Breeze Smoke, LLC v. FDA ( 2021 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 21a0260p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
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BREEZE SMOKE, LLC,
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Petitioner, │
> No. 21-3902
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v. │
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UNITED STATES FOOD AND DRUG ADMINISTRATION, │
Respondent. │
┘
On Emergency Motion for Administrative Stay.
Petition for Review of an Order of the United States Food and Drug Administration;
Agency Case No. PM0000983.
Decided and Filed: November 12, 2021
Before: MOORE, GILMAN, and KETHLEDGE, Circuit Judges.
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COUNSEL
ON EMERGENCY MOTION FOR ADMINISTRATIVE STAY AND REPLY: Brian T.
Burgess, Andrew Kim, GOODWIN PROCTER LLP, Washington, D.C., for Petitioner.
ON RESPONSE: Kathleen B. Gilchrist, Hilary K. Perkins, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Respondent. ON MOTION TO FILE
AMICUS BRIEF AND ON BRIEF: Jacquelyn A. Klima, KERR, RUSSELL, AND WEBER,
PLC, Detroit, Michigan, for Amicus Curiae.
The court delivered an order. KETHLEDGE, J., (pg. 11), delivered a separate dissenting
opinion.
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ORDER
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Breeze Smoke, LLC petitions for review of a Food and Drug Administration (“FDA”)
order denying its Premarket Tobacco Product Applications for certain of its electronic nicotine
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delivery systems (“ENDS”). Breeze Smoke moves for a stay of the FDA’s order. In addition,
several parties—the American Academy of Pediatrics, American Cancer Society Cancer Action
Network, American Heart Association, American Lung Association, Campaign for Tobacco-Free
Kids, Parents Against Vaping E-Cigarettes, and Truth Initiative—move to file an amicus brief in
support of the FDA’s position.
“A petitioner must ordinarily move first before the agency for a stay pending review of
its decision or order.” Fed. R. App. P. 18(a)(1). Thus, a party first moving for relief in this court
must “show that moving first before the agency would be impracticable” or “that, a motion
having been made, the agency denied the motion or failed to afford the relief requested . . . .”
Fed. R. App. P. 18(a)(2)(A)(i)–(ii). Under the Family Smoking Prevention and Tobacco Control
Act (“TCA”), however, “any person adversely affected by” the denial of a Premarket Tobacco
Product Application may seek judicial review of the denial, 21 U.S.C. § 387l(a)(1)(B), and “the
court shall have jurisdiction to review the regulation or order . . . and to grant appropriate relief,
including interim relief,” id. § 387l(b). Breeze Smoke contends that seeking a stay from the
FDA of its marketing-denial order would have been impracticable because the order takes effect
immediately and the FDA can take months to consider an agency-level request for a stay.
We agree. See Wages & White Lion Invs., LLC v. FDA, — F.4th —, No. 21-60766, 2021 WL
4955257, at *2 n.1 (5th Cir. Oct. 26, 2021).
A stay is “an exercise of judicial discretion” dependent on the case’s facts. Nken v.
Holder, 556 U.S. 418, 433 (2009) (quotation omitted). The party seeking “a stay bears the
burden of showing that the circumstances justify an exercise of [our] discretion.” Id. at 433–34.
We consider four factors in determining whether to grant a stay: (1) “whether the stay applicant
has made a strong showing that [it] is likely to succeed on the merits”; (2) the likelihood that “the
applicant will be irreparably injured absent a stay”; (3) “whether issuance of the stay will
substantially injure” other interested parties; and (4) “where the public interest lies.” Hilton v.
Braunskill, 481 U.S. 770, 776 (1987). The first two factors “are the most critical.” Nken,
556 U.S. at 434.
“The FDA’s administrative decisions are subject to review under the Administrative
Procedure Act (‘APA’), 5 U.S.C. § 706, which requires the reviewing court to set aside an
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agency action that is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance
with law.’” ISTA Pharms. v. FDA, 898 F. Supp. 2d 227, 230 (D.D.C. 2012) (citation omitted);
see also 21 U.S.C. § 387l(b). We therefore “must consider whether the decision was based on a
consideration of the relevant factors and whether there has been a clear error of judgment.”
