Appellate Case: 21-9577 Document: 010111006058 Date Filed: 02/27/2024 Page: 1
FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS February 27, 2024
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
_______________________________________
ELECTRIC CLOUDS, INC. and
CLOUD 9 VAPOR PRODUCTS,
L.L.C.,
Petitioners,
v. Nos. 21-9577 & 21-9578
UNITED STATES FOOD AND
DRUG ADMINISTRATION,
Respondent.
----------------------------------------
AMERICAN ACADEMY OF
FAMILY PHYSICIANS;
AMERICAN ACADEMY OF
PEDIATRICS; AMERICAN
CANCER SOCIETY CANCER
ACTION NETWORK; AMERICAN
HEART ASSOCIATION;
AMERICAN LUNG ASSOCIATION
OF OKLAHOMA; AMERICAN
MEDICAL ASSOCIATION;
CAMPAIGN FOR TOBACCO-FREE
KIDS; COLORADO MEDICAL
SOCIETY; PARENTS AGAINST
VAPING E-CIGARETTES; TRUTH
INITIATIVE,
Amici Curiae.
Appellate Case: 21-9577 Document: 010111006058 Date Filed: 02/27/2024 Page: 2
___________________________________________
PETITION FOR REVIEW FROM AN ORDER OF THE
U.S. FOOD AND DRUG ADMINISTRATION
(FDA Nos. PM0002382 & PM002523)
_________________________________________
Jerad Wayne Najvar, Najvar Law Firm, PLLC, Houston, Texas, for
Petitioners.
Joshua M. Koppel, Appellate Staff Attorney, U.S. Department of Justice,
Washington D.C. (Bryan M. Boynton, Principal Deputy Assistant Attorney
General, and Alisa B. Klein, Appellate Staff Attorney, with him on the
briefs), for Respondent.
William B. Schultz, Andrew N. Goldfarb, and Trillium Chang of
Zuckerman Spaeder LLP, Washington D.C., and Dennis A. Henigan and
Connor Fuchs, Campaign for Tobacco-Free Kids, Washington, D.C., filed
an amicus curiae brief in support of Respondent.
__________________________________________
Before BACHARACH, BALDOCK, and MURPHY, Circuit Judges.
___________________________________________
BACHARACH, Circuit Judge.
___________________________________________
This case arose from concern over the spread of nicotine.
Traditionally, nicotine had come mainly from cigarettes. But nicotine now
comes from other sources, such as e-cigarettes. With e-cigarettes, users
inhale vaporized liquid rather than smoke; the vapor comes from heated
liquids called e-liquids.
E-liquids contain nicotine, which harms human health. So the Food
and Drug Administration began requiring manufacturers to apply for
approval before they could continue selling e-liquids. Because the
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application process would be new, the FDA issued guidance for
manufacturers.
With this guidance, manufacturers blitzed the FDA with applications
to market e-liquids bearing attractive flavors. Our petitions for review
involve applications from two of these manufacturers: Electric Clouds, Inc.
and Cloud 9 Vapor Products, L.L.C. With their applications, Electric
Clouds and Cloud 9 submitted scientific data and marketing proposals to
restrict access for children. The FDA rejected the applications without
reviewing the proposed restrictions on access, and Electric Clouds and
Cloud 9 seek judicial review on two main issues:
1. Notice: Because the application process was new, the FDA
provided manufacturers with guidance. For example, the FDA
suggested to manufacturers that they would need to show
enough benefits to adult users to offset the risk of attracting
children to e-liquids. Did this suggestion mislead
manufacturers to believe that they wouldn’t need long-term
clinical studies or comparisons involving flavored and nonflavored e-liquids? We answer no.
2. Harmless error: The FDA studied existing access restrictions
based on age and found that they had generally proved
ineffective. Electric Clouds and Cloud 9 proposed age
restrictions like those that the FDA had regarded as ineffective.
Did the FDA prejudice Electric Clouds or Cloud 9 by rejecting
their applications without reviewing their proposed agerestrictions? We again answer no.
1. FDA approval is required to manufacture e-liquids.
The FDA considered the applications against the backdrop of federal
law, which permits approval only if the availability of the e-liquid “would
3
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be appropriate” to protect public health. 21 U.S.C. § 387j(c)(2)(A). To
apply this standard, the FDA must balance
• the chance that more adult users will transition away from
tobacco use and
• the risk that more children will start using e-liquids.
21 U.S.C. § 387j(c)(4)(A)–(B).
In balancing these factors, the FDA has considered the advantages
and disadvantages of e-liquids. The disadvantages mainly involve the
presence of nicotine. See Family Smoking Prevention and Tobacco Control
Act, Pub. L. 111-31, § 2(3),
123 Stat. 1776, 1777 (2009); Avail Vapor, LLC
v. FDA,
55 F.4th 409, 414–15 (4th Cir. 2022). So the FDA has set out to
encourage adult users to transition to e-liquids without making them
attractive to children. Breeze Smoke, LLC v. FDA,
18 F.4th 499, 504–05
(6th Cir. 2021). This task was complicated by the growing use of flavors in
e-liquids. These flavors attract children by making the e-liquids taste like
fruit, mint, candy, desserts, and other sweets. See Avail Vapor,
55 F.4th at
415.
2. The FDA denied the applications by Electric Clouds and Cloud 9
to market flavored e-liquids.
With this regulatory framework in place, Electric Clouds and Cloud 9
applied for approval to manufacture flavored e-liquids bearing names like
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Ice Cream Dream, Berries Gone Wild, Cap’n Berry Crack, Banana Colada,
Apple Pie, and Candy Man. ER6–10, 306–23.
The FDA denied the applications, finding that Electric Clouds and
Cloud 9 hadn’t shown that their flavored e-liquids would help adult
smokers enough to offset the risk to youth. ER14–15, ER325–26. The FDA
considered the manufacturers’ scientific evidence, but regarded it as
deficient based on the absence of
• long-term, product-specific studies of cigarette reduction or
comparisons to tobacco-flavored e-liquids (such as a
randomized controlled trial or longitudinal cohort study) or
• other evidence that had reliably evaluated the effect of
flavoring on adults reducing their use of cigarettes or
transitioning to e-liquids.
ER14–15, 325–26.
Given these deficiencies, the FDA rejected the applications without
reviewing the proposed marketing plans. ER15, 325. The FDA
acknowledged that marketing plans might theoretically reduce the risk to
youth. ER35 n.xix, 352 n.xix. But the FDA pointed out that it hadn’t yet
seen any marketing plans that would sufficiently offset the risk of
attracting young consumers. Id.
3. The FDA didn’t mislead Electric Clouds or Cloud 9 by ambushing
them with a new, undisclosed evidentiary standard.
Electric Clouds and Cloud 9 argue in part that the FDA misled them
by imposing rigid requirements after suggesting a more flexible approach.
5
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The changes, according to Electric Clouds and Cloud 9, involved
requirements for long-term clinical studies and comparisons between e-
liquids based on the presence of flavoring.
