[00:00:00] Speaker 00: Taste number 22-1076, Fontan US LLC Petitioner versus United States Food and Drug Administration. [00:00:09] Speaker 00: Mr. Prince for the petitioner, Mr. Coyle for the respondent. [00:00:18] Speaker 02: Good morning, Mr. Prince. [00:00:20] Speaker 01: Everybody ready? [00:00:21] Speaker 01: Good morning, Your Honor. [00:00:27] Speaker 04: Thank you, and may it please the court. [00:00:29] Speaker 04: FDA denied Fondam's e-cigarette applications in this case for an alleged failure to satisfy the tobacco control acts appropriate for the protection of public health standards. [00:00:39] Speaker 04: But FDA notably never concluded that Fondam's products pose any actual public health problem, notwithstanding that Fondam's tobacco flavored product had been on the market for many years. [00:00:49] Speaker 04: Instead, they denied the application for alleged data gaps [00:00:54] Speaker 04: But those data gaps were solely the result of FDA's flawed review process. [00:00:58] Speaker 04: Before getting to the merits, though, I would like to briefly address the elephant in the room, which is the effect of the courts' or FDA's denial of supervisory review, late breaking last Friday. [00:01:10] Speaker 04: We filed a new petition for review on Monday, which the court graciously acted on quickly and consolidated with our original petition for review. [00:01:19] Speaker 04: We apologize for the last-minute filings, of course, but it was done out of necessity. [00:01:24] Speaker 04: But the upshot of that flurry of activity is my understanding, as the parties now agree, that the prematurity concerns raised by the government in its response brief will result. [00:01:36] Speaker 04: And that is consistent with this court's past precedents in Bahamas County and Columbia Falls Aluminum, where a very similar situation arose [00:01:46] Speaker 04: and the court consolidated to resolve any immaturity concerns. [00:01:51] Speaker 02: As to the impact of the supervisory... Mr. Prince, you don't concede that there was a prematurity problem with your first petition, do you? [00:02:00] Speaker 04: We do not, Your Honor. [00:02:01] Speaker 04: We stand by the arguments we raised in our reply brief. [00:02:06] Speaker 04: Having now done a very deep dive on these cases, I think a very interesting law review article could be written about the interaction [00:02:12] Speaker 04: of the incurably premature doctrine, the Supreme Court's recent repeated cautioning not to read jurisdictional requirements into the statute where Congress has not put them in there, and this Court's recent clarification that finality in many cases is in fact non-jurisdictional. [00:02:30] Speaker 04: But I don't think the Court needs to address that in this case. [00:02:34] Speaker 04: because either we're right or the government's right. [00:02:36] Speaker 04: So this court has jurisdiction to review the marketing denial order. [00:02:40] Speaker 04: And in fact, a very similar situation came up in a case I'll provide, which we haven't provided to you yet. [00:02:47] Speaker 04: It's Collins V National Transportation Safety Board 351 F3 1246. [00:02:53] Speaker 04: from 2003, where the court was faced with competing petitions for review in an incurably premature situation. [00:03:01] Speaker 04: They said, we just don't even need to decide this, because either way, we have jurisdiction. [00:03:05] Speaker 04: And we would submit the same rule. [00:03:06] Speaker 02: It does seem that it would be helpful to have a rule, though, for other companies in a similar position with the FDA. [00:03:12] Speaker 02: Maybe that's not your concern. [00:03:15] Speaker 04: I don't dispute that. [00:03:16] Speaker 04: And protective petitions are filed in the circumstance frequently, because I think the law is fairly unclear on it. [00:03:23] Speaker 04: But again, it is a fairly complicated issue and requires resolving a bunch of kind of late breaking principles of law. [00:03:31] Speaker 04: So I would submit you don't need to do it in this case. [00:03:34] Speaker 04: As to the impact of the supervisory review denial itself, in final view, it has no impact on this court's review of the merits under the Supreme Court's decision and locomotive engineers. [00:03:46] Speaker 04: Whereas here are requests to the agency if it can be considered reconsideration was focused on error in the underlying order [00:03:53] Speaker 04: The agency's order denying that request is unreviewable unless the agency's formal disposition is to modify the order. [00:04:03] Speaker 04: And that's true, the Supreme Court said, and this court has also said, even if the order refusing reconsideration discusses the merits of the claims at length. [00:04:11] Speaker 04: Here, all the agency did was decline to disturb its underlying order. [00:04:16] Speaker 04: The supervisor said, [00:04:19] Speaker 04: and thus deny your argument. [00:04:21] Speaker 04: So there was no reopening and issuing a new order in this case. [00:04:26] Speaker 04: It's unreal. [00:04:28] Speaker 04: Turning to the merits of the marketing denial order that actually is an issue in this case, I'd like to start, unless the court has different preference, with our structural arguments, which we believe caused FDA to simply misapply the statute. [00:04:42] Speaker 04: Simply put, FDA has ignored all of the advanced notice requirements that Congress put in place [00:04:48] Speaker 04: in the statute. [00:04:50] Speaker 04: Congress specifically set forth in 387JC the four criteria that FDA is to consider when evaluating an application, including whether the product is appropriate for the protection of the public health, and including whether it complies with manufacturing standards that FDA is obligated under the statute to promulgate. [00:05:10] Speaker 04: The delineation is important because Congress directed that specific problems be addressed in very specific ways, and the manufacturing prong [00:05:19] Speaker 04: is especially relevant here because I think it's undisputed in this case that FDA denied our application for manufacturing reasons. [00:05:27] Speaker 04: Deficiency two, deficiency six, these are literally in the heartland of what would normally be put in an FDA. [00:05:35] Speaker 05: Can I give you an interpretation of the statute and you tell me why it's wrong? [00:05:41] Speaker 05: You look at A and it says the FDA can do individual adjudications where they balance and they figure out [00:05:48] Speaker 05: this product been enough for public health, then B and D in particular allow the FDA to promulgate rules using notice and comment with regard to manufacturing tobacco product standards. [00:06:03] Speaker 05: And the benefit of doing that FDA is that when there is adjudication, which is going to focus on the balancing and a FDA won't even have to give an explanation if the tobacco product [00:06:17] Speaker 05: has violated one of the rules promulgated under B and D. So the FDA can do it one of two ways. [00:06:22] Speaker 05: They can either do it all under A and explain themselves, or they can promulgate under B and D. And then if B and D's rules are violated, when they apply A, all they have to say is, you didn't follow the rule that we promulgated under B and D. I hear that, Your Honor. [00:06:43] Speaker 04: I have a few responses. [00:06:44] Speaker 04: One is there's always overlap between the prongs in these cases. [00:06:48] Speaker 04: In Justice Scalia's opinion in Rad LAX, for example, there was undoubtedly overlap between the prongs. [00:06:53] Speaker 04: And what the court said is, look, [00:06:56] Speaker 04: when there's overlap and one of the provisions is very specific and Congress has sort of gone out of its way to articulate a process that needs to be honored. [00:07:05] Speaker 04: Here, the manufacturing provision in particular, it makes eminent sense that Congress would want manufacturers to have advanced notice of things like what they need to test and what documentation they need. [00:07:16] Speaker 04: That's why we have, the lack of that is why we have such a fundamentally broken FDA review process. [00:07:22] Speaker 04: But it would be very odd for Congress to have said, okay, you must obligate these manufacturing standards. [00:07:28] Speaker 04: By the way, you need to consult with technical experts when you do it. [00:07:32] Speaker 04: You need to give manufacturers grace periods to comply. [00:07:35] Speaker 04: All of these are to benefit manufacturers, not FDA. [00:07:38] Speaker 04: So I don't think the provision can be read as, you know, essentially conferring on FDA discretion to do what it thinks, right? [00:07:45] Speaker 04: It's avoiding procedural rights of manufacturers. [00:07:49] Speaker 