NOTICE: This opinion is subject to
formal revision before publication in the United States Reports.
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SUPREME COURT OF THE UNITED STATES
_________________
No. 23–1038
_________________
FOOD AND DRUG ADMINISTRATION, PETITIONER
v. WAGES AND WHITE LION INVESTMENTS, L.L.C, dba TRITON
DISTRIBUTION, et al.
on writ of certiorari to the united states
court of appeals for the fifth circuit
[April 2, 2025]
Justice Alito delivered the opinion of the
Court.
This case concerns the efforts of the Food and
Drug Administration (FDA) to regulate the sale of “e-cigarettes,” a
product that rapidly gained popularity during the past 20 years.
The governing federal law, the Family Smoking Prevention and
Tobacco Control Act of 2009 (TCA), restricts the sale of all
“tobacco products” that were not commercially marketed in the
United States before February 15, 2007. Unless otherwise
authorized, a manufacturer may not introduce such a product to the
market until the FDA determines that it is “appropriate for the
protection of the public health.” 21 U. S. C.
§387j(c)(2)(A). In this case, we consider whether the FDA lawfully
denied authorization to market certain flavored e-cigarette
products.
I
One of the FDA’s longstanding
responsibilities, dating back nearly a century, is to determine
whether manufacturers may market new drugs. For much of that
history, the FDA lacked jurisdiction to regulate tobacco products.
By the time Congress conferred that authority in 2009, a new
product was ascendant on the market: the e-cigarette. This product
offers existing smokers a potentially safer alternative to
traditional combustible cigarettes. But e-cigarettes carry their
own health risks, and they come in a dizzying array of flavors,
many of which, such as dessert, candy, and fruit flavors, are
particularly appealing to the young. The surging youth demand for
flavored products—and the prospect of a new generation of
smokers—caught the FDA on its back foot. In 2016, the agency
declared that manufacturers of e-cigarette products would need to
obtain the same marketing authorization that is required for other
“tobacco products.” The FDA’s regulatory efforts culminated in the
2021 denial of over a million applications for flavored e-
cigarette products. The dispute before us arises from that mass
denial.
A
The Pure Food and Drug Act of 1906 was
Congress’s first foray into the comprehensive regulation of food
and drugs. The Act prohibited the interstate transportation of “any
article of food or drugs which is adulterated or misbranded.” Ch.
3915, §2, 34Stat. 768. That Act also vested important
responsibility in the precursor to the FDA, the Bureau of Chemistry
in the U. S. Department of Agriculture. §4,
id., at
769. But early in its tenure, the Bureau disclaimed any authority
to regulate tobacco products “labeled in such a manner as to
indicate their use for” nonmedicinal purposes like “smoking or
chewing or as snuff.” Dept. of Agriculture, Bureau of Chemistry, 13
Service and Regulatory Announcements 24 (Apr. 1914) (Feb. 1914
Announcements ¶13, Opinion of Chief of Bureau C. Alsberg). Congress
later renamed the Bureau of Chemistry, first as the Food, Drug and
Insecticide Administration and then as the FDA, the name by which
we know it today. A Historical Guide to the U. S. Government
249 (G. Kurian ed. 1998).
In 1938, Congress enacted the Federal Food,
Drug, and Cosmetic Act (FDCA), which vastly expanded the FDA’s
regulatory authority over “drugs and devices.” 52Stat. 1049. One of
the FDCA’s major innovations was the establishment of a system for
premarket authorization under which manufacturers are prohibited
from marketing “any new drug” in interstate commerce without the
FDA’s approval. §§505(a)–(b), (d),
id., at 1052; Historical
Guide, at 251. To receive such authorization, manufacturers must
prove to the FDA that their new products are safe for use. And if
the FDA has “insufficient information” to make that determination,
it must “issue an order refusing” marketing authorization. §505(d),
52Stat. 1052.
By the middle of the 20th century, nearly one in
two Americans regularly smoked. See R. Rabin, A Sociolegal History
of the Tobacco Tort Litigation, 44 Stan. L. Rev. 853, 855
(1992). Toward the latter half of the century, however, the public
became increasingly aware of the “great” “potential hazard” of
tobacco, Dept. of Health, Education, and Welfare, Surgeon General’s
Advisory Committee, Smoking and Health 25 (1964), and the addictive
properties of nicotine, see L. Goitein, G. Chernack, G. Liu, &
M. Davis, Developments in Policy: The FDA’s Tobacco Regulations, 15
Yale L. & Pol’y Rev. 399, 402 (1996).
The FDCA was enacted long before public
awareness of the dangers of smoking became widespread, and neither
its text nor its legislative history provided any indication that
tobacco products fell within the FDA’s jurisdiction. See A.
Boeckman, An Exercise in Administrative Creativity: The FDA’s
Assertion of Jurisdiction Over Tobacco, 45 Cath. U. L. Rev.
991, 1015 (1996). Thus, during the first 60 years after the FDCA’s
enactment, the FDA (like the Chemistry Bureau) repeatedly stated
that it “lacked authority under the FDCA to regulate tobacco absent
claims of therapeutic benefit by the manufacturer.”
FDA v.
Brown & Williamson Tobacco Corp.,
529 U.S.
120, 144 (2000); see R. Kluger, Ashes to Ashes: America’s
Hundred-Year Cigarette War, the Public Health, and the Unabashed
Triumph of Philip Morris 757–759 (1997) (Kluger).
Tobacco regulation was largely left to Congress,
which enacted various statutes between 1965 and the turn of the
century to address the harms of tobacco use, including the
imposition of warning requirements (15 U. S. C. §§1331,
1333, 4402(a)(1) (2000 ed.)); restrictions on the advertisement of
certain tobacco products (15 U. S. C. §§1335, 4402(a)(2),
(f ) (2000 ed.)); requirements that the Secretary of Health
and Human Services report on scientific findings about, among other
things, “the addictive property of tobacco” ( 42 U. S. C.
§290aa–2(b)(2) (1994 ed.)); and age restrictions on the sale or
distribution of tobacco products ( 42 U. S. C.
§300x–26(a)(1) (2000 ed.)). See
Brown & Williamson Tobacco
Corp., 529 U. S., at 137–139, 143–144. At no point during
that period did Congress grant the FDA jurisdiction to regulate
tobacco or tobacco products under the FDCA. And when the FDA tried
via regulation to assert such jurisdiction in 1996, see 61 Fed.
Reg. 44619–45318 (1996), this Court rejected that effort as beyond
the FDA’s statutory authority, see
Brown & Williamson
Tobacco Corp., 529 U. S., at 126.
Against that backdrop, Congress enacted the
Family Smoking Prevention and Tobacco Control Act of 2009, 123Stat.
1776. The TCA vests the Secretary of Health and Human Services,
acting through the FDA, with the authority that this Court
previously found lacking: namely, the power to regulate the
manufacturing, marketing, sale, and distribution of tobacco
products. See §901,
id., at 1786. The TCA explicitly granted
the FDA regulatory authority over “cigarettes, cigarette tobacco,
roll-your-own tobacco, and smokeless tobacco.” 21
U. S. C. §387a(b). It also granted authority to regulate
“any other tobacco products” that the FDA “by regulation deems” to
meet the definition of a tobacco product.
Ibid.
The TCA’s reach was broad. While the Act barred
the FDA from banning all regulated tobacco products outright or
requiring manufacturers to reduce nicotine yields to zero, see
§387g(d)(3), it prohibited a manufacturer from marketing any “new
tobacco product” without FDA authorization, see §387j(a)(2)(A). A
“new tobacco product” is one that was not marketed in the United
States before February 15, 2007, and the TCA subjected such
products to a premarket authorization process. See §§387j(a)(1)(A),
(a)(2).
One pathway to authorization of the sale of a
new tobacco product is the submission of a premarket tobacco
product application.[
1]
§387j(c)(1)(A)(i). These applications require, among other things,
information about a product’s components and additives, the method
by which it is manufactured, any proposed labeling, and an
assessment of its health risks. See §387j(b)(1). There are many
reasons why the FDA may deny marketing authorization to a “new
tobacco product,” but of main importance here, the agency
must deny an application unless it is shown that the product
“would be appropriate for the protection of the public health.”
§387j(c)(2)(A).
To determine whether a product meets this
standard, the FDA must consider “the risks and benefits to the
population as a whole” and “tak[e] into account” the “increased or
decreased likelihood” of two outcomes: first, that the new product
will induce users of existing tobacco products such as conventional
cigarettes to stop using those products and, second, that “those
who do not use tobacco products will start using” them.
§387j(c)(4). The FDA’s determination regarding the likely effects
of a new product must, “when appropriate,” be based on
“well-controlled investigations” or other “valid scientific
evidence” that is “sufficient to evaluate the tobacco product.”
§387j(c)(5).
