On August 19, 2026, the U.S. Court of Appeals for the Fifth Circuit issued a published opinion granting petitions for review in seven consolidated cases, vacating FDA’s Premarket Tobacco Product Application (PMTA) marketing denial orders (MDOs) for each manufacturer petitioner’s electronic nicotine delivery system (ENDS) products, and remanding the PMTAs back to the agency for further proceedings. The consolidated cases included the following manufacturers and associated retailers: NicQuid, L.L.C.; Wood Creek Vapory; Breeze Smoke, L.L.C.; Texas Wholesale; Vertigo Vapor, L.L.C. d/b/a Baton Vapor; Max & Zach’s Vapor Shops Inc.; Lead by Sales, L.L.C. d/b/a White Cloud Cigarettes; JP-MAXX, L.L.C. d/b/a Jail Puff Max; Vapermate, L.L.C.; Vape Away, L.L.C.; Elite Brothers, L.L.C.; Clouds Vapors, L.L.C.; and American Vapor Company, L.L.C.
The decision is significant because it enforced a core administrative law principle: whenever an agency develops and adopts a generally applicable regulatory obligation, it should do so pursuant to notice-and-comment rulemaking requirements instead of internally or through informal adjudications (in this case, during PMTA reviews). Specifically, the court found that FDA formulated its “comparative-efficacy standard” for flavored ENDS behind closed doors or during PMTA reviews without actually basing the standard on a case-by-case review of the data and evidence contained in those applications. While the court did not hold that FDA is prohibited from considering comparative evidence in PMTA reviews, it held that FDA cannot adopt and impose a binding, across-the-board evidentiary standard without following the required APA notice-and-comment process.
Background: PMTAs and Comparative Efficacy for Flavored ENDS
Under the Family Smoking Prevention and Tobacco Control Act, new tobacco products may not be marketed without FDA authorization. FDA must deny a PMTA unless the applicant demonstrates that the product is “appropriate for the protection of the public health” (APPH). For ENDS products, that standard requires FDA to weigh population-wide risks and benefits, including the likelihood that non-users, particularly youth, will initiate tobacco use and the likelihood that existing tobacco users will stop using combustible products.
In denying the applications at issue, instead of reviewing the entire contents of each PMTA and weighing all of the data and evidence contained therein, FDA focused on the absence of comparative efficacy data in the form of randomized controlled trials, longitudinal cohort studies, or other robust evidence comparing the adult switching or cigarette-reduction benefits of non-tobacco flavored versus tobacco-flavored ENDS products. That evidentiary approach is what the Fifth Circuit described as FDA’s “comparative-efficacy standard.” Under that standard, FDA was required to deny marketing authorization if a PMTA did not contain such evidence. The question before the court therefore was not whether FDA may consider comparative evidence as part of the PMTA public-health analysis; rather, the central procedural question was whether FDA could apply that standard as a binding rule across PMTA adjudications without first giving the ENDS industry formal notice and an opportunity to comment on the standard before it was applied.
How the Issues Were Narrowed
The opinion arrived after several important appellate decisions had narrowed the field of arguments available to PMTA applicants challenging their MDOs. The Supreme Court’s decision in FDA v. Wages & White Lion Investments, L.L.C. foreclosed the argument that FDA unlawfully changed position from prior FDA guidance when requiring comparative-efficacy data in PMTAs for certain non-tobacco flavored ENDS products. The Fifth Circuit’s recent decision in VDX Distro, Inc. v. FDA further rejected the argument that the comparative-efficacy standard is a “tobacco product standard” under the Tobacco Control Act and should have been adopted through that statute’s own notice-and-comment procedures for such standards.
But those decisions did not decide the distinct APA question here. The Fifth Circuit emphasized that both decisions had reserved whether FDA’s comparative-efficacy standard required APA notice-and-comment rulemaking. The NicQuid panel took up that reserved issue and held that the standard is a substantive rule that could not be adopted through informal adjudication.
The Court’s APA Holding
The APA generally requires that a rule—which is designed to implement a statute and will be applied prospectively to regulated entities—be adopted only after the agency gives potentially regulated entities notice of the proposed rule and an opportunity to submit written comments, which the agency must then adequately consider before issuing a final rule. These procedural protections ensure that those who will be subject to the rule are able to fully participate in its development.
The court held that FDA violated the APA by developing internally or using informal adjudication (i.e., the PMTA reviews) to apply the comparative-efficacy standard in a manner that looks more like a binding rule or regulation—i.e., it gives agency staff no discretion but to deny a PMTA if such evidence is missing, applies prospectively to an unbounded class of applicants, and in practice has resulted in a de facto ban of non-tobacco flavored ENDS. In the panel’s view, the practical effect of the standard, not FDA’s label for it, controlled the analysis.
The court focused on several indicators of binding effect. It emphasized the scale of FDA’s PMTA program, including evidence that FDA had issued marketing denial orders for more than 1.2 million flavored ENDS products, and had authorized only a small number of ENDS products overall. The court also pointed to FDA internal memoranda and the consistent denial of applications lacking comparative-efficacy evidence as support for the conclusion that the standard constrained agency reviewers rather than merely guiding discretionary case-by-case review of each PMTA.
The panel also rejected FDA’s reliance on the general principle that agencies may choose between rulemaking and individualized adjudication to develop rules. Agencies may develop policy through adjudication when the need for flexibility demands it—e.g., a new, unforeseen issue arises, when agency experience in a field is limited, or when the problem is too fact-specific for a general rule. The Fifth Circuit concluded those rationales did not fit here. FDA’s standard was not derived from the facts of a particular adjudication and then applied by analogy to future PMTAs; rather, the court viewed it as a hard-and-fast evidentiary rule developed internally and then applied without exception through PMTA denials, regardless of other data and evidence contained in each application.
The distinction between more formal rulemaking procedures and informal adjudication also mattered. The court reasoned that FDA’s MDOs are individual licensing denials, a form of informal adjudication, which did not allow the wider ENDS industry to participate and provide input in real-time. Because informal adjudication lacks the procedural protections of notice-and-comment rulemaking or other types of formal adjudication (e.g., public hearings and testimony), the court held that FDA could not use it as the vehicle for adopting a substantive rule with broad prospective effect.
What the Decision Does Not Decide
Importantly, the decision is procedural. The Fifth Circuit did not strike down FDA’s comparative-efficacy standard on the merits, require FDA to authorize any product, or eliminate FDA’s authority to consider youth initiation risk, adult switching benefits, or comparative product evidence in its review of PMTAs. The court resolved the petitions here on APA procedural grounds and did not reach other legal arguments made by the petitioners, such as that FDA acted arbitrarily and capriciously when it applied the comparative-efficacy standard to these particular PMTAs or that FDA unlawfully asserted jurisdiction over certain petitioners’ zero-nicotine products.
Looking Ahead
The court’s vacatur and remand do not authorize marketing of the products. They return the consolidated matters to FDA for further proceedings consistent with the opinion. On remand, FDA may reconsider the comparative-efficacy standard, adopt it through APA-compliant procedures, or take another lawful course. Because the litigation remains active, the decision should be read with that posture in mind. For the petitioners, the opinion is a significant procedural victory. More broadly, it reinforces that FDA’s PMTA authority remains subject to the APA’s basic safeguards: when the agency adopts standards that operate broadly and carry the practical force of law, it must do so through transparent procedures that give affected parties notice and an opportunity to participate.
Keller and Heckman is pleased to have represented the petitioners in this important challenge and will continue to monitor FDA’s response on remand and related developments affecting PMTA review.