03: So- Council, let me try a simpler. [00:07:53] Speaker 03: What, if anything, tell me, what did the FDA say about the methods used in or the facilities or controls used for the manufacturer itself? [00:08:08] Speaker 04: What does it say that that means, or what does it say? [00:08:12] Speaker 03: What in their decision did they say? [00:08:13] Speaker 03: You're saying they rested on, that inappropriately rested on B considerations when rendering a decision under A, right? [00:08:20] Speaker 03: So what did they say about B considerations? [00:08:23] Speaker 04: So for example, many of the efficiencies are based on the methods and the documentation we have to map out our product characteristics, the testing against those product characteristics. [00:08:38] Speaker 04: For example, environmental controls, the humidity and storage rooms. [00:08:42] Speaker 04: This is all within the heartland of manufacturing regulations. [00:08:45] Speaker 03: But it seems to me they faulted you time and time again. [00:08:50] Speaker 03: for failing to produce something that they wanted or maybe newly discovered that they wanted. [00:08:58] Speaker 03: Not for failure to comply with anything in B, but in failure to file information on which they could make a decision relating to B. What B is intended to do is set up the processes and procedures that you need to follow to get to a position where FDA can make a decision. [00:09:18] Speaker 04: I would point your honors to the medical device context in the same statute, which is what Congress modeled it. [00:09:24] Speaker 04: And there, FDA has hundreds of pages in the Federal Register describing what you need to do. [00:09:30] Speaker 04: You need to keep controls for environmental controls. [00:09:33] Speaker 04: You need to have various sort of processes and procedures for stability issues. [00:09:42] Speaker 04: We are supposed to know to do that so that FDA can then reach a decision based on the data that we know we have to collect. [00:09:48] Speaker 04: And I don't even read FDA's brief, by the way, to be opposing our views that, for example, deficiency two could be considered under beat. [00:09:57] Speaker 04: And I think FDA's argument is different. [00:09:59] Speaker 04: I think they conceded it. [00:10:01] Speaker 04: I think FDA's argument is different. [00:10:03] Speaker 04: Their argument, as I understand it, is notwithstanding the overlap, we're allowed to do it under the public health prong as long as it raises some conceivable public health issue. [00:10:12] Speaker 04: But there's two problems with that. [00:10:14] Speaker 04: The first problem is that manufacturing standards, Congress put right in the statute, also address public health issues. [00:10:19] Speaker 04: So there's a much more specific solution as to manufacturing for public health issues that Congress has told FDA to use. [00:10:29] Speaker 04: And again, I mean, to me this case is indistinguishable from RAD-LAX. [00:10:34] Speaker 04: There's an overlap. [00:10:35] Speaker 04: The agency would prefer to use one criteria, but the other [00:10:38] Speaker 04: a criteria that's more specific. [00:10:40] Speaker 03: Well, I think you're correct about the agency's view of the relationship between B and A, whether you agree with it or not. [00:10:50] Speaker 03: That, I think, is the position they've taken. [00:10:55] Speaker 03: It may be that straightforward reading makes it even easier. [00:11:02] Speaker 04: I was just going to say that if that is the agency's view, I submit that they had misapplied the law and the orders need to be vacated for the agency to apply the correct legal standard. [00:11:13] Speaker 04: And if it thinks some of these on reflection are not actually manufacturing issues, it's obligated under the APA to clearly explain why. [00:11:20] Speaker 02: I think one of the... [00:11:23] Speaker 02: I'm sympathetic to your argument that there are these four different reasons that they can deny the approval of an application. [00:11:32] Speaker 02: And so you can't necessarily put one of these prongs into another one. [00:11:37] Speaker 02: But I think one of the difficult things about this statute is the approval authority allows FDA to require applications to have fairly specific content. [00:11:51] Speaker 02: right, to provide information on a whole host of different subjects. [00:11:56] Speaker 02: And so I think you need to have some account of how that content maps on to the requirement to have tobacco product standards or manufacturing standards. [00:12:06] Speaker 02: I think that that inner relationship is very important to understand. [00:12:12] Speaker 04: I think so, too. [00:12:14] Speaker 04: It's not a perfect overlap, but I think the application criteria, which Congress does spell out, actually map on pretty closely to the denial grounds. [00:12:22] Speaker 04: There's, I believe, one that maybe could fit into multiple categories. [00:12:25] Speaker 04: But otherwise, it's like literally using the same length, right? [00:12:28] Speaker 04: Submit information about the methods and controls for manufacturing. [00:12:31] Speaker 04: And then there's a separate version of the statute that says, OK, FDA, you can deny it when the methods and controls don't conform to your manufacturing regulations. [00:12:41] Speaker 04: FDA did point to that relationship in their brief, but I just don't think it works. [00:12:46] Speaker 04: It's creating superfluidity, as Justice Scalia said. [00:12:51] Speaker 02: Well, so if they don't do standards, and yet their applications include things about, say, the methods and content of these products, how are they supposed to evaluate the things that are required in the application in the absence of standards? [00:13:10] Speaker 04: Well, I don't think [00:13:11] Speaker 04: I don't think they can do that consistent with the statute. [00:13:14] Speaker 04: I think if they're going to deny an application for manufacturing issues, things that would fall within B, they need to first promulgate a standard because by definition the statute says the ground for denial is a failure to comply with the regulation. [00:13:30] Speaker 04: The product standards argument is admittedly a little bit more difficult for us because that already is phrased in more permissive terms. [00:13:38] Speaker 04: But let's suppose there is no statutory violation. [00:13:42] Speaker 04: Disagree with us on the statutory violation. [00:13:44] Speaker 04: FDA still would need to give very clear, as this were to said, reasonably certain to a good faith regulated entity, notice of what the manufacturing requirements are. [00:13:55] Speaker 04: And we submit to not have [00:13:58] Speaker 04: to not have reasonably certain notice of any of these requirements. [00:14:01] Speaker 04: And if you disagree with us on that, I would just invite the court to compare the high level of generality of the deficiency letter, which is frankly difficult for me to even understand in parts, with the clarity of the rejection letter, where FDA is imposing very specific requirements for very specific kinds of testing, telling us exactly the kind of data we would need in many circumstances. [00:14:23] Speaker 02: So how does it work in practice? [00:14:25] Speaker 02: I mean, the FDA says that a manufacturer can file as many amendments as it chooses to an application in order to comply with a deficiency letter. [00:14:37] Speaker 02: So how does that work in practice for the ultimate denial? [00:14:42] Speaker 04: Yes, Your Honor. [00:14:43] Speaker 04: So I think it helps to take a step back and look at the other regulatory regimes that FDA is implementing, because they work very similar, where FDA is applying [00:14:52] Speaker 04: what is admittedly a broad statutory standard. [00:14:55] Speaker 04: And normally, you're having meetings with the agency. [00:14:57] Speaker 04: There are many, many rounds of these kind of deficiency letters. [00:15:01] Speaker 04: The agency publishes product-specific drug guidance, device guidance. [00:15:05] Speaker 04: These are the type of environmental controls you need. [00:15:08] Speaker 04: So the regulated entities sort of know what they're aiming at. [00:15:11] Speaker 04: And then you're meeting with the agency throughout a year-long process. [00:15:15] Speaker 04: Is this study design acceptable? [00:15:16] Speaker 04: Is it not? [00:15:19] Speaker 04: I submit here that FDA basically implemented for tobacco a regulatory regime without doing any of the prerequisite work to put in place a regulatory regime. [00:15:28] Speaker 04: But nonetheless, that's what it did. [00:15:29] Speaker 04: And the solution is that FDA needs to do the same kind of iterative process