In a highly anticipated decision, a Fifth Circuit Court of Appeals panel ruled Monday against Triton Distribution and Vapetasia in their appeal of FDA Marketing Denial Orders (MDOs) the companies received last September. The vote was 2-1, with Judge Edith Jones vigorously dissenting from the majority.
A separate three-judge panel had unanimously stayed Triton’s MDO in October 2021, calling the FDA’s imposition of new evidentiary standards for vape industry applicants a “surprise switcheroo,” and ruling that the Triton appeal was likely to succeed on its merits. The stay allowed Triton to continue doing business until the second panel reviewed the company’s merits briefing and heard oral arguments from Triton and the FDA.
Following Triton’s stay, belief was strong in the independent vape industry that the Triton petition for review would be the first in a row of legal dominoes to fall, perhaps finally putting an end to the extreme deference courts have shown the FDA in the vaping and nicotine space. Now that hope has been dashed yet again.
Triton, in its appeal, alleged that the FDA acted “arbitrarily and capriciously” by changing requirements for successful premarket tobacco applications (PMTAs) after the deadline for applications had already passed, and that the agency rejected Triton’s PMTA without considering relevant information included in the application about youth use and marketing plans. The company also said that the FDA didn’t have statutory authority to impose a requirement that manufacturers prove flavored vaping products are more effective for cessation than tobacco flavors.
But the two-judge court majority dismissed all of Triton’s arguments, seeming to bend over backwards to accept the FDA’s improbable explanation for its cookie-cutter PMTA denials. Writing for the majority, Judge Catharine Haynes, a George W. Bush appointee, noted that “where the parties disagree on the science, we owe the FDA deference.” Judge Gregg Costa, appointed by President Obama, concurred.
Because the FDA’s written guidance and other communications to manufacturers before the September 2020 PMTA submission deadline explained that randomized controlled trials and longitudinal cohort studies would “probably” not be necessary to submit a successful application—and were not “required”—did not, said the court, prevent the agency from wiping thousands of products off the market with rubber-stamp denials that cited only the lack of those studies as the reason.
The FDA also decided to skip review of manufacturers’ marketing plans “for the sake of efficiency,” and because (it said) previous attempts by tobacco companies to reduce or eliminate youth use with marketing restrictions were unsuccessful. The court’s majority said the FDA was under no obligation to review Triton’s marketing plans—or any company’s—even though the agency’s PMTA mandate is to assess all aspects of each application individually.
The dissent from Judge Edith Jones, a Reagan appointee, followed much of the reasoning in the 3-0 stay order issued last October. Judge Jones agreed with that panel’s characterization of the FDA’s imposition of an after-the-fact standard as a “surprise switcheroo,” and cited mountains of reasons the FDA’s actions were arbitrary and capricious.
“In a mockery of ‘reasoned’ administrative decision-making,” Judge Jones wrote, “FDA (1) changed the rules for private entities in the middle of their marketing application process, (2) failed to notify the public of the changes in time for compliance, and then (3) rubber-stamped the denial of their marketing applications because of the hitherto unknown requirements.”
“Kafka would have understood the FDA all too well,” the judge added, probably unaware that she was echoing years of complaints by thousands of small businesses and millions of vaping consumers.
An internal FDA communication called the “fatal flaw memo” formed the basis for most or all of the FDA’s cookie-cutter PMTA denials. The memo instructed reviewers to deny any application that lacked the two kinds of studies the agency said—after applications had been submitted—were necessary to prove products in flavors other than tobacco and menthol could be “appropriate for the protection of public health.”
The FDA said the memo was rescinded before Triton’s PMTA denial was issued, but Judge Jones questioned that claim, noting that “Significant sections of that internal memo, though also claimed by FDA to be rescinded, are copied word-for-word in the TPLs [technical project leads—details of the reasons for a PMTA decision, written by the PMTA reviewer] for petitioners’ products.”
In the FDA’s October 2021 final PMTA Rule, Judge Jones noted that the FDA doubled down on its claims that applications would get individual analysis, and repeated its claim that no limiting criteria would be applied across the board to all applications. “Instead,” Judge Jones writes, “FDA assured that it would ‘consider many factors,’ would not rely on ‘one static set of requirements,’ does not assign weight to different types of evidence, and carefully ‘balances’ risks and benefits.”
That is what the FDA said it would do, both before and after the agency denied every flavored product sold by hundreds of companies, but that isn’t what it did.
“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,” writes Judge Jones. “The MDOs should be vacated, and the case remanded to FDA with instructions to allow these petitioners to develop and offer further evidence in support of the PMTAs.”
Triton (also known as Wages and White Lion Investments, LLC) is a Texas-based e-liquid manufacturer that produces products under its own brand names and also for other companies under contract. Its MDO appeal was consolidated with the appeal by Vapetasia, one of its partners that received a separate MDO. Some of the branded products included in Triton’s MDOs were Suicide Bunny, Boiler Maker, Vape Hooligan, Chewy Clouds, and Teleos.
Triton and Vapetasia can now request an en banc rehearing of their petitions—meaning a review of the case by all active judges on the Fifth Circuit. Most circuit court appeals are decided by a three-judge panel, but in some special circumstances, a majority of the active judges will vote to rehear the case en banc.
In its briefs, Triton had asked the court, if it ruled against the company, to at least “enjoin FDA from taking further adverse action on the Petitioners’ PMTAs for 18 months to allow Petitioners to conduct the necessary studies to prove comparative efficacy.” The court did not do that, and now Triton’s future as a legal manufacturer will depend on the full Fifth Circuit granting a review.