Filed: Oct. 26, 2021
Latest Update: Oct. 27, 2021
Case: 21-60766 Document: 00516068813 Page: 1 Date Filed: 10/26/2021
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
October 26, 2021
No. 21-60766 Lyle W. Cayce
Wages and White Lion Investments, L.L.C., doing business as
United States Food and Drug Administration,
Petition for Review of an Order of the
Food and Drug Administration
Before Elrod, Oldham, and Wilson, Circuit Judges.
Andrew S. Oldham, Circuit Judge:
The Food and Drug Administration denied Triton’s application to
market flavored e-cigarettes. Triton moved for a stay pending disposition of
its petition for review. We grant the stay.
In 2009, Congress enacted the Family Smoking Prevention and
Tobacco Control Act (“TCA”) to regulate tobacco products. Pub. L. No.
111-31, 123 Stat. 1776 (2009). The TCA authorizes the Secretary of Health
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and Human Services to implement the Act through the Food and Drug
Administration (“FDA”). See 21 U.S.C. §§ 387a(b), 393(d)(2). The TCA
prohibits manufacturers from selling any “new tobacco product” without
authorization. See id. § 387j(a). In 2016, the FDA deemed electronic nicotine
delivery systems (“ENDS”)—colloquially called “electronic cigarettes” or
“e-cigarettes”—a “new tobacco product.” 81 Fed. Reg. 28,973
2016) (“Deeming Rule”); see also Big Time Vapes, Inc. v. FDA, 963 F.3d 436
443 (5th Cir. 2020) (“In the TCA, Congress delegated to the Secretary the
power to ‘deem’ which tobacco products should be subject to the Act’s
mandates.”). Thus, the TCA and the Deeming Rule generally prohibited the
marketing of e-cigarettes.
This created a serious and obvious problem because, by the time the
FDA got around to issuing the Deeming Rule, manufacturers were widely
marketing e-cigarettes throughout the United States. To avoid an overnight
shutdown of the entire e-cigarette industry, the FDA delayed enforcement of
the Deeming Rule. Then the FDA forced e-cigarette makers to meet a series
of requirements and staggered deadlines to keep their products on the
As relevant here, the FDA required e-cigarette manufacturers to
submit premarket tobacco applications (“PMTAs”). The PMTA process is
“onerous,” to put it mildly. See Big Time Vapes, 963 F.3d at 439 (“The
PMTA process is onerous, requiring manufacturers to gather significant
amounts of information.”). A manufacturer must submit to the FDA
information on the product’s health risks, ingredients, and manufacturing
process. The manufacturer also must include samples of the product and its
proposed labeling. 21 U.S.C. § 387j(b)–(c).
In the months and years following the Deeming Rule, the FDA moved
its regulatory goalposts in at least two important ways. First, it moved the
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PMTA deadline. Originally, the FDA demanded that all PMTAs must be
filed within 24 months of the Deeming Rule—i.e., by 2018. The FDA later
purported to extend the PMTA deadline to 2022. But then, in response to
litigation from anti-smoking groups, the FDA moved the deadline up to
September 9, 2020. Second, and crucial to this case, the FDA changed the
regulatory requirements for PMTAs. Initially, the FDA’s guidance stated
that “in general, FDA does not expect that applicants will need to conduct
long-term studies to support an application.” A.74; see also A.92 (same). As
Triton’s case illustrates, however, the FDA later changed its mind and
required the very thing it said it would not—namely, long-term studies of e-
Wages and White Lion Investments, LLC, doing business as Triton
Distribution (“Triton”), is a Texas-based manufacturer of e-cigarettes.
Some of its e-cigarette products have been on the market since August 4,
2016—before the Deeming Rule’s effective date. Triton submitted a timely
PMTA for certain flavored e-cigarettes. So did many other e-cigarette
On August 26, 2021, the FDA announced that it would deny the
PMTAs for 55,000 flavored e-cigarettes. In its press release, the FDA
explained that it would do so because it “likely” needed evidence from long-
term studies to grant a PMTA for flavored e-cigarettes. Less than a week after
the FDA changed its regulatory requirements, Triton submitted a letter
stating that it intended to conduct long-term studies of its products.
