Episode 118
Opinion Summary: FDA v. Wages and White Lion Investments, LLC | Date Decided: 4/2/25 | Case No. 23-1038
The question presented in this case is: Whether the court of appeals erred in setting aside FDA's denial orders as arbitrary and capricious.
The Supreme Court held: The Fifth Circuit’s conclusion that the FDA acted arbitrarily and capriciously in its adjudication of manufacturers’ premarket tobacco product applications is vacated because the FDA’s denial orders were sufficiently consistent with its predecisional guidance—as to scientific evidence, comparative efficacy, and device type—and thus did not run afoul of the change-in-position doctrine.
Transcript
The question presented in this case is whether the Court of Appeals erred in setting aside FDA's denial orders as arbitrary and capricious.
Speaker A:Justice Alito delivered the opinion for a unanimous court.
Speaker A:Justice Sotomayor filed a concurring opinion.
Speaker A:Please note that this opinion is read.
Speaker B:By an automated voice majority opinion from the syllabus.
Speaker B:This case concerns whether the Food and Drug Administration lawfully denied Respondents authorization to market certain electronic nicotine delivery system products known as electronic cigarettes, E cigarettes, or vapes.
Speaker B:These products have rapidly gained popularity during the past 20 years, offering existing smokers a potentially safer alternative to traditional combustible cigarettes.
Speaker B:But E cigarettes carry their own health risks and the panoply of available flavors, which include not only traditional cigarette flavors like tobacco and menthol, but also fruit, candy, and dessert flavors, appeals to non smokers, particularly younger Americans.
Speaker B:The FDA has long had the responsibility to determine whether manufacturers may market new.
Speaker C:Drugs, but it was the passage of.
Speaker B:The Family Smoking Prevention and Tobacco control.
Speaker C: Act of: Speaker C:Although the act barred the FDA from banning all regulated tobacco products outright, the c.21 USC section 387 GD3 it prohibited a manufacturer from marketing any new tobacco product without FDA authorization.
Speaker C:C.
Speaker C:Section 387 JA22A.1 pathway to authorization of a new tobacco product is the submission of a premarket tobacco product application.
Speaker C:See section 387Jc1AI.
Speaker C:The TCA requires the FDA to deny such an application unless an applicant shows that its product would be appropriate for the protection of the public health.
Speaker C:Section 387JC2A.
Speaker C:To determine this, the FDA must consider, among other things, the risks and benefits to the population as a whole and take into account the likelihood that users of existing tobacco products will stop using those products and that non users will start using them.
Speaker B: in: Speaker B: ,: Speaker B:Most manufacturers of E cigarette products would thus need to comply with the TCA's premarket authorization regime to sell their products.
Speaker B:This made the continued sale of most E cigarette products illegal absent authorization.
Speaker B:So to give these manufacturers adequate time to submit pre market tobacco product applications.
Speaker B:The FDA delayed enforcement for two to three years.
Speaker B:C81 federal registration 28,977 to 28,978.
Speaker B:This permitted E cigarette products to remain on the market while manufacturers filed their applications.
Speaker B: ,: Speaker D:In the lead up to the application deadline, the FDA issued numerous forms of guidance concerning pre market tobacco product applications that orbited around four central themes 1 the types of scientific evidence that would be required, 2 the importance of cross product comparisons and investigations 3 the FDA's enforcement priorities with respect to device type and 4 manufacturers marketing plans which were described as specific restrictions on sale and distribution meant to deter new smokers from taking up e cigarette products.
Speaker D: In: Speaker B:Respondents submitted applications seeking approval to market and sell flavored E liquids for open system E cigarettes.
Speaker B:The FDA denied respondents applications concluding they.
Speaker C:Had not provided sufficient scientific evidence to.
Speaker B:Demonstrate that the marketing of their products.
Speaker C:Would be appropriate for the protection of public health.
Speaker B:Specifically, the FDA held respondents had not.
Speaker C:Provided evidence from a randomized controlled trial, longitudinal cohort study or or other robust and reliable evidence that their dessert, candy and fruit flavored products had benefits over tobacco flavored products.
Speaker C:Despite previously describing marketing plans as critical, the FDA decided for the sake of efficiency, not to evaluate respondents marketing plans.
Speaker C:To each denial order, the FDA appended a technical project lead TPL review.
