Category: Litigation

  • ‘FDA Failed to Consider Marketing Plans’

    ‘FDA Failed to Consider Marketing Plans’

    Photo: tanasin

    The U.S. Food and Drug Administration must reevaluate the premarket tobacco product applications (PTMAs) of six e-cigarette manufacturers after an appeals court ruled that the agency failed to adequately consider the companies’ marketing plans, reports Bloomberg Law.

    On Aug. 23, the U.S. Court of Appeals for the 11th Circuit granted petitions for review filed by Bidi Vapor, Diamond Vapor and four other companies challenging the FDA’s rejection of their e-cigarette applications. According to Chief Judge William Pryor, the agency didn’t assess “the companies’ marketing and sales-access-restriction plans designed to minimize youth exposure and access.”

    The court explicitly labeled the FDA’s decision-making as “arbitrary and capricious.” Prior legal decisions have determined that FDA action must consider all relevant factors in order to be legally justifiable. In the case of these vape manufacturers, the court ruled that the FDA had not performed such consideration.

    Vapor industry advocates welcomed the decision. Gregory Conley, director of legislative and external affairs at the American Vapor Manufacturers Association said that while court ruling does not order the FDA to grant PMTAs—and that the agency is likely to deny the applications in the future—the companies involved could end up in the queue for review in 2025, which keeps them in business.

    “Additionally, this leaves the door open for further litigation on these and other PMTAs,” Conley wrote on Twitter. “The FDA’s vague and undefined ‘appropriate for the protection of public health’ standard has long been open for attack. This is just the start.”

    The 11th Circuit decision follows revelations that forced the FDA to admit to not considering all evidence when issuing marketing denial orders (MDOs) to vape products made by Juul and Turning Point Brands. In the interests of public health, future FDA decision-making must engage with all available evidence, not just evidence that leads to their preferred outcomes.

  • Bidi Vapor Prevails Over FDA in PMTA Denial Suit

    Bidi Vapor Prevails Over FDA in PMTA Denial Suit

    The U.S. Court of Appeals for the Eleventh Circuit has ruled that the U.S. Food and Drug Administration’s marketing denial orders (MDOs) for Kaival Brands’ Bidi Vapor products are arbitrary and capricious. The majority stated that the FDA was wrong not to “even look at” the company’s marketing plans to prevent youth access.

    “The Administration refused to consider the marketing and sales access restrictions plans based on both its need for efficiency and its experience that the marketing and sales access restrictions do not sufficiently reduce youth use of electronic nicotine products,” Chief Judge William Pryor wrote. “Because ‘agency action is lawful only if it rests on a consideration of the relevant factors,’ and the Administration failed to consider the marketing and sales access restrictions plans, the marketing denial orders were arbitrary and capricious.”

    In the court’s 2-1 split decision, additionally, the majority stated:

    • The court recognizes relevant distinctions between closed/cartridge systems (that are easy to conceal and use) and the open tank liquids sold in vape shops
    • FDA’s refusal to review marketing plans was error and not harmless (disagreeing with Fifth and DC Circuits)

    In the 70-page opinion (nearly half of which was the dissent), Bidi Vapor, Diamond Vapor, Johnny Copper, Vapor Unlimited, Union Street Brands and Pop Vapor, the petitioners in the case, had all appeals granted, denial orders vacated and remanded.

    In her dissent, Judge Robin Stacie Rosenbaum wrote, “Spoiler alert: This opinion contains spoilers on how the U.S. Food and Drug Administration will resolve petitioner vaping product companies’ premarket tobacco product applications on remand from this appeal.”

    She then stated “never mind. There’s nothing to spoil here. Anyone who knows all the relevant facts necessarily already knows how this one ends.”

    She stated that the while the majority faulted the FDA for not considering the companies’ proposed restrictions on youth use, the FDA’s framework for evaluating PMTAs leaves “no room for doubt that the FDA will deny—in fact, under the Family Smoking Prevention and Tobacco Control Act, must deny—the applications on remand. To paraphrase the Borg, then, remand is futile.”

    This story will be updated.

  • Bidi Vapor Prevails Over FDA in PMTA Denial Suit

    Bidi Vapor Prevails Over FDA in PMTA Denial Suit

    The U.S. Court of Appeals for the Eleventh Circuit has ruled that the U.S. Food and Drug Administration’s marketing denial orders (MDOs) for Kaival Brands’ Bidi Vapor products are arbitrary and capricious.