About two weeks later, on September 14, the FDA issued a marketing
denial order (“Order”) to Triton. See 21 U.S.C. § 387j(c)(2). The FDA
acknowledged that it did not consider Triton’s letter in its determination
because the FDA “received [the letter] near the completion of scientific
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review.” A.14–15. The “key basis” for the denial, wrote the FDA, was that
Triton’s PMTA lacked “robust and reliable evidence” from long-term
studies, such as a “randomized controlled trial,” a “longitudinal cohort
study,” or “other evidence . . . evaluat[ing] the impact of the new flavored
vs. Tobacco-flavored products on adult smokers’ switching or cigarette
reduction over time.” A.49.
Triton then petitioned for review and moved to stay the Order
pending that review.1 We granted a temporary administrative stay to prevent
the FDA from shutting down Triton’s business. Now we enter a full stay
pending disposition of Triton’s petition.
For a stay pending review, we must consider four factors: (1) whether
the requester makes a strong showing that it’s likely to succeed on the merits;
(2) whether the requester will be irreparably injured without a stay;
(3) whether other interested parties will be irreparably injured by a stay; and
(4) where the public interest lies. Nken v. Holder, 556 U.S. 418
, 426 (2009).
“The first two factors are the most critical.” Valentine v. Collier, 956 F.3d
, 801 (5th Cir. 2020) (per curiam). “‘The party seeking the stay bears the
burden of showing its need.’” Tex. League of United Latin Am. Citizens v.
Hughs, 978 F.3d 136
, 143 (5th Cir. 2020) (quoting Clinton v. Jones, 520 U.S.
, 708 (1997)); see also Nken, 556 U.S. at 433
–34 (“The party requesting a
stay bears the burden of showing that the circumstances justify an exercise of
that discretion.”). Triton has met its burden: The first three factors support
a stay, while the fourth is at worst neutral.
Triton did not first ask the FDA for a stay. But it’s common ground that it would
have been “impracticable” for Triton to do so. See Fed. R. App. P. 18(a)(2)(i).
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First, likelihood of success. The Administrative Procedure Act
(“APA”) directs courts to “hold unlawful and set aside agency action[s]”
that are “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2). “The APA’s arbitrary-and-
capricious standard requires that agency action be reasonable and reasonably
explained.” FCC v. Prometheus Radio Project, 141 S. Ct. 1150
, 1158 (2021). We
must not “substitute” our “own policy judgment for that of the agency.”
Still, 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.” Ibid.; see also Motor Vehicle
Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29
(1983) (“[T]he agency must examine the relevant data and articulate a
satisfactory explanation for its action including a ‘rational connection
between the facts found and the choice made.’” (quoting Burlington Truck
Lines v. United States, 371 U.S. 156
, 168 (1962))). “Put simply, we must set
aside any action premised on reasoning that fails to account for ‘relevant
factors’ or evinces ‘a clear error of judgment.’” Univ. of Tex. M.D. Anderson
Cancer Ctr. v. HHS, 985 F.3d 472
, 475 (5th Cir. 2021) (quoting Marsh v. Or.
Nat. Res. Council, 490 U.S. 360
, 378 (1989)).
In reviewing an agency’s action, we may consider only the reasoning
“articulated by the agency itself”; we cannot consider post hoc
rationalizations. State Farm, 463 U.S. at 50
; see also DHS v. Regents of the
Univ. of Cal., 140 S. Ct. 1891
, 1909 (2020) (“An agency must defend its
actions based on the reasons it gave when it acted.”). Our review is “not
toothless.” Sw. Elec. Power Co. v. EPA, 920 F.3d 999
, 1013 (5th Cir. 2019). In
fact, after Regents, it has serious bite. See 140 S. Ct. at 1907–15; see also, e.g.,
Texas v. Biden, 10 F.4th 538
, 552–57 (5th Cir. 2021) (per curiam); Biden v.
Texas, No. 21A21, 2021 WL 3732667
, at *1 (U.S. Aug. 24, 2021).
