Amicus Curiae Brief — Lotus Vaping Technologies, LLC, Petitioner v. Food and Drug Administration

No. 23-871

IN THE

Supreme Court of the United States

____________

LOTUS VAPING TECHNOLOGIES , LLC,

Petitioner,

v.

UNITED STATES FOOD AND DRUG ADMINISTRATION,

Respondent.

____________

On Petition for Writ of Certiorari to the United

States Court of Appeals for the Ninth Circuit

____________

BRIEF OF WASHINGTON LEGAL FOUNDATION AS

AMICUS CURIAE SUPPORTING PETITIONER

____________

John M. Masslon II

Counsel of Record

Cory L. Andrews

WASHINGTON LEGAL FOUNDATION

2009 Massachusetts Ave. NW

Washington, DC 20036

(202) 588-0302

jmasslon@wlf.org

March 11, 2024

QUESTION PRESENTED

Whether FDA’s denial of premarket tobacco

product applications because the applicant followed

FDA’s own directives and evidentiary standards was

arbitrary and capricious.

iii

TABLE OF CONTENTS

Page

QUESTION PRESENTED ......................................... i

TABLE OF AUTHORITIES ..................................... iv

INTEREST OF AMICUS CURIAE ............................1

INTRODUCTION .......................................................1

STATEMENT ..............................................................3

SUMMARY OF ARGUMENT.....................................6

ARGUMENT ...............................................................8

I.

FDA’S DENIAL ORDERS DEPRIVED LOTUS OF

DUE PROCESS OF LAW BY NOT GIVING FAIR

NOTICE OF THE APPLICATION REQUIREMENTS ....................................................................8

II. FDA’S DENIAL ORDERS WERE ARBITRARY

AND CAPRICIOUS .................................................11

III. REGULATED PARTIES WILL BE UNABLE TO

RELY ON ANY AGENCY GUIDANCE UNLESS

THIS COURT INTERVENES .....................................17

CONCLUSION ..........................................................20

iv

TABLE OF AUTHORITIES

Page(s)

Cases

Ackerman v. U.S. Dep’t of Agric.,

995 F.3d 528 (6th Cir. 2021)................................16

Bidi Vapor LLC v. FDA,

47 F.4th 1191 (11th Cir. 2022) ............................15

Christopher v. SmithKline

Beecham Corp.,

567 U.S. 142 (2012) ............................................8, 9

In re Cigar Ass’n of Am.,

812 F. App’x 128 (4th Cir. 2020) ...........................1

City of Chicago v. Morales,

527 U.S. 41 (1999) ..................................................8

Clark County v. FAA,

522 F.3d 437 (D.C. Cir. 2008) ..............................15

Connally v. Gen. Const. Co.,

269 U.S. 385 (1926) ............................................2, 8

Del. Dep’t of Nat. Res. &

Env’t Control v. EPA,

785 F.3d 1 (D.C. Cir. 2015) ..................................16

Encino Motorcars, LLC v. Navarro,

579 U.S. 211 (2016) ..............................................11

FCC v. Fox Television Stations, Inc.,

556 U.S. 502 (2009) ..........................................8, 11

Int’l Harvester Co. of Am. v. Kentucky,

234 U.S. 216 (1914) ............................................2, 8

Johnson v. United States,

576 U.S. 591 (2015) ................................................2

v

TABLE OF AUTHORITIES

(continued)

Page(s)

Kisor v. Wilkie,

139 S. Ct. 2400 (2019)............................................2

Lanzetta v. New Jersey,

306 U.S. 451 (1939) ............................................2, 8

Little Sisters of the Poor Saints Peter

& Paul Home v. Pennsylvania,

140 S. Ct. 2367 (2020)....................................11, 12

Long Island Care at Home, Ltd. v. Coke,

551 U.S. 158 (2007) ................................................2

Menkes v. Dep’t of Homeland Sec.,

486 F.3d 1307 (D.C. Cir. 2007) ..............................8

Morton v. Ruiz,

415 U.S. 199 (1974) ................................................9

Motor Vehicle Mfrs. Assn. of U.S., Inc.

v. State Farm Mut. Auto. Ins.,

463 U.S. 29 (1983) ................................................12

PHH Corp. v. CFPB,

839 F.3d 1 (D.C. Cir. 2016) ....................................9

R.J. Reynolds Vapor Co. v. FDA,

65 F.4th 182 (5th Cir. 2023) ................................11

Roe v. Dep’t of Def.,

947 F.3d 207 (4th Cir. 2020)................................15

United States v. Chrysler Corp.,

158 F.3d 1350 (D.C. Cir. 1998) ............................19

Vapor Tech. Ass’n v. FDA,

977 F.3d 496 (6th Cir. 2020)..............................4, 5

vi

TABLE OF AUTHORITIES

(continued)

