Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
Medical Marijuana, Inc. v. Horn
Seeking relief from his accident-related chronic pain, Douglas Horn purchased and began taking “Dixie X,” a purportedly THC-free, nonpsychoactive CBD tincture produced by Medical Marijuana, Inc. A few weeks later, however, Horn’s employer selected him for random drug screening, and Horn tested positive for THC. After he refused to participate in a substance abuse program, his employer fired him.
Horn then sued Medical Marijuana under the Racketeer Influenced and Corrupt Organizations Act, which creates a cause of action for “[a]ny person injured in his business or property” by reason of a criminal RICO violation.
The district court granted summary judgment to Medical Marijuana. Horn’s lost employment derived from a personal injury of ingesting THC, the court reasoned. And in the court’s view, Section 1964(c) forecloses recovery not only for personal injuries, but also for business or property harms that result from such injuries. The 2nd Circuit Court of Appeals reversed, concluding that Horn had been “injured in his business” when he lost his job.
In so holding, the 2nd Circuit rejected the “antecedent-personal-injury bar,” a rule adopted by several circuits that precludes recovery for business or property losses that derive from a personal injury.
The U.S. Supreme Court held that under civil RICO, Section 1964(c), a plaintiff may seek treble damages for business or property loss even if the loss resulted from a personal injury.
It affirmed the judgment of the circuit court and remanded the case.
Justice Amy Coney Barrett delivered the opinion of the court, in which Justices Sonia Sotomayor, Elena Kagan, Neil Gorsuch and Ketanji Brown Jackson joined. Jackson filed a concurring opinion. Justice Clarence Thomas filed a dissenting opinion. Justice Brett Kavanaugh filed a dissenting opinion, in which Chief Justice John Roberts Jr. and Justice Samuel Alito Jr. joined.
Thomas wrote that he thought the case was ill-suited to decide the question presented. He explained that he would have dismissed the writ of certiorari as improvidently granted.
“The parties dispute an important threshold issue: whether the plaintiff here suffered a personal injury in the first place. And, they have inadequately briefed their views on the meaning of the key statutory phrase ‘injured in his business or property,’” Thomas noted.
Kavanaugh noted in a separate dissent that he disagreed that a plaintiff could sue for personal injuries under RICO.
“[RICO] provides that any ‘person injured in his business or property by reason of a violation’ of the Act ‘shall recover threefold the damages he sustains,’” Kavanaugh wrote. “Under the text of RICO, therefore, a plaintiff may sue for ‘business or property’ injuries, and he may seek recovery of the damages he sustains from those injuries. But a plaintiff may not sue for ‘personal injuries.’”
FDA v. Wages and White Lion Investments, LLC
This case concerns whether the Food and Drug Administration lawfully denied respondents authorization to market e-cigarettes or vapes. These products have rapidly gained popularity during the past 20 years, offering existing smokers a potentially safer alternative to traditional combustible cigarettes.
But e-cigarettes carry their own health risks, and the panoply of available flavors — which include not only traditional cigarette flavors (like tobacco and menthol) but also fruit, candy and dessert flavors — appeals to nonsmokers, particularly younger Americans.
The FDA has long had the responsibility to determine whether manufacturers may market new drugs, but it was the passage of the Family Smoking Prevention and Tobacco Control Act of 2009 that first gave the FDA broad jurisdiction to regulate tobacco products. Although the act barred the FDA from banning all regulated tobacco products outright, it prohibited a manufacturer from marketing any new tobacco product without FDA authorization. One pathway to authorization of a new tobacco product is the submission of a premarket tobacco product application.
The TCA requires the FDA to deny such an application unless an applicant shows that its product “would be appropriate for the protection of the public health.”
To determine this, the FDA must consider, among other things, “the risks and benefits to the population as a whole” and “tak[e] into account” the likelihood that users of existing tobacco products will stop using those products and that nonusers will start using them.