The FDA must act “[a]s promptly as possible” on
a premarket tobacco product application and “in no event later than
180 days after the receipt of an application.” §387j(c)(1)(A). If
the FDA denies an application for premarket authorization, “any
person adversely affected” by the denial has 30 days to seek
judicial review in a court of appeals. §387
l(a)(1). The
reviewing courts must in turn apply the provisions of the
Administrative Procedure Act (APA). §387
l(b) (citing 5
U. S. C. §706(2)(A)).
B
At the end of the 20th century, tobacco
manufacturers tried without much luck to market safer alternatives
to traditional cigarettes, such as “smokeless” cigarettes. See
Kluger 599–604; Dept. of Health & Human Servs., E- Cigarette
Use Among Youth and Young Adults: A Report of the Surgeon General 9
(2016) (2016 Surgeon General’s Report). But in 2007 a new product
hit the American market: electronic nicotine delivery systems,
which are popularly known as electronic cigarettes, e-cigarettes,
or vapes. See
id., at 10; K. Lichtenberg, E-Cigarettes:
Current Evidence and Policy, 114 Mo. Med. 335 (2017). Practically
overnight, e-cigarettes became ubiquitous. Sales for e-cigarette
products “surged exponentially” after 2010, 2016 Surgeon General’s
Report 152, and according to one estimate, 11.2 million American
adults used e-cigarettes by 2016, see O. Obisesan et al.,
Trends in E-Cigarette Use in Adults in the United States,
2016–2018, 180 JAMA Internal Med. 1394 (2020).
The impetus for the invention of e-cigarettes
was the desire to create a product that would reduce the health
risks of smoking. A traditional combustible cigarette contains
shredded tobacco wrapped in paper, and when lit, the tobacco
“catches fire” and “produces smoke, which contains nicotine” and
“tar”—a “complex chemical mixture of more than 7,000 compounds that
cause a wide range of diseases.” Brief for Global Action To End
Smoking, Inc., as
Amicus Curiae 14 (internal
quotation marks omitted). In contrast, an e-cigarette contains a
battery, a heating element or atomizer, a liquid nicotine
reservoir, and a mouthpiece. See 2016 Surgeon General’s Report 11.
When an e-cigarette user inhales through the device’s mouthpiece,
the heating coil engages, and the liquid (called e-liquid or
e-juice) turns into a nicotine-infused vapor. See
ibid.
Unlike a traditional cigarette, an e-cigarette does not release tar
or other “byproducts of combustion,” but it does “emit potentially
toxic substances,” including “fine particulate matter,” “metals,”
and, of course, nicotine. Brief for Global Action To End Smoking,
Inc., as
Amicus Curiae 15–16 (internal quotation
marks omitted).
E-cigarettes typically come in either a “closed”
or “open” system. See 2016 Surgeon General’s Report 151–152.
Closed-system e-cigarettes contain a set amount of e-liquid that is
determined by the manufacturer. Some closed- system products are
designed to be discarded after the e-liquid supply runs out, while
others can be reused by inserting a cartridge or pod that contains
e-liquid. By contrast, an open-system e-cigarette contains a “tank”
that users can manually refill with the desired amount of e-liquid.
Users of open-system products may mix their own e-liquids and
adjust the amount of e-liquid in the tank.
There is fierce public debate about the
potential benefits and harms of e-cigarettes. On one hand, many
view e- cigarettes as a harm-reduction tool. They enable current
smokers who are addicted to nicotine to reduce exposure to some of
the more harmful byproducts of traditional combustible cigarettes.
See
id., at 10–11; National Academies of Sciences,
Engineering, and Medicine, Committee on the Review of the Health
Effects of Electronic Nicotine Delivery Systems, Public Health
Consequences of E-Cigarettes 18 (2018). On the other hand,
e-cigarettes, as noted, pose their own health risks, and there is
concern that the use of e- cigarettes by non-smokers—and especially
young non-smokers—may eventually lead them to smoke conventional
cigarettes. See
id., at 532–535.
Early on, evidence began to mount that young
Americans are particularly drawn to e-cigarette products. By the
mid-2010s, approximately 2.4 million high-school students and
620,000 middle-school students reported using an e- cigarette at
least once in the last 30 days. 2016 Surgeon General’s Report 5,
10. And a more recent estimate suggests that approximately 3.6
million American middle- and high-school students used an
e-cigarette within a 30-day period. See Congressional Research
Service, H. Sheikh & V. Green, FDA Regulation of Tobacco
Products 1 (2021).
One particular feature of e-cigarette products
appears to drive this youth demand: the panoply of e-liquid
flavors. One nearly decade-old estimate found that there were 7,700
unique e-liquid flavors, including not only flavors that were
familiar to cigarette smokers (tobacco and menthol) but also fruit,
candy, and dessert flavors that were appealing to non-smokers. See
2016 Surgeon General’s Report 11. The kaleidoscope of flavor
options adds to the allure of e-cigarettes and has thus contributed
to the booming demand for such products among young Americans. See
ibid.
Because the popularity of e-cigarettes is a
relatively recent phenomenon, these products initially escaped the
FDA’s regulatory reach. But in 2016, the FDA issued a rule deeming
e-cigarettes and e-liquids to be “tobacco products.” 81 Fed. Reg.
29028 (2016). Since most e-cigarette products were “not
commercially marketed in the United States as of February 15,
2007,” the deeming rule retroactively rendered such products “new
tobacco products” subject to the TCA’s premarket-authorization
regime. 21 U. S. C. §387j(a)(1)(A). And because those
products had not received premarket authorization, the effect of
the rule was to make their continued sale illegal. Companies that
proceeded to sell their products without such authorization would
be subject to stiff penalties. See §§331(a), 333(a)(1), and
(f )(9).
To give these manufacturers adequate time to
apply for “premarket” authorization, the FDA delayed enforcement
for two to three years. See 81 Fed. Reg. 28977–28978. This
permitted e-cigarette products to remain on the market while
manufacturers filed their applications. Initially, applications
were due by August 8, 2018. See
Vapor Tech. Assn. v.
FDA, 977 F.3d 496, 498 (CA6 2020) (citing 81 Fed. Reg.
29010–29011). The FDA later tried via guidance to extend the
compliance deadline through 2022, but a Federal District Court
ultimately imposed a deadline of September 9, 2020, adding to the
time crunch for compliance. See
American Academy of
Pediatrics v.
FDA, 399 F. Supp. 3d 479, 487 (Md.
2019) (imposing a May 12, 2020, deadline); Order in
American
Academy of Pediatrics v.
FDA, No. 18–cv–883 (D Md., Apr.
22, 2020), ECF Doc. 182, p. 1 (extending the deadline to
September 9, 2020, due to the COVID–19 pandemic); see also
Vapor
Tech. Assn., 977 F. 3d, at 498–500 (detailing the shifting
compliance deadline).
C
At the center of this case are the FDA’s
actions leading up to its adjudication of manufacturers’ premarket
tobacco product applications. The agency proposed a rule outlining
application requirements, issued guidance to assist e- cigarette
manufacturers, and crafted internal memoranda discussing how
applications were to be reviewed. These voluminous and discursive
documents paint a picture of an agency that was feeling its way
toward a final stance and was unable or unwilling to say in clear
and specific terms precisely what applicants would have to provide.
Pervading these documents are four overarching topics that animate
the dispute before us.
1
The first topic was the types of scientific
evidence needed to show that an e-cigarette product is “appropriate
for the protection of the public health.” §387j(c)(2)(A). Recall
that the TCA states that “well-controlled investigations” may
support such a showing “when appropriate,” §387j(c)(5)(A), as can
“other ‘valid scientific evidence’ if found sufficient to evaluate
the tobacco product,” App. 28 (quoting §387j(c)(5)(B)). At an
October 23, 2018, public meeting, an FDA official opined that “[i]n
most situations,” the FDA would expect “some analytical testing
specific to [a manufacturer’s] product.” FDA/Center for Tobacco
Products, Tobacco Product Application Review, A Public Meeting
October 22–23, 2018—Day 2, Sess. 7, Part 2, at 2:12:35–2:12:43,
https://www.fda.gov/tobacco-products/ctp-newsroom/
tobacco-product-application-review-public-meeting#Video2 (2018
Presentation Video). But the FDA also assured manufacturers that no
“specific studies,” “[y]outh behavioral data,” or “new nonclinical
or clinical studies” would be required. FDA, Premarket Tobacco
Product Application Content Overview 18, 26 (Oct. 23, 2018),
https://www.fda.gov/ media/117507/download (2018 Presentation). The
FDA said much the same thing in a lengthy 2019 guidance document,
noting that the “relatively new entrance” of e- cigarette products
meant that “limited data may exist from scientific studies and
analyses.” App. 28. So, according to this document, the FDA would
not require “long-term studies,” and manufacturers could instead
rely on various alternatives, like observational studies,
literature reviews, or evidence bridging their new tobacco product
to “a studied tobacco product.”
Id., at 28, 99–105.
After manufacturers submitted millions of
applications for flavored e-cigarette products, the FDA
“develop[ed] a new plan to effectively manage” the scientific
evidence underlying the onslaught of applications.
Id., at
242. In a July 9, 2021, internal memorandum, the FDA took a far
less capacious view of the scientific evidence it would consider.
Specifically, the FDA said that it would consider it a “fatal flaw”
if an application lacked scientific evidence about a product based
on either a randomized controlled trial or a longitudinal cohort
study.
Id., at 243. A “fatal flaw” would lead to a
manufacturer’s “likely receiv[ing] a marketing denial order” for
that product.
Ibid.
Over a month later on August 17, 2021, the FDA
issued another internal memorandum that differed in some respects
from the July memorandum. It stated that, in addition to randomized
controlled trials and longitudinal cohort studies, the FDA “would
also consider evidence from another study design, provided that it
could reliably and robustly assess behavior change” and “compar[e]
users of flavored products with those of tobacco-flavored
products.”
