Court Opinion

ID: 5121222
Source: CourtListenerOpinion
Date Created: 2021-10-26 18:00:59.769757+00
Date Added: 2024-06-11T08:22:21.454585
License: Public Domain

Case: 21-60766      Document: 00516068813         Page: 1   Date Filed: 10/26/2021

            United States Court of Appeals
                 for the Fifth Circuit
                                                                    United States Court of Appeals
                                                                             Fifth Circuit

                                                                           FILED
                                                                    October 26, 2021
                                   No. 21-60766                       Lyle W. Cayce
                                                                           Clerk

   Wages and White Lion Investments, L.L.C., doing business as
   Triton Distribution,

                                                                     Petitioner,

                                       versus

   United States Food and Drug Administration,

                                                                   Respondent.

                       Petition for Review of an Order of the
                          Food and Drug Administration

   Before Elrod, Oldham, and Wilson, Circuit Judges.
   Andrew S. Oldham, Circuit Judge:
          The Food and Drug Administration denied Triton’s application to
   market flavored e-cigarettes. Triton moved for a stay pending disposition of
   its petition for review. We grant the stay.
                                          I.
                                         A.
          In 2009, Congress enacted the Family Smoking Prevention and
   Tobacco Control Act (“TCA”) to regulate tobacco products. Pub. L. No.
   111-31, 123 Stat. 1776 (2009). The TCA authorizes the Secretary of Health
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                                   No. 21-60766

   and Human Services to implement the Act through the Food and Drug
   Administration (“FDA”). See 21 U.S.C. §§ 387a(b), 393(d)(2). The TCA
   prohibits manufacturers from selling any “new tobacco product” without
   authorization. See id. § 387j(a). In 2016, the FDA deemed electronic nicotine
   delivery systems (“ENDS”)—colloquially called “electronic cigarettes” or
   “e-cigarettes”—a “new tobacco product.” 81 Fed. Reg. 28,973 (May 10,
   2016) (“Deeming Rule”); see also Big Time Vapes, Inc. v. FDA, 963 F.3d 436,
   443 (5th Cir. 2020) (“In the TCA, Congress delegated to the Secretary the
   power to ‘deem’ which tobacco products should be subject to the Act’s
   mandates.”). Thus, the TCA and the Deeming Rule generally prohibited the
   marketing of e-cigarettes.
          This created a serious and obvious problem because, by the time the
   FDA got around to issuing the Deeming Rule, manufacturers were widely
   marketing e-cigarettes throughout the United States. To avoid an overnight
   shutdown of the entire e-cigarette industry, the FDA delayed enforcement of
   the Deeming Rule. Then the FDA forced e-cigarette makers to meet a series
   of requirements and staggered deadlines to keep their products on the
   market.
          As relevant here, the FDA required e-cigarette manufacturers to
   submit premarket tobacco applications (“PMTAs”). The PMTA process is
   “onerous,” to put it mildly. See Big Time Vapes, 963 F.3d at 439 (“The
   PMTA process is onerous, requiring manufacturers to gather significant
   amounts of information.”). A manufacturer must submit to the FDA
   information on the product’s health risks, ingredients, and manufacturing
   process. The manufacturer also must include samples of the product and its
   proposed labeling. 21 U.S.C. § 387j(b)–(c).
          In the months and years following the Deeming Rule, the FDA moved
   its regulatory goalposts in at least two important ways. First, it moved the