An agency must explain changes in its position, particularly when a
regulated party has relied on the earlier position. FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 515–16 (2009). Electric Clouds and Cloud 9
argue that the FDA changed its position after fostering reliance on its
written guidance, proposed rule, and statements in a public meeting. We
disagree, concluding that the FDA didn’t deviate from its earlier
statements. See Prohibition Juice Co. v. FDA,
45 F.4th 8, 20–21 (D.C. Cir.
2022) (rejecting a similar challenge because the FDA’s final
determinations were consistent with the FDA’s 2019 Guidance).
3.1 The FDA’s statements didn’t mislead Electric Clouds or Cloud 9
on the need for long-term clinical studies or the equivalent.
Electric Clouds and Cloud 9 argue that three of the FDA’s statements
had suggested to manufacturers that they could forgo long-term clinical
studies:
1. the Guidance in 2019 for e-liquid manufacturers, FDA,
Guidance for Industry, Premarket Tobacco Applications for
Electronic Nicotine Delivery Systems (June 2019),
2. a 2019 proposed rule, Premarket Tobacco Product Applications
and Recordkeeping Requirements, 84 Fed. Reg. 50,566 (Sept.
25, 2019), and
3. an FDA public meeting on October 22–23, 2018.
6
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3.1.1 The 2019 Guidance didn’t mislead the manufacturers.
Electric Clouds and Cloud 9 argue that they were misled by the
FDA’s guidance. Granted, “[t]he fair-notice requirement extends to
informal guidance.” Breeze Smoke, LLC v. FDA, 18 F.4th 499, 504 (6th
Cir. 2021). But the guidance itself stressed that
• it was not binding,
• the FDA would continue to adapt to new information, and
• manufacturers would need to show empirical data at multiple
points in time.
In both 2019 and 2020, the FDA issued guidance, beginning both
times with warnings that they “represent[] the current thinking of the
[FDA] on this topic” and are “not binding on the FDA or the public.”
ER47, ER115 (emphasis added). The 2019 Guidance added that “guidances
. . . should be viewed only as recommendations, unless specific regulatory
or statutory requirements are cited.” ER117. To emphasize the nonbinding
nature of the guidance, the FDA included a bolded disclaimer on every
page saying that it “[c]ontains nonbinding recommendations.” See Wages &
White Lion Invs., LLC v. FDA, 90 F.4th 357, slip op. at 65 n.6 (5th Cir.
2024) (en banc) (Haynes, J., dissenting) (“The conditional language used
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by the FDA in its nonbinding guidance documents indicates that it never
guaranteed that a certain type of evidence would be sufficient.”). 1
With these disclaimers, the FDA emphasized in the 2020 Guidance
that the requirements would change based on new information:
“Manufacturers cannot have settled expectations to market unlawful
products, especially in the face of evolving public health concerns.” ER72,
Enforcement Priorities for Electronic Nicotine Delivery Systems (ENDS)
and Other Deemed Products on the Market Without Premarket
Authorization (Revised): Guidance for Industry (Apr. 2020). Given the
development of new information, the FDA reminded manufacturers that
they
• would need to adapt their compliance policies based on
“changed circumstances” and
1
The Fifth Circuit disagreed, reasoning that the D.C. Circuit had
declined to consider cautionary language in two opinions: Southwest
Airlines Co. v. FERC, 926 F.3d 851 (D.C. Cir. 2019), and Physicians for
Social Responsibility v. Wheeler,
956 F.3d 634 (D.C. Cir. 2020). Wages &
White Lion Invs., LLC v. FDA,
90 F.4th 357, slip op. at 27–40 (5th Cir.
2024) (en banc). But in these opinions, the D.C. Circuit hadn’t addressed
the impact of an agency’s cautionary language. For example, in Southwest
Airlines Co., the D.C. Circuit had examined an agency’s sudden departure
from longstanding procedures for making determinations. See Sw. Airlines
Co., 926 F.3d at 856–58. The case hadn’t involved guidance or a
suggestion that the agency’s statements weren’t binding. See
id. The same
is true of Physicians for Social Responsibility. This case had involved an
agency directive departing from a policy established by a handbook and a
report. Physicians for Soc. Respon.,
956 F.3d at 645. There the court again
had no occasion to discuss administrative guidance or a suggestion that the
agency’s statements weren’t binding. See
id.
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• couldn’t reasonably rely “on a . . . policy subject to change at
any time.”
ER79–80. 2
Regardless of these reminders, the 2019 Guidance shouldn’t have
induced Electric Clouds or Cloud 9 to omit long-term clinical studies or
the equivalent. In the guidance, the FDA regarded long-term clinical
studies as the strongest type of evidence; however, the FDA also
acknowledged that existing data might suffice. For example, the FDA said
that it would consider “established bod[ies] of evidence,” such as “existing
2
In their reply brief, Electric Clouds and Cloud 9 urge judicial
estoppel for the first time, arguing that the FDA made contrary arguments
in other federal cases. Petitioners’ Reply Br. at 12–13. We generally
decline to address issues raised for the first time in a reply brief. See, e.g.,
Belnap v. Iasis Healthcare, 844 F.3d 1272, 1293 n.16 (10th Cir. 2017).
But we would reject this argument even if it had come earlier
because the FDA hadn’t taken a different position in the prior cases. In
those cases, the FDA emphasized that
• “the guidance [was] ‘not binding on FDA or the public’” and
• manufacturers could submit alternative forms of evidence, but
only “if [the evidence] satisfie[d] the requirements of the
applicable statutes and regulations.”
Defendants’ Response to Industry Amicus Br. at 4, Am. Acad. of Pediatrics
v. FDA, No. 18-883 (D. Md. June 26, 2019) (quoting the 2019 Guidance);
see also Final Br. for Appellees at 26, Nicopure Labs, LLC v. FDA, No. 17-
5196 (D.C. Cir. June 5, 2018) (“FDA has stated in draft guidance that
scientific-literature reviews may be acceptable in some circumstances, and
has discussed alternatives to randomized, controlled trials.” (emphasis
added)). The FDA took the same position here. See pp. 10–11, below.
9
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longer duration studies in the public literature.” ER160, ER127. But the
manufacturer would still need to “bridg[e]” its own e-liquid to the existing
data by showing why the existing data would apply to the new product.
ER127; see ER160.
The 2019 Guidance also clarified that
• the FDA would review “‘other valid scientific evidence’” to
determine whether it was “sufficient to evaluate the tobacco
product,” ER126 (quoting 21 U.S.C. § 387j(c)(5)(B)),
• “[n]onclinical studies alone [were] generally not sufficient,”
ER126, and
• “[p]ublished literature reviews . . . [were] considered a less
robust form of support.” ER161.