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Triton has shown a strong likelihood of success on the merits. That’s
because the FDA failed to “reasonably consider the relevant issues and
reasonably explain” the Order. Prometheus, 141 S. Ct. at 1158; see also
Michigan v. EPA, 576 U.S. 743
, 750, 752 (2015) (“[A]gency action is lawful
only if it rests on a consideration of the relevant factors” and “important
aspect[s] of the problem.” (quotation omitted)). The relevant factors the
FDA inadequately addressed or explained include: (1) Triton’s marketing
plan; (2) Triton’s reliance interests; (3) less disruptive alternatives;
(4) device-type preferences; and (5) evidence on the potential benefits of
flavored e-cigarettes. The FDA’s counterarguments (6) are unavailing.
The FDA failed to reasonably consider Triton’s proposed marketing
plan. The FDA repeatedly stated that a marketing plan is “a critical factor
in FDA’s statutorily required determination.” Premarket Tobacco Product
Applications and Recordkeeping Requirements, 86 Fed. Reg. 55,300
(Oct. 5, 2021) (“Final Rule”); see also 84 Fed. Reg. 50,566
, 50,581 (Sept. 25,
2019) (“Proposed Rule”) (“The applicant’s marketing plans . . . will provide
input that is critical to FDA’s determination of the likelihood of changes in
tobacco product use behavior, especially when considered in conjunction
with other information contained in the application.” (emphasis added));
A.45 n.xix (“Limiting youth access and exposure to marketing is a critical
aspect of product regulation.” (emphasis added)); A.45 (Premarket
“assessment includes evaluating the appropriateness of the proposed
marketing plan.”). Here, however, the FDA simply ignored Triton’s plan. It
stated: “[F]or the sake of efficiency, the evaluation of the marketing plan in
applications will not occur at this stage of review, and we have not evaluated
any marketing plans submitted with these applications.” A.45 n.xix.
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The FDA’s excuses for ignoring the “critical factor” of Triton’s
marketing plan are unpersuasive. First, the FDA says it didn’t evaluate
Triton’s plan for “the sake of efficiency.” Ibid.
But “efficiency” is no
substitute for “reasoned decisionmaking.” Michigan, 576 U.S. at 750; see also
Judulang v. Holder, 565 U.S. 42
, 64 (2011) (emphasizing that “cheapness
alone cannot save an arbitrary agency policy”).
Second, the FDA claimed that its purported expertise and experience
showed that no marketing plan would be sufficient, so it stopped looking:
It is theoretically possible that significant mitigation efforts
could adequately reduce youth access and appeal such that the
risk for youth initiation would be reduced. However, to date,
none of the ENDS PMTAs that FDA has evaluated have
proposed advertising and promotion restrictions that would
decrease appeal to youth to a degree significant enough to
address and counter-balance the substantial concerns, and
supporting evidence, discussed above regarding youth use.
Similarly, we are not aware of access restrictions that, to date,
have been successful in sufficiently decreasing the ability of
youth to obtain and use ENDS.
A.45 n.xix. This statement is insufficient. For one thing, it’s unreasonable for
the FDA to stop looking at proposed plans because past ones have been
unpersuasive. That’s like an Article III judge saying that she stopped reading
briefs because she previously found them unhelpful.
For another, reliance on expertise and experience, like efficiency, is
no substitute for “reasoned decisionmaking.” Michigan, 576 U.S. at 750. Of
course, “[a]gencies . . . have expertise and experience in administering their
statutes that no court can properly ignore.” Judulang, 565 U.S. at 53
here that hurts, not helps, the FDA. That’s because experience and expertise
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[A]n agency’s “experience and expertise” presumably enable
the agency to provide the required explanation, but they do not
substitute for the explanation, any more than an expert
witness’s credentials substitute for the substantive
requirements applicable to the expert’s testimony under
[Federal Rule of Evidence] 702. The requirement of
explanation presumes the expertise and experience of the
agency and still demands an adequate explanation in the
CS Wind Viet. Co., Ltd. v. United States, 832 F.3d 1367
, 1377 (Fed. Cir. 2016)
The FDA did not meet its obligation. Its statement on marketing plans
is conclusory, unsupported, and thus wholly insufficient. See, e.g., United
Techs. Corp. v. U.S. Dep’t of Def., 601 F.3d 557
, 562 (D.C. Cir. 2010) (“We
do not defer to the agency’s conclusory or unsupported suppositions.”
