.
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Diamond Roofing Co. v. Occupational Safety & Health Rev. Comm’n, 528 F.2d
645, 649 (5th Cir. 1976); see also Gates & Fox Co. v. Occupational Safety &
Health Rev. Comm’n, 790 F.2d 154, 156 (D.C. Cir. 1986) (relying on Diamond
Roofing to formulate the D.C. Circuit’s fair notice doctrine).
The fair notice doctrine is rooted in the Fifth Amendment’s Due
Process Clause. Gen. Elec. Co. v. EPA, 53 F.3d 1324, 1328–29 (D.C. Cir.
1995); see also United States v. Chrysler Corp., 158 F.3d 1350, 1354–55 (D.C.
Cir. 1998); Albert C. Lin, Refining Fair Notice Doctrine: What Notice is
Required of Civil Regulations, 55 Baylor L. Rev. 991, 992–98 (2003).
Obviously, the Fifth Amendment is traditionally relevant to criminal
proceedings. See Gates & Fox, 790 F.2d at 156. And in the criminal context,
fair notice requirements are well understood. As Justice Holmes explained in
overturning a criminal conviction, “a fair warning should be given to the
world in language that the common world will understand, of what the law
intends to do if a certain line is passed.” McBoyle v. United States, 283 U.S.
25, 27 (1931).
But the fair notice doctrine also applies more broadly to civil
administrative proceedings:
[A]s long ago as 1968, we recognized this “fair notice”
requirement in the civil administrative context. In Radio
Athens, Inc. v. FCC, we held that when sanctions are drastic—
in that case, the FCC dismissed the petitioner’s application for
a radio station license—“elementary fairness compels clarity”
in the statements and regulations setting forth the actions with
which the agency expects the public to comply.
Gen. Elec. Co., 53 F.3d at 1329 (quoting Radio Athens, Inc. v. FCC, 401 F.2d
398, 404 (D.C. Cir. 1968)); see also ibid. (emphasizing fair notice doctrine
“has now been thoroughly ‘incorporated into administrative law,’” far
outside criminal proceedings (quoting Satellite Broad. Co. v. FCC, 824 F.2d
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1, 3 (D.C. Cir. 1987))). For example, the D.C. Circuit applied the doctrine to
a product recall in Chrysler. 158 F.3d at 1351, 1354–55. The D.C. Circuit
applied the doctrine to a $25,000 fine in General Electric. 53 F.3d at 1327,
1329–30. And, most relevant to the present controversy, the D.C. Circuit has
repeatedly applied the doctrine to the “drastic” sanction of denying
applications for radio and cellular licenses in cases like Radio Athens, 401 F.2d
at 400, 404, Satellite Broadcasting, 824 F.2d at 2–4, and McElroy Elecs. Corp.
v. FCC, 990 F.2d 1351, 1353, 1363 (D.C. Cir. 1993). If there is a “drasticness”
distinction between the denial of a cellular license application and the denial
of a tobacco marketing application, FDA does not point to it. And it is hard
to imagine one, given the MDOs in this case will unquestionably put
petitioners out of business. See EB Oral Arg. at 13:07–49. So we take it as
undisputed that the fair notice doctrine applies.
Chrysler provides a helpful illustration of the doctrinal contours of the
fair notice requirement. In that case, NHTSA promulgated a seatbelt safety
standard called “Standard 210.” See Chrysler, 158 F.3d at 1351. Standard 210
required carmakers to install seatbelt anchorages that could withstand certain
pressure forces for certain durations of time. Ibid. The standard further
required carmakers to conduct their pressure tests using a “pelvic body
block,” an L-shaped metal block resembling a human pelvis. Ibid. Standard
210 did not specify, however, where carmakers should install the pelvic body
blocks in their tests. Ibid. (citation omitted). So Chrysler put the pelvic block
against the seat back—a reasonable decision given how people sit in cars and
given that “NHTSA’s own test schematic for Standard 210, entitled
‘Typical FMVSS 210 Anchorage Pull Test Setup,’ shows the pelvic body
block against the seat back.” Id. at 1356. On those parameters, Chrysler’s cars
met Standard 210. Ibid.
NHTSA nonetheless required Chrysler to recall 91,000 cars. Id. at
1351. NHTSA pointed out that nothing in Standard 210 guaranteed that a car
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would pass the testing pressures when the pelvic block was pressed against
the seat back. Id. at 1355–56. To the contrary, the Standard itself did not
specify a location for the block. Id. at 1356. And the agency put the world on
notice that when a Standard is silent about testing locations, the carmaker
must be able to meet the testing pressures at any and all testing locations.
Specifically, the agency published this notice in the Federal Register:
As a general matter, when a standard does not specify a
particular test condition, there is a presumption that the
requirements of the standard must be met at all such test
conditions. This presumption that the standard must be met at
all positions of unspecified test conditions may be rebutted if
the language of the standard as a whole or its purposes indicate
an intention to limit unspecified test conditions to a particular
condition or conditions.
In the case of the strength requirements in Standard No. 210,
nothing in the language of the standard suggests that the
strength requirements were only to be measured with the safety
belt or other vehicle features at certain adjustment positions.
Indeed, the purpose of the standard is to reduce the likelihood
that an anchorage will fail in a crash. To serve this purpose, the
anchorage must be capable of meeting the strength
requirements with the safety belt and other vehicle features at
any adjustment, since those features could be at any
adjustment position during a crash.
Federal Motor Vehicle Safety Standards; Seat Belt Assembly Anchorages, 56
Fed. Reg. 63,676, 63,677 (1991). And when the pelvic block was moved away
from the seat back, the seatbelt anchors failed the pressure test. Chrysler, 158
F.3d at 1352. NHTSA argued that the plain language of the Federal Register
put Chrysler on fair notice of its testing obligations and required recall of the
unsafe cars. Id. at 1356. After Chrysler refused to institute a recall, NHTSA
sued the carmaker. Id. at 1352.
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Chrysler won. Even though the Federal Register told Chrysler that it
needed to satisfy Standard 210 “at all positions of unspecified test
conditions,” 56 Fed. Reg. at 63,677 (emphasis added), the D.C. Circuit held
this language was “far too general” to give Chrysler fair notice of its
obligations to move the pelvic block. Chrysler, 158 F.3d at 1356. It also did not
matter that NHTSA previously told regulated entities not to rely on the
testing schematic attached to Standard 210 because “an agency is hard
pressed to show fair notice when the agency itself has taken action in the past
that conflicts with its current interpretation of a regulation.” Ibid. (citing
Gen. Elec. Co., 53 F.2d at 1332). In sum, “Chrysler might have satisfied
NHTSA with the exercise of extraordinary intuition or with the aid of a
psychic, but these possibilities are more than the law requires.” Id. at 1357.
2.
So too here. The differences between the October 2018 Guidance and
the June 2019 Guidance on the one hand and FDA’s across-the-board denials
of every flavored PMTA on the other are far starker than in Chrysler.
Guidance: In the October 2018 Guidance, FDA told petitioners: “No
specific studies are required for a PMTA; it may be possible to support a
marketing order for an ENDS product without conducting new nonclinical
or clinical studies given other data sources can support the PMTA.” October
2018 Guidance at 26 (emphasis added). It also told petitioners: “Youth
behavioral data not required at this time.” Id. at 18 (emphasis in original).
And it never told petitioners they could not rely on existing data from
unflavored products to support their flavored PMTAs. To the contrary, in the
June 2019 Guidance, FDA twice told petitioners: “[I]n general, FDA does not
expect that applicants will need to conduct long-term studies to support an
application.” A.299 (emphasis added); see also A.317 (same). FDA instead
invited flavored manufacturers to rely on existing data (including studies of
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smokers and users of unflavored ENDS products) to make inferences about
flavored ENDS products. October 2018 Guidance at 11–12. And both the
June 2019 Guidance and the October 2018 Guidance invited petitioners to
use “observational studies,” which could include surveys. A.324 (June 2019
Guidance); see also October 2018 Guidance at 16–17.
MDOs: Then FDA flip-flopped. FDA turned around and denied
petitioners’ applications because they did not perform “a randomized
controlled trial and/or longitudinal cohort study” or other comparably
robust evidence that directly measured the behaviors of those who use their
flavored products. See A.57, A.85 & n.vi. And when petitioners submitted
voluminous, robust scientific studies to show e-cigarettes induce adults to
switch from smoking (and thus save lives), FDA categorically rejected that
data as irrelevant because it did not show flavored e-cigarettes promote more
switching than unflavored ones. See A.57. And FDA ignored as irrelevant
petitioners’ observational cross-section studies without any
acknowledgement that the agency previously invited them.
3.
FDA’s principal justification for its about-face is that it provided
manufacturers fair notice of the PMTA requirements in the June 2019
Guidance. See FDA EB Br. 29–37. Specifically, FDA points to one sentence
in that 52-page, single-spaced guidance document: “We recommend an
applicant compare the health risks of its product to both products within the
same category and subcategory, as well as products in different categories as
appropriate.” A.299; see also FDA EB Br. 36 (relying on this sentence alone
to provide fair notice). But it is undisputed that petitioners compared the
health risks of their products to other products in the same or different
categories. As FDA itself concedes in its en banc brief:
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Petitioners asserted in their application that “flavors are
crucial to getting adult smokers to make the switch and stay
away from combustible cigarettes,” A379; that adult smokers
prefer flavored e-cigarettes to tobacco-flavored e-cigarettes,
A380; and that this preference “has powerful implications for
not only the role of flavors in helping smokers’ transition from
smoking to vaping, but also in connection with helping vapers
maintain smoking abstinence and preventing relapse to
smoking,” id.
FDA EB Br. 35. Thus, there is no question that petitioners compared the
health risks of their products to other products as the June 2019 Guidance
recommended.
The question is whether FDA gave petitioners fair notice of their need
to provide long-term scientific studies as proof of those relative risks. And on
that question, the very best sentence FDA can find is this one from its June
2019 Guidance: “Nonclinical studies alone are generally not sufficient to
support a determination that permitting the marketing of a tobacco product
would be appropriate for the protection of the public health.” A.298. From
that, FDA argues that it gave petitioners fair notice that they might be
obligated to conduct new long-term scientific studies on their flavored
products. FDA EB Br. 31. Of course, saying X might not be sufficient is a far
cry from saying Y is necessary. But more fundamentally, the agency’s
position beggars belief because it ignores the very next sentence in the guidance
document: “[I]n general, FDA does not expect that applicants will need to
conduct long-term studies to support an application.” A.299. FDA also
ignores that the very same paragraph says “FDA understands that limited
data may exist from scientific studies and analyses” to support e-cigarette
applications. A.298. And FDA ignores that the very same guidance
document comes back to this point a few pages later:
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Due to the emerging nature of ENDS products within the
general tobacco market, FDA acknowledges that there may be
limited nonclinical or clinical research conducted on specific
ENDS products. Thus, it is likely that applicants will conduct
certain investigations themselves and submit their own
research findings as a part of their PMTA. However, in general,
FDA does not expect that applicants will have to conduct long-term
studies to support an application.
A.317 (emphasis added). The agency simply cannot contend that when it
twice said “FDA does not expect that applicants will have to conduct long-
term studies to support an application” for a specific flavored product,
A.299, A.317, it put petitioners on fair notice that “FDA will deny your
application if you do not conduct long-term studies on your specific flavored
product.”
Nor can FDA deny that it in fact required long-term studies. In its
explanation for denying petitioners’ applications, FDA imposed two
requirements—randomized controlled trials and longitudinal cohort studies.
Then it found both of those long-term scientific studies lacking in
petitioners’ applications, for the obvious reason that FDA previously said
these studies were unnecessary:
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A.70. That sure looks like a requirement that petitioners perform long-term
scientific studies on their e-cigarette products; otherwise, it is hard to
understand why FDA would devote the overwhelming majority of its
decision document to rejecting the PMTAs for failing to include such studies.
True, FDA then included a single sentence regarding “other”
scientific evidence:
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A.71 (Triton); see also A.134 (similar one-sentence rejection for Vapetasia).
But FDA made clear it could be persuaded by “other evidence” “only if it
reliably and robustly evaluated the impact of the new flavored vs. Tobacco-
flavored products on adult smokers’ switching or cigarette reduction over
time.” A.57 (emphasis added).
To the extent that “reliably and robustly” evaluating impact “over
time” means a randomized controlled trial or a longitudinal cohort study,
that is obviously a violation of the fair notice doctrine for the reasons
explained above. FDA cannot require petitioners to perform such long-
term/over-time studies after telling petitioners that, “[d]ue to the emerging
nature of ENDS products within the general tobacco market, FDA
acknowledges that there may be limited nonclinical or clinical research
conducted on specific ENDS products.” A.317; see also A.298 (same). Yet in
its “technical project lead” supporting the MDOs, FDA said this about the
“other evidence” it would consider “on a case-by-case basis”:
For example, we would consider evidence from another study
design if it could reliably and robustly assess behavior change
(product switching or cigarette reduction) over time, comparing
users of flavored products with those of tobacco-flavored
products. In our review of PMTAs for flavored ENDS so far,
we have learned that, in the absence of strong evidence generated
by directly observing the behavioral impacts of using a flavored
product vs. a tobacco-flavored product over time, we are unable
to reach a conclusion that the benefit outweighs the clear risks
to youth.