Id., at 247, n. ix. Then, on August 25,
2021, just before denying respondents’ applications, the FDA
rescinded the August 17, 2021, memorandum and stated it would “not
consider or rely” on it when evaluating premarket tobacco product
applications.
Id., at 282.
2
The second topic was the need for
manufacturers to compare their proposed products to other products.
The TCA requires premarket tobacco product applications to provide
“full reports of all
information . . . concerning investigations
which have been made to show” that a new product “presents less
risk than other tobacco products.” 21 U. S. C.
§387j(b)(1)(A). Elaborating on that standard at a presentation on
October 23, 2018, an FDA official encouraged applicants to provide
comparisons between their products and a “representative sample of
tobacco products on the market.” 2018 Presentation 11. And a 2019
guidance document similarly recommended comparisons of “the health
risks of [a manufacturer’s] product to both products within the
same category and subcategory, as well as products in different
categories as appropriate.” App. 30. The 2019 guidance also gave
manufacturers discretion to choose comparator products as long as
the FDA could “understand [an] applicant’s rationale and
justification for [the] comparators chosen.”
Ibid. Later
that year at a public meeting, an FDA official offered the same
general advice that a successful premarket tobacco product
application “may include comparisons to other tobacco products in
the same category or in other categories or subcategories.”
FDA/CTP, Deemed Tobacco Product Applications, Video Presentation of
Premarket Tobacco Product Applications (PMTAs) Review Process and
Resources (Oct. 28, 2019), at 31:10–31:16, https://
collaboration.fda.gov/ptf21jryjxyk/?OWASP_CSRFTOKEN=
7a8d148ac776ca8f3aec38aff7dee12ea4988c1caed05010cded06ab7496714f.
3
In a lengthy April 2020 guidance
document,[
2] the FDA elaborated
on a third theme: its enforcement priorities based on device type.
The agency said it would “prioritize enforcement of flavored,
cartridge-based” e-cigarette products “other than tobacco- and
menthol-flavored products.” App. 160. It claimed that “youth
overwhelmingly prefer cartridge-based” products, which are “easy to
conceal, can be used discreetly, may have a high nicotine content,
and are manufactured on a large scale.”
Id., at 163. And the
document asserted that certain flavors, such as candy and fruit
flavors, “are a strong driver for youth use.”
Id., at 164;
see also
id., at 190 (discussing the increased use of
“fruit- and candy-flavored” products). Although the FDA suggested
that its focus on flavored, cartridge-based products “should have
minimal impact on small manufacturers (
e.g., vape shops)
that primarily sell non-cartridge-based” products, it noted that it
would also prioritize enforcement against “[a]ll other
[e-cigarette] products for which the manufacturer has failed to
take (or is failing to take) adequate measures to prevent minors’
access,” as well as “[a]ny [e-cigarette] product that is targeted
to minors or whose marketing is likely to promote use of
[e-cigarettes] by minors.”
Id., at 160–161.
4
The final theme cutting across these documents
is the FDA’s unflinching advice that manufacturers should submit
“marketing plans” as part of their applications. “Marketing plans”
broadly refer to a manufacturer’s “specific restrictions on sale
and distribution” that could, for example, “decreas[e] the
likelihood that those who do not use tobacco products will start
using tobacco products.”
Id., at 27. In its 2019 guidance,
the FDA urged manufacturers to “shar[e]” their “marketing plan[s]
to enable FDA to better understand the potential consumer
demographic” of their products.
Id., at 83. The 2020
enforcement guidance hit the same note, suggesting the FDA
“intend[ed] to consider” marketing plans and that such plans would
be relevant to the agency’s enforcement “prioritization.”
Id., at 167, 169. The FDA even offered examples of what
marketing restrictions manufacturers might consider, including
screening retailers, age-verification technology, mystery-shopper
programs, controls over distributors, and quantity limits.
Id., at 167–169, 223. It also cautioned that, based on its
experience, “focusing on how the product was sold” and “age
verification” “would not be sufficient to address youth use.”
Id., at 215, 220–221.
D
In 2019, the FDA proposed a rule setting out
the requirements for premarket tobacco product applications. See 84
Fed. Reg. 50566 (2019). That proposed rule, in significant part,
crystallized the four themes discussed above. It offered specifics
on the “types of [scientific] investigations” that applications
“would be required to contain.”
Id., at 50603; see,
e.g.,
ibid. (listing “[c]ross sectional and
longitudinal surveys,” “epidemiologic studies,” and “analytic
studies” like “randomized controlled clinical trials, cohort
studies, and case control studies”);
id., at 50599
(proposing “health risk investigations” besides new clinical
studies). The proposed rule also required certain cross-product
comparisons. See
id., at 50603 (requiring that applicants
“submit investigations that have been made to show whether the
tobacco product has the same or different potential health
risks . . . than other tobacco products”). And
it underscored the importance of device type with respect to
product testing. See
id., at 50585 (proposing requirements
for constituent testing specific to open-system products). In
addition, the proposed rule obligated manufacturers to submit
marketing plans, which were described as “provid[ing] input that is
critical” to the agency’s review.
Id., at 50580, 50581.
Notice-and-comment rulemaking takes time, and
with a court-imposed deadline fast approaching, the FDA proceeded
to adjudicate the first major wave of premarket tobacco product
applications in August and September 2021 without a final rule and
the standards it included. It was not until October 5, 2021, that
the FDA adopted the final rule. See 86 Fed. Reg. 55300 (2021).
1
Respondents Wages and White Lion Investments,
LLC, doing business as Triton Distribution, and Vapetasia, LLC,
manufacture flavored e-liquids for open-system e-cigarettes. Their
e-liquid flavor offerings include “Killer Kustard Blueberry,”
“Rainbow Road,” “Iced Blackberry Lemonade,” “Pineapple Express,”
“Suicide Bunny Mother’s Milk and Cookies,” and “Blueberry Parfait.”
See App 396, 546, 587, 593, 605, 608.
Respondents submitted premarket tobacco product
applications on September 9, 2020, the final court-ordered
deadline. As the FDA recommended in its guidance, their
applications included marketing plans, which touted respondents’
use of third-party age-verification technology, quantity limits,
and requirements for retailers to develop compliance checks. See
id., at 431–436, 441. To show the safety of their products,
respondents “pool[ed] resources” with “other, similarly situated
e-liquid companies” to “fund the development of certain, required
non-product specific data,” including what they characterized as a
“comprehensive review of the scientific literature.”
Id., at
311. One of the respondents, Vapetasia, also submitted the results
of a cross-sectional survey of current and former adult e-
cigarette smokers. See App. to Pet. for Cert. 280a.
The FDA received applications from more than 500
companies in total, covering more than 6.5 million e-cigarette
products. See FDA Denies Marketing Applications for About 55,000
Flavored E-Cigarette Products for Failing To Provide Evidence They
Appropriately Protect Public Health (Aug. 26, 2021),
https://fda.gov/news-events/press-
announcements/fda-denies-marketing-applications-about-
55000-flavored-e-cigarette-products-failing-provide-evidence.
Almost a year after the court-ordered deadline, the FDA adjudicated
its first slate of premarket tobacco product applications and
issued marketing denial orders to three manufacturers whose
applications covered 55,000 flavored e-cigarette products. See
ibid. The FDA concluded that the manufacturers failed to
provide “sufficient product-specific scientific evidence to
demonstrate enough of a benefit to adult smokers that would
overcome the risk posed to youth.”
Ibid. Such “scientific
evidence,” the agency said, “would likely be in the form of a
randomized controlled trial or longitudinal cohort study,” but the
FDA promised that it remained open to “other types of evidence”
that are “sufficiently robust and reliable.”
Ibid.
Shortly thereafter, the FDA denied respondents’
applications. See App. to Pet. for Cert. 166a, 278a. It concluded
that respondents had not provided sufficient scientific evidence to
demonstrate that the marketing of their products would be
appropriate for the protection of public health. See
id., at
166a–167a. Specifically, the FDA held respondents had not provided
evidence from a randomized controlled trial, longitudinal cohort
study, or another “reliabl[e] and robus[t]” method showing that
their dessert-, candy-, and fruit-flavored products had benefits
“over an appropriate comparator tobacco-flavored” product.
Id., at 167a. With such evidence lacking, the FDA deemed
respondents’ products “misbranded” and “adulterated” under the
FDCA.
Id., at 168a.
To each denial order, the FDA appended a
“Technical Project Lead (TPL) Review.” See
id., at 177a,
285a. These lengthy documents have several noteworthy features. To
start, they offer a window into the FDA’s evolving understanding of
how flavor, regardless of e-cigarette device type, drives youth
smoking initiation and nicotine addiction. The reviews canvass the
scientific literature on youth e-cigarette use and explain that
this literature had led the agency to conclude that flavors make
e-cigarette smoking “more palatable for novice youth and young
adults” and may “increase nicotine exposure by potentially
influencing the rate of nicotine absorption.”
Id., at 190a,
298a. What is more, the FDA stated, young people are drawn to
particular flavors, and the FDA anticipated that its crackdown on
one type of e-cigarette device would lead youth to flock to a
different type of device to continue using a desired flavor. See
id., at 192a, 300a.
Despite the FDA’s prior representations about
the importance of marketing plans, the reviews stated that, “for
the sake of efficiency,” the FDA had decided not to evaluate
respondents’ marketing plans.
