FDA v. Wages and White Lion Investments, LLC, Docket No. 23-1038

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The Supreme Court looked at a case involving the Food and Drug Administration and a company that wanted to sell flavored e-cigarettes. The lower court had said the FDA was wrong to deny the company’s request to sell these products, calling the agency’s actions unfair and inconsistent. But the Supreme Court disagreed, saying the FDA had actually followed its own rules and guidance when it made its decision.

The justices explained that the FDA’s process for reviewing these e-cigarette products was in line with what it had told companies to expect, especially when it came to the kind of scientific evidence and comparisons it wanted to see. The Court also said that the FDA didn’t break any rules by sticking to its earlier positions. However, the Supreme Court didn’t end the case there. Instead, it sent the case back to the lower court to take another look at whether the FDA made a harmless mistake by not reviewing the company’s marketing plans. This case shows how the courts look closely at whether government agencies are following their own guidelines, and what happens if they don’t.

Summary of the Case

In FDA v. Wages and White Lion Investments, LLC (No. 23-1038), the Food and Drug Administration (FDA) denied premarket tobacco product applications (PMTAs) submitted by two e-liquid manufacturers, Wages and White Lion (dba Triton) and Vapetasia. Under the Tobacco Control Act of 2009 (TCA), any “new tobacco product”—including most flavored e-liquids sold after February 15, 2007—may not be marketed absent FDA authorization, which must be granted only if the product “would be appropriate for the protection of the public health.” 21 U.S.C. § 387j(c)(2)(A). The FDA concluded the applicants had not submitted sufficient scientific evidence—including randomized controlled trials or longitudinal cohort studies—to demonstrate benefits for adult smokers that would outweigh youth-initiation risks, nor did it review their marketing-plan commitments (Syllabus, pp. 2–3; App. 177a, 285a).

The Fifth Circuit, sitting en banc, held the FDA acted arbitrarily and capriciously by applying standards different from those announced in pre-decision guidance concerning (1) types of scientific evidence, (2) cross-flavor comparisons, (3) device types, and (4) marketing plans, and it rejected the agency’s harmless-error defense (90 F. 4th 357, 376–384). The Supreme Court granted certiorari to resolve conflicts among the circuits and to clarify whether the FDA’s denials complied with the Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(A).

Opinion of the Court

Justice Alito, writing for a unanimous Court, vacated the Fifth Circuit’s judgment and remanded. The Court first declined to decide whether the FDA was required to issue notice-and-comment regulations rather than guidance. It then applied the “change-in-position” doctrine, under which an agency may change policy so long as it “provide[s] a reasoned explanation,” “display[s] awareness that it is changing position,” and considers “serious reliance interests.”

1. Scientific Evidence
   The TCA contemplates both “well-controlled investigations” and “other valid scientific evidence.” The FDA’s guidance made clear that, absent randomized trials or cohort studies, manufacturers must submit “robust” alternative evidence bridged to their specific products. The Court held the agency’s denial orders simply applied that approach: respondents offered literature reviews and surveys, but not evidence sufficiently tied to their flavored products. No unacknowledged “change” occurred.

2. Comparative Efficacy
   The TCA requires comparisons of new products to other tobacco products and the FDA’s guidance recommended comparing health risks “within the same category and … different categories as appropriate”. Its later emphasis on dessert-, candy-, and fruit-flavors over tobacco flavors naturally flowed from data showing those flavors disproportionately appeal to youth. The denial orders tracked that guidance, not a repudiation of it.

3. Device Type
   A 2020 guidance prioritized enforcement against flavored, cartridge-based products, but it also covered any products “targeted to, or whose marketing is likely to promote use by, minors”. The FDA reasonably concluded youth demand shifted from disposable cartridges to other flavored devices, justifying scrutiny of all flavored products regardless of cartridge status.

4. Harmless Error and Marketing Plans
   Although the FDA admitted it did not review marketing plans—contrary to its guidance—it did not seek plenary review of that finding. Instead, the agency asked the Court to clarify the proper harmless-error standard. Noting tension between the remand rule of SEC v. Chenery Corp. and the APA’s harmless-error directive the Court held the Fifth Circuit misread Calcutt v. FDIC by treating its sole exception to the remand rule as universal. The Court vacated and remanded for the Fifth Circuit to apply a proper blend of remand-and-harmless-error principles.

Separate Opinions

Justice Sotomayor filed a brief concurrence emphasizing that the record shows the FDA provided consistent, clear guidance on the need for rigorous product-specific evidence that benefits to adult smokers outweigh youth risks. She stressed that e-cigarette regulation under the TCA served a core public-health purpose and did not support any suggestion that the FDA “was unable or unwilling to say in clear and specific terms precisely what applicants would have to provide.”

Nuance of the Law

The Family Smoking Prevention and Tobacco Control Act of 2009 (TCA) brought tobacco products within the FDA’s ambit for the first time while preserving the FDCA’s existing premarket approval scheme for “new drugs”. A “new tobacco product” is any tobacco product not marketed in the U.S. before February 15, 2007 and the TCA mandates FDA authorization before sale. To approve a PMTA, the agency must find the product “appropriate for the protection of the public health,” weighing “risks and benefits to the population as a whole” and the likelihood of adult cessation versus youth initiation. Those findings “when appropriate” rely on “well-controlled investigations” or “other valid scientific evidence,” but the statute leaves to the FDA’s discretion what studies or data suffice.

This delegation reflects Congress’s judgment that tobacco products pose unique, shifting risks—particularly because of rapidly proliferating flavors and devices—requiring individualized review rather than blanket standards. At the same time, Congress bounded the FDA’s power by insisting on a public-health test rather than an outright ban and by providing judicial review under 5 U.S.C. § 706 via the TCA’s review provision. In turn, the APA’s arbitrary-and-capricious standard demands agency consistency or, if it changes course, “a reasoned explanation,” awareness of reliance interests, and consideration of serious reliance. Finally, the remand rule of SEC v. Chenery must be harmonized with the APA’s harmless-error directive to permit courts to remand when an agency “rested decision on an unsustainable reason,” but also to excuse harmless errors that “had no bearing” on the outcome.