In October 2022, the U.S. Food and Drug Administration (FDA) announced that the Department of Justice (DOJ), on its behalf, filed complaints against six electronic nicotine delivery system (ENDS) companies in federal district courts, seeking permanent injunctions. These cases are important because they mark the first time the FDA has litigated against companies to enforce the Federal Food, Drug, and Cosmetic Act’s premarket review requirements for new tobacco products.

The six cases are:

  • United States of America v. Seditious Vapours LLC et al, 2:22-CV-01777 (D. Ariz.);
  • United States of America v. Morin Enterprises, Inc. et al, 0:22-CV-02592 (D. Minn.);
  • United States of America v. Soul Vapor, LLC et al, 1:22-CV-00458 (S.D. W.Va.);
  • United States of America v. Super Vape’z LLC et al, 3:22-CV-05789 (W.D. Wash.);
  • United States of America v. Vapor Craft LLC et al, 4:22-CV-00160 (M.D. Ga.); and
  • United States of America v. Lucky’s Convenience & Tobacco, LLC et al, 6:22-CV-01237 (D. Kan.).

In the six complaints, FDA alleges that (1) each company is an ENDS manufacturer that sells ENDS to individuals for personal consumption; (2) each company is engaged in interstate commerce; (3) the ENDS are illegally adulterated and misbranded because they are “new tobacco products” that have not received FDA marketing authorization; and (4) each company has a history of violative conduct, including continuing to sell their ENDS after receiving FDA warning letters and being inspected by FDA. Given these allegations, FDA has asked the courts to permanently restrain and enjoin the companies from marketing their ENDS without proper authorizations and allow FDA to inspect the companies’ places of business to ensure compliance with the injunction.

There have been significant developments in three of the cases over the last few weeks. In Seditious Vapours and Morin Enterprises, the parties have agreed to and asked the court to issue consent decrees. In Vapor Craft, the parties have agreed to and the court has approved a consent decree. The consent decrees are all very similar, and the key terms are summarized below.

  • The defendants will be permanently restrained and enjoined from manufacturing, distributing, selling, and/or offering for sale any new tobacco product at or from their establishments, unless and until:
    • The ENDS have received marketing authorization from FDA;
    • FDA representatives inspect the defendants’ establishments;
    • The defendants reimburse FDA for the costs of all FDA inspections, investigations, supervision, analyses, examinations, and reviews that FDA deems necessary to evaluate the defendants’ compliance; and
    • FDA notifies the defendants in writing that they appear to be in compliance.
  • The defendants must destroy all ENDS within their possession in the presence of FDA within 30 days of entry of the consent decree.
  • After having received written notice of compliance and the defendants commence manufacturing and sales of ENDS, the defendants will be permanently enjoined from doing so if they adulterate or misbrand the products or fail to implement and maintain the consent decree requirements.
  • If at any time after the entry of the consent decree FDA determines the defendants have failed to comply or violated the law, FDA may notify the defendants in writing of the noncompliance and take corrective action.
  • Upon receipt of any order issued for noncompliance, the defendants must immediately comply.
  • FDA reserves the right to inspect the defendants’ facilities without prior notice to ensure compliance with the consent decree.
  • The defendants must immediately provide FDA any information or records FDA requests regarding the manufacture and sale of ENDS.
  • The defendants must pay all costs of any FDA inspection, investigation, supervision, analysis, examination, and review that FDA deems necessary to evaluate the defendants’ compliance.
  • Within five business days after entry of the consent decree, the defendants must display the consent decree in a prominent location in employee common areas and leave it posted for as long as it remains in effect.
  • Within 10 business days after entry of the consent decree, the defendants must hold a general meeting or series of smaller meetings with the defendants’ directors, officers, agents, representatives, employees, attorneys, successors, assigns, and any and all persons or entities in active concert or participation with any of them (including individuals, partnerships, corporations, subsidiaries, affiliates, franchisees, and “doing business as” entities) (Associated Persons) at which they describe the terms and obligations of the consent decree, and within 15 business days, provide FDA an affidavit stating the fact and manner of compliance with the meeting requirement and a copy of the agenda, list of attendees, and meeting minutes from the meeting(s) held.
  • Within 10 business days after entry of the consent decree, the defendants must provide a copy of the consent decree to each and all of their Associated Persons, and within 20 business days, provide to FDA an affidavit stating the fact and manner of compliance with the copy submission required identifying the names, addresses, and positions of all Associated Persons who have received a copy of the consent decree, and attaching a copy of the executed certified mail return receipts.
  • The defendants must notify FDA in writing at least 10 business days before any change in ownership, name, or character of their business occurs.
  • If any defendant fails to comply with any provision of the consent decree, the law, or its implementing regulations, then defendants must pay $5,000 in liquidated damages for each day such violation continues, an additional sum of $4,000 in liquidated damages per day per violation, and an additional sum in liquidated damages equal to twice the retail value of any product distributed in violation of the consent decree, the law, or its implementing regulations.

While there are several options for obtaining marketing authorization from FDA for new tobacco products, the most burdensome is the premarket tobacco application (PMTA) pathway. PMTAs for ENDS that were on the market by August 8, 2016 were required to be submitted to FDA by September 9, 2020. At a recent conference, FDA mentioned that its highest enforcement priorities include ENDS for which no application is pending, for example, those with marketing denial orders, and those for which no application was submitted. To date, FDA has only issued marketing granted orders for approximately 24 ENDS products as shown in the FDA database here. FDA has denied, however, the vast majority of ENDS PMTAs for various reasons.

Until recently, FDA’s enforcement tool of choice has been to send warning letters to over 450 ENDS companies selling products without marketing authorization. Now, for the first time, FDA is setting new enforcement action precedent with these six lawsuits. It remains to be seen whether injunctions and/or consent decrees through litigation will become a common enforcement tool for FDA, including for tobacco products other than ENDS, or whether it will choose to use that enforcement tool only for companies in more egregious circumstances.