The US Court of Appeals for the Fifth Circuit ruled FDA unlawfully rejected flavored e-cigarette applications. Photo credit: Katrin Bolovtsova, Pexels.
A federal appeals court has handed the US vaping industry one of its most consequential regulatory victories in years, ruling that the Food and Drug Administration (FDA) unlawfully applied a key evidentiary standard to reject flavored e-cigarette applications.
On August 19, the US Court of Appeals for the Fifth Circuit granted petitions brought by NicQuid and six other groups of vapor companies, vacated the FDA marketing denial orders at issue, and sent the cases back to the agency. The unanimous three-judge panel held that FDA's comparative-efficacy standard is a substantive rule that should have undergone the public notice-and-comment process required by the Administrative Procedure Act.
The decision does not strip FDA of its authority to weigh the benefits that flavored electronic nicotine delivery system (ENDS) products may provide to adult smokers against the risks they pose to young people. Nor does it require the agency to authorize NicQuid's products.
Instead, the ruling attacks the procedure FDA used to establish an evidentiary standard that has shaped decisions on a vast number of premarket tobacco product applications. "We hold that FDA's comparative efficacy standard amounts to a substantive rule," Judge Jerry E. Smith wrote for the panel, concluding that its adoption without notice and comment violated the APA.
The court directed FDA to reconsider the rule, adopt it through an APA-compliant process, or take other appropriate action on remand. The distinction could have implications that extend well beyond NicQuid.
The Fifth Circuit said FDA has issued marketing denial orders for more than 1.2 million flavored ENDS products after receiving applications for more than 6 million ENDS products. The court cited those numbers as evidence that comparative efficacy was functioning as a generally applicable rule rather than merely one consideration in individualized scientific reviews.
A rule developed behind closed doors
The comparative-efficacy standard emerged from FDA's effort to determine whether the potential benefits of flavored vaping products for adults who smoke outweigh the risks those products pose to youth.
Under the Tobacco Control Act, a new tobacco product must be found "appropriate for the protection of the public health" (APPH) before it receives marketing authorization. That determination requires FDA to weigh population-wide risks and benefits, including the likelihood that non-users will start using tobacco products and the likelihood that existing users will stop.
For flavored ENDS, however, the agency developed an approach under which applicants were expected to demonstrate that their products offered benefits to adult smokers beyond those of tobacco-flavored alternatives.
NicQuid submitted PMTAs in 2020 for products including Menthol Blend, Strawberry-Peach, Spearmint, and Sweet Leaf, as well as a zero-nicotine product. FDA denied the applications in May 2024, stating that the evidence was insufficient to show that the flavored products would provide adult benefits adequate to outweigh youth risks.
Among the missing evidence were randomized controlled trials, longitudinal cohort studies, or other evidence that could robustly compare switching or cigarette reduction among users of flavored products with users of tobacco-flavored products.
NicQuid's lawyers argued that what FDA characterized as case-by-case adjudication had become a binding evidentiary rule. At oral arguments in April, NicQuid attorney Eric P. Gotting of Keller and Heckman described the process in stark terms.
"All it has done is opened up this mass of applications and asked if there a comparative efficacy study," Gotting told the panel. "If the answer is no, you get an MDO. That is it."
The court ultimately reached a similar conclusion.
It said it was "implausible" that more than 1 million marketing denial orders could involve applications with materially indistinguishable facts. A more convincing interpretation of the record, the judges said, was that the process was a "check-the-box exercise" in which applications lacking the necessary comparative evidence were denied.
Internal FDA documents bolstered the manufacturers' case.
The administrative record included 2022 memoranda from then-Center for Tobacco Products director Brian King and FDA official Benjamin Apelberg regarding the agency's approach to menthol-flavored ENDS. The court also considered a 2021 memorandum, later rescinded, that an earlier Fifth Circuit panel said led to a review form focused on whether a PMTA included a randomized controlled trial or a longitudinal cohort study.
For the Fifth Circuit, those records showed that the policy was developed internally and prospectively, rather than arising from an individual adjudication. "Instead of originating in a specific adjudication or order," Smith wrote, "it is most plausible to say that the comparative efficacy standard was born in internal agency policymaking and was then publicly debuted in an adjudication rather than through notice-and-comment."
