Justices Open Door to Multiple-Venue Challenges to E-Cigarette Rules

WASHINGTON — The Supreme Court on Friday held that retailers who would sell a new tobacco product if not for the Food and Drug Administration’s rejection of the product, can sue to seek judicial review of the agency’s decision.

The 7-2 ruling by the court in FDA v. RJR Vapor opens the door for vape and e-cigarette companies to pick the courts they want to hear their challenges to adverse decisions against their products.

Under the Family Smoking Prevention and Tobacco Control Act, manufacturers are required to apply for and receive approval from the FDA before marketing any “new tobacco product.”  

In 2016, the FDA decided that e-cigarettes and related products were new tobacco products subject to the act.  

Given the size of the existing e-cigarette market, the FDA announced that it would defer enforcement of the Tobacco Control Act against e-cigarette manufacturers and retailers while the manufacturers sought agency approval.  

Shortly thereafter, R. J. Reynolds Vapor Co. — a manufacturer of e-cigarettes — sought FDA approval to continue marketing its popular Vuse Alto products.  

But the FDA denied the applications, finding that RJR Vapor had failed to demonstrate that marketing Vuse Alto products would be “appropriate for the protection of the public health” as required by the Tobacco Control Act. 

That order sounded the death knell for a significant portion of the e-cigarette market, and RJR Vapor sought to challenge it. 

The Tobacco Control Act provides that “any person adversely affected” by an FDA denial order can petition for judicial review in either the D.C. Circuit or “the circuit in which such person resides or has their principal place of business.”  

Had RJR Vapor sought judicial review on its own, it could have filed a petition in the D.C. Circuit (the statutory default) or the 4th Circuit (which includes North Carolina, RJR Vapor’s state of incorporation and principal place of business).  

RJR Vapor opted to take another route. It combined forces with a Texas-based retailer and a Mississippi-based trade association of retailers to challenge the FDA’s denial order in the 5th Circuit, which includes both Texas and Mississippi.  

In response, the FDA asked the court to either dismiss the joint petition for lack of venue or transfer it to the D.C. Circuit or 4th Circuit.  

In doing so, the agency argued that only a disappointed applicant — in this case, RJR Vapor — is “adversely affected” by an FDA denial order within the meaning of the Tobacco Control Act.  

Because the retailers had no right to seek review, the FDA argued, the petition had no basis for being in the 5th Circuit. 

A divided 5th Circuit panel concluded the venue was proper and denied the FDA’s motion. 

While on its face, the legal question before the court seems technical in nature, justices on both sides of the ruling expressed trepidation about its ultimate outcome.

Justice Amy Coney Barrett, a member of the majority, noted that no circuit court, including the 5th Circuit in this case, has analyzed whether every petitioner in a joint petition must independently satisfy the Tobacco Control Act’s venue provisions.

“We rarely address an argument raised for the first time in this court. … In the ordinary course, [p]rudence … dictates awaiting a case in which the issue was fully litigated below, so that we will have the benefit of developed arguments on both sides and lower court opinions squarely addressing the question.

“Prudence counsels that course here, because anything we say about the TCA’s venue provisions would inevitably inform debates about similar statutes — including 28 U. S. C. §1391(e)(1), the general venue statute for lawsuits against the government,” she wrote.

In dissent, Justice Ketanji Brown Jackson had similar concerns.

“The majority correctly acknowledges that the disputed ‘any person adversely affected’ language in §387l(a)(1) of the Tobacco Control Act implicates our well-established zone-of-interest test,” she wrote. 

“All agree, too, that, under the zone-of-interest test, the watchword is congressional intent,” she continued. “But I would proceed to determine Congress’ intent as normal, by applying the traditional tools of statutory interpretation to investigate the scope of §387j(c) — the provision that respondents argue the FDA violated. 

“Every available indicator reveals that Congress intended to permit manufacturers — not retailers — to challenge the denial of a manufacturer’s marketing application (and to do so only in the designated courts).  

“In concluding otherwise, the majority not only opens up an avenue for judicial review that Congress did not intend, it also allows manufacturers like RJR Vapor to evade the statute’s venue requirements,” Jackson wrote.

Dan can be reached at [email protected] and @DanMcCue