Given these qualifications, seven federal appellate courts have
rejected similar challenges, reasoning that the 2019 Guidance had not
guaranteed approval without long-term clinical studies. Magellan Tech.,
Inc. v. FDA, 70 F.4th 622, 629 (2d Cir. 2023); Liquid Labs, LLC v. FDA,
52 F.4th 533, 541 (3d Cir. 2022); Avail Vapor, LLC v. FDA,
55 F.4th 409,
422–23 (4th Cir. 2022); Breeze Smoke, LLC v. FDA,
18 F.4th 499, 505–07
(6th Cir. 2021); Gripum, LLC v. FDA,
47 F.4th 553, 559–60 (7th Cir.
2022); Lotus Vaping Techs., LLC v. FDA,
73 F.4th 657, 672 (9th Cir.
2022); Prohibition Juice Co. v. FDA,
45 F.4th 8, 23 (D.C. Cir. 2022).
For example, the D.C. and Seventh Circuits addressed similar
reliance on the 2019 Guidance. In these cases, manufacturers of e-liquids
argued that they had skipped long-term studies because of the 2019
10
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Guidance. See Prohibition Juice Co., 45 F.4th at 23–24; Gripum, 47 F.4th
at 559. The D.C. Circuit rejected this argument, explaining that the FDA
hadn’t “guaranteed that unspecified other forms of evidence would
necessarily be sufficient—only that they might be, so the FDA would
consider them.” Prohibition Juice Co., 45 F.4th at 21 (citing the 2019
Guidance at 12–13). The Seventh Circuit also rejected the argument,
pointing out that the 2019 Guidance had “consistently reflected” the need
for “product-specific long-term data . . . only if existing studies [had been]
inadequately related to the proposed product.” Gripum, 47 F.4th at 559.
These opinions are persuasive. 3 Unlike Electric Clouds and Cloud 9,
the D.C. and Seventh Circuits relied on the entirety of the FDA’s guidance.
Even if that guidance could have fostered reliable expectations, the
entirety of the documents would have informed manufacturers of the need
to
• tie their own e-liquids to the existing data or
• present new studies.
3
One circuit disagrees, pointing out that “law is not a nose-counting
exercise.” Wages & White Lion Invs., LLC v. FDA, 90 F.4th 357, slip op. at
20, 28–30 (5th Cir. 2024) (en banc). We agree, but we’re persuaded by the
reasoning of the seven other circuit courts.
11
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3.1.2 The proposed rule didn’t mislead the manufacturers.
The manufacturers rely not only on the 2019 Guidance, but also on a
proposed rule. There the FDA said that it didn’t expect each applicant to
include a new long-term clinical study. But the FDA explained that with or
without such a study, applicants would need to provide “both clinical and
nonclinical investigations” offering “comprehensive information about the
product’s likely health effects in the U.S. market.” 84 Fed. Reg. 50,566;
50,619 (Sept. 25, 2019). The FDA added that an applicant might be able to
forgo new studies by “bridging” its own e-liquid to existing studies.
Id.
And even then, the FDA cautioned, “information from nonclinical studies
alone” would generally not suffice.
Id.
Given the whole of the proposed rule, it shouldn’t have misled
Electric Clouds or Cloud 9 to think that it could forgo a new long-term
clinical study or an effort to bridge the new e-liquids to an existing study.
3.1.3 The 2018 public meeting didn’t mislead the manufacturers.
Electric Clouds and Cloud 9 also argue that the FDA misled them at a
public meeting in 2018. At that meeting, an FDA representative stated:
“[I]t may be possible to support a marketing order for an [electronic
nicotine delivery system], as an example, without conducting new non-
clinical or clinical studies, given other data sources can support the
[marketing application].” Transcript, Tobacco Product Application Review
Public Meeting at 133–34 (Oct. 23, 2018).
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This statement shouldn’t have misled Electric Clouds or Cloud 9. The
representative said only that “it may be possible” to rely on existing
studies. From that statement, Electric Clouds and Cloud 9 shouldn’t have
assumed that they could forgo either a new long-term clinical study or any
effort to bridge the new e-liquids to an existing study. 4
…
The FDA didn’t mislead Electric Clouds or Cloud 9 about the need to
present either a new long-term clinical study or to bridge the new e-liquid
to an existing study. 5
4
The Fifth Circuit concluded that the public meetings had misled
tobacco manufacturers. There the Fifth Circuit relied on the FDA’s slides
that
• included this statement and
• disclaimed a requirement for “specific studies.”
Wages & White Lion Invs., LLC v. FDA, 90 F.4th 357, slip op. at 5–7 (5th
Cir. 2024) (en banc). It’s unclear whether Electric Clouds and Cloud 9 are
relying on the FDA’s statement at the public meeting or the slides.
The slides themselves are not in our record. From the petitioners’
description, however, the slides shouldn’t have misled anyone. Just
because the FDA didn’t require a specific type of study doesn’t mean that
Electric Clouds and Cloud 9 could omit any new studies or bridging
efforts. After all, the FDA had repeatedly stressed that applicants would
need to bridge their own products to valid scientific evidence. See Parts
3.1.1–3.1.2, above.
5
Electric Clouds and Cloud 9 also cite the final rule, arguing that the
FDA never said that it would require long-term studies. Premarket Tobacco
Product Applications and Recordkeeping Requirements, Final Rule, 86
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3.2 The FDA didn’t mislead manufacturers about the need to
compare e-liquids with and without flavoring.
Electric Clouds and Cloud 9 also argue that the FDA misled them
about the need to compare flavored and unflavored e-liquids. But the FDA
repeatedly explained that manufacturers would need to present comparative
data on the impact of flavors.
3.2.1 The Tobacco Control Act should have flagged the need for
comparative evidence.
The Tobacco Control Act itself would have informed manufacturers
that they needed to compare flavored e-liquids with other e-liquids. See
Abhe & Swoboda, Inc. v. Chao, 508 F.3d 1052, 1060–61 (D.C. Cir. 2007)
(stating that the underlying statute provided fair notice of regulatory
requirements). For example, the Act requires manufacturers to show
whether the new e-liquid “presents less risk than other tobacco products.”
Fed. Reg. 55,300 (Oct. 5, 2021). But the final rule came after the
application deadline, so the petitioners could not have relied on it.
The final rule was consistent with the FDA’s prior statements, saying
only that the FDA would consider evidence besides long-term studies:
While this [Final Rule] does not necessarily require applicants
to conduct new studies . . . FDA expects that it could not issue a
marketing granted order unless an application contains data from
a variety of sources, including both clinical and nonclinical
investigations that give FDA comprehensive information about
the product’s likely health effects.
Id. at 55,387. With this language, the FDA warned that “information from
nonclinical studies alone [was] generally not sufficient” for approval. Id.
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21 U.S.C. § 387j(b)(1)(A) (emphasis added). To evaluate that showing, the
FDA must consider “the increased or decreased likelihood that existing
users of tobacco will stop using such products.” 21 U.S.C. § 387j(c)(4)(A)
(emphasis added).
