The Supreme Court is likely to let the Vape business’s FDA challenge continue

Argument analysis

In the case of oral arguments earlier this week, the Supreme Court was skeptical of Food and Drug Administration efforts to block a North Carolina-based company from contesting the rejection on its application to market e-cigarettes in the Conservative US Appeal Court of the 5th Circuit, based in Louisiana.

Over the course of 72 minutes of oral arguments, almost all the judges peppered Vivek Suri, the assistant of the US lawyer representing the FDA, with a shower of questions. Ryan Watson, who argued on behalf of RJ Reynolds Vapor Company and a group of retailers based in Texas and Mississippi, primarily asked questions from only two judges, judges Sonia Sotomayor and Ketanji Brown Jackson – a promising sign for his clients.

The question comes to court as part of the FDA’s efforts to regulate the multimilliard-dollar vaping industry. In 2009, Congress Family Smoking Prevention and Tobacco Control Act adopted the FDA power to regulate tobacco products and require producers to obtain the FDA’s permission before putting a new tobacco product on the market. In 2016, the FDA issued a rule indicating that the law applies to e-cigarettes and e-liquids.

RJR Vapor filed an application for permission to sell its popular e-cigarettes with menthol-taste vuse. According to the Tobacco Control Act, when the FDA refuses a marketing request, “any person who is adversely affected” of this refusal may “submit a request for court control of such regulation or refusal to the US Appeals Court of District of Columbia Circuit or for The circuit in which such a person resides ” – as for a company is usually the place where it is registered -” or has their main business place. “

RJR Vapor is incorporated and placed in North Carolina, where the challenges of the FDA’s refusal of applications to sell e-cigarettes had been unsuccessful. Instead, RJR Vapor went to 5th Circuit, who had already breached the FDA’s rejection of two other companies’ requests to market vape fluids with flavor. (The Supreme Court heard arguments in December in the FDA’s contention of the 5th circuit decision in that case, but it has not yet made a decision.) Its petition was joined Avail Vapor, a store in Texas selling its products, as well as a Industry Association for Mississippi gas stations and grocery stores that sell Vuse E-cigarettes with menthol flavor.

The 5th Circuit rejected the FDA’s proposal to move the case to DC Circuit. It justified that the retailers were “undisputed in this circuit” and “unfavorably influenced by the refusal” because (among other things) AVABE VAPOR has said it will go bankrupt if it cannot sell the Vuse products.

In Tuesday’s oral argument, Suri told the judges that the 5th circuit decision has “actually canceled the tobacco control law’s restrictions”, where objections can be made to rejection of a marketing application. The decision of the Court of Appeal, he said, allows an applicant to “challenge the rejection in any circuit anywhere in the country as long as it can get a local dealer who is willing to join its petition.”

There are two problems with that attitude, he claimed. The first is that only the unit that has actually applied for permission to market the tobacco item can challenge the rejection of an application. “Retailers,” he emphasized, “are spectators of the application process.” But even if the retailers were allowed to sue, he continued, “Applicants are not going to ride their coattails” and rely on the retailers’ residence to establish that their case is correct in the 5th circuit. “The meeting place must be established separately for each party” – that is, each party can show that it can submit its challenge in the forum there.

But most of the judges were in doubt that the provision at the center of the case only allows applicants – those who seek to market tobacco products – to contest the rejection on their applications. Judge Clarence Thomas was the first to express this skepticism, as he asked Suri why, if the provision on judicial review applies only to applicants, it refers to “any person who is adversely affected” by the rejection.

Suri opposite that the provision simply requires the courts to decide, based on the structure of the law, who is negatively affected. When the FDA denies marketing approval, he suggested that it has only a negative impact on the applicant himself – as stated in the fact that retailers do not participate in the process leading up to the rejection of an application and is not notified of the rejection itself . “It’s unlikely,” Suri emphasized that Congress created a system where someone, the retailers, would have the right to challenge an agency order but would not have the right to be notified of the order in the first place. “

Judge Sonia Sotomayor seemed to agree. She pressed Ryan Watson, who represented the challengers, to explain what further role, compared to the producer, the retailers could play in the process – and as a result, why Congress could have wanted to include them among the units that could challenge the rejection of a Marketing application. “What arguments could you travel,” she asked, “there would be different from the manufacturer?”

