Fifth Circuit: FDA’s Comparative-Efficacy Requirement for ENDS PMTAs Is a Substantive Rule Requiring APA Notice-and-Comment (Cannot Be Imposed via Informal Adjudication)

I. Introduction

Vapermate, L.L.C. v. FDA (consolidated with multiple ENDS manufacturers and retailers) presented a procedural administrative-law challenge to the Food and Drug Administration’s Marketing Denial Orders (“MDOs”) issued under the Family Smoking Prevention and Tobacco Control Act (“TCA”). The petitioners—ENDS businesses whose premarket tobacco product applications (“PMTAs”) were denied—argued that FDA effectively required “comparative efficacy” evidence (e.g., a randomized controlled trial (“RCT”) or longitudinal cohort evidence comparing flavored products to tobacco-flavored products) and that FDA imposed this requirement through adjudication rather than notice-and-comment rulemaking.

The dispute unfolded against a dense backdrop of recent precedent: the Supreme Court’s decision in FDA v. Wages & White Lion Invs., L.L.C., 604 U.S. 542 (2025) (“Wages”), this circuit’s statutory analysis in VDX Distro, Inc. v. FDA, 179 F.4th 3 56 (5th Cir. 2026), and the Fifth Circuit’s notice-and-comment framework in R.J. Reynolds Vapor Co. v. FDA, 65 F.4th 182 (5th Cir. 2023). The key question left open by Wages and VDX Distro—and squarely resolved here—was whether FDA’s comparative-efficacy standard is a “substantive rule” that must be adopted via the Administrative Procedure Act (“APA”) notice-and-comment process.

II. Summary of the Opinion

The Fifth Circuit granted the petitions for review, vacated the MDOs, and remanded. Although Wages foreclosed several petitioners’ theories (notably “change-in-position” objections for non-menthol characterizing flavors and certain TCA-based arguments), the court held that FDA’s comparative efficacy standard is a substantive rule under the APA. Because FDA developed and applied that standard through informal adjudication (PMTA denials) rather than APA notice-and-comment rulemaking, the court concluded the agency acted “without observance of procedure required by law” and set the MDOs aside under 5 U.S.C. § 706(2).

The panel also addressed venue: even if one co-petitioner (e.g., a retailer) is properly venued in the Fifth Circuit under 21 U.S.C. § 387l(a)(1), the out-of-circuit co-petitioner may proceed in the joint petition—consistent with circuit venue precedent and not undermined by Trump v. CASA, 606 U.S. 831 (2025).

III. Analysis

A. The Legal Rule Announced

The court’s principal doctrinal contribution is a procedural holding with broad administrative-law consequences:

  • FDA’s “comparative efficacy standard” is a substantive rule because it binds agency staff, applies prospectively to an unbounded set of applicants, and materially alters the evidentiary obligations of regulated parties.
  • Substantive rules require APA notice-and-comment. FDA may not “sidestep” those requirements by embedding a generally applicable, binding evidentiary demand within PMTA denials issued through informal adjudication.
  • Remedy: vacatur and remand. On remand FDA must either rethink the rule, re-adopt it through notice-and-comment, or pursue other proceedings consistent with the opinion.

B. Precedents Cited (and How They Drove the Result)

1. FDA v. Wages & White Lion Invs., L.L.C., 604 U.S. 542 (2025) (“Wages”)

Wages was central—both as a constraint and as an opening. The FDA relied on Wages for the proposition that the TCA “expressly contemplates comparisons of different tobacco products” and that FDA did not unlawfully change position when it demanded stronger evidence to show that flavored products’ adult-cessation benefits outweigh youth-initiation risks.

The Fifth Circuit accepted that Wages foreclosed certain arbitrariness and “change-in-position” arguments for non-menthol flavors, but emphasized that Wages expressly reserved whether the agency’s use of adjudication violated APA/TCA notice-and-comment requirements. The panel treated that reservation as an “invitation” to decide the APA question left unanswered.