    “The Administration refused to consider the marketing and sales access restrictions plans based on both its need for efficiency and its experience that the marketing and sales access restrictions do not sufficiently reduce youth use of electronic nicotine products,” Chief Judge William Pryor wrote. “Because ‘agency action is lawful only if it rests on a consideration of the relevant factors,’ and the Administration failed to consider the marketing and sales access restrictions plans, the marketing denial orders were arbitrary and capricious.”

    In the court’s 2-1 split decision, additionally, the majority stated:

    • The court recognizes relevant distinctions between closed/cartridge systems (that are easy to conceal and use) and the open tank liquids sold in vape shops;
    • FDA’s refusal to review marketing plans was error and not harmless (disagreeing with Fifth and DC Circuits).

    In the 70-page opinion, Bidi Vapor, Diamond Vapor, Johnny Copper, Vapor Unlimited, Union Street Brands and Pop Vapor, the petitioners in the case, had all appeals granted, denial orders vacated and remanded.

    In her dissent, Judge Robin Stacie Rosenbaum wrote, “Spoiler alert: This opinion contains spoilers on how the U.S. Food and Drug Administration will resolve petitioner vaping product companies’ premarket tobacco product applications on remand from this appeal.”

    She then stated “never mind. There’s nothing to spoil here. Anyone who knows all the relevant facts necessarily already knows how this one ends.”

    She stated that the while the majority faulted the FDA for not considering the companies’ proposed restrictions on youth use, the FDA’s framework for evaluating PMTAs leaves “no room for doubt that the FDA will deny—in fact, under the Family Smoking Prevention and Tobacco Control Act, must deny—the applications on remand. To paraphrase the Borg, then, remand is futile.”

  • Bidi Vapor Prevails Over FDA in PMTA Denial Suit

    Bidi Vapor Prevails Over FDA in PMTA Denial Suit

    The U.S. Court of Appeals for the Eleventh Circuit has ruled that the U.S. Food and Drug Administration’s marketing denial orders (MDOs) for Kaival Brands’ Bidi Vapor products are arbitrary and capricious.

    “The Administration refused to consider the marketing and sales access restrictions plans based on both its need for efficiency and its experience that the marketing and sales access restrictions do not sufficiently reduce youth use of electronic nicotine products,” Chief Judge William Pryor wrote. “Because ‘agency action is lawful only if it rests on a consideration of the relevant factors,’ and the Administration failed to consider the marketing and sales access restrictions plans, the marketing denial orders were arbitrary and capricious.”

    In the court’s 2-1 split decision, additionally, the majority stated:

    • The court recognizes relevant distinctions between closed/cartridge systems (that are easy to conceal and use) and the open tank liquids sold in vape shops
    • FDA’s refusal to review marketing plans was error and not harmless (disagreeing with Fifth and DC Circuits)

    In the 70-page opinion, Bidi Vapor, Diamond Vapor, Johnny Copper, Vapor Unlimited, Union Street Brands and Pop Vapor, the petitioners in the case, had all appeals granted, denial orders vacated and remanded.

    In her dissent, Judge Robin Stacie Rosenbaum wrote, “Spoiler alert: This opinion contains spoilers on how the U.S. Food and Drug Administration will resolve petitioner vaping product companies’ premarket tobacco product applications on remand from this appeal.”

    She then stated “never mind. There’s nothing to spoil here. Anyone who knows all the relevant facts necessarily already knows how this one ends.”

    She stated that the while the majority faulted the FDA for not considering the companies’ proposed restrictions on youth use, the FDA’s framework for evaluating PMTAs leaves “no room for doubt that the FDA will deny—in fact, under the Family Smoking Prevention and Tobacco Control Act, must deny—the applications on remand. To paraphrase the Borg, then, remand is futile.”

    This story will be updated.

  • Judge Boosts PM’s Infringement Award

    Judge Boosts PM’s Infringement Award

    Photo: New Africa

    R.J. Reynolds Vapor Co. owes Philip Morris Products more than $14 million after a federal judge on Aug. 17 increased a jury’s June patent-infringement award over vapor products to include prejudgment interest and supplemental damages, reports Bloomberg Law.