Page(s)

Wages & White Lion

Invs., L.L.C. v. FDA,

90 F.4th 357 (5th Cir. 2024) ...... 8, 9, 10, 11, 13, 16

Statutes

21 U.S.C.

§ 387 note § 4 .........................................................4

§ 387j(a) ..................................................................4

§ 387j(b) ..................................................................4

§ 387j(c)(2)(A) .........................................................4

Regulatory Materials

21 C.F.R. § 1100.2 .......................................................4

Deeming Tobacco Products To Be

Subject to the Federal Food, Drug,

and Cosmetic Act, as Amended by

the Family Smoking Prevention and

Tobacco Control Act; Restrictions on

the Sale and Distribution of Tobacco

Products and Required Warning

Statements for Tobacco Products,

81 Fed. Reg. 28,974 (May 10, 2016) .......... 4, 16, 17

FDA, FDA Issues Decisions on

Additional E-Cigarette Products

(Mar. 24, 2022) .....................................................16

FDA, Premarket Tobacco Product

Applications for Electronic Nicotine

Delivery Systems: Guidance for

Industry (June 2019) .............................................5

vii

TABLE OF AUTHORITIES

(continued)

Page(s)

FDA, Premarket Tobacco Product

Applications for Electronic Nicotine

Delivery Systems (Mar. 2023) ..............................10

FDA, Premarket Tobacco Product

Applications for Electronic Nicotine

Delivery Systems (May 2016)...............................10

FDA, Statement from Comm’r Scott

Gottlieb, M.D., on proposed new

Steps to protect youth by preventing

access to flavored tobacco products

and banning menthol in cigarettes

(Nov. 15, 2018) ...............................................14, 15

Premarket Tobacco Product

Applications and Recordkeeping

Requirements,

84 Fed. Reg. 50,566 (Sept. 25, 2019) .................5, 9

Other Authorities

Eunice Park-Lee et al., Notes from

the Field: E-Cigarette Use Among

Middle and High School Students National Youth Tobacco Survey,

United States, 2021,

70 Morbidity & Mortality Weekly

Report 1387 (2021).........................................13, 14

Iilun Murphy, Premarket Tobacco

Product Application Content

Overview (Oct. 23, 2018) ....................................5, 6

viii

TABLE OF AUTHORITIES

(continued)

Page(s)

Nicholas Florko, Former FDA

Commissioner Calls for a Full

Ban on Pod-Based E- Cigarettes,

Stat (Nov. 12, 2019) .............................................12

Teresa W. Wang et al., E-cigarette Use

Among Middle and High School

Students - United States, 2020,

69 Morbidity & Mortality Weekly

Report 1310 (2020)...............................................13

1

INTEREST OF AMICUS CURIAE*

Washington Legal Foundation is a nonprofit,

public-interest law firm and policy center with

supporters nationwide. WLF promotes free

enterprise, individual rights, limited government,

and the rule of law. Consistent with its free-market

mission, WLF believes that the best way to limit

smoking’s adverse health effects is to provide smokers

with various less-harmful alternatives to combustible

tobacco. So it has often filed briefs and regulatory

comments about the Food and Drug Administration’s

regulation of modified-risk tobacco products. See, e.g.,

WLF Comment, In re Modified Risk Tobacco Product

Application for iQOS System (FDA-2017-D-3001); In

re Cigar Ass’n of Am., 812 F. App’x 128 (4th Cir. 2020)

(per curiam).

If this Court allows the Ninth Circuit’s decision

to stand, millions of Americans will lack access to

popular combustible tobacco alternatives. This will

lead to more preventable diseases and deaths. As

agencies cannot bar such lawful products from

interstate commerce without providing due process

and following the Administrative Procedure Act, this

Court should grant the petition.

INTRODUCTION

The Court has long recognized the importance

of fair notice under the Due Process Clause.

Fundamental fairness requires that citizens “be

* No party’s counsel authored any part of this brief. No

person or entity, other than Washington Legal Foundation and

its counsel, paid for the brief’s preparation or submission. WLF

timely notified all parties of its intent to file this brief.

2

informed as to what the State commands or forbids.”

Lanzetta v. New Jersey, 306 U.S. 451, 453 (1939). In

other words, the fair notice requirement is “the first

essential of due process of law.” Connally v. Gen.

Const. Co., 269 U.S. 385, 391 (1926) (citing Int’l

Harvester Co. of Am. v. Kentucky, 234 U.S. 216, 221

(1914)).