Speaker C:See Appendix to Petition for Certificate 177A.
Speaker C:285A.
Speaker C:These lengthy documents, which canvas the scientific literature on youth e cigarette use, reflect the FDA's evolving understanding of how flavor, regardless of e cigarette device type, drives youth smoking initiation and nicotine addiction.
Speaker B:Respondents petitioned for judicial review of the FDA's denial orders under the Administrative Procedure Act APA.
Speaker B:See section 387 lb.
Speaker B:Citing 5 U.S.C.
Speaker B: section: Speaker C:Remanded to the fda.
Speaker B:The en banc majority held that the FDA had acted arbitrarily and capriciously by applying application standards different from those articulated.
Speaker C:In its pre decisional guidance documents regarding scientific evidence, cross flavor comparisons, and device type.
Speaker C:The court expressed particular concern about the FDA's failure to review marketing plans it previously deemed critical.
Speaker C:It also rejected the FDA's argument that any errors were harmless.
Speaker B:Held two as a preliminary matter, the court declines to reach and thus expresses no view on respondents argument that the FDA erred in evaluating Respondents applications under standards developed in adjudication rather than standards promulgated in notice and comment rulemaking.
Speaker B:This complicated question sweeps beyond the question presented and lacks adequate briefing.
Speaker B:Punty de Vetnacht 2.
Speaker B:The Fifth Circuit's conclusion that the FDA acted arbitrarily and capriciously in its adjudication of manufacturers premarket tobacco product applications is vacated because the FDA's denial orders were sufficiently consistent with its pre decisional guidance as to scientific evidence, comparative efficacy, and device type and thus did not run afoul of the change in position doctrine.
Speaker B:Pdvatsit sorokadin A the court analyzes the Fifth Circuit's conclusion that the FDA acted arbitrarily and capriciously under the change in position doctrine, which provides that agencies are free to change their existing policies as long as they provide a reasoned explanation for the change, display awareness that they are changing position, and consider serious reliance interests.
Speaker B:Encino Motor Cars, LLC vs.
Speaker B:Navarro, 579 U.S.
Speaker B:211221 to 222 quoting FCCV Fox Television Stations, Inc.
Speaker B:556 U.S.
Speaker B:502, 515.
Speaker B:This doctrine asks two questions.
Speaker B:First, whether an agency changed existing policy and second, whether the agency displayed awareness of the change and offered good reasons for the new policy.
Speaker B:P Dvatsy Dvatsy Pyati B the FDA's denial orders were sufficiently consistent with its pre decisional guidance regarding scientific evidence.
Speaker B:The TCA states that either well controlled investigations or other valid scientific evidence, if found sufficient, may support a finding that a new tobacco product is appropriate for the protection of the public health.
Speaker B:Section 3.187jc5a b the TCA thus left the FDA broad discretion to decide what sort of scientific evidence an applicant was required to submit across its various guidance documents.
Speaker B:The FDA's main point was that manufacturers.
Speaker C:Who failed to submit evidence based on well controlled investigations would need to provide rigorous scientific evidence that the sale of their particular products would be appropriate for the protection of the public health.
Speaker C:The applicants did not submit randomized controlled trials or longitudinal cohort studies, so the fate of their applications turned on whether they submitted other evidence that met the FDA's standard of scientific rigor and relevance to their product.
Speaker C:The FDA rejected Respondents applications because that test was not met as evidence of a change in position.
Speaker C: ,: Speaker C: ,: Speaker C:A representation afforded a presumption of regularity.
Speaker B:The FDA's comparative efficacy requirement was not inconsistent with its pre decisional guidance.
Speaker B:The TCA expressly contemplates comparisons of different tobacco products and the FDA's guidance elaborated on the types of comparisons that would be helpful.
Speaker B: The FDA's: Speaker C: ories as appropriate, and its: Speaker C:Thus, when the FDA denied respondents applications for failing to demonstrate the benefit of their flavored products over tobacco flavored products, it was following a natural consequence of its Pre decisional guidance.
Speaker C:Pp.
Speaker C:32, 37d.
Speaker B: n position doctrine the FDA's: Speaker B: Although the: Speaker B:That latter category seemingly covers respondents products.
Speaker B:Even if the FDA had changed its.