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   PMTA deadline. Originally, the FDA demanded that all PMTAs must be
   filed within 24 months of the Deeming Rule—i.e., by 2018. The FDA later
   purported to extend the PMTA deadline to 2022. But then, in response to
   litigation from anti-smoking groups, the FDA moved the deadline up to
   September 9, 2020. Second, and crucial to this case, the FDA changed the
   regulatory requirements for PMTAs. Initially, the FDA’s guidance stated
   that “in general, FDA does not expect that applicants will need to conduct
   long-term studies to support an application.” A.74; see also A.92 (same). As
   Triton’s case illustrates, however, the FDA later changed its mind and
   required the very thing it said it would not—namely, long-term studies of e-
   cigarettes.
                                         B.
          Wages and White Lion Investments, LLC, doing business as Triton
   Distribution (“Triton”), is a Texas-based manufacturer of e-cigarettes.
   Some of its e-cigarette products have been on the market since August 4,
   2016—before the Deeming Rule’s effective date. Triton submitted a timely
   PMTA for certain flavored e-cigarettes. So did many other e-cigarette
   manufacturers.
          On August 26, 2021, the FDA announced that it would deny the
   PMTAs for 55,000 flavored e-cigarettes. In its press release, the FDA
   explained that it would do so because it “likely” needed evidence from long-
   term studies to grant a PMTA for flavored e-cigarettes. Less than a week after
   the FDA changed its regulatory requirements, Triton submitted a letter
   stating that it intended to conduct long-term studies of its products.
          About two weeks later, on September 14, the FDA issued a marketing
   denial order (“Order”) to Triton. See 21 U.S.C. § 387j(c)(2). The FDA
   acknowledged that it did not consider Triton’s letter in its determination
   because the FDA “received [the letter] near the completion of scientific

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   review.” A.14–15. The “key basis” for the denial, wrote the FDA, was that
   Triton’s PMTA lacked “robust and reliable evidence” from long-term
   studies, such as a “randomized controlled trial,” a “longitudinal cohort
   study,” or “other evidence . . . evaluat[ing] the impact of the new flavored
   vs. Tobacco-flavored products on adult smokers’ switching or cigarette
   reduction over time.” A.49.
           Triton then petitioned for review and moved to stay the Order
   pending that review.1 We granted a temporary administrative stay to prevent
   the FDA from shutting down Triton’s business. Now we enter a full stay
   pending disposition of Triton’s petition.
                                              II.
           For a stay pending review, we must consider four factors: (1) whether
   the requester makes a strong showing that it’s likely to succeed on the merits;
   (2) whether the requester will be irreparably injured without a stay;
   (3) whether other interested parties will be irreparably injured by a stay; and
   (4) where the public interest lies. Nken v. Holder, 556 U.S. 418, 426 (2009).
   “The first two factors are the most critical.” Valentine v. Collier, 956 F.3d
   797, 801 (5th Cir. 2020) (per curiam). “‘The party seeking the stay bears the
   burden of showing its need.’” Tex. League of United Latin Am. Citizens v.
   Hughs, 978 F.3d 136, 143 (5th Cir. 2020) (quoting Clinton v. Jones, 520 U.S.
   681, 708 (1997)); see also Nken, 556 U.S. at 433–34 (“The party requesting a
   stay bears the burden of showing that the circumstances justify an exercise of
   that discretion.”). Triton has met its burden: The first three factors support
   a stay, while the fourth is at worst neutral.

           1
            Triton did not first ask the FDA for a stay. But it’s common ground that it would
   have been “impracticable” for Triton to do so. See Fed. R. App. P. 18(a)(2)(i).

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                                           A.
          First, likelihood of success. The Administrative Procedure Act
   (“APA”) directs courts to “hold unlawful and set aside agency action[s]”
   that are “arbitrary, capricious, an abuse of discretion, or otherwise not in
   accordance with law.” 5 U.S.C. § 706(2). “The APA’s arbitrary-and-
   capricious standard requires that agency action be reasonable and reasonably
   explained.” FCC v. Prometheus Radio Project, 141 S. Ct. 1150, 1158 (2021). We
   must not “substitute” our “own policy judgment for that of the agency.”
   Ibid. Still, we must ensure that “the agency has acted within a zone of
   reasonableness and, in particular, has reasonably considered the relevant
   issues and reasonably explained the decision.” Ibid.; see also Motor Vehicle
   Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
   (1983) (“[T]he agency must examine the relevant data and articulate a
   satisfactory explanation for its action including a ‘rational connection
   between the facts found and the choice made.’” (quoting Burlington Truck
   Lines v. United States, 371 U.S. 156, 168 (1962))). “Put simply, we must set
   aside any action premised on reasoning that fails to account for ‘relevant
   factors’ or evinces ‘a clear error of judgment.’” Univ. of Tex. M.D. Anderson
   Cancer Ctr. v. HHS, 985 F.3d 472, 475 (5th Cir. 2021) (quoting Marsh v. Or.
   Nat. Res. Council, 490 U.S. 360, 378 (1989)).
          In reviewing an agency’s action, we may consider only the reasoning
   “articulated by the agency itself”; we cannot consider post hoc
   rationalizations. State Farm, 463 U.S. at 50; see also DHS v. Regents of the
   Univ. of Cal., 140 S. Ct. 1891, 1909 (2020) (“An agency must defend its
   actions based on the reasons it gave when it acted.”). Our review is “not
   toothless.” Sw. Elec. Power Co. v. EPA, 920 F.3d 999, 1013 (5th Cir. 2019). In
   fact, after Regents, it has serious bite. See 140 S. Ct. at 1907–15; see also, e.g.,
   Texas v. Biden, 10 F.4th 538, 552–57 (5th Cir. 2021) (per curiam); Biden v.
   Texas, No. 21A21, 2021 WL 3732667, at *1 (U.S. Aug. 24, 2021).

