Tag: SCOTUS

  • SCOTUS to Hear Triton Vaping Case Next Week

    SCOTUS to Hear Triton Vaping Case Next Week

    Credit: Renas Child

    In one week, the U.S. Supreme Court will hear the U.S. Food and Drug Administration’s defense of the agency’s rejection of two companies’ premarket tobacco product applications (PMTAs) to sell flavored vape products that it has determined pose health risks for young consumers.

    The live audio of the hearing can be found here.

    The justices took up the FDA’s appeal filed after a lower court ruled that the agency had failed to follow proper legal procedures under federal law when it denied the applications to bring their nicotine-containing products to market.

    The Supreme Court is due to hear the case in its next term, which begins in October, according to Reuters.

    Two e-cigarette liquid makers, Triton Distribution and Vapetasia LLC, filed FDA applications in 2020 for products with flavors such as sour grape, pink lemonade, and crème brulee and names such as “Jimmy The Juice Man Strawberry Astronaut” and “Suicide Bunny Bunny Season.”

    An FDA rule that took effect in 2016 deemed e-cigarettes to be tobacco products, like traditional cigarettes, subject to agency review under a 2009 federal law called the Tobacco Control Act. The rule said manufacturers of the products would need to apply for approval to continue selling them.

    The FDA rejected the applications by the two companies, along with more than one million other products, according to court records. The FDA has approved only 27 e-cigarette products, all tobacco or menthol flavored.

    Triton and Vapetasia in 2021 asked the New Orleans-based 5th U.S. Circuit Court of Appeals to review the FDA’s denial of their applications.

    In January, the full slate of 5th Circuit judges ruled 10-6 that the FDA had been arbitrary and capricious, in violation of a federal law called the Administrative Procedure Act, by denying the applications without considering plans by the companies to prevent underage access and use.

  • Lawmakers File Amicus Brief in SCOTUS Vape Case

    Lawmakers File Amicus Brief in SCOTUS Vape Case

    supreme court of US
    VV Archives

    A group of congressional lawmakers urged the Supreme Court of the United States to overturn a lower court ruling that blocked federal regulators from rejecting certain e-cigarette products. They argued that the move could hinder government efforts to keep illegal vaping products off store shelves.

    The Supreme Court is set to tackle the FDA’s power to regulate vape sales altogether this term, in FDA v. Wages and White Lion Investments, LLC. The forthcoming case challenges a January ruling from the Fifth Circuit, which found that the FDA overstepped its authority when it rejected marketing applications from two manufacturers looking to sell flavored liquids for e-cigarettes, according to Courthouse News.

    In an amicus brief filed with the Supreme Court Monday, the group of legislators — led by Senate Majority Whip Dick Durbin, Oregon Senator Jeff Merkley and New Jersey Representative Frank Pallone — argued that the FDA’s decision to reject these marketing applications was “carefully” reasoned.

    “Guided by Congress’ chief directive — to deny such authorization unless a product under review would be ‘appropriate for the protection of the public health’ … FDA has been appropriately mindful of children and teenagers, the most vulnerable pool of non-tobacco users,” the lawmakers wrote.

    They contended that judicial oversight of the agency’s authority had been “generally consistent” until the Fifth Circuit’s ruling and had not impeded it from accomplishing its regulatory responsibilities.

    The legislatures told the high court that allowing the lower court’s ruling to stand would not only force the FDA to waste resources reevaluating the rejected marketing applications but could also invite other manufacturers previously rejected by the FDA to relitigate their own marketing requests.

    “While those applications are once again pending FDA review, the tobacco products they cover would continue to be sold, despite the law’s clear pre-market authorization regime,” the lawmakers said. That provides a “powerful financial incentive” for manufacturers to reapply for FDA approval, even if they know the agency will ultimately deny their applications.

  • Supreme Decision

    Supreme Decision

    Credit: Sean Pavone Photo

    The U.S. vaping industry is anxiously awaiting a decision from the highest court in the land.

    By Timothy S. Donahue

    The Supreme Court of the United States (SCOTUS) is poised to address a crucial case for the vaping industry that challenges the U.S. Food and Drug Administration’s decision to block the marketing of flavored e-cigarette products. The FDA is contesting a lower court ruling that favored two vaping companies, which argue that the FDA unjustly rejected over a million premarket tobacco product applications (PMTAs) to sell flavors other than tobacco or menthol.

    Under the agency’s PMTA pathway, companies must demonstrate that the marketing of a product would be appropriate for the protection of public health (APPH). When the FDA makes decisions about vaping products, it must take into consideration the risks and benefits to the entire population, not just users of the products.

    The case, Wages and White Lion Investments v. U.S. FDA, is compelling because a major factor in predicting how SCOTUS will rule in the first vaping case to be heard by the high court, and potentially at least three others, is that in the wake of another SCOTUS ruling, courts no longer need to defer to agency interpretation of the law simply because a statute is ambiguous (see “Principle Response,” page 22).

    Gregory Conley, an experienced industry attorney and director of legislative and external affairs at the American Vapor Manufacturers Association, said that the overturning of the Chevron deference could have a profound impact on the vaping and broader nicotine industries by reducing the deference courts previously granted to regulatory agencies like the FDA.