A.85 n.vi (emphases added). Again, that looks like a requirement for direct
observations and controlled scientific studies, supported by strong and robust
statistical evidence, which FDA previously said it did not require.
If “reliably and robustly” evaluating impact “over time” instead
means something else, petitioners (and the courts) are left simply to imagine
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what the agency might have had in mind. FDA and the dissenting opinions
do not say what “other evidence” petitioners might have supplied to win
approval. Instead, one of the dissenting opinions disputes the premise that an
agency must specify the grounds for its decisions because, as the dissenting
opinion puts it, “the FDA must use its science to evaluate the applications.”
Post, at 60 (Haynes, J., dissenting). It is obviously true that science matters—
and it is also true that agencies must give regulated entities fair notice of what
science matters. If an agency could instead move the scientific goalposts and
then refuse to specify the new scientific goal line, the administrative process
would be governed not by science but by diktat.
And it is flatly untrue that petitioners’ “other evidence” was
“None.” A.71 (Triton); see also A.134 (Vapetasia’s MDO, stamping its
“other evidence” as “N/A”). Rather, it is undisputed that petitioners did
present some “other evidence.” For example, Triton submitted:
published studies and articles, as well as subject matter
databases, related to the topic areas identified in FDA’s PMTA
Guidance: in vivo and in vitro toxicology (e.g., carcinogenesis,
genotoxicity, mutagenicity, reactive oxygen species,
inflammation, cytotoxicity, respiratory health, cardiovascular
disease, and reproductive and developmental toxicity), clinical
health, abuse liability and pharmacokinetics, trends in usage
and factors that influence ENDS usage (e.g., susceptibility,
consumer perception, initiation, cessation, transition),
topography, human factors, biomarkers of harm and exposure,
and population health (e.g., FDA’s Population Assessment of
Tobacco and Health (PATH)).
A.369–70. Triton also pointed to peer-reviewed studies, long-term
randomized controlled studies, longitudinal cohort studies, short-term
studies, and a meta-analysis by the National Academies of Science,
Engineering, and Medicine to show the public health benefits of e-cigarette
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use by cigarette smokers. See, e.g., A.431. The dissenting opinions do not
explain why or how this science could be rejected out of hand with FDA’s
one-word rubber stamp labeled “None” or “N/A.”
FDA, by contrast, did explain why the PMTAs could be summarily
rejected for submitting “None” of the studies FDA belatedly demanded: It
created a new, after-the-fact, categorical ban on using scientific data from
unflavored products to support flavored PMTAs. In its MDOs, the agency
said petitioners should have submitted scientific studies on the public health
benefits of their specific, flavored e-cigarette liquids: As FDA put it, petitioners
should have submitted “a randomized controlled trial and/or longitudinal
cohort study that demonstrated the benefit of your flavored [ENDS] products
over an appropriate comparator tobacco-flavored [ENDS].” A.57 (emphasis
added). Or petitioners should have submitted some unspecified “other
evidence” that “reliably and robustly evaluated” the public health benefits
of petitioners’ specific “new flavored” products. Ibid. This new approach—
adopted for the first time in the MDOs and after years of contrary guidance—
prohibited flavored product manufacturers from relying on existing data
involving unflavored products.
The problem of course is that FDA never gave petitioners fair notice
that they needed to conduct long-term studies on their specific flavored
products. And crucially, FDA never told petitioners that their “other
evidence” categorically could not include existing studies involving
unflavored e-cigarettes. To the contrary, the entirety of FDA’s voluminous
pre-decisional guidance said the precise opposite: “Due to the emerging
nature of ENDS products within the general tobacco market, FDA
acknowledges that there may be limited nonclinical or clinical research
conducted on specific ENDS products.” A.317; see also A.298 (same). And
FDA told petitioners they did not need to conduct long-term studies on their
specific products. See A.299, A.317. To the contrary, FDA promulgated
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detailed instructions on how petitioners could build a “bridge” from existing
studies4 to support their PMTAs. See, e.g., A.332–36. Then FDA turned
around and categorically banned flavored-product manufacturers from
relying on any study that did not focus on the specific flavored product
mentioned in the PMTA. Petitioners “might have satisfied [FDA] with the
exercise of extraordinary intuition or with the aid of a psychic, but these
possibilities are more than the law requires.” Cf. Chrysler, 158 F.3d at 1357.
That warrants vacatur of the MDOs and remand to the agency for a lawful
consideration of petitioners’ applications.
C.
The third hoary principle of administrative law at issue in this case is
the change-in-position doctrine. The APA “demand[s] that [the agency]
_____________________
4
The caveats FDA placed on “bridging” further underscore the capriciousness of
its flip-flop in the MDOs. For example, in its pre-decisional guidance, FDA told e-cigarette
manufacturers how they could “bridge” from existing literature reviews:
[W]hen you submit a literature review to support an ENDS PMTA, FDA
recommends that you consider the relevancy of the literature and adequacy of the study
design in order to determine the likelihood that a particular body of literature will support
a marketing order for the new tobacco product. For example, the following questions may
be considered:
• Is the tobacco product in the literature comparable in terms of technology to the
new tobacco product?
• Are there data (e.g., range of possible use, emissions under conditions of use,
biomarkers of exposure) that can be used to adequately demonstrate comparability?
• Was the product in the literature used in a population that adequately represents
the target population for the new tobacco product?
• Is the information in the literature sufficient to determine how the tobacco
product was used?
A.334. At no point in that list of caveats did FDA even hint at what it later
announced in the MDOs—that literature reviews involving non-flavored products are
somehow categorically irrelevant to the public health benefits of flavored e-cigarettes.
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display awareness that it is changing position. An agency may not, for
example, depart from a prior policy sub silentio or simply disregard rules that
are still on the books.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515
(2009) (emphasis in original). Rather, an agency must provide a “detailed
justification” for its change when “its new policy rests upon factual findings
that contradict those which underlay its prior policy; or when its prior policy
has engendered serious reliance interests that must be taken into account. It
would be arbitrary or capricious to ignore such matters.” Ibid. (citation
omitted).
We (1) explain the change-in-position doctrine and then (2) analyze
FDA’s violation of it.
1.
The change-in-position doctrine requires careful comparison of the
agency’s statements at T0 and T1. An agency cannot shift its understanding
of the law between those two times, deny or downplay the shift, and escape
vacatur under the APA. As the D.C. Circuit put it in the canonical case:
“[A]n agency changing its course must supply a reasoned analysis indicating
that prior policies and standards are being deliberately changed, not casually
ignored, and if an agency glosses over or swerves from prior precedents
without discussion it may cross the line from the tolerably terse to the
intolerably mute.” Greater Bos. Television Corp. v. FCC, 444 F.2d 841, 852
(D.C. Cir. 1970) (footnote omitted); accord Encino Motorcars, LLC v.
Navarro, 579 U.S. 211, 222 (2016) (“When an agency changes its existing
position, it . . . must at least display awareness that it is changing position and
show that there are good reasons for the new policy.” (quotation and citation
omitted)).
Take for example Physicians for Social Responsibility v. Wheeler, 956
F.3d 634 (D.C. Cir. 2020) (“PSR”). In that case, the Environmental
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Protection Agency had a “general[]” policy of allowing EPA grant recipients
to serve on EPA advisory committees. Id. at 641. The source of that
“general” policy was unclear; the D.C. Circuit established it by pointing only
to a 2013 Office of the Inspector General report for the proposition that
receiving an EPA grant “generally” did not create a financial conflict
sufficient to disqualify the recipient from serving on an advisory committee.
See ibid. (citing Office of the Inspector General, EPA, EPA
Can Better Document Resolution of Ethics and
Partiality Concerns in Managing Clean Air Federal
Advisory Committees 9–10 (2013) https://perma.cc/8EES-WTNV
(“2013 OIG Report”)). The underlying OIG report was couched in all of the
cautious language so often used for guidance documents drafted inside the
Beltway. It purported to provide only “guidance.” 2013 OIG Report at 10. It
hedged that “[t]his report presents the opinion of the OIG and does not
necessarily represent the final EPA position.” Id. at cover page. And at no
point did the 2013 OIG Report ever promise that grant recipients could serve
on EPA advisory committees. To the contrary, the report twice cautioned that
grants “could . . . potentially present an independence concern,” so EPA
required committee members to fill out reports and subjected them to
thorough independence reviews to identify potential conflicts. Id. at 10; see
also ibid. (separately emphasizing a committee member’s “research or grant
is a potential area of concern” in certain circumstances).
However flexible, qualified, and hazy the preexisting “guidance” was,
EPA changed it in October 2017. In that month, the then-new EPA
administrator issued a “directive.” PSR, 956 F.3d at 641. In that 2017
directive, the EPA administrator found it would “strengthen and improve
the independence, diversity, and breadth of participation on EPA federal
advisory committees” to disqualify EPA grant recipients from participation.
Ibid. Several grant recipients who wanted to keep their committee
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assignments claimed EPA violated the APA in changing its pre-2017
guidance.
The D.C. Circuit agreed with the petitioners. The 2017 directive used
words like “strengthen” and “improve”—which obviously connote change
from the previous standards that needed strengthening and improving. And
EPA conceded that the whole purpose of the directive was to change the
agency’s previous conflicts policy. See Brief for EPA at 42–43, PSR, 956 F.3d
634 (No. 19-5104), 2019 WL 6895452. (“Anyone reading the Directive and
accompanying memorandum would understand that it was being issued
precisely because EPA was marking a policy change.”). Still, the D.C. Circuit
held the agency was not explicit enough in announcing to the world that it was
changing positions and that its directive was therefore tantamount to a sub
silentio policy change. PSR, 956 F.3d at 645 (holding EPA said “not a peep”
about its pre-2017 conflicts policy). The court of appeals held the change-in-
position doctrine required EPA both to explicitly acknowledge the old policy
and explain why its new one was better. Id. at 647–48. And it mattered not
one bit that the previous policy was couched in cautious qualifiers as non-
binding “guidance” from the Inspector General. It also did not matter that
EPA’s directive comported with every applicable substantive law on ethics,
conflicts, and advisory committees. Nor did it matter that EPA thought a
more robust conflicts policy would serve the public interest. What mattered,
the D.C. Circuit held, is that EPA did not acknowledge the 2013 OIG Report
and explain its reasons for changing positions. Ibid.
Or consider Southwest Airlines Co. v. FERC, 926 F.3d 851 (D.C. Cir.
2019). That case involved even more flexible agency policies and standards.
FERC had a “general[]” policy of relying on two prior-year inflation data to
determine whether an oil pipeline’s rate increase was “substantially” too
high. HollyFrontier Refin. & Mktg. LLC v. SFPP, LP, 162 FERC ¶ 61,232,
para. 16 (Mar. 15, 2018). When FERC deviated from that policy to reject
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Southwest’s challenge to a pipeline’s rate increase, FERC noted that it never
promised to apply the same two-year-data approach to every rate challenge.
To the contrary, the Commission emphasized, its heavily qualified
standards—replete with cautionary language like “generally” and
“substantially”—gave it “considerable discretion” to take a different
approach where the facts and the agency’s expertise warranted it. Brief for
FERC at 17, Southwest Airlines, 926 F.3d 851 (No. 18-1134), 2019 WL
1043117. FERC further emphasized that its approach in Southwest’s case—
to consider more recent data that more accurately reflected the economic
reality of the challenged pipeline rate—was unquestionably more accurate
than petitioners’ contrary approach. Id. at 22.
The D.C. Circuit granted the petition for review anyway. True, FERC
never promised to use any particular cost index. Southwest Airlines, 926 F.3d
at 858. And true, FERC’s approach had the virtue of using the “best available
information,” which unquestionably served the public interest and best
fulfilled the commission’s statutory obligations. Id. at 856. But none of that
mattered because the fundamental fact remained: FERC previously used one
cost index, and then it turned around and used a different one without
acknowledging the change. Id. at 858–59.
2.
Again, so too here. The differences in FDA’s positions between the
October 2018 Guidance and the June 2019 Guidance on the one hand and the
MDOs on the other are radically starker than the difference between EPA’s
positions in PSR. The pre-MDO guidance documents said: “No specific
studies are required for a PMTA.” October 2018 Guidance at 26. The pre-
MDO guidance also said: “[I]n general, FDA does not expect that applicants
will need to conduct long-term studies to support an application.” A.299; see
also A.317 (same). If an agency is arbitrary and capricious when it
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(1) acknowledges changing its position from (2) a policy reflected in a solitary
OIG report, see PSR, 956 F.3d at 645–48, how much more arbitrary and
capricious is the agency when it (1) refuses to acknowledge the change in its
position from (2) its own voluminous guidance documents, PowerPoint
decks, and enforcement memoranda promulgated over years and reiterated
in numerous different ways? Indeed, the PSR court even required EPA to
explain its change from the position of a different government agency (the
Office of Government Ethics). Id. at 646–47. This is an a fortiori case.