Given the statutory language, five federal appellate courts have
concluded that the Act supplied adequate notice of the need to compare
flavored and unflavored e-liquids. Magellan Tech., Inc. v. FDA, 70 F.4th
622, 632 (2d Cir. 2023); Liquid Labs, LLC v. FDA,
52 F.4th 533, 542–43,
543 n.12 (3d Cir. 2022); Avail Vapor, LLC v. FDA,
55 F.4th 409, 427–28
(4th Cir. 2022); Lotus Vaping Techs., LLC v. FDA,
73 F.4th 657, 670–71
(9th Cir. 2023); Prohibition Juice Co. v. FDA,
45 F.4th 8, 23 (D.C. Cir.
2022). 6 For example, the Second and Fourth Circuits addressed similar
challenges based on the FDA’s guidance. In these cases, the courts rejected
the challenges, reasoning in part that the Tobacco Control Act “explicitly
contemplates that FDA must embark on a comparative inquiry.” Avail
Vapor, LLC v. FDA,
55 F.4th 409, 427 (4th Cir. 2022); see Magellan Tech.,
Inc. v. FDA,
70 F.4th 622, 632 (2d Cir. 2023) (following the Fourth
Circuit’s analysis involving the Act).
6
Only one circuit court has found inadequate notice of the FDA’s
scientific requirements. Wages & White Lion Invs., LLC v. FDA, 90 F.4th
357, slip op. at 22–42 (5th Cir. 2024) (en banc). But that court did not
discuss notice from the statute itself. See
id.
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This reasoning is persuasive. The Tobacco Control Act uses clear
comparative language and should have expressly alerted manufacturers to
the need to compare e-liquids based on flavoring.
3.2.2 The FDA flagged the need for comparative evidence.
Before the application process unfolded, the FDA had told
manufacturers that they would need to compare products within the same
category. For example, the 2019 Guidance recommended comparisons to
“other . . . tobacco products within the same product category.” ER138
(emphasis added). And in the proposed rule, the FDA encouraged
manufacturers to “compare the health risks of [their] products to both
products within the same category and subcategory, as well as [other]
products.” 84 Fed. Reg. 50,566, 50,600 (Sept. 25, 2019) (emphasis added).
Electric Clouds and Cloud 9 argue that the term category was too
vague. But the FDA had repeatedly explained the youthful appeal of
flavoring. For example, the 2019 Guidance stressed the importance of
“scientific reviews of flavors” because of “the potential impact of flavors
on . . . appeal to youth and young adults.” ER155. Given the potential
effect on youthful consumers, the 2019 Guidance urged applicants to
compare the risks from new products with the risks from “other tobacco
products.” ER156.
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The FDA repeated these recommendations in guidance published in
2020. ER45. There the FDA again interpreted the data to “show that
flavors are a strong driver for youth use.” ER65.
The public meetings contained similar admonitions. In these
meetings, the FDA encouraged manufacturers to show how
• “appeal of a specific product might be generalized to other
products within the same brand family, or to similar products
of other brands” and
• “consumers perceive the product and its flavor, as well as [the
flavor’s] impact on intention to use the product, as well as
actual use.”
Transcript, Tobacco Product Application Review Public Meeting at 123–24
(Oct. 23, 2018).
The FDA thus repeatedly notified manufacturers of the need to
compare the risks of e-liquids with and without flavoring. Without these
comparisons, the FDA explained that it couldn’t adequately assess the
increased risk of attracting children from the presence of flavoring. Given
these explanations, the FDA didn’t mislead Electric Clouds and Cloud 9;
they had adequate notice of the need to compare their flavored e-liquids
with unflavored e-liquids. See Prohibition Juice Co. v. FDA, 45 F.4th 8, 23
(D.C. Cir. 2023) (“Petitioners’ own unflavored or tobacco-flavored e-
liquids were an obvious, otherwise-similar comparator against which to
gauge whether the added risk of their flavored e-liquids are overcome by
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those products’ added benefits to adult smokers.”); Lotus Vaping Techs.,
LLC v. FDA, 73 F.4th 657, 671 (9th Cir. 2023) (same).
4. The FDA’s internal documents don’t show reliance on a new
evidentiary standard.
Electric Clouds and Cloud 9 argue not only that they were misled,
but also that the FDA secretly planned to deny any application omitting
long-term clinical studies (even if the application contained the equivalent
information). For this argument, Electric Clouds and Cloud 9 rely on
• a July 2021 internal memorandum, which the FDA later
superseded,
• an August 2021 internal memorandum, which the FDA later
rescinded, and
• the review forms attached to each denial letter.
These documents don’t suggest a plan to automatically reject applications
lacking long-term clinical studies, and the internal memoranda had lapsed
before Electric Clouds and Cloud 9 applied. 7
In July 2021, the FDA internally circulated a memorandum on how to
assess applications lacking long-term clinical studies. ER167–68. In the
memorandum, an employee suggested that the FDA should deny any
7
Electric Clouds and Cloud 9 wouldn’t have seen these documents
until after they had applied. So Electric Clouds and Cloud 9 couldn’t have
relied on these documents. See Avail Vapor, LLC v. FDA, 55 F.4th 409,
424 (4th Cir. 2022) (reasoning that the memoranda were “internal
documents unlikely to create reliance interests”).
18
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application lacking either a randomized controlled trial or long-term
clinical studies. Id. The FDA superseded this memorandum a month later,
and there’s no evidence that the FDA ever applied the earlier
memorandum.
Electric Clouds and Cloud 9 also rely on another FDA memorandum
from August 2021, which suggested that applications for flavored e-liquids
show “that the flavored products have an added benefit relative to that of
tobacco-flavored” e-liquids. ER180. But the FDA rescinded this
memorandum before accepting applications.
Even if the memoranda hadn’t become obsolete, they didn’t suggest a
plan to require long-term clinical studies. The first memorandum didn’t
foreclose “reliance on other forms of rigorous evidence,” and the second
memoranda “expressly required the agency to consider other forms of
evidence if sufficiently robust.” Prohibition Juice Co. v. FDA, 45 F.4th at
22; Liquid Labs v. LLC v. FDA,
52 F.4th 533, 541 (3d Cir. 2022) (quoting
Prohibition Juice,
45 F.4th at 22).
No matter what the memoranda had said, they were superseded or
rescinded before the FDA opened the application process. So four federal
appellate courts have concluded that the memoranda in July and August
2021 couldn’t have supported the existence of an internal plan. Magellan
Tech., Inc. v. FDA, 70 F.4th 622, 630 (2d Cir. 2023); Liquid Labs,
52 F.4th
at 540 n.7, 541 (3d Cir. 2022); Avail Vapor, LLC v. FDA,
55 F.4th 409, 424
19
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(4th Cir. 2022); Prohibition Juice Co., 45 F.4th at 22. For example, the
Fourth Circuit explained that “these internal documents were just that:
internal.” Avail Vapor,
55 F.4th at 424.
We agree with these courts: the memoranda don’t reveal a secret
plan, and they weren’t even in effect when Electric Clouds and Cloud 9
applied.