    “Judges will now critically evaluate the FDA’s regulatory processes and interpretations of ambiguous statutes rather than assuming the agency knows best,” Conley said. “In simpler terms, for the first time since its creation, the FDA’s Center for Tobacco Products will have to follow the law as written.”

    Vape companies secured a legal victory when the 5th U.S. Circuit Court of Appeals sided with Wages and White Lion (doing business as Triton Distribution) and Vapetasia when it overturned the orders denying the marketing of the companies’ flavored products. In its decision, the 5th Circuit condemned the FDA’s imposed requisites as “unfair,” noting that the agency “unexpectedly demanded” that the companies present studies demonstrating that flavored products would contribute to smoking cessation.

    In January, the en banc panel of the 5th Circuit voted 9-5 to grant the petitions for review. The judges ruled that the FDA had been “arbitrary and capricious,” in violation of a federal law called the Administrative Procedure Act (APA), by denying the applications without considering the companies’ plans to prevent underage access and use.

    “Over several years, the [FDA] sent manufacturers of flavored e-cigarette products on a wild goose chase. First, the agency gave manufacturers detailed instructions for what information federal regulators needed to approve e-cigarette products. Just as importantly, FDA gave manufacturers specific instructions on what regulators did not need,” Circuit Judge Andrew S. Oldham wrote in the majority opinion. “The agency said manufacturers’ marketing plans would be ‘critical’ to the success of their applications.

    “And the agency promulgated hundreds of pages of guidance documents, hosted public meetings and posted formal presentations to its website—all with the (false) promise that a flavored-product manufacturer could, at least in theory, satisfy FDA’s instructions. The regulated manufacturers dutifully spent untold millions conforming their behavior and their applications to FDA’s say-so.

    “Then, months after receiving hundreds of thousands of applications predicated on its instructions, FDA turned around, pretended it never gave anyone any instructions about anything, imposed new testing requirements without any notice, and denied all 1 million flavored e-cigarette applications for failing to predict the agency’s volte-face. Worse, after telling manufacturers that their marketing plans were ‘critical’ to their applications, FDA candidly admitted that it did not read a single word of the 1 million plans.”

    The case began when the FDA rejected 55,000 applications to market flavored e-cigarettes in August 2021, including Triton’s, and said applicants would likely need to conduct long-term studies establishing their products’ benefits to win approval. The Office of the Solicitor General asked the Supreme Court to review whether the 5th Circuit’s decision relied upon “legal theories that have been rejected by other courts of appeals that have reviewed materially similar FDA denial orders.”

    The regulatory agency’s “legal theories” in Triton are based on administrative fairness and regulatory consistency, not Chevron deference. In most vaping industry lawsuits, appeals courts have supported the FDA, and manufacturers have sought appeals. In the Triton Distribution case, however, the FDA had to petition the court to review the 5th Circuit’s decision, which was based more on APA violations. SCOTUS is scheduled to hear the case sometime during its new session, which begins in October.

    Conley explained that, while the end of Chevron signals a new openness by the Supreme Court to scrutinize federal agencies, the 5th Circuit’s opinion focused on matters of statutory interpretation, including procedural conduct and the FDA’s sudden imposition of new standards without proper notification.

    “With or without Chevron deference, we believe that the ‘switcheroo’ pulled by the FDA was arbitrary, capricious and not in line with the Administrative Procedures Act,” said Conley. “This stance aligns with the court’s broader view that agencies should not have unchecked power to interpret and enforce ambiguous statutes without clear congressional authorization.”

    Much of the lower court’s opinion is based on APA violations. The APA process for creating federal regulations has (typically) three main phases: initiating rulemaking actions, developing proposed rules and developing final rules. In practice, however, this process is often complex, requiring regulatory analysis, internal and interagency reviews, and opportunities for public comments.

    At its most basic level, the APA requires that an agency create a draft proposed rule, review/approve it, publish a notice of proposed rulemaking in the Federal Register and open a public comment period of at least 30 days. In a footnote to the Triton decision, the court characterized the FDA’s denial of all PMTAs for nontobacco-flavored e-cigarettes as a “de facto flavor ban” that circumvented the APA’s required notice-and-comment rulemaking process:

    “(5) FDA’s categorical ban has other statutory problems. For example, the TCA states that FDA must follow notice-and-comment procedures before adopting a ‘tobacco product standard.’ See 21 U.S.C. § 387g(c)–(d). And Congress specifically called a ban on tobacco flavors a ‘tobacco product standard.’

    “See id. § 387g(a)(1)(A) (referring to tobacco flavors, ‘including strawberry, grape, orange, clove, cinnamon, pineapple, vanilla, coconut, licorice, cocoa, chocolate, cherry or coffee, that is a characterizing flavor of the tobacco product or tobacco smoke’); see also id. § 387g(a)(2) (cross-referencing notice-and-comment obligation to revise flavor standards). FDA unquestionably failed to follow § 387g’s notice-and-comment obligations before imposing its de facto ban on flavored e-cigarettes.”

    Attorneys from the U.S. Department of Justice told the justices that the 5th Circuit’s ruling “has far-reaching consequences for public health and threatens to undermine the TCA’s central objective of ‘ensuring that another generation of Americans does not become addicted’” to nicotine products.

    In court papers, Solicitor General Elizabeth Prelogar told SCOTUS justices that the FDA has never adopted a categorical ban on flavored e-cigarette products. “Rather, it has recognized that, because such products pose a ‘known and substantial risk to youth,’ applicants bear a particularly high burden of proving a potential for benefit to adult smokers that could justify the risk,” she wrote.

