Fifth Circuit Rebukes FDA for Regulatory “Switcheroo” in Denying Vaping Product Applications

In 2016 the Food & Drug Administration “deemed” electronic cigarettes, vaping pens, and other electronic Nicotine delivery systems (“ENDS”) to be “tobacco products” under the Family Smoking Prevention and Tobacco Control Act. All ENDS producers were then required to file premarket tobacco applications in order to sell their products. According to the Tobacco Act the FDA may only approve a PMTA when it finds that approval is appropriate for public health and takes into account the risks and benefits of the product to all. Unapproved PMTAs cannot be sold for deemed tobacco products.

It is expected that PMTAs be submitted BeforeThe FDA does not allow the sale of a brand new product. However, this is impossible because the rule applies to existing products. The FDA stated that ENDS producers would need to submit their detailed and lengthy applications within two years. Otherwise, they could face FDA enforcement. Because each product is defined very clearly (i.e.,.) a distinct PMTA must be prepared and submitted. The FDA quickly realized the amount of information required to prepare PMTAs. Every package size, flavor, nicotine level and delivery system is different. The FDA attempted to extend the deadline for enforcement until 2022. But, anti-smoking organizations sued and settled on 2020.

Over 4.8 Million ENDS products were submitted to the FDA by 230 businesses. This is more than what the FDA expected and the agency has worked to process most of the applications. A PMTA rejection is a death sentence. Some disappointed ENDS producers filed suit to challenge the denials, and seek judicial orders that block FDA enforcement.

Yesterday’s ruling by the U.S. Court of Appeals, Fifth Circuit was on a petition filed by a company seeking a stay pending resolution of its appeal challenging FDA denial of PMTAs. In its opinion, the court Wages and White Lion Investments LLC against the USFDA (WWLI). This is an indictment on the agency’s decisions-making and evaluations of ENDSPMTAs.

 WWLI a unanimous panel granted Triton Distribution’s application for a stay, concluding that  it had demonstrated not only a strong likelihood of success on the merits, but also that it would suffer irreparable injury without a stay, and the government would not.

One of the problems with how the FDA dealt with Triton’s PMTAs (and others ENDS manufacturer) was that it based its refusal on a standard that it did not tell companies to follow. This type of action is antithetical and against the principles of due process.

The FDA has been telling ENDS manufacturer that they don’t need to do long-term health assessments on the products. This was for many years. This makes complete sense as ENDS makers only have a very short period of time for their materials to be prepared. On August 26, the FDA denied PMTAs to 55,000 flavor e-cigarette products. It claimed such studies were necessary in order for FDA approval. The FDA rejected Triton’s application a few weeks later. It explained that there was no “robust or reliable evidence” from long term studies.
FDA previously stated that such studies were not necessary. The FDA declined to accept Triton’s assurance that it would conduct these studies.

Judge Oldham’s opinion reveals that the FDA denied Triton’s request and is a textbook example of how agencies work. NotYou were supposed to. The decision was made without proper explanation and consideration for serious reliance interests, but it also refused to take into account multiple factors or information provided by Triton.

These are just a few of the examples Oldham has provided:

Triton’s proposal for a marketing plan was rejected by FDA. According to the FDA, a marketing strategy is critical for success.[]FDA requires a statutorily-required determination. Premarket Tobacco Products Applications and Recordkeeping requirements, 86 Fed. Reg. 55,300, 55.324 (Oct. 5 2021 (“Final Rule”)); also see 84 Fed. Reg. Reg. . . You will receive input which is ImportantFDA determination of likelihood of changing tobacco product usage behavior. This information is especially important when viewed in combination with other information in the application. (emphasis on added)
A.45.n.xix “Limiting youth accessibility and exposure to marketing are a ImportantProduct regulation is an important aspect. (italics added). A.45. Premarket Assessment includes evaluation of the marketing plan .”).. However, FDA ignored Triton’s plan. It said:[F]For efficiency and speed, we will not be evaluating the marketing plan included in the applications at this stage. We haven’t evaluated the marketing plans that were submitted along with the applications.

Unpersuasive excuses by the FDA for not evaluating Triton’s marketing plans aren’t convincing. First, FDA states that Triton’s plan was not evaluated by it for efficiency. Ibid. However, “efficiency” cannot be substituted for “reasonable decisionmaking.” MichiganAt 750, 576 U.S. Judulang v. Holder, 55 U.S. 42 (2009), 64 (2011). This emphasizes that “cheapness alone can’t save an arbitrarily designed agency policy”. . . .