2. Wages and White Lion Invs., L.L.C. v. FDA, 90 F.4th 357 (5th Cir. 2024) (en banc)

The opinion notes this circuit’s en banc decision was reversed by the Supreme Court in Wages. Its relevance here is mainly historical: petitioners’ earlier successes on “change-in-position” theories were narrowed by the Supreme Court, pushing the litigation toward the APA procedural attack that Wages did not resolve.

3. VDX Distro, Inc. v. FDA, 179 F.4th 3 56 (5th Cir. 2026)

VDX Distro foreclosed the statutory argument that comparative efficacy is a “tobacco product standard” requiring the TCA’s special rulemaking procedures. Critically, however, VDX Distro explicitly left open the separate question of APA notice-and-comment. This case occupies that reserved space: the panel treats VDX Distro as resolving the TCA definitional issue, not the APA procedural one.

4. R.J. Reynolds Vapor Co. v. FDA, 65 F.4th 182 (5th Cir. 2023)

This is the opinion’s doctrinal anchor for distinguishing substantive rules from policy statements/interpretive rules. The panel relies on R.J. Reynolds for the proposition that a rule is substantive if it (i) affects broad classes of unspecified individuals, and (ii) binds the agency or removes meaningful discretion—especially where the agency’s practice becomes check-the-box and outcome-determinative.

The panel characterizes R.J. Reynolds as still binding on the “substantive rule” issue (even if other aspects were “abrogated” by Wages), and it adopts R.J. Reynolds’s rhetoric: “This is not a close call.”

5. APA Substantive-Rule Doctrine in Fifth Circuit Case Law

  • Texas v. EEOC, 933 F.3d 433 (5th Cir. 2019): used for the “intent to bind” inquiry—whether the agency has committed itself to a particular legal position.
  • Texas v. United States, 809 F.3d 134 (5th Cir. 2015): used for focusing on “binding effect on agency discretion or severely restricts it,” and for the practical look at uniform application.
  • City of Arlington v. FCC, 668 F.3d 229 (5th Cir. 2012) and Phillips Petroleum Co. v. Johnson, 22 F.3d 616 (5th Cir. 1994): used for the principle that courts look to what the agency does, not the label it uses.
  • Syncor Int'l Corp. v. Shalala, 127 F.3d 90 (D.C. Cir. 1997) and Gen. Elec. Co. v. EPA, 290 F.3d 377 (D.C. Cir. 2002): cited through Fifth Circuit decisions for the concept that legislative/substantive rules add to or modify legal norms and bind.

6. Adjudication vs. Rulemaking: SEC v. Chenery Corp., 332 U.S. 194 (1947) (Chenery II) and NLRB v. Bell Aerospace Co. Div. of Textron, Inc., 416 U.S. 267 (1974)

FDA invoked Chenery II for the broad discretion to develop standards through adjudication. The Fifth Circuit countered with Chenery II’s own limiting rationale: adjudication is appropriate where issues are unforeseeable, experience is insufficient to “rigidify” a rule, or the problem is too specialized for general rules. The panel reasoned that none fit: FDA had abundant experience (millions of products; over a million denials) and was acting via a rigid, prospective, across-the-board requirement.

The court then used Bell Aerospace to emphasize procedural fairness: adjudication-based lawmaking is more defensible where affected parties receive a “full opportunity to be heard.” That, the panel said, is missing in PMTA informal adjudication where applicants allegedly had no meaningful pre-denial opportunity to address the new evidentiary bar.

7. United States v. Mead Corp., 533 U.S. 218 (2001)

The panel invoked Mead for the proposition that “action with the effect of law” usually correlates with “relatively formal administrative procedure.” The court used this to support a structural point: it would be incoherent to require notice-and-comment for substantive rules if agencies could impose the same binding standards through informal adjudication lacking comparable participatory safeguards.