    Robert Burton, a longtime player in the U.S. vaping industry and current group scientific and regulatory director for the U.K.-based vaping company Plxsur, said that concerning the Triton case, decisions will now need to carry a significant weight of evidence on both sides.

     “Without the Chevron precedent, it may come down to a judgment based upon who knows the market and consumer best and who understands ‘best’ what is in the interest of public health, but based upon facts and data rather than a gray area deferral,” said Burton.

    Attorney Eric Heyer, who is representing Triton, expressed intense anticipation for the Supreme Court’s hearing of the case. He strongly criticized the FDA for imposing “surprise, after-the-fact … study requirements” and failing to adhere to the guidelines the agency itself had developed.

    It is unclear whether SCOTUS will hear the three other vaping-related cases, which are also before it (Magellan Technology Inc. v. Food and Drug Administration; Lotus Vaping Technologies LLC v. Food and Drug Administration; and Logic Technology Development LLC v. Food and Drug Administration). In these cases, vaping manufacturers seek a review of their losses in FDA-issued marketing denial order appeals handed down by various other circuit courts.

    Yolonda Richardson, president and CEO of the Campaign for Tobacco-Free Kids, has urged the high court to overturn the appeals court order, emphasizing that if allowed to stand, it could significantly harm public health, particularly that of children. Vaping companies have asserted that their products can mitigate the harm caused by smoking combustible cigarettes.

    When the Triton decision was announced, Tony Abboud, executive director of the Vapor Technology Association, welcomed the decision as a “blistering indictment” of the FDA’s Center for Tobacco Products for its “intentional misleading” of the U.S. e-cigarette industry.

    “The court was so stupefied by the FDA’s bad-faith efforts to reject all flavored e-cigarette products [that] it cited Shakespeare to illustrate the full extent of the FDA’s disingenuity, particularly after the court explained that the plaintiffs in that case provided scientific evidence that e-cigarettes ‘save lives,’” Abboud said. “The court also emphasized the dramatic and abrupt ‘FDA flip-flop,’ which led to the implementation of what the court called a ‘de facto ban’ on flavored e-cigarette products in the U.S.

    “This was in addition to the voluminous jurisprudence cited by the court laying bare just how egregious the behavior of the FDA administrative state has been toward e-cigarette products and the consumers that use them. As the court stated, ‘No principle is more important when considering how the unelected administrators of the fourth branch of government treat the American people.’”

    Triton Cited as Precedent by 5th Circuit

    The U.S. Food and Drug Administration is starting to see vapor on the horizon. The regulatory agency has been handed another brutal defeat by a federal court. The 5th Circuit Court of Appeals granted petitions for review to five vaping companies, citing its own decision in the Triton Distribution case as precedent.

    The court sent the company’s marketing denial orders (MDOs) back to the FDA for additional scientific evaluation. As a result, the manufacturers may keep selling their products until the agency completes new reviews of their premarket tobacco product applications (PMTAs) or until the Supreme Court takes action.

    “Specifically, the court determined that (1) FDA did not give e-cigarette manufacturers fair notice of the rule requiring long-term studies for PMTAs; (2) FDA did not acknowledge or adequately explain its change in position; and (3) FDA ignored reasonable and serious reliance interests that manufacturers had in the pre-MDO guidance,” the 5th Circuit wrote in its ruling.

    Five companies, Cloud House, Paradigm Distribution, SWT Global Supply, Vaporized and SV Packaging, first challenged their MDOs in court in October 2021. The court consolidated the five cases, and in November 2021, all petitioners were granted stays pending review.

    In January, the 5th Circuit found in favor of Wages and White Lion Investments (doing business as Triton Distribution) in the e-liquid manufacturer’s appeal of an MDO. The FDA later petitioned the Supreme Court to review the 5th Circuit’s ruling, and last month, the Supreme Court agreed to hear the agency’s appeal.

    The FDA challenged the Triton decision, and the U.S. Supreme Court agreed to hear that case. “But now, another panel of the 5th Circuit has applied the same rationale as in Triton to hold that these five, small-business manufacturers prevail for the same reason: FDA pulled a surprise switcheroo,” wrote the United States Vaping Association on X.

    “From 2018 to 2020, FDA provided a ‘dizzying’ array of detailed instructions explaining the requirements for PMTAs,” the opinion states. “But ‘[n]ever in this long, winding and byzantine regulatory process of meetings, PowerPoint decks, proposed rules, comment periods, guidance documents and enforcement priorities did FDA ever say that it was contemplating an across-the-board ban on flavored products. Nor did FDA ever give fair notice that flavored product manufacturers had to submit robust scientific studies on flavored e-cigarette products.’”

    The 5th Circuit found that the recent petitions posed the same issues as Triton’s. “Petitioners spent substantial time and resources preparing their PMTAs based on FDA guidance that they would not need to submit long-term clinical studies,” the court wrote. “Nevertheless, FDA rejected their PMTAs using the same boilerplate language it used for the Wages petitioners’ denials as well as those of thousands of other e-cigarette manufacturers.

    “Accordingly, for the reasons amply explained by the en banc court in Wages, we hold that FDA acted unlawfully here as well by denying petitioners’ PMTAs based on the absence of long-term clinical studies.”