The Court has often expounded on the right to

fair notice when considering vague statutes. The

Court has struck down statutes and regulations

because parties cannot tell whether they violate a

statute or regulation by reading its text. See, e.g.,

Johnson v. United States, 576 U.S. 591, 595-605

(2015). Vagueness, however, is not the only basis for

finding that an agency’s action violates due process.

Agencies can also violate due process by not giving

adequate notice to regulated parties.

Agencies sometimes fail to give adequate notice

by not complying with the APA’s notice-and-comment

rulemaking process. But they can also violate

regulated parties’ due-process rights by issuing a

“new interpretation” “that creates ‘unfair surprise’ to

regulated parties.” Kisor v. Wilkie, 139 S. Ct. 2400,

2418 (2019) (quoting Long Island Care at Home, Ltd.

v. Coke, 551 U.S. 158, 170 (2007)).

That is what happened here. For years, FDA

told electronic nicotine delivery system (ENDS)

manufacturers that they need provide only certain

data to obtain approval for their products. But when

faced with a court-imposed deadline to act on

applications, FDA denied almost every one for

following its prior guidance. Rather than take FDA at

its word, companies were told they should have

3

assumed that FDA would change its mind and decide

that companies must present evidence that FDA

assured them was unnecessary.

Moving the goalposts is the antithesis of due

process of law. When applications were due, regulated

parties lacked notice of the information FDA later

decided was needed for approval. Companies spent

eight figures for research studies to include with their

applications. That money went down the drain when

FDA did an about face and rejected those studies as

inadequate.

The APA protects parties’ due-process rights by

requiring courts to set aside agency actions like FDA’s

actions here. Allowing FDA to issue form denials to

almost every company that complied with its prior

guidance would invite other agencies to follow suit.

The APA also cabins agencies’ discretion by requiring

courts to set aside arbitrary or capricious actions.

FDA’s actions here are quintessential examples of

arbitrary decisions. Rather than rely on relevant

science, FDA relied on unrelated findings to deny

Lotus’s applications. Because the Ninth Circuit split

from the Fifth and Eleventh Circuits in affirming that

decision, this Court should grant review and resolve

this important split.

STATEMENT

The Family Smoking Prevention and Tobacco

Control Act of 2009 grants FDA authority to regulate

cigarettes and other tobacco products. Among the

TCA’s goals is to provide FDA with “new and flexible

enforcement authority to ensure that there is effective

oversight of the tobacco industry’s efforts to develop,

4

introduce, and promote less harmful tobacco

products.” 21 U.S.C. § 387 note § 4. To accomplish this

goal, Congress gave FDA authority to address tobacco

products’ harms.

The TCA requires FDA to determine whether a

product introduced to the market after 2007 would be

“appropriate for the protection of the public health.”

21 U.S.C. § 387j(c)(2)(A). If the answer is no, then the

product may not be marketed. To ensure compliance

with this provision, manufacturers must submit a

premarket approval application before marketing a

new tobacco product. See id. § 387j(a), (b).

For seven years, the TCA did not cover ENDS

products. But then FDA exercised its statutory

authority by deeming ENDS tobacco products under

the TCA. See 21 C.F.R. § 1100.2. This meant that at

least 25,000 ENDS products on the market at the

time would become illegal overnight. See Vapor Tech.

Ass’n v. FDA, 977 F.3d 496, 498 (6th Cir. 2020). It also

would require ENDS manufacturers to seek

premarket approval without direction about what

evidence was needed to obtain premarket approval.

So at the same time FDA deemed ENDS

products covered by the TCA, it promised not to start

enforcement actions against ENDS manufacturers

until it developed rules for the premarket

applications—by 2018. Deeming Tobacco Products To

Be Subject to the Federal Food, Drug, and Cosmetic

Act, as Amended by the Family Smoking Prevention

and Tobacco Control Act; Restrictions on the Sale and

Distribution of Tobacco Products and Required

Warning Statements for Tobacco Products, 81 Fed.

Reg. 28,974, 28,977-78 (May 10, 2016). FDA first

5

extended its amnesty to 2022, but then changed the

deadline to 2021 for ENDS products with flavors

other than tobacco, menthol, or mint.

In 2019, FDA reassured ENDS manufacturers

seeking premarket approval that it “underst[ood] that

limited data may exist from scientific studies and

analyses.” FDA, Premarket Tobacco Product

Applications for Electronic Nicotine Delivery Systems:

Guidance for Industry, 12 (June 2019). Thus,

manufacturers would not need “to conduct long-term

studies to support an application.” Id. at 13. Later

that year, FDA repeated that it did not think studies

lasting six months or more were needed for ENDS

manufacturers

seeking

premarket

approval.