8. Due Process and “Fair Warning”: Christopher v. SmithKline Beecham Corp., 567 U.S. 142 (2012)

While the holding is grounded in the APA, the panel layered due-process concerns: regulated parties must have fair warning of what is required before suffering adverse consequences. Christopher supplies the “fair warning” framing, reinforcing the court’s view that secretive internal policy development, followed by uniform denials, imperils due-process-protected commercial interests.

9. Venue, Joinder, and Remedies: FDA v. R.J. Reynolds Vapor Co., 606 U.S. 226 (2025), Trump v. CASA, 606 U.S. 831 (2025), and Fifth Circuit venue precedent

FDA pressed a venue theory: that each joint petitioner must independently satisfy the TCA venue clause. The Fifth Circuit rejected that, relying on National Association of Private Fund Managers v. SEC, 103 F.4th 1097 (5th Cir. 2024) (interpreting similar venue language to allow organizational/petition joinder) and Global Van Lines, Inc. v. ICC, 691 F.2d 773 (5th Cir. 1982).

FDA’s reliance on Trump v. CASA, 606 U.S. 831 (2025)—a case about universal injunctions and equitable relief for nonparties—did not persuade the panel, which distinguished vacatur/remand in an APA case with actually present parties from universal injunction practice. The court also noted that any joinder objection was unbriefed and forfeited.

10. Additional cited authorities shaping the court’s administrative-law posture

  • Michigan v. EPA, 576 U.S. 743 (2015) and Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359 (1998): cited for “reasoned decisionmaking,” supporting the normative value of APA procedure.
  • Ohio v. EPA, 603 U.S. 279 (2024): used as a contemporary reminder that procedural obligations (including meaningful response to stakeholder submissions) matter.
  • Tearney v. NTSB, 868 F.2d 1451 (5th Cir. 1989): cited by FDA on foreseeability limits for adjudicatory departures; the panel effectively bypassed it by treating the case as an APA notice-and-comment problem.
  • Neustar, Inc. v. FCC, 857 F.3d 886 (D.C. Cir. 2017): used to distinguish informal adjudication used for polycentric, fact-bound selection decisions from informal adjudication used to promulgate broadly binding standards.
  • Brown-Forman Corp. v. NLRB, 169 F.4th 646 (6th Cir. 2026): persuasive authority supporting limits on adjudication-based policymaking where an agency announces a rigid rule of general applicability not rooted in case-specific facts.

C. Legal Reasoning: Why the Comparative-Efficacy Standard Was a Substantive Rule

The court’s reasoning follows a practical, effects-based approach typical of APA procedural review:

1. General applicability to an unbounded set of parties (and prospectivity)

The panel stressed the sheer scope: FDA had received applications for “more than six million ENDS products” and issued “over 1.2 million” denials, while approving only a tiny fraction. In the court’s view, that scale makes it implausible that all denials reflect truly individualized adjudication. Instead, the record suggested a uniform policy applied prospectively to present and future PMTA applicants.

2. Binding effect on agency discretion (and on private obligations)

Relying on its “binding effect” doctrine, the court found the comparative-efficacy approach functioned as mandatory: the MDO’s emphasis on missing RCT/cohort/comparative evidence, the alleged check-the-box mechanics described in prior litigation, the late-filed internal memoranda (King/Apelberg), and FDA’s own draft guidance all supported the inference that reviewers lacked real discretion. The rule effectively imposed a new evidentiary obligation: comparative evidence by flavor type against tobacco-flavored comparators.

3. De facto ban as evidence of rule-like operation

The opinion repeatedly links the substantive-rule finding to the practical consequence that, absent the specified comparative evidence, applications are denied at scale—functionally resembling a prospective marketwide prohibition on large categories of flavored ENDS. Even if not a “tobacco product standard” under the TCA (per VDX Distro), the rule’s uniform operation made it “substantive” under the APA.