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          Triton has shown a strong likelihood of success on the merits. That’s
   because the FDA failed to “reasonably consider[] the relevant issues and
   reasonably explain[]” the Order. Prometheus, 141 S. Ct. at 1158; see also
   Michigan v. EPA, 576 U.S. 743, 750, 752 (2015) (“[A]gency action is lawful
   only if it rests on a consideration of the relevant factors” and “important
   aspect[s] of the problem.” (quotation omitted)). The relevant factors the
   FDA inadequately addressed or explained include: (1) Triton’s marketing
   plan; (2) Triton’s reliance interests; (3) less disruptive alternatives;
   (4) device-type preferences; and (5) evidence on the potential benefits of
   flavored e-cigarettes. The FDA’s counterarguments (6) are unavailing.
                                         1.
          The FDA failed to reasonably consider Triton’s proposed marketing
   plan. The FDA repeatedly stated that a marketing plan is “a critical factor
   in[] FDA’s statutorily required determination.” Premarket Tobacco Product
   Applications and Recordkeeping Requirements, 86 Fed. Reg. 55,300, 55,324
   (Oct. 5, 2021) (“Final Rule”); see also 84 Fed. Reg. 50,566, 50,581 (Sept. 25,
   2019) (“Proposed Rule”) (“The applicant’s marketing plans . . . will provide
   input that is critical to FDA’s determination of the likelihood of changes in
   tobacco product use behavior, especially when considered in conjunction
   with other information contained in the application.” (emphasis added));
   A.45 n.xix (“Limiting youth access and exposure to marketing is a critical
   aspect of product regulation.” (emphasis added)); A.45 (Premarket
   “assessment includes evaluating the appropriateness of the proposed
   marketing plan.”). Here, however, the FDA simply ignored Triton’s plan. It
   stated: “[F]or the sake of efficiency, the evaluation of the marketing plan in
   applications will not occur at this stage of review, and we have not evaluated
   any marketing plans submitted with these applications.” A.45 n.xix.

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          The FDA’s excuses for ignoring the “critical factor” of Triton’s
   marketing plan are unpersuasive. First, the FDA says it didn’t evaluate
   Triton’s plan for “the sake of efficiency.” Ibid. But “efficiency” is no
   substitute for “reasoned decisionmaking.” Michigan, 576 U.S. at 750; see also
   Judulang v. Holder, 565 U.S. 42, 64 (2011) (emphasizing that “cheapness
   alone cannot save an arbitrary agency policy”).
          Second, the FDA claimed that its purported expertise and experience
   showed that no marketing plan would be sufficient, so it stopped looking:
          It is theoretically possible that significant mitigation efforts
          could adequately reduce youth access and appeal such that the
          risk for youth initiation would be reduced. However, to date,
          none of the ENDS PMTAs that FDA has evaluated have
          proposed advertising and promotion restrictions that would
          decrease appeal to youth to a degree significant enough to
          address and counter-balance the substantial concerns, and
          supporting evidence, discussed above regarding youth use.
          Similarly, we are not aware of access restrictions that, to date,
          have been successful in sufficiently decreasing the ability of
          youth to obtain and use ENDS.
   A.45 n.xix. This statement is insufficient. For one thing, it’s unreasonable for
   the FDA to stop looking at proposed plans because past ones have been
   unpersuasive. That’s like an Article III judge saying that she stopped reading
   briefs because she previously found them unhelpful.
          For another, reliance on expertise and experience, like efficiency, is
   no substitute for “reasoned decisionmaking.” Michigan, 576 U.S. at 750. Of
   course, “[a]gencies . . . have expertise and experience in administering their
   statutes that no court can properly ignore.” Judulang, 565 U.S. at 53. But
   here that hurts, not helps, the FDA. That’s because experience and expertise
   bring responsibility:

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           [A]n agency’s “experience and expertise” presumably enable
           the agency to provide the required explanation, but they do not
           substitute for the explanation, any more than an expert
           witness’s credentials substitute for the substantive
           requirements applicable to the expert’s testimony under
           [Federal Rule of Evidence] 702. The requirement of
           explanation presumes the expertise and experience of the
           agency and still demands an adequate explanation in the
           particular matter.
   CS Wind Viet. Co., Ltd. v. United States, 832 F.3d 1367, 1377 (Fed. Cir. 2016)
   (citations omitted).
           The FDA did not meet its obligation. Its statement on marketing plans
   is conclusory, unsupported, and thus wholly insufficient. See, e.g., United
   Techs. Corp. v. U.S. Dep’t of Def., 601 F.3d 557, 562 (D.C. Cir. 2010) (“We
   do not defer to the agency’s conclusory or unsupported suppositions.”
   (quotation omitted)); Texas v. Biden, 10 F.4th at 556 (collecting cases).2 This
   “omission alone [likely] renders [the FDA’s] decision arbitrary and
   capricious.” Regents, 140 S. Ct. at 1913.
                                               2.
           The FDA also failed to reasonably consider Triton’s legitimate
   reliance interests. Between the Deeming Rule’s effective date and the
   deadline for PMTAs, the FDA held public meetings and issued guidance on

           2
             The FDA’s failure to meaningfully consider Triton’s marketing plan is even more
   unreasonable because part of Triton’s plan was endorsed by a former FDA commissioner.
   See Statement from FDA Commissioner Scott Gottlieb, M.D., On Proposed New Steps to
   Protect Youth by Preventing Access to Flavored Tobacco Products and Banning Menthol
   in Cigarettes (Nov. 15, 2018) (“The changes I seek would protect kids by having all flavored
   ENDS products (other than tobacco, mint and menthol flavors or non-flavored products)
   sold in age-restricted, in-person locations and, if sold online, under heightened practices
   for age verification.”); ibid. (calling some of Triton’s proposed marketing restrictions
   “best practices”).

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   how e-cigarette manufacturers could get premarket authorization. In its
   “final guidance,” the FDA stated that it did not “expect” that tobacco
   manufacturers would need to conduct long-term studies to support their
   PMTA. See, e.g., A.73–74; A.92; see also Nicopure Labs, LLC v. FDA, 944
   F.3d 267, 282 (D.C. Cir. 2019) (“The FDA has expressed willingness to
   accept scientific literature reviews instead of commissioned studies in
   support of e-cigarette applications in appropriate circumstances.”). The
   FDA’s expectation did not deviate in its Proposed Rule issued before the
   Order or the Final Rule issued a couple weeks after the Order. See Final Rule,
   86 Fed. Reg. at 55,387 (“FDA does not expect that long-term clinical studies
   will need to be conducted for each PMTA; instead, it expects that it should
   be able to rely on other valid scientific evidence to evaluate some PMTAs.”);
   Proposed Rule, 84 Fed. Reg. at 50,619 (similar). Many e-cigarette companies
   relied on the FDA’s repeated insistence that it did “not expect that
   applicants will have to conduct long-term studies to support an application”
   and did not perform or submit such evidence. A.74.
          Then the FDA “pull[ed] a surprise switcheroo on regulated entities.”
   Env’t Integrity Project v. EPA, 425 F.3d 992, 996 (D.C. Cir. 2005) (Sentelle,
   J.); accord Azar v. Allina Health Servs., 139 S. Ct. 1804, 1810 (2019) (citing
   the “surprise switcheroo” doctrine). Almost a year after the PMTA
   deadline, the FDA issued its first marketing denial orders for various flavored
   e-cigarettes and announced that it required the very studies it originally
   expected it didn’t need. See Press Release, FDA Denies Marketing
   Applications for About 55,000 Flavored E-Cigarette Products for Failing to
   Provide Evidence They Appropriately Protect Public Health (Aug. 26, 2021).
   It explained: “[T]he evidence of benefits to adult smokers for such products
   would likely be in the form of a randomized controlled trial or longitudinal
   cohort study, although the agency does not foreclose the possibility that other
   types of evidence could be adequate if sufficiently robust and reliable” and