(quotation omitted)); Texas v. Biden, 10 F.4th at 556 (collecting cases).2 This
“omission alone [likely] renders [the FDA’s] decision arbitrary and
capricious.” Regents, 140 S. Ct. at 1913.
The FDA also failed to reasonably consider Triton’s legitimate
reliance interests. Between the Deeming Rule’s effective date and the
deadline for PMTAs, the FDA held public meetings and issued guidance on
The FDA’s failure to meaningfully consider Triton’s marketing plan is even more
unreasonable because part of Triton’s plan was endorsed by a former FDA commissioner.
See Statement from FDA Commissioner Scott Gottlieb, M.D., On Proposed New Steps to
Protect Youth by Preventing Access to Flavored Tobacco Products and Banning Menthol
in Cigarettes (Nov. 15, 2018) (“The changes I seek would protect kids by having all flavored
ENDS products (other than tobacco, mint and menthol flavors or non-flavored products)
sold in age-restricted, in-person locations and, if sold online, under heightened practices
for age verification.”); ibid. (calling some of Triton’s proposed marketing restrictions
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how e-cigarette manufacturers could get premarket authorization. In its
“final guidance,” the FDA stated that it did not “expect” that tobacco
manufacturers would need to conduct long-term studies to support their
PMTA. See, e.g., A.73–74; A.92; see also Nicopure Labs, LLC v. FDA, 944
, 282 (D.C. Cir. 2019) (“The FDA has expressed willingness to
accept scientific literature reviews instead of commissioned studies in
support of e-cigarette applications in appropriate circumstances.”). The
FDA’s expectation did not deviate in its Proposed Rule issued before the
Order or the Final Rule issued a couple weeks after the Order. See Final Rule,
86 Fed. Reg. at 55,387 (“FDA does not expect that long-term clinical studies
will need to be conducted for each PMTA; instead, it expects that it should
be able to rely on other valid scientific evidence to evaluate some PMTAs.”);
Proposed Rule, 84 Fed. Reg. at 50,619 (similar). Many e-cigarette companies
relied on the FDA’s repeated insistence that it did “not expect that
applicants will have to conduct long-term studies to support an application”
and did not perform or submit such evidence. A.74.
Then the FDA “pull[ed] a surprise switcheroo on regulated entities.”
Env’t Integrity Project v. EPA, 425 F.3d 992
, 996 (D.C. Cir. 2005) (Sentelle,
J.); accord Azar v. Allina Health Servs., 139 S. Ct. 1804
, 1810 (2019) (citing
the “surprise switcheroo” doctrine). Almost a year after the PMTA
deadline, the FDA issued its first marketing denial orders for various flavored
e-cigarettes and announced that it required the very studies it originally
expected it didn’t need. See Press Release, FDA Denies Marketing
Applications for About 55,000 Flavored E-Cigarette Products for Failing to
Provide Evidence They Appropriately Protect Public Health (Aug. 26, 2021).
It explained: “[T]he evidence of benefits to adult smokers for such products
would likely be in the form of a randomized controlled trial or longitudinal
cohort study, although the agency does not foreclose the possibility that other
types of evidence could be adequate if sufficiently robust and reliable” and
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performed over time. Ibid.
About two weeks later, the FDA maintained its
long-term-study requirement in the Order denying Triton premarket
authorization. See A.49; A.37 (materially identical language to Press Release).
Despite the radical difference, the FDA never mentioned, let alone
reasonably considered, whether e-cigarette manufacturers, like Triton,
could’ve reasonably relied on the FDA’s prior meetings and guidance.
The law requires more. “When an agency changes course, . . . it must
be cognizant that longstanding policies may have engendered serious reliance
interests that must be taken into account.” Regents, 140 S. Ct. at 1913
(quotation omitted). This does not mean that the FDA could not have
“determine[d], in the particular context before it, that other interests and
policy concerns outweigh any reliance interests. Making that difficult
decision was the agency’s job, but the agency failed to do it.” Id. at 1914. This
reinforces that the Order was likely arbitrary, capricious, or otherwise
The FDA insufficiently addressed alternatives to issuing the Order as
well. “[W]hen an agency rescinds [or alters] a prior policy[,] its reasoned
analysis must consider the alternatives that are within the ambit of the existing
policy.” Regents, 140 S. Ct. at 1913 (emphasis added) (quotation omitted).
