DISCUSSION OF CASE
By Amy Howe
on 20 January 2025
at 23.41
The judges will hear Food and Drug Administration v. RJ Reynolds Vapor Co. on Tuesday. (Katie Barlow)
The Supreme Court will hear oral arguments on Tuesday in a clash over whether a North Carolina-based company can challenge the Food and Drug Administration’s denial of its application to market e-cigarettes in the conservative U.S. Court of Appeals for the 5th Circuit, based in Louisiana. The company, RJ Reynolds Vapor Company, joined a lawsuit by retailers based in Texas and Mississippi — two states covered by the 5th Circuit.
While the dispute may seem like a technical one, the FDA claims the stakes are high. If the lower court’s ruling allowing RJR Vapor’s case to proceed stands, the FDA says, other manufacturers will also try to circumvent the restrictions imposed by federal law on where such challenges can be filed. More broadly, the FDA warns that the 5th Circuit’s ruling could open the door to efforts by other plaintiffs to file their challenges to federal agency actions in courts they believe will be friendly to them. That kind of forum shopping, the FDA suggests, is “harmful to the judiciary.”
The law at the center of the case is the law on smoking prevention and tobacco control for the family. Passed in 2009, it gives the FDA the authority to regulate tobacco products and requires manufacturers to obtain the FDA’s permission before putting a new tobacco product on the market.
If the FDA denies a marketing application, the Act provides that “any person adversely affected” by that denial may “file a petition for judicial review of such regulation or denial in the United States Court of Appeals for the District of Columbia Circuit or for circuits in which such person is domiciled – which for a company is normally the place where it is registered – “or has its principal place of business.”
In 2016, the FDA issued a rule indicating that the law applies to e-cigarettes and e-liquids. RJR Vapor applied for permission to market (among others) its menthol-flavored Vuse brand e-cigarettes, one of the most popular e-cigarette brands among adults. The FDA rejected RJR Vapor’s application, finding that it had not shown (as required by law) that its product would be “suitable for the protection of public health.”
The Supreme Court heard arguments in December in a separate dispute over the FDA’s rejection of two different companies’ applications to sell flavored vape liquids. The 5th Circuit overturned the FDA’s denials in those cases, accusing the agency of sending these companies and other manufacturers “on a wild ride.”
RJR Vapor is incorporated and headquartered in North Carolina, which is part of the U.S. Court of Appeals for the 4th Circuit – which had overturned challenges to the FDA’s denial of applications to sell e-cigarette products. Instead, RJR Vapor filed a petition for review in the 5th Circuit, joined by Avail Vapor, a Texas retailer that sells its products, and by a trade association of Mississippi gas stations and convenience stores that sell RJR Vapor’s products.
A divided panel of the 5th Circuit rejected the FDA’s motion to transfer the case to the DC Circuit. In an unsigned order, the majority — made up of Judge Edith Jones, a Reagan appointee, and Judge James Ho, a Trump appointee — explained that Avail Vapor and the industry association “undisputedly are in this circuit” and were “adversely affected by ” the refusal because the dealers indicated that they would go bankrupt if the refusal stood.
Judge Stephen Higginson, an Obama appointee, dissented. He would have transferred the case to either the DC Circuit or the 4th Circuit.
The FDA went to the Supreme Court, which in October agreed to weigh in.
In its Supreme Court brief, the FDA is urging the justices to reverse the 5th Circuit’s decision and send the case back to the Court of Appeals with instructions to send it to the DC Circuit. The FDA first tells the court that the retailers do not have standing to go to court to seek review of the FDA’s denial of RJR Vapor’s application.
FDA points to the law’s use of the term “adversely affected” to describe who can file a request for review of FDA’s denial of a marketing application. That phrase, the FDA points out, is a term of art in federal administrative law that invokes a doctrine known as the “zone of interest” test — the idea that someone can go to court to seek review of an agency’s action only if it relies on on an interest that is among those protected by law that is the center of the dispute.
The provision requiring the FDA to rule on an application to market e-cigarette products does not implicate the interests of retailers such as Avail or trade group members, the FDA argues. Instead, the agency argues that when it issues an order on applications like RJR Vapor’s, the order “always or almost always” regulates only the manufacturer; any effect on retailers is only indirect.
