Supreme Court Vacates Fifth Circuit Judgment on FDA Denials of Flavored E-Cigarette Applications

The decision

On April 2, 2025, the Supreme Court of the United States vacated a judgment of the en banc United States Court of Appeals for the Fifth Circuit, which had granted petitions for review of the Food and Drug Administration’s denial of premarket applications for flavored e-liquids submitted by Wages and White Lion Investments, LLC, doing business as Triton Distribution, and Vapetasia, LLC, and had remanded to the agency. In a unanimous opinion by Justice Alito, the Court held that the FDA’s denial orders were sufficiently consistent with the agency’s earlier guidance on scientific evidence, comparative efficacy and device type, and so did not violate the change-in-position doctrine of arbitrary-and-capricious review.

On a fourth issue, the FDA’s failure to consider the applicants’ marketing plans, the FDA did not contest the Fifth Circuit’s finding of error. The Court held that the Fifth Circuit had read Calcutt v. FDIC “too broadly” in rejecting the FDA’s harmless-error argument, and remanded for the Fifth Circuit to decide that question again. Justice Sotomayor joined the opinion and filed a concurrence.

Background

According to the opinion, the Family Smoking Prevention and Tobacco Control Act of 2009 (TCA) gave the FDA authority over tobacco products, which the Court had found lacking in FDA v. Brown & Williamson Tobacco Corp. The Act prohibits marketing a “new tobacco product” without authorization, and the FDA must deny a premarket tobacco product application unless the product is shown to be “appropriate for the protection of the public health.” In 2016, the FDA deemed e-cigarettes and e-liquids to be tobacco products, which made most of them new tobacco products requiring authorization. After shifting deadlines, a federal district court set September 9, 2020, as the deadline for applications.

Before ruling on applications, the FDA issued guidance, public presentations and internal memoranda. The opinion organizes these around four themes: the types of scientific evidence required, cross-product comparisons, enforcement priorities by device type, and marketing plans. A July 9, 2021, internal memorandum stated that lack of evidence from a randomized controlled trial or longitudinal cohort study would be a fatal flaw likely to result in denial; an August 17, 2021, memorandum said other study designs would also be considered; on August 25, 2021, the FDA rescinded the August 17 memorandum.

The respondents manufacture flavored e-liquids for open-system e-cigarettes. They filed applications on the deadline, including marketing plans and a pooled literature review; Vapetasia also submitted a cross-sectional survey. The FDA received applications from more than 500 companies covering more than 6.5 million products. It denied the respondents’ applications for lack of a randomized controlled trial, longitudinal cohort study or other reliable and robust evidence showing that their dessert-, candy- and fruit-flavored products had benefits over tobacco-flavored comparators. The appended reviews stated that the FDA had decided not to evaluate the marketing plans, despite earlier describing such plans as “critical.”

A Fifth Circuit merits panel denied the petitions for review, but the en banc court granted them and remanded to the FDA, holding that the agency had acted arbitrarily and capriciously by departing from its predecisional guidance and rejecting the FDA’s harmless-error argument. The Court granted the FDA’s petition for certiorari.

The court’s reasoning

A question not reached

The Court first declined to decide whether the Administrative Procedure Act (APA) or the TCA required the FDA to set application requirements through notice-and-comment rulemaking rather than adjudication. It stated that certiorari had not been granted on that question and that the briefing was inadequate. In a footnote, the Court also declined to reach constitutional and “major questions” arguments raised by amici, which it said were outside the question presented and not pressed in the respondents’ brief.

The change-in-position doctrine

The Court treated the Fifth Circuit’s several grounds as reducing to one concern: that the FDA told applicants one thing in guidance and did another in the denial orders. It held that the change-in-position doctrine governs that concern, quoting Encino Motorcars, LLC v. Navarro: “[a]gencies are free to change their existing policies as long as they provide a reasoned explanation for the change.” The doctrine asks whether the agency changed existing policy and, if so, whether it displayed awareness of the change and offered “good reasons” for it. In a footnote, the Court assumed without deciding that the doctrine applies to departures from nonbinding guidance, because neither party had contested the point. The Court acknowledged that “[a]ffected parties may have come away with the impression that the agency would apply a less demanding standard of proof than is evident in the denial orders the FDA ultimately issued,” but concluded that no improper change had occurred on the first three themes.