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   performed over time. Ibid. About two weeks later, the FDA maintained its
   long-term-study requirement in the Order denying Triton premarket
   authorization. See A.49; A.37 (materially identical language to Press Release).
   Despite the radical difference, the FDA never mentioned, let alone
   reasonably considered, whether e-cigarette manufacturers, like Triton,
   could’ve reasonably relied on the FDA’s prior meetings and guidance.
          The law requires more. “When an agency changes course, . . . it must
   be cognizant that longstanding policies may have engendered serious reliance
   interests that must be taken into account.” Regents, 140 S. Ct. at 1913
   (quotation omitted). This does not mean that the FDA could not have
   “determine[d], in the particular context before it, that other interests and
   policy concerns outweigh any reliance interests. Making that difficult
   decision was the agency’s job, but the agency failed to do it.” Id. at 1914. This
   reinforces that the Order was likely arbitrary, capricious, or otherwise
   unlawful.
                                          3.
          The FDA insufficiently addressed alternatives to issuing the Order as
   well. “[W]hen an agency rescinds [or alters] a prior policy[,] its reasoned
   analysis must consider the alternatives that are within the ambit of the existing
   policy.” Regents, 140 S. Ct. at 1913 (emphasis added) (quotation omitted).
   While considering less disruptive alternatives, the FDA “was required to
   assess whether there were reliance interests, determine whether they were
   significant, and weigh any such interests against competing policy concerns.”
   Id. at 1915. The FDA did not consider alternatives when changing from its
   no-long-term-studies-necessary policy to its apparent long-term-studies-
   required policy.
          And even if the FDA did, it failed to adequately assess reliance
   interests. “So it would be impossible for the [Order] to properly weigh the

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   relevant interests against competing policy concerns while considering
   alternatives.” Texas v. Biden, 10 F.4th at 555.
                                           4.
          The FDA also failed to adequately address Triton’s contention that
   its reusable e-cigarette will reduce youth popularity compared to disposable
   e-cigarettes. In January 2020 guidance, the FDA found that “youth
   overwhelmingly prefer [disposable] ENDS products” because they “are easy
   to conceal” and “can be used discreetly.” Enforcement Priorities for
   Electronic Nicotine Delivery Systems and Other Deemed Products on the
   Market Without Premarket Authorization; Guidance for Industry;
   Availability, 85 Fed. Reg. 720, 722 (Jan. 7, 2020). By contrast, the FDA found
   in the Order that the type of system didn’t matter. Specifically, the FDA
   found that “preference for device types and popularity of certain styles is
   likely fluid and affected by the marketplace” and “that the removal of one
   flavored product option prompted youth to migrate to another ENDS type
   that offered the desired flavor option, underscoring the fundamental role of
   flavor in driving appeal.” A.42.
          Because its “new policy rest[ed] upon factual findings that contradict
   those which underlay its prior policy,” the FDA had to provide “a more
   detailed justification.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515
   (2009). The FDA initially said that disposable e-cigarettes pose risks to
   youths. When Triton said that concern doesn’t apply to its reusable e-
   cigarettes, the FDA turned around and ignored its prior disposable-reusable
   distinction. The FDA failed to adequately explain this change. This further
   reinforces that the Order is likely arbitrary, capricious, or otherwise unlawful.
                                           5.
          In announcing its rule that the manufacturer must provide long-term
   studies to get approval for flavored e-cigarettes, the FDA resorted entirely to