Judge Oldham writes in a footnote, that FDA did not consider Triton’s marketing plans and control of youth access. He makes this observation because Scott Gottleib (then-FDA Commissioner) had identified Triton’s approach as one of the “best practices”.

Trtiton also has reliance rights, which FDA ignored in its regulatory “switcheroo”.

Between the Deeming Rule’s effective date, and the PMTAs deadline, FDA held open meetings and provided guidance to e-cigarette producers on how they could receive premarket authorization. FDA said in its final guidance that it didn’t expect tobacco producers to need long-term studies for support of their PMTA. See, e.g., A.73–74; A.92; see also Nicopure Labs, LLC v. FDA944 F.3d 267 (D.C. Cir. 2019″ (“The FDA expressed its willingness to accept scientific literature reviews in lieu of commission studies for support of ecigarette applications .”).. In its Final Rule, a few weeks later than the Order, the FDA did not differ from the expectation. See Final Rule, Fed. Reg. Reg. at 55,387″; Proposed Rule (84 Fed. Reg. Reg. Many companies selling e-cigarettes relied upon the FDA’s insistence to applicants that they would not have to do long-term research to support their application. The FDA did not conduct or submit any such evidence.  .74

The FDA pulled the plug.[ed]A surprise switcheroo in the regulation of entities Env’t Integrity Project v. EPA425 F.3d 992, 996 (D.C. Cir. 2005). (Sentelle J.2005). accord Azar v. Allina Health Servs.,139 S. Ct. 1804, 1800 (2019), (citing the “surprise switchederoo”) doctrine. The FDA published its first marketing denial order for various flavors of flavored ecigarettes almost one year after the PMTA deadline and said that it needed the exact studies it initially thought it did not need. . . . Despite their radical differences, FDA did not mention, much less reasonably consider, whether Triton or other e-cigarette makers could reasonably have relied upon the FDA’s previous meetings and guidance.

It is more than that. If an agency is unable to follow its original course of action, it can be. . . It is important to be aware that some policies have been in place for a long time and may result in serious dependence interests. This must be considered. Regents140 S. Ct. 1913 (quotation removed). It does not necessarily mean that FDA cannot have made “decisions”.[d]In the context it was placed in, other policy and interest concerns overtook any reliance interests. The agency had to make this difficult decision, and it failed. Italicsat 1914. At 1914. This
It is clear that the Order was likely to be arbitrary, capricious or illegal.

Triton’s interests in reliance, the possibility of alternative denials on that basis and any other evidence presented by Triton were not considered by FDA. Judge Oldham observed that Triton made more claims to the FDA before the Fifth Circuit than the FDA did when rejecting Triton’s PMTA. A majority of the other factors that were relevant favored Triton’s request to stay, according to the court.

Also, it rejected the argument of the government that Triton wanted relief (a stay in FDA enforcement action) that was refused by the court. A court can issue a stay to prevent the deportation or unlawful presence of an alien while it reviews the claim of asylum or lawful presence. However, an order may be issued by a court for an administrative agency defendant in order to maintain the status quo until the court’s decision. It is difficult to imagine how a government lawyer would argue the alternative, especially considering the new arguments for broad judicial authority that allows the federal government to place stays. 8 litigation, something that I don’t doubt was lost by this panel.

Fifth Circuit WWLI Decision indicates that FDA will have to defend many of its PMTA refusals. It appears FDA is aware of this. Others have sought legal relief, and the FDA began to retreat even before the Fifth Circuit decision was issued. The FDA, in response to a pending Stay request from the U.S. Court of Appeals (Sixth Circuit), agreed on October 11 that it would rescind the denial of Turning Point Brands PMTAs.

The FDA’s treatment for ENDS producers is especially troubling. It is aware that ENDS products present a lower risk than traditional cigarettes and acknowledges that ENDS may help smokers quit. There is also substantial evidence to suggest that ENDS product restrictions will encourage smoking among young people, as well as other health issues. Therefore, the FDA’s refusal to approve PMTAs is not just arbitrary and capricious but it also goes against the FDA’s fundamental public health mission.