Summary
This Supreme Court case addresses whether the Food and Drug Administration (FDA) lawfully denied premarket authorization for certain flavored electronic nicotine delivery systems under the Family Smoking Prevention and Tobacco Control Act. The Court vacated the Fifth Circuit's ruling that the FDA acted arbitrarily and capriciously, holding that the agency's denial orders were sufficiently consistent with its prior guidance and did not violate the change-in-position doctrine. The Court also remanded the harmless-error question regarding the FDA's failure to evaluate marketing plans, instructing the lower court to apply a more nuanced standard.
Topics
Practice areas
Questions Presented
- Whether the FDA acted arbitrarily and capriciously by applying scientific-evidence requirements inconsistent with its prior guidance.
- Whether the FDA acted arbitrarily and capriciously by requiring comparisons between flavored products and tobacco-flavored products.
- Whether the FDA acted arbitrarily and capriciously by applying its enforcement priorities to flavored open-system products despite prior guidance emphasizing cartridge-based products.
- Whether the Fifth Circuit applied an overly restrictive harmless-error standard in rejecting the FDA's argument that its failure to consider marketing plans was harmless.
- Whether the FDA was required by the APA or the Tobacco Control Act to establish the application requirements through notice-and-comment rulemaking.
Holdings
- The Court declined to decide whether the APA or the Tobacco Control Act required the FDA to use notice-and-comment rulemaking, because the issue was outside the question presented and inadequately briefed.
- The FDA's denial orders were sufficiently consistent with its predecisional guidance concerning scientific evidence, comparative efficacy, and device type, and therefore did not violate the change-in-position doctrine.
- The Fifth Circuit read Calcutt v. FDIC too broadly by treating remand as required for every agency error except when the agency would necessarily have taken the same action. The case was vacated and remanded so the Fifth Circuit could reconsider harmless error under a standard that reconciles the Chenery remand rule with the APA's prejudicial-error provision.
Key quotations
“Agencies are free to change their existing policies as long as they provide a reasoned explanation for the change, display awareness that they are changing position, and consider serious reliance interests.” (568)
“The change-in-position doctrine asks two questions. The first is whether an agency changed existing policy.” (569)
“an agency action cannot stand unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained.” (587)
“reviewing courts should adapt the rule of prejudicial error applicable in ordinary civil litigation (also known as the harmless-error rule) to the administrative-law context” (588)
“Where the agency has rested decision on an unsustainable reason, the court should generally reverse and remand even though it discerns a possibility, even a strong one, that by another course of reasoning the agency might come to the same result” (591)
Factual background
Respondents manufacture flavored e-liquids for open-system electronic cigarettes. They submitted premarket tobacco product applications by the court-ordered September 9, 2020, deadline, including marketing plans and scientific materials such as literature reviews and, for one respondent, a cross-sectional survey. The FDA denied the applications because respondents had not supplied sufficiently robust and product-specific evidence demonstrating that their dessert-, candy-, and fruit-flavored products provided a benefit over appropriate tobacco-flavored comparators. Although the FDA had previously described marketing plans as important or critical, it did not evaluate respondents' plans when issuing the denial orders.
Procedural history
The FDA denied respondents' applications to market flavored e-liquids, concluding that the applications lacked sufficient scientific evidence showing that the products would be appropriate for the protection of the public health. A Fifth Circuit merits panel initially denied review, but the en banc court granted review and remanded after finding that the FDA had acted arbitrarily and capriciously by applying requirements inconsistent with its guidance and by failing to consider marketing plans. The Supreme Court held that the FDA's denial orders were sufficiently consistent with its predecisional guidance concerning scientific evidence, comparative efficacy, and device type, but remanded for the Fifth Circuit to reconsider harmless error regarding the FDA's failure to evaluate marketing plans.
Remand instructions
The judgment of the Fifth Circuit was vacated and the case remanded for the Fifth Circuit to reconsider whether the FDA's failure to consider respondents' marketing plans was harmless, applying a standard that does not rely on the court's overly broad reading of Calcutt and that reconciles the Chenery remand rule with the APA's prejudicial-error rule.