Marsh v. Or. Nat. Res. Council, 490 U.S. 360, 378 (1989) (quotation omitted). Although
“[j]udicial review under [the arbitrary or capricious] standard is deferential, and a court may not
substitute its own policy judgment for that of the agency,” we must “ensure[] that the agency has
acted within a zone of reasonableness and, in particular, has reasonably considered the relevant
issues and reasonably explained the decision.” FCC v. Prometheus Radio Project, 141 S. Ct.
1150, 1158 (2021).
Breeze Smoke has not made a strong showing that it would likely succeed on its claim
that the FDA’s review of its application was arbitrary or capricious. Nor has Breeze Smoke
made a strong showing that the FDA’s denial of its application contradicted the FDA’s
nonbinding 2019 guidance because that guidance contemplated more rigorous scientific data
than Breeze Smoke’s application contained.
Administrative agencies are generally required to provide “fair notice” of requirements.
See Golden Living Ctr. – Mountain View v. Sec’y of Health & Human Servs., 832 F. App’x 967,
975–76 (6th Cir. 2020) (citing the fair-notice doctrine). The fair-notice requirement extends to
informal guidance. PHH Corp. v. Consumer Fin. Prot. Bureau, 839 F.3d 1, 48 (D.C. Cir. 2016),
reinstated in relevant part, 881 F.3d 75, 83 (D.C. Cir. 2018) (en banc), abrogated on other
grounds sub nom. Seila Law, LLC v. Consumer Fin. Prot. Bureau, 140 S. Ct. 2182 (2020).
Courts must review agency action based on the justifications given at the time, not post hoc
litigation rationales. Dep’t Homeland Sec. v. Regents of Univ. of Cal., 140 S. Ct. 1891, 1909
(2020). Finally, although agencies must consider reliance interests when they “change[] course,”
id. at 1913, the fact that a regulated entity has relied on an agency decision does not bar the
agency from reconsidering that decision, Belville Mining Co. v. United States, 999 F.2d 989, 999
(6th Cir. 1993).
The TCA subjects certain new tobacco products to the FDA’s premarketing review.
21 U.S.C. § 387 et seq. All parties agree that the TCA applies to Breeze Smoke’s flavored
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ENDS products. Under the TCA, the FDA “shall deny” applications for new products if, based
on the information submitted to the FDA as part of the application “and any other information
before [the FDA] with respect to such tobacco product,” the FDA finds “a lack of a showing that
permitting such tobacco product to be marketed would be appropriate for the protection of the
public health [‘APPH’].” 21 U.S.C. § 387j(c)(2). To determine whether the marketing of the
tobacco product is appropriate for the protection of the public health, the FDA evaluates “the
risks and benefits to the population as a whole, including users and nonusers of the tobacco
product.” Id. § 387j(c)(4). That requires considering both the “likelihood that existing users of
tobacco products will stop using such products,” and the “likelihood that those who do not use
tobacco products will start using such products.” Id.
In 2016, the FDA deemed all tobacco products subject to the TCA. 81 Fed. Reg. 28,973(May 10, 2016). This meant that tens of thousands of products then on the market could not
legally be sold without the FDA’s approval. The FDA allowed the products to stay on the
market while it considered the flood of applications, and after a series of schedule changes
implemented by the FDA and federal courts, the deadline fell on September 9, 2020. Vapor
Tech. Ass’n v. FDA, 977 F.3d 496, 500 (6th Cir. 2020).
In advance of this deadline, the FDA issued nonbinding guidance that sought to help
firms comply with this accelerated deadline. Hotly contested here is the FDA’s guidance
regarding “Valid scientific evidence”:
The FD&C Act states that the finding of whether permitting the marketing
of a product would be APPH will be determined, when appropriate, on the basis
of well-controlled investigations (section 910(c)(5)(A)). However, section
910(c)(5)(B) of the FD&C Act also allows the Agency to consider other “valid
scientific evidence” if found sufficient to evaluate the tobacco product. Given
the relatively new entrance of ENDS on the U.S. market, FDA understands
that limited data may exist from scientific studies and analyses. If an
application includes, for example, information on other products (e.g.,
published literature, marketing information) with appropriate bridging
studies, FDA intends to review that information to determine whether it is
valid scientific evidence sufficient to demonstrate that the marketing of a
product would be APPH. Nonclinical studies alone are generally not sufficient
to support a determination that permitting the marketing of a tobacco product
would be appropriate for the protection of the public health. Nonetheless, in
general, FDA does not expect that applicants will need to conduct long-term
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studies to support an application. As an example for nonclinical assessments,
long-term studies such as carcinogenicity bioassays are not expected to be
included in an application. For clinical assessments, instead of conducting
clinical studies that span months or years to evaluate potential clinical
impact, applicants could demonstrate possible long-term health impact by
including existing longer duration studies in the public literature with the
appropriate bridging information (i.e., why the data used are applicable to
the new tobacco product) and extrapolating from short-term studies. In
addition, nonclinical in vitro assays that assess the toxicities that are seen
following long-term use of tobacco products may be supportive of these clinical
assessments. These studies, used as a basis to support a[n application], should
be relevant to the new tobacco product and address, with robust rationale,
acute toxicological endpoints or other clinical endpoints that may relate to
long-term health impacts. In this context, FDA considers long-term studies to
be those studies that are conducted over six months or longer.