Nor can FDA deny that it changed its position based on the qualified
language in its pre-MDO guidance documents. It is unquestionably true that
the pre-MDO guidance documents had all manner of disclaimers, qualifiers,
and cautionary language. Those documents had headings like “Contains
Nonbinding Recommendations.” A.299; A.317. And FDA never promised or
committed itself to doing any particular thing on any particular application.
But precisely the same thing was true in PSR and Southwest Airlines. In PSR,
the “guidance” was even more cautionary—it wasn’t even issued by EPA
but instead was issued by the Inspector General, and it contained similar
“guidance” disclaimers. And in Southwest Airlines, all agreed that FERC
never promised to use any particular cost index in adjudicating Southwest’s
claims. But that does not matter for purposes of the change-in-position
doctrine. In all three cases—PSR, Southwest Airlines, and this one—the
agency violated that doctrine by changing its position without acknowledging
the change, and it cannot avoid judicial review by pointing to cautionary
headers and words like “generally.” See, e.g., Southwest Airlines, 926 F.3d at
858.
Nor can FDA deny that it changed its position on cartridge-versus-
open systems. In its 2020 Enforcement Guidance, FDA found a material
distinction between cartridge-based flavored products and other products,
like the e-liquids made by petitioners, that generally refill open-tank systems.
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See A.201–04. Then in its August 2021 press release and its MDOs, FDA
imposed an across-the-board ban on all flavored products, regardless of
device type. As in PSR and Southwest Airlines, it might very well be true that
the agency has the power to impose the policy it wants to impose. And it
might very well be true that FDA’s ban better serves the public health. But
again, that does not matter under the change-in-position doctrine. All that
matters here is that the agency unquestionably changed its position and then
pretended otherwise.5
Were there any doubt on this score, although we think there is none,
it would be resolved by the 2020 Enforcement Guidance. In that document,
FDA acknowledged all manner of relatively minor changes in its
understanding of the public health standard. For example, it went to great
lengths to differentiate e-cigarette cartridges from tanks, and to discuss
whether “mint” is a flavor. And FDA did so, it acknowledged, because those
distinctions reflected changes in the agency’s position. See A.204. Not only
does that prove that FDA understood its obligations to acknowledge such
changes, but it also put the public on notice of what it should expect from
FDA when and if the agency changed its position. Reasonable manufacturers
in petitioners’ shoes could expect FDA to continue updating its approach to
flavored e-cigarette products. But no reasonable manufacturer could read the
_____________________
5
FDA’s categorical ban has other statutory problems. For example, the TCA states
that FDA must follow notice-and-comment procedures before adopting a “tobacco
product standard.” See 21 U.S.C. § 387g(c)–(d). And Congress specifically called a ban on
tobacco flavors a “tobacco product standard.” See id. § 387g(a)(1)(A) (referring to tobacco
flavors, “including strawberry, grape, orange, clove, cinnamon, pineapple, vanilla,
coconut, licorice, cocoa, chocolate, cherry, or coffee, that is a characterizing flavor of the
tobacco product or tobacco smoke”); see also id. § 387g(a)(2) (cross-referencing notice-
and-comment obligation to revise flavor standards). FDA unquestionably failed to follow
§ 387g’s notice-and-comment obligations before imposing its de facto ban on flavored e-
cigarettes.
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2020 Enforcement Guidance and think the agency would publicly disclose
picayune distinctions like whether mint is a flavor while silently requiring the
long-term studies it previously said were unnecessary.
FDA failed to acknowledge its multiple changes in position between
the pre-MDO guidance documents and the MDOs. That too warrants
vacatur of the agency actions and remand for further proceedings. See, e.g.,
Southwest Airlines, 926 F.3d at 859.
D.
The fourth and final deeply rooted administrative law principle at
issue in this case is the good faith reliance doctrine. Under it, even when an
agency lawfully changes its position, it cannot fault a party for relying in good
faith on the prior one. See, e.g., Christopher v. SmithKline Beecham Corp., 567
U.S. 142, 156–57 (2012) (prohibiting agency from penalizing party for “good-
faith reliance” on the agency’s prior positions (citation omitted)); Fox, 556
U.S. at 515 (requiring agency to consider “serious reliance interests”).
Consider for example Satellite Broadcasting. The dispute in that case
centered on whether petitioner timely filed an application for a microwave
radio license by tendering it to FCC’s office in Washington, D.C. Satellite
Broad., 824 F.2d at 2. FCC’s regulations were ambiguous about where such
applications should be filed. One could reasonably read them to require
timely filing in Washington. Ibid. Or one could reasonably read them to
require timely filing only in Gettysburg, Pennsylvania. FCC chose the former
reading, rejected petitioner’s latter reading, and rejected the applications as
untimely. Ibid.
The D.C. Circuit agreed with Satellite Broadcasting, reversed the
commission’s ruling, and remanded. The court of appeals reasoned the
FCC’s documents could be reasonably interpreted to require either result.
See id. at 3 & n.4. But it was precisely because the petitioner could reasonably
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understand that its actions were permissible that the agency could not ignore
that reasonable reliance, reach a contrary result, and reject the applications:
The Commission through its regulatory power cannot, in
effect, punish a member of the regulated class for reasonably
interpreting Commission rules. Otherwise the practice of
administrative law would come to resemble “Russian
Roulette.” The agency’s interpretation is entitled to
deference, but if it wishes to use that interpretation to cut off a
party’s right, it must give full notice of its interpretation. We
accordingly vacate as arbitrary and capricious the FCC’s order
dismissing these applications and remand this case for their
reinstatement nunc pro tunc.
Id. at 3–4 (footnote omitted).
Yet again, so too here. Even if we agreed with our sister circuits’
decisions that FDA’s pre-MDO guidance documents could be reasonably
read to put manufacturers on notice of their obligations to perform long-term
scientific studies,6 those documents certainly could be read in good faith the
way petitioners read them. There is ample language spread out across
multiple documents, multiple PowerPoint decks, and multiple public
meetings to say “[n]o specific studies are required for a PMTA”; “[y]outh
behavioral data [is] not required at this time”; and manufacturers need not
“conduct long-term studies to support an application.” See October 2018
Guidance at 18, 26; A.299; A.317. There is not a single sentence anywhere in
the voluminous record before us that says: “manufacturers should submit
long-term scientific studies on the differences between their new flavored e-
_____________________
6
See, e.g., Prohibition Juice Co. v. FDA, 45 F.4th 8, 22–23 (D.C. Cir. 2022); Avail
Vapor, LLC v. FDA, 55 F.4th 409, 423 (4th Cir. 2022); Liquid Labs LLC v. FDA, 52 F.4th
533, 542 n.11 (3d Cir. 2022); Breeze Smoke, LLC v. FDA, 18 F.4th 499, 506–07 (6th Cir.
2021).
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cigarette products and other non-flavored e-cigarette products.” And even if
(counterfactually) the agency gave conflicting instructions—“you need not
submit long-term studies” and “you should submit long-term studies”—the
regulated entity cannot have its application denied because it chose one or
the other. See Satellite Broad., 924 F.2d at 4. It follows a fortiori that when the
agency says: “you need not submit long-term studies” and “this is general
guidance,” the regulated entity cannot have its application denied because it
did not submit long-term studies. To hold otherwise is to turn “the practice
of administrative law [into] ‘Russian Roulette,’” ibid.—where the regulated
entity chooses to trust the agency’s affirmative statement (“you need not
submit long-term studies”) and simply hopes the administrative gun (“this
is general guidance”) has no bullet in the chamber.
Any doubt on this score is resolved by the FDA’s approach to flavored
e-cigarettes more generally. Recall that for FDA to prevail, not only must its
understanding of the pre-MDO rules be reasonable, but the manufacturers’
understanding of those rules also must be unreasonable. See id. at 3–4. FDA
received over one million PMTAs for flavored e-cigarette products—and not
a single one of them contained the scientific studies that FDA now requires
and that (it says) any reasonable manufacturer would have known ex ante
were required. It is perhaps possible that FDA did its part to give the
regulated community clear guidance and that one million out of one million
not only got it wrong but got it unreasonably wrong. But administrative law
does not turn on such infinitesimal possibilities. See Chrysler, 158 F.3d at
1357. It instead prohibits administrative agencies from saying one thing,
pulling a surprise switcheroo, and ignoring the reasonable reliance interests
engendered by its previous statements.
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E.
Against all of this, FDA’s counterargument boils down to this: Some
other circuits agree with the agency. It is true that five circuits have sided
with FDA, while the Eleventh Circuit and ours have found the agency acted
arbitrarily and capriciously. But law is not a nose-counting exercise. Compare,
e.g., Cochran v. SEC, 20 F.4th 194, 237 (5th Cir. 2021) (en banc) (Costa, J.,
dissenting) (“Five circuits have considered the question. By a count of 15-0,
every judge deciding those cases has [found no jurisdiction.]”), with Axon
Enter., Inc. v. FTC, 598 U.S. 175, 195–96 (2023) (unanimously finding
jurisdiction in Cochran). Rather, the relevant question is whether our sister
circuits have spotted a defect in petitioners’ arguments that we have missed.
With deepest respect for our colleagues who have seen this case the other
way, we think not.
Take for example FDA’s principal authority, Prohibition Juice Co. v.
FDA, 45 F.4th 8 (D.C. Cir. 2022). There the D.C. Circuit rejected the e-
cigarette manufacturer’s arbitrary-and-capricious claim for two reasons.
First, the court of appeals pointed to the June 2019 Guidance, which it read
to say “randomized controlled trials or longitudinal studies would not be
necessary if applicants submitted similarly rigorous ‘valid scientific
evidence.’” Id. at 21 (quoting June 2019 Guidance at 12, which appears at our
A.298). Again, with deepest respect to our colleagues on the D.C. Circuit,
that is not what the June 2019 Guidance said. Here is the quoted passage in
full:
The FD&C [Food, Drug, and Cosmetic] Act states that the
finding of whether permitting the marketing of a product would
be APPH will be determined, when appropriate, on the basis of
well-controlled investigations (section 910(c)(5)(A)).
However, section 910(c)(5)(B) of the FD&C Act also allows
the Agency to consider other “valid scientific evidence” if
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found sufficient to evaluate the tobacco product. Given the
relatively new entrance of ENDS on the U.S. market, FDA
understands that limited data may exist from scientific studies
and analyses. If an application includes, for example,
information on other products (e.g., published literature,
marketing information) with appropriate bridging studies,
FDA intends to review that information to determine whether
it is valid scientific evidence sufficient to demonstrate that the
marketing of a product would be APPH. Nonclinical studies
alone are generally not sufficient to support a determination
that permitting the marketing of a tobacco product would be
appropriate for the protection of the public health.
Nonetheless, in general, FDA does not expect that applicants will
need to conduct long-term studies to support an application. As an
example for nonclinical assessments, long-term studies such as
carcinogenicity bioassays are not expected to be included in an
application. For clinical assessments, instead of conducting
clinical studies that span months or years to evaluate potential
clinical impact, applicants could demonstrate possible long-
term health impact by including existing longer duration
studies in the public literature with the appropriate bridging
information (i.e., why the data used are applicable to the new
tobacco product) and extrapolating from short- term studies.
In addition, nonclinical in vitro assays that assess the toxicities
that are seen following long-term use of tobacco products may
be supportive of these clinical assessments. These studies,
used as a basis to support a PMTA, should be relevant to the
new tobacco product and address, with robust rationale, acute
toxicological endpoints or other clinical endpoints that may
relate to long-term health impacts. In this context, FDA
considers long-term studies to be those studies that are
conducted over six months or longer.
A.298–99 (emphasis added and footnotes omitted). This passage explicitly
states that, instead of performing long-term studies, manufacturers could
submit “existing longer duration studies in the public literature with the
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appropriate bridging information” and “nonclinical in vitro assays that
assess the toxicities that are seen following long-term use of tobacco
products.” A.299.
And it is undisputed that petitioners submitted the specified
information. They submitted information from existing studies, along with
“bridging” information to connect it to their PMTA products. See supra, at
33–35. Neither the D.C. Circuit nor any other court of appeals that has sided
with FDA can point to a single word in the June 2019 Guidance (or any other
guidance) that says existing data on unflavored e-cigarette use is categorically
irrelevant to the public health benefits of flavored e-cigarettes.
The D.C. Circuit’s second explanation is that “FDA nowhere
guaranteed that unspecified other forms of evidence would necessarily be
sufficient—only that they might be, so the FDA would consider them.”
