52 F.4th 533
3rd Cir.2022Background
- Liquid Labs manufactured flavored e-liquids for open-system e-cigarettes and submitted two PMTAs on September 4, 2020 covering 20 products.
- FDA had previously "deemed" ENDS subject to the Tobacco Control Act and required PMTAs to show marketing is appropriate for protection of public health.
- Liquid Labs submitted an abuse liability study, a cross-sectional perception and intention survey, modeling and literature reviews, and a marketing plan.
- In September 2021 FDA issued Marketing Denial Orders finding Liquid Labs lacked sufficiently robust evidence that flavored products provide net benefit to adult smokers to outweigh known youth risks, noting absence of randomized controlled trials or longitudinal studies and lack of flavor-to-tobacco-flavor comparisons.
- Liquid Labs sought agency re-review and then petitioned this court; the FDA reaffirmed its denial and the Third Circuit denied the petition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FDA engaged in a "surprise switcheroo" by suddenly requiring specific study types | FDA reversed course and unexpectedly required RCTs/longitudinal and comparative studies, upsetting reliance | Guidance never guaranteed other evidence would be sufficient; FDA consistently required rigorous, valid scientific evidence and explained why applicant evidence was inadequate | Court held no surprise switch; FDA did not change standards unlawfully and denial rested on insufficiency of submitted evidence |
| Whether FDA unlawfully required RCTs, long-term studies, or comparative testing of flavored vs tobacco-flavored ENDS | FDA effectively imposed blanket requirement for RCTs/long-term comparative trials | Statute and June 2019 Guidance permit consideration of multiple evidence types but require strong, reliable evidence including comparative behavioral data; FDA reasonably sought evidence likely to show switching/reduction over time | Court held FDA permissibly focused on comparative/behavioral evidence; it did not mandate long-term studies as sole route but reasonably found applicant evidence inadequate |
| Whether FDA acted arbitrarily by declining to consider Liquid Labs' marketing plan or by ignoring open-system product characteristics and certain population segments | FDA ignored marketing plan and unique open-system attributes; failed to consider adults who might turn to illicit market | FDA considered product-type evidence and population effects; marketing plan measures mirrored those previously found inadequate and would not cure scientific deficiencies | Court found any failure to consider the marketing plan harmless; FDA adequately considered product characteristics and population-level risks/benefits |
| Whether FDA acted ultra vires or violated APA/notice-and-comment requirements by changing standards | FDA exceeded statutory authority and should have used notice-and-comment rulemaking for new standards | FDA acted within statutory mandate to evaluate population-level risks and benefits and relied on guidance, not binding rulemaking | Court held FDA acted within its statutory authority and complied with APA standards; no rulemaking required |
Key Cases Cited
- Prohibition Juice Co. v. U.S. Food & Drug Admin., 45 F.4th 8 (D.C. Cir. 2022) (rejecting surprise-switcheroo challenge and affirming need for robust evidence in PMTAs)
- Wages & White Lion Invs., LLC v. U.S. Food & Drug Admin., 41 F.4th 427 (5th Cir. 2022) (upholding FDA comparative-evidence approach and scrutiny of applicant studies)
- Breeze Smoke, LLC v. U.S. Food & Drug Admin., 18 F.4th 499 (6th Cir. 2021) (similar rejection of claim that FDA improperly changed evidentiary requirements)
- Big Time Vapes, Inc. v. Food & Drug Admin., 963 F.3d 436 (5th Cir. 2020) (discussing FDA deeming rule that made ENDS subject to the Tobacco Control Act)
- Bidi Vapor LLC v. U.S. Food & Drug Admin., 47 F.4th 1191 (11th Cir. 2022) (divergent holding remanding on failure to consider marketing plan as harmful)
- Gripum, LLC v. United States Food & Drug Admin., 47 F.4th 553 (7th Cir. 2022) (affirming FDA's evidentiary approach in PMTA denials)
- SEC v. Chenery Corp., 332 U.S. 194 (1947) (courts review agency decisions based on grounds invoked by agency)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious standard for agency action)
- Nat'l Ass'n of Home Builders v. Defs. of Wildlife, 551 U.S. 644 (2007) (review standards and reliance interest principles)
- Shinseki v. Sanders, 556 U.S. 396 (2009) (harmless-error rule and burden of showing prejudice)