    The FDA’s failure was not simply a failure to provide notice that a particular type of study was required (long-term studies) but a failure to provide notice of the substantive standard requiring comparison between the flavored products at issue and tobacco-flavored juices, according to the USVA.

    “USVA members have now won important legal precedent in the 11th and 5th Circuits,” the USVA posted. “Note that manufacturers who didn’t file a petition in a court of appeals to challenge their MDOs can still sue in district court, and if you’re in the 5th or 11th Circuit, you have binding precedent in place that should provide a solid prospect of securing a quick ruling vacating your MDO.”

  • Principled Response

    Principled Response

    VV Archives

    The end of Chevron deference could have ripple effects across the nicotine industry.

    By Timothy S. Donahue

    U.S. courts will no longer need to “humbly respect” how government agencies interpret the law. The end of Chevron deference means unelected officials will no longer have the leeway to subjectively decide what Congress intends when it passes regulatory legislation.

    The court’s ruling in Loper Bright Enterprises v. Raimondo and the related case Relentless v. Department of Commerce will likely have far-reaching impacts on nearly every action government agencies take. For the nicotine industry, it could change how courts view the U.S. Food and Drug Administration’s premarket tobacco product application (PMTA) process. It could also impact the agency’s efforts to regulate menthol and lower the levels of allowable nicotine in combustible cigarettes.

    “For far too long, unelected bureaucrats at the FDA have been making up the law to suit their ulterior agenda and … the Supreme Court has thankfully put a stop to it once and for all,” said Allison Boughner, vice president of the American Vapor Manufacturers Association, in a statement. “No longer will it be good enough for [prohibitionists] in Congress to write vague, Crayola language and then connive behind closed doors with FDA to impose arbitrary policies on the American public that could never withstand the light of day. [This] ruling is a stirring rebuke of FDA and, we hope, with more soon to follow in pending cases.”

    In declaring the doctrine’s demise, Chief Justice John Roberts wrote that agencies “have no special competence” in resolving statutory ambiguities—but courts do.

    “Chevron is overruled,” wrote Justice Roberts in the Loper Bright decision. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA [Administrative Procedure Act] requires. Careful attention to the judgment of the Executive Branch may help inform that inquiry.

    “And when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation while ensuring that the agency acts within it. But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.”

    Agustin E. Rodriguez, a partner with Troutman Pepper, explained that “under the doctrine of Chevron deference, courts would defer to a federal agency’s interpretation of an ambiguous statute if the agency was charged with administering the statute in question and its interpretation was reasonable. However, the end of Chevron deference may alter that traditional thinking.”

    Bryan Haynes, also a partner at Troutman Pepper, added, “The Supreme Court’s decision overruling Chevron in the Loper Bright Enterprises v. Raimondocase could affect federal courts’ overall outlook on agency interpretations, possibly making courts hesitant to defer to agencies as a general practice.”

    The decision could potentially result in alterations to the FDA’s methods of regulating vaping products. The Supreme Court of the United States (SCOTUS) has agreed to hear its first-ever vaping case, Wages and White Lion Investments v. U.S. FDA, which is compelling because deferring to Chevron has been the standard for lower courts when deciding regulatory cases brought by manufacturers of nicotine products (the end of Chevron deference isn’t likely to directly impact the White Lion case, according to its attorneys).

    Robert Burton, an expert with more than 11 years of experience in the U.S. vaping industry and current group scientific and regulatory director for the U.K.-based vaping company Plxsur, said another general concern is that now, federal agencies may have to put more resources into the additional legal challenges that they will likely face and divert staff away from review/approval processes.

    “Agencies, such as FDA, may also have to look to improve their primary knowledge in those ‘gray areas’ to be able to demonstrate they actually have the knowledge and expertise rather than it being ‘assumed’ or deferred by judges based upon Chevron,” Burton explained. “I also can’t see anything changing soon; if anything, this will create a further backlog of court cases and delays in regulatory decisions based upon the potential for an agency to be challenged legally.”

    How it started

    The Chevron doctrine, based on the 1984 decision in Chevron v. Natural Resources Defense Council, held that courts should defer to the interpretations of “expert” federal agencies regarding ambiguous laws they are required to implement, as long as the agency interpretations are reasonable.

    In many cases, what would be considered “reasonable” was also left to government agencies to decide because nonelected bureaucrats were often considered “experts” even though they had little to no experience in the industries they were regulating.

    For 40 years, unelected officials were given latitude to decide on their own what Congress had intended when it wrote unclear laws—even if there were other sufficient interpretations that the courts could have considered. According to the New York Times, Chevron deference was applied in 70 Supreme Court decisions and 17,000 lower-court rulings during those years.

    The plea to overturn the Chevron doctrine came to the court in two cases challenging a rule issued by the National Marine Fisheries Service (NMFS) that requires the herring industry to bear the costs of observers on fishing boats. Applying Chevron, both the U.S. Court of Appeals for the District of Columbia Circuit and the U.S. Court of Appeals for the 1st Circuit upheld the rule, finding it to be a reasonable interpretation of federal law.

    The fishing companies brought their case to the Supreme Court, seeking the justices’ input on both the rule in question and the overruling of the Chevron doctrine. Roman Martinez, speaking on behalf of a group of fishing vessels, informed the justices that the Chevron doctrine undermines the courts’ responsibility to interpret the law and violates the federal law that governs administrative agencies, which calls for courts to independently review legal questions.