Scientific evidence

The Court found that both the TCA and the FDA’s guidance left the agency broad discretion over what evidence would suffice, and that “at no point did it lay down any clear test.” It read the guidance as saying that well-controlled investigations were not essential but that applicants who omitted them would need rigorous scientific evidence specific to their products. The respondents’ literature review, the Court noted, was a type of evidence the 2019 guidance had called “a less robust form of support,” and the denial orders echoed the earlier guidance. The Court concluded: “No change in position occurred in this respect.” It rejected the argument that the July 9, 2021, memorandum had been secretly applied, relying on the later August 17 memorandum, the FDA’s representation that the internal memoranda played no role, and the presumption of regularity under Citizens to Preserve Overton Park, Inc. v. Volpe.

Comparative efficacy

The Court held that the FDA’s requirement of comparisons between dessert-, candy- and fruit-flavored products and tobacco-flavored products was not inconsistent with prior guidance. It observed that the TCA itself contemplates comparisons among tobacco products and that the 2019 guidance recommended comparing “the health risks of its product to both products within the same category and subcategory, as well as products in different categories as appropriate.” The Court acknowledged that the FDA never stated this precise comparison in so many words, but characterized the standard as a “predictable outgrowth” of the guidance. It added that the respondents’ own applications attempted such comparisons, which it called “strong evidence that regulated entities had adequate notice.”

Device type

The Court held that the FDA’s 2020 enforcement guidance, which emphasized flavored cartridge-based products, did not create “a safe harbor” for open-system products, because the guidance also listed enforcement priority for products “whose [products’] marketing is likely to promote use by . . . minors.” The Court distinguished FCC v. Fox Television Stations, Inc., and stated that even if the FDA had changed position, it offered “good reasons,” namely surveillance data showing youth demand had shifted from cartridge-based to disposable flavored products. It also found no “serious reliance interes[t]” in predictions about enforcement discretion, and declined to consider a study postdating the applications and outside the administrative record.

Marketing plans and harmless error

Because the FDA did not seek review of the finding that its failure to consider marketing plans was error, the Court addressed only harmlessness. It described the problem as reconciling the remand rule of SEC v. Chenery Corp. with the APA’s instruction to take due account of the rule of prejudicial error, discussed in Shinseki v. Sanders. The Fifth Circuit had read Calcutt to mean that “APA errors are only harmless where the agency would be required to take the same action no matter what.” The Court stated: “For now, we agree with the FDA that the Fifth Circuit read Calcutt too broadly.” It pointed to Massachusetts Trustees of Eastern Gas & Fuel Associates v. United States as recognizing another long-accepted exception, while adding that the FDA’s reading of Sanders “may also be excessive.” The Court stated that it would not provide a complete answer to the tension, and, because the FDA had asked only that the Court identify the correct rule and remand, it followed that course.

Separate opinions

Justice Sotomayor filed a concurring opinion joining the Court’s opinion in full. She wrote: “I write separately, however, to clarify one point.” She disagreed with the majority’s description of the predecisional documents as painting a picture of an agency that was “feeling its way” toward its final position. In her view, the record showed that the agency reasonably gave manufacturers some flexibility as to the forms of evidence that would suffice while adhering to its statutory duty. Given the statutory text and the documented risks of flavored e-cigarettes to youth, she wrote, “it should have come as no surprise” that applicants would need rigorous scientific evidence that the benefits of their products outweighed those risks.

Status

The Court vacated the judgment of the Fifth Circuit and remanded “for further proceedings consistent with this opinion.” The Fifth Circuit is to decide afresh whether the FDA’s failure to consider the respondents’ marketing plans was harmless, without relying on its reading of Calcutt.