to make sure that regulated entities are getting fair notice. [00:15:38] Speaker 04: Really, all we needed here was the opportunity to respond to the rejection letter. [00:15:42] Speaker 04: And we could resolve the vast majority of these things. [00:15:45] Speaker 04: It's just information that you didn't provide this one data point, and we need it. [00:15:50] Speaker 04: That's all we needed to do. [00:15:52] Speaker 02: I'd like to talk about deficiency five, about the flavored products. [00:15:58] Speaker 02: So with respect to deficiency five, I mean, the reasoning that the FDA gives for that deficiency is very similar to the type of reasoning that this court approved in prohibition juice. [00:16:11] Speaker 02: And so I'm wondering how your challenge to Deficiency Five, how would you distinguish that from the type of reasoning that this court upheld in Prohibition Juice? [00:16:23] Speaker 04: I actually think Prohibition Juice is a nice comparison because the standard the FDA reported to be applying there was different than the one it's purporting to apply here, which kind of shows the shifting standards and the lack of [00:16:34] Speaker 04: Notice that Prohibition Juice was fundamentally about whether FDA is allowed to do the sort of comparative comparison. [00:16:42] Speaker 04: Do you have to show not only that your product has a health benefit, but that it has a health benefit over tobacco? [00:16:50] Speaker 04: We're not disputing sort of that aspect of it. [00:16:54] Speaker 04: And we submitted longitudinal studies, unlike the Prohibition Juice folks, which we think demonstrate that. [00:17:02] Speaker 04: But here FDA is sort of doing, it's a different kind of challenge. [00:17:06] Speaker 04: Our challenge here is grounded in cases like Pearson and City of Vernon, which the agency has set up a standard where it wants something quantitative in the numerator. [00:17:15] Speaker 04: What is your benefits to adults? [00:17:17] Speaker 04: But the denominator is significant risk to youth, which nobody knows what it means. [00:17:22] Speaker 04: It's impossible to actually do any comparison to tell whether you overcome the significant risk to youth, because it means whatever the agency wants it to mean. [00:17:31] Speaker 04: And this order seems to say, [00:17:34] Speaker 04: You can't do the comparison yourself, but we know the only thing that will overcome it is a device access restriction, which nothing in the history of the tobacco control regulation has ever been required. [00:17:46] Speaker 04: And FDA admits is novel and rare in this record. [00:17:50] Speaker 04: The agency can't just have a standard that is, I know what I see. [00:17:53] Speaker 04: The court's held that squarely, and we submit that's effectively what they've imposed in deficiency five. [00:17:59] Speaker 04: I see I'm over time. [00:18:01] Speaker 05: I've got a couple of questions. [00:18:03] Speaker 05: If I can direct you to deficiency four without saying anything that's under seal, what would you say to this argument? [00:18:23] Speaker 05: If you're going to use data from a previous product or new product, you have to tell the FDA [00:18:34] Speaker 05: why every new aspect of the new product is immaterial. [00:18:42] Speaker 05: And with regard to one aspect of the new product, you did it. [00:18:49] Speaker 04: So we understood the request to justify the product changes that we reasonably thought could lead to a problem. [00:18:59] Speaker 04: And that's what we did to the agency. [00:19:01] Speaker 04: The agency knew about that one specific product design that you're talking about. [00:19:06] Speaker 04: It didn't specifically ask us a question about it. [00:19:08] Speaker 04: We personally did not think it was the [00:19:11] Speaker 04: The company did not think it personally was relevant, and so it didn't address it. [00:19:18] Speaker 04: But it's fine if the agency is concerned about that. [00:19:22] Speaker 04: All it needed to do is ask us a specific question about it, and we would have told the agency. [00:19:28] Speaker 05: And I'm pretty sympathetic to the last thing that you said. [00:19:31] Speaker 05: If I were running the agency, I have no doubt I would have done that. [00:19:37] Speaker 05: question is whether a P a statute here require it and what they said in the deficiency letter is provide evidence to show. [00:19:45] Speaker 05: It changes. [00:19:51] Speaker 05: Do not. [00:19:54] Speaker 05: Changes for and you didn't dress every change. [00:20:02] Speaker 04: All I can say, Your Honor, is we addressed the changes that we thought we were relevant and- What would you say to the argument that they didn't ask you to address the changes you thought were relevant? [00:20:11] Speaker 05: They asked you to address all the changes. [00:20:15] Speaker 04: I would say the agency needs to speak so that we know with reasonable certainty what the requirements are. [00:20:24] Speaker 04: And that's not what we took the required to mean. [00:20:27] Speaker 04: I would also say, Your Honor, that that deficiency alone [00:20:31] Speaker 05: is not a support marketing denial. [00:20:34] Speaker 05: So that's my last question. [00:20:35] Speaker 05: What's your would assume I with the FDA on the merits of deficiency for and I'm not with them on anything else. [00:20:44] Speaker 05: What's tell me why efficiency for isn't enough for us to deny your [00:20:50] Speaker 04: Because the agency has not reported his claim that's an independent ground for one again it needs to speak with I think with reasonable ascertainability that that's what it was intended to do and that's not with the decision maker. [00:21:03] Speaker 04: It's also just fundamentally inconsistent with the test that the agency purports to be applying when it's doing a public health analysis, which is to weigh all the risks and the benefits contained in the application. [00:21:17] Speaker 04: These are just statements, FDAs. [00:21:18] Speaker 04: Consider the application as a whole. [00:21:20] Speaker 04: FDA declines to assign specific weight to any evidence. [00:21:25] Speaker 04: So if mere uncertainty about that one product characteristic, which by the way, FDA never actually says is likely to happen. [00:21:32] Speaker 04: They just say, oh, we don't know. [00:21:33] Speaker 04: It's a little unclear. [00:21:34] Speaker 04: They would have to say and explain why that outweighs all of the numerous benefits that our products have that are stated elsewhere in the record. [00:21:43] Speaker 04: And it hasn't done that. [00:21:44] Speaker 04: I'll also note, Your Honor, that I think deficiency four, at least in terms [00:21:49] Speaker 04: of what we're required to do to manage product changes and document and test against would also typically be considered a manufacturing regulation issue under FDA's other regulatory. [00:21:59] Speaker 05: You said one thing toward the beginning there where you said the FDA never said this was an independent ground, but they said would be needed. [00:22:08] Speaker 05: They said this is needed. [00:22:10] Speaker 04: Sounds like would be needed to resolve the would be needed to resolve the deficiency. [00:22:15] Speaker 04: I do not read them to be saying that the deficiency itself is is an independent graph and we're not saying by the way that FDA it's inconceivable that FDA could ever have an order where there are multiple you know if your product blows up in somebody's face the FDA could clearly say like yes this this deficiency alone is so serious that it outweighs any possible benefit but you know [00:22:37] Speaker 04: uncertainty about a tiny little thing that changed in our product, it's a real stretch that the decision maker would have completed. [00:22:45] Speaker 02: So as a court, are we supposed to sort through that if we think some deficiencies are reasonable and supported by the statute and some are not? [00:22:53] Speaker 02: I mean, how do we decide? [00:22:54] Speaker 04: I don't think that's your role just in generally under normal administrative law, but also in particular where the agency is applying a balancing test. [00:23:01] Speaker 04: That comes up in all sorts of other areas of the law, sentencing issues. [00:23:05] Speaker 04: I mean, if the agency has misconstrued the statute, [00:23:08] Speaker 04: by factors Congress didn't want it to consider needs to go back to the agency to redo. [00:23:13] Speaker 02: Do you think that that the denial letter contains at least a separate distinction between the flavored products and tobacco flavored product. [00:23:23] Speaker 04: I do, and I think the agency's best arguments for independent ground would be on deficiency five in part because they can say, hey, we looked at