Premarket Tobacco Product Applications for ENDS: Guidance for Industry, A204–05 (emphasis
added) (footnotes omitted). To provide brief context on this language: The FDA acknowledged
in 2018 that ENDS products may provide a beneficial alternative to combustible cigarettes
because they deliver nicotine without also bombarding the user’s lungs with the toxins found in
cigarettes. See Vapor Tech. Ass’n, 977 F.3d at 499. The FDA has also recognized, however, that
ENDS products particularly appeal to children, with high-school-age use of ENDS products
increasing by over 75% from 2017 to 2018, and middle-school-age use increasing by almost
50% over that same period. Am. Acad. of Pediatrics v. FDA, 379 F. Supp. 3d 461, 467 (D. Md.
2019). Flavored ENDS products especially appeal to children: As of 2020, 84.7% of high
school ENDS users and 73.9% of middle school ENDS users reported using flavored products.
FDA Review of Breeze Smoke’s Application, A12. And according to one study, over 80% of
children aged 12-17 said that their first experience with ENDS involved a flavored product. Id.This data brings into focus the problem facing the FDA: e-cigarettes offer potential
health benefits, to the extent that they convince combustible-tobacco users to get their nicotine
from e-cigarettes instead. But flavored e-cigarettes disproportionately appeal to children. The
FDA, under a statutory obligation to approve only those products that are “appropriate for the
protection of the public health,” must determine whether applicants can show that their flavored
ENDS product will benefit public health enough to outweigh this public-health detriment to
children. See FDA Review of Breeze Smoke’s Application, A9 (noting the importance of
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considering whether “the flavored products have an added benefit relative to that of tobacco-
flavored [e-cigarettes] in facilitating smokers completely switching away from or significantly
reducing their smoking.”).
Turning to this case’s facts, Breeze Smoke contends that it followed the FDA’s 2019
industry guidelines for submitting its Premarket Tobacco Product Applications. But the FDA
denied Breeze Smoke’s application, citing the lack of longitudinal cohort studies and randomized
controlled trials and the insufficiency of the evidence provided, which included published
literature, marketing information on other products, bridging studies, and its marketing plan, all
of which Breeze Smoke believed comported with the earlier-issued guidance.
The FDA’s denial of Breeze Smoke’s application emphasized that the strong appeal of
flavored ENDS products to youths required a showing of a “substantial enough” “magnitude of
the likely benefit . . . to overcome the significant risk of youth uptake and use posed by the
flavored ENDS product.” FDA Review of Breeze Smoke’s Application, A16; see also id.,A18 n.xxii. The FDA suggested that randomized control trials would present the strongest
evidence of appropriateness for the public health. Id., A17. The FDA then acknowledged that
applicants theoretically could “rely on, and bridge to,” data concerning general ENDS category
literature. Id. But the FDA concluded that, based on the known risks that flavored ENDS
products present to youths, Breeze Smoke’s application did not demonstrate health benefits to
adult smokers sufficient to overcome flavored products’ appeal to youths. Id., A21.
Breeze Smoke identifies four buckets of evidence that it submitted: (1) a literature
review showing that ENDS use is less harmful than smoking tobacco combustibles,
(2) information “bridging” its products to those evaluated in the literature, (3) a survey that
Breeze Smoke conducted of its adult users that purported to show a preference for flavored
products, and (4) information concerning Breeze Smoke’s plan to avoid marketing its products to
youth. Pet’r Br. at 7.