    Under the Chevron doctrine, he observed, even if all nine Supreme Court justices agree that the fishing vessels’ interpretation of federal fishing law is better than the NMFS’ interpretation, they would still be required to defer to the agency’s interpretation as long as it was reasonable. Such a result, Martinez concluded, is “not consistent with the rule of law.”

    Chris Howard, executive vice president of external affairs and new product compliance for Swisher, parent to the vaping company E-Alternative Solutions, welcomed the ruling, saying that federal agencies have had too much power for decades.

    “That ended with the Supreme Court’s decision overturning the longstanding Chevron doctrine,” said Howard. “The decision marks a significant shift in the judicial landscape, correcting the balance of power between federal agencies and the judiciary. It fundamentally alters how courts rule on agency statutory interpretation. As the majority states, courts will no longer be restrained by the need to provide deference.

    “Instead, ‘Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.’ This transformation will likely lead to significantly less regulatory flexibility and increased judicial scrutiny. The implications of this decision will resonate across industries, including the tobacco industry, influencing regulatory practices and shaping the future of administrative law. Regulatory overreach will become the exception as opposed to the norm and enable courts to fulfill their duty to interpret the law.”

    Immediate uproar

    The end of Chevron deference is extremely far-reaching, with other industries, such as healthcare, likely to review previous decisions that have gone against them. Justice Elena Kagan, in her dissent, asserted that government regulators are best positioned to tackle highly technical subjects.

    “This court has long understood Chevron deference to reflect what Congress would want, and so to be rooted in a presumption of legislative intent,” Kagan wrote. “Congress knows that it does not—in fact cannot—write perfectly complete regulatory statutes. It knows that those statutes will inevitably contain ambiguities that some other actor will have to resolve and gaps that some other actor will have to fill.

    “Today, the court flips the script: It is now ‘the courts (rather than the agency)’ that will wield power when Congress has left an area of interpretive discretion. A rule of judicial humility gives way to a rule of judicial hubris. In recent years, this court has too often taken for itself decision-making authority Congress assigned to agencies. The court has substituted its own judgment on workplace health for that of the Occupational Safety and Health Administration, its own judgment on climate change for that of the Environmental Protection Agency and its own judgment on student loans for that of the Department of Education.

    “In one fell swoop, the majority today gives itself exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law. As if it did not have enough on its plate, the majority turns itself into the country’s administrative czar. It defends that move as one (suddenly) required by the (nearly 80-year-old) Administrative Procedure Act. But the act makes no such demand. Today’s decision is not one Congress directed. It is entirely the majority’s choice. And the majority cannot destroy one doctrine of judicial humility without making a laughingstock of a second.”

    Several national healthcare groups made a joint statement expressing that Chevron deference protected the legal stability of public health programs such as Medicare and Medicaid. The groups claim that Chevron ensured that laws passed by Congress were interpreted and implemented by expert federal agencies such as the Centers for Medicare and Medicaid Services.

    “As our amicus brief noted, large health programs such as Medicaid and Medicare, as well as issues related to the Food, Drug and Cosmetic Act, are extremely complex, so it is key that decisions about how to interpret and implement relevant laws are made by experts at government agencies,” the statement reads. “Yet [this] majority opinion explicitly ends the use of this sensible doctrine.

    “As leading organizations that work on behalf of people across the country who face serious, acute and chronic illnesses and many people who lack access to quality and affordable healthcare, we will continue to work to ensure that healthcare laws are implemented in ways that benefit public health.”

    In its response to the Chevron ruling, the Public Health Law Center at the Mitchell Hamline School of Law stated that the Loper Bright ruling will “undoubtedly impact” the field of administrative law and implicate regulations that, in addition to promoting public health and safety, have served to protect consumers, workers, civil rights and the environment.

    “Legal experts differ on the degree to which Loper Bright may wreak havoc on the federal administrative state; however, the forceful dissent written by Justice Kagan in this case and its companion case, Relentless v. Department of Commerce, should not be ignored. The dissent expressed grave concern that these decisions ‘will … cause a massive shock to the legal system, cast doubt on many settled constructions of statutes and threaten the interests of many parties who have relied on them for years.’

    “In the absence of Chevron deference, the tobacco industry will doubtless feel emboldened to dispute any regulatory actions taken on its products. This includes e-cigarette manufacturers who will be eager for courts to undo FDA-issued premarket tobacco product application denial orders for many thousands of vape products.”

    The Biden administration called the Chevron decision “yet another deeply troubling decision that takes our country backward,” adding that President Biden’s legal team would work with federal agencies to do “everything we can to continue to deploy the extraordinary expertise of the federal workforce.”

    Reshma Ramachandran, a health policy expert and assistant professor at the Yale School of Medicine, said, “This term has been disastrous for public health in many ways.”

    In the vaping industry, however, Tony Abboud, executive director of the Vapor Technology Association (VTA), said that the decision clearly bolsters what the VTA has been saying for years: the FDA and, specifically, the Center for Tobacco Products overstepped their authority when they chose to implement a de facto ban on flavored e-cigarettes in their deeply flawed implementation of the PMTA process.

