FDA vs. Triton: Supreme Court Showdown Dec. 2nd

Next Monday, Dec. 2, the Supreme Court will hear oral arguments in the FDA’s appeal of its Fifth Circuit Court of Appeals loss to Triton Distribution. 

The case, FDA v. Wages and White Lion Investments, L.L.C., could be the most consequential legal event ever for the independent vaping industry. If the court decides to uphold the January 2024 Fifth Circuit decision, the FDA could be forced to revamp its entire premarket tobacco application (PMTA) authorization system and scrap all marketing denial orders (MDOs) issued since 2021. The agency might even have to abandon part or all of its 2016 Deeming Rule.

On the other hand, if the court rules for the FDA, it would validate the existing FDA process, which would likely mean that flavored products, bottled e-liquids, and open-system (refillable) devices would have no future in the legal U.S. vape product marketplace.

The court will render a decision on the case later this session, probably next spring. 

What to expect at oral arguments

On Dec. 2 at 10:00 a.m. EST, lawyers representing the FDA and Triton will lay out their arguments and then answer questions from the nine Supreme Court justices. You can hear the arguments and questioning live on the court’s website. The site also maintains recordings of oral arguments if you’re unable to listen live.

Triton’s case will be argued by Eric Heyer, a partner at legal firm Thompson Hine’s Washington, D.C. office. Heyer has represented several vaping businesses that have challenged MDOs in various federal appeals courts, and is well-versed on the issues.

The FDA will be represented by Curtis Gannon, a Deputy Solicitor General in the Office of the Solicitor General, which represents the federal government in Supreme Court cases.

Briefs from both sides, as well as amicus curiae briefs from interested outside parties, are available on the court’s docket page. 

The justices will already be familiar with each side’s legal arguments before Monday’s event, so expect the lawyers’ prepared remarks to be cut off by probing questions. It is during the questioning that observers can get an idea of the justices’ thinking on the issues in the case.

Triton and the Fifth Circuit Court of Appeals

Triton Distribution (formally known as Wages & White Lion Investments, LLC) and partner company Vapetasia LLC received MDOs in mid-September 2021. Both companies filed petitions for review in the Fifth Circuit in October, and the cases were consolidated later that month. (Although legal documents post-consolidation often don’t name Vapetasia, all decisions in the case apply to that company too.)

On Oct. 26, Triton was granted a stay pending the outcome of its appeal by a unanimous three-judge panel of the court. In that stay order, Judge Andrew S. Oldham famously called the FDA’s shifting regulatory standards a “surprise switcheroo,” and noted that Triton was likely to prevail because the FDA denial order is “likely arbitrary, capricious or otherwise unlawful.”

However, a separate Fifth Circuit merits panel ruled 2-1 against Triton in July 2022. Despite Judge Edith Jones’s vigorous dissent—she noted that “Kafka would have understood the FDA all too well”—the panel accepted the FDA’s decision-making process without argument, and concluded that “where the parties disagree on the science, we owe the FDA deference.” (That is no longer true after the Supreme Court’s 2024 rejection of so-called “Chevron deference.”)

Encouraged by the original stay order and Jones’s dissent, Triton petitioned for a rare en banc rehearing, in which all active members of the appeals court participate. The rehearing was granted in January 2023, and a year later, on Jan. 3, 2024, the Fifth Circuit ruled 10-6 in favor of Triton.

The court took the FDA to task over its PMTA process, ruling that the agency’s actions were arbitrary and capricious, violating the Administrative Procedure Act (APA).

“Over several years, the Food and Drug Administration sent manufacturers of flavored e-cigarette products on a wild goose chase,” wrote Judge Andrew S. Oldham for the majority.

“FDA justifies its behavior with two principal arguments,” wrote Judge Oldham. “First, FDA argues that its years’ worth of regulatory guidance was not worth the paper it was printed on because it was hedged with cautious qualifiers and never guaranteed that any particular submission would be granted. Second, and most disturbingly, FDA argues that its capriciousness should be forgiven as harmless because the agency promises to deny petitioners’ applications even if we remand to make the agency follow the law.

“Today," he wrote, "we reject both propositions.”

In March 2024, facing a future of lost MDO appeals in the Fifth Circuit (because future decisions would be denied based solely on the Triton precedent), the FDA rolled the dice and petitioned the Supreme Court to review the Triton case. 