Premarket Tobacco Product Applications and

Recordkeeping Requirements, 84 Fed. Reg. 50,566,

50,619 (Sept. 25, 2019).

Activists eventually sued FDA for extending

the application deadlines. Because it expected only

6,800 applications, FDA consented to a ten-month

deadline for receiving applications and a one-year

period for FDA to review the applications. The United

States District Court for the District of Maryland

ordered FDA to comply with those deadlines. See

Vapor Tech., 977 F.3d at 499-500. Because of COVID19, the court later extended the application deadline

by four months. See id.

FDA told ENDS manufacturers that their

applications could include data “from a variety of

sources” and that conducting new nonclinical or

clinical studies was unnecessary. Joint Appendix at

34, Avail Vapor, LLC v. FDA, 55 F.4th 409 (4th Cir.

2022) (21-2077); see Iilun Murphy, Premarket Tobacco

6

Product Application Content Overview, 26 (Oct. 23,

2018), https://perma.cc/2JF4-J3ZR. Many ENDS

manufacturers relied on that guidance. They were

later surprised to receive FDA’s marketing denial

orders faulting them for not conducting a randomized

controlled trial or longitudinal cohort study to

contrast flavored ENDS products with an appropriate

comparator tobacco-flavored ENDS.

Lotus timely filed its applications for its ENDS

products. Following FDA guidance, the applications

included results from a focus group study and a crosssectional perception and intent study. They also

included a marketing plan that had what FDA told

Lotus were adequate measures to prevent youth

vaping. One year later, FDA denied Lotus’s

applications because the applications lacked a

randomized controlled trial or longitudinal cohort

study showing that non-tobacco flavored vaping

products were more successful at helping smokers

quit than tobacco-flavored vaping products.

Lotus petitioned the Ninth Circuit for review of

FDA’s denial orders. The Ninth Circuit denied the

petition for review. Lotus now asks this Court to

review the circuit split on this important issue.

SUMMARY OF ARGUMENT

I. The Fifth Amendment guarantees due

process of law. At the heart of this due-process

guarantee is the right to know what conduct is

prohibited. The Court has long applied this principle

in many contexts and continues to do so today.

7

FDA denied Lotus and other ENDS

manufacturers fair notice of what it required for them

to continue marketing and selling their products. In

fact, FDA pulled a bait-and-switch. It told

manufacturers what information must be included in

applications. Then, after the deadline for submitting

applications passed, FDA did an about face and told

manufacturers that its instructions were wrong. It

then denied Lotus’s applications because of these

alleged shortcomings. This exemplifies a due-process

violation.

II. FDA’s denial orders will be used for decades

in administrative law textbooks as the epitome of

arbitrary and capricious agency action. FDA ignored

all the evidence Lotus presented because it didn’t like

the result of those studies, then faulted Lotus for

failing to provide evidence that FDA said was

unnecessary. This arbitrary and capricious process

doesn’t even consider FDA’s about face caused by

congressional pressure. So even if the denials did not

deprive Lotus of due process, they must be set aside

under the APA.

III. The stakes here may seem low, but a closer

look reveals what is at stake if this Court denies

review. Every year, pharmaceutical companies spend

billions of dollars relying on FDA guidance when

developing drugs, vaccines, and medical devices. If

that guidance is worthless, companies’ research and

development budgets will shrink. And the Ninth

Circuit’s decision here makes FDA guidance not

worth the paper it’s printed on. Only this Court’s

review can reassure companies that, if they follow

FDA’s directions, the agency cannot arbitrarily do an

about face.

8

ARGUMENT

I.

FDA’S DENIAL ORDERS DEPRIVED LOTUS OF

DUE PROCESS OF LAW BY NOT GIVING FAIR

NOTICE OF THE APPLICATION REQUIREMENTS.

Fair notice of what the law requires is at the

core of the Due Process Clause. City of Chicago v.

Morales, 527 U.S. 41, 58 (1999) (citing Lanzetta, 306

U.S. at 453); see Wages & White Lion Invs., L.L.C. v.

FDA, 90 F.4th 357, 374 (5th Cir. 2024) (en banc) (fair

notice “is rooted in the Fifth Amendment’s Due

Process Clause” (citations omitted)). The Court has

long recognized the importance of fair notice to due

process. Almost 100 years ago, the Court described

the fair notice requirement as “the first essential of

due process of law.” Gen. Const. Co., 269 U.S. at 391

(citing Int’l Harvester Co. of Am., 234 U.S. at 221).