    “To be clear, it is [the] FDA’s responsibility under the law to create a regulation that clearly addresses the statutory standard of what is ‘appropriate for the protection of public health’ since the Tobacco Control Act is ambiguous on how that determination should be made. However, there is no question that the FDA violated the Administrative Procedure Act by implementing what the 5th Circuit Court of Appeals called ‘a de facto ban on flavored e-cigarettes’ through its shifty implementation of the PMTA regulation by imposing new requirements on products after applications were already filed, ultimately ensuring their application’s demise.

    “The Supreme Court’s decision elevates the importance of the Reagan-Udall Foundation’s findings after being convened at the request of the FDA commissioner, which specifically and clearly criticized the FDA’s Center for Tobacco Products for failing to inform companies what must be provided under the regulation to demonstrate APPH [appropriate for the protection of the public health] and, as importantly, for failing to inform the public on how FDA is applying this standard.”

    Beyond nicotine

    The cannabis industry also will likely be impacted by the Chevron ruling. Asheville, NC-based attorney Rod Kight, a global resource and expert in cannabis law, said that the recent ruling by the SCOTUS that Chevron deference is dead is welcome news to the cannabis industry. With respect to the hemp sector, the death of Chevron means that unofficial positions taken about various cannabinoids and processes to produce hemp products by both the U.S. Drug Enforcement Agency (DEA) and the FDA on their respective websites and in letters to stakeholders do not hold any weight, at least not with the courts.

    “In practical terms, this means that judges may not defer to federal agency positions and interpretations and, instead, must weigh their positions relative to the strength of the legal positions and interpretations put forth by the hemp industry,” explains Kight. “For instance, with respect to tetrahydrocannabinolic acid (THCA), the DEA has stated in two letters during the past year that ‘cannabis-derived THCA does not meet the definition of hemp under the CSA because upon conversion for identification purposes as required by Congress, it is equivalent to delta-9 THC.’

    “As I have discussed in several blog posts and interviews, this is partially incorrect and is not exactly what ‘Congress required.’ Rather, Congress requires a post-decarboxylation test for hemp production (i.e., cultivation) but not for harvested hemp or hemp products.”

    In the past, this type of unofficial guidance may have warranted a court’s deference to the DEA, even if an opposing position by a hemp industry participant was stronger and more well articulated. However, Kight said that, in the post-Chevron world, the DEA’s position will not hold any more weight with the court than a counter-position by an opposing litigant.

    “The same thing applies to any number of other issues, from vapes to synthetic cannabinoids,” said Kight. “Hopefully, this exciting legal development will curb the appetite for DEA and FDA to take strong positions that are often unwarranted while helping the hemp industry to carve out favorable judicial rulings based on the best and most well-articulated positions.”

    Abboud said the SCOTUS’ decision in Loperexposes the FDA’s improper regulation of flavored e-cigarettes. While the vaping cases that have gone before the SCOTUS were not explicitly decided on Chevron deference, it is hard to believe that the court will not look skeptically on the FDA’s prior “regulatory shenanigans and post-hoc justifications” laid bare by the 5th Circuit Court of Appeals in the White Lion case.

    “However, unlike the complete overturning of Chevron, it is likely that the court would issue a more limited ruling in the vape cases before it. That said, the real power of Loper is that it provides a template for new litigation against the FDA that is not limited to individual application decisions,” said Abboud. “This new regulatory challenge would reveal the full story of FDA’s tortured and disingenuous implementation of the ambiguous PMTA statutory provisions to ban flavored vaping products and possibly, as a result, spell the demise of the PMTA regulation.

    “VTA is once again calling for the FDA to immediately suspend any further denials based on its existing process and instead create a clear and streamlined tobacco product standard that will allow independent companies of all sizes to get less harmful nicotine alternatives on the market as it is required to do under the law.”

  • RICO-Based Hemp Case Headed for Supreme Court

    RICO-Based Hemp Case Headed for Supreme Court

    Credit: Adobe Stock

    For the first time since the 2018 Farm Bill became law, the Supreme Court of the United States will decide a case about hemp. The lawsuit, Medical Marijuana, Inc., et al. v. Douglas J. Horn, involves the Racketeer Influenced and Corrupt Organizations Act (RICO) and asks whether product manufacturers can be held responsible for a person’s lost earnings and other job benefits under that powerful statute.

    The plaintiff is a commercial truck driver who was fired for failing a random drug test after taking a CBD product that was marketed as THC-free. The plaintiff then filed a RICO claim and state law claims against the companies that marketed the CBD product. He asserted that his lost job earnings and benefits are “business or property” damages that are recoverable under RICO.

    The federal district court dismissed the plaintiff’s RICO claim, finding for the companies that RICO does not provide for personal injury losses. However, the Second Circuit Court of Appeals reversed the district court and reinstated the RICO claim. The Supreme Court agreed to take up the case. If the Supreme Court affirms the Second Circuit’s ruling, the plaintiff could recover up to three times his lost earnings, plus attorney’s fees.

    The U.S. Hemp Roundtable has filed a “friend of the court” brief supporting the defendants’ position that Congress did not intend RICO to apply to personal injury losses. As the brief argues, expanding RICO has major implications for the hemp products industry.

    Industry experts have stated that increased costs will be passed on to consumers, potentially making products unavailable to people who need them. Additionally, more liability may cause manufacturers, distributors, or retailers to exit the industry entirely, which will reduce economic opportunities for hemp farmers and businesses.