On July 2—just four days after its blockbuster Loper Bright Enterprises v. Raimondo decision that freed federal courts from giving deference to administrative agencies in their decisions—the Supreme Court agreed to review the Triton decision. 

“Triton looks forward to having the Supreme Court review FDA’s surprise, after-the-fact imposition of new study requirements and failure to follow its own guidance for applicants for marketing authorization for flavored ENDS products,” Triton attorney Eric Heyer said following the Supreme Court announcement.

What will be argued in the Supreme Court?

Following are some notes about the issues to be decided by the Supreme Court, although not an exhaustive list. (Also note that I'm not a lawyer.)

FDA’s shifting PMTA standards

Triton argued, and the appeals court agreed, that the FDA had changed standards for companies submitting applications in the years leading up to the PMTA submission deadline—and, in fact, the agency’s standards had shifted again after the deadline passed. 

Nearly a year after the PMTA submission deadline, in August 2021, the agency began issuing MDOs to small vaping businesses, and explained that manufacturers of “flavored” (meaning any flavor but tobacco and menthol) e-liquids would have to provide “evidence of benefits to adult smokers for such products." Such evidence, said the FDA, "would likely be in the form of a randomized controlled trial or longitudinal cohort study.”

The FDA said manufacturers of flavored products must show “sufficient product-specific scientific evidence to demonstrate enough of a benefit to adult smokers that would overcome the risk posed to youth.” Again, that requirement came a year after PMTAs had been submitted.

Triton argued that the agency’s shifting of regulatory goalposts was “arbitrary and capricious,” and the Fifth Circuit agreed. The new standards, imposed after the application deadline, amounted to rulemaking by the FDA—but without following the APA-mandated notice-and-comment requirements for rulemaking, said Triton.

Fifth Circuit Judge Oldham described these shifting standards as a regulatory “surprise switcheroo” by the FDA.

FDA’s failure to follow APA-mandated notice-and-comment rulemaking

In fact what had happened was the FDA—faced with millions of PMTAs from small companies it knew would be unlikely to succeed in court—had created an unpublished standard and a system that allowed agency employees to rapidly issue cookie-cutter marketing denials based on that standard. 

The so-called “fatal flaw” memo—obtained and described by Filter reporter Alex Norcia in November 2021—laid out a system by which FDA staff searched the text of PMTAs (for flavored vapes) for evidence of randomized controlled trials or longitudinal cohort studies, and summarily denied the PMTAs if the studies hadn’t been done.

The FDA said the fatal flaw memo had been rescinded before Triton’s MDO was issued, but Triton argues that the Technical Project Lead Reviews (TPLs—details of the PMTA decision, written by the FDA reviewer) used substantially the same language as the fatal flaw memo to justify the denial. 

The Tobacco Control Act, which guides FDA tobacco regulation, mandates that each PMTA be individually analyzed and considered to determine if the product under review is “appropriate for the protection of public health.” As silly as that standard may seem—since legacy tobacco products, including combustible cigarettes, are exempt from it—it demands individual consideration for each application, and does not allow the agency to sweep an entire category of products off the market. 

Banning flavors would require the agency to follow APA rulemaking procedures: issue a proposed rule, accept public comments, review the comments, and revise the rule before publishing and implementing it. The agency has not followed that process, but instead has devised a method to accomplish the same goal without following the APA.

In fact, the FDA wanted a flavor ban included in the 2016 Deeming Rule (it was rejected by the Obama White House), and in 2018 proposed a rule that would restrict flavors. Failing in those attempts to ban flavors, the agency appears to have rigged the PMTA process to get the same result.

The FDA says in its Supreme Court brief that its June 2024 authorization of some NJOY menthol vapes, and earlier authorization of menthol-flavored IQOS heated tobacco refills, proves it has not deliberately rejected flavored vapes en masse. However, the agency still has not authorized any flavor but menthol, nor any bottled e-liquid (and IQOS is not an e-liquid-based vape at all).

FDA’s decision not to evaluate marketing plans

Before the 2020 submission deadline, the FDA also indicated that a crucial element of a successful PMTA would be a company’s marketing plan showing how it would prevent youth uptake of its product. 

But the FDA said later it had decided to skip reviewing marketing plans “for the sake of efficiency,” and because previous attempts by tobacco companies to reduce or eliminate youth use with marketing restrictions were unsuccessful. The FDA says this is “harmless error” because it had already considered and rejected similar plans from other manufacturers.