Wages and White Lion Invest v. FDA

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.

Case: 21-60766 Document: 00517019541 Page: 2 Date Filed: 01/03/2024

______________________________

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

_____________________

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,

_____________________

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

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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

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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 guar

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