    The case is expected to be heard during the court’s next session, which begins in October.

  • SCOTUS to Hear Vaping PMTA Suit FDA v. Triton

    SCOTUS to Hear Vaping PMTA Suit FDA v. Triton

    supreme court of USThe U.S. Supreme Court agreed on Tuesday to hear the U.S. Food and Drug Administration’s defense of the agency’s rejection of two companies’ premarket tobacco product applications (PMTAs) to sell flavored vape products that it has determined pose health risks for young consumers.

    The justices took up the FDA’s appeal filed after a lower court ruled that the agency had failed to follow proper legal procedures under federal law when it denied the applications to bring their nicotine-containing products to market.

    The Supreme Court is due to hear the case in its next term, which begins in October, according to Reuters.

    Two e-cigarette liquid makers, Triton Distribution and Vapetasia LLC, filed FDA applications in 2020 for products with flavors such as sour grape, pink lemonade, and crème brulee and names such as “Jimmy The Juice Man Strawberry Astronaut” and “Suicide Bunny Bunny Season.”

    An FDA rule that took effect in 2016 deemed e-cigarettes to be tobacco products, like traditional cigarettes, subject to agency review under a 2009 federal law called the Tobacco Control Act. The rule said manufacturers of the products would need to apply for approval to continue selling them.

    The FDA rejected the applications by the two companies, along with more than one million other products, according to court records. The FDA has approved only 27 e-cigarette products, all tobacco or menthol flavored.

    Triton and Vapetasia in 2021 asked the New Orleans-based 5th U.S. Circuit Court of Appeals to review the FDA’s denial of their applications.

    In January, the full slate of 5th Circuit judges ruled 10-6 that the FDA had been arbitrary and capricious, in violation of a federal law called the Administrative Procedure Act, by denying the applications without considering plans by the companies to prevent underage access and use.

  • U.S. Supreme Court Overturns Chevron Deference

    U.S. Supreme Court Overturns Chevron Deference

    Credit: Sean Pavone Photo

    On Friday, June 28, the Supreme Court of the United States ruled 6-3 in favor of overturning the “Chevron deference,” a backbone principle for how the federal government keeps corporations in check. Chevron is the practice by which federal courts defer to federal agencies when sorting out ambiguities in a law. Justices Breyer, Kagan, and Sotomayor dissented.

    The ruling could impact the U.S. Food and Drug Administration and its process for authorizing vaping products through the premarket tobacco product authorization process. In practice, Chevron deference often gives agencies broad leeway to reach beyond the limits of a statute’s plain language, often bypassing the rulemaking process otherwise required under the Administrative Procedure Act and making it more difficult to challenge an agency action in court.

    Chris Howard, executive vice president, External Affairs & New Product Compliance for Swisher, said that for decades federal agencies have had too much power.

    “That ended today with the Supreme Court’s decision overturning the long-standing Chevron Doctrine. The decision marks a significant shift in the judicial landscape, correcting the balance of power between federal agencies and the judiciary,” said Howard. “It fundamentally alters how courts rule on agency statutory interpretation. As the majority states, courts will no longer be restrained by the need to provide deference.

    “Instead, ‘Courts must exercise their inde­pendent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.’ This transformation will likely lead to significantly less regulatory flexibility and increased judicial scrutiny. The implications of this decision will resonate across industries, including the tobacco industry, influencing regulatory practices and shaping the future of administrative law. Regulatory overreach will become the exception as opposed to the norm and enable courts to fulfill their duty to interpret the law.”

    In the years since electronic nicotine delivery systems (ENDS) became subject to FDA regulation, the vast majority of courts reviewing ENDS industry challenges to premarket application denials, as well as FDA rulemakings and guidance documents, have rubber-stamped the agency’s interpretation of the Family Smoking Prevention and Tobacco Control Act (TCA) and the “appropriate for the protection of the public health” standard.

    Critics contend that the Chevron deference has enabled the FDA to impermissibly interpret the TCA to implement a de facto ban on all nontobacco-flavored ENDS products without any requisite notice and comment rulemaking or congressional amendments to the TCA.

    “For far too long, unelected bureaucrats at the FDA have been making up the law to suit their own ulterior agenda and Today, the Supreme Court has thankfully put a stop to it once and for all,” said Allison Boughner, vice president of the American Vapor Manufacturers Association. “No longer will it be good enough for prohibitionists in Congress to write vague, Crayola language and then connive behind closed doors with FDA to impose arbitrary policies on the American public that could never withstand the light of day.”

    It has been nearly 40 years since the Supreme Court indicated in Chevron v. Natural Resources Defense Council that courts should defer to an agency’s reasonable interpretation of an ambiguous statute.

    The court’s ruling could have ripple effects across the federal government, where agencies frequently use highly trained experts to interpret and implement federal laws, according to SCOTUSblog. Although the doctrine was relatively noncontroversial when it was first introduced in 1984, in recent years conservatives – including some members of the Supreme Court – have called for it to be overturned.

    The plea to overturn the Chevron doctrine came to the court in two cases challenging a rule, issued by the National Marine Fisheries Service, that requires the herring industry to bear the costs of observers on fishing boats. Applying Chevron, both the U.S. Court of Appeals for the District of Columbia Circuit and the U.S. Court of Appeals for the 1st Circuit upheld the rule, finding it to be a reasonable interpretation of federal law.