In 2016, in response to the surging youth demand for flavored products, the FDA deemed e-cigarettes “tobacco products.” Given that most e-cigarette products were not marketed in the U.S. before Feb. 15, 2007, the vast majority of these products qualified as a “new tobacco product” under the TCA. Most manufacturers of e-cigarette products would thus need to comply with the TCA’s premarket-authorization pathway to sell their products. This made the continued sale of most e-cigarette products illegal absent authorization.
So to give these manufacturers adequate time to submit premarket tobacco product applications, the FDA delayed enforcement for two to three years. This permitted e-cigarette products to remain on the market while manufacturers filed their applications. A federal district court ultimately imposed a deadline of Sept. 9, 2020, for applications.
In the lead up to the application deadline, the FDA issued numerous forms of guidance concerning premarket tobacco product applications that orbited around four central themes: (1) the types of scientific evidence that would be required; (2) the importance of cross-product comparisons and investigations; (3) the FDA’s enforcement priorities with respect to device type; and (4) manufacturers’ marketing plans, which were described as “specific restrictions on sale and distribution” meant to deter new smokers from taking up e-cigarette products.
In 2019, the FDA proposed a rule related to the submission of premarket tobacco product applications, and the proposed rule distilled the four topics discussed in the predecisional guidance.
Respondents submitted applications seeking approval to market and sell flavored e-liquids for open-system e-cigarettes. The FDA denied respondents’ applications, concluding they had not provided sufficient scientific evidence to demonstrate that the marketing of their products would be appropriate for the protection of public health. Specifically, the FDA held respondents had not provided evidence from a randomized controlled trial, longitudinal cohort study or other “robust and reliable” evidence that their dessert-, candy- and fruit-flavored products had benefits over tobacco-flavored products. Despite previously describing marketing plans as critical, the FDA decided “for the sake of efficiency” not to evaluate respondents’ marketing plans.
To each denial order, the FDA appended a technical project lead review. These lengthy documents, which canvass the scientific literature on youth e-cigarette use, reflect the FDA’s evolving understanding of how flavor, regardless of e-cigarette device type, drives youth smoking initiation and nicotine addiction.
Respondents petitioned for judicial review of the FDA’s denial orders under the Administrative Procedure Act.
The 5th Circuit Court of Appeals, sitting en banc, granted respondents’ petitions for review and remanded to the FDA. The en banc majority held that the FDA had acted arbitrarily and capriciously by applying application standards different from those articulated in its predecisional guidance documents regarding scientific evidence, cross-flavor comparisons and device type. The court expressed particular concern about the FDA’s failure to review marketing plans it previously deemed critical. It also rejected the FDA’s argument that any errors were harmless.
The U.S. Supreme Court held that, as a preliminary matter, it declined to reach and thus expressed no view on respondents’ argument that the FDA erred in evaluating respondents’ applications under standards developed in adjudication rather than standards promulgated in notice-and-comment rulemaking. The high court found that the complicated question swept beyond the question presented and lacked adequate briefing.
The court also vacated the 5th Circuit’s ruling that the FDA acted arbitrarily and capriciously because the court found the FDA’s denial orders were sufficiently consistent with its predecisional guidance — as to scientific evidence, comparative efficacy and device type — and didn’t run afoul of the change-in-position doctrine.
Finally, the Supreme Court held that the 5th Circuit relied on an overly broad reading of the court’s decision in Calcutt v. FDIC to reject the FDA’s claim of harmless error regarding the agency’s change of position on marketing plans.
The FDA doesn’t contest that despite assuring manufacturers that marketing plans would be critical to their applications, the FDA ultimately didn’t consider respondents’ marketing plans. The FDA argued that any error in this respect was harmless because it issued denial orders to other manufacturers after reviewing marketing plans that were materially indistinguishable from respondents’. The 5th Circuit rejected the FDA’s harmless-error argument, relying on the Supreme Court’s decision in Calcutt for the proposition that “APA errors are only harmless where the agency would be required to take the same action no matter what. In all other cases, an agency cannot avoid remand.”
The high court remanded the case.
Justice Samuel Alito Jr. delivered the opinion for a unanimous court. Justice Sonia Sotomayor filed a concurring opinion