Prohibition Juice, 45 F.4th at 21. That is true; FDA never guaranteed that any
particular study would be sufficient to garner approval of a PMTA. But FDA
did tell manufacturers to submit “existing longer duration studies in the
public literature with the appropriate bridging information” and “nonclinical
in vitro assays that assess the toxicities that are seen following long-term use
of tobacco products.” A.299. Petitioners undisputedly submitted those
studies. And then FDA turned around and said those studies were
categorically insufficient because manufacturers should have performed long-
term scientific studies of the kind the June 2019 Guidance said were
unnecessary.
One of today’s dissenting opinions points to a different court of
appeals decision—the Fourth Circuit’s in Avail Vapor. See post, at 84
(Graves, J., dissenting). In that case, the Fourth Circuit described a PMTA
as:
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like a driver’s test, in that it has two components: First, valid
scientific evidence showing that a product is appropriate for
the protection of the public health, like the “written test,” and
second, a determination that the totality of the evidence
supports a marketing authorization, like the “road test.” A
marketing plan, which includes youth access restrictions,
comes in at the road test phase to support the final
determination that an application is appropriate for the
protection of the public health.
Like a driver’s test, both components are necessary, and
neither is sufficient. An applicant who fails the written test
does not proceed to the road test. So too here: FDA determined
that Avail could not show its products were appropriate for the
protection of the public health, and no marketing plan could
rectify that baseline infirmity.
Avail Vapor, 55 F.4th at 425.
With greatest respect to our dissenting colleague and our sister circuit,
that analogy is misplaced. Unlike a driving test, the statutory text in
§ 387j(c)(4)(A)–(B) is not disjunctive. The two statutory requirements:
“likelihood that existing users of tobacco products will stop using such
products” (scientific evidence) and the “likelihood that those who do not use
tobacco products will start using such products” (marketing plans) are linked
with a conjunctive “and.” Ibid. The statute does not proceed sequentially;
rather, it commands the agency to take both criteria into account.
Section 387j(c)(4)(A)–(B) is perhaps better understood as a
standardized test with two sections, scored as a composite. Because a low
score on part one of a two-part test can be counterbalanced by a high score
on the other, the administrator must grade both sections. To put a finer point
on it, imagine a hypothetical ENDS product that gets only one existing
smoker to quit, but has a marketing plan so restrictive that no non-smokers
could access it and use it to start vaping. That product has an obvious net
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public health benefit. And FDA could not reject a PMTA for it after scoring
only half of its test.
In any event, even if the “and” in § 387j(c)(4)(A) could or should be
read as “or,” that is still not enough to save the FDA. As noted, the Eleventh
Circuit held the agency repeatedly represented that the marketing plans were
“critical” and “necessary” to a successful application. Bidi Vapor, 47 F.4th
at 1203–04. The agency cannot now claim they were in fact always
meaningless.
* * *
In sum, FDA’s denials of petitioners’ PMTAs were arbitrary and
capricious. The agency did not give manufacturers fair notice of the rules;
the agency did not acknowledge or explain its change in position; the agency
ignored reasonable and serious reliance interests that manufacturers had in
the pre-MDO guidance; and the agency tried to cover up its mistakes with
post hoc justifications at oral argument. The contrary views expressed by some
of our sister circuits do not address our principal concerns with FDA’s
decisionmaking. We therefore hold the agency acted unlawfully.
III.
Finally, FDA argues that even if it arbitrarily and capriciously denied
petitioners’ applications, that error was harmless. FDA reasons that there is
nothing special about petitioners’ applications, so the agency will deny them
on remand even if we send the case back and order FDA to conform its
decisionmaking to the APA. FDA EB Br. 27–28.
FDA misunderstands how harmless error review works under the
APA. We (A) explain the harmless error rule and then (B) hold it provides no
help to the agency.
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A.
In administrative law, the harmless error rule is quite narrow. “It is a
well-established maxim of administrative law that if the record before the
agency does not support the agency action, or if the agency has not
considered all relevant factors, the proper course, except in rare
circumstances, is to remand to the agency for additional investigation or
explanation.” Calcutt, 598 U.S. at 628–29 (quotation and citation omitted).
“The reviewing court is not generally empowered to conduct a de novo
inquiry into the matter being reviewed and to reach its own conclusions based
on such an inquiry.” Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744
(1985). Once we identify an error in the agency’s decision, our work is almost
always done: If the agency rests its decision on “grounds [that] are
inadequate or improper, the court is powerless to affirm the administrative
action by substituting what it considers to be a more adequate or proper
basis.” SEC v. Chenery Corp. (Chenery II), 332 U.S. 194, 196 (1947)
(emphasis added).
Consider for example Calcutt. In that case, FDIC sanctioned the CEO
of a bank. The CEO petitioned for review in the Sixth Circuit, and the court
of appeals identified two legal errors in the agency’s decision. The Sixth
Circuit nonetheless held those errors were harmless and denied the CEO’s
petition. The Supreme Court of the United States unanimously and
summarily reversed. Calcutt, 598 U.S. at 628.
Two parts of the Calcutt summary reversal bear emphasis. First, the
Court emphasized that the “ordinary” rule is that a federal court must
remand to the agency as soon as it identifies a legal error in the agency’s
decision. Id. at 629 (“[T]he Sixth Circuit should have followed the ordinary
remand rule here.”); see also Gonzales v. Thomas, 547 U.S. 183, 187 (2006)
(per curiam) (applying “the ordinary remand rule”); INS v. Orlando
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Ventura, 537 U.S. 12, 18 (2002) (same). That ordinary remand rule has deep
roots in administrative law. Part of it is rooted in the admonition, dating back
at least to Chenery I, that agency decisions must stand or fall on the
explanation the agency gave at the time. Courts are simply not free to look
past the error on the supposition that the error would not affect the agency’s
decisionmaking. And part of it is rooted in the Court’s recognition that the
Administrative Procedure Act requires agencies to follow procedures, and
those procedures are what give agency decisions legitimacy. A court cannot
forgive procedural violations simply because the court thinks they did not
matter. “[T]he guiding principle, violated here, is that the function of the
reviewing court ends when an error of law is laid bare.” FPC v. Idaho Power
Co., 344 U.S. 17, 20 (1952).
Second, Calcutt recognized “[i]t is true that remand may be
unwarranted in cases where there is not the slightest uncertainty as to the
outcome of the agency’s proceedings on remand.” 598 U.S. at 629–30
(quotation omitted). That is a different way of saying remand may be
unnecessary where the petitioner could not have been prejudiced. Shinseki v.
Sanders, 556 U.S. 396, 409 (2009) (requiring courts to consider whether an
error was prejudicial); 5 U.S.C. § 706 (same). But, the Calcutt Court
emphasized, this rule applies “only in narrow circumstances.” 598 U.S. at 630
(emphasis added). Specifically, “[w]here the agency was required to take a
particular action, . . . that it provided a different rationale for the necessary
result is no cause for upsetting its ruling.” Ibid. (emphasis in original)
(quotation and citation omitted). But in any case where the agency’s decision
was discretionary, the ordinary remand rule must apply. Ibid. As the Calcutt
Court put it: The harmless-error “exception does not apply in this case.
FDIC was not required to reach the result it did; the question whether to
sanction petitioner—as well as the severity and type of any sanction that
could be imposed—is a discretionary judgment.” Ibid. (emphasis omitted).
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The upshot: APA errors are only harmless where the agency would be
required to take the same action no matter what. In all other cases, an agency
cannot avoid remand.7
B.
This case is controlled by Calcutt. All agree that FDA’s standards for
adjudicating PMTAs are discretionary. Those applications are highly fact-
specific. And the ultimate decision to approve or deny an application turns
on FDA’s ever-evolving understanding of what “public health” requires.
The harmless-error rule simply does not apply to such discretionary
administrative decisions.
Similarly, we have held an “APA deficiency is not prejudicial only
when it is one that clearly had no bearing on the procedure used or the
substance of decision reached.” United States v. Johnson, 632 F.3d 912, 930
(5th Cir. 2011) (quotation and citation omitted). Thus, Johnson prohibits us
from holding an APA error is harmless simply because the petitioner did not
or could not show that but for the error the agency would have decided the
matter differently (“the substance of decision reached”). Rather, the rule is
stated in the disjunctive, and it provides an error is harmful unless it had “no
bearing on the procedure used or the substance of decision reached.” It is
hard to imagine an APA error that could have “no bearing on the procedure
used.” And in any event, each of FDA’s errors in this case plainly affected
“the procedure used” and hence were not harmless. On that score, we agree
_____________________
7
Of course, an agency cannot demand remand where the law is clear and where an
agency has failed to heed a prior remand order. See, e.g., Lewis v. United States,
--- F.4th ---, ---, No. 21-30163, 2023 WL 8711318, at *4 (5th Cir. Dec. 18, 2023); El Paso
Elec. Co. v. FERC, 76 F.4th 352, 366 (5th Cir. 2023). The principle that unites both lines of
precedent is that an administrative agency cannot avoid judicial review by gaming the
APA’s remand rules.
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with the entirety of the Eleventh Circuit’s analysis and its application of a
harmless error rule identical to Johnson’s. See Bidi Vapor, 47 F.4th at 1205–
08.
* * *
The petitions for review are GRANTED, FDA’s marketing denial
orders are SET ASIDE, and the matters are REMANDED to FDA.
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Haynes, Circuit Judge, joined by Stewart, Southwick,
Higginson, and Douglas, Circuit Judges, dissenting:
In 2009, Congress enacted the Family Smoking Prevention and
Tobacco Control Act (“TCA”), Pub. L. No. 111-31, 123 Stat. 1776 (2009)
(codified at 21 U.S.C. §§ 387–387(u)), to empower the FDA in the fight
against tobacco products, which Congress considered “the foremost
preventable cause of premature death in America.” TCA § 2(13), 123 Stat.
at 1777. Concerned that “past efforts to restrict advertising and marketing of
tobacco products ha[d] failed adequately to curb tobacco use by
adolescents,” TCA § 2(6), 123 Stat. at 1776, Congress submitted authority
to the FDA to regulate tobacco products in the interest of public health and,
specifically, the protection of our country’s youth. See Big Time Vapes, Inc.
v. FDA, 963 F.3d 436, 444 (5th Cir. 2020) (“Obviously, the TCA’s purpose
sounds in (1) protecting public health and (2) preventing young people from
accessing (and becoming addicted to) tobacco products.”).
Over time, e-cigarettes, including “vaping” models, came into play.
The notion was that these were safer than regular cigarettes and might get
those who are smokers to become vapers and, ultimately, neither. As I
discuss more fully below, the e-cigarettes are not safe. Just as being shot in
the stomach might be less likely to cause death than being shot in the head,
but neither one is wanted, neither e-cigarettes nor cigarettes are safe. As
such, the focus on e-cigarettes has been to assist those already addicted, not
to create a whole new group of youth becoming addicted. Thus, while this
dissenting opinion is long, a short sentence could sum it up: the Petitioners
here did not establish that their products would so sufficiently assist adults
that it would overcome the harm to youth.
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As a result of the history of e-cigarettes, as of 2016, e-cigarettes and
their component parts (including e-liquids)1 are subject to the requirements
of the TCA. Deeming Tobacco Products To Be Subject to the Federal Food,
Drug, and Cosmetic Act, 81 Fed. Reg. 28974 (May 10, 2016) (“Deeming
Rule”). The FDA is thus required to deny a Premarket Tobacco Product
Application (“PMTA”) for an e-cigarette unless permitting the product to
be marketed would be “appropriate for the protection of the public health”
(“APPH”), based on an evaluation of “the risks and benefits to the
population as a whole” as demonstrated by “well-controlled investigations”
or other “valid scientific evidence.” 21 U.S.C. § 387j(c). Contrary to the
majority opinion’s seeming contention that any application that has some
good sounds to it must be granted, the FDA should only be granting anything
that is shown to aid public health (i.e., the addicted adults), not create more
addicted youth such that our country has much earlier deaths over time.
A body of knowledge growing over the past several years has exposed
the extreme risks that flavored e-cigarettes pose to children. By any metric,
our country is in the throes of a youth vaping epidemic that has reached crisis
proportions. In 2020, 3.6 million kids in the United States reported using e-
cigarettes, including 20% of high school students and 5% of middle school
students. FDA, Technical Project Lead (TPL) Review of PMTAs (2021), at 6.
Use of these products at such an early age, “when the developing brain is
most vulnerable to nicotine addiction,” puts these children at much greater
risk of tobacco use and dependence as adults. As the D.C. Circuit noted
recently, “[t]he public health consequences are dire: Tobacco is quickly and
powerfully addicting, and e-cigarettes can permanently damage developing
_____________________
1
As the majority opinion does, I use the term “e-cigarettes” throughout this
opinion to refer to all forms of electronic nicotine delivery devices (“ENDS”) and their
component parts, including e-liquids.
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adolescent brains, cause chronic lung diseases, and hook young users for
life.” Prohibition Juice Co. v. FDA, 45 F.4th 8, 10 (D.C. Cir. 2022).
