Vapor Unlimited LLC v. U.S. Food and Drug Administration, 47 F.4th 1191

Background

The Tobacco Control Act requires FDA premarket authorization for new tobacco products and directs FDA to weigh population-level risks and benefits, including likelihood of uptake by nonusers and cessation by existing users.
FDA deemed e-cigarettes tobacco products in 2016 and issued guidance (2019, 2020) and a proposed rule encouraging applicants to submit marketing and sales-access-restriction plans to show youth exposure and access would be limited.
Before final rulemaking, FDA adopted a "fatal flaw" evidentiary approach prioritizing randomized controlled trials or longitudinal cohort studies to show adult benefits; internal memoranda and Technical Project Lead (TPL) reviews marked many applications as lacking such studies and declined to evaluate marketing plans for efficiency and because FDA believed such restrictions had not worked.
FDA issued near-identical marketing denial orders in Sept. 2021 to six companies for flavored non-tobacco products, stating applications lacked sufficient evidence of adult benefit and that marketing plans were not considered.
Petitioners challenged the denials; the Eleventh Circuit held FDA acted arbitrarily and capriciously by failing to consider the companies' marketing and sales-access-restriction plans, set aside the orders, and remanded for reconsideration; a dissent argued remand would be futile.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FDA arbitrarily and capriciously failed to consider applicants' marketing and sales-access-restriction plans	Applicants: marketing/access plans were relevant to statutory public-health balancing and FDA guidance encouraged submission, so FDA had to consider them	FDA: it did not consider them because (a) efficiency and (b) agency experience showed such plans did not sufficiently reduce youth use	Court: FDA must consider those plans; ignoring them was arbitrary and capricious
Whether FDA's reliance on its prior experience and efficiency justified ignoring the plans	Applicants: experience/efficiency cannot substitute for consideration of relevant factors	FDA: prior experience shows those measures fail; evaluating plans would be inefficient and futile	Court: rejected experience and efficiency as lawful justifications for omitting consideration of relevant factors
Whether the omission was harmless error or required remand	Applicants: failure to consider plans was prejudicial; remand appropriate so FDA can evaluate plans	FDA and dissent: error harmless or remand futile because record shows plans would not change outcome	Court: error was not harmless; remand required to allow FDA to evaluate plans (dissent would find remand futile)
Whether substantive evidentiary standard (RCT/longitudinal studies) justified denials without further review	Applicants: submitted other evidence plus marketing plans relevant to youth-risk balancing	FDA: absence of RCT/longitudinal evidence is a ‘‘fatal flaw’’ as to adult-benefit showing	Court: did not reach final substantive approval decision; held procedural error in failing to consider marketing/access evidence and remanded for proper consideration

Key Cases Cited

Michigan v. Environmental Protection Agency, 576 U.S. 743 (2015) (agency action lawful only if it rests on consideration of relevant factors)
Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983) (arbitrary and capricious standard requires consideration of important aspects of the problem)
Federal Communications Commission v. Prometheus Radio Project, 141 S. Ct. 1150 (2021) (agency action must be reasonable and reasonably explained)
Department of Homeland Security v. Regents of the University of California, 140 S. Ct. 1891 (2020) (an agency must defend its actions based on the reasons it gave when it acted)
United States v. Schwarzbaum, 24 F.4th 1355 (11th Cir. 2022) (harmless-error analysis in administrative review)
Chenery Corp. v. United States, 318 U.S. 80 (1943) (courts generally remand to agencies to allow agencies to explain or cure errors)
Center for Biological Diversity v. U.S. Bureau of Land Management, 698 F.3d 1101 (9th Cir. 2012) (courts may look to statutes, regulations, and the administrative record to determine whether agency considered relevant factors)
Shinseki v. Sanders, 556 U.S. 396 (2009) (burden to show that administrative error was harmful)