this, we rejected it in prohibitions use, why wouldn't we reject it here? [00:23:35] Speaker 04: So that's FDA's strongest argument. [00:23:38] Speaker 04: I would submit that FDA has said you need to conduct a product-specific balancing of the risks and the benefits, and our record of benefits is not the same as in prohibitions. [00:23:49] Speaker 03: Counsel, a moment ago you referred to [00:23:51] Speaker 03: the many benefits shown in the record. [00:23:55] Speaker 03: Remind me just briefly, what are you referring to? [00:23:58] Speaker 04: The major benefit is the significant reduction in harmful and potentially harmful compounds relative to combusted cigarettes, which is sort of the gold standard. [00:24:06] Speaker 03: How does that depend upon switching smokers from combustible to vaping? [00:24:15] Speaker 04: Well, yes, I suppose there does. [00:24:18] Speaker 03: And the agency said that's not documented in a sufficient way to amount to anything. [00:24:25] Speaker 03: But your off-hand references to all these benefits is one of the very things being disputed. [00:24:30] Speaker 04: I don't agree that the agency said that, Your Honor. [00:24:33] Speaker 04: I think they said specifically with regard to flavored products. [00:24:36] Speaker 04: We hadn't demonstrated sufficient switching effects. [00:24:39] Speaker 03: Well, they certainly said that. [00:24:41] Speaker 03: And they did not say something comparable, are you telling me, with regard to non-flavored [00:24:45] Speaker 03: I do. [00:24:47] Speaker 03: I do not believe so. [00:24:52] Speaker 02: Okay. [00:24:55] Speaker 02: Thank you. [00:24:55] Speaker 02: We'll give you some time. [00:24:56] Speaker 05: Thank you. [00:25:07] Speaker 02: Morning, Mr Quail. [00:25:09] Speaker 06: Good morning and please support Eric Quail for the government. [00:25:14] Speaker 06: For six independent reasons, FDA reasonably determined that quantum didn't meet the statutory public health standard to market its e-cigarettes, many of which come in fruit and dessert flavors attractive to kids. [00:25:29] Speaker 06: As FDA explained, despite the deficiency letter and the industry guidance, quantum provided inadequate information about its product's health risks. [00:25:38] Speaker 06: This included information about emissions of substances like lead [00:25:43] Speaker 06: formaldehyde and nicotine, the risk of burn injuries, and the level of toxins and bacteria in the products over their shelf life. [00:25:53] Speaker 06: Before jumping to the merits, I would like to briefly address the effect of the decision on the supervisor review request. [00:26:02] Speaker 06: We've requested the opportunity to provide supplemental briefing on that issue. [00:26:08] Speaker 06: We got the other side's 28-J letter on Monday evening. [00:26:13] Speaker 06: And so we would request the opportunity to, uh, to provide the court with additional briefing. [00:26:19] Speaker 06: We do think that decisions properly before the court and can be considered at this state. [00:26:26] Speaker 06: What would be, what would be the point of the supplemental to explain what the effects of that decision are on the issues before the court? [00:26:35] Speaker 06: Are there any? [00:26:36] Speaker 06: Yes, we do think there are other than the finality question. [00:26:39] Speaker 06: Yes, besides the question, for example, the questions about whether the grounds are independent. [00:26:46] Speaker 06: There are seven, I believe, separate pieces of support for that in a supplemental decision. [00:26:53] Speaker 06: We think it was clear from the original decision, but there's any doubt will be eliminated with the supplemental decision. [00:26:59] Speaker 06: There are also some additional arguments that they have made, for example, in their [00:27:05] Speaker 06: their letter earlier this month, referencing the Office of Special Counsel findings to see how FDA passed on that that would require the court to consider the supplemental decision. [00:27:17] Speaker 02: Would it work if if the first denial letter was incurably premature? [00:27:23] Speaker 02: I mean, how would this work in practice? [00:27:24] Speaker 02: I mean, the statute says that a party has 30 days to seek judicial review from the denial of an application. [00:27:32] Speaker 02: And then, so in this case, you know, the quantum sought, you know, filed a petition for review within 30 days, and then it sought an administrative appeal after that 30 days, right? [00:27:45] Speaker 02: So how does this work? [00:27:46] Speaker 02: I mean, would the 30-day timing for seeking a denial of an application be told if there was administrative appeal pending? [00:27:54] Speaker 02: Is there some time limit [00:27:56] Speaker 02: for filing an appeal. [00:27:57] Speaker 02: I mean, the FDA's process is entirely informal. [00:28:01] Speaker 02: Perhaps there's some guidance indicating some timelines for filing an appeal. [00:28:05] Speaker 02: We were unable to locate any. [00:28:07] Speaker 02: I mean, just how would this work in practice? [00:28:10] Speaker 02: I mean, if you could just toll indefinitely, then the 30-day timeline in the statute would become irrelevant for filing a petition from the original denial. [00:28:20] Speaker 06: I'd like to press my answer by saying I don't think the court needs to decide that in this case. [00:28:24] Speaker 06: I think we've agreed that the new petition is properly presented here. [00:28:27] Speaker 02: Right, but your position is that the first petition was incurably premature. [00:28:33] Speaker 02: And I presume the agency may take that position in later cases. [00:28:37] Speaker 02: And so I just want to understand how the agency thinks this would work, given that the appeal process is not based in the statute. [00:28:44] Speaker 02: I'm not aware of any source of regulatory or even guidance [00:28:49] Speaker 02: that sets out the appeal process. [00:28:50] Speaker 02: I mean, how do those two things, I mean, how does the appeal process interact with judicial review, which is clearly specified in the statute? [00:28:59] Speaker 06: I analogy to the Hobbs Act, a filing of a petition for reconsideration before the agency tolls the statutory time to come to court and file a petition for review. [00:29:10] Speaker 06: But we think that would also apply in this circumstance as well. [00:29:15] Speaker 02: a person have to file the administrative appeal within 30 days? [00:29:20] Speaker 02: Could it be at any time after 30 days? [00:29:22] Speaker 06: I think if the petition for the reconsideration request were filed after 30 days, and there were also not a petition for review in this court within the 30 day period, then there might be a timing problem with coming to court. [00:29:36] Speaker 06: Afterwards, it might depend on whether the decision on reconsideration [00:29:40] Speaker 06: resulted in a new denial order or simply, uh, simply, you know, reaffirming. [00:29:47] Speaker 06: But your answer just kind of reveals all the uncertainties for regulated entities in pursuing any of these paths, which is why I think the court, this might not be the case, uh, that it would be the best vehicle to decide that question. [00:30:00] Speaker 03: Think of it this way and tell me what you think. [00:30:03] Speaker 03: If the, if the first petition is filed from an order that is apparently final, [00:30:11] Speaker 03: And then someone seeks reconsideration of that order, essentially making the first order non-final. [00:30:18] Speaker 03: We're waiting for the final order. [00:30:20] Speaker 03: Whatever the final order says, whether it addresses the merits or not, that would then be the final matter subject to a new petition, and the new petition would be added. [00:30:31] Speaker 03: Yes, we agree. [00:30:33] Speaker 03: Thank you. [00:30:35] Speaker 02: How does that intersect though with the Supreme Court's ICC versus Brotherhood of Locomotive Engineers case? [00:30:43] Speaker 06: Again, we would like the opportunity to brief this. [00:30:45] Speaker 06: We just got this letter on Monday night. [00:30:47] Speaker 06: And I'm not prepared to concede today that Brotherhood of Locomotive Engineers even applies to this circumstance. [00:30:53] Speaker 06: But even under Brotherhood of Locomotive Engineers, there is a distinction between a request for reconsideration that just rehashes the prior arguments and says the agency got it wrong. [00:31:03] Speaker 06: the denial of that is not typically subject to judicial review, and a petition for review that presents either new evidence or changed circumstances, the denial of which is subject to judicial review. [00:31:16] Speaker 06: And here, there are multiple examples of new evidence