While considering less disruptive alternatives, the FDA “was required to
assess whether there were reliance interests, determine whether they were
significant, and weigh any such interests against competing policy concerns.”
Id. at 1915. The FDA did not consider alternatives when changing from its
no-long-term-studies-necessary policy to its apparent long-term-studies-
And even if the FDA did, it failed to adequately assess reliance
interests. “So it would be impossible for the [Order] to properly weigh the
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relevant interests against competing policy concerns while considering
alternatives.” Texas v. Biden, 10 F.4th at 555.
The FDA also failed to adequately address Triton’s contention that
its reusable e-cigarette will reduce youth popularity compared to disposable
e-cigarettes. In January 2020 guidance, the FDA found that “youth
overwhelmingly prefer [disposable] ENDS products” because they “are easy
to conceal” and “can be used discreetly.” Enforcement Priorities for
Electronic Nicotine Delivery Systems and Other Deemed Products on the
Market Without Premarket Authorization; Guidance for Industry;
Availability, 85 Fed. Reg. 720
, 722 (Jan. 7, 2020). By contrast, the FDA found
in the Order that the type of system didn’t matter. Specifically, the FDA
found that “preference for device types and popularity of certain styles is
likely fluid and affected by the marketplace” and “that the removal of one
flavored product option prompted youth to migrate to another ENDS type
that offered the desired flavor option, underscoring the fundamental role of
flavor in driving appeal.” A.42.
Because its “new policy rest[ed] upon factual findings that contradict
those which underlay its prior policy,” the FDA had to provide “a more
detailed justification.” FCC v. Fox Television Stations, Inc., 556 U.S. 502
(2009). The FDA initially said that disposable e-cigarettes pose risks to
youths. When Triton said that concern doesn’t apply to its reusable e-
cigarettes, the FDA turned around and ignored its prior disposable-reusable
distinction. The FDA failed to adequately explain this change. This further
reinforces that the Order is likely arbitrary, capricious, or otherwise unlawful.
In announcing its rule that the manufacturer must provide long-term
studies to get approval for flavored e-cigarettes, the FDA resorted entirely to
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experience and expertise from reviewing applications other than Triton’s
PMTA. See A.45. In so doing, the FDA used “generalized language to
reject” Triton’s PMTA. See Siddiqui v. Holder, 670 F.3d 736
, 744 (7th Cir.
2012) (“Where, as here, the agency uses only generalized language to reject
the evidence, we cannot conclude that the decisions rest on proper
grounds.”). The consequence is that the FDA failed to reasonably consider
relevant issues that Triton brought up in its PMTA but that others might not
The FDA responded to much of Triton’s evidence for the first time
before our court. But “[i]t is a fundamental precept of administrative law that
an administrative agency cannot make its decision first and explain it later.”
Texas v. Biden, 10 F.4th at 558–59; see also Sherley v. Sebelius, 689 F.3d 776
784 (D.C. Cir. 2012) (Sentelle, C.J.) (“The failure to respond to comments
is significant only insofar as it demonstrates that the agency’s decision was
not based on a consideration of the relevant factors.” (quotation omitted));
Circus Circus Casinos, Inc. v. NLRB, 961 F.3d 469
, 476 (D.C. Cir. 2020)
(“New rules set through adjudication must meet the same standard of
reasonableness as notice and comment rulemaking.” (citing Allentown Mack
Sales & Serv., Inc. v. NLRB, 522 U.S. 359
, 374 (1998))).
For example, Triton urged the FDA to consider a 2015 survey of
20,000 e-cigarette users showing that nearly a third of the respondents
“started out using tobacco or menthol flavors” and then began using other
flavored e-cigarettes. A.296. Similarly, Triton asserted that flavored e-
cigarettes “could serve an important role in transitioning existing adult users
away from more harmful, combustible cigarette products.” Ibid.
But in the
Order, the FDA ignored the first point altogether and gave the second short
shrift. The FDA cannot cure those deficiencies by offering post hoc
rationalizations before our court. The very fact that the FDA perceived the
need to rehabilitate its Order with new and different arguments before our
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court underscores that the Order itself omitted a reasoned justification for
the agency’s action. This further confirms that the Order is likely arbitrary,
capricious, or otherwise unlawful.
