Bidi Vapor LLC v. U.S. Food & Drug Admin.

• Decision Date: 23 August 2022
• Docket Number: 21-13340,21-13387,21-13438,21-13454,21-13521,21-13522
• Parties: BIDI VAPOR LLC, Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, ACTING COMMISSIONER OF U.S. FOOD AND DRUG ADMINISTRATION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondents. DIAMOND VAPOR LLC, Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent. JOHNNY COPPER, L.L.C., Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent. VAPOR UNLIMITED LLC, Petitioner. v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent. UNION STREET BRANDS L.L.C., Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent. POP VAPOR CO. LLC, Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent.
• Court: U.S. Court of Appeals — Eleventh Circuit

BIDI VAPOR LLC, Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, ACTING COMMISSIONER OF U.S. FOOD AND DRUG ADMINISTRATION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES, Respondents.

DIAMOND VAPOR LLC, Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent.

JOHNNY COPPER, L.L.C., Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent.

VAPOR UNLIMITED LLC, Petitioner. v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent.

UNION STREET BRANDS L.L.C., Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent.

POP VAPOR CO. LLC, Petitioner, v. U.S. FOOD AND DRUG ADMINISTRATION, Respondent.

Nos. 21-13340, 21-13387, 21-13438, 21-13454, 21-13521, 21-13522

United States Court of Appeals, Eleventh Circuit

August 23, 2022

Petitions for Review of a Decision of the Food and Drug Administration Agency Nos. PM0003460, PM0003472 Petitions for Review of a Decision of the Food and Drug Administration Agency No. PM0003757 Petitions for Review of a Decision of the Food and Drug Administration Agency No. PM0003581 Petitions for Review of a Decision of the Food and Drug Administration Agency No. PM0003525, PM0002546 Before William Pryor, Chief Judge, Rosenbaum, and Brasher, Circuit Judges.

William Pryor, Chief Judge:

These petitions for review concern whether it was arbitrary and capricious for the Food and Drug Administration to issue marketing denial orders to six tobacco companies for their electronic nicotine-delivery systems without considering the companies' marketing and sales-access-restriction plans designed to minimize youth exposure and access. The Administration refused to consider the marketing and sales-access-restriction plans based on both its need for efficiency and its experience that marketing and sales-access restrictions do not sufficiently reduce youth use of electronic nicotine products. Because “agency action is lawful only if it rests ‘on a consideration of the relevant factors,'” Michigan v. Env't Prot. Agency, 135. S.Ct. 2699, 2706 (2015) (quoting Motor Vehicle Mfrs. Ass'n U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)), and the Administration failed to consider the relevant marketing and sales-access-restrictions plans, the marketing denial orders were arbitrary and capricious. So, we grant the petitions for review, set aside the marketing denial orders, and remand to the Administration.

I. BACKGROUND

The Tobacco Control Act of 2009 prohibits manufacturers from selling any “new tobacco product” without approval from the Food and Drug Administration. See 21 U.S.C. § 387j. Any tobacco product that was not on the market as of February 15, 2007, is a “new tobacco product.” Id. § 387j(a)(1). The Act instructs the Administration to deny applications for new tobacco products if, based on the information before it, the Administration finds “a lack of a showing that permitting such tobacco product to be marketed would be appropriate for the protection of the public health.” Id. § 387j(c)(2), (2)(A). Whether a new product is “appropriate for the protection of the public health” is determined by evaluating “the risks and benefits to the population as a whole, including users and nonusers of the tobacco product.” Id. § 387j(c)(4). To make this determination, the Administration must consider both the “likelihood that existing users of tobacco products will stop using such products” and the “likelihood that those who do not use tobacco products will start using such products.” Id.

In 2016, the Administration deemed that electronic nicotine-delivery systems using nicotine derived from tobacco-including e-liquids and e-cigarettes-were “tobacco products” within the Administration's regulatory authority. Deeming Tobacco Products to Be Subject to the Federal Food, Drug, and Cosmetic Act, 81 Fed. Reg. 28,974, 29,028 (May 10, 2016) (hereinafter Deeming Rule). The Administration defines e-cigarettes as “electronic device[s] that deliver[] e-liquid in aerosol form into the mouth and lungs when inhaled.” U.S. Food & Drug Admin., Premarket Tobacco Product Applications for Electronic Nicotine Delivery Systems: Guidance for Industry 6 (2019) (hereinafter 2019 Guidance). E-liquids are defined to “include liquid nicotine, nicotine- containing liquids,” and other liquids “that are intended or reasonably expected to be used with or for the human consumption of a tobacco product.” Id.

