US Supreme Court Hears Flavored Vape Case: Key Takeaways for Industry Stakeholders

The U.S. Supreme Court heard oral arguments on Monday in Wages and White Lion Investments. The Court heard arguments regarding the FDA’s defense of refusing to let two e-cigarette companies sell nicotine-containing flavored vape products deemed risky to youths. The FDA appealed a lower court’s decision, claiming it failed to follow proper legal procedures under the Administrative Procedure Act when rejecting the applications.

Background of the Case

Wages and White Lion Investments revolves around the FDA’s regulatory authority under the Family Smoking Prevention and Tobacco Control Act (TCA) of 2009. The TCA gave the FDA extensive powers to regulate the manufacturing, distribution, and marketing of tobacco products. In recent years, through the Deeming Regulation, the FDA has increasingly focused on vaping products.

White Lion Investments, d/b/a Triton, challenged the FDA’s regulations, arguing that they are overly burdensome and exceed the agency’s statutory authority. Specifically, the company contested the FDA’s requirement for premarket tobacco applications (PMTAs), which demand extensive scientific data to prove that a product is appropriate for the protection of public health. Triton secured a major victory in its case when the en banc Fifth Circuit Court of Appeals ruled in its favor.

Supreme Court Divided on Law, United on Remedy

It can be difficult to predict an outcome based on oral arguments. What was clear, and not necessarily unexpected, is the Court is divided. Justices Kagan, Soytomer, and Jackson repeatedly asked White Lion’s counsel where the surprise was (excerpts will be provided once the transcript is released), pointing both to the language in the statute and the apparent common knowledge about the dangers of flavored vapes. The conservative wing expressed a greater willingness to see how the FDA created a moving target. What may unify the Court is the remedy. The Justices grappled with what remedy the Court could provide, in particular, since both vape companies could simply re-submit the PMTA. White Lion’s counsel argued it was a question of enforcement, and absent the continued stay of the Marketing Denial Order (MDO), the two vape companies would go out of business.

Key Issues in the Case

1. Fair Notice and Shifting Standards
   A central argument from the respondents (the manufacturers) is that the FDA provided unclear and shifting guidance about what evidence was necessary for approval. They claim that their applications were unfairly judged against standards that were not articulated in advance, violating the Administrative Procedure Act (APA).

The FDA counters that the statutory framework itself provides adequate notice, placing the burden on manufacturers to demonstrate the required public health benefit. The agency insists it did not mislead applicants and had consistently emphasized the importance of rigorous scientific evidence.

2. The Harmless Error Doctrine
   The FDA argues that any procedural missteps in evaluating the applications were harmless because the manufacturers lacked the evidence necessary to satisfy statutory requirements. The Supreme Court must determine whether the harmless error doctrine applies in cases where an agency’s denial of applications is challenged.
3. Balancing Public Health Risks and Benefits
   The broader policy issue is whether flavored e-cigarettes can be justified as tools for smoking cessation for adults, given their well-documented appeal to youth. Congress established the TCA with the clear goal of protecting public health, but this case highlights the challenges in applying that standard to innovative products like e-cigarettes.

Key Takeaways from Oral Arguments

During the hearing, several justices explored the procedural fairness of the FDA’s actions. Justice Gorsuch pressed the FDA on whether its standards were clearly communicated, while Justice Barrett questioned whether the Due Process Clause imposes additional fair notice obligations on regulatory agencies.

On the other hand, Justice Sotomayor emphasized the addictive nature of nicotine and the risks posed to youth, suggesting deference to the FDA’s expertise in weighing public health considerations.

Potential Outcomes

The Court’s decision will likely fall into one of three scenarios:

1. Reversal of the Fifth Circuit’s Decision
   If the Court finds the FDA acted within its statutory authority and that the manufacturers were not misled, it will reverse the Fifth Circuit’s ruling. This outcome reinforces the FDA’s discretion in regulating tobacco products and sets a high bar for manufacturers seeking to challenge denials.
2. Affirmation of the Fifth Circuit’s Decision
   If the Court agrees with the Fifth Circuit that the FDA failed to provide fair notice or acted arbitrarily, the case could be remanded for further proceedings. This would require the FDA to clarify its standards and potentially reconsider the applications.
3. Narrow Ruling on Procedural Grounds
   The Court could issue a narrow ruling addressing only the procedural issues, such as whether the FDA provided adequate notice or improperly relied on certain evidence. This approach could provide guidance for future FDA actions without drastically altering its regulatory authority.

Implications for Industry Stakeholders

This case underscores the critical importance of robust, well-documented evidence in FDA applications. Manufacturers must anticipate rigorous scrutiny and ensure their applications are backed by sound science, particularly when marketing products with potential risks to vulnerable populations.

For regulatory agencies, the decision will likely clarify the scope of their procedural obligations under the APA and the Due Process Clause. Agencies may need to reevaluate how they communicate expectations to regulated entities, particularly in fast-evolving sectors like e-cigarettes.

As the industry awaits the Supreme Court’s decision, one thing is clear: The outcome will shape the future of e-cigarette regulation and provide key insights into the balance of power between regulatory agencies and the courts.

Stay tuned for updates on this critical case and its implications for the FDA and the regulated community.