The fair-notice requirement is not limited to

statutes or formal regulations. Agencies may not

“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); see

Menkes v. Dep’t of Homeland Sec., 486 F.3d 1307,

1310, 1314 (D.C. Cir. 2007). That is because dueprocess principles require agencies to “provide

regulated parties fair warning” of what the agency

“prohibits or requires” before taking adverse action.

Christopher v. SmithKline Beecham Corp., 567 U.S.

142, 156 (2012) (quotation omitted).

Fair notice bars agencies from announcing

positions, then springing an “unfair surprise” by

penalizing regulated parties for their “good-faith

9

reliance”

on

the

agency’s

representations.

Christopher, 567 U.S. at 156-57 (quotation omitted);

see Wages & White Lion, 90 F.4th at 381. This

principle applies to both formal and informal

guidance. See Morton v. Ruiz, 415 U.S. 199, 235

(1974); PHH Corp. v. CFPB, 839 F.3d 1, 48 (D.C. Cir.

2016), reinstated in relevant part, 881 F.3d 75, 83

(D.C. Cir. 2018) (en banc).

FDA’s denial orders flaunt this well-settled

rule. They fault Lotus for not conducting a

“randomized controlled trial[, ] longitudinal cohort

study,” or similarly “reliabl[e] and robust[]” study

“over time” comparing the effectiveness of “flavored”

vs. “tobacco-flavored” products in promoting smoking

cessation. Pet. App. 21. And FDA now deems “crosssectional surveys, consumer perception studies, and

general scientific literature” as unreliable on this

score. Pet. App. 20.

But any shortcomings in Lotus’s applications

resulted from FDA’s own instructions to applicants.

See Wages & White Lion, 90 F.4th at 383. It

continually reassured manufacturers that it “did not

expect that applicants would need to conduct”

longitudinal studies. Pet. App. 85 n.xxiii. FDA also

disavowed requiring longitudinal studies, including

“randomized controlled clinical trials.” E.g., 84 Fed.

Reg. at 50,619.

These statements alone are bad enough. Yet

they only scratch the surface of FDA’s bait-and-switch

approach here. Its prior instructions explicitly

encouraged submission of the very evidence it later

rejected. It “support[ed] the use of different types of

studies, methods, instruments and analyses” from

10

various sources. See Letter from Mary Kushman,

Lead Toxicologist, FDA to Bidi Vapor LLC, USA (May

8, 2020). As to cessation, FDA offered “[e]xamples of

information that FDA recommends” as evidence of

“likelihood of * * * cessation.” FDA, Premarket

Tobacco Product Applications for Electronic Nicotine

Delivery Systems (“2016 guidance”), 36 (May 2016).

This included studies that FDA now considers

unreliable—“[p]ublished

literature”

and

“observational studies (perception, actual use, or

both) examining cessation behaviors.” Id. at 37.

As to flavored products, FDA asked

manufacturers to “describe consumer perceptions

among current ENDS users and other tobacco users

for appeal.” 2016 guidance, supra at 40. It even told

manufacturers to supply “published reports and data

on consumer perceptions,” including “data [they]

collect[ed] on consumer perceptions” to gauge

“intentions to use the product.” Id. at 36. “Then FDA

flip-flopped.” Wages & White Lion, 90 F.4th at 377.

FDA’s flip-flop creates obvious unfair

surprises. FDA issued guidance to “assist persons

submitting [applications] for [ENDS]” products, “to

improve the efficiency of application submission and

review.”

FDA,

Premarket

Tobacco

Product

Applications for Electronic Nicotine Delivery Systems,

cover (Mar. 2023). FDA expressly sought to “enable

ENDS manufacturers to consider and strengthen

their applications based on the final PMTA for ENDS

guidance.” Decl. of Mitchell Zeller, Dir., Ctr. For

Tobacco Prods., FDA, ¶ 13, Am. Acad. of Pediatrics v.

FDA, 399 F. Supp. 3d 479 (D. Md. 2019) (No. 18-cv883).

11

Lotus spent significant sums of money

submitting studies that followed FDA’s guidance.

FDA cannot then penalize Lotus—by denying its

applications—for faithfully adhering to FDA’s

instructions. FDA’s technical review acknowledges

that FDA moved the evidentiary goalposts, based on

what FDA “learned” from “review[ing applications]

for flavored ENDS so far.” Pet. App. 61 n.vi. But if

FDA wanted to change its evidentiary requirements

based on its “deepened * * * understanding of the

[appropriate for the protection of public health]

evaluation,” Pet. App. 80, FDA should have

acknowledged that shift before the application

deadline and offered a “detailed justification.” Encino

Motorcars, LLC v. Navarro, 579 U.S. 211, 221 (2016)

(quoting Fox Television, 556 U.S. at 515).

