Food and Drug Administration v. R.J. Reynolds Vapor Co.

LII note: The U.S Supreme Court has now decided Food and Drug Administration v. R.J. Reynolds Vapor Co.

Issues

May a manufacturer file a petition for judicial review in a circuit (apart from the United States Court of Appeals for the District of Columbia) where it does not reside or have its principal place of business, if the petition is joined by someone who sell the manufacturer’s products with that circuit?

Oral argument:
January 21, 2025
Court below:
United States Court of Appeals for the Fifth Circuit

This case asks the Supreme Court to determine whether a manufacturer is allowed to file a petition for judicial review in a place besides the United States Court of Appeals for the District of Columbia, where it also does not reside or have its principal place of business, because the petition is joined by a seller of the manufacturer’s products that is located there. In this case, the Food and Drug Administration denied R.J. Reynolds Vapor Co.’s premarket tobacco product application, and R.J. Reynolds Vapor Co. sought judicial review of this administrative order along with certain retail sellers. The Food and Drug Administration argues that filing a petition for review based on a retail seller’s residence or principal place of business is improper because retail sellers are not covered within the Tobacco Control Act’s zone of interests, the Tobacco Control Act would prohibit retailers from obtaining judicial review, and venue must be proper for all petitioners. R.J. Reynolds Vapor Co. counters that their petition is proper because retail sellers are covered within the Tobacco Control Act’s zone of interests, the Tobacco Control Act would allow retail sellers to obtain judicial review, and venue only needs to be proper for a single petitioner. This case has important implications for the regulation of e-cigarettes, retail sellers of tobacco products, and forum shopping.

Questions as Framed for the Court by the Parties

Whether a manufacturer may file a petition for review in a circuit (other than the U.S. Court of Appeals for the District of Columbia Circuit) where it neither resides nor has its principal place of business, if the petition is joined by a seller of the manufacturer’s products that is located within that circuit.

Facts

In 2009, Congress passed the Family Smoking Prevention and Tobacco Control Act (“TCA”), giving the Food and Drug Administration (“FDA”) the authority to regulate tobacco products, including e-cigarettes. To market e-cigarettes, manufacturers must submit a premarket tobacco product application (“PMTA”). The PMTA requires manufacturers to submit comparative health risk data using “products that consumers are most likely to consider interchangeable” to the FDA. In March 2020, R.J. Reynolds submitted a PMTA for its Vuse Vibe e-cigarette featuring a new menthol flavor. In January 2023, the FDA denied the PMTA, stating that R.J. Reynolds failed to show that its products would convince more smokers to quit tobacco than tobacco-flavored e-cigarettes. Under the TCA, manufacturers can file petitions to have a United States Court of Appeals review the FDA’s denial either in the D.C. Circuit or the circuit in which they reside– the Fourth Circuit for R.J. Reynolds, which is incorporated in North Carolina. R.J. Reynolds petitioned the United States Court of Appeals for the Fifth Circuit to stay the denial. After the Fifth Circuit agreed to hear the case, three Vuse product retailers joined R.J. Reynolds’s petition: RJR Vapor Co., Avail Vapor Texas, and the Mississippi Petroleum Marketers and Convenience Stores Association.

The Fifth Circuit held that because the TCA allows “any person adversely affected” by a marketing denial order (“MDO”) to challenge them, and two of the retailers were based in the Fifth Circuit, the venue was proper there. Reviewing the order under the Administrative Procedure Act ’s (“APA”) “ arbitrary and capricious ” standard, the Fifth Circuit held that when agencies change longstanding policies, they must consider how people or companies have relied on the prior policy. The Fifth Circuit held that the FDA did not consider R.J. Reynolds’s reliance interest before altering its policy on what types of studies and marketing plans companies should include in a PMTA. The court held that the agency arbitrarily changed its position on the required evidence. The Fifth Circuit also noted that the FDA found that the measures R.J. Reynolds took to prevent minors from using e-cigarettes were inadequate, even though the company took the specific steps the agency had previously recommended. The court held that the agency could have formally changed its policies but did not do so and did not allow R.J. Reynolds to supplement its PMTA before denying it.

The Fifth Circuit also held that the FDA failed to adequately consider R.J. Reynolds’s evidence that cigarette smokers switching to menthol Vuse would lead to substantial health benefits and that menthol was not a popular flavor for youth smokers. The court stated that the FDA instituted a “de facto ban” on flavored e-cigarettes without using the standard notice and comment rulemaking procedure. The court also found that R.J. Reynolds would suffer irreparable harm from the denial, as they would be forced to pull the Vuse Vibe from the market after seven years of sales. As a result, the Fifth Circuit granted the stay of the FDA’s denial order on February 2, 2024.

The FDA petitioned the Supreme Court of the United States to hear the case on May 2, 2024. The Supreme Court granted certiorari on October 24, 2024.