The panel was unusually emphatic in its conclusion. "The nominal process of adjudication cannot conceal or excuse the secretive development of a prospective policy," Smith wrote. "This is not a close call.”
Narrow ruling, broad consequences
The decision is significant, in part, because of what the US Supreme Court did not decide in its 2025 ruling in FDA v. Wages & White Lion Investments. In that case, the Supreme Court rejected a challenge alleging that FDA improperly changed its position on the evidence flavored-vape applicants were required to provide. But the high court expressly declined to decide the separate question of whether FDA's standards should have been established through APA notice-and-comment rulemaking.
The Fifth Circuit later left that issue unresolved in another case involving VDX Distro. "We take up those courts' invitations," the panel said in the NicQuid opinion. The decision nevertheless falls well short of declaring that the FDA cannot demand comparative evidence.
Indeed, the Supreme Court has previously held that determining whether a tobacco product is APPH is inherently comparative. In NicQuid, FDA argued that the Tobacco Control Act expressly contemplates comparisons among tobacco products and that the agency was permitted to develop its approach through adjudication.
The Fifth Circuit disagreed with the agency about how far that flexibility extends.
The panel found that the standard affected broad classes of applicants, applied prospectively to future applicants, and constrained FDA reviewers' discretion. Those characteristics made it a substantive rule requiring notice and comment under Fifth Circuit precedent.
The court also described the standard as amounting to a "de facto ban," citing the enormous disparity between applications and authorizations. The opinion noted that FDA's subsequent May authorization of four Glas flavored products increased the petitioners' cited flavored-product approval rate only from roughly 0.000333% to 0.000666%.
The ruling is narrower in another important respect. Following the Supreme Court's Wages decision, NicQuid and Wood Creek Vapory dropped their claims regarding fruit-, candy-, and dessert-flavored products. Their remaining claims concerned menthol, tobacco-flavored, and zero-nicotine products. The Fifth Circuit also declined to decide whether FDA acted arbitrarily and capriciously in applying comparative efficacy to those products, because the APA procedural violation was sufficient to resolve the case.
That means the ruling should not be read as a court finding that flavored vaping products satisfy the APPH standard or that manufacturers no longer need strong evidence of adult benefit. What it does say is that FDA cannot convert an evidentiary approach into a binding, prospective rule for an unlimited class of applicants without the procedural protections that accompany rulemaking.
That was precisely the argument Goting pressed during oral arguments. "We still have that with regard to non-menthol flavor products, and that has resulted in an effect of ban," he told the court.
FDA now faces a consequential choice
The immediate result is straightforward: the marketing denial orders before the court have been vacated, and the applications have returned to the FDA. What happens next is less clear.
The Fifth Circuit said the agency may "rethink the rule," adopt it through an APA-compliant process that allows affected parties to participate, or pursue other proceedings consistent with the opinion. The judges expressly declined to dictate the agency's next move.
For the broader vapor sector, the broader question is what the decision means for other PMTAs evaluated under the same comparative-efficacy approach. The ruling does not automatically grant marketing authorization to those products, nor does it necessarily invalidate every MDO issued under the FDA's flavored-ENDS framework. The judgment directly resolves the consolidated petitions before the Fifth Circuit.
But its reasoning is difficult to confine to NicQuid alone.
The court expressly grounded its substantive-rule finding in the breadth and uniformity of the FDA's approach, including its application to more than 1 million MDOs and millions of products. It concluded that the standard binds FDA reviewers, affects the rights of numerous applicants, and applies to an open-ended group of future applicants.
That gives other manufacturers whose applications were evaluated under the same standard a significant new argument in challenging FDA decisions, particularly in the Fifth Circuit.
It could also complicate FDA's current effort to clarify its evaluation of flavored ENDS. The court specifically noted the agency's March 2026 draft guidance, which states that FDA has long applied a comparative efficacy approach to flavored ENDS applications and that this approach remains unchanged.
Now, FDA faces a fundamental regulatory choice. It can attempt to preserve comparative efficacy by subjecting the standard to notice-and-comment rulemaking, by modifying how it evaluates flavored applications, or by developing another approach that complies with the Fifth Circuit's ruling.
For an industry that has spent years arguing that the PMTA process imposed requirements manufacturers could not have known about when applications were due, the decision represents a substantial shift.