4. The adjudication/rulemaking line: Chenery discretion has limits

The panel’s most ambitious reasoning is structural: even if agencies may sometimes announce new principles in adjudication (Chenery II), doing so here conflicted with Chenery II’s justifications because FDA was not responding to unforeseeable, specialized, or experience-poor circumstances. It was instead implementing a mature, rigid policy applicable across countless PMTAs.

5. The “informal adjudication” problem

The court went further, suggesting that even where adjudication-based policymaking is permissible, promulgating a generally binding substantive policy through informal adjudication is suspect because it lacks procedures that “foster the fairness and deliberation” associated with actions having “the effect of law” (United States v. Mead Corp.). The panel contrasted the PMTA process with the NLRB’s more formal adjudication referenced in Bell Aerospace.

D. Impact

1. For FDA’s ENDS PMTA program

  • Procedural reset: If FDA wishes to maintain a comparative-efficacy evidentiary demand as a generally applicable threshold, it may need to promulgate it via APA notice-and-comment, creating a public record and responding to stakeholder input.
  • Litigation leverage: Future petitioners in the Fifth Circuit can frame PMTA denials as procedurally defective if they reflect an undeclared, binding evidentiary rule—especially where internal guidance or metrics show uniform denials.
  • Remand dynamics: The court “express[ed] no view” on the ultimate APPH merits, preserving FDA’s substantive authority, but forcing procedural compliance before the agency can deploy the disputed standard as a generally binding requirement.

2. For administrative law beyond tobacco regulation

  • Reinforced substantive-rule policing: The decision strengthens the Fifth Circuit’s willingness to characterize “guidance-by-denial” as de facto rulemaking when it binds discretion and applies broadly.
  • Constraint on “adjudication laundering”: Agencies may face heightened scrutiny when internal memoranda effectively predetermine outcomes and are then “publicly debuted” through individual orders.
  • Remedy posture post-CASA: The venue/remedy discussion suggests the Fifth Circuit views APA vacatur/remand for parties properly before the court as distinct from universal injunction concerns raised in Trump v. CASA.

IV. Complex Concepts Simplified

PMTA / MDO
A PMTA is an application to market a “new tobacco product.” An MDO is FDA’s denial, which prevents lawful marketing.
APPH (“appropriate for the protection of the public health”)
A population-level balancing test: FDA must consider both (i) the likelihood nonusers (especially youth) will start and (ii) the likelihood current users will stop or switch away from more harmful products.
Comparative efficacy standard
FDA’s approach (as described here) requiring evidence that flavored ENDS produce adult switching/cessation benefits greater than (or adequate relative to) tobacco-flavored ENDS, which FDA views as less attractive to youth.
Substantive (legislative) rule vs. guidance/policy statement
A substantive rule effectively changes real-world legal obligations or binds agency decisionmakers. Guidance/policy statements are supposed to leave discretion and not predetermine outcomes.
Notice-and-comment rulemaking
The APA process requiring publication of a proposed rule, an opportunity for public comment, and a reasoned final response—designed to improve legitimacy and rationality.
Informal adjudication
Agency decisionmaking that produces an “order” (like a licensing denial) without the trial-type procedures of formal adjudication. This case treats informal adjudication as an improper vehicle for imposing broadly binding substantive standards.
Vacatur and remand
The court nullifies (“sets aside”) the agency action and sends it back for further proceedings consistent with the court’s procedural ruling.

V. Conclusion

The Fifth Circuit’s key contribution in Vapermate, L.L.C. v. FDA is procedural but consequential: FDA’s comparative-efficacy requirement—when it functions as a binding, prospective, generally applicable evidentiary threshold for PMTAs—counts as a substantive rule. Substantive rules require APA notice-and-comment; FDA cannot impose them through informal adjudication via mass PMTA denials supported by internally generated, effectively mandatory staff directives. The court therefore vacated the MDOs and remanded, leaving FDA free to pursue its public-health objectives, but only through procedures “required by law.”