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   experience and expertise from reviewing applications other than Triton’s
   PMTA. See A.45. In so doing, the FDA used “generalized language to
   reject” Triton’s PMTA. See Siddiqui v. Holder, 670 F.3d 736, 744 (7th Cir.
   2012) (“Where, as here, the agency uses only generalized language to reject
   the evidence, we cannot conclude that the decisions rest on proper
   grounds.”). The consequence is that the FDA failed to reasonably consider
   relevant issues that Triton brought up in its PMTA but that others might not
   have.
           The FDA responded to much of Triton’s evidence for the first time
   before our court. But “[i]t is a fundamental precept of administrative law that
   an administrative agency cannot make its decision first and explain it later.”
   Texas v. Biden, 10 F.4th at 558–59; see also Sherley v. Sebelius, 689 F.3d 776,
   784 (D.C. Cir. 2012) (Sentelle, C.J.) (“The failure to respond to comments
   is significant only insofar as it demonstrates that the agency’s decision was
   not based on a consideration of the relevant factors.” (quotation omitted));
   Circus Circus Casinos, Inc. v. NLRB, 961 F.3d 469, 476 (D.C. Cir. 2020)
   (“New rules set through adjudication must meet the same standard of
   reasonableness as notice and comment rulemaking.” (citing Allentown Mack
   Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374 (1998))).
           For example, Triton urged the FDA to consider a 2015 survey of
   20,000 e-cigarette users showing that nearly a third of the respondents
   “started out using tobacco or menthol flavors” and then began using other
   flavored e-cigarettes. A.296. Similarly, Triton asserted that flavored e-
   cigarettes “could serve an important role in transitioning existing adult users
   away from more harmful, combustible cigarette products.” Ibid. But in the
   Order, the FDA ignored the first point altogether and gave the second short
   shrift. The FDA cannot cure those deficiencies by offering post hoc
   rationalizations before our court. The very fact that the FDA perceived the
   need to rehabilitate its Order with new and different arguments before our

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   court underscores that the Order itself omitted a reasoned justification for
   the agency’s action. This further confirms that the Order is likely arbitrary,
   capricious, or otherwise unlawful.
                                          6.
          The FDA makes four other counterarguments. They fail.
          First, the FDA argues that its consistency “in reviewing other
   manufacturers’ similar applications to market flavored e-cigarette products
   is a hallmark of good government, not a reason to fault the agency.” Opp. at
   23 (citation omitted). Consistency is great—but only when the agency is
   consistently following the law. As the Supreme Court has made clear:
   “Arbitrary agency action becomes no less so by simple dint of repetition.”
   Judulang, 565 U.S. at 61; see also ibid. (“[L]ongstanding capriciousness
   receives no special exemption from the APA.”).
          Second, the FDA insists that the reasoning in the Order is consistent
   with its prior guidance. According to the FDA, it didn’t make a rule requiring
   long-term studies because it left open that “other types of evidence could be
   adequate[] and will be evaluated on a case-by-case basis.” A.37.
          But the administrative record makes clear that the FDA now requires
   direct evidence through studies performed “over time” for flavored e-
   cigarettes. A.46; see also, e.g., A.37 n.vi; A.47 n.xxiii. And it’s clear the FDA
   expressly rejected reliance on evidence it approved of in its pre-Order
   guidance, such as observational and consumer-perception studies. Compare
   A.46–47, with A.99. The FDA did not have to completely flip flop for there
   to be a change in position. Cf. Sw. Airlines Co. v. Fed. Energy Regul. Comm’n,
   926 F.3d 851, 856 (D.C. Cir. 2019) (“A full and rational explanation becomes
   especially important when, as here, an agency elects to shift its policy or
   depart from its typical manner of administering a program.” (quotation
   omitted)). It is enough that the FDA’s guidance indicated long-term studies