Analysis

WHETHER SELLERS FALL WITHIN THE TOBACCO CONTROL ACT’S ZONE OF INTERESTS

The FDA contends that the TCA only allows a person to file a petition for judicial review of an FDA denial order in three possible circuits: the D.C. Circuit, the circuit in which the person resides, or the circuit where the person has their principal place of business. The FDA further highlights that the statutory language of the TCA includes the phrase “adversely affected” which is a term of art that necessitates the use of the “ zones-of-interests ” test. The FDA outlines that this test only allows a plaintiff to seek judicial review if their interests are within the “zone of interests” that are supposed to be protected by the law in question. Moreover, the FDA argues that the retailer does not fall within this “zone of interest” because this case involved an administrative agency adjudication that only seeks to protect the applicant. In outlining this argument, the FDA notes that the relevant judicial review provision only authorizes the court to review an order issued under 21 U.S.C. § 387j(c) ; and, the order issued here was only made to the manufacturer applicant rather than any of the retail sellers. Furthermore, although the retailer may indeed be indirectly affected by such an adjudication, the FDA alleges that the retailers should still not get judicial review of the denied application because their interests are adequately protected by the manufacturer’s ability to seek judicial review. The FDA also maintains that the other provisions in 21 U.S.C. § 387j demonstrate that Congress did not intend to protect retailers because no provisions under this act consider the role of retailers in the judicial review process, procedural protections for retailers, or consideration of retailers’ interests.

R.J. Reynolds contends that retailers are within the zone of interests because the plain language of the statute indicates that the Act covers any person who is adversely affected by an FDA marketing denial order. Although R.J. Reynolds agrees that the zone of interests test is the correct standard, it believes that an individual would only fail this test if their interests are so unrelated to or inconsistent with the statute’s purpose that it would be unreasonable to assume that Congress would want to allow such a lawsuit. Moreover, R.J. Reynolds asserts that other courts have interpreted the “adversely affected” language, which are included in other statutes, to allow broad classes of people, beyond those who were directly regulated by an administrative agency, to obtain judicial review. Moreover, R.J. Reynolds claims that the text of the TCA only prevents retailers from seeking review of a withdrawal of authorization, but specifically allows for “any person adversely affected” to challenge a denial. R.J. Reynolds considers the phrase “any person adversely affected” to be especially telling since it intuitively means that judicial review under the TCA should not simply be limited to parties that are regulated by the FDA. In support of this argument, R.J. Reynolds points out that TCA includes other provisions that regulate and protect retailers who sell the products of manufacturers; these provisions indicate that retailers fall within the zone of interests of the TCA.

WHETHER THE TOBACCO CONTROL ACT’S STATUTORY SCHEME INTENDED FOR SELLERS TO BE ABLE TO OBTAIN JUDICIAL REVIEW

The FDA insists that the statutory scheme of the TCA suggests that Congress did not intend for retailers to be able to obtain judicial review. First, the FDA notes that the TCA contains a confidentiality provision that prohibits the FDA from disclosing the existence, denial, and content of a manufacturer’s application, as well as the denial order and agency record, to retailers and other members of the public. Because of this, the FDA finds it hard to believe that Congress would want retailers to be able to obtain judicial review since they might not even know of the existence of such an application or the reasons for its denial. Second, the FDA delineates that denial orders do not affect a retailer’s legal rights or duties since the retailer did not have a legal right to sell the unauthorized product before the denial order and still lacks the right to do so after the application is denied. In this regard, the FDA points out that the denial order does not actually “adversely affect” the retailers, so they should not be allowed to petition for judicial review. Third, the FDA observes that the TCA empowers it to withdraw authorization that it has already given for products, but it does not allow retailers to challenge such a withdrawal even though this would affect retailers much more than a denied application.

R.J. Reynolds argues that the statutory scheme of the TCA indicates that retailers should be allowed to obtain judicial review. In making this argument, R.J. Reynolds notes that there are many provisions within the TCA that regulate and protect retailers who are reselling a manufacturer’s products. Moreover, R.J. Reynolds contends that retailers are not just indirectly affected by an FDA denial because an arbitrary denial would unlawfully prevent them from selling products that they should be legally allowed to sell. Additionally, R.J. Reynolds points out that the TCA contains a number of prohibitions, restrictions, and requirements that apply to retailers. R.J. Reynolds further highlights that the TCA protects retailers by providing them procedural protections for violations of the Act. Finally, R.J. Reynolds also asserts that the FDA overstates the importance of the TCA’s confidentiality provisions since the FDA publicly announces denial orders; and, even if retailers had difficulty obtaining information, they believe that this is not a sufficient reason to foreclose challenges by retailers.