Id., at 200a–201a,
n. xix, 308a–309a, n. xix. The FDA acknowledged that it
“is theoretically possible that significant mitigation efforts”
could decrease the appeal of flavored e-cigarettes to a sufficient
degree to counterbalance the documented risks of such products, but
it found that none of the marketing plans the FDA had seen had
managed to do that.
Ibid.
The FDA estimates that in its first wave of
marketing orders, it issued denials to 320 applicants, who sought
approval for approximately 1.2 million products. See Tr. of Oral
Arg. 33.
2
Respondents petitioned for review in the Fifth
Circuit. A motions panel initially granted a stay of their
marketing denial orders pending review, see 16 F. 4th 1130,
1134 (2021), but a divided merits panel ultimately denied the
petitions, see 41 F. 4th 427, 430 (2022).
The court then reheard the case en banc, granted
respondents’ petitions for review, and remanded to the FDA. The en
banc majority held that the FDA had acted arbitrarily and
capriciously in denying respondents’ applications. In its view, the
FDA performed a surprise switch from the requirements articulated
in the various predecisional documents. 90 F. 4th 357, 362
(2024). The court pointed to several main examples of this
phenomenon, including the FDA’s positions on scientific evidence,
cross-flavor comparisons, and device type. See,
e.g.,
id., at 376, 377, 384. The court expressed particular
concern that the FDA pulled the rug out from under manufacturers by
“not even read[ing] the marketing plans it previously said were
critical.”
Id., at 372. Although the FDA’s attorneys
represented that the agency had reviewed
“ ‘summar[ies]’ ” of respondents’ marketing plans, the
court deemed that representation an illicit
post hoc
rationalization.
Id., at 373.
In a footnote, the en banc majority also
suggested that the FDA had violated a provision of the TCA’s
notice-and-comment requirements, see 21 U. S. C.
§§387g(c)–(d), by imposing a “de facto ban on flavored
e-cigarettes” through mass adjudicatory denials, 90 F. 4th, at
384, n. 5.
Having found that the FDA had erred in these
ways, the court rejected the FDA’s suggestion that any errors were
harmless. Relying heavily on our decision in
Calcutt v.
FDIC, 598 U.S. 623 (2023) (
per curiam), the court
suggested that “APA errors are only harmless where the agency would
be
required to take the same action no matter what. In all
other cases,” the court concluded, “an agency cannot avoid remand.”
90 F. 4th, at 390. And, in a brief alternative analysis, the
court found that each of the FDA’s errors “plainly affected the
procedure used” and was prejudicial.
Ibid. (internal
quotation marks omitted).
Judge Haynes, joined by four other judges,
dissented. See
id., at 390. Judge Graves joined the dissent
in part. See
id., at 405.
The en banc Fifth Circuit’s decision conflicted
with those of other Circuits, and we granted the FDA’s petition for
a writ of certiorari. 603 U. S. ___ (2024). We now vacate and
remand.
II
The question we agreed to decide is whether
the FDA acted arbitrarily and capriciously in denying respondents’
applications for premarket approval of their tobacco products. See
Pet. for Cert. I. But before tackling that question, we briefly
address as a preliminary matter an argument that is touched on in
respondents’ brief: namely, that either the APA or the TCA required
the FDA to use notice-and-comment rulemaking to set out the
requirements that must be met in a premarket tobacco product
application.
Unless Congress has specified otherwise,
agencies are generally free to develop regulatory standards “either
by general [legislative] rule or by individual order” in an
adjudication.
SEC v.
Chenery Corp.,
332 U.S.
194, 202–203 (1947) (
Chenery II). Of course, if a
statute requires rulemaking, the affected agency must comply.
Ibid. And that is what respondents claim in passing here.
Respondents’ defense of the decision below is based almost entirely
on 5 U. S. C. §706(2)(A) and related case law. But their
brief also suggests that the FDA’s decision to issue denials based
on standards developed in adjudication violated other provisions of
the APA and TCA that, they claim, required notice-and-comment
rulemaking. See Brief for Respondents 47–49, and n. 33. This
echoes an argument the Court of Appeals made in a short footnote.
See 90 F. 4th, at 384, n. 5 (citing 21 U. S. C.
§§387g(a)(1)(A), (a)(2), (c)–(d)).
We did not grant certiorari on that question,
and without adequate briefing, it would not be prudent to decide it
here. See
Anza v.
Ideal Steel Supply Corp.,
547 U.S.
451, 461 (2006). Accordingly, we do not reach that question and
express no view on its merits.[
3]
III
We now turn to the Court of Appeals’ holding
that the FDA acted arbitrarily and capriciously. That decision was
multifaceted, but its analysis boils down to a central concern: it
faulted the FDA for allegedly changing the requirements for
premarket tobacco product applications between the time of its
guidance and the denials of respondents’ applications.
The feature of our current case law on
arbitrary-and- capricious review that addresses that issue is our
change-in-position doctrine. Under that doctrine, we must ask
whether the FDA changed course and, if it did, whether it offered
satisfactory reasons for the change. Analysis of the FDA’s position
prior to the denials at issue requires a close reading of nuanced
statements in a body of guidance documents that evidence the
agency’s evolving assessment of the relevant issues. Affected
parties may have come away with the impression that the agency
would apply a less demanding standard of proof than is evident in
the denial orders the FDA ultimately issued, but in the end, we
cannot say that the FDA improperly changed its position with
respect to scientific evidence, comparative efficacy, or device
type. With respect to the FDA’s guidance on marketing plans, we
clarify the appropriate legal standard governing claims of harmless
error, and we remand to the Fifth Circuit to apply that standard in
the first instance.
A
We begin with our change-in-position doctrine.
The APA requires a reviewing court to “hold unlawful and set aside
agency action” found to be “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law.” 5
U. S. C. §706(2)(A). Our well-worn
arbitrary-and-capricious standard ensures that an administrative
agency “examine[d] the relevant data and articulate[d] a
satisfactory explanation for its action including a rational
connection between the facts found and the choice made.”
Motor
Vehicle Mfrs. Assn. of United States, Inc. v.
State Farm
Mut. Automobile Ins. Co.,
463 U.S.
29, 43 (1983) (internal quotation marks omitted). The scope of
this review “is narrow,” and reviewing courts must exercise
appropriate deference to agency decisionmaking and not substitute
their own judgment for that of the agency.
Ibid.
Our case law identifies numerous ways in which
an agency may act arbitrarily and capriciously. The Fifth Circuit
concluded that the FDA overstepped this standard in four such ways.
In its view, the FDA (1) “invent[ed]
post hoc
justifications” for its failure to consider applicants’ marketing
plans; (2) failed to give “fair notice” of the evidentiary and
comparative requirements that would be imposed at the application
stage; (3) changed its position regarding scientific evidence
and device type; and (4) faulted respondent “for relying in
good faith on [its] previous” guidance. 90 F. 4th, at
371–386.
All four of these principles orbit around the
same basic concern: an agency should not mislead regulated
entities. The essence of respondents’ argument is that the FDA told
them in guidance documents that it would do one thing and then
turned around and did something different when it reviewed their
applications.
The change-in-position doctrine is
administrative law’s answer to that problem. Under that doctrine,
“[a]gencies are free to change their existing policies as long as
they provide a reasoned explanation for the change,”
“ ‘display awareness that [they are] changing
position,’ ” and consider “ ‘serious reliance
interests.’ ”
Encino Motorcars, LLC v.
Navarro,
579 U.S. 211, 221–222 (2016) (quoting
FCC v.
Fox
Television Stations, Inc.,
556 U.S.
502, 515 (2009)). For reasons we explain, the
change-in-position doctrine provides the governing framework
here.
Respondents appear to recognize as much,
although they suggest at times that the applicable requirements are
not just part of arbitrary-and-capricious review but are rooted in
part on the constitutional right to due process. See Brief for
Respondents 28–29, 35, 44. In substance, however, there is little
difference in the standard they ask us to apply.[
4] They do not rely on four distinct
administrative-law principles; rather, their arguments before this
Court rest primarily on the FDA’s supposed change in position
regarding application requirements. See
id., at 29–42,
45–47; Tr. of Oral Arg. 88. To the extent respondents raise a
freestanding “fair notice” argument, see
id., at 90, the
exact contours of that contention are somewhat unclear. By asking
us to affirm the decision below, respondents do not now suggest
that under the TCA the FDA “had an affirmative obligation to issue
specific guidance” as to how it would evaluate flavored products.
Brief for Respondents 33 (internal quotation marks omitted).
Instead, respondents merely support the Fifth Circuit’s conclusion
that when an agency issues guidance, it cannot “change the
requirements set forth therein without consideration of applicants’
reasonable reliance interests, proper notice to applicants, and a
reasonable opportunity for applicants to conform to the changed
requirements.”
Ibid. It is unclear what, if any, daylight
exists between that conception of “fair notice” and our
change-in-position doctrine. See,
e.g.,
Encino
Motorcars, 579 U. S., at 221–222 (“In explaining its
changed position, an agency must also be cognizant that
longstanding policies may have engendered serious reliance
interests that must be taken into account. . . . [A]
reasoned explanation is needed for disregarding facts and
circumstances that underlay or were engendered by the prior policy”
(internal quotation marks omitted)).