Flavored products are a key driver of the problem.2 According to the
2020 National Youth Tobacco Survey, 85% of high school e-cigarette users
report using a flavored product, compared to 65% in 2014. Petitioners
produce e-cigarettes in flavors like sour grape, pink lemonade, and pound
cake with names such as “Jimmy The Juice Man Strawberry Astronaut” and
“Suicide Bunny Bunny Season”—which, as one member of our sister circuit
recently commented, “seem designed to have appeal to kids.” Bidi Vapor
LLC v. FDA, 47 F.4th 1191, 1212–13 (11th Cir. 2022) (Rosenbaum, J.,
dissenting). Indeed, the FDA has found that the availability of flavored
products “is one of the primary reasons for the popularity of [e-cigarettes]
among youth.”
The issue for manufacturers of flavored e-cigarettes, like Petitioners,
is that no counterbalancing evidence has emerged as to the product’s
benefits. While e-cigarettes may help some current smokers quit or switch
to vaping, the research does not establish that flavored products provide an
increased benefit over non-flavored products. As the FDA noted during its
review of Petitioners’ PMTAs, “in contrast to the evidence related to youth
initiation—which shows clear and consistent patterns of real-world use that
support strong conclusions—the evidence regarding the role of flavors in
promoting switching among adult smokers is far from conclusive.” Thus,
according to current knowledge, flavored e-cigarettes present a much higher
risk to youth than non-flavored e-cigarettes, without any compensatory
benefit. Such a calculus does not bode well for approval under the TCA.
_____________________
2
In accordance with the FDA’s guidance documents and the parties’ briefs, the
term “flavored” as used herein does not include tobacco- or menthol-flavored e-cigarettes.
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Still, in accordance with the guidance it has consistently given applicants, the
FDA continues to conduct a case-by-case evaluation of each PMTA for
flavored e-cigarettes to determine whether it contains sufficiently reliable and
robust evidence to shift the balance of risks and benefits in favor of approval.
It is against this backdrop that the FDA reviewed the PMTAs of
Wages and White Lion Investments, LLC, d/b/a Triton Distribution
(“Triton”) and Vapetasia LLC (“Vapetasia”) (collectively, “Petitioners”)
and issued marketing denial orders (“MDOs”) to Petitioners. The FDA
denied Petitioners’ PMTAs because they did not contain any reliable
evidence suggesting the benefits of Petitioners’ flavored products
outweighed the significant risks to youth—an outcome that aligned with both
the guidance the FDA had given to applicants and its statutory mandate
under the TCA. But the majority opinion erroneously concludes that the
FDA changed the evidentiary standards applied to Petitioners’ PMTAs and
wholly ignored Petitioners’ marketing plans, and thus acted in an arbitrary
and capricious manner. Unfortunately, based on a misreading of the law and
a misconstruing of the relevant facts, the majority opinion supersedes the
FDA’s work by remanding instead of denying the petition, which cuts the
FDA’s legs out from under it in the middle of a dangerous and constantly
evolving public health crisis.
In so doing, the majority opinion also departs from all but one of our
sister circuits that have addressed the same issue. See, e.g., Magellan Tech.,
Inc. v. FDA, 70 F.4th 622 (2d Cir. 2023) (unanimous denial); Liquid Labs
LLC v. FDA, 52 F.4th 533 (3rd Cir. 2022) (unanimous denial); Avail Vapor,
LLC v. FDA, 55 F.4th 409 (4th Cir. 2022) (unanimous denial), cert. denied,
No. 22-1112, 2023 WL 6558399 (U.S. Oct. 10, 2023); Gripum, LLC v. FDA,
47 F.4th 553 (7th Cir. 2022) (unanimous denial), cert. denied, 143 S. Ct. 2458
(2023); Lotus Vaping Techs., LLC v. FDA, 73 F.4th 657 (9th Cir. 2023)
(unanimous denial); Prohibition Juice, 45 F.4th 8 (unanimous denial); see also
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Breeze Smoke, LLC v. FDA, 18 F.4th 499 (6th Cir. 2021) (denying motion for
stay), app. for stay denied, 142 S. Ct. 638 (2021). The only circuit that granted
a petition for review in a comparable context did so on much narrower
grounds than the majority opinion embraces today. See Bidi Vapor, 47 F.4th
at 1195 (remanding based on the FDA’s failure to consider marketing and
sales-access-restriction plans); but see id. at 1208–18 (Rosenbaum, J.,
dissenting). Despite the Eleventh Circuit’s opinion, however, it is telling
that the Supreme Court recently denied certiorari for two cases in which
other circuits considered similar facts to those before us and denied the
petition for review. See Gripum, LLC v. FDA, 143 S. Ct. 2458 (2023) (mem.);
Avail Vapor, LLC v. FDA, No. 22-1112, 2023 WL 6558399 (U.S. Oct. 10,
2023) (mem.); see also Breeze Smoke, LLC v. FDA, 142 S. Ct. 638 (2021)
(mem.) (denying application for stay of FDA’s denial, without any recorded
dissent).
Reevaluating this case en banc, I would reach the same determination
that the merits panel did and deny the petitions for review before us. See
Wages & White Lion Invs., L.L.C. v. FDA, 41 F.4th 427, 441, 442 (5th Cir.
2022) (“Wages II”), reh’g en banc granted, vacated by 58 F.4th 233 (5th Cir.
2023). Because the majority opinion arrives at a different conclusion, I
respectfully dissent.
I. Statutory, Regulatory, and Procedural Background
Before turning to the majority opinion’s conclusions, it is worth
briefly reviewing the relevant statutory, regulatory, and procedural
background of this case.
As previously noted, Congress passed the TCA in 2009 in an effort to
protect all Americans, and particularly children, from the health detriments
of tobacco. See, e.g., TCA § 2(34), 123 Stat. at 1779 (“Because the only
known safe alternative to smoking is cessation, interventions should target all
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smokers to help them quit completely.”); TCA § 2(1), 123 Stat. at 1777
(“The use of tobacco products by the Nation’s children is a pediatric disease
of considerable proportions that results in new generations of tobacco-
dependent children and adults.”). Congress decided that the FDA has the
necessary “scientific expertise to . . . evaluate scientific studies supporting
claims about the safety of products[] and to evaluate the impact of labels,
labeling, and advertising on consumer behavior in order to reduce the risk of
harm and promote understanding of the impact of the product on health.”
TCA § 2(44), 123 Stat. at 1780.
Accordingly, Congress gave broad authority to the FDA to regulate
tobacco products, requiring that most “new tobacco product[s]” receive
authorization from the FDA prior to marketing. 21 U.S.C. § 387j(a)(2)(A).
The TCA applies to “all cigarettes, cigarette tobacco, roll-your-own tobacco,
and smokeless tobacco” as well as “any other tobacco products that the
[FDA] Secretary by regulation deems to be subject to this subchapter.” Id.
§ 387a(b). In 2016, the FDA used that discretion to deem e-cigarettes as
tobacco products subject to the requirements of the TCA. Deeming Rule, 81
Fed. Reg. 28974.
Under the Deeming Rule, manufacturers must submit PMTAs to the
FDA for any flavored e-cigarettes and their component parts, such as the e-
liquids manufactured by Petitioners. The majority opinion is a switcheroo
from the statute: the TCA requires the FDA to deny any PMTA if the
applicant cannot show that marketing such a tobacco product “would be
appropriate for the protection of the public health [APPH].” 21 U.S.C. §
387j(c)(2)(A). In determining whether a product is APPH, the FDA must
consider “the risks and benefits to the population as a whole.” Id.
§ 387j(c)(4). This includes considering “the increased or decreased
likelihood that existing users of tobacco products will stop using such
products,” id. § 387j(c)(4)(A), as well as “the increased or decreased
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likelihood that those who do not use tobacco products will start using such
products,” id. § 387j(c)(4)(B). The FDA must make this determination “on
the basis of well-controlled investigations” or other “valid scientific
evidence” that, in the FDA’s discretion, is “sufficient to evaluate the
tobacco product.” Id. § 387j(c)(5). Thus, the FDA must use its science to
evaluate the applications and cannot grant an insufficient PMTA.
Although the Deeming Rule was set to go into effect in August 2016,
various events pushed out its final deadline until September 2020. In the
intervening years, more information came to light regarding the prevalence
of and dangers associated with e-cigarette use, particularly by youth. In case
there were any doubts about the deleterious effects of e-cigarettes, research
into the use of such devices has made several things clear: (1) e-cigarette
usage entails myriad health risks, including lifelong addiction to e-cigarettes
or traditional cigarettes, lung disease, and attention and learning deficits; (2)
in most instances the use of, and addiction to, tobacco products begins during
adolescence; and (3) e-cigarettes are the most popular tobacco product
among youth, with flavored e-cigarettes having particular appeal.
E-cigarettes thus pose a significant public health risk, particularly to
children. Concerningly, the FDA observed a “dramatic increase in the
prevalence of [e-cigarette] use among U.S. youth in 2018,” which caused the
FDA Commissioner to label the problem a “youth vaping epidemic.” The
FDA responded by increasing enforcement efforts, particularly against non-
tobacco and non-menthol flavored e-cigarettes. In 2020, the FDA issued a
guidance document announcing its new priorities and describing the
underlying evidence showing that flavors were a key driver of increased youth
use of e-cigarettes. FDA, “Enforcement Priorities for Electronic Nicotine
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Delivery Systems (ENDS) and Other Deemed Products on the Market
Without Premarket Authorization” (“January 2020 Guidance”).3
On September 9, 2020, Petitioners submitted PMTAs to the FDA
seeking permission to market various flavored e-cigarette products. In
September 2021, the FDA reviewed these PMTAs and issued MDOs to
Petitioners. As to Triton, the FDA explained the “key basis” for its denial
was that its “PMTAs lack[ed] sufficient evidence demonstrating that [its]
flavored [e-cigarettes] will provide a benefit to adult users that would be
adequate to outweigh the risks to youth.” Vapetasia received a similar
explanation. The FDA further elaborated on its reasoning in technical
project lead reports (“TPLs”) it provided to Petitioners.
Petitioners timely sought review of the FDA’s denials in our court.
Triton moved for a stay, and the two cases were consolidated for appeal. A
motions panel granted Triton’s motion for a stay in October 2021, Wages &
White Lion Invs., L.L.C. v. FDA, 16 F.4th 1130, 1144 (5th Cir. 2021) (“Wages
_____________________
3
The majority opinion suggests that the January 2020 Guidance “did not apply to
[P]etitioners or their liquids” because “Petitioners do not make e-cigarettes, vape pens,
vape pods, vape cartridges or any other vaping device covered by the January 2020
Enforcement Guidance,” but then cites to the January 2020 Guidance as evidence of
FDA’s positions on the public health standard as applied to e-cigarettes. Like the majority
opinion, I find value in the January 2020 Guidance as an expression of the FDA’s views on
topics relevant to its assessment of whether Petitioners’ products were APPH, particularly
regarding the heightened risk that flavored products pose to kids. The January 2020
Guidance focused on closed-system devices, which generally come with prefilled e-liquid
cartridges that are replaced after the e-liquid runs out, whereas Petitioners market flavored
e-liquids that can be used to refill open-system products. However, in response to the
FDA’s increased enforcement efforts against flavored closed-system devices, youth
responded by migrating to other device types that also had flavored e-liquids. Specifically,
“when FDA changed its enforcement policy to prioritize pod-based flavored ENDS, which
were most appealing to youth at the time, [it] subsequently observed a substantial rise in
use of disposable flavored [e-cigarettes]—a ten-fold increase (from 2.4% to 26.5%) among
high school current e-cigarette users.” Thus, the FDA identified the “fundamental role of
flavor” of any kind in driving youth appeal to e-cigarettes.
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I”), before a merits panel denied the petitions for review in July 2022, see
Wages II, 41 F.4th at 442. Petitioners subsequently submitted petitions for
panel rehearing and rehearing en banc. The merits panel denied the petition
for panel rehearing by equal vote,4 before we ordered the case be reheard en
banc.
II. The FDA Did Not Act Arbitrarily and Capriciously
Our duty in this case is to determine whether the FDA’s denials of
Petitioners’ PMTAs were “arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law.” See 21 U.S.C. § 387l(b); 5 U.S.C.
§ 706(2)(A). The scope of our review is very narrow. Motor Vehicle Mfrs.
Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins., 463 U.S. 29, 43 (1983).
Critically, “[i]t is not our job as a reviewing court to redo an agency’s
evaluation of relevant evidence.” Avail Vapor, 55 F.4th at 427. We are “not
to substitute [our] judgment for that of the agency” and must “uphold a
decision of less than ideal clarity if the agency’s path may reasonably be
discerned.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513 (2009)
(quotations omitted).
The majority opinion takes issue with two aspects of the FDA’s
review: (1) the evidentiary standards applied to Petitioners’ PMTAs, and
(2) the FDA’s approach towards Petitioners’ marketing plans. Both were
reasonable exercises of the agency’s authority.