Electric Clouds and Cloud 9 rely not only on the internal memoranda,
but also on the FDA’s review forms. These forms tell the reviewer to
consider not only long-term clinical studies, but also other evidence.
Reviewers had to note “whether the [applications] contain evidence from a
randomized controlled trial, longitudinal cohort study, and/or other
evidence.” ER20, 333 (emphasis added). So the review forms didn’t
suggest a secret plan to nix any application omitting a long-term clinical
study.
…
The FDA’s documents don’t show a secret change in position after
the FDA’s issuance of informal guidance to manufacturers because
• the FDA superseded the July 2021 memorandum,
• the FDA rescinded the August 2021 memorandum, and
• the review forms showed the opportunity for manufacturers to
rely on evidence besides long-term clinical studies.
20
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5. The FDA didn’t act arbitrarily and capriciously by finding
insufficient scientific evidence for approval.
Electric Clouds and Cloud 9 also argue that the denials were
arbitrary and capricious based on the administrative record. See 5 U.S.C.
§ 706(2)(A) (arbitrary-and-capricious standard). We disagree.
Congress designated the FDA as the agency with scientific expertise.
Family Smoking Prevention and Tobacco Control Act, Pub. L. 111-31,
§ 2(44)–(45), § 3(1), (7),
123 Stat. 1776, 1780, 1782 (2009). So we
conduct a “narrow” review and can’t substitute our judgment for the
FDA’s. Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto.
Ins. Co.,
463 U.S. 29, 43 (1983).
In our view, the denials weren’t arbitrary and capricious. The FDA
considered the evidence and acted reasonably in concluding that the
applications didn’t merit approval under the statutory standard.
Under that standard, Electric Clouds and Cloud 9 needed to show that
the benefit to adult smokers would outweigh the risk of attracting children
to tobacco. 21 U.S.C. § 387j(c)(4)(A)–(B). In trying to satisfy this
standard, Electric Clouds and Cloud 9 submitted two kinds of evidence:
1. Literature reviews summarizing existing scientific studies and
2. surveys of current customers.
The FDA acted reasonably when it regarded the literature reviews as
insufficient for approval. The literature reviews acknowledged
21
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• the need for more long-term studies comparing the harms from
e-cigarettes and traditional cigarettes and
• the presence of mixed results involving the impact of e-liquids
on young individuals’ use of cigarettes. 8
And in the literature reviews submitted by Electric Clouds and Cloud 9,
there was no discussion about the impact of flavoring on underage use. See
ER278–84. So the FDA had no evidence to compare the risks of
• flavored e-liquids and
• unflavored or tobacco-flavored e-liquids.
When faced with similar literature reviews, six federal appellate
courts have concluded that the FDA didn’t act arbitrarily and capriciously
by rejecting applications based on insufficient evidence arising from the
8
The literature reviews stated:
The evolving nature of [electronic nicotine delivery systems]
presents challenges for the gathering of recent relevant studies
of current methods of use. Current studies find that [electronic
nicotine delivery systems] are much less harmful to the user than
traditional combustible cigarettes, but more long term studies are
needed.
…
Some studies have found that for youth and young adults,
[electronic nicotine delivery systems] may increase the use of
ever using combustible cigarettes; however, other studies found
that the reverse is true—that e-cigarette use in youth is limited
primarily to individuals who already smoke combustible
cigarettes.
ER207.
22
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presence of mixed results or the absence of studies addressing the impact
of flavors on youth. Magellan Tech., Inc. v. FDA, 70 F.4th 622, 629 (2d
Cir. 2023); Liquid Labs, LLC v. FDA,
52 F.4th 533, 541 (3d Cir. 2022);
Avail Vapor, LLC v. FDA,
55 F.4th 409, 420–21 (4th Cir. 2022); Breeze
Smoke, LLC v. FDA,
18 F.4th 499, 506 (6th Cir. 2022); Lotus Vaping
Techs., LLC v. FDA,
73 F.4th 657, 672–73 (9th Cir. 2022); Prohibition
Juice Co. v. FDA,
45 F.4th 8, 21–22 (D.C. Cir. 2022). 9
For example, the D.C. Circuit said that a literature review was
“insufficiently rigorous” because of the dearth of “evidence from well-
designed studies to determine whether e-cigarette flavors aid in smoking
cessation.” Prohibition Juice Co., 45 F.4th at 21 (quoting the petitioners’
literature review). Similarly, the Third Circuit concluded that the FDA had
acted properly in denying an application based on uncertainty in the
literature on the value of flavors in helping smokers to quit. Liquid Labs,
52 F.4th at 541. This reasoning is persuasive here because Electric Clouds
and Cloud 9 submitted literature reviews with equally mixed results.
9
The Fifth Circuit disagreed, concluding that the agency should have
credited the tobacco manufacturers’ literature review. Wages & White Lion
Invs., LLC v. FDA, 90 F.4th 357, slip op. at 33–34 (5th Cir. 2024) (en
banc). But the Fifth Circuit did not discuss the mixed nature of the
literature reviews. Cf.
id., slip op. at 68, 75 n.12 (en banc) (Haynes, J.,
dissenting) (noting that the majority didn’t address statements in the
literature reviews that there was “not enough evidence . . . to determine
whether e-cigarette flavors aid in smoking cessation” (quoting the
petitioners’ literature reviews)).
23
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Electric Clouds and Cloud 9 also presented surveys, but the FDA
identified four defects:
1. The surveys hadn’t compared flavored and unflavored e-
cigarettes.
2. The surveys had captured only a single point in time, so they
couldn’t help to assess product switching or cigarette reduction
from the “use of these [flavored] products over time.” ER326.
3. The customer surveys had been online and voluntary, which
restricted participation to existing customers.
4. One survey had included only 314 participants, and another
survey had included only 30 participants.
We’re not the first court to address similar survey results: Six federal
appellate courts have already concluded that similar surveys weren’t
rigorous enough to support approval. Magellan Tech., Inc. v. FDA, 70
F.4th 622, 628 (2d Cir. 2023); Liquid Labs, LLC v. FDA,
52 F.4th 533, 541
(3d Cir. 2022); Avail Vapor, LLC v. FDA,
55 F.4th 409, 421, 425 (4th Cir.
2022); Breeze Smoke, LLC v. FDA,
18 F.4th 499, 506 (6th Cir. 2021);
Gripum, LLC v. FDA,
47 F.4th 553, 557 (7th Cir. 2022); Lotus Vaping
Techs., LLC v. FDA,
73 F.4th 657, 673 (9th Cir. 2023).
For example, the Ninth Circuit considered customer surveys
measuring a single point in time. Lotus Vaping Techs., 75 F.4th at 666.
Measurement of a single point in time posed a problem, the Ninth Circuit
explained, because the surveys hadn’t enabled “reliable evaluation of
behavior change over time.” Id. at 673 (quoting the FDA’s denial order).