The APA forbids FDA from imposing new

requirements on regulated parties after it is too late

for them to comply. And as the Fifth Circuit found,

the new requirements were “a substantive rule.” R.J.

Reynolds Vapor Co. v. FDA, 65 F.4th 182, 193 (5th

Cir. 2023) (citation omitted). The new requirements

thus violated Lotus’s due-process rights. See Wages &

White Lion, 90 F.4th at 388 (FDA “did not give

manufacturers fair notice of the rules.”). And because

the APA bars such due-process violations, the Ninth

Circuit erred by denying Lotus’s petition for review.

See id. at 381.

II.

FDA’S DENIAL ORDERS WERE ARBITRARY

AND CAPRICIOUS.

The Court requires agencies to “articulate a

satisfactory explanation for [their] action[s].” Little

Sisters of the Poor Saints Peter & Paul Home v.

12

Pennsylvania, 140 S. Ct. 2367, 2383 (2020) (quoting

Motor Vehicle Mfrs. Assn. of U.S., Inc. v. State Farm

Mut. Auto. Ins., 463 U.S. 29, 43 (1983)). FDA claims

it weighed the risks of youth usage against the

benefits of flavored ENDS products’ reducing or

eliminating adult smoking. But it did not actually

weigh the costs and benefits because it disregarded

key evidence.

FDA’s conclusions about the risks of youth

usage undergird its whole approach. FDA continues

to view youth usage as a substantial threat, citing

general studies about youths’ using closed-system

products—small, highly portable, and often

disposable devices. It also purports to rely on

scientific literature and consumer studies showing

that flavors appeal to youth more than tobaccoflavored or unflavored products. See Pet. App. 68-70.

WLF opposes youths’ using ENDS products.

The record shows that Lotus similarly condemns

youths’ using ENDS. See, e.g., CA9 ER-194–229. But

FDA refused to consider evidence that its general risk

assessment does not apply to Lotus’s products. Lotus

sells bottled e-liquid products used in things like

tanks. See Pet. 1; Pet. App. 6. As former FDA

commissioner Dr. Scott Gottlieb said, “kids just don’t

like those big open-tank contraptions.” Nicholas

Florko, Former FDA Commissioner Calls for a Full

Ban on Pod-Based E-Cigarettes, Stat (Nov. 12, 2019),

https://perma.cc/WRW6-ST8C.

FDA “did not assess” the “aspects of the

applications” that showed that youth are unlikely to

use Lotus’s products. Pet. App. 23 (cleaned up).

Rather, it concluded that “across * * * different device

13

types, the role of flavor is consistent.” Pet. App. 31

n.14 (cleaned up). This was another change in course.

In 2020, FDA found that youths “overwhelming[ly]

prefer” cartridge-based ENDS because of their

concealability, high nicotine content, and ease of use.

Pet. App. 16 (cleaned up); see also Wages & White

Lion, 90 F.4th at 357 (“cartridge-based products [are]

popular with young people” because of their

“relatively small size that allows for easy

concealability”

(quotation

omitted)).

These

characteristics are noticeably missing from Lotus’s

products. Yet FDA painted with a broad brush to

conclude that flavor drove youth ENDS usage.

Although that may be true within a given ENDS

product type, FDA could not cite any evidence about

the effect of flavor across all product types. The

evidence shows that those who use Lotus’s products

are typically in their 40s. Although this may sound

youthful to some on this Court, it is not the vulnerable

youth that FDA was worried about.

The Centers for Disease Control and

Prevention’s most recent data confirms that FDA

missed the mark on youth ENDS use. It shows that

youth use of tank-based ENDS compatible with

Lotus’s bottled e-liquids had decreased in recent

years, despite the removal of flavored cartridge-based

products from the market. Compare Teresa W. Wang

et al., E-cigarette Use Among Middle and High School

Students – United States, 2020, 69 Morbidity &

Mortality Weekly Report 1310, 1310-12 (2020)

(youths’ use of ENDS dropped from 27.5% to 19.6%, of

which only 14.8% used a tank system) with Eunice

Park-Lee et al., Notes from the Field: E-Cigarette Use

Among Middle and High School Students – National

Youth Tobacco Survey, United States, 2021, 70

14

Morbidity & Mortality Weekly Report 1387, 1387-88

(2021) (youths’ use of ENDS dropped from 19.6% to

11.3%, of which only 7.5% reported using a tank

system).