The FDA makes four other counterarguments. They fail.
First, the FDA argues that its consistency “in reviewing other
manufacturers’ similar applications to market flavored e-cigarette products
is a hallmark of good government, not a reason to fault the agency.” Opp. at
23 (citation omitted). Consistency is great—but only when the agency is
consistently following the law. As the Supreme Court has made clear:
“Arbitrary agency action becomes no less so by simple dint of repetition.”
Judulang, 565 U.S. at 61
; see also ibid.
receives no special exemption from the APA.”).
Second, the FDA insists that the reasoning in the Order is consistent
with its prior guidance. According to the FDA, it didn’t make a rule requiring
long-term studies because it left open that “other types of evidence could be
adequate and will be evaluated on a case-by-case basis.” A.37.
But the administrative record makes clear that the FDA now requires
direct evidence through studies performed “over time” for flavored e-
cigarettes. A.46; see also, e.g., A.37 n.vi; A.47 n.xxiii. And it’s clear the FDA
expressly rejected reliance on evidence it approved of in its pre-Order
guidance, such as observational and consumer-perception studies. Compare
A.46–47, with A.99. The FDA did not have to completely flip flop for there
to be a change in position. Cf. Sw. Airlines Co. v. Fed. Energy Regul. Comm’n,
926 F.3d 851
, 856 (D.C. Cir. 2019) (“A full and rational explanation becomes
especially important when, as here, an agency elects to shift its policy or
depart from its typical manner of administering a program.” (quotation
omitted)). It is enough that the FDA’s guidance indicated long-term studies
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were likely unnecessary, while the FDA’s Order at the very least created a
strong presumption that such evidence is required.
Plus, if we accepted the FDA’s current position that it did not
acknowledge a change in policy in the Order, then the Order would obviously
be arbitrary and capricious. That’s because “[w]hen an agency changes its
existing position, it . . . must at least display awareness that it is changing
position and show that there are good reasons for the new policy.” Encino
Motorcars, LLC v. Navarro, 136 S. Ct. 2117
, 2125–26 (2016) (quotation
omitted); see also id. at 2126
(explaining that an “unexplained inconsistency
in agency policy is a reason for holding an [action] to be an arbitrary and
capricious change from agency practice” (quotation omitted)); Fox, 556 U.S.
(“[T]he requirement that an agency provide reasoned explanation for
its action would ordinarily demand that it display awareness that it is
changing position. An agency may not . . . depart from a prior policy sub
silentio.”). It would be impossible for the FDA to display awareness that it
was changing position if it believed it wasn’t.
Third, the FDA argues that Triton should not have relied on the
agency’s pre-Order guidance. This is because, the FDA claims, 21 U.S.C.
§ 387j(c)(5) “directs FDA to make that finding based on ‘clinical
investigations by experts qualified by training and experience to evaluate the
tobacco product’ or other ‘valid scientific evidence’ that FDA determines is
sufficient.” Opp. at 19; see also id. at 20 (The “2019 guidance does not and
could not relax the statute’s requirements.”). Of course, an agency cannot
issue guidance on the meaning of a statute, encourage its regulated entities to
rely on the guidance, and then blame the statute for pulling the rug out from
under the entities. And in any event, the FDA mischaracterizes § 387j(c)(5).
Paragraph (5) does not require the FDA to base all of its appropriate-for-the-
protection-of-the-public-health findings on long-term studies; instead, it
requires the FDA to base its decision on “well-controlled investigations”
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“when appropriate” and provides that those investigations “may include 1 or
more clinical investigations.” 21 U.S.C. § 387j(c)(5)(A) (emphases added).
And the consideration of other “valid scientific evidence” is likewise
discretionary. See id. § 387j(c)(5)(B) (“may authorize”). The FDA’s “final
guidance” reflected its “expect[ation]” that, at the time, it would not deem
it “appropriate” to base its decision on long-term studies. A.74; A.92. The
guidance also stated that the FDA would consider the type of evidence Triton
presented “valid scientific evidence.” So of course, the statute might have
permitted the FDA to demand the evidence it ultimately did. But it does not
follow that the statute required the FDA to jettison the guidance it previously
offered regulated entities.