The Breeze Smoke literature review offers mixed findings on flavored ENDS products.
See Breeze Smoke Lit. Review, A52 (“The use of food flavorings in e-liquids . . . need[s] more
scientific study.”), A69 (citing a study suggesting that adults who vape flavored e-cigarettes are
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more likely subsequently to quit smoking than those who vape unflavored e-cigarettes),
A70 (citing a separate study saying that users strongly prefer flavored e-cigarettes). Breeze
Smoke argues that the literature review was meant to bridge to materials specifically concerning
flavored products. Pet’r Br. at 7. But as the FDA noted in its denial of Breeze Smoke’s
application, the “clear and consistent patterns of real-world use” showing youth initiation of
flavored ENDS products rendered this bridging insufficient. FDA Review of Breeze Smoke’s
Application, A17–18.
On this record, Breeze Smoke’s survey presents methodological issues. The FDA’s 2019
guidance suggested that applicants include studies “with robust rationale, acute toxicological
endpoints or other clinical endpoints that may relate to long-term health impacts.” Premarket
Tobacco Product Applications for ENDS: Guidance for Industry, A205. Breeze Smoke’s study,
submitted via Google Form, contained responses from customers “solicited . . . by request in
the retail stores.” Breeze Smoke Lit. Review, A70. This suggests biased respondents. See id.,A73–77.
Considering all of Breeze Smoke’s evidence, we disagree with Breeze Smoke, and with
our colleagues on the Fifth Circuit, who say that the FDA orchestrated a “surprise switcheroo.”
Wages & White Lion Invs., LLC v. FDA, No. 21-60766, 2021 WL 4955257, at *5 (5th Cir. Oct.
26, 2021). The FDA said that, in light of the accelerated court-ordered deadline for submission
of applications for new tobacco products, it might accept evidence other than long-term studies,
if that evidence had sufficient scientific underpinnings to meet the TCA’s statutory mandate of
demonstrating that flavored ENDS devices are appropriate for the protection of public health.
Premarket Tobacco Product Applications for ENDS: Guidance for Industry, A204 (“FDA
intends to review that information”), A205 (“[I]nstead of conducting clinical studies that span
months or years to evaluate potential clinical impact, applicants could demonstrate possible long-
term health impact by including existing longer duration studies in the public literature with the
appropriate bridging information (i.e., why the data used are applicable to the new tobacco
product) and extrapolating from short-term studies.”) (emphasis added in this and following),
A223 (“[I]t is likely that applicants will conduct certain investigations themselves and submit
their own research findings as a part of their [application].”), A238 (“[I]f there is an established
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body of evidence regarding the health impact (individual or population) of your product or a
similar product that can be adequately bridged to your product, such as data from the published
literature or government-sponsored databases, these data may be sufficient to support a[n
application]”).
The FDA found Breeze Smoke’s evidence lacking against this standard. See FDA
Review of Breeze Smoke’s Application, A18 (describing the results from bridging literature
studies to flavored ENDS products as “quite mixed”). Breeze Smoke argues that the FDA’s
willingness to consider some forms of evidence, explicitly phrased as such, required the FDA to
accept that evidence as meeting a statutory requirement even where the FDA found the evidence
unsatisfactory. We decline to embrace that claim.
On this record, the FDA’s 2019 language and its 2021 order likely did not fail to consider
reliance interests, see Regents, 140 S. Ct. at 1914, and did not introduce a new standard of review
in adjudication such that it likely deprived Breeze Smoke of fair warning, see Christopher v.
SmithKline Beecham Corp., 567 U.S. 142, 156–57 (2012). Additionally, the FDA correctly
notes that Breeze Smoke’s reliance on caselaw where an agency was not afforded deference
because it acted contrary to longstanding precedent is inapposite because the FDA’s 2019
guidance does not qualify as “longstanding.”