    The fishing companies came to the Supreme Court, asking the justices to weigh in on the rule itself but also to overrule Chevron. Roman Martinez, representing one group of fishing vessels, told the justices that the Chevron doctrine undermines the duty of courts to say what the law is and violates the federal law governing administrative agencies, which similarly requires courts to undertake a fresh review of legal questions.

    Under the Chevron doctrine, he observed, even if all nine Supreme Court justices agree that the fishing vessels’ interpretation of federal fishing law is better than the NMFS’s interpretation, they would still be required to defer to the agency’s interpretation as long as it was reasonable. Such a result, Martinez concluded, is “not consistent with the rule of law.”

  • Keller and Heckman Files Amicus Brief with SCOTUS

    Keller and Heckman Files Amicus Brief with SCOTUS

    Credit: Sean Pavone Photo

    Eric Gotting and Azim Chowdhury, partners at Keller and Heckman, filed an amicus brief with the Supreme Court of the United States (SCOTUS) in support of Avail Vapor’s writ of certiorari petitioning the SCOTUS to review the 4th Circuit’s decision to uphold the U.S. Food and Drug Administration’s marketing denial order of Avail’s premarket tobacco product application for its nontobacco-flavored e-liquids, according to a post on The Continuum of Risk.

    The brief, filed on behalf of a group of public health experts, is intended to provide relevant scientific background on comparative health impacts of electronic nicotine-delivery system (ENDS) products with combustible cigarettes.

    The brief argues that ENDS are, beyond a reasonable doubt, much safer than cigarettes; ENDS help adult smokers quit and can reach many adults who would not otherwise quit smoking; ENDS flavors are important to adults trying to quit smoking; youth vaping has declined markedly since 2019, with most youth vaping being infrequent, nonaddictive and temporary, and more frequent and intense vaping generally limited to adolescents who are otherwise likely to smoke.

    Youth do not generally use the refillable tank devices sold in vape shops but instead use more mass-market products; claims that vaping is a gateway to smoking are based on a misunderstanding of the evidence; and because smoking and vaping are linked, measures like e-liquid flavor bans can cause more smoking or other damaging unintended consequences.

    In its petition, Avail asks the Supreme Court to consider the lower court’s legal reasoning and decision.

    Among other things, Avail argues in its petition that the FDA’s decisionmaking was arbitrary and capricious; that another court sided with a different petitioner against the FDA on the same basic arguments; and that the case is significant not only for Avail but for the entire industry and its customers.

    The Supreme Court has not yet decided whether it will hear Avail’s case.

  • Supreme Court Paves Path for California Flavor Ban

    Supreme Court Paves Path for California Flavor Ban

    Credit: Niro World

    The Supreme Court of the United States on Monday rejected a last-minute plea from the tobacco industry and cleared the way for California to enforce a statewide ban on the sale of most flavored tobacco products, including menthol cigarettes.

    The court’s action has the effect of upholding a measure passed by the Legislature in 2020, which in turn was approved by 63 percent of voters in November. It is due to take effect next week, according to the Los Angeles Times.

    Washington attorney Noel Francisco, who served as U.S. solicitor general under then-President Trump, filed an emergency appeal with Justice Elena Kagan on Nov. 29, asking her and the high court to stop California’s statewide ban from taking effect.

    Kagan referred the appeal led by R.J. Reynolds to the full court, which issued a brief order denying it without comment and with no dissents.

    The outcome is a victory for anti-tobacco advocates who called for cracking down on e-cigarettes and eliminating youth-friendly flavors such as bubble gum, cotton candy and cherry.

    California joins Massachusetts and New York in prohibiting the sale of flavored tobacco.

  • RJ Reynolds Asks SCOTUS to Stop California Flavor Ban

    RJ Reynolds Asks SCOTUS to Stop California Flavor Ban

    Credit: Sean Pavone Photo

    R.J. Reynolds and other vaping and tobacco companies filed a request Tuesday asking the Supreme Court of the United States to impose an emergency order to stop California from enforcing a ban on flavored vaping and other tobacco products.

    The ban was overwhelmingly approved by voters earlier this month.

    First passed by the state legislature two years ago, the ban never took effect after tobacco companies gathered enough signatures to put it on the ballot, according to media reports.

    However, after nearly two-thirds of voters approved of banning the sale of everything from cotton-candy flavored e-liquid to menthol cigarettes. The law is set to go into effect by Dec. 21.

    Supporters of the ban say the law was necessary to put a stop to a staggering rise in teen smoking.

    Several companies filed suit over filed a lawsuit against California in federal court over the state’s ban on flavored products one day after voters backed the ban in a Nov. 8 referendum. However, the 9th U.S. Circuit Court of Appeals on Tuesday denied the company’s emergency motion to block the law pending appeal.

    The companies suing California argue that the authority to ban flavored products rests in federal law. The Family Smoking Prevention and Tobacco Control Act gives the FDA the authority to regulate tobacco.

    In the filing, the companies said they would suffer “irreparable harm” from not being able to sell the products in one of the nation’s largest markets.

    The companies argued that small retailers will face laying off employees and possibly closing. Among those filing for the order is the Neighborhood Market Association, a group of San Diego retailers that include vape shops.