Fourth and last, the FDA argues that Triton’s reliance interests
shouldn’t matter because Triton has been breaking the law and the FDA’s
non-enforcement was entirely discretionary. Regents squarely forecloses this
argument. There, the Department of Homeland Security (“DHS”) tried to
rescind the Deferred Action for Childhood Arrivals (“DACA”) program
because of “the Attorney General’s conclusion that DACA was unlawful.”
Regents, 140 S. Ct. at 1910. The United States argued that justified ignoring
potential reliance interests. Id. at 1913–14. The Supreme Court rejected that
argument. Ibid. The Court instead required reasonable consideration of the
relevant issues and the “important aspects of the problem.” Id. at 1910
(quotation omitted). That was because, the Court explained, “deciding how
best to address a finding of illegality moving forward can involve important
policy choices.” Ibid. The same is true here. The FDA was free to make that
policy choice, but it had to address Triton’s reliance interests in a reasonable
and reasonably explained decision.
For these reasons, Triton has shown a likelihood of success based on
its APA challenge. So this critical factor favors granting a stay. We therefore
need not address Triton’s argument that the FDA violated the Due Process
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Clause for not giving “fair warning” of its change in position on what
evidence would be required in its PMTA.
Next, irreparable injury. Triton alleges that because of the Order, it
“has stopped production of all of its flavored ENDS products, representing
90 percent of its annual revenue, thereby requiring the company to make
plans to lay off its employees within approximately two weeks and
threatening the company’s very existence.” Stay Mot. at 21; see also A.15–16
(Declaration of Triton’s General Manager). The FDA does not contest that
Triton’s alleged injury is irreparable for two independent reasons.
First, we’ve explained that “substantial financial injury” may be “sufficient
to show irreparable injury.” Texas v. EPA, 829 F.3d 405
, 433 (5th Cir. 2016).
Triton’s alleged financial injury “threatens the very existence of [its]
business.” Id. at 434
. Even assuming the financial costs are recoverable, this
suffices to show irreparable injury. See id. at 434 n.41
costs may constitute irreparable harm where the loss threatens the very
existence of the movant’s business.” (quotation omitted)).
Second, the costs are likely unrecoverable. “Indeed, complying with
[an agency order] later held invalid almost always produces the irreparable
harm of nonrecoverable compliance costs.” Id. at 433
The FDA does not contend that Triton has an avenue to recover costs from
complying with the Order. That’s probably because federal agencies
generally enjoy sovereign immunity for any monetary damages. See, e.g.,
Alabama-Coushatta Tribe of Texas v. United States, 757 F.3d 484
, 488 (5th Cir.
2014); Louisiana v. United States, 948 F.3d 317
, 320 (5th Cir. 2020); Muniz-
Muniz v. U.S. Border Patrol, 741 F.3d 668
, 671 (6th Cir. 2013) (“Sovereign
immunity extends to agencies of the United States.” (quotation omitted)).
Case: 21-60766 Document: 00516068813 Page: 17 Date Filed: 10/26/2021
At bottom, Triton’s lack of a “guarantee of eventual recovery” is another
reason that its alleged harm is irreparable. Alabama Ass’n of Realtors v. Dep’t
of Health & Hum. Servs., 141 S. Ct. 2485
, 2489 (2021).
The FDA makes no developed argument contesting irreparable harm.
See Opp. at 11, 13 (mentioning “irreparable injury” in passing). So such
arguments are forfeited. See, e.g., DeVoss v. Sw. Airlines Co., 903 F.3d 487
490 n.1 (5th Cir. 2018) (concluding that an argument was “forfeited”
because it wasn’t “structured”); Texas v. EPA, 829 F.3d at 435 (“Because
EPA offers nothing beyond this cursory comment, it has waived any
argument about the scope of the stay.”).
In these circumstances, given Triton’s uncontested allegations of
injury and the FDA’s failure to make a developed argument challenging this
factor, we conclude that Triton has met its burden of showing irreparable
harm. Thus, the two most critical factors favor granting a stay.