_____________________
4
By the time all of this came into play, one of the members of the merits panel who
had joined in the majority opinion had resigned from our court. Thus, the merits panel had
only the original author of the majority opinion and the author of the dissenting opinion
who, unsurprisingly, did not agree.
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A. Evidentiary Standards
Unlike every other circuit that has ruled on this issue,5 the majority
opinion concludes that the FDA changed the evidentiary standards it applied
to flavored e-cigarettes between the pre-MDO guidance and the denials of
Petitioners’ PMTAs. In reality, however, the FDA consistently
communicated the evidentiary standard that it would apply to all PMTAs for
flavored e-cigarettes, applied that standard to Petitioners’ PMTAs, and
rightfully concluded that Petitioners’ applications did not meet it and thus
must be denied—all in accordance with its mandate under the TCA.
1. Pre-MDO Communications
First and foremost, the FDA consistently communicated that it would
conduct a case-by-case determination of each PMTA pursuant to the
_____________________
5
See Magellan Tech., 70 F.4th at 630 (“Given that the FDA did not impose a new
evidentiary standard on Magellan, the FDA did not need to provide notice or consider its
reliance interests” and thus “the FDA did not act arbitrarily or capriciously.”); Liquid
Labs, 52 F.4th at 541 (“[T]he FDA did not “reverse course” and newly require
randomized controlled trials and/or longitudinal cohort studies, and therefore did not
upset Liquid Labs’ reliance interests, provide inadequate notice, or act arbitrarily and
capriciously.”); Avail Vapor, 55 F.4th at 421 (“[W]e join the majority of our sister circuits
in finding that FDA neither changed the standard nor the types of evidence required.”);
Breeze Smoke, 18 F.4th at 507 (“[T]he FDA’s 2019 language and its 2021 order likely did
not fail to consider reliance interests, . . . and did not introduce a new standard of review in
adjudication such that it likely deprived Breeze Smoke of fair warning.”); Gripum, 47 F.4th
at 560 (agreeing with Sixth Circuit and D.C. Circuit that FDA did not shift its evidentiary
standard); Lotus Vaping Techs., 73 F.4th at 673 (“[T]he agency consistently advised that,
in the absence of long-term data, it might rely upon sufficiently robust and reliable other
evidence” and “did not act arbitrarily or capriciously by concluding that Petitioners’
evidence fell short of that standard.”); Prohibition Juice, 45 F.4th at 20 (“We hold that the
FDA did not misdirect applicants.”). Even the Eleventh Circuit’s decision in Bidi Vapor
was limited to consideration of the FDA’s approach to the marketing and sales-access-
restriction plans, and the opinion did not address the FDA’s position on evidentiary
requirements for PMTAs. See Bidi Vapor LLC, 47 F.4th at 1195 (holding limited to
consideration of marketing and sales-access-restriction plans).
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standard mandated by the TCA. See 21 U.S.C. § 387j(c) (PMTAs must
present “well-controlled investigations” or other “valid scientific evidence”
showing that “permitting such tobacco product to be marketed would be
appropriate for the protection of the public health”); see also FDA, Premarket
Tobacco Product Applications and Recordkeeping Requirements, Proposed
Rule, 84 Fed. Reg. 50566, 50619 (Sept. 25, 2019) (“September 2019
Proposed Rule”) (“FDA will determine . . . whether the available evidence,
when taken as a whole, is adequate to support a determination that permitting
the new tobacco product to be marketed would be APPH.”). Each guidance
documented cited by the majority opinion makes clear that the
recommendations contained therein extend only insofar as they further the
statutory requirements. See, e.g., FDA, Premarket Tobacco Product
Application Content Overview (Oct. 23, 2018), https://perma.cc/BV8D-
HR7H (“October 2018 Guidance”) at 3–5, 31–32 (outlining statutory
requirements); FDA, Premarket Tobacco Product Application (PMTA)
Review Pathway, at 20 (Oct. 28, 2019), https://perma.cc/9S7Z-JQX8
(“October 2019 Guidance”) at 5–6 (same); FDA, “Premarket Tobacco
Product Applications for Electronic Nicotine Delivery Systems: Guidance
for Industry” (“June 2019 Guidance”) at 10 (“FDA will review an ENDS
PMTA consistent with the requirements of section 910(c) of the FD&C
Act.”); FDA, Press Release, FDA Makes Significant Progress in Science-
Based Public Health Application for Review, Taking Action on Over 90% of
More than 6.5 Million ‘Deemed’ New Tobacco Products Submitted (Sept.
9, 2021), https://perma.cc/4F69-MRUB (“As we have said before, the
burden is on the applicant to provide evidence to demonstrate that permitting
the marketing of their product meets the applicable statutory standard.”). As
such, any suggestion that the FDA was required to accept evidence it deemed
unsatisfactory under the TCA requirements “neglect[s] the forest for the
trees.” See Avail Vapor, 55 F.4th at 419.
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In advance of the September 2020 deadline, as the FDA continued to
gather more information about youth e-cigarette use, the agency made clear
that the bar of “valid scientific evidence” was a high one. The FDA issued
a document containing “Nonbinding Recommendations”6 in June 2019 that
stated, “[n]onclinical studies alone are generally not sufficient to support a
determination that permitting the marketing of a tobacco product would be
appropriate for the protection of the public health.” June 2019 Guidance at
12; see also id. at 34 (same). However, “in some cases, it may be possible to
support a marketing order for an ENDS product without conducting new
nonclinical or clinical studies,” such as “if there is an established body of
evidence regarding the health impact (individual or population) of [the]
product or a similar product that can be adequately bridged to [the] product.”
Id. at 46. In order to demonstrate APPH, the June 2019 Guidance also
recommended “an applicant compare the health risks of its product to both
products within the same category and subcategory, as well as products in
different categories as appropriate.” Id. at 13. As such, the FDA made clear
_____________________
6
The majority opinion suggests that, although it is “unquestionably true that the
pre-MDO guidance documents had all manner of disclaimers, qualifiers, and cautionary
language,” the FDA cannot “deny that it changed its position based on th[at] qualified
language.” As detailed herein, the evidentiary standards that the FDA applied to
Petitioners’ PMTAs align with the pre-MDO guidance, so the FDA did not change its
position. The conditional language used by the FDA in its nonbinding guidance documents
indicates that it never guaranteed that a certain type of evidence would be sufficient. This
is a reasonable position, particularly in such a rapidly evolving area of public health concern.
The cases cited by the majority opinion are inapposite. See Physicians for Soc. Resp. v.
Wheeler, 956 F.3d 634, 646 (D.C. Cir. 2020) (explaining the EPA fully acknowledged it had
changed its position and that the point of contention was whether EPA sufficiently
acknowledged the reasons underlying its change in course); Southwest Airlines Co. v. FERC,
926 F.3d 851, 858 (D.C. Cir. 2019) (holding that “the Commission’s consistent practice,
whether adopted expressly in a holding or established impliedly through repetition, sets the
baseline from which future departures must be explained” (emphasis added)).
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that evidence of comparisons between flavored and non-flavored e-cigarette
products was a recommended part of a PMTA.
Notably, although the FDA never required (and still does not require)
any specific type of study, it also never said that nonclinical studies would be
sufficient to support a PMTA. Rather, the FDA has always suggested and
continues to suggest that such studies might be useful, in particular where, as
here, the evidence presented in a PMTA is otherwise weak. See, e.g., October
2018 Guidance (“[I]t may be possible to support a marketing order for an
ENDS product without conducting new nonclinical or clinical studies given
other data sources can support the PMTA.” (emphasis added)); June 2019
Guidance at 13 (“In addition, nonclinical in vitro assays that assess the
toxicities that are seen following long-term use of tobacco products may be
supportive of these clinical assessments.” (emphasis added)), 12 (FDA
“intends to review” non-clinical evidence), 47 (“Published literature
reviews (including meta-analysis) or reports may be acceptable to support a
PMTA, but are considered a less robust form of support for a PMTA.”
(emphasis added)); Premarket Tobacco Product Applications and
Recordkeeping Requirements (Final Rule), 86 Fed. Reg. 55300, 55387 (Oct.
5, 2021) (“FDA does not expect that long-term clinical studies will need to be
conducted for each PMTA; instead, it expects that it should be able to rely on
other valid scientific evidence to evaluate some PMTAs.” (emphasis
added)). Ultimately, while the FDA “broadened the types of evidence it
would consider” beyond just randomized controlled trials or longitudinal
studies, it also “made clear it would not relax the scientific rigor of the
requisite public health demonstration.” Prohibition Juice, 45 F.4th at 21.
To summarize, leading up to the September 2020 deadline, the FDA
published nonbinding guidance to give applicants an insight into what the
PMTA review would look like, namely: (1) a case-by-case assessment,
(2) guided first and foremost by statutory requirements, with (3) the burden
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on applicants to provide (4) valid scientific evidence (likely in the form of
randomized control trials or longitudinal studies, although other forms of
similarly robust and reliable evidence may be sufficient) (5) showing that the
public health benefits of their specific products outweighed the risks.
2. Application to Petitioners’ PMTAs
Then, the FDA applied that standard to Petitioners’ applications.
The FDA considered whether Petitioners’ PMTAs demonstrated “potential
benefits to smokers from marketing [the] products with robust and reliable
evidence” that was “significant enough to overcome the risk to youth.”
Because flavored e-cigarettes present a disproportionately high risk to
children, the risk to youth was higher for Petitioners’ products than for
similar menthol- or tobacco-flavored e-cigarettes. The FDA rightfully
factored that into its review by examining whether the applications had “any
acceptably strong evidence that the flavored products have an added benefit
relative to that of tobacco-flavored ENDS in facilitating smokers completely
switching away from or significantly reducing their smoking.”
The FDA reasonably concluded Petitioners did not submit
sufficiently robust and reliable scientific evidence to demonstrate the
requisite benefit.7 According to Petitioners’ PMTAs, “[t]he most important
_____________________
7
This appeal was filed more than two years ago. At the time it was filed, the
Petitioners contended they were not given the time to do the studies the FDA sought.
Thus, they originally asked this court alternatively to “vacate the MDOs and enjoin FDA
from taking further adverse action on Petitioners’ PMTAs for 18 months if Petitioners will
be required to conduct long-term studies to demonstrate comparative efficacy going
forward.” Given that this case and the “18 month request” were filed more than two years
ago, Petitioners now have had plenty of time. Indeed, during that time, they could have
reapplied to the FDA with whatever information they gathered. Yet, to my knowledge, and
based on the lack of any information to the contrary from the Petitioners, the Petitioners
have submitted no additional evidence during that time to the FDA. Given the majority
opinion’s remand, the Petitioners certainly will not have an argument about a lack of time.
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consideration in deciding whether e-cigarettes produce a public health
benefit is determining if using e-cigarettes is an effective cessation method
for combustible cigarette use.” Both Petitioners submitted a variety of
published studies and articles discussing topics relevant to the APPH
determination. However, Petitioners admitted their own literature reviews
found “not enough evidence from well-designed studies to determine
whether e-cigarette flavors aid in smoking cessation.”
Vapetasia also submitted a cross-sectional survey as part of its PMTA,
which the FDA similarly found did not change the risk-benefit balance. The
panel opinion summarized why that was a reasonable conclusion:
[The] survey suffered from several methodological flaws:
(1) only 294 people were surveyed; (2) the survey respondents
are all Vapetasia customers; and (3) it’s not clear how these
individuals were selected to take the survey.[] In other words,
there were strong reasons to doubt the survey’s results. The
FDA therefore did not act arbitrarily in concluding that
Vapetasia’s survey “is not sufficient to show a benefit to adult
smokers.”
Wages II, 41 F.4th at 436 (footnote omitted).
In both Petitioners’ MDOs, the FDA explained that this evidence was
not sufficient to make the requisite showing under the TCA:
All of your PMTAs lack sufficient evidence demonstrating that
your flavored ends will provide a benefit to adult users that
would be adequate to outweigh the risks to youth. In light of
the known risks to youth of marketing flavored ends, robust
and reliable evidence is needed regarding the magnitude of the
potential benefit to adult smokers. This evidence could have
been provided using a randomized controlled trial and/or
longitudinal cohort study that demonstrated the benefit of your
flavored ends products over an appropriate comparator
tobacco-flavored ends. Alternatively, FDA would consider
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other evidence but only if it reliably and robustly evaluated the
impact of the new flavored vs. Tobacco-flavored products on
adult smokers’ switching or cigarette reduction over time. We
did not find such evidence in your PMTA[s]. Without this
information, FDA concludes that your application is
insufficient to demonstrate that these products would provide
an added benefit that is adequate to outweigh the risks to youth
and, therefore, cannot find that permitting the marketing of
your new tobacco products would be appropriate for the
protection of the public health.
The FDA provided an additional explanation for Vapetasia:
Although your PMTAs contained a cross-sectional survey
“Vapetasia PMTA Survey and Testimonial”, this evidence is
not sufficient to show a benefit to adult smokers of using these
flavored ENDS because it does not evaluate the specific
products in the application(s) or evaluate product switching or
cigarette reduction resulting from use of these products over
time.