B
The change-in-position doctrine asks two
questions. The first is whether an agency changed existing
policy.[
5] And we have
suggested that this occurs when an agency acts “inconsistent[ly]”
with an “earlier position,”
id., at 224, performs “a
reversal of [its] former views as to the proper course,”
State
Farm, 463 U. S., at 41, or “disavow[s]” prior
“inconsistent” agency action as “no longer good law,”
Fox
Television, 556 U. S., at 517 (internal quotation marks
omitted). For example, we have held that an agency changed its
position when it rescinded a prior regulation, see
State
Farm, 463 U. S., at 41–42, “expand[ed] the scope of its
enforcement activity,”
Fox Television, 556 U. S., at
517, and “abandon[ed a] decades-old practice” applied in
enforcement actions,
Encino Motorcars, 579 U. S., at
218.
Once a change in agency position is identified,
the doctrine poses a second question: Did the agency “display
awareness that it
is changing position” and offer “good
reasons for the new policy”?
Fox Television, 556 U. S.,
at 515. At this second step, the agency does not need to show “that
the reasons for the new policy are
better than the reasons
for the old one.”
Ibid. Nor must it “provide a more detailed
justification than what would suffice for a new policy created on a
blank slate.”
Ibid. But the agency must “be cognizant that
longstanding policies may have ‘engendered serious reliance
interests that must be taken into account.’ ”
Encino
Motorcars, 579 U. S., at 221–222 (quoting
Fox
Television, 556 U. S., at 515).
Echoing the Fifth Circuit, respondents claim
that the FDA violated the change-in-position doctrine with respect
to the four principal themes discussed above. See
supra, at
9–14. First, according to respondents, the FDA, after initially
telling applicants that no specific kinds of scientific evidence
were required, turned around and rejected all applications lacking
evidence from a randomized controlled trial or longitudinal cohort
study. See Brief for Respondents 37, 40–42. Second, respondents
claim, the FDA told applicants they had discretion to choose
appropriate comparator products, but it ultimately denied
applications on the ground that they failed to make specific
comparisons between dessert-, candy-, and fruit-flavored products,
on the one hand, and tobacco-flavored products on the other. See
id., at 27–36. Third, respondents claim that the FDA
abandoned earlier guidance about the importance of device type and
instead denied authorization to all dessert-, candy-, and
fruit-flavored e-cigarette products regardless of device type. See
id., at 45–47. And fourth, according to respondents, the FDA
went back on its word by failing even to consider their marketing
plans. See
id., at 49–50.
As to the first three issues, we conclude that
the FDA’s denial orders were sufficiently consistent with its
predecisional guidance and thus did not run afoul of the change-
in-position doctrine. As to the failure to consider marketing
plans, the FDA does not seek review of the Fifth Circuit’s finding
of error. See Brief for Petitioner 31. Rather, it asks us to
clarify the harmless-error rule and remand for application of the
proper standard. See
id., at 38. We agree with the FDA that
that is the appropriate course of action.
1
We first address the FDA’s position on
scientific evidence. In respondents’ view, the FDA initially stated
that manufacturers would not need to provide specific kinds of
studies like randomized controlled trials or longitudinal cohort
studies but then treated such evidence as essential.
a
Respondents express frustration about the lack
of clear prior notice regarding the type of scientific evidence
that was essential for approval of an application, but we cannot
agree with their argument that the FDA went back on any commitments
made in the guidance it provided before ruling on respondents’
applications.
Both the TCA itself and the FDA’s guidance left
the agency broad discretion to decide what sort of scientific
evidence an applicant was required to submit. The TCA itself
imposes only basic requirements on this matter. It says that the
agency’s determination of what “would be appropriate for the
protection of the public health” must be made based on either
“well-controlled investigations, which
may include 1 or more
clinical investigations by experts qualified by training and
experience to evaluate the tobacco product,” 21 U. S. C.
§387j(c)(5)(A) (emphasis added), or—and this is the point that is
critical here—other “valid scientific evidence” that “is sufficient
to evaluate the tobacco product,” §387j(c)(5)(B). The TCA leaves it
to the FDA to decide what constitutes a “well-controlled
investigatio[n]” or other “valid scientific evidence” that is
“sufficient.”
Before ruling on respondents’ and other
manufacturers’ applications, the FDA addressed the issue of
scientific evidence in a series of lengthy documents and oral
presentations by agency officials, but it is hard to find in all
this verbiage any specific commitments about exactly what sorts of
scientific evidence an applicant would have to provide. As we will
detail below when we discuss the particulars of respondents’
applications, the FDA commented on the strength of various types of
evidence and how particular types of evidence would likely be
evaluated, but at no point did it lay down any clear test.
For example, during an October 23, 2018, public
meeting, an agency official said that
“[i]n most situations
it is
likely that at least some [new] analytical testing
specific to the product
would be conducted to support an”
application. 2018 Presentation Video, at 2:12:35–2:12:44 (emphasis
added). The official then offered examples such as “randomized
controlled clinical trials”; “alternatives” like “pharmacokinetic,”
“pharmacodynamic,” “biomarker,” “topography,” or “focus group
studies”; published peer-reviewed literature; and literature
reviews more generally.
Id., at 2:13:07–2:14:44. But the
official never stated that any particular type of study was
necessary. On the contrary, the FDA acknowledged that it was open
to evidence besides “new nonclinical or clinical studies.” 2018
Presentation 26. And the FDA promised that it would consider
evidence “bridging” new tobacco products to already marketed
products whose safety was backed by “existing clinical,
nonclinical, or product information.”
Id., at 18, 27. None
of this amounted to anything like a hard-and-fast commitment as to
the minimum evidence the agency would require for marketing
authorization.[
6]
A June 2019 guidance document was similarly
noncommittal. After reiterating the statutory requirement of
“well-controlled investigations,” the document recognized that the
“relatively new entrance” of e-cigarettes “on the U.S. market”
meant that “limited data may exist from scientific studies and
analyses.” App. 28 (citing 21 U. S. C. §387j(c)(5)(A)).
As a result, the document stated, the FDA would consider “other
‘valid scientific evidence’ if found sufficient.” App. 28. But it
cautioned that “[n]onclinical studies alone are generally not
sufficient.”
Ibid.
The guidance document went on to give examples
of “other evidence” that might suffice, but in doing so, it
cautioned about the need for scientific rigor. For example, while
stating that applicants could cite “data from the published
literature or government-sponsored databases,” it warned that such
data must be “adequately bridged to your product” with “a
scientific rationale.”
Id., at 98. The document told
manufacturers that they could also cite “[p]ublished literature
reviews (including meta-analysis),” but that such evidence is
“considered a less robust form of support.”
Id., at 100. And
applicants were advised that they could “conduc[t] independent
analyses of published studies,” but that “if critical study details
are not submitted, the studies may not be useful in FDA’s review.”
Id., at 102.
A fair summary of the main point made in all
this guidance is that (a) it was not essential for manufacturers to
submit evidence based on “well-controlled investigations,” such as
randomized controlled trials or longitudinal cohort studies, but
(b) if they did not do so, they would have to provide rigorous
scientific evidence that the sale of their particular products
would be appropriate for the protection of the public health. In
this case, the applicants did not submit randomized controlled
trials or longitudinal cohort studies, so the fate of their
applications turned on whether they submitted “other evidence” that
met the FDA’s standard of scientific rigor and relevance to their
product. The FDA rejected respondents’ applications because it
concluded that its “other evidence” test was not met, and the
explanation in its denial orders echoed statements made at various
points in its earlier guidance.
Both respondents relied on a “comprehensive
review of the scientific literature.”
Id., at 303, 392. But
respondents had notice from the 2019 guidance that the FDA
considered literature reviews “a less robust form of support.”
Id., at 100. The 2019 guidance also instructed that
applicants submitting literature reviews should, among other
things, “[i]nclude comparative assessments of the health risks
associated with use of [a manufacturer’s] new tobacco product
compared to the risks associated with quitting tobacco product use,
using other tobacco products, and never using tobacco products.”
Id., at 101. Respondents’ literature review did the
opposite. It concluded that “there is not enough evidence
. . . to determine whether e-cigarette flavors aid in
smoking cessation.”
Id., at 475.
One of the respondents, Vapetasia, submitted
results from a cross-sectional survey finding that “82.99% of
survey respondents indicated that e-cigarettes helped them quit
smoking combustible tobacco.” 41 F. 4th, at 436. But the FDA
concluded the survey was not adequately tied to Vapetasia’s
flavored products. App. to Pet. for Cert. 280a. That requirement
echoed the 2019 guidance’s advice that manufacturers submitting
evidence from “new nonclinical . . . studies” should
“explain why [a] study is relevant to use for the [manufacturer’s]
product (e.g., the similarities between the product, product use,
or product market).” App. 98–99.
Based on the FDA’s largely noncommittal guidance
on scientific evidence and its specific reasons for rejecting
respondents’ applications, we cannot say that the agency deviated
“from a prior policy
sub silentio or simply disregard[ed]”
what it had previously said.
Fox Television, 556 U. S.,
at 515. In line with the agency’s prior guidance, each denial order
was based on the applicant’s failure to provide either evidence
from well-controlled investigations, such as “a randomized
controlled trial and/or longitudinal cohort study,” see App. to
Pet. for Cert. 167a, or other evidence that was found to be
“reliabl[e] and robus[t],”
id., at 167a–168a. No change in
position occurred in this respect.
b
Contrary to respondents’ contention, this
conclusion is not undermined by the FDA’s scientific-review form,
which contained checkboxes to indicate whether an applicant
submitted a randomized controlled study (Criterion A), a
longitudinal cohort study (Criterion B), or other evidence “related
to potential benefit to adults” (Criterion C). App. 615–638; see
Brief for Respondents 32. Criterion C appears to defeat
respondents’ argument, but they contend that the FDA made it clear
that this criterion demanded a study of the effect of flavored
products on adult smokers “ ‘ “over time” ’ ”
and that this requirement duplicated Criterion B, which looked for
a “longitudinal cohort study.”