    Judge Leonie M. Brinkema amended the judgment entered June 15 in the U.S. District Court for the Eastern District of Virginia to reflect a total judgment amount of $10.9 million for infringement of one patent and $3.16 million for infringement of another.

    In its June 15 judgement, the jury found that RJR’s Vuse Solo and Alto devices infringe two Philip Morris patents covering parts of a vaping device for heating substances and preventing leaks. At the same time, the jury cleared Vuse Alto of infringing one of the patents.

    The verdict concerned counterclaims in RJR’s ongoing patent lawsuit over PMI’s IQOS heated-tobacco device. RJR won an order blocking IQOS imports at the U.S. International Trade Commission last November.

    Philip Morris succeeded earlier this year in invalidating parts of some patents RJR accused it of infringing at a U.S. Patent Office tribunal.

    RJR parent company BAT has also sued Philip Morris over IQOS in the United Kingdom, Germany and elsewhere. A PMI filing with the U.S. Securities and Exchange Commission earlier this year said IQOS patent lawsuits and challenges outside of the U.S. have “repeatedly and universally failed.”

    Altria has separately sued Reynolds for patent infringement in North Carolina over the Vuse line.

  • Florida: Drop in Smoking Hits MSA Revenues

    Florida: Drop in Smoking Hits MSA Revenues

    Photo: JF19

    Florida will likely collect lower-than-expected revenues from a landmark settlement with the tobacco industry because fewer people are smoking, and the remaining smokers are smoking less, reports The Free Press.

    In 1998, America’s largest tobacco companies settled litigation brought by state attorneys general over the cost of treating sick smokers. The tobacco industry agreed to pay billions of dollars over more than two decades, with the level of payments depending on the number of cigarettes sold.

    In a report released on Aug. 5, economists anticipated Florida to receive $412.1 million in settlement payments by the end of year, down from the earlier anticipated $413.8 million.

    The report pointed to a forecast last month that cigarette sales would decline by 2.5 percent annually over the next decade.

    The decline had earlier been projected between 1.44 percent and 1.75 percent. The report also said that tobacco manufacturer payments were $1.7 million less than anticipated for the recently completed 2021–2022 fiscal year.

    Meeting at the state Revenue Estimating Conference, the economists also revised anticipated payments for the coming years.

    After earlier projecting $442.5 million in revenue for the 2023–2024 fiscal year, the state is now forecast to receive $417.9 million through the settlement during that period.

  • Dryft Files Antitrust Suit Against Swedish Match

    Dryft Files Antitrust Suit Against Swedish Match

    Photo: Dryft Sciences

    Dryft Sciences has filed an antitrust lawsuit seeking $1.2 billion in damages from Swedish Match (SM).

    Brought on Aug. 2 in the California Central District Court, the suit accuses SM of filing baseless lawsuits against Dryft in order to increase legal costs, deter third-party investment and ultimately force Dryft out of business in order to establish a monopoly on nicotine pouch (NP) products.

    “SM brought these legal actions against Dryft because it knew it could not compete fairly with Dryft based on the qualities and price of its NP product, Zyn,” Dryft Sciences wrote in its complaint.

    According to Dryft, SM publicly expressed its intent to unlawfully eliminate the product Dryft from the market. In a convenience store industry report dated Sept. 16, 2020, SM’s director of category management stated that Dryft would be the first brand casualty, Dryft Sciences alleges in its complaint.

    Originally developed by Thomas Eriksson in Sweden, Dryft was launched in the United States by Kretek International in 2016. Kretek International later spun off Dryft Sciences and the Dryft product into a separate entity.

    The case is 2:22-cv-05355, Dryft Sciences LLC v. Swedish Match North America LLC.

  • Tobacco Sued Over MSA Payments

    Tobacco Sued Over MSA Payments

    Tom Miller

    Iowa Attorney General Tom Miller accuses Philip Morris USA, R.J. Reynolds Tobacco Co., and 16 other tobacco companies of defrauding Iowa of more than $133 million, according to a lawsuit filed Thursday.

    The lawsuit stems from the 1998 Master Settlement Agreement, which requires tobacco manufacturers to pay billions annually to participating states in exchange for the states agreeing not to sue for health-related damages to citizens. The motion, filed in Polk County District Court, alleges that the companies have withheld a portion of their annual payments to Iowa in bad faith and “through a scheme of false claims and feigned ignorance.”