However, Jo John Roberts was not convinced. “I think it’s a bit a lot,” he noticed for Suri, “calling” retailers “spectators” when “their business depends on” their ability to market products such as Vuse E-cigarettes with menthol taste. In fact, Roberts reflected when the “whole point” with the government’s investigation into the decision on whether to grant or deny a marketing permit is whether the products will be sold to the public, the retailers may be “the most likely people” to challenge the refusal of authorization.

Justice Brett Kavanaugh repeated Robert’s doubt. He noted that under the federal legislation that regulates administrative agencies, the term “negatively affected” usually finds in competitors and others in the distribution chain, such as retailers and distributors.

Suri acknowledged that the term “unfavorably affected” “determined includes competitors in a wide variety of contexts.” But he tried to distinguish these contexts from the one dealt with court on Tuesday, and told them that “this is a very different circumstance” involving “an ally to the direct regulated party.”

Judge Elena Kagan asked Suri if the rejection of an application to market a tobacco product affects anyone other than the applicant negatively. When Suri replied “No,” she suggested that Congress could simply have drafted the law to refer to the “applicant” instead, and she noted that Congress had done exactly that for another provision that involved court checks for decisions that require Withdrawal of tobacco products from the market.

Together with Sotomayor, Jackson was the only other judge who seemed sympathetic to the government’s attitude. She saw things differently. She noted that retailers “have a significant interest once the product is on the market” and they sell it. But even then, she said, when “they would clearly be injured,” Congress has not allowed the retailers to challenge the withdrawal of the product from the market. It would seem “strange,” she told Watson that retailers cannot sue to challenge the withdrawal of a product from the market, but could challenge the rejection of a marketing application.

Judge Amy Coney Barrett questioned whether the court should decide on the second question that the government had raised: Whether each challenger should show that it has submitted its request for review in the right place, or whether RJR Vapor can instead trust in the request of the retailers. to challenge the FDA’s decision in the 5th circuit. She noted that the appeals courts were not shared in the question – a classic scenario where the Supreme Court is likely to weigh in to resolve a conflict between the lower dishes.

Suri characterized the extent to which e-cigarette producers have tried to submit their petitions to review in the 5th circuit as “quite remarkable.” In 2024, he told the judges, there were “about 14 petitions on review submitted by e-cigarette companies under” TCA in that circuit.

Several judges, including Barrett, pushed Suri about the extent of a potential decision for the government on this issue. “The government is being sued in many places,” she noted. “And this would matter beyond just TCA, right?”

Suri admitted that the court could avoid a broader decision by focusing on the language of the tobacco control law. The central part of the provision that is subject to the court, he explained is its requirement that an injured person file A request for trial in the circuit where it resides or has its main location. The use of the verb “file”, he suggested, means that a device cannot join someone else’s request, but even must either live in that circuit or have his business there.

Judge Samuel Alito also asked about the scope of the government’s interpretation and pointed to a “friend of the court” cards suggesting that there are “as many as 650 audit regulations similar to the one” in this case .

Suri pushed back, although he agreed that at least two other federal laws – Investment Advisors Act and the Natural Gas Act – have similar wording.

Watson disproved that the government’s interpretation could actually sweep quite broadly. He claimed that the language in this case is “quite similar” both the Hobbs Act, which prohibits robbery and extortion, and the general law that regulates venue in federal courts, “all of which have been interpreted to allow only one party to establish venue. ”

Thomas was also unsympathetic to the government’s situation here. “As a practical matter,” he asked Suri, “why is it inconvenient for the government to conduct litigation in one orbit instead of another?”

Suri told the judges that this was not a matter of convenience, but instead “about the congress’s choice in the statute” to define where cases can be brought. “Almost all the cases are brought in the fifth circuit,” he emphasized.

Judge Neil Gorsuch questioned whether the court’s decision would have any practical effect in the FDA’s e-cigarette spaces in the light of the government’s admission that lawsuits in the 5th circuit do not create logistical problems. Even if the producers could not do piggyback directly from the retailers ‘petitions to challenge the FDA’s rejection of the marketing application, he asked, couldn’t producers just finance the retailers’ litigation anyway and actually leave the dispute in the same place?

Watson pressed on a similar point and told the judges that if the court agrees with the challengers that retailers can sue, it doesn’t have to go any further. First, he explained, the government waived the right to argue that each party must show that it is correct in the 5th circle. But in any case, because RJR Vapor and retailers under a separate federal procedural law will still end in the 5th circuit where they challenge the marketing rejection order, the Supreme Court’s decision will not “make a difference in this case.”

A decision in the case is expected until summer.

This article was originally published on Howe on the Court.