Now, the balance of harms and public interest.
The balance of the harms favors a stay. We’ve explained that “the
maintenance of the status quo is an important consideration in granting a
stay.” Barber v. Bryant, 833 F.3d 510
, 511 (5th Cir. 2016) (quotation omitted).
And staying the Order will preserve the status quo ante. Cf. Turning Point
Brands, Inc. v. FDA, No. 21-3855, ECF No. 19 at 9–10 (6th Cir. Oct. 8, 2021)
(FDA letter rescinding a marketing denial order and stating the “FDA has
no intention of initiating an enforcement action against any of your tobacco
products identified in” the relevant PMTA). “Given the great likelihood that
[Triton] will ultimately succeed on the merits, combined with the
undeniable, irreparable harm that [the Order] would inflict on” Triton and
the FDA’s failure to make a developed argument on this factor, we conclude,
Case: 21-60766 Document: 00516068813 Page: 18 Date Filed: 10/26/2021
in these circumstances, “that the balance of harms weighs in favor of”
Triton. Tex. Democratic Party v. Abbott, 961 F.3d 389
, 412 (5th Cir. 2020).
The public-interest factor is at worst neutral. The “public interest is
in having governmental agencies abide by the federal laws that govern their
existence and operations.” Texas v. Biden, 10 F.4th at 559 (quotation
omitted). “And ‘there is generally no public interest in the perpetuation of
unlawful agency action.’” Id. at 560 (alteration omitted) (quoting League of
Women Voters of U.S. v. Newby, 838 F.3d 1
, 12 (D.C. Cir. 2016)). Although
the FDA fails to argue this factor, amici curiae do. They argue that the public
interest cuts against a stay because continued sale of flavored e-cigarettes will
endanger the youth much more than it might help adults. “But our system
does not permit agencies to act unlawfully even in pursuit of desirable ends.”
Alabama Ass’n of Realtors, 141 S. Ct. at 2490. So we conclude that this factor
is at best neutral, or, in all events, outweighed by the three other factors
favoring a stay.
Finally, the FDA argues that Triton requests relief we cannot give.
We have no authority, says the FDA, to permit Triton to continue marketing
and selling the products denied in the Order. But again, the APA says
otherwise. Under 5 U.S.C. § 705, we may, under certain “conditions[,] . . .
and to the extent necessary to prevent irreparable injury, . . . issue all
necessary and appropriate process to postpone the effective date of an agency
action or to preserve status or rights pending conclusion of the review
The immigration context is instructive. Consider an alien that is
unlawfully present in the United States. Suppose the Government attempts
to remove the alien. Then the alien argues that he should not be removed
because he deserves asylum, and he asks us to stay the removal pending our
Case: 21-60766 Document: 00516068813 Page: 19 Date Filed: 10/26/2021
review of his petition. Under the FDA’s logic, we couldn’t do anything. After
all, we couldn’t order the Board of Immigration Appeals to grant the alien
asylum or otherwise adjust his immigration status to make his presence
lawful. But of course, we could grant a stay of the removal, giving the alien
interim relief. See generally Tesfamichael v. Gonzales, 411 F.3d 169
2005) (granting a stay of removal pending the court of appeals’ consideration
of the party’s petition for review); see also Nken, 556 U.S. at 429
seeking a stay of removal pending adjudication of a petition for review does
not ask for a coercive order against the Government, but rather for the
temporary setting aside of the source of the Government’s authority to
remove. Although such a stay acts to bar Executive Branch officials from
removing the applicant from the country, it does so by returning to the status
quo—the state of affairs before the removal order was entered.” (quotation
Triton’s request is not materially different. It merely seeks to preserve
the status quo ante, before the FDA issued the Order. In other words, “the
relief sought here would simply suspend administrative alteration of the status
quo.” Nken, 556 U.S. at 430 n.1. So we reject the FDA’s argument that we
lack authority to grant a stay that provides interim relief.
* * *
Three factors—including the two most critical—favor granting a stay,
while one factor is at worst neutral. Triton has thus met its burden. Contrary
to the FDA’s suggestion, we have the authority to give Triton relief pending
review. For the foregoing reasons, Triton’s motion for a stay pending review
of its petition is GRANTED.