24
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The Third Circuit also considered a survey that hadn’t compared all the
manufacturer’s flavored e-cigarettes with unflavored e-cigarettes,
concluding that the results hadn’t shown “a benefit to flavoring” or
provided “meaningful information regarding actual switching or
reduction.” Liquid Labs, 52 F.4th at 541. The same is true of the customer
surveys submitted by Electric Clouds and Cloud 9.
The FDA also rejected the literature reviews and surveys because
they didn’t relate to the e-liquids made by Electric Clouds and Cloud 9. In
response, Electric Clouds and Cloud 9 argue that the FDA
• used a double-standard by relying on a scientific consensus to
regard flavors as dangerous to children,
• failed to consider whether these dangers had applied to the e-
liquids that Electric Clouds and Cloud 9 were making, and
• relied on a consensus involving closed systems even though
Electric Clouds and Cloud 9 used open systems.
We reject these arguments and conclude that the FDA acted
reasonably in relying on a scientific consensus. The Tobacco Control Act
requires the FDA to consider all available information. See 21 U.S.C.
§ 387j(c)(2)(A); see also Avail Vapor, LLC v. FDA, 55 F.4th 409, 419 (4th
Cir. 2022) (recognizing the “FDA’s broad statutory mandate to determine
from the totality of the evidence”). In considering such information, the
FDA legitimately found a consensus showing the dangers from flavoring
regardless of the type of device. ER31.
25
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The FDA found no such consensus on the value of flavoring on adults
trying to quit. See ER35 (“Although . . . bridged data from the literature
may still be appropriate for many new products, including tobacco-flavored
[electronic nicotine delivery systems], robust and direct evidence . . . has
been needed when the known risks are high as with all flavored [electronic
nicotine delivery systems].”). The difference led the Fourth Circuit to
reject a similar challenge:
Whereas the evidence on the role of flavors in promoting youth
use of [electronic nicotine delivery systems] was established as
a matter of scientific consensus, there was no comparable
showing of the benefits that flavored [electronic nicotine
delivery systems] have for adult smokers in promoting switching
or cessation. Moreover, evidence showed that tobacco-flavored
[electronic nicotine delivery systems] may offer the same type
of public health benefits as flavored [electronic nicotine delivery
systems], in encouraging adult cigarette smokers to switch to
[electronic nicotine delivery systems] and decreasing the use of
combustible cigarettes. Such tobacco-flavored products,
however, do not pose the same degree of risk of youth uptake as
fruit or dessert-flavored products. As such, FDA required [the
manufacturer] to provide strong, product-specific evidence
demonstrating its products would provide an extra benefit to
current smokers over that of other lower-risk products.
Avail Vapor, LLC v. FDA, 55 F.4th 409, 421 (4th Cir. 2022) (cleaned up);
see also Prohibition Juice Co. v. FDA,
45 F.4th 8, 22 (D.C. Cir. 2022)
(rejecting a similar challenge based on the consensus as to the risks from
flavored products and inconclusive information as to the benefits).
Electric Clouds and Cloud 9 disagree with the FDA, arguing that the
existing information involves systems that were closed rather than open.
26
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But the FDA could reasonably regard the role of flavor as consistent
between closed systems and open systems. See Avail Vapor, LLC, 55 F.4th
at 427 (rejecting a similar challenge based on the FDA’s conclusion that
the risks of flavoring were consistent between open and closed systems);
Prohibition Juice Co.,
45 F.4th at 26 (rejecting a similar challenge based
on the FDA’s assessment that the risks from flavoring were consistent and
equally applicable to open and closed systems).
Electric Clouds and Cloud 9 point to a 2021 study, which they
characterize as proof that few children use open-system devices. But the
administrative record doesn’t include this study, and it didn’t exist when
the FDA decided the applications submitted by Electric Clouds and Cloud
9. 10 See note 11, below (discussing our inability to stray beyond the
administrative record).
At that time, the FDA could reasonably conclude that children
preferred flavored e-liquids regardless of device type. The FDA thus
10
Electric Clouds and Cloud 9 also cite an article, which quoted a
former FDA commissioner. Petitioners’ Opening Br. at 44. When the
individual made the quoted statement, he had left the FDA and was serving
as a resident fellow at the American Enterprise Institute and as a special
partner at a venture capital firm. Nicholas Florko, Former FDA
Commissioner Calls for a Full Ban on Pod-Based E-Cigarettes, Stat News
(Nov. 12, 2019) https://tinyurl.com/mdrjpyhw, quoted in Petitioners’
Opening Br. at 44. So his comments didn’t represent the FDA’s position,
and Electric Clouds and Cloud 9 do not point to evidence supporting his
statement.
27
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explained that it had learned that “the removal of one flavored product
option prompted youth to migrate to another [electronic nicotine delivery
system] type that offered the desired flavor options, underscoring the
fundamental role of flavor in driving appeal.” ER32.
This explanation doesn’t suggest that the FDA ignored the
distinctions between products. To the contrary, the FDA relied on new
evidence showing that children care more about flavors than the devices.
See, e.g., ER31–32 (explaining the data showing the consistent role of
flavor in youth use of all tobacco products). 11
The FDA used the new information to carry out the statutory mandate
to balance
• the known risks that flavored e-liquids posed to children and
• the potential benefit to adults wanting to quit.
The FDA didn’t act arbitrarily or capriciously by regarding flavors as
attractive to children even when using open systems. See Prohibition Juice
11
The petitioners argue that open-system devices are big and clunky,
making them unappealing to youth. The Fifth Circuit credited this
argument, pointing to photographs of large open-system devices. Wages &
White Lion Invs., LLC v. FDA, 90 F.4th 357, slip op. at 12 (5th Cir. 2024)
(en banc). In our case, the FDA said that new open-system devices are
often small, pointing to pictures submitted by the amici. Brief of Amici
Curiae Medical, Public Health, and Community Groups in Support of
Respondent at 11. But none of these photographs or pictures are in our
record. So we don’t rely on them. See, e.g., Atteberry v. Finch,
424 F.2d
36, 39 (10th Cir. 1970) (stating that judicial review is limited to evidence
in the administrative record).
28
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Co. v. FDA, 45 F.4th 8, 22, 26 (D.C. Cir. 2022) (rejecting the double-
standard argument and upholding the FDA’s denial of approval to market
an open-system e-liquid); Liquid Labs, LLC v. FDA,
52 F.4th 533, 544–45
(3d Cir. 2022) (upholding the FDA’s denial of approval to market an open-
system e-liquid because flavors appealed to children regardless of the
device type); Breeze Smoke, LLC v. FDA,
18 F.4th 499, 506, 508 (6th Cir.
2021) (upholding the FDA’s determination that generalized evidence
included in an open-system e-liquid application could not overcome the
clear preference of children for flavored e-cigarettes); Gripum, LLC v.