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   were likely unnecessary, while the FDA’s Order at the very least created a
   strong presumption that such evidence is required.
          Plus, if we accepted the FDA’s current position that it did not
   acknowledge a change in policy in the Order, then the Order would obviously
   be arbitrary and capricious. That’s because “[w]hen an agency changes its
   existing position, it . . . must at least display awareness that it is changing
   position and show that there are good reasons for the new policy.” Encino
   Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125–26 (2016) (quotation
   omitted); see also id. at 2126 (explaining that an “unexplained inconsistency
   in agency policy is a reason for holding an [action] to be an arbitrary and
   capricious change from agency practice” (quotation omitted)); Fox, 556 U.S.
   at 515 (“[T]he requirement that an agency provide reasoned explanation for
   its action would ordinarily demand that it display awareness that it is
   changing position. An agency may not . . . depart from a prior policy sub
   silentio.”). It would be impossible for the FDA to display awareness that it
   was changing position if it believed it wasn’t.
          Third, the FDA argues that Triton should not have relied on the
   agency’s pre-Order guidance. This is because, the FDA claims, 21 U.S.C.
   § 387j(c)(5) “directs FDA to make that finding based on ‘clinical
   investigations by experts qualified by training and experience to evaluate the
   tobacco product’ or other ‘valid scientific evidence’ that FDA determines is
   sufficient.” Opp. at 19; see also id. at 20 (The “2019 guidance does not and
   could not relax the statute’s requirements.”). Of course, an agency cannot
   issue guidance on the meaning of a statute, encourage its regulated entities to
   rely on the guidance, and then blame the statute for pulling the rug out from
   under the entities. And in any event, the FDA mischaracterizes § 387j(c)(5).
   Paragraph (5) does not require the FDA to base all of its appropriate-for-the-
   protection-of-the-public-health findings on long-term studies; instead, it
   requires the FDA to base its decision on “well-controlled investigations”

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   “when appropriate” and provides that those investigations “may include 1 or
   more clinical investigations.” 21 U.S.C. § 387j(c)(5)(A) (emphases added).
   And the consideration of other “valid scientific evidence” is likewise
   discretionary. See id. § 387j(c)(5)(B) (“may authorize”). The FDA’s “final
   guidance” reflected its “expect[ation]” that, at the time, it would not deem
   it “appropriate” to base its decision on long-term studies. A.74; A.92. The
   guidance also stated that the FDA would consider the type of evidence Triton
   presented “valid scientific evidence.” So of course, the statute might have
   permitted the FDA to demand the evidence it ultimately did. But it does not
   follow that the statute required the FDA to jettison the guidance it previously
   offered regulated entities.
          Fourth and last, the FDA argues that Triton’s reliance interests
   shouldn’t matter because Triton has been breaking the law and the FDA’s
   non-enforcement was entirely discretionary. Regents squarely forecloses this
   argument. There, the Department of Homeland Security (“DHS”) tried to
   rescind the Deferred Action for Childhood Arrivals (“DACA”) program
   because of “the Attorney General’s conclusion that DACA was unlawful.”
   Regents, 140 S. Ct. at 1910. The United States argued that justified ignoring
   potential reliance interests. Id. at 1913–14. The Supreme Court rejected that
   argument. Ibid. The Court instead required reasonable consideration of the
   relevant issues and the “important aspects of the problem.” Id. at 1910
   (quotation omitted). That was because, the Court explained, “deciding how
   best to address a finding of illegality moving forward can involve important
   policy choices.” Ibid. The same is true here. The FDA was free to make that
   policy choice, but it had to address Triton’s reliance interests in a reasonable
   and reasonably explained decision.
          For these reasons, Triton has shown a likelihood of success based on
   its APA challenge. So this critical factor favors granting a stay. We therefore
   need not address Triton’s argument that the FDA violated the Due Process