Id., at 37.
This argument fails because a “longitudinal
cohort study” and evidence of a product’s effects “over time” are
not the same thing. The term “longitudinal study” is typically used
to describe a particular kind of long-term study, namely, one that
“employ[s] continuous or repeated measures to follow particular
individuals over prolonged periods of time—often years or decades.”
E. Caruana, M. Roman, J. Hernández-Sánchez, & P. Solli,
Longitudinal Studies, 7 J. Thoracic Disease E537 (2015). Not every
study that considers a product’s effects “over time” falls within
this understanding.[
7]
c
Based on the FDA’s internal memoranda from the
summer of 2021, respondents argue that the agency secretly enforced
a new requirement that manufacturers must submit evidence from
either a randomized control trial or longitudinal cohort study. See
Brief for Respondents 31–32. Recall that the FDA’s July 9, 2021,
memorandum stated that the failure to submit such evidence would
constitute a “fatal flaw” that would “likely” result in denial of
an application. App. 243. Even though this statement, like most of
what the FDA said in its guidance, was not categorical, it
certainly suggested a much harder stance than was implied by the
FDA’s public statements, which told applicants that “other
evidence” might be capable of proving a new tobacco product’s
appropriateness for the protection of public health.
Respondents suggest that the FDA surreptitiously
applied the “fatal flaw” memorandum, and as evidence, they note
that until well after their applications were denied, the FDA
rejected all applications for flavored products. But agencies are
entitled to a presumption of regularity,
Citizens to Preserve
Overton Park, Inc. v.
Volpe,
401
U.S. 402, 415 (1971), and the record offers enough support for
us to conclude that the FDA never enforced a rigid “fatal flaw”
standard.
To start, a later internal memorandum dated
August 17, 2021, appeared to contradict the “fatal flaw”
memorandum. The new memorandum represented that the FDA “would also
consider evidence from another study design” besides randomized
controlled trials and longitudinal cohort studies, “provided that
it could reliably and robustly assess behavior change” and
“compar[e] users of ” dessert-, candy-, and fruit-flavored
“products with those of tobacco-flavored products.” App. 247,
n. ix. The FDA also acknowledged that “indirect evidence or
bridged data from the literature might still be appropriate for
many new products” too.
Id., at 266. Even though the FDA
predicted these “other types of evidence” would “not likely be
sufficiently robust or direct,” the August 17, 2021, memorandum is
unambiguous that the FDA would nevertheless consider such evidence.
Id., at 267.
This memo might be viewed as dooming any
argument based on the earlier “fatal flaw” memorandum, but on
August 25, 2021, the FDA rescinded the August 17, 2021, memorandum
and represented that it would “not consider or rely on [it] as a
supporting document.”
Id., at 282.
Rescission of the August 17 memorandum raises
the question whether that action effectively reinstated the July 9,
2021, “fatal flaw” memorandum or was a pretext to mask the FDA’s
adherence to secret criteria. But the FDA represents that these
internal memoranda played no role in its review of applications,
see Reply Brief 11–12, and for us to peel back the curtain on that
representation would have required respondents to make a “strong
showing of bad faith or improper behavior,”
Overton Park,
401 U. S., at 420; see also
Department of Commerce v.
New York, 588 U.S. 752, 781 (2019) (“[J]udicial inquiry into
‘executive motivation’ represents ‘a substantial intrusion’ into
the workings of another branch of Government and should normally be
avoided” (quoting
Arlington Heights v.
Metropolitan
Housing Development Corp.,
429 U.S.
252, 268, n. 18 (1977))). Respondents have not surmounted
the high standard that must be met to warrant such a “substantial
intrusion” into the Executive’s functioning.
Id., at 268,
n. 18 (internal quotation marks omitted).
We thus conclude that respondents failed to show
that the FDA changed its position with respect to the scientific
evidence supporting premarket tobacco product applications.
2
Next, we turn to the FDA’s
comparative-efficacy requirement, which called on manufacturers to
compare the health effects of their dessert-, candy-, and
fruit-flavored products to those of tobacco-flavored products. On
respondents’ reading of the record, the FDA initially gave
applicants broad discretion to select appropriate comparators for
their products, but it later categorically rejected applications
that failed to show that “
flavored e-cigarettes promote more
switching than
unflavored” or tobacco-flavored e-cigarettes.
90 F. 4th, at 376—377; accord, Brief for Respondents
29–33.
a
The record does not suggest that the FDA
contradicted its predecisional guidance by requiring certain
cross-flavor comparisons. To start, the TCA expressly contemplates
comparisons of different tobacco products. It requires an applicant
to provide “full reports of all information . . .
concerning investigations which have been made to show
. . . whether [its] tobacco product
presents less risk
than other tobacco products.” 21 U. S. C.
§387j(b)(1)(A) (emphasis added). Moreover, the FDA’s determination
that a new tobacco product is “appropriate for the protection of
the public health” is an inherently comparative judgment. The FDA
must account for the “increased or decreased likelihood that
existing users of tobacco products will stop using such products”
and the “increased or decreased likelihood that those who do not
use tobacco products will start using such products.” §387j(c)(4).
This balancing test calls out for various types of comparisons,
including comparisons between new tobacco products and those that
are already available, as well as between different types of new
tobacco products that may attract new smokers.
Through its predecisional guidance, the FDA
elaborated on the types of comparisons that would be helpful.
Echoing the TCA, the June 2019 guidance document recommended that a
manufacturer “compare the health risks of its product to both
products within the same category and subcategory, as well as
products in different categories as appropriate.” App. 30. The FDA
went on to explain what it means for manufacturers to make
comparisons to “similar, marketed tobacco products in the same
category.”
Id., at 58. “For example,” it advised, “if your
[application] is for an e-liquid, we recommend a comparison to
other e-liquids with similar nicotine content, flavors, and other
ingredients, used in the same manner and under similar conditions.”
Ibid. The plain implication of this statement is that the
FDA might consider whether an application for a flavored product
included a comparison with other products in the flavored
category.
Other parts of the 2019 guidance also underlined
the FDA’s concern about “the potential impact of flavors on product
toxicity and appeal to youth and young adults.”
Id., at 87.
The FDA noted that it “considers the appeal and use of
[e-cigarette] product flavors important in ascertaining the health
risks of these products” and thus recommended “scientific reviews
of flavors.”
Id., at 87–88. Specifically, it called on
manufacturers to “examine the impact of flavoring on consumer
perception . . . especially given the
attractiveness of flavors to youth and young adults.”
Id.,
at 88.
Further, in its 2020 enforcement guidance, the
FDA telegraphed its view that dessert-, candy-, and fruit-flavored
e-cigarette products are more likely than tobacco- and
menthol-flavored products to appeal to the young. The FDA noted its
intent to “prioritize enforcement of flavored” e-cigarette products
“other than tobacco- and menthol-flavored products,”
id., at
160, and observed that “youth use of mint- and fruit-flavored
[e-cigarette] products is higher than that of menthol- and
tobacco-flavored [e-cigarette] products.”
Id., at 163. The
FDA also relied on data that flavors like tobacco and menthol “were
preferred more by adults than youth.”[
8]
Id., at 162
.
When it reviewed respondents’ applications, the
FDA did not contradict any previously announced position with
respect to the comparative effects of differently flavored
products. As respondents’ marketing denial orders stated, their
applications were unsuccessful because they failed to
“demonstrat[e] the benefit of ” their dessert-, candy-, and
fruit-flavored e-cigarette “products over an appropriate comparator
tobacco-flavored” e-cigarette product. App. to Pet. for Cert. 167a.
Admittedly, the FDA has not pointed us to any portion of its
predecisional guidance that said in so many words that
manufacturers must draw that precise comparison. And, in fact, the
2019 guidance gave manufacturers some discretion in choosing
appropriate comparators as long as the “FDA [could] understand [an]
applicant’s rationale and justification for comparators chosen.”
App. 30. But the FDA’s comparative-efficacy standard was a natural
consequence of its predecisional guidance, which highlighted, among
other things, (1) the need for robust cross-product
comparisons (including on the dimension of flavor) and (2) the
FDA’s heightened concern with dessert-, candy-, and fruit- flavored
products compared to tobacco- and menthol-flavored products. Such a
predictable outgrowth from previous guidance is not an
“[u]nexplained inconsistency” amounting to a “change” under the
change- in-position doctrine.
National Cable &
Telecommunications Assn. v.
Brand X Internet Services,
545 U.S.
967, 981 (2005); cf.
Long Island Care at Home, Ltd. v.
Coke,
551 U.S.
158, 174 (2007) (“The Courts of Appeals have generally
interpreted this to mean that the final rule the agency adopts must
be a logical outgrowth of the rule proposed” (internal quotation
marks omitted)).
b
Respondents contend that the FDA “said nothing
about comparing” dessert-, candy-, and fruit-flavored “products to
tobacco-flavored products,” Brief for Respondents 27, and even
suggested manufacturers could “freely select” comparators as long
as they provided adequate “justification or rationale” for their
comparator choice,
id., at 30–31.