FDA,
47 F.4th 553, 559–60 (7th Cir. 2022) (concluding that without
product-specific evidence, the manufacturer of an open-system e-liquid
hadn’t satisfied its burden of proof); Lotus Vaping Techs., LLC v. FDA,
73
F.4th 657, 671 n.14 (9th Cir. 2023) (concluding that the FDA didn’t
arbitrarily disregard device types because the scientific consensus had
shown that children preferred flavored e-liquids). 12
12
In their reply brief, Electric Clouds and Cloud 9 argue that the
FDA’s studies show that open systems are less popular with youth than
tobacco-flavored e-cigarettes. Petitioners’ Reply Br. at 19. For this
argument, Electric Clouds and Cloud 9 cite a statement by the FDA; but
this statement doesn’t discuss open systems. Id. (citing ER30). To the
contrary, the cited page suggests that youthful consumers prefer fruit
flavors over tobacco flavors without any mention of the devices being
used. ER30 (stating that “66.8% of youth [electronic nicotine delivery
system] users aged 13 to 17 reported using fruit, followed by . . . 13.3%
for tobacco flavor”). When open systems were incorporated, the FDA
29
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According to Electric Clouds and Cloud 9, the FDA reached different
results for similarly situated manufacturers. But Electric Clouds and Cloud
9 present no support for this claim, and we see no evidence of different
standards for manufacturers of similar e-liquids. See Prohibition Juice Co.,
45 F.4th at 26 (rejecting this argument). To the contrary, the FDA
consistently rejected evidence involving literature reviews and surveys:
Circuit Case Affirming FDA Manufacturers’ Scientific Evidence
Denial
Prohibition Juice Co. v. FDA, 45 Online, one-time voluntary studies;
F.4th 8, 21–22 (D.C. Cir. 2022) mixed literature review.
Magellan Tech., Inc. v. FDA, 70 Focus group of only 24 participants; 2-
F.4th 622, 627–29 (2d Cir. 2023) week online study of 18 existing
customers; a study of 15 participants; an
online survey of 400 smokers and over
1,000 non-smokers; insufficient literature
review.
Liquid Labs, LLC v. FDA, 52 Study lacking a comparison between
F.4th 533, 537, 541 (3d Cir. flavored e-liquids with unflavored e-
2022) liquids; survey that failed to discuss
switching or reduction; mixed literature
review.
Avail Vapor, LLC v. FDA, 55 Online study for 2 weeks; focus group of
F.4th 409, 417, 420 (4th Cir. 39 participants; national attitude survey;
2022) study of 18 participants; mixed literature
review.
Breeze Smoke, LLC v. FDA, 18 Online survey of existing retail-store
F.4th 499, 506 (6th Cir. 2021) customers; mixed literature review.
Gripum, LLC v. FDA, 47 F.4th Consumer surveys; insufficient literature
553, 557 (7th Cir. 2022) review (no “bridge”).
Lotus Vaping Techs., LLC v. Survey of existing customers; survey of
FDA, 73 F.4th 657, 666, 672–73 thousands of participants; insufficient
(9th Cir. 2023) literature review (no “bridge”).
found that 76% of high-school and middle-school students preferred
flavors for the open systems. ER31, 348.
30
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The FDA thus did not act arbitrarily and capriciously by regarding the
scientific evidence as inadequate to approve the petitioners’ applications.
6. Even if the FDA should have reviewed the marketing plans, the
error would have been harmless.
Electric Clouds and Cloud 9 also argue that the FDA erred by failing
to review their marketing plans. But even if an error had taken place, it
would have been harmless because the FDA would have regarded the
marketing plans as deficient for reasons already stated.
The Tobacco Control Act incorporates the harmlessness standard
from the Administrative Procedure Act. See 21 U.S.C. § 387l(b)
(instructing courts to apply 5 U.S.C. § 706); see also All Indian Pueblo
Council v. United States,
975 F.2d 1437, 1443 (10th Cir. 1992)
(considering harmlessness in the review of agency decisions). Under this
standard, the petitioners must show that the FDA’s alleged error was
harmful. See St. Anthony Hosp. v. U.S. Dep’t of Health & Hum. Servs.,
309
F.3d 680, 691 (10th Cir. 2002).
Generally, we cannot affirm an agency’s decision on grounds that the
agency didn’t supply. SEC v. Chenery Corp., 332 U.S. 194, 196 (1947).
But an exception exists if the error clearly didn’t affect the outcome. See
Allen v. Barnhart,
357 F.3d 1140, 1145 (10th Cir. 2004) (explaining that
we apply the harmless-error standard when “no reasonable administrative
31
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factfinder, following the correct analysis, could have resolved the factual
matter in any other way”).
This exception applies here. The FDA had warned before that similar
marketing plans had proven ineffective. So the petitioners’ marketing plans
couldn’t have overcome the other deficiencies in the applications.
These marketing plans focused on restrictions designed to prevent
children from getting the e-liquids. Cloud 9’s plan consisted of a single
paragraph, promising only warnings and a 21+ age-verification system. 13
ER365. Electric Clouds submitted a more detailed plan, which proposed
requirements for identifying customers at retail stores, age verification for
online sales, child-resistant packaging, and prohibitions on marketing or
packaging that targeted minors.
But the FDA had already rejected these types of restrictions. For
example, in the 2020 Guidance, the FDA had addressed similar measures,
which included
• technology to verify the customer’s age when making online
purchases,
13
In its opening brief, Cloud 9 cited a more detailed marketing plan.
But this marketing plan was not part of the administrative record or
included with Cloud 9’s application. And Cloud 9 concedes that the more
detailed marketing plan isn’t material to the issue. Petitioners’ Reply Br. at
24 n.6, 24–25. So we need not consider the more detailed marketing plan
cited in Cloud 9’s opening brief. See note 11, above (stating that we
consider evidence only if it was in the administrative record).
32
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• enhanced monitoring to ensure that retailers complied with the
age requirements,
• contractual penalties for retailers that sell tobacco to minors,
and
• restrictions on the amount of e-liquids that customers can buy
within a given time-period.
The FDA concluded that these measures hadn’t stopped children from
using e-cigarettes: “The reality is that youth have continued access to these
products in the face of legal prohibitions and even after voluntary actions
by some manufacturers.” ER66 (emphasis added). The FDA thus warned
manufacturers that marketing plans wouldn’t suffice if they focused only
on “how the product was sold.” Id.
Electric Clouds and Cloud 9 don’t assert that their proposed
marketing restrictions differ from the marketing restrictions that the FDA
had already found ineffective. Because Electric Clouds and Cloud 9 had
already failed to present adequate scientific evidence, their marketing
plans couldn’t have salvaged their applications.
