On January 21, the Supreme Court heard arguments in a case addressing who may challenge Food and Drug Administration (FDA) marketing denial orders for new tobacco products.

Under the Tobacco Control Act (TCA), new tobacco products, including most novel tobacco products, such as electronic cigarettes, heat-not-burn products, and nicotine pouches, must obtain FDA marketing authorization to be lawfully sold in the U.S.

If FDA denies authorization, the TCA allows “any person adversely affected” by the marketing denial order (MDO) to “file a petition for judicial review” in the D.C. Circuit or “the circuit in which such person resides or has their principal place of business.”

In October 2023, FDA issued MDOs for several of R.J. Reynolds Vapor Co.’s menthol- and mixed-berry- flavored electronic cigarette products under its Vuse Alto brand. R.J. Reynolds challenged the MDO in the Fifth Circuit, together with retailers located there.

The key question at issue in the case before the Supreme Court, R.J. Reynolds Vapor Co. v. FDA, Dkt. No. 23-1187, is who constitutes “any person adversely affected” by an MDO? Is it only the manufacturer who submitted the application for marketing authorization? Or does it also include a retailer of products subject to the application at issue?

R.J. Reynolds Vapor Company’s and the retailers’ position is that “any person adversely affected” may include retailers who face financial harm as a result of an MDO. The companies observe that a different TCA judicial-review provision in the context of withdrawal of marketing authorization allows only applicantsto sue, but here, Congress chose the phrase “any person adversely affected” — which must extend to at least one person beyond the applicant itself. Because the TCA’s marketing authorization provisions refer to sales, they argue that the retailers are next in line.

FDA argues that R.J. Reynolds only sought review in the Fifth Circuit because its principal argument — that FDA acted arbitrarily and capriciously by changing the evidentiary standards for flavored electronic cigarettes after manufacturers submitted their applications — was previously rejected by other courts and the company is “forum shopping.” FDA also argues that retailers are not within the “zone of interests” protected by the statutory provision at issue, which should extend only to the applicant whose marketing application is denied. The agency asserts that, without marketing authorization, the sale of the products is unlawful (even though FDA allowed the continued sale of the products pursuant to an enforcement discretion policy), so the retailers’ legal rights are not changed by virtue of the MDO and they are instead “bystanders.”

At oral argument, a majority of the justices seemed skeptical of FDA’s position. Chief Justice Roberts said, “I think it’s a bit much to call them bystanders,” observing that the retailers’ business depends on being able to sell the products and “[t]he reason the manufacturer” is seeking FDA premarket review “is because it wants to make a product that the retailers want to sell.” Similarly, in reaction to FDA counsel’s acknowledgement that the retailer is being prevented from selling such products, Justice Kavanaugh remarked, “That sounds like adversely affected.”

In addition, Justice Kagan seemed somewhat persuaded by the argument that Congress must have intended for the phrase “any person adversely affected” to cover more than just the applicant. She observed that Congress “knew how to use the word ‘applicant,'” and “if they thought that the denials should only be about applicants … then they would have written a provision pretty much like the [TCA’s] withdrawal provision that says, with respect to a denial, an applicant can sue.”

Justice Thomas suggested that FDA may also have a bias in avoiding the Fifth Circuit. He questioned FDA’s motives for contesting R.J. Reynolds’ and the retailers’ challenge to the MDO in the Fifth Circuit, asking “So does it … have anything to do with your … not winning in the Fifth Circuit?”

In contrast, Justice Jackson pressed some of the hardest questions for counsel for R.J. Reynolds and the retailers, and she appeared to agree with FDA that retailers are not “adversely affected” by an MDO under the TCA. First, she questioned why Congress would have allowed only applicants to challenge FDA’s withdrawal of marketing authorization — which would pose an even more serious harm to retailers who have already stocked the affected products. She said that if Congress were concerned about retailers’ interests, they “would have given retailers the ability to sue where their interests are most seriously affected.” Second, she doubted that retailers have “the same interest as a manufacturer in pre-market [and] pre-development” of a product, which is implicated by an MDO. Lastly, she also expressed concern that allowing just one party to satisfy the TCA’s venue requirement “directly undermine[s] Congress’s intent to channel … these kinds of actions in a particular way.”

We expect a decision later this year and will report on the outcome.