This data shows that the percentage of youths

who used a tank system after flavor-based cartridge

ENDS were taken off shelves in 2020 decreased—not

increased—by almost 50%. This would make no sense

if FDA’s assumption that flavor drives everything for

youths was correct. Under FDA’s reasoning, youths

would have substituted tank-based systems for the

cartridge systems once the cartridges exited the

market. Because the exact opposite occurred, it

further exposes FDA’s conclusion that flavors drive

youth initiation across ENDS device types as lacking

a rational basis in the data and FDA’s overall decision

as arbitrary and capricious.

FDA also ignored evidence showing Lotus’s

successful efforts to prevent youth access. Lotus’s

applications detailed its thorough auditing and ageverification measures and marketing strategy that

targeted only adults. See, e.g., Pet. App. 37-38. But

FDA acknowledged “not evaluat[ing] any” of this

evidence. Pet. App. 81 n.xix. Instead, citing other

applications, FDA claimed to be “[un]aware of access

restrictions that, to date, have been successful in

sufficiently decreasing the ability of youth to obtain

and use ENDS.” Id. Yet FDA had confirmed that ageverification protections like Lotus’s “would protect

kids” by “preventing access to flavored” products.

FDA, Statement from Comm’r Scott Gottlieb, M.D., on

proposed new Steps to protect youth by preventing

access to flavored tobacco products and banning

menthol

in

cigarettes

(Nov.

15,

2018),

15

https://perma.cc/HQ8W-PFSN. Ignoring this contrary

evidence was arbitrary and capricious. See Roe v.

Dep’t of Def., 947 F.3d 207, 225 (4th Cir. 2020); Clark

County v. FAA, 522 F.3d 437, 442-43 (D.C. Cir. 2008).

The Eleventh Circuit’s granting of a similar

petition for review proves the point. There, as here,

FDA “refused to consider the marketing and salesaccess-restriction plans” showing that the applicant

could limit youth use of the ENDS products. Bidi

Vapor LLC v. FDA, 47 F.4th 1191, 1195 (11th Cir.

2022). Chief Judge Pryor, writing for the court,

correctly found this action to be “arbitrary and

capricious.” Id.

FDA also concluded that, to overcome the

perceived high risk of youth usage, Lotus must

produce especially rigorous evidence of countervailing

benefits to adult smokers. Pet. App. 33. Thus, if FDA

miscalculated the risks of youth usage, it also miscalibrated the evidentiary standard for judging

benefits to adult smokers.

Even so, FDA’s sky-high evidentiary mandate

for showing benefits for smokers is arbitrary. FDA

demands product-specific studies contrasting the

appeal of flavored vs. tobacco-flavored products. Yet,

as discussed above, FDA saw no need for such

specifics in asserting risks to youth. In fact, it found

that it need not consider more specific studies. The

reason for this disparity was simple: the productspecific studies for youth usage did not support FDA’s

position but the broad studies did.

Similarly, to show that adult smokers reduce or

stop smoking, FDA declared all “cross-sectional

16

surveys, consumer perception studies, and general

scientific literature” surveys inherently unreliable.

Pet. App. 20. Yet FDA called these very same studies

“the best available evidence” of youth usage. Pet. App.

83. FDA thinks that product-specific features drive

adult cessation but not youth initiation. Pet. App. 82

n.xx. This “self-contradictory, wandering logic does

not constitute an adequate explanation.” Del. Dep’t of

Nat. Res. & Env’t Control v. EPA, 785 F.3d 1, 16 (D.C.

Cir. 2015) (quotation omitted); cf. Wages & White

Lion, 90 F.4th at 373 (FDA’s post hoc contradictory

arguments were not an adequate explanation for

denying applications).

FDA also failed to “adequately consider the

impact of” its extraordinarily specific evidentiary

standard. See Ackerman v. U.S. Dep’t of Agric., 995

F.3d 528, 533-34 (6th Cir. 2021). FDA ignored the

consequences of employing a rationale that

apparently rejects all flavored ENDS products for

insufficient evidence using cookie-cutter reasoning.

Those denials are forcing an exodus of products from

the market—products that FDA acknowledges former

smokers rely on to stop smoking. See FDA, FDA Issues

Decisions on Additional E-Cigarette Products, PR

Newswire (Mar. 24, 2022), https://perma.cc/TG5AAHYH. (The FDA tacitly acknowledged its arbitrary

and capricious behavior by removing this statement

from its website because of this litigation.) FDA had

cautioned that this “public health outcome” was to be

“avoided if at all possible” because of the “serious” risk

that former adult smokers would switch back to

cigarettes. Zeller Decl., supra ¶¶ 12, 15. FDA likewise

failed to consider that its denials could cause ENDS

users to turn to the illicit market—another problem

FDA previously recognized. See 81 Fed. Reg. at

17

29,007. Now, FDA says nothing about what will

happen to millions of former smokers. FDA’s erratic

regulatory approach was arbitrary and capricious.