In similar circumstances, six federal appellate courts have found
similar errors harmless for marketing plans like those submitted by
Electric Clouds and Cloud 9. Prohibition Juice Co. v. FDA, 45 F.4th 8, 16,
24–25 (D.C. Cir. 2022); Magellan Tech., Inc. v. FDA,
70 F.4th 662, 630–
31 (2d Cir. 2023); Liquid Labs, LLC v. FDA,
52 F.4th 533, 543–44 (3d Cir.
2022); Avail Vapor, LLC v. FDA,
55 F.4th 409, 417, 425–27 (4th Cir.
33
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2022); Breeze Smoke, LLC v. FDA, 18 F.4th 499, 508 (6th Cir. 2021);
Lotus Vaping Techs., LLC v. FDA,
73 F.4th 657, 666, 674–75 (9th Cir.
2023).
For example, the Ninth Circuit considered a marketing plan that
• relied on age verification and
• required that the product be “strictly marketed and sold to
adults in adult-only retailers and through age-verified online
websites.”
Lotus Vaping Techs., 73 F.4th at 674 (quoting the manufacturer’s
marketing plan). But the Ninth Circuit concluded that any error would have
been harmless because
• those measures “track those that the FDA found were
ineffective to counterbalance the risk of youth use” and
• the manufacturer had not “otherwise argue[d] that any of
marketing tactics were novel.”
Id. at 675.
The Fourth Circuit similarly addressed harmlessness when the
marketing plans “focused solely on age verification and avoiding
marketing that would make its products attractive to youth.” Avail Vapor,
LLC v. FDA, 55 F.4th 409, 426 (4th Cir. 2022). The court regarded these
measures as “insufficient,” but suggested that the manufacturer could have
supported its application with “novel access restrictions beyond those that
the FDA previously determined were not working.”
Id.
34
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The Third Circuit agreed that “marketing plans would not change the
result” when the manufacturers had “not explained how the [proposed]
approaches . . . differ from ones previously found insufficient or how [the
proposed] marketing plans would have cured other noted deficiencies in its
applications.” Liquid Labs, LCC v. FDA, 52 F.4th 533, 544 (3d Cir. 2022).
We are persuaded by the reasoning of the Third, Fourth, and Ninth
Circuits. Electric Clouds and Cloud 9 presented marketing plans focused
on age verification; these plans involved only the kinds of measures that
the FDA had already rejected.
Two circuits have concluded that similar errors weren’t harmless,
basing these conclusions on two different reasons. The Fifth Circuit has
rejected harmlessness based on its interpretation of Calcutt v. FDIC, 598
U.S. 623 (2023). Wages & White Lion Invs., LLC v. FDA,
90 F.4th 357,
slip op. at 3, 49–52 (5th Cir. 2024) (en banc). The Eleventh Circuit has
rejected harmlessness because the marketing plans included novel
marketing restrictions that the FDA hadn’t previously discussed. Bidi
Vapor v. FDA,
47 F.4th 1191, 1205 (11th Cir. 2022). Neither of these
rationales apply here.
Calcutt does not bar consideration of harmlessness. To the contrary,
Calcutt prohibits courts from basing harmlessness on a rationale that the
agency didn’t invoke. Calcutt, 598 U.S. at 624, 628. This prohibition
doesn’t apply here because we’re basing harmlessness on the FDA’s
35
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existing approach to marketing restrictions, not a reason that we’ve
detected on our own. And Calcutt acknowledged that the court may not
need to remand when the agency’s prior actions make the outcome clear.
Id. at 629–30.
The Eleventh Circuit rejected harmlessness because there the
manufacturers had used marketing plans unlike those that the FDA had
addressed. Bidi Vapor, 47 F.4th at 1205 (discussing proposed
“Trace/Verify technology” and an authentication system for preventing
counterfeit products); see also Avail Vapor, LLC v. FDA, 55 F.4th 409,
417–18, 427 (4th Cir. 2022) (distinguishing the novel measures in Bidi
Vapor from “garden variety restrictions” like age-verification services);
Lotus Vaping Techs., LLC v. FDA, 73 F.4th at 675 (distinguishing age
verification and restrictions on retailers from the novel measures addressed
in Bidi Vapor).
Electric Clouds and Cloud 9 don’t contend that their marketing plans
contained any novel measures, but argue that the FDA
• ignored the importance of device types and
• could have required extra measures to overcome deficiencies in
the proposed plans.
These arguments are unconvincing for two reasons.
First, Electric Cloud and Cloud 9 say that because they manufacture
e-liquids for open-system devices, the FDA shouldn’t have assumed that
36
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age restrictions would be ineffective. But the FDA warned manufacturers
that flavored e-liquids had become increasingly popular among children
regardless of device type. See pp. 25–27, above. Given that warning, other
circuits have rejected arguments about prejudice based on the FDA’s
failure to review similar marketing plans for open-system e-liquids.
Prohibition Juice Co. v. FDA, 45 F.4th 8, 26 (D.C. Cir. 2022); Liquid
Labs, LLC v. FDA,
52 F.4th 533, 545 (3d Cir. 2022); Lotus Vaping Techs.,
LLC v. FDA,
73 F.4th 657, 671 n.14 (9th Cir. 2023). That reasoning is
persuasive here.
Second, Electric Clouds and Cloud 9 agree that the FDA should have
considered the possibility of imposing measures to reduce the risk to
children. But the manufacturers bore the burden to show that their e-
liquids weren’t too risky for children. See 21 U.S.C. § 387j(c)(2)(A)
(stating that the FDA “shall deny” applications that fail to make the
required showing). Electric Clouds and Cloud 9 failed to carry that burden.
We thus agree with other circuits that found no prejudice when the
FDA had failed to review similar marketing plans:
37
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Circuit Case Affirming Manufacturers’ Proposed Marketing Plans
FDA Denial
Prohibition Juice Co. v. Age-verification measures on websites;
FDA, marketing and packaging not directed and
45 F.4th 8, 15–16 (D.C. Cir. minors.
2022)
Magellan Tech., Inc. v. Age-verification measures.
FDA,
70 F.4th 662, 631 (2d
Cir. 2023)
Liquid Labs, LLC v. FDA, Age-verification measures; mystery-shopper
52 F.4th 533, 544 (3d Cir. program; marketing not directed at minors.
2022)
Avail Vapor, LLC v. FDA, Non-descriptive names; age verification in
55 F.4th 409, 417–18 (4th stores; program to bind distributors.
Cir. 2022)
Lotus Vaping Techs., LLC v. Age verification in stores; age-verification
FDA,
73 F.4th 657, 666 (9th measures on websites; individual purchase
Cir. 2023) limits for online sales; age-gated industry
trade shows; program to bind retailers.
7. Conclusion
The FDA didn’t mislead Electric Clouds or Cloud 9 about what to put
in their applications, and the FDA could reasonably regard the literature
reviews and customer surveys as inadequate.
Along with the literature reviews and customer surveys, Electric
Clouds and Cloud 9 submitted marketing plans. Though the FDA didn’t
review these marketing plans, any possible error would have been
harmless. These plans relied on youth-prevention measures that the FDA
had previously rejected as ineffective.
We thus deny the petitions for judicial review of the denial of the
applications to market flavored e-liquids.
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