As we noted, respondents are correct that the
FDA did not provide this precise instruction in its predecisional
guidance. But, as an FDA official noted at the 2018 public
presentation, manufacturers were encouraged throughout the
application process to think hard about “what is or are the most
appropriate comparators” to their products. 2018 Presentation
Video, at 1:57:37–1:57:42. And the agency’s subsequent guidance
emphasized the importance of cross- product comparators and the
FDA’s specific worry that dessert-, candy-, and fruit-flavored
products would appeal to youth more than tobacco- and
menthol-flavored products. The FDA is thus better understood as
having extended, not reversed, its previous guidance. See
supra, at 34–35.
Quite tellingly, respondents appear to have
received the FDA’s message on this front. Their applications are
replete with statements attempting (albeit unsuccessfully) to draw
comparisons between dessert-, candy-, and fruit-flavored and
tobacco-flavored products—the same sort of comparisons for which
the FDA allegedly provided no notice. See,
e.g., App. 320
(“Another recent survey of more than 69,000 adult vapers found that
just 16% identified tobacco, menthol, or mint as flavors they used
most often; the vast majority preferred fruit and sweet flavors”);
ibid. (“ ‘Fruity’ flavor was the number one flavor
preference by 49.98% of all respondents. Only about 3% of all
respondents stated that they preferred no flavor”);
id., at
321 (noting that a third of surveyed smokers “stated that they
started out using tobacco or menthol flavors but now always or
almost always use other flavors”). All that is to say, respondents’
applications are themselves strong evidence that regulated entities
had adequate notice of the sort of comparative analysis the FDA
anticipated.
Furthermore, even assuming the predecisional
guidance did not perfectly predict the comparative-efficacy
standard ultimately applied to applications, the FDA was not
required to issue such guidance in the first place. Respondents do
not argue that the TCA imposed an affirmative obligation on the FDA
to spell out in detail how it expected applicants to compare a new
tobacco product to other tobacco products. See Brief for
Respondents 33. Rather, as we have explained, the FDA had
discretion to work out the meaning of the TCA’s comparative
standard when evaluating premarket tobacco product applications.
See 21 U. S. C. §§387j(b)(1)(A), (c)(4). A contrary rule
would be in tension with
Chenery II ’s teaching that,
absent a statutory prohibition, agencies may generally develop
regulatory standards through either adjudication or rulemaking. 332
U. S., at 202–203.
3
Finally, we turn to the issue of device type.
In respondents’ view, the FDA’s 2020 guidance saw a material
distinction between cartridge-based and other flavored products,
but when it came to ruling on applications, the FDA effectively
imposed a flat ban on
all flavored products. Brief for
Respondents 45–47.
a
We cannot agree with respondents that the
denial orders’ treatment of device type was “inconsistent” with any
“earlier position.”
Encino Motorcars, 579 U. S., at
224. The 2020 guidance explained how the FDA “intend[ed] to
prioritize [its] enforcement resources.” App. 129. Specifically,
the agency planned to target three types of e-cigarette products:
(1) “[f]lavored, cartridge-based” products; (2) “[a]ll other
[e-cigarette] products for which the manufacturer has failed to
take (or is failing to take) adequate measures to prevent minors’
access”; and (3) “[a]ny [e-cigarette] products targeted to, or
whose marketing is likely to promote use by, minors.”
Id.,
at 145. Admittedly, on any reading of this guidance document, the
FDA’s central concern was the first category because data suggested
“youth are more likely to use certain flavored, cartridge-based
[e-cigarette] products.”
Id., at 147.
But nothing in the 2020 guidance suggested the
FDA would decline to take enforcement action against other products
that might be appealing to the young. In fact, the FDA’s
enumeration of the second and third enforcement priorities, which
are not limited to flavored cartridge-based products, supports the
contrary conclusion. So when the FDA ultimately denied
authorization to respondents’ flavored (though non-cartridge)
products, it did not reverse course. Rather, it followed through on
the 2020 guidance’s warning that the agency would
also
prioritize enforcement against manufacturers “whose [products’]
marketing is likely to promote use by . . . minors.”
Id., at 145. Indeed, the FDA’s marketing denial orders
stated that respondents’ applications were “insufficient to
demonstrate that the[ir] products would provide an added benefit
that is adequate to outweigh the risks to youth.” App. to Pet. for
Cert. 168a. That is a consistent application of the 2020 guidance’s
enforcement framework or, at the very least, an application that
did not “revers[e the FDA’s] former views as to the proper course.”
State Farm, 463 U. S., at 41.
This case is unlike
Fox Television, in
which we held that an agency changed position by “expanding the
scope of its enforcement activity.” 556 U. S., at 517. That
case concerned the Federal Communications Commission’s (FCC)
enforcement of the federal indecency ban against the use of
offensive words on broadcast television. Initially, the FCC
distinguished between literal and nonliteral uses of offensive
words and determined that fleeting uses of nonliteral offensive
words were not actionably indecent. See
id., at 508. But
then, in a subsequent adjudication, the FCC eliminated that safe
harbor for nonliteral expletives and explained that even a single
use of an offensive word was actionably indecent. See
ibid.
We deemed that shift in enforcement policy “a change” for purposes
of the change-in-position doctrine. See
id., at 517.
Here, in contrast, the FDA’s 2020 guidance did
not establish “a safe harbor” for non-cartridge-based products.
Id., at 518. True, the 2020 guidance unmistakably emphasized
cartridge-based products, but it said nothing to suggest dessert-,
candy-, and fruit-flavored products for open-system e-cigarettes
would escape regulatory scrutiny. And further distinguishing
Fox
Television, the FDA’s actions here did not “br[eak] new
ground.”
Id., at 517. Indeed, there was no new ground to
break because respondents’ denial orders were part of the FDA’s
first major exercise of its new authority over tobacco products
under the TCA. In other words, the FDA could not “expan[d] the
scope of ” previously nonexistent “enforcement activity.”
Ibid.
Even if the FDA had changed its position, it
offered “good reasons” for looking beyond cartridge-based
e-cigarette products,
id., at 515, namely, that there was
evidence from national surveillance data that youth demand had
moved from flavored
cartridge-based products to flavored
disposable products, App. to Pet. for Cert. 191a–192a. From
this, the FDA drew the conclusion that “across these different
device types, the role of flavor is consistent.”
Id., at
191a. If one type of flavored product were removed from the market,
the FDA concluded, youth would “migrate to another” type of
flavored product.
Id., at 192a
. So the FDA decided to
focus on the “role of flavors . . . across tobacco
product categories.”
Id., at 191a
. The FDA made this
“conscious change of course” because it “
believe[d] it to be
better,” and the agency gave “good reasons” for the change.
Fox
Television, 556 U. S., at 515.
Respondents cannot claim that the FDA’s revised
enforcement priorities upset a “legitimate reliance” interest.
Smiley v.
Citibank (South Dakota), N. A.,
517 U.S.
735, 742 (1996). At most, the 2020 guidance may have led
respondents to
believe that the FDA was more likely to
authorize their open-system products than other manufacturers’
cartridge-based products. But such a belief about how an agency is
likely to exercise its enforcement discretion is not a “serious
reliance interes[t].”
Fox Television, 556 U. S., at
515
. Our prior change-in-position cases have set a much
higher bar, requiring, for example, “decades of industry reliance
on [an agency’s] prior policy.”
Encino Motorcars, 579
U. S., at 222. Here, in contrast, respondents could not have
built up decades of reliance because they were part of the very
first wave of marketing denials under the FDA’s newly minted
jurisdiction over tobacco products.
We thus hold that the FDA’s treatment of device
type, even if it evolved over time, did not violate the
change-in-position doctrine.
b
Respondents take issue with the FDA’s
explanation that it changed enforcement priorities based on
evidence that youth demand shifted from cartridge-based products to
disposable products. In respondents’ view, that evidence had
nothing to do with products such as theirs that are intended for
open-system e-cigarette products. See Brief for Respondents 45–46.
And respondents cite evidence from a study finding that between
2020 and 2021 high-school- student demand for devices compatible
with flavored bottled e-liquids actually decreased. See
id.,
at 46, and n. 32 (citing E. Park-Lee et al., Centers for
Disease Control and Prevention,
Notes From the Field:
E-Cigarette Use Among Middle and High School Students—National
Youth Tobacco Survey, United States, 2021, 70 Morbidity and
Mortality Weekly Rep. 1387, 1387–1388 (2021))
.
This counterargument is not persuasive. Even
though the FDA did not cite evidence that was specifically about
increasing youth demand for open-system e-cigarette products, the
FDA drew a reasonable inference based on the data before it:
namely, that the rapid shift in youth demand from flavored
cartridge-based products to flavored disposable products strongly
suggested that youth were most strongly drawn by flavor rather than
device type. We see no reason why the FDA could not extrapolate
from that data and conclude that young people would be drawn to
flavored products for open-system e-cigarettes. Regardless, we are
not positioned in this arbitrary-and-capricious challenge to
consider respondents’ evidence from a study that postdates the
filing of their applications and is, in any event, outside “the
administrative record already in existence.”
Camp v.
Pitts,
411 U.S.
138, 142 (1973) (
per curiam). Nor is respondents’
evidence of sufficient heft to call into question whether the FDA’s
“factual determinations” about the powerful effect of flavor is
supported by “substantial evidence” in the “existing administrative
record.”
