Federal Court Rules Against FDA in Six MDO Appeals

A federal appeals court handed the independent vaping industry its first major win yesterday, ruling that the FDA acted improperly when it issued marketing denial orders (MDOs) to six small manufacturers. The decision nullifies the MDOs and forces the FDA to begin new reviews of the companies’ premarket tobacco applications (PMTAs).

A three-judge panel of the Eleventh Circuit Court of Appeals ruled 2-1 that the MDOs were arbitrary and capricious because the agency didn’t consider the marketing plans submitted by the small businesses in their applications. The six companies are:

The companies had all received MDOs from the FDA in September 2021, and filed petitions for review with the court soon after. Lawyers for the companies, four of which received stays from the court in February, participated in oral arguments before the three-judge panel on May 17. The six cases were consolidated for the decision.

The ruling: FDA ignored marketing plans

The ruling marked the first time an appeals court majority has found the argument that the FDA ignored manufacturers’ marketing plans persuasive. Before the Sept. 9, 2020 PMTA submission deadline, the FDA had assured manufacturers that their marketing plans would be considered during review. But when the agency began issuing boilerplate PMTA denials, it based them solely on the lack of certain studies proving flavored products could benefit public health.

In the Fifth Circuit Court’s July 18 ruling against Triton Distribution and Vapetasia, the majority said the FDA was under no obligation to review marketing plans. A week later, the D.C. Circuit Court ruled that the FDA’s decision to not review market plans was “harmless error,” because the four small manufacturers challenging the agency had “failed to identify how individualized review of the plans they submitted could have made any difference.”

But in the Eleventh Circuit’s ruling yesterday, the court’s Chief Judge William Pryor and Judge Andrew Brasher (both appointed by Republican presidents) ruled against the FDA on this point, noting that the FDA’s guidance to manufacturers conflicted with the agency's eventual refusal to review the companies' plans to prevent sales to underage users.

Additionally, this leaves the door open for further litigation on these and other PMTAs.

The FDA's vague and undefined "appropriate for the protection of public health" standard has long been open for attack. This is just the start.

— Gregory Conley (@GregTHR) August 23, 2022

The FDA could choose to ask the court for an en banc review—a reconsideration of the appeal by the full Eleventh Circuit. If that happens, the court's decision could change. If it doesn’t, the six companies’ PMTAs will go back to the FDA to be reconsidered.

While there’s a good chance the agency will arrive at the same conclusion (as long as it considers flavors a de facto reason for denial), these manufacturers’ PMTAs will presumably move to the back of the review queue, potentially giving them additional years of sales before they must fight another round of MDOs.

“This decision will further complicate the FDA’s attempt to ban 99.9 percent-plus of vaping products on the market today,” Gregory Conley of the American Vapor Manufacturers Association told Vaping360. “The Tobacco Control Act was written at a time when courts routinely deferred to the wisdom of unelected bureaucrats, but fortunately for vapers, federal judges are beginning to push back.”

The ruling also creates a split among the appeals courts. That could eventually lead the Supreme Court to step in to reconcile the conflicting lower court decisions. In a Reason article published today, Case Western Reserve University law professor Jonathan Adler noted that the FDA's vaping regulation "could soon be ripe for Supreme Court review."

"With the FDA hopelessly politicized and members of Congress unwilling to push for sound reforms in the face of relentless anti-vaping and anti-industry campaigns,” says Gregory Conley, “the future of the vaping industry could be determined by the Supreme Court.”

Dissent by Judge Robin Rosenbaum: just get it over with

The lone dissenter, Judge Robin Rosenbaum (appointed by President Obama) essentially said that the FDA is bound to deny these manufacturers’ applications the second time around anyway, so why bother prolonging the agony?

“I see no point in sending these petitions back for the FDA to do what everyone paying attention here knows that, under the framework the FDA has established for evaluating whether a new flavored vaping product is appropriate for the protection of the public health, the FDA will and must do: deny the applications,” wrote Judge Rosenbaum. “Engaging in this futile activity only delays the inevitable—and in the process imposes unnecessary time, effort, and financial costs on all involved.”

Her dissent included claims that might have been copied directly from Campaign for Tobacco-Free Kids propaganda, and indicated agreement with the FDA’s unstated but obvious goal to clear the market of flavored vaping products.

We now have a federal circuit court split on how the FDA has and can handle Pre-Market Tobacco Product Applications in the US.

Thus far they’ve done a horrible job. https://t.co/PzcYp9tSqI

— Paul Blair (@gopaulblair) August 23, 2022

Judge Rosenbaum’s dissent is reminiscent of the majority Fifth Circuit opinion in the Triton case, and the unanimous ruling against Prohibition Vapor and three co-petitioners in the D.C. Circuit. The judges, by and large, have had no interest in entertaining the idea that flavored vaping products could be at all beneficial to public health.

In fact, even the two majority judges in yesterday's ruling seem to share that opinion. They went out of their way to explain that theirs was a technical decision based on legal points, and not a vote in favor of vaping.

“Our conclusion that it was arbitrary and capricious for the Administration to ignore the relevant marketing and sales-access restriction plans does not mandate a different result on remand,” wrote Judge Pryor for the majority. “We acknowledge the evidence in the record catalogued by the dissent of the serious risk to youth, and it may be that the Administration will conclude on remand that the marketing and sales-access restriction plans submitted in the tobacco companies’ applications do not outweigh those risks. We do not make a moral judgment—only a procedural one.”

The Eleventh Circuit is located in Atlanta, and handles federal appeals for Alabama, Florida and Georgia. Five of the six companies that won yesterday are from Florida. The sixth, Pop Vapor Co., is based in Georgia.