FDA v. Wages and White Lion Investments, LLC
604 U. S. ____ (2025) (2025)
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Rule of Law:
Under the Administrative Procedure Act's change-in-position doctrine, an agency does not act arbitrarily and capriciously when it applies an adjudicatory standard that is a predictable outgrowth or natural consequence of its prior, less specific guidance. If an agency commits a procedural error, a reviewing court must conduct a harmless-error analysis that is not rigidly limited to whether the agency was legally required to take the same action.
Facts:
- The 2009 Family Smoking Prevention and Tobacco Control Act (TCA) gave the FDA authority to regulate new tobacco products, requiring manufacturers to obtain premarket authorization showing their product is 'appropriate for the protection of the public health.'
- In 2016, the FDA issued a rule deeming e-cigarettes to be 'tobacco products,' thus subjecting them to the TCA's premarket authorization requirement.
- Respondents, Wages and White Lion Investments (Triton) and Vapetasia, manufacture and sell flavored e-liquids for open-system e-cigarettes, with flavors such as 'Killer Kustard Blueberry' and 'Pineapple Express.'
- Prior to the application deadline, the FDA issued various guidance documents indicating it would consider multiple forms of scientific evidence and that manufacturer marketing plans to prevent youth access would be 'critical' to its review.
- Respondents submitted premarket applications by the September 9, 2020 deadline, which included scientific literature reviews, survey data, and detailed marketing plans.
- The FDA issued marketing denial orders to the respondents, concluding they had failed to provide robust scientific evidence, such as a randomized controlled trial or longitudinal cohort study, to show their flavored products benefited adult smokers enough to outweigh the risks to youth, particularly when compared to tobacco-flavored products.
- In its denial letters, the FDA stated that 'for the sake of efficiency,' it did not evaluate the respondents' marketing plans.
Procedural Posture:
- Respondents petitioned the U.S. Court of Appeals for the Fifth Circuit for judicial review of the FDA's marketing denial orders.
- A motions panel of the Fifth Circuit granted a stay of the orders, and a merits panel later denied the petitions.
- The Fifth Circuit, sitting en banc, granted the petitions for review, vacated the FDA’s orders, and remanded the case to the agency.
- The en banc court held that the FDA had acted arbitrarily and capriciously by changing its application standards without fair notice and by failing to consider the marketing plans.
- The FDA, the petitioner, filed a petition for a writ of certiorari with the U.S. Supreme Court, which was granted.
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Issue:
Does the Food and Drug Administration (FDA) act arbitrarily and capriciously under the Administrative Procedure Act by denying premarket tobacco product applications for flavored e-cigarettes based on evidentiary standards that the applicants claim are a sudden and unexplained departure from the agency's prior guidance?
Opinions:
Majority - Justice Alito
No. The FDA's denial orders were not arbitrary and capricious because its standards for scientific evidence, comparative efficacy, and device type were sufficiently consistent with its prior guidance, and the court of appeals applied an incorrect standard for harmless error regarding the agency's failure to review marketing plans. The agency's requirement for robust, product-specific evidence comparing flavored e-liquids to tobacco-flavored ones was a 'natural consequence' of its predecisional guidance, which consistently highlighted the need for strong scientific support and expressed concerns about flavors appealing to youth. While the FDA erred by changing its position on the importance of marketing plans and failing to review them, the Fifth Circuit's harmless-error analysis was flawed because it read this Court's precedent in Calcutt too broadly, suggesting remand is required for any error unless the agency was legally compelled to reach the same result. The case is therefore remanded for the court to apply a proper harmless-error analysis to the marketing plan issue.
Concurring - Justice Sotomayor
Yes, I join the Court's opinion but write separately to clarify a point. The FDA was not merely 'feeling its way toward a final stance.' Rather, the record shows the agency was reasonably flexible on the specific forms of evidence required while remaining firm on its statutory duty to approve only products proven to be 'appropriate for the protection of the public health.' Given the well-documented risks that flavored e-cigarettes pose to young people, it should have been no surprise to applicants that they needed to submit rigorous scientific evidence demonstrating that the benefits of their products outweighed those substantial risks.
Analysis:
This decision refines the 'change-in-position' doctrine in administrative law, giving agencies more latitude to develop and clarify standards through adjudication without being deemed arbitrary and capricious, provided the final standards are a 'predictable outgrowth' of earlier guidance. It signals that agencies are not required to provide exhaustive, explicit instructions in advance. The Court also clarifies the harmless-error rule in the APA context, rejecting an overly rigid interpretation of the 'remand rule' from SEC v. Chenery Corp. and allowing for a more flexible analysis, though it stops short of defining the rule's precise contours. This outcome strengthens agency discretion in adjudicatory processes, especially in novel regulatory fields, while leaving the exact standard for harmless error open for future development.