The FDA thus reasonably concluded that, as compared to menthol-
and tobacco-flavored products, Petitioners’ flavored products posed an
increased risk in seducing children to start vaping without any evidence of a
heightened benefit in helping existing smokers quit. Accordingly, as the FDA
said in its briefing, “FDA denied petitioners’ applications not because they
failed to include a randomized controlled trial or longitudinal cohort study
but because they failed to include any evidence robust enough to carry
petitioners’ burden under the statute.” This outcome is not only reasonable
but required under the TCA. See 21 U.S.C. § 387j(c).
3. The FDA’s Position Has Not Changed
So, where is the switch? The FDA’s denials of Petitioners’ PMTAs
are a product of the same standards that the FDA shared with applicants
before the September 2020 deadline and has continued to publicize since
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then. None of the FDA’s communications or actions since September 2020
indicate otherwise.
The majority opinion suggests that the FDA announced a new
“scientific-studies-or-bust standard” in an August 2021 press release that
said:
Based on existing scientific evidence and the agency’s
experience conducting premarket reviews, the evidence of
benefits to adult smokers for such products would likely be in
the form of a randomized controlled trial or longitudinal cohort
study, although the agency does not foreclose the possibility
that other types of evidence could be adequate if sufficiently
robust and reliable.
See FDA, Press Release, FDA Denies Marketing Applications for About
55,000 Flavored E-Cigarette Products for Failing to Provide Evidence They
Appropriately Protect Public Health (Aug. 26, 2021),
https://perma.cc/LCD8-VWGQ (“Aug. 2021 Press Release”). Setting
aside that the FDA has always centered its guidance on the statutory
requirement for “valid scientific evidence,” this statement is simply not a
deviation from the guidance quoted above. According to its experience and
expertise, the FDA believed randomized control trials or longitudinal cohort
studies were most likely to provide persuasive enough evidence of benefits to
adult smokers that would outweigh the high risk to youth of flavored e-
cigarettes, but it was willing to consider other data if sufficiently robust and
reliable. This approach aligns with the TCA and all of the FDA’s pre-MDO
communications.
The majority opinion faults the FDA for failing to give fair notice that
“FDA will deny your application if you do not conduct long-term studies on
your specific flavored product.” But the FDA has never imposed a
requirement for long-term studies, much less a requirement for those studies
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conducted on Petitioners’ specific products. As demonstrated above, the
FDA did not reject Petitioners’ applications because they lacked a certain
type of study on any certain type of product, but rather because they lacked
“any evidence robust enough to carry petitioners’ burden under the statute.”
The majority opinion also says that “[i]n its explanation for denying
petitioners’ applications, FDA imposed two requirements—randomized
controlled trials and longitudinal cohort studies.” But even a cursory read of
the MDO belies that portrayal:
In light of the known risks to youth of marketing flavored ends,
robust and reliable evidence is needed regarding the magnitude
of the potential benefit to adult smokers. This evidence could
have been provided using a randomized controlled trial and/or
longitudinal cohort study that demonstrated the benefit of your
flavored ends products over an appropriate comparator
tobacco-flavored ends. Alternatively, FDA would consider
other evidence but only if it reliably and robustly evaluated the
impact of the new flavored vs. Tobacco-flavored products on
adult smokers’ switching or cigarette reduction over time.
Contrary to the majority opinion’s assertion, this last line cannot possibly be
code for a randomized control trial or longitudinal cohort study because it is
explicitly presented as an “alternat[e]” option. Nor is this a requirement for
long-term scientific studies; rather, it is an emphasis on evidence regarding
long-term impact. As our sister circuits have stated:
[T]he “FDA never guaranteed that manufacturers could carry
their evidentiary burden under the [Act] without providing
long-term data.” . . . And by focusing on isolated statements in
the 2019 Guidance that the FDA did not expect applicants
would need to conduct long-term studies, Petitioners “failed
to look at the 2019 guidance in any depth,” as “[t]he agency
made quite clear that it was interested in receiving information
about long-term impact, even if that information did not
necessarily come from a long-term study.”
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Lotus Vaping Tech., 73 F.4th at 672 (quoting Avail Vapor, 55 F.4th at 422–23
(brackets in original)).
Indeed, the FDA’s interest in long-term impact is rooted in the
statutory APPH standard, which requires FDA to consider “the increased or
decreased likelihood that existing users of tobacco products will stop using
such products.” 21 U.S.C. § 387j(c)(4)(A). As we explained in the panel
opinion, “[n]othing can ‘increase’ or ‘decrease’ in a vacuum.” Wages II, 41
F.4th at 434. Accordingly, although the FDA imposed no long-term studies
requirement, it did emphasize the importance of valid scientific evidence
demonstrating long-term impact, which should not have come as a shock to
anyone given the comparative efficacy requirements in the TCA.8
Nor does the FDA’s denial of all PMTAs it has thus far received for
flavored e-liquids indicate that the FDA changed its position. The majority
_____________________
8
The majority opinion states that “there is no question that petitioners compared
the health risks of their products to other products as the June 2019 Guidance
recommended,” pointing to this quote from the FDA’s en banc brief:
Petitioners asserted in their application that “flavors are crucial to getting adult
smokers to make the switch and stay away from combustible cigarettes,” . . . that adult
smokers prefer flavored e-cigarettes to tobacco-flavored e-cigarettes, . . . and that this
preference “has powerful implications for not only the role of flavors in helping smokers’
transition from smoking to vaping, but also in connection with helping vapers maintain
smoking abstinence and preventing relapse to smoking.”
Petitioners’ “assert[ions]” are a far cry from valid scientific evidence.
Furthermore, even cherry-picking findings from individual studies with no mention of the
methodological concerns cannot refute Petitioners’ own conclusion that “there is not
enough evidence from well-designed studies to determine whether e-cigarette flavors aid
in smoking cessation.” In other words, the fact that Petitioners presented other scientific
evidence in their PMTAs does not mean that such evidence was valid or persuasive.
Similarly, just because Petitioners included some “bridging” information in an attempt to
connect existing studies about unflavored products to their own flavored products does not
mean that evidence was sufficient—indeed, the FDA apparently concluded it was not.
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opinion frames this as a “categorical ban” on flavored e-liquids, which it sees
as dispositive evidence that the FDA changed its position without fair notice
to Petitioners. But this was a case-by-case review (so we should not review
ones not before us) and, as stated before, the FDA is not obligated to grant
but rather obligated to deny UNLESS the e-cigarette in question would
benefit the adult health well over the harm to the youth health. Thus, there
is another more likely explanation: none of these applications had sufficient
evidence that their products were APPH because flavored e-liquids are not
APPH. That is, the high risk that these products in particular pose to
youth—including increased likelihood of starting to use nicotine and tobacco
products, becoming addicted, and experiencing other health problems
including permanent damage to developing brains—is not outweighed by the
benefit they may provide in helping adult smokers quit.9
Of course, it is not the court’s role to make this determination.
Congress has provided that authority to the FDA.10 Drawing on its scientific
expertise (far greater than ours), the FDA has evaluated each PMTA for
flavored e-liquids individually and concluded it did not provide sufficient
evidence to demonstrate its product was APPH. The agency presumably will
continue this case-by-case evaluation, remaining open to the possibility that
a PMTA for a flavored e-liquid product could provide sufficiently robust and
_____________________
9
No applicant has submitted reliable evidence to the contrary. As mentioned
above, the Petitioners have now had plenty of time to get more information but have not,
at least based upon the information in our court, bothered to do so.
10
Contrary to the majority opinion’s assertion, it is also neither our nor the FDA’s
responsibility to “say what ‘other evidence’ petitioners might have supplied to win
approval.” As detailed herein, both the statute and the FDA’s guidance provide
recommendations for what types of valid scientific evidence might be sufficient. But the
statute places the burden on applicants to present such evidence showing their product is
APPH, and it requires the FDA to deny any PMTA that fails to do so. See 21 U.S.C.
§ 387j(c)(2)(A).
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reliable evidence to tip the APPH balance in favor of approval, unless and
until it announces a change in its position.11 But the FDA is not required to
approve an unsatisfactory application to market a flavored e-liquid just to
prove that it has not imposed a categorical ban on these products—in fact, it
is prohibited by the statute from doing so. See 21 U.S.C. § 387j(c).
The majority opinion’s portrayal of Petitioners’ PMTA denials as a
categorical ban on the use of data involving unflavored products in flavored-
product PMTAs similarly ignores the facts of this case and the APPH
balancing standard mandated by the TCA. The FDA consistently advised
applicants that data regarding other products should only be included in a
PMTA to the extent it is appropriate to show the product at issue is APPH.
See, e.g., October 2018 Guidance at 11 (advising that, if a PMTA
“[c]ompare[s] the new tobacco product to a representative sample of tobacco
products on the market,” it should “[i]nclude justification for why using
evidence or data from other products is appropriate”); June 2019 Guidance
at 48 (advising applicants who rely on literature reviews to “[p]rovide
adequate justification for bridging data from the new product studied to your
new product”). Further, as the FDA was acutely aware, the risks associated
with flavored products are higher than those associated with non-flavored
products, which means evidence of benefits for flavored products must be
stronger than for non-flavored products to satisfy the APPH standard. See 21
U.S.C. § 387j(c)(2) and (4). That necessarily suggests evidence about the
benefits of non-flavored products, by itself, would not be sufficient for the
FDA to approve a PMTA for a flavored product. Nevertheless, as promised,
the FDA continues to conduct a case-by-case assessment of each PMTA,
_____________________
11
The majority opinion’s statement that a “categorical ban” would have “other
statutory problems,” including requiring adherence to notice-and-comment obligations,
underscores the point that the FDA has never imposed such a ban.
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including whether an applicant has presented sufficiently robust “bridging”
evidence justifying its use of other products’ data. Based on the FDA’s
scientific expertise, Petitioners simply failed to do so here.12
In this case, Petitioners failed to show that their products were APPH.
As our sister circuits have held, “[t]he Agency’s finding that the evidence
was insufficiently rigorous does not reflect a changed standard, but the
manufacturers’ failure to meet the standard the agency consistently
applied.” Prohibition Juice, 45 F.4th at 21; see also Lotus Vaping Techs., 73
F.4th at 673 (“[W]e join the Second, Third, Fourth, Seventh, and D.C.
Circuits in determining that the agency consistently advised that, in the
absence of long-term data, it might rely upon sufficiently robust and reliable
other evidence. The agency did not act arbitrarily or capriciously by
concluding that Petitioners’ evidence fell short of that standard.”). Because
“FDA did not ‘reverse course’ and newly require randomized controlled
trials and/or longitudinal cohort studies,” we should safely conclude that it
“did not upset [Petitioners’] reliance interests . . . or act arbitrarily and
capriciously” and deny the petitions. Liquid Labs LLC, 52 F.4th at 541.
B. Marketing Plans
The majority opinion also concludes that the FDA acted arbitrarily
and capriciously because it entirely failed to consider Petitioners’ sales and
marketing plans in its review of their PMTAs, but the record demonstrates
that is not the case.
_____________________
12
Remember, even Petitioners admitted their own literature reviews found “not
enough evidence from well-designed studies to determine whether e-cigarette flavors aid
in smoking cessation”—a glaring admission to which the majority opinion provides no
response.
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In their PMTAs, Petitioners included summaries of their marketing
plans, which provided that their products “w[ould] continue to be strictly
marketed and sold to adults in adult-only retailers and through age-verified
online websites,” and that Petitioners and third parties would not promote
these products “on social media, radio or television.” Petitioners also
averred that they would use “robust age-verification software,” such as “a
pop-up ‘age-gate.’” As part of these age-verification measures, Petitioners
also described their implementation of “AgeCheckner.Net . . . which
provides state-of-the-art age verification services to online stores that sell age
restricted products such as vaporizers and tobacco related products.”
In its MDOs and TPLs to Petitioners, the FDA explained that it had
reviewed Petitioners’ PMTAs, and that its “assessment includes evaluating
the appropriateness of the proposed marketing plan[s].” However, in a
footnote, the FDA also discussed the fact that, “to date, none of the [e-
cigarette] PMTAs that the FDA has evaluated have proposed advertising and
promotion restrictions that would decrease appeal to youth to a degree
significant enough to address and counter-balance the substantial concerns
. . . regarding youth use.” Accordingly, the FDA stated, “for the sake of
efficiency, the evaluation of the marketing plans in applications will not occur
at this stage of review, and we have not evaluated any marketing plans
submitted with these applications.”