Biestek v.
Berryhill, 587 U.S. 97, 102
(2019).
C
That brings us to the FDA’s guidance
concerning marketing plans. Recall that the FDA does not contest
the Fifth Circuit’s finding that it changed position regarding the
submission of marketing plans, but it argues that this error was
harmless. This question presents a difficult problem. It requires
us to reconcile the so-called remand rule developed in
SEC
v.
Chenery Corp.,
318 U.S.
80, 88, 93–95 (1943)
(Chenery I), and
Chenery II,
332 U. S., at 196–197, with the APA’s instruction that
reviewing courts must take “ ‘due account’ ” of
“ ‘the rule of prejudicial error’ ” that “ordinarily
appl[ies] in civil cases,”
Shinseki v.
Sanders,
556 U.S.
396, 406 (2009) (quoting 5 U. S. C. §706).
1
In
Chenery I, the Court announced the
now-bedrock principle that an agency action cannot stand “unless
the grounds upon which the agency acted in exercising its powers
were those upon which its action can be sustained.” 318 U. S.,
at 95. There, we rejected the Securities and Exchange Commission’s
belated request to affirm its action on an alternative ground
raised for the first time in litigation.
Id., at 92–94. We
reasoned that when Congress vests an agency with authority to make
“a determination of policy or judgment” and the agency fails to
exercise that authority, “a judicial judgment cannot be made to do
service for an administrative judgment.”
Id., at 88.
Upholding agency action on an alternative ground not considered by
the agency, the Court reasoned, would “intrude upon the domain
which Congress . . . exclusively entrusted to an
administrative agency.”
Ibid. We reaffirmed this principle
in
Chenery II, see 332 U. S., at 196–197, and a
necessary implication of that principle is that the better course
when an agency error is identified is for the reviewing court,
“except in rare circumstances,” “to remand to the agency for
additional investigation or explanation,”
Florida Power &
Light Co. v.
Lorion,
470 U.S.
729, 744 (1985). That implication of
Chenery is
colloquially referred to as the “remand rule.” See
INS v.
Orlando Ventura,
537 U.S.
12, 18 (2002) (
per curiam) (internal quotation
marks omitted).
Three years after
Chenery I was handed
down, Congress enacted the APA. Ch. 324, 60Stat. 237. At that time,
Rule 61 of the Federal Rules of Civil Procedure instructed courts
not to disturb a judgment or order unless refusal to do so would be
“inconsistent with substantial justice.” Fed. Rule Civ. Proc. 61
(1939). The APA picked up on this principle and required courts
reviewing agency action to take “due account . . . of the
rule of prejudicial error.” §706. Taking “due account” of a rule is
not literally the same as applying that rule lock, stock, and
barrel. The most natural interpretation of the APA’s language is
thus that reviewing courts should adapt the “rule of prejudicial
error” applicable in ordinary civil litigation (also known as the
harmless- error rule) to the administrative-law context, which, of
course, includes the remand rule.
2
The FDA’s failure to consider marketing plans
and its chosen arguments in litigation have set the remand rule and
the APA’s harmless-error principle in tension. Despite assuring
manufacturers in predecisional guidance that their marketing plans
would be “critical,” the FDA refused to consider respondents’
marketing plans when it reviewed their premarket tobacco product
applications. 84 Fed. Reg. 50581. Based on its experience, the FDA
opined that marketing and access restrictions on flavored
e-cigarette products are, as a practical matter, categorically
insufficient to sustain an otherwise inadequate application. See
App. to Pet. for Cert. 200a, n. xix. The Fifth Circuit held
that this about-face was arbitrary and capricious, see 90
F. 4th, at 372–373, and the FDA has “not sought review of the
Fifth Circuit’s threshold finding of error,” Brief for Petitioner
31. Instead, it expands upon an argument it raised before the Fifth
Circuit, see En Banc Brief for Respondent in No. 21–60766,
p. 29, and contends that its failure to consider marketing
plans was harmless error because, subsequent to denying
respondents’ applications, it issued denial orders to other
manufacturers after reviewing marketing plans that were materially
indistinguishable from respondents’. See Brief for Petitioner
34–36. That is proof, the FDA says, that reviewing respondents’
marketing plans would not have made a difference.
The Fifth Circuit rejected the FDA’s
harmless-error argument based on our most recent decision invoking
the remand rule,
Calcutt v.
FDIC, 598 U.S. 623 (2023)
(
per curiam). See 90 F. 4th, at 389–390. In
Calcutt, after reciting the remand rule in strong terms, we
acknowledged that a “remand may be unwarranted . . .
[w]here the agency ‘was
required’ to take a particular
action.” 598 U. S., at 630 (quoting
Morgan Stanley Capital
Group Inc. v.
Public Util. Dist. No. 1 of Snohomish
Cty.,
554 U.S.
527, 544 (2008)). The Fifth Circuit interpreted
Calcutt’s discussion to mean that there is only one
exception to the remand rule. See 90 F. 4th, at 390 (“APA
errors are only harmless where the agency would be
required
to take the same action no matter what. In all other cases, an
agency cannot avoid remand”). That is certainly a plausible
interpretation of
Calcutt, but it would imply a need to
remand for all but the narrowest category of agency errors,
minimizing the role of harmless-error review.
The FDA disagrees with this broad reading of
Calcutt and cites, among other authorities, our decision in
Sanders. In that case, we opined that the APA incorporates
“the same kind of ‘harmless-error’ rule that courts ordinarily
apply in civil cases.” 556 U. S., at 406
. That
principle, taken to its logical extreme, could permit a reviewing
court to sustain a flawed agency decision whenever it finds that
the agency would have reached the same result absent the initial
error. Understood in that way, harmless error might swallow the
remand rule.
There is thus obviously tension between
Calcutt and
Sanders, and neither decision sought to
harmonize the remand and harmless-error rules.
Calcutt made
no reference to the APA’s prejudicial-error provision, and
Sanders did not discuss the remand rule or even cite
Chenery.
Commentators have long puzzled over this tension
and proposed ways to bridge the divide. See H. Friendly,
Chenery Revisited: Reflections on Reversal and Remand of
Administrative Orders, 1969 Duke L. J. 199, 222–225
(Friendly); N. Bagley, Remedial Restraint in Administrative Law,
117 Colum. L. Rev. 253, 302–307 (2017) (Bagley); C. Walker,
Against Remedial Restraint in Administrative Law, 117 Colum.
L. Rev. Online 106, 115–120 (2017). And the courts of appeals
have apparently developed their own practices to reconcile the
remand and harmless-error rules. See Bagley 302, n. 328
(citing cases). We will not attempt to provide a complete answer to
this vexing problem here.
For now, we agree with the FDA that the Fifth
Circuit read
Calcutt too broadly. It has long been accepted,
for example, that a remand may not be necessary when an agency’s
decision is supported by a plethora of factual findings, only one
of which is unsound. When it is clear that the agency’s error “had
no bearing on the procedure used or the substance of [the] decision
reached,” a remand would be pointless.
Massachusetts Trustees of
Eastern Gas & Fuel Associates v.
United States,
377 U.S.
235, 248 (1964); see Friendly 210–211 (“
Massachusetts
Trustees v.
United States . . . might be
regarded as a true indentation of
Chenery, [but] it is an
altogether sound one”).[
9] We
do not suggest that this exception and the one recognized in
Calcutt exhaust the universe of exceptions to the remand
rule. But the existence of this exception is sufficient to show
that the Fifth Circuit’s reading of
Calcutt went too
far.
That said, the FDA’s reading of
Sanders
may also be excessive. In an article that the FDA quotes with
approval, see Brief for Petitioner 41, Judge Friendly accurately
captured the core of the remand rule when he wrote, “[w]here the
agency has rested decision on an unsustainable reason, the court
should generally reverse and remand even though it discerns a
possibility,
even a strong one, that by another course of
reasoning the agency might come to the same result,” Friendly 222
(emphasis added). There is an important distinction, if only a
subtle one, between this formulation and the FDA’s argument that a
party attacking an agency decision must prove that an error had a
“substantial bearing” on the decision. Brief for Petitioner 36–37.
And the FDA has not identified any prior case in which we have held
that the application of an erroneous understanding of the governing
law was harmless because a subsequent agency decision shows that
the agency would have reached the same result if it had applied the
correct understanding of the law.
The FDA has not asked us to decide the
harmless-error question at this juncture. True, in its petition for
certiorari, it requested that we “review and
reverse the
Fifth Circuit’s holding that the error was not harmless.” Pet. for
Cert. 18 (emphasis added). But the FDA unmistakably abandoned that
full-throated request after we granted certiorari. In its opening
brief, the FDA asked that we “only identify the correct
harmless-error rule and remand the case, allowing the Fifth Circuit
to determine whether respondents have met their burden of showing
prejudice.” Brief for Petitioner 38. It reiterated that position in
its reply. See Reply Brief 18. And at argument, when asked, the FDA
was upfront that it seeks vacatur and remand so the Fifth Circuit
can decide the question afresh without relying on its overly
expansive reading of
Calcutt. Tr. of Oral Arg. 55–56. We
follow that course.
* * *
For these reasons, we vacate the judgment of
the United States Court of Appeals for the Fifth Circuit and remand
the case for further proceedings consistent with this opinion.
It is so ordered.