Speaker C:Position in this respect, it offered good.
Speaker B:Reasons, namely evidence showing that youth demand.
Speaker C:Had moved from flavored cartridge based products to flavored disposable products.
Speaker C:Fox Television, 556 US at 515.
Speaker C:From that evidence, the FDA drew the reasonable inference that youth were most strongly drawn by flavor rather than device type.
Speaker B:The Fifth Circuit relied on an overly broad reading of Calcut VDIC, 598 US 623 per curiam to reject the FDA's claim of harmless error regarding the agency's change of position on marketing plans.
Speaker B:The FDA does not contest that despite assuring manufacturers that marketing plans would be critical to their applications, the FDA ultimately did not consider respondents marketing plans.
Speaker B:The FDA argued below that any error in this respect was harmless error because it issued denial orders to other manufacturers after reviewing marketing plans that were materially indistinguishable from respondents.
Speaker B:The Fifth Circuit rejected the FDA's harmless error argument relying on this court's decision in Calcutt for the proposition that APA errors are only harmless where the agency would be required to take the same action no matter what.
Speaker B:In all other cases, an agency cannot avoid remand.
Speaker B:90 F.4, 357, 390 the court agrees with the FDA that the Fifth Circuit read Calcutt too broadly.
Speaker B:That said, the proper standard presents a difficult problem requiring reconciliation of the so called remand rule developed in SEC vs.
Speaker B:Chenery Corp.
Speaker B:318 US 80, 88, 93, 95 with the APA's instruction that reviewing courts must take due account of the rule of prejudicial error that ordinarily applies in civil cases.
Speaker B:Shinseki v.
Speaker B:Sanders, 556 United States 396, 406 quoting 5 United States Code section 706.
Speaker B:The most natural interpretation of the APA's language is that reviewing courts should adapt the rule of prejudicial error applicable in ordinary civil litigation, also known as the harmless error rule, to the administrative law context, which of course includes the remand rule in Calcutt.
Speaker B:After reciting the remand rule in strong terms, the court acknowledged that a remand.
Speaker C:May be unwarranted where the agency was.
Speaker B:Required to take a particular action.
Speaker C:598 U.S.
Speaker C:at 6, 30 quoting Morgan.
Speaker B:Stanley Capital Group, Inc.
Speaker B:V.
Speaker B:Public Util.
Speaker C:District Number 1 of Snohomish County, 554 U.S.
Speaker C:527544.
Speaker C:Although the Fifth Circuit interpreted Calcutt's discussion to mean that there is only one exception to the remand rule, it has long been accepted that a remand may not be ne when an agency's decision is supported by a plethora of factual findings, only one of which is unsound because a remand would be pointless.
Speaker C:CEG Massachusetts Trustees of Eastern Gas and Fuel Associates versus United States, 377 U.S.
Speaker C:235, 248.
Speaker C:The existence of this exception is sufficient to show that the Fifth Circuit's reading of Calcutt went too far.
Speaker C:That said, the FDA's reading of Sanders may also be excessive.
Speaker C:The FDA has not asked the court to decide the harmless error question at this juncture, and the court vacates and remands so the Fifth Circuit can decide the question afresh without relying on its overly expansive reading of Calcutt.
Speaker C:Pp.
Speaker C:4146 90f.
Speaker B:4Th 357 vacated and remanded.
Speaker E:Concurring Opinion Justice Sotomayor filed a concurring opinion agreeing with the Court's holding that the FDA did not act arbitrarily and capriciously in denying pre market approval applications for flavored e cigarette products.
Speaker E:While joining the majority opinion in full, Justice Sotomayor wrote separately to clarify that the FDA's guidance to manufacturers was not, as the majority suggests, unclear or evolving.
Speaker E:Rather, the FDA deliberately provided flexibility in the types of evidence manufacturers could submit while maintaining strict adherence to its statutory mandate.
Speaker E:Justice Sotomayor emphasized that manufacturers should have anticipated the need for rigorous scientific evidence given both the statutory requirement that products be appropriate for the protection of the public health and the well documented risks flavored e cigarettes pose to youth.
Speaker E:This statutory context and public health evidence made it reasonably clear that manufacturers would need to provide robust scientific evidence showing their products benefits outweighed the risks, regardless of the specific form that evidence took.