that FONTA presented in the agency reconsideration request, like the Office of Special Counsel report that just came out last month. [00:31:28] Speaker 06: That was never presented in the original one. [00:31:30] Speaker 06: That's something that [00:31:31] Speaker 06: that the agency just had a chance to look at now. [00:31:33] Speaker 06: And so we do think even under locomotive engineers, that would be subject to review. [00:31:40] Speaker 03: You're saying the record's different. [00:31:42] Speaker 03: Exactly. [00:31:42] Speaker 03: First petition dealt with one record. [00:31:44] Speaker 03: The second petition was somewhat different. [00:31:46] Speaker 03: Correct. [00:31:47] Speaker 05: Under your theory, what would stop the FDA from just sitting on the reconsideration request in order to preclude judicial review? [00:31:58] Speaker 06: So two responses, first of all, [00:32:00] Speaker 06: There's no requirement that a petitioner seek reconsideration before FDA and many, many manufacturers have come straight to the Court of Appeals without seeking reconsideration. [00:32:13] Speaker 06: And there's also no suggestion, no allegation that FDA is anything but diligent here in resolving the administrative appeal. [00:32:22] Speaker 05: With respect, I think I interpret you to say nothing. [00:32:26] Speaker 05: nothing would stop the FDA from sitting on the motion, on the reconsideration request in order to preclude judicial. [00:32:33] Speaker 06: I think the agencies, there's no, in the agency regulation, there is no time limit, for example, limiting the agency's ability to decide, requiring it to decide within a particular time. [00:32:46] Speaker 06: But there's also nothing to prevent an applicant who is frustrated with the pace from withdrawing the application for supervisory review if they so choose to do so. [00:32:56] Speaker 03: So we've had situations where, and this is typically after a rematch, but it would be the same idea. [00:33:05] Speaker 03: The agency doesn't do anything, and the party then seeks under the All Writs Act an order imposing a deadline, an immediate deadline on the agency. [00:33:19] Speaker 03: And I think the cases will show that it takes about 18 months before we will agree that the agency [00:33:26] Speaker 03: to sluggish. [00:33:28] Speaker 06: I'm not familiar with that again. [00:33:29] Speaker 06: We got this on this letter on Monday night. [00:33:31] Speaker 06: We would like the opportunity if the court is interested in this to present supplemental briefing on the issue. [00:33:35] Speaker 06: If I can turn to the merits and based on where the questioning went earlier, I'd like to start with the statutory argument. [00:33:43] Speaker 03: I have a question about that. [00:33:46] Speaker 03: It's the same question I was pursuing with your opposing counsel. [00:33:51] Speaker 03: What did the agency say [00:33:53] Speaker 03: to the effect that the methods or controls used for manufacturer, et cetera, et cetera, do not conform to the requirements of 387 FP. [00:34:05] Speaker 06: I don't believe that that was the ground for the basis of the denial order here. [00:34:09] Speaker 03: The denial order here is the agency said nothing about that, correct? [00:34:12] Speaker 03: Correct. [00:34:13] Speaker 03: The agency determined that this application said they didn't provide enough information for you to make a determination under A. That's exactly right. [00:34:23] Speaker 06: I also want to add that the Act requires FDA to adjudicate marketing applications. [00:34:28] Speaker 06: The Act says that FDA is to consider a broad range of information when doing so, including about the product's health risks and manufacturing processes. [00:34:36] Speaker 06: And the Act requires FDA to deny an application when the manufacturer doesn't make [00:34:42] Speaker 06: required public health showing under the appropriate for the protection of the public health. [00:34:48] Speaker 02: So maybe you can speak to that. [00:34:50] Speaker 02: What is the relationship between the content that's required on the application and how the FDA measures whether it's appropriate for the protection of public [00:35:03] Speaker 02: So in a situation where the FDA has not promulgated tobacco product standards and has not promulgated manufacturing standards, what do they do with this information on the application? [00:35:14] Speaker 02: I mean, what is it fair to ask manufacturers to demonstrate in these applications in the absence of any notice about what the standards are? [00:35:25] Speaker 06: The statute itself puts the burden on manufacturers to make the showing that their products [00:35:30] Speaker 06: are appropriate for the protection of the public health, meaning the benefits outweigh the risks, considering the risks and benefits to the population as a whole. [00:35:39] Speaker 06: And the agency has, in this case, explained how each of the shortcomings in Fontum's application affect the public health in the end of the day. [00:35:48] Speaker 06: The emission of substances like lead, formaldehyde, nicotine, [00:35:52] Speaker 02: Those are very granular things. [00:35:54] Speaker 02: So the statute for the adequate for the protection of public health sets out this risk benefit analysis standard. [00:36:04] Speaker 02: But it also suggests that there are other prongs for denial where an application fails to meet a manufacturing standard or a tobacco product standard. [00:36:14] Speaker 02: So I guess I'm not sure why FDA thinks that it can effectively impose those standards under the broader public health umbrella. [00:36:24] Speaker 06: The agency is not imposing those standards under the broader public health umbrella. [00:36:28] Speaker 06: We agree with Judge Walker's questions earlier that manufacturing requirements and product standards [00:36:34] Speaker 06: you know, potentially allow FDA to deny an application solely for that ground, irrespective of the effects of that particular product on the public health, are two separate prongs of the statute that FDA analyzes? [00:36:46] Speaker 02: Well, they are two separate prongs, but I mean, the statute is very specific. [00:36:50] Speaker 02: I mean, it doesn't seem, I mean, I know FDA denies that they're in fact doing this, but if they, through the public health prong, say you haven't met a certain standard of emissions, [00:37:02] Speaker 02: or other controls. [00:37:03] Speaker 02: I don't want to mention any of the sealed material. [00:37:06] Speaker 02: At what point can they do that just under the general public health prong, as opposed to through the notice that's required by promulgating a standard? [00:37:16] Speaker 02: I mean, the statute is very granular in what it requires for FDA rulemaking. [00:37:23] Speaker 02: There are very specific requirements for the type of notice that must be given, for the length of comment periods. [00:37:29] Speaker 02: for consultation with the expert advisory committee, for delayed effective dates of standards. [00:37:37] Speaker 02: And that is very specific guidance from Congress about what FDA is supposed to do. [00:37:43] Speaker 02: So it does seem difficult then to impose those standards effectively through the public health prop. [00:37:49] Speaker 06: The true response is first one about the specific denial here and then about the effect of the statute more generally. [00:37:55] Speaker 06: The shortcomings here were that Antim didn't provide adequate information about its product's health risk to allow FDA to make the ultimate public health finding under the standard. [00:38:06] Speaker 02: But that information is being judged against some type of implicit standard that FDA is considering, right? [00:38:13] Speaker 02: You're saying the information is inadequate for us to evaluate against some [00:38:20] Speaker 02: standard, a standard that has not been stated in advance through rulemaking that Congress required? [00:38:27] Speaker 06: It is not here. [00:38:28] Speaker 06: The defects here were not that the application failed to show that the products met a particular manufacturing requirement or product standard. [00:38:38] Speaker 06: For example, the microbial stability data didn't exceed a certain level. [00:38:43] Speaker 06: That was not what the deficiency was. [00:38:45] Speaker 06: The deficiency was [00:38:46] Speaker 06: content didn't provide the required information so that FDA could evaluate it at all and conclude that the risks were not outweighed by the benefit. [00:38:53] Speaker 02: Yeah, but that information goes to some specific way that the FDA is going to evaluate the benefits and risks. [00:39:02] Speaker 02: So you can say it's a failure of information, but it's failure of