But in any event, the FDA continues, RJR Vapor also cannot rely on the retailers to seek judicial review in the 5th Circuit. The Tobacco Control Act, the FDA writes, “makes clear that a person may sue in a circuit only if that person is based there. A manufacturer cannot sue based on a dealer’s residence.”
Although a legal principle known as joinder allows lawsuits that could have been filed separately to be filed and tried together, FDA recognizes that this principle does not give the parties more rights or expand the court’s power. Because RJR Vapor is based in North Carolina and incorporated there, it could not petition for review in the 5th Circuit, nor can it join others’ petitions there.
RJR Vapor and the retailers counter that the Supreme Court lacks jurisdiction at all to review this case. They say that the general federal law authorizing the Supreme Court to grant review, on which the FDA relies, does not give the Supreme Court the power to review non-final orders in cases — like this one — that began in an appellate court, rather than a federal court. At the very least, RJR and the retailers say, “this jurisdictional issue is sufficiently complicated and rare that” the justices need not address it here and should instead dismiss the case without ruling on it.
But if they don’t, RJR Vapor and the retailers continue, the Supreme Court should uphold the 5th Circuit’s decision. The federal law governing administrative agencies uses a “catchy” approach that allows anyone harmed by an agency’s action to challenge that action if their interests are even “reasonably” related to the interests protected by the law.
Here, RJR Vapor and the retailers say, the retailers fall squarely within the law’s definition of “any person adversely affected” by the FDA’s denial of RJR Vapor’s application: The FDA threatened them with enforcement (which could include criminal penalties) if they did so . not stop selling the menthol-flavored Vuse brand e-cigarettes at the center of the dispute. But if they can’t sell these e-cigarettes, the retailers explain, they will lose significant amounts of money and Avail Texas will likely go out of business.
The structure of the Tobacco Control Act also confirms that retailers can bring this suit, RJR Vapor and the retailers add. Although the law specifically provides that only an applicant himself can go to court to challenge withdrawal of the marketing authorisation, it expresses more generally that “any person adversely affected” can challenge refusal authorization – which signals that the latter is not limited to applicants. And if “any person adversely affected” is not limited to applicants, then it would apply to the retailers who, according to RJR, are most likely to be “adversely affected”
The FDA argues that the 5th Circuit’s rule would also allow “clear evasion” of the limits set by law on where challenges to the FDA’s orders can be filed. Congress, it emphasizes, outlined three places where lawsuits can be filed: in the DC Circuit, in the place where the plaintiff lives, or in the place where it has its principal place of business. But the 5th Circuit would allow lawsuits to be filed “anywhere in the country as long as” the plaintiff “finds a local dealer willing to join its petition.”
This, the FDA continues, creates incentives for forum-shopping. And indeed, the FDA notes, “[a]At least eight other out-of-circuit manufacturers — based in China, California, Florida, Michigan, North Carolina, Ohio and Washington — have since invoked the same tactics to seek judicial review in the Fifth Circuit.”
The 5th Circuit’s approach could have ripple effects beyond the Tobacco Control Act, the FDA warns, because other laws that authorize challenges to the agency’s actions contain similar restrictions. “However, the logic of the decision below would make it easier for challengers to avoid these limitations,” the FDA writes, as long as they could find someone who lives in the circuit where they want to file their lawsuit and then “seek review with that person. “
And the broader problem of forum shopping, the FDA concludes, could prove “harmful to the judiciary.” “When parties across the country employ complex procedural strategies to channel their cases into a single circuit, even when they have no meaningful ties to that circuit,” the FDA argues, “they erode the perception that judicial decisions rest on universally applicable rules of law. . . . “
RJR Vapor and the retailers are pushing back against the FDA’s insistence that allowing the case to proceed in the 5th Circuit will circumvent the restrictions Congress intended in the Tobacco Control Act. Unless the case is filed in the DC Circuit, they observe, at least one of the challengers must be in the circuit where the case is filed. “And there are a number of reasons why an out-of-circuit applicant might not be able to find an in-circuit applicant” to file suit, they add—for example, because the manufacturer sells directly to consumers or because there is not a negotiator willing to pursue the lawsuit.
This article was originally published on Howe on the Court.