    The tobacco companies demand that Iowa must go to arbitration to recover each year’s withheld payment. According to Miller, it has taken years to litigate each dispute, creating a long backlog and a growing amount of withheld payments. Iowa has prevailed in every dispute, most recently in September 2021, but the companies still refused to pay the amount they withheld from Iowa.

    “We have fought, and won, these legal battles for years, and there is no end to these disputes in sight,” Miller said in a statement. “We now must escalate the matter and force the tobacco companies to pay what they owe the state of Iowa.”

    The lawsuit seeks to recover actual and punitive damages, plus attorneys’ fees and other costs. Under Iowa’s False Claims Act, the state seeks three times the amount of actual damages.

  • Court Denies Triton, Vapetasia Review of FDA Orders

    Court Denies Triton, Vapetasia Review of FDA Orders

    Two makers of flavored e-liquids lost their bid to force the U.S. Food and Drug Administration to allow them to market their vaping products, after the U.S. Court of Appeals for the Fifth Circuit denied their requests Monday for review of the agency’s orders.

    Wages and White Lion Investments LLC, doing business as Triton Distribution, and Vapetasia LLC didn’t show that the FDA acted arbitrarily or capriciously when it rejected their premarket tobacco product applications (PMTAs), the Fifth Circuit said.

    If the ruling holds, Triton and Vapetasia will not be able to sell their reduced-risk nicotine products.

    Dozens of other smaller vape companies have accused the agency of operating unfairly, and will likely be disheartened by this ruling, reports Alex Norcia for Filter.

    “Among the three judges who heard the Triton case, Catharina Haynes and Gregg Costa sided with the FDA. Edith Jones, the former chief judge of the Fifth Circuit who has served since the Reagan administration, dissented from her colleagues,” Norcia writes.

    Todd Wages, a partner at Triton Distribution, told Filter he was “very disappointed” in the court. “We’re exploring our next steps. I will not stop fighting until I can’t any longer, until every door is closed,” he said.

    The FDA rejected applications to market 55,000 flavored e-cigarettes in August, 2021, including Triton’s, and said applicants would likely need to conduct long-term studies establishing their products’ benefits to win approval.

    A Fifth Circuit panel then in October agreed with Triton’s claim that the new requirement for long-term studies differed from earlier FDA guidance and was a “surprise switcheroo” and the panel allowed Triton to keep selling its e-cigarettes until another panel could hear its appeal.

    Eric Heyer, the lawyer representing Triton Distribution, told Filter that the company “intends to file a petition for rehearing en banc by the entirety of the Fifth Circuit.”

  • Tobacco Firms Settle Messaging Dispute

    Tobacco Firms Settle Messaging Dispute

    Several tobacco companies have reached an agreement in long-running litigation brought by the U.S. Department of Justice (DOJ) and certain public health organizations regarding the communication of tobacco-related messaging at retail locations.

    The agreement will require Altria, Philip Morris USA, R.J. Reynolds Tobacco and ITG Brands to supply their contracted stores with court-ordered signs that must be posted for 21 months.

    The agreement covers the last remaining dispute from the lawsuit DOJ filed against Altria, Philip Morris USA and R..J Reynolds in the 1990s, according to the National Association of Convenience Stores (NACS).

    “This litigation has always put the retailers in a uniquely bad position,” said Doug Kantor, NACS general counsel. “Retailers were not parties to the lawsuit and should not be burdened with a court-ordered remedy, but this negotiated outcome avoids even worse results that DOJ and public health groups were advocating.”

    The agreement provides that each store under contract with one of the manufacturers will have to post at least one sign carrying one of 17 different, pre-approved health messages that will be distributed at random to retailers around the country.

    Each store will be required to rotate to a new message halfway through the time period required in the agreement. The manufacturers will be required to hire auditors to check whether the signs are properly posted. A summary of the agreement explaining the requirements on retailers as well as answers to frequently asked questions about it can be found here.

    A hearing on the proposed agreement will be held in the U.S. District Court for the District of Columbia on July 28 and 29. The court will then decide whether to accept the agreement and enter an order to implement it.

    The timing of the requirements for signs to be posted will depend on when the court decides whether to accept the agreement.