There are two categories of e-cigarettes: open and closed. Open e-cigarettes are typically larger and require the user to re-fill a tank with e-liquid. Id. Closed e-cigarettes tend to be smaller and are either entirely disposable or use disposable, pre-filled cartridges. Id.

Because many electronic nicotine-delivery systems were already on the market by 2016, the Administration decided to stagger its evaluation of the products and allow the products to stay on the market in the interim. Deeming Rule, 81 Fed. Reg. at 29,009-10. The Administration explained that as it gained more experience regulating electronic nicotine-delivery systems, it expected to provide more guidance to manufacturers as to what information would be required in the premarket authorization applications to show that a product was “appropriate for the protection of [the] public health.” See Id. at 28,997. The original application deadline for flavored electronic nicotine-delivery systems was September 2018, but “a series of schedule changes implemented by the [Administration] and federal courts” moved the final deadline to September 9, 2020. Breeze Smoke, LLC v. U.S. Food & Drug Admin., 18 F.4th 499, 504 (6th Cir. 2021); accord Enforcement Priorities for Electronic Nicotine Delivery Systems and Other Deemed Products on the Market Without Premarket Authorization (Revised), 85 Fed. Reg. 23,973, 23,974 (Apr. 30, 2020).

Before the September 2020 application deadline, the Administration issued nonbinding guidance, hosted public meetings, and published a proposed rule to explain to manufacturers what evidence would be required in their applications. The Administration repeatedly represented to tobacco companies that marketing and sales-access-restriction plans were relevant to its determination of whether their products were “appropriate for the protection of the public health.” See 21 U.S.C. § 387j(c)(4). For example, at a public meeting in 2018, an Administration representative stated that one of the considerations the Administration “ha[d] used in deciding whether a [tobacco] product [wa]s appropriate for the protection of the public health” was whether “the marketing of the new [product] [would] affect the likelihood of nonuser uptake, cessation rates[,] or other significant shifts in user demographics in a manner to decrease morbidity and mortality from tobacco product use.” Iilun Murphy, Premarket Tobacco Product Application Content Overview, U.S. Food & Drug Admin. (Oct. 23, 2018), https://www.fda.gov/media/117507/download.

The Administration repeated this advice when it published final guidance on premarket authorization applications for electronic nicotine-delivery-system products in June 2019. See 2019 Guidance,supra. The Administration recommended companies include any applicable “restrictions on the sales and distribution” of their products in their applications “to help support a showing that the marketing of the product would be [appropriate for the protection of the public health].” Id. at 20-21; accord Id. at 12.

The Administration communicated its expectation that companies submit marketing and sales-access-restriction plans in a proposed rule published in September 2019. The proposed rule included a requirement for applicants to submit marketing plans, including “[a]ny means by which youth-access or youth-exposure to the products' labeling, advertising, marketing, and promotion would be limited.” Premarket Tobacco Product Applications and Recordkeeping Requirements, 84 Fed. Reg. 50,566, 50,643 (proposed Sept. 25, 2019) (to be codified at 21 C.F.R. pt. 1114). The proposed rule explained that the information in an applicant's marketing plan “is critical to [the Administration's] determination of the likelihood of changes in tobacco product use behavior.” Id. at 50,581; accord Id. (stating that the Administration “wi l review the marketing plan to evaluate potential youth access to, and youth exposure to the labeling, advertising, marketing, or promotion of, a new tobacco product” (emphasis added)). As an example, the proposed rule stated that “heavy use of online social media to promote a tobacco product without access restrictions, as opposed to actions such as paper mailings directed only to current smokers of legal age, indicates the potential for youth to be exposed to the promotion of the product.” Id.

In April 2020, the Administration published a guidance document about its enforcement priorities and “current thinking” on electronic nicotine-delivery systems which detailed the most-current data on youth electronic nicotine-delivery-systems use, the enforcement measures employed by the Administration in its attempt to curb minor use, and the considerations of the Administration going forward. See U.S. Food & Drug Admin., Enforcement Priorities for Electronic Nicotine Delivery Systems (ENDS) and Other Deemed Products on the Market Without Premarket Authorization (Revised): Guidance for Industry 2-3 (Apr. 2020) (hereinafter 2020 Guidance). The 2020 Guidance stated that, since 2017, the Administration had seen “an alarming increase in the use of [electronic nicotine-delivery systems] by middle and high school students.” Id. at 6. The 2020 Guidance explained that, in response, the Administration increased enforcement against and sent warning letters to manufacturers and retailers who marketed or sold products to...