As the record makes clear, the FDA was not mistaken in its approach
to Petitioners’ sales and marketing plans. The FDA determined that it would
not fully consider Petitioners’ marketing plans in light of the fact that,
although “[i]t is theoretically possible that significant mitigation efforts could
adequately reduce youth access and appeal,” it had not once evaluated a
marketing plan that actually did so. This conclusion accords with guidance
the FDA published in 2020, which noted that youth use of e-cigarettes
continued to rise despite the FDA’s prior efforts to curb predatory
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marketing. Based on its expertise, the FDA determined that traditional
marketing schemes like those Petitioners submitted—which rely on
customers self-verifying their age at the point of sale—are inadequate to
prevent young people from starting to use e-cigarettes. Indeed, the FDA
explained that, based on “the most recent data that youth use of [e-cigarette]
products continues to increase,” it “believes that age verification alone is not
sufficient to address this issue,” and “focusing on how the product was sold
would not be sufficient to address youth use of these products.” In contrast,
the FDA has pointed to proposed plans that use “biometric locking
mechanism[s]” to prevent youth use as an example of “novel” marketing
plans that could adequately address youth access.
The majority opinion characterizes the FDA as having effectively
misled applicants, including Petitioners, as to the potential significance that
marketing plans would play in the agency’s review of PMTAs. However, this
description is at odds with the aforementioned guidance, which provides
readers with clear insight into the FDA’s data-backed determination that
traditional marketing schemes are inadequate to stem the tide of youth
misuse of e-cigarettes. See Prohibition Juice Co., 45 F.4th at 25 (highlighting
where petitioners’ “plans—to require customers’ self-verification of age at
the point of sale and to use what they characterize as less vibrant marketing
unappealing to youth—track measures the FDA in its 2020 guidance deemed
inadequate”); Lotus Vaping Techs., 73 F.4th at 674 (reviewing FDA’s 2020
Guidance in the context of petitioners’ marketing plan challenge and noting
FDA’s conclusion that, based on the inadequacies of manufacturers’
proposed measures to restrict youth access to e-cigarettes, efforts related to
how e-cigarette products are sold are insufficient to deter youth use).
It is certainly true that the FDA previously acknowledged that
marketing plans are a relevant factor to its overall review of PMTAs. See
Premarket Tobacco Product Applications and Recordkeeping Requirements
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(Proposed Rule), 84 Fed. Reg. 50566, 50581 (Sept. 25, 2019) (“The
applicant’s marketing plans will help FDA determine whether permitting the
marketing of the new tobacco product would be [appropriate for the
protection of public health]”); Premarket Tobacco Product Applications and
Recordkeeping Requirements (Final Rule), 86 Fed. Reg. 55300, 55324 (Oct.
5, 2021) (“FDA has rationally concluded that the required descriptions of
marketing plans will directly inform . . . its consideration of the potential
impact on youth initiation and use.”). However, these acknowledgments do
not obviate the clear “Guidance for Industry” the FDA provided in 2020
that traditional marketing plans would be inadequate for purposes of
PMTAs. Put differently, what the FDA made clear through its various
announcements was that marketing plans were necessary for PMTAs, but
traditional marketing plans were not sufficient to justify approval of such
applications. This is a particularly salient distinction in the context of
flavored e-cigarettes, where an incremental decrease in the alarmingly high
risk to youth cannot compensate for the utter lack of evidence of the
product’s benefits.
If the FDA had not actually reviewed any documentation regarding
the content of the marketing plans, the FDA arguably could not have known
that Petitioners’ plans aligned with the traditional, ineffective plans and were
not unique. But that is not the case here. Rather, the FDA clarified at oral
argument that it did review summaries of Petitioners’ marketing plans
contained within their PMTAs, and thus reasonably concluded that
Petitioners’ plans contained no novel proposals that would have changed
FDA’s analysis. See Wages II, 41 F.4th at 441.
Of course, we do not accept post hoc justifications for agency actions,
and the FDA “must defend its actions based on the reasons it gave when it
acted.” Dep’t of Homeland Sec. v. Regents of the Univ. of Cal., 140 S. Ct. 1891,
1909 (2020) (emphasis added). But the FDA’s explanation at oral argument
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is not the same as a situation in which an agency submits an entirely new, post
hoc argument for why a previous action was justified. On the contrary, in its
MDOs and TPLs, the FDA explained that its “evaluation of the marketing
plans in applications will not occur at this stage of review” only after
separately stating that its “assessment [of PMTAs] includes evaluating the
appropriateness of the proposed marketing plan.” The FDA had clearly
stated that it reviewed the PMTA; that document clearly includes a summary
of the marketing. Within the context of these two, at-first-seemingly
contradictory stances, the FDA’s oral argument statements are not a newly
fabricated post hoc justification but instead a clarification of the FDA’s
approach to reviewing marketing materials (i.e. reviewing the marketing plan
summaries rather than the full marketing plans themselves).
This clarification is not inconsistent with the FDA’s explanations in
the MDOs and TPLs, and the panel opinion properly considered it. Indeed,
this is exactly the type of factual clarification we seek at oral argument. See,
e.g., Cooper Cameron Corp. v. U.S. Dep’t of Lab., OSHA, 280 F.3d 539, 542
(5th Cir. 2002) (“Given the gaps in the record, we attempted to clarify at oral
argument what kinds of documents OSHA had withheld . . . Counsel for the
DOL, to his credit, conceded that the withheld material included some
newspaper articles.”); Schofield v. Saul, 950 F.3d 315, 322 (5th Cir. 2020)
(noting that counsel at oral argument asserted the agency had not relied on
the decision of the appeals council, so the panel declined to consider it);
Pennzoil Co. v. FERC, 789 F.2d 1128, 1139 & n.28 (5th Cir. 1986) (relying on
FERC counsel’s responses to questions at oral argument when concluding
that the FERC Commissioner decided the case at issue on procedural
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grounds).13 Other circuit courts facing cases similar to this have also taken
into consideration the explanations and other concessions made during oral
arguments. See, e.g., Avail Vapor, LLC, 55 F.4th at 425 (discussing the
FDA’s explanation “in oral argument” that “a PMTA is like a driver’s test,
in that it has two components”); Bidi Vapor LLC, 47 F.4th at 1208
(distinguishing the case before the court with this case while noting that “the
statements made before the Fifth Circuit at oral argument by the [FDA] . . .
were not made before this Court”).
Common sense makes clear that we must be able to consider these
types of clarifications—otherwise, we should have far fewer oral arguments.
Put simply, we are free, and indeed often choose, to ask questions of agencies
during oral argument and account for their answers that are consistent with
or explain the evidence. This process allows us to ground our conclusions in
the most-accurate facts of a given case. Doing so here makes clear that the
FDA’s approach to Petitioners’ marketing plans was not arbitrary and
capricious.
* * *
The facts of this case and the applicable law, as confirmed by our sister
circuits, make the conclusion in this case clear: the FDA properly fulfilled its
statutory mandate by considering the relevant portions of Petitioners’
PMTAs and coming to a reasonable conclusion that marketing Petitioners’
_____________________
13
The majority is correct that none of these cases stands for the proposition that
an agency can use oral argument to provide post hoc rationalizations that contradict its past
positions; that is because, as we clearly state herein, an agency is not permitted to do so.
See Regents of the Univ. of Cal., 140 S. Ct. at 1909. But the FDA did not do that in this case.
Here, the FDA made two seemingly contradictory express statements in the record: first,
it said that it reviewed the PMTA, which included a summary of the marketing plan; then,
it said that it did not evaluate any marketing plan submitted with the application during its
review. The oral argument comments simply clarified this point.
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products is not appropriate for public health. Because the majority comes to
a different conclusion, I respectfully dissent.
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James E. Graves, Jr., Circuit Judge, joining the dissent in part:
I agree with the dissent that the FDA did not act arbitrarily or
capriciously when it denied Petitioners’ Premarket Tobacco Product
Applications. I also agree with most, but not all, of the dissent’s analysis. I
write separately as to the FDA’s treatment of Petitioners’ sales and
marketing plans.
In determining “whether the marketing of a tobacco product . . . is
appropriate for the protection of the public health,” the FDA must consider
(A) the “increased or decreased likelihood that existing users of tobacco
products will stop using such products” and (B) “the increased or decreased
likelihood that those who do not use tobacco products will start using such
products.” 21 U.S.C. § 387j(c)(4)(A)–(B). It is the applicant’s burden to
demonstrate to the FDA that its product meets that standard. §
387j(c)(2)(A); see supra at 58. As to part (B) in this case, Petitioners were
required to submit a marketing plan to explain to the FDA how they would
avoid attracting new or youth tobacco users. See, e.g., 84 Fed. Reg. 50581.
I fully agree with the dissent that the FDA correctly concluded that
Petitioners failed to present any satisfactory evidence as to part (A). The
issue, then, is whether the FDA acted arbitrarily and capriciously by failing
to consider the marketing plans that Petitioners submitted to satisfy part (B).
The majority concludes that the FDA did not consider the plans, and that its
decision not to do so was arbitrary and capricious. The dissent concludes that
the FDA did consider the plans, and that the FDA’s experience with, and
data about, similar marketing plans was a sufficient basis on which to deny
them.
The majority correctly concludes that the FDA did not consider the
marketing plans to any significant degree. The FDA told Petitioners as much
when it denied their applications, writing that “for the sake of efficiency, the
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evaluation of the marketing plans in applications will not occur at this stage
of review, and we have not evaluated any marketing plans submitted with
these applications.”
The dissent concludes that the FDA clarified at oral argument that it
reviewed summaries of Petitioners’ marketing plans, and from the
summaries could tell that the plans were inadequate. I agree that this court
may, and often does, seek clarification at oral argument. But the FDA’s
statement does not clarify. Among other things, the statement raises the
question of why, if the FDA did review the summaries, it told Petitioners that
it had “not evaluated any marketing plans.” As it stands, the FDA’s
statement at oral argument is at odds with the record. For that reason alone,
the court should disregard it.
Nor can I agree that the FDA would have been justified to “not fully
consider” the marketing plans because its data and experience showed that
traditional marketing schemes, generally, are not adequate to curb youth
access to e-cigarettes. Just because no applicant has introduced a satisfactory
marketing scheme does not mean that one cannot exist. Moreover, as the
dissent notes, 21 U.S.C. § 387j(c)(2) sets forth a framework for case-by-case
analysis of applications. While general scientific understanding of the
dangers of flavored tobacco products will no doubt inform the FDA’s
consideration of each application, the agency also must not reject a marketing
plan on the basis that it judged some other plans to be deficient.
In my view, however, the FDA correctly declined to evaluate the
marketing plans. It appears that only the Eleventh and Fourth Circuits have
reached the merits of this issue. The Eleventh Circuit concluded that the
FDA’s decision not to review the plans was arbitrary and capricious because
the FDA represented that the plans were “critical” and “necessary.” Bidi
Vapor LLC v. FDA., 47 F.4th 1191, 1203-04 (11th Cir. 2022).
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The Fourth Circuit reached the opposite conclusion. It analogized:
[A Premarket Tobacco Product Application] is like a driver’s
test, in that it has two components: First, valid scientific
evidence showing that a product is appropriate for the
protection of the public health, like the “written test,” and
second, a determination that the totality of the evidence
supports a marketing authorization, like the “road test.” A
marketing plan, which includes youth access restrictions,
comes in at the road test phase to support the final
determination that an application is appropriate for the
protection of the public health.
Like a driver’s test, both components are necessary, and
neither is sufficient. An applicant who fails the written test
does not proceed to the road test. So too here: FDA determined
that Avail could not show its products were appropriate for the
protection of the public health, and no marketing plan could
rectify that baseline infirmity.
Avail Vapor, LLC v. FDA, 55 F.4th 409, 425 (4th Cir. 2022).
That analogy is apt because part (A) and part (B) are “pass-fail”
tests—an applicant either satisfies them or it does not—that are bound by
the conjunctive “and,” such that each represents a “critical” and
“necessary” showing that is nevertheless insufficient on its own to carry an
applicant’s burden.
The majority poses a hypothetical involving an application for an e-
cigarette product “that gets only one existing smoker to quit, but has a
marketing plan so restrictive that no non-smokers could access it and use it
to start vaping.” Supra at p. 50. The majority reasons that such a product
would seemingly score poorly on part (A) of the test, but that because of its
obvious public health benefit, the FDA “could not reject a PMTA for it.” Id.
But that hypothetical fails to capture the essence of § 387j(c)(2), which
concerns long-term “risks” and “likelihoods” and is necessarily predictive.
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When an applicant submits its application, no one knows for certain whether
its product will cause one smoker or 100,000 smokers to quit smoking; the
best an applicant can do is present scientific evidence to aid the FDA in
making a prediction. If an applicant furnishes enough evidence to support
“the increased . . . likelihood that existing users of tobacco products will stop
using such products,” part (A) is satisfied. If not, the applicant fails part (A),
and consequently, the larger test.
Here, Petitioners failed to submit reliable evidence that their products
provide any benefit to adult smokers. Once the FDA made that
determination, Petitioners’ marketing plans, and any other aspect of part (B),
became irrelevant, because even the most promising plans would not have
helped them show that their products are appropriate for the protection of
the public health. For that reason alone, the FDA’s decision not to review
the plans was justified. There was no error.
In sum, the FDA did not act arbitrarily or capriciously when it denied
Petitioners’ applications.
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