information to make a determination under some standard, right? [00:39:12] Speaker 02: Because the information is not just information in general, it's information to evaluate something specific. [00:39:17] Speaker 06: And the specific is that [00:39:19] Speaker 06: Statutory requirement that the product be appropriate for the protection of the public health considering the risks and benefits. [00:39:25] Speaker 06: And it was relevant to the product's risks, the product's health risks to its users. [00:39:31] Speaker 06: The other response more generally, talking about the statute, [00:39:35] Speaker 06: This provision still had independent effect. [00:39:38] Speaker 06: And I'd point out that the pre-market adjudication process applies only to new tobacco products, that is products that were not on the market in 2007. [00:39:46] Speaker 06: If FDA wants to impose a requirement on a product that's not a new tobacco product, like a cigarette that was on the market in 2007, then manufacturing requirements or product standards would be the way to do that. [00:39:59] Speaker 06: And then they're also just the focus of the two provisions is different. [00:40:03] Speaker 06: One is looking at the product specific effects on the population as a whole. [00:40:08] Speaker 06: That's what adjudication is. [00:40:10] Speaker 06: Whereas the manufacturing requirements and product standards are looking at the effects of imposing a requirement on a broader class of [00:40:18] Speaker 02: Is there any limitation on what the FDA can consider under the public health prong? [00:40:24] Speaker 02: Is it just sort of anything it thinks may be relevant to the risks and benefits of these products? [00:40:29] Speaker 06: I think the FDA has to explain how the particular information is relevant, and FDA did so here. [00:40:35] Speaker 06: It talked about why the level of microbes, the level of toxins and bacteria can change in a product over shelf life and how those can cause cancer and respiratory problems, for example. [00:40:45] Speaker 06: So I think FTA has to connect it to the bottom line as a public health standard. [00:40:50] Speaker 06: But the statute itself tells FTA that there's a broad range of information that it should be considering in doing that. [00:40:55] Speaker 02: Has FTA promulgated any tobacco product standards or manufacturing standards under the statute? [00:41:01] Speaker 06: I believe there is a, I don't know the latest status, but there is a product standard that would prohibit menthol in cigarettes, menthol flavor in cigarettes. [00:41:13] Speaker 06: I don't know the status of that. [00:41:15] Speaker 06: The manufacturing requirement, there's a proposed rule on the unified agenda. [00:41:19] Speaker 06: It's been pending with OMB since May of last year. [00:41:22] Speaker 06: I don't know any more information than that. [00:41:25] Speaker 02: So just two? [00:41:27] Speaker 06: I don't know. [00:41:27] Speaker 06: There might be more product standards. [00:41:32] Speaker 06: I don't know one way or the other. [00:41:35] Speaker 05: Can I ask about, well, first I want to ask what the FDA meant in the order when it used the word need [00:41:44] Speaker 05: So for example, it describes information about the temperature and humidity in the clean room as needed. [00:41:53] Speaker 05: Did the FDA mean that information is so essential that it will deny quantum's quest without it? [00:42:07] Speaker 05: Or did it mean that information would be maybe not essential, but really helpful to [00:42:15] Speaker 05: the FDA's consideration of Fontam's request. [00:42:19] Speaker 06: I believe each deficiency on its own is independent, so all of the information under a particular deficiency would be needed in order to meet the standard, is what FDA said here. [00:42:32] Speaker 05: I think you can also see that from the... So Fontam says that if that's the case, that would be arbitrary and capricious in itself to say that just simply leaving out the temperature of clean rooms [00:42:46] Speaker 05: It would justify denying on them application. [00:42:50] Speaker 06: That was not the sole basis of efficiency. [00:42:53] Speaker 06: It was not just temperature and humidity. [00:42:55] Speaker 06: It's the entirety of deficiency. [00:42:56] Speaker 06: Three is the independent ground. [00:42:58] Speaker 06: that included information about accreditation certificates for testing. [00:43:02] Speaker 05: So when I think I follow, I'm following and I think what you're saying is when the word needed was used with regard to the temperature in the control room, FDA didn't mean it's that information is needed in order for Fontam's application to be granted. [00:43:17] Speaker 05: It may be meant it was needed in order for deficiency three to be satisfied. [00:43:25] Speaker 06: I don't think that's right. [00:43:26] Speaker 06: I think the, [00:43:28] Speaker 06: Market itself says that that information would be needed in a subsequent application, not that. [00:43:35] Speaker 06: I'm going to make a stronger showing on other in other areas to overcome that. [00:43:39] Speaker 05: Then now we're back to my question, which quantum raises this brief. [00:43:43] Speaker 05: Wouldn't it be arbitrary and capricious for the FDA to say. [00:43:48] Speaker 05: The information about temperature in the room is so important to us that it's essential and we're gonna deny your application if you don't give it to us. [00:43:57] Speaker 05: That sounds, wouldn't that be arbitrary and cautious? [00:43:59] Speaker 05: I don't think it necessarily would be, but that's not the question here. [00:44:02] Speaker 06: There's more to deficiency three includes. [00:44:04] Speaker 05: Right, no, I know, but I'm making it hypothetical. [00:44:06] Speaker 06: I don't think that would be unreasonable. [00:44:08] Speaker 06: Temperature can affect the growth of all sorts of substances like bacteria, fungi, mold, but that's not the sole basis. [00:44:14] Speaker 06: I would also point your honor to the, [00:44:16] Speaker 06: technical project lead review pages 858 and 859 FDA explained that without each piece of piece of information FDA could not reach the bottom line public health conclusion. [00:44:31] Speaker 01: Those are internal documents right? [00:44:33] Speaker 06: I think they can properly be considered [00:44:36] Speaker 06: For a couple of reasons, I'm pointing to JA 816. [00:44:40] Speaker 06: This is the first page of the technical project lead memo. [00:44:44] Speaker 06: It's issued on the same date that the marketing denial order is. [00:44:48] Speaker 06: And at the bottom, the decision maker for the marketing denial order signs the technical project lead memorandum saying he concurs with the recommendation and the basis for the recommendation. [00:44:59] Speaker 06: So I think it's properly considered as part of the agency's decision here. [00:45:02] Speaker 06: It's not a post hoc rationalization. [00:45:04] Speaker 06: It was decided the same day. [00:45:06] Speaker 06: uh, as simultaneous with the marketing. [00:45:10] Speaker 03: Council, are you familiar with the GMP regulations for drugs? [00:45:14] Speaker 06: I'm not familiar, your honor. [00:45:17] Speaker 05: I apologize. [00:45:20] Speaker 05: Assume that I agree with you about the merits of deficiency for assume I disagree with you about everything else. [00:45:29] Speaker 05: uh, all the other deficiencies. [00:45:31] Speaker 05: What's your best argument for why we should agree with the FDA when it said efficiency for is alone enough to justify denying the app. [00:45:45] Speaker 06: The two record places I would point you to our day 8 58 and 8 59 where FDA explained that without [00:45:55] Speaker 06: that information in deficiency for FDA could not conclude that the products were appropriate for the protection of the public health, which is the ultimate statutory requirements that FDA has to find before it can grant. [00:46:08] Speaker 06: And second, I point your honor to JA 880 to 83, which includes the would-be-needed language that your honor was referring to. [00:46:17] Speaker 06: And then if I could ask. [00:46:18] Speaker 06: I'm sorry, one more. [00:46:20] Speaker 06: We also think that the [00:46:21] Speaker 06: Decision on the supervisor review request makes this crystal clear. [00:46:26] Speaker 06: Pages three, four, eight, nine, 10. [00:46:30] Speaker 06: Or not eight, three, four, nine, 10, 12, 17, and 23 and 24. [00:46:35] Speaker 06: I think seven separate places there. [00:46:38] Speaker 06: It's clear that the grounds are in this. [00:46:40] Speaker 02: It's not surprising since that was done after the segregation. [00:46:44] Speaker 02: So where that was precisely the issue that wasn't in