III.

REGULATED PARTIES WILL BE UNABLE TO

RELY ON ANY AGENCY GUIDANCE UNLESS

THIS COURT INTERVENES.

This case is vital to the ENDS industry. At the

start of the process, FDA expected to receive about

6,800 ENDS applications. Although that may seem

like a lot, it is small in the scheme of our nation’s

economy. As usual, however, FDA missed the mark by

light years. It received about 6.5 million ENDS

applications, or over 900 times its projection. The

astronomically high number of applications shows

just how entrenched ENDS products are in our

nation’s marketplace. This alone confirms the reach

of the Ninth Circuit’s decision to abdicate its

responsibility and rubber-stamp FDA’s form denial

letters to millions of ENDS applicants.

But the effects of the Ninth Circuit’s decision

will be felt far beyond the ENDS market. FDA, of

course, must also approve prescription drugs for

marketing in the United States. The process for

obtaining that approval is long and arduous.

Companies must go through multiple stages of

clinical trials to show that the drug is safe and

effective for human use. These studies normally take

years but can last over a decade in some cases.

Drug manufacturers rely on FDA guidance

when deciding how to structure their clinical trials so

that drugs can be approved if the clinical trials are

successful. Yet now drug companies undertaking

18

costly research and development must assume the

risk that FDA will do an about face when ruling on

their drug applications. Imagine a company that has

spent hundreds of millions of dollars following FDA

guidance while conducting clinical trials over a

decade. Then after the company submits its drug

application, FDA changes its mind and wants a

different type of clinical trial—one that will take

years and millions of dollars to complete.

Under the Ninth Circuit’s view of fair notice,

the APA blesses such flip-flopping. That is, FDA is not

bound by its guidance and need not tell companies

when it changes its mind or give them fair notice of

the regulatory requirements. It can flip-flop any time

its leadership faces tough questions at a congressional

hearing.

Nor are drugs and tobacco products the whole

of FDA’s regulatory authority. Like drugs, vaccines

(normally) go through years or decades of research

and testing that cost millions of dollars. Under the

Ninth Circuit’s decision, FDA could decide that all

that testing was for nothing if a politician pressures

FDA to change the requirements for clinical trials.

Medical devices must also undergo rigorous

testing before sales can begin. But fewer companies

will invest in researching and developing new devices

if FDA gets to change the rules mid game. In short,

any party following FDA regulations will have to

factor in the chance of FDA’s changing its

requirements when deciding whether to invest in

promising research.

19

The Ninth Circuit’s APA rule, of course, applies

not only to FDA. It is a general rule about agencies

using their “expertise” to change their minds and

deprive regulated parties of fair notice. Nothing stops

the National Highway Traffic Safety Administration

from changing its guidance about automobile testing

after production has started. This would mean that

cars slated to hit the road soon could be blocked

because of a NHTSA about face. Cf. United States v.

Chrysler Corp., 158 F.3d 1350, 1356-57 (D.C. Cir.

1998) (agreeing with John G. Roberts, Jr. that

NHTSA acted arbitrarily and capriciously by ordering

a recall because it changed its guidance). Again, that

would mean millions of dollars and years of

innovation wasted because of an unelected

bureaucrat’s decision to alter requirements after the

fact.

The same logic applies to any other product

that needs federal regulatory approval. Be it

something used on the ground, like herbicides

regulated by the Environmental Protection Agency,

or something that flies overhead, like airplanes

regulated by the Federal Aviation Administration,

development will slow if regulated companies must

guess whether the regulatory agencies will change

their minds down the road.

The only way to stop this regulatory

uncertainty is to grant review. That way, this Court

can reverse the Ninth Circuit’s decision and reaffirm

that agencies must provide fair notice of what is

required of regulated parties. Unannounced and

poorly reasoned switcheroos should not survive

judicial scrutiny.

20

CONCLUSION

This Court should grant the petition.

Respectfully submitted,

John M. Masslon II

Counsel of Record

Cory L. Andrews

WASHINGTON LEGAL FOUNDATION

2009 Massachusetts Ave. NW

Washington, DC 20036

(202) 588-0302

jmasslon@wlf.org

March 11, 2024