WHETHER VENUE IS PROPER

The FDA alleges that for a lawsuit to proceed in a specific court, venue must be proper for each of the parties involved unless Congress specifies otherwise. The FDA provides three main reasons why venue is not proper in this particular case. First, the FDA points out that the statutory language of the TCA indicates that venue must be proper for all petitioners. Second, the FDA asserts that the rules of joinder permit claims by multiple plaintiffs to be joined only if they could have brought their claims separately. However, the FDA contends that R.J. Reynolds could not have filed a petition for review in the Fifth Circuit by themselves under the TCA. Third, the FDA notes that the traditional principles of venue require venue to not only be proper for each party but also for each claim that they assert. The FDA argues that this has historically been shown through a series of judicial decisions which have held that “each plaintiff must be competent to sue and each defendant must be liable to be sued in the chosen forum.”

R.J. Reynolds believes that the FDA’s argument, that venue must be proper for each petitioner involved in the lawsuit, should be forfeited because it was never presented to any lower court. Even if the FDA’s venue argument is not forfeited, R.J. Reynolds holds that Congress intended for the TCA to only require one petitioner to establish venue because the TCA uses the language of the Hobbs Act , which has been uniformly interpreted to only require one petitioner to reside in or have their principal place of business within the circuit in which the lawsuit is being brought. R.J. Reynolds also claims that the FDA’s arguments about joinder actually support their position since joinder allows for two or more people to join in and have review by the same court when their interests make doing so practical.

Discussion

ADVERSELY AFFECTED PARTIES

In support of the FDA, Public Health, Medical, and Community Groups (“Public Health Groups”) argue that flavored e-cigarettes like R.J. Reynolds’s Vuse are particularly attractive to young smokers. Public Health Groups cite surveys showing that teenage e-cigarette use is rising, that most teenage e-cigarette smokers use flavored products, and that most list the flavors as one of the primary reasons for using e-cigarettes. Public Health Groups argue that preserving the FDA’s authority to regulate is critical for youth public health. Public Health Groups contend that from 2016–2019, when the FDA did not act to regulate e-cigarette products, youth use increased substantially.

Conversely, R.J. Reynolds argues that e-cigarettes are a key harm reduction tool for cigarettes. R.J. Reynolds cites FDA data and statements from FDA leadership asserting that e-cigarettes are far less harmful than traditional cigarettes. In support of R.J. Reynolds, Electronic Nicotine Delivery System Trade Associations and Small Businesses (“Trade Associations”) argue that retailers are adversely affected by an MDO because they can face criminal and civil penalties if they continue to sell the products after the MDO has been issued. Thus, the Trade Associations argue that retailers have been given a role in the administrative process and should be able to challenge an MDO. Also in support of R.J. Reynolds, the NCLA argues that the FDA’s arguments would affect the interpretation of many other Congressional statutes. The NCLA contends that many federal statutes use the “adversely affected” language of the TCA, so requiring that a petitioner be a party to be adversely affected would restrict the availability of judicial review in all such laws.

FORUM SHOPPING

In support of the FDA, Public Health Groups argue that the Fifth Circuit has been unusually friendly to cigarette manufacturers when considering marketing denial orders (“MDOs”). Public Health Groups argue that R.J. Reynolds’s interpretation of the TCA’s venue provision enables forum shopping in the Fifth Circuit, undermining the law’s purpose of ensuring e-cigarettes are sold only if they protect public health by reducing use of more harmful products, meaning youth e-cigarette use will spike once again. Additionally, the FDA argues that the D.C. Circuit is a unique court responsible for reviewing the national government’s actions, and Congress intended the D.C. Circuit to review MDOs, which apply nationwide. The FDA contends that many statutes have venue provisions like the TCA, allowing litigants to sue in the district where they are based or the D.C. Circuit. Thus, the FDA asserts that R.J. Reynolds’s arguments would also invite forum shopping under many other federal laws.

In support of R.J. Reynolds, Foreign Ends Manufacturers and Domestic Resellers of Their Products (“Foreign Ends Manufacturers”) argue that concerns about forum shopping are overstated. Foreign Ends Manufacturers assert that the FDA’s interpretation of the statute as allowing review only in the D.C. Circuit would require many foreign manufacturers to seek review in a circuit where their products are not sold. Foreign Ends Manufacturers claim that any concerns about forum shopping are temporary, pointing to a pending Supreme Court case, FDA v. Wages & White Lion Investments, L.L.C. , in which the merits of an e-cigarette MDO is at issue. Foreign Ends Manufacturers claim that the Supreme Court’s decision will set the nationwide precedent that all circuits will follow, making a manufacturer’s choice of forum less relevant. Also supporting R.J. Reynolds, the American Center for Law and Justice (“ACLJ”) argues that the FDA’s “forum shopping” arguments are inappropriate because Congress has explicitly authorized the use of these forums in the TCA. The ACLJ argues that when Congress authorizes a forum, no policy considerations justify restricting that choice.

Conclusion

Authors

Written by: Brian Kam and Michael Spivey

Edited by: Sean Lee

Additional Resources