the initial order. [00:46:50] Speaker 02: It's not surprising. [00:46:52] Speaker 06: But the agency considered the arguments there and said, you know what? [00:46:55] Speaker 06: We think you're wrong. [00:46:56] Speaker 06: But even if you were right, we would come to the same bottom line decision. [00:47:01] Speaker 05: Let me ask about deficiency too on the merits. [00:47:07] Speaker 05: J617 is under seal. [00:47:10] Speaker 05: I'm just going to talk about paragraph. [00:47:12] Speaker 05: I'm just going to say it's the second full paragraph. [00:47:26] Speaker 05: 617. [00:47:42] Speaker 06: Second full paragraph for the second. [00:47:44] Speaker 05: The second over starts with although okay. [00:47:49] Speaker 05: Why isn't. [00:47:53] Speaker 05: Good enough to justify. [00:47:56] Speaker 05: that phantoms test, tests reflect the use patterns of the puff. [00:48:07] Speaker 06: There's a distinction between the length of puff and the number of puffs. [00:48:12] Speaker 06: The deficiency that FDA found was on the number of, the justification for the number of puffs used. [00:48:18] Speaker 06: The paragraph you're referring to is about puff duration. [00:48:21] Speaker 05: It looks like number of puffs. [00:48:28] Speaker 05: Oh, I see. [00:48:29] Speaker 05: I think I see. [00:48:32] Speaker 05: I'll take a look at it more closely, but fair enough. [00:48:34] Speaker 05: And then my last question is on footnote three in the denial letter, which is public. [00:48:50] Speaker 05: It's JA 475. [00:48:55] Speaker 05: And FONTA makes this argument pretty clearly in its briefing. [00:49:02] Speaker 05: It says, here you are just categorically imposing a requirement for device access restrictions when it comes to flavored e-cigarettes. [00:49:15] Speaker 05: And you can't just impose a categorical rule like that when absent knows a comment. [00:49:23] Speaker 05: when you say you're doing a balancing test and you've never told us about this catapult before. [00:49:30] Speaker 05: So do you agree with Fontum that you are imposing an absolute requirement for flavor e-cigs to have device access? [00:49:40] Speaker 05: No, we do not. [00:49:41] Speaker 05: Why is why does footnote three not say? [00:49:44] Speaker 06: We're talking solely on the risk side of the equation here. [00:49:47] Speaker 06: This is a risk benefit balancing test and we're only looking at the risks to you. [00:49:51] Speaker 06: And what FDA is saying is that it's got a lot of experience with the traditional sales access and marketing restrictions, like requiring somebody to show ID when they buy one of these products. [00:50:04] Speaker 06: And FDA's experience shows that that's not good enough to lower the risk because people get these from friends. [00:50:11] Speaker 06: Kids get these from their friends, not from buying them at convenience stores. [00:50:15] Speaker 06: And so the risks are going to remain high if those traditional types of [00:50:21] Speaker 06: of sales access and marketing restrictions are the only thing that's proposed. [00:50:25] Speaker 06: And there may be a way to lower those risks if you have device access restrictions, like requiring a fingerprint to unlock it the way you unlock your phone. [00:50:34] Speaker 06: But FDA considers those in each separate application, and FDA has enacted a requirement to have those. [00:50:42] Speaker 06: But that's just the risk side. [00:50:44] Speaker 06: Then FDA takes a look at the benefits, potential benefits to adult smokers and says, [00:50:49] Speaker 06: If you've only got the traditional sales access and marketing restrictions, you're going to have a high risk. [00:50:56] Speaker 06: So you need to show an even higher benefit to adult smokers. [00:51:00] Speaker 06: And that's where FDA looked at the specific evidence here and identified the shortcomings of each study that quantum submitted. [00:51:08] Speaker 06: The inadequate sample sizes, the mixed results, the lack of a showing that their products were going to be [00:51:17] Speaker 05: more beneficial to adult cigarette smokers than tobacco flavored. [00:51:21] Speaker 05: So would it be fair to say that unless Fontum can produce evidence that's never been produced before, that the benefit side is higher than we realized, then Fontum has to do a device access restriction. [00:51:37] Speaker 05: Otherwise, the risk side is always going to outweigh the risk side. [00:51:41] Speaker 06: FTA looks at each application individually. [00:51:44] Speaker 06: I don't think there is a blanket rule that would [00:51:47] Speaker 06: always require anything other than the benefits outweigh the risks. [00:51:54] Speaker 01: But FDA has never improved a flavored application, a flavored e-cigarette product. [00:52:00] Speaker 06: That's correct. [00:52:01] Speaker 06: There are still flavored applications pending with FDA. [00:52:04] Speaker 06: FDA takes a look at each of them individually, looks at the risks on one side, the benefits on the other. [00:52:08] Speaker 06: I do believe that there are attempts to provide the types [00:52:15] Speaker 06: robust and reliable evidence on the benefit side, and FDA is still considering those in each instance. [00:52:20] Speaker 06: They're considering applications that present randomized control trials and longitudinal cohort studies. [00:52:26] Speaker 06: There was none here. [00:52:26] Speaker 06: There was a, probably submitted a plan to conduct one of those types of studies and didn't provide any of the results or data. [00:52:34] Speaker 06: So FDA explained that that wasn't an issue. [00:52:40] Speaker 02: FDA explain you know so it's a general course has been to proceed as you said individually through adjudicating these applications I mean Congress gave FDA the authority to regulate tobacco products but but arguably the Tobacco Control Act is like is a very [00:52:58] Speaker 02: detailed and comprehensive negotiated deal between protecting public health and the interests of manufacturers. [00:53:06] Speaker 02: And the interest of manufacturers is largely reflected in all of the rulemaking requirements that are imposed on FDA. [00:53:16] Speaker 02: So if all of these tobacco [00:53:20] Speaker 02: product concerns are adjudicated through the general public health prong. [00:53:24] Speaker 02: I'm just wondering how that is consistent with this very careful grant of authority that Congress gave to the FDA. [00:53:33] Speaker 02: I mean, I think it's just sort of like stepping back. [00:53:35] Speaker 02: You know, I've read through the whole act carefully, and I do think that this general approach is hard to square with what Congress did here very clearly and plainly in the tobacco control [00:53:48] Speaker 06: I think the two provisions have independent effect. [00:53:52] Speaker 06: I talked about the new tobacco product versus not. [00:53:54] Speaker 06: I also agree with Judge Walker's questions earlier, which indicated that if FDA does go that rulemaking route, then it can deny an application solely for the failure to satisfy the particular rule without respect to the product's effects on the public health. [00:54:13] Speaker 06: So the truly independent basis. [00:54:16] Speaker 02: But that suggests that the rulemaking is just a convenience to FDA. [00:54:20] Speaker 02: But that's clearly not the only purpose of rulemaking. [00:54:23] Speaker 02: The primary purpose of rulemaking is to allow for public input, to provide notice, to provide some clear standards that entities can attempt to meet. [00:54:34] Speaker 02: And that's the main purpose of notice and comment rulemaking. [00:54:38] Speaker 02: Yeah, I agree with that. [00:54:40] Speaker 02: It's not a convenience to the agency. [00:54:42] Speaker 02: It's for the public and for private companies who are trying to market these products. [00:54:47] Speaker 06: It certainly is. [00:54:48] Speaker 06: But once the rule has gone through that, then the failure to comply with that rule would be an independently sufficient reason to deny an application. [00:54:57] Speaker 06: The public health standard is a separate ground to deny an application. [00:55:01] Speaker 06: You have to consider the risks and benefits to the whole population [00:55:07] Speaker 06: that would come from marketing that particular product. [00:55:10] Speaker 03: So your approach is to say, I guess, that the agency may proceed by adjudication rather than by regulation. [00:55:20] Speaker 06: Not only may, the act requires the agency to adjudicate marketing applications, and it requires the agency to deny an application if it doesn't make the decision. [00:55:30] Speaker 03: Well, that wouldn't work if the statute requires you to issue a regulation. [00:55:35] Speaker 03: which is what's being implied. [00:55:37] Speaker 06: They're separate forces of authority. [00:55:39] Speaker 06: I think there is still the requirement that the agency adjudicate marketing application. [00:55:45] Speaker 02: I mean, you say that they're separate, but they're also connected because some of the grounds for denial of an application turn on whether the application meets regulatory standards that the statute seems to assume FDA will promulgate. [00:56:02] Speaker 02: So I mean, they are connected. [00:56:03] Speaker 02: And the language of the content of the applications is phrased in terms almost identical, or in many cases, in fact identical, to the statutory provisions requiring FDA to do tobacco product standards and manufacturing standards. [00:56:19] Speaker 02: So there is, I mean, there is an adjudic, I mean, of course FDA has the ability to adjudicate these applications, but that authority is very much connected in the statute, arguably, to the requirement the rule make. [00:56:33] Speaker 06: There's certainly overlap. [00:56:34] Speaker 06: And that's because the way products are manufactured can have effects on the public health, on the health risks to users and the potential benefits. [00:56:42] Speaker 06: So there's certainly going to be some overlap. [00:56:45] Speaker 06: But we think the statute still requires FDA to decide these and to deny them when they don't make the bottom line statutory public health showing in the act. [00:57:01] Speaker ?: Thank you. [00:57:02] Speaker ?: Thank you. [00:57:26] Speaker 04: I think you're ours. [00:57:27] Speaker 04: I thought I would start with with the government's pointing out that the reconsideration or supervisory review denial address a memo from the special counsel's office regarding one of the letters under review. [00:57:42] Speaker 04: The Supreme Court in Locomotive Engineers said it's the formal disposition that matters of the agency order. [00:57:49] Speaker 04: You don't sort of read between the lines to see was the agency, the Supreme Court said, quote, in fact, doing reconsideration, it's the formal disposition. [00:57:59] Speaker 04: But I would note that even if the agency did affect limited reopening for that limited purpose, it would still be a mixed order that is almost entirely denying reconsideration and addressing that one specific new issue [00:58:11] Speaker 04: And under this court's precedence, I point you to USPSB, the Postal Regulatory Commission, 841, F3rd, 509. [00:58:18] Speaker 04: The part that's addressing the record that was before the agency before remains unreviewable. [00:58:26] Speaker 04: Even if that small little sliver is then subject to review in that case for abuse of discretion, we are not raising any challenge to the agency's consideration of the memo addressed in the special. [00:58:40] Speaker 04: But I think it's just irrelevant in this case. [00:58:44] Speaker 04: I understand why the agency wants to get supervisory review denial of it, because the agency actually did say that there are independent grounds for a decision. [00:58:53] Speaker 04: But even taking that on its own terms, it's entirely unexplained. [00:58:57] Speaker 04: They just assert it. [00:58:58] Speaker 04: They assert it seven times, but they never explain why that would be an independent ground, why it would be independently sufficient to tip the balancing test that the agency [00:59:08] Speaker 04: when it benefits the agency reports to be applying in order to discount benefits. [00:59:12] Speaker 04: But if it sees a flaw, then all of a sudden, you know, it's no longer balancing. [00:59:16] Speaker 04: I don't think the court should accept that rationale. [00:59:22] Speaker 04: Judge Walker, you were focused on deficiency four. [00:59:25] Speaker 04: Again, I submit that changes to product design should be set out in manufacturing regulations. [00:59:32] Speaker 04: So if you agree with us on that, I don't think you need to get to the issue that you were concerned about about whether that one document reported to give us notice for public health purposes. [00:59:45] Speaker 04: And just in terms of the structural argument that you were talking to my friend on the other side about, [00:59:52] Speaker 04: And Judge Ginsburg, you raised this earlier. [00:59:54] Speaker 04: I do not hear the government to be walking away from the argument that it is free to pick and choose between the manufacturing prong and the public health prong. [01:00:05] Speaker 04: And the case law is abundantly clear. [01:00:07] Speaker 04: A client can't do that in addition to Radlax. [01:00:10] Speaker 03: I don't think you said that. [01:00:11] Speaker 03: I think they're saying they're distinguishing between a violation of a manufacturing standard and a failure to provide information. [01:00:20] Speaker 04: But you're at the whole point of the manufacturing regulations as it's telling you the sort of information you need to collect. [01:00:26] Speaker 04: That is about processes and controls and requirements for documenting, for documenting conditions, for documenting the specifications of your product and testing against them to see if they deviate. [01:00:37] Speaker 04: the medical device regulations are just replete with all of these kind of requirements, which the FDA flushes out on a product-specific basis with guidance. [01:00:49] Speaker 04: And so if FDA had put those regulations in place and had appropriate guidance, we would have known, for example, to monitor the humidity in various rooms in our manufacturing facilities. [01:00:58] Speaker 04: But we didn't know until the denial. [01:01:03] Speaker 04: I understand the government to be saying it can pick and choose, and this court's already made clear a genus that FDA is not allowed to do that. [01:01:09] Speaker 03: Is it part of your case that the government, pardon, that the FDA was required and failed to issue regulations? [01:01:17] Speaker 04: Yes. [01:01:18] Speaker 04: I mean, if it was going to deny us for issues that properly fall within the manufacturing problem within B, it was required to prongate regulations. [01:01:28] Speaker 03: Or should we remand this case for them to issue their regulations? [01:01:32] Speaker 04: You should vacate and remand this case. [01:01:35] Speaker 03: For that purpose? [01:01:36] Speaker 03: So they can hold it until they get regulations out? [01:01:40] Speaker 04: I think it is sufficient for you to vacate and remand this case saying that the agency applied the incorrect legal standard and considered factors that Congress did not allow it to consider. [01:01:52] Speaker 04: The agency on remand can then decide, do we want to try and deny quantum on manufacturing grounds again? [01:02:00] Speaker 04: which case it couldn't do it until it issued a manufacturing regulation, or if it's claiming to you here that these other grounds were truly independent, it could try and deny us on those grounds with proper reasoning that we would then be able to challenge in court as arbitrary and capricious. [01:02:16] Speaker 03: It would take a couple of years to get regulations. [01:02:21] Speaker 04: I will note that [01:02:22] Speaker 04: FDA has denied thousands of applications for e-cigarettes. [01:02:26] Speaker 04: And as far as I know, we are the only application where it purported to address these kind of manufacturing issues. [01:02:30] Speaker 04: So I don't think it's going to create a big problem in the sense that you might be worried about. [01:02:36] Speaker 05: Is product design same thing as the methods used in the manufacturer processing or packing product? [01:02:46] Speaker 04: Yes, design controls are embedded within the manufacturing provision. [01:02:51] Speaker 04: In fact, Congress specifically went to, FDA specifically went to Congress to have the ability to impose design controls added to the medical device provision. [01:03:00] Speaker 04: So now those provisions overlap. [01:03:02] Speaker 04: But yes, the sort of things your product needs to be able to do, the specifications, how you test against it are manufacturing. [01:03:11] Speaker 05: This sounds more like a product. [01:03:12] Speaker 05: stand. [01:03:13] Speaker 04: I think there, I think there, I think there is some overlap between those, but FDA didn't do either here. [01:03:19] Speaker 04: So don't really have an opportunity. [01:03:21] Speaker 04: I mean, the FDA admittedly can try and distinguish, put some meat on the bones of those two things and flesh it out with a reasoned decision, but we just don't have that. [01:03:31] Speaker 04: Thank you, Your Honor. [01:03:32] Speaker 04: I appreciate it. [01:03:33] Speaker 02: Thank you, Mr. Prince. [01:03:34] Speaker 02: The case is submitted.