The FDA’s formulaic consideration of Breeze Smoke’s youth marketing plan warrants
further scrutiny. The FDA acknowledged in its denial of Breeze Smoke’s application that the
marketing plan, the strategy that a firm uses to avoid marketing flavored ENDS products to those
under 21, “is a critical aspect of product regulation.” FDA Review of Breeze Smoke’s
Application, A17 n.xix. The FDA called it “theoretically possible” that “significant” mitigation
efforts could reduce flavored products’ appeal to youths “such that the risk for youth initiation
would be reduced.” Id. The FDA then said that, because it had not yet seen an application that
showed advertising restrictions that would significantly enough decrease youth use, it would not
evaluate Breeze Smoke’s proposal “at this stage of review” “for the sake of efficiency.” Id.The FDA likely should have more thoroughly considered Breeze Smoke’s marketing
plan. Agency action must consider “the relevant factors” when reaching a decision, and may not
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“entirely fail[] to consider an important aspect” of the relevant regulatory task. Motor Vehicle
Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). The FDA
argues that it properly declined to consider Breeze Smoke’s marketing strategy because
“consideration of the specific marketing measures proposed in petitioner’s application would not
alter its analysis.” FDA Br. at 18. It is not clear how the FDA could have known this. The FDA
cites Butte County v. Chaudhuri for the proposition that an agency need not explicitly mention
each piece of evidence, but there the agency’s analysis cited countervailing evidence showing
why it had rejected the allegedly ignored evidence. 887 F.3d 501, 509 (D.C. Cir. 2018). Here,
by contrast, the FDA ignored the marketing plan entirely because prior marketing plans had not
satisfied the agency.
Because Breeze Smoke bears the burden of showing a strong likelihood of success on the
merits, and because the FDA likely properly concluded that Breeze Smoke failed to show that its
products adequately protected the public health, described above, we still deny Breeze Smoke’s
motion for stay, even in light of the FDA’s possibly insufficient consideration of Breeze
Smoke’s marketing plan. This oversight has not “permeated the entire [adjudication] process.”
See Pub. Citizen v. Fed. Motor Carrier Safety Admin., 374 F.3d 1209, 1217 (D.C. Cir. 2004).
The FDA reasonably concluded that Breeze Smoke’s application did not meet the TCA’s
requirements that new tobacco products be appropriate for the protection of the public health.
The FDA cited well-developed evidence showing that flavored ENDS products’ special appeal to
youths harms the public health to a degree not outweighed by the (far-less-supported) effects of
adult cigarette smokers switches to e-cigarettes. Breeze Smoke argues that the FDA deployed
separate standards of review, considering literature that supported the thesis that flavored ENDS
products pose special health risks to children and requiring Breeze Smoke present more than
literature reviews to justify its products’ public health benefits. Pet’r Br. at 18. But the FDA
relied on literature concerning flavored ENDS products’ appeal to youths because those risks are
understood as a matter of scientific consensus. See Breeze Smoke Lit. Review, A66 (“There is
substantial evidence that e-cigarette use increases risk of ever using combustible tobacco
cigarettes among youth and young adults.”); FDA Comm’r Speech, A171 ( “we know” that “kid-
appealing flavors in products like . . . ENDS . . . are a leading driver of youth smoking”);
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Enforcement Priorities for ENDS without Premarket Authorization Guidance for Industry,
A272–78 (collecting data showing “substantial and increasing initiation of ENDS products by
youth, particularly certain flavored, cartridge-based products” (on A278)). This differs sharply
from an agency’s “raw assertion that [two concepts] are different.” Cincinnati Bell Tel. Co. v.
Fed. Commc’ns Comm’n, 69 F.3d 752, 768 (6th Cir. 1995).
Because Breeze Smoke has not shown a strong likelihood of success on the merits, we
need not consider the other stay factors. Gonzales v. Nat’l Bd. of Med. Exam’rs, 225 F.3d 620,
632 (6th Cir. 2000). We also need not consider the FDA’s argument that, were we to grant a
stay, Breeze Smoke would still lack the necessary authorization to market its products.
Accordingly, the motion for a stay is DENIED. The motion for leave to file an amicus
brief is GRANTED.
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DISSENT
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KETHLEDGE, Circuit Judge, dissenting. I would grant the motion for a stay for
substantially the reasons stated by the Fifth Circuit in Wages & White Lion Invs., L.L.C. v.
United States Food & Drug Admin., 2021 WL 4955257 (5th Cir. Oct. 26, 2021). The FDA
essentially decided these applications en masse rather than individually; that case is thus
materially identical to this one.
ENTERED BY ORDER OF THE COURT
Deborah S. Hunt, Clerk