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   Clause for not giving “fair warning” of its change in position on what
   evidence would be required in its PMTA.
                                        B.
          Next, irreparable injury. Triton alleges that because of the Order, it
   “has stopped production of all of its flavored ENDS products, representing
   90 percent of its annual revenue, thereby requiring the company to make
   plans to lay off its employees within approximately two weeks and
   threatening the company’s very existence.” Stay Mot. at 21; see also A.15–16
   (Declaration of Triton’s General Manager). The FDA does not contest that
   allegation.
          Triton’s alleged injury is irreparable for two independent reasons.
   First, we’ve explained that “substantial financial injury” may be “sufficient
   to show irreparable injury.” Texas v. EPA, 829 F.3d 405, 433 (5th Cir. 2016).
   Triton’s alleged financial injury “threatens the very existence of [its]
   business.” Id. at 434. Even assuming the financial costs are recoverable, this
   suffices to show irreparable injury. See id. at 434 n.41 (“Even recoverable
   costs may constitute irreparable harm where the loss threatens the very
   existence of the movant’s business.” (quotation omitted)).
          Second, the costs are likely unrecoverable. “Indeed, complying with
   [an agency order] later held invalid almost always produces the irreparable
   harm of nonrecoverable compliance costs.” Id. at 433 (quotation omitted).
   The FDA does not contend that Triton has an avenue to recover costs from
   complying with the Order. That’s probably because federal agencies
   generally enjoy sovereign immunity for any monetary damages. See, e.g.,
   Alabama-Coushatta Tribe of Texas v. United States, 757 F.3d 484, 488 (5th Cir.
   2014); Louisiana v. United States, 948 F.3d 317, 320 (5th Cir. 2020); Muniz-
   Muniz v. U.S. Border Patrol, 741 F.3d 668, 671 (6th Cir. 2013) (“Sovereign
   immunity extends to agencies of the United States.” (quotation omitted)).

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   At bottom, Triton’s lack of a “guarantee of eventual recovery” is another
   reason that its alleged harm is irreparable. Alabama Ass’n of Realtors v. Dep’t
   of Health & Hum. Servs., 141 S. Ct. 2485, 2489 (2021).
          The FDA makes no developed argument contesting irreparable harm.
   See Opp. at 11, 13 (mentioning “irreparable injury” in passing). So such
   arguments are forfeited. See, e.g., DeVoss v. Sw. Airlines Co., 903 F.3d 487,
   490 n.1 (5th Cir. 2018) (concluding that an argument was “forfeited”
   because it wasn’t “structured”); Texas v. EPA, 829 F.3d at 435 (“Because
   EPA offers nothing beyond this cursory comment, it has waived any
   argument about the scope of the stay.”).
          In these circumstances, given Triton’s uncontested allegations of
   injury and the FDA’s failure to make a developed argument challenging this
   factor, we conclude that Triton has met its burden of showing irreparable
   harm. Thus, the two most critical factors favor granting a stay.
                                         C.
          Now, the balance of harms and public interest.
          The balance of the harms favors a stay. We’ve explained that “the
   maintenance of the status quo is an important consideration in granting a
   stay.” Barber v. Bryant, 833 F.3d 510, 511 (5th Cir. 2016) (quotation omitted).
   And staying the Order will preserve the status quo ante. Cf. Turning Point
   Brands, Inc. v. FDA, No. 21-3855, ECF No. 19 at 9–10 (6th Cir. Oct. 8, 2021)
   (FDA letter rescinding a marketing denial order and stating the “FDA has
   no intention of initiating an enforcement action against any of your tobacco
   products identified in” the relevant PMTA). “Given the great likelihood that
   [Triton] will ultimately succeed on the merits, combined with the
   undeniable, irreparable harm that [the Order] would inflict on” Triton and
   the FDA’s failure to make a developed argument on this factor, we conclude,

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   in these circumstances, “that the balance of harms weighs in favor of”
   Triton. Tex. Democratic Party v. Abbott, 961 F.3d 389, 412 (5th Cir. 2020).
          The public-interest factor is at worst neutral. The “public interest is
   in having governmental agencies abide by the federal laws that govern their
   existence and operations.” Texas v. Biden, 10 F.4th at 559 (quotation
   omitted). “And ‘there is generally no public interest in the perpetuation of
   unlawful agency action.’” Id. at 560 (alteration omitted) (quoting League of
   Women Voters of U.S. v. Newby, 838 F.3d 1, 12 (D.C. Cir. 2016)). Although
   the FDA fails to argue this factor, amici curiae do. They argue that the public
   interest cuts against a stay because continued sale of flavored e-cigarettes will
   endanger the youth much more than it might help adults. “But our system
   does not permit agencies to act unlawfully even in pursuit of desirable ends.”
   Alabama Ass’n of Realtors, 141 S. Ct. at 2490. So we conclude that this factor
   is at best neutral, or, in all events, outweighed by the three other factors
   favoring a stay.
                                         III.
          Finally, the FDA argues that Triton requests relief we cannot give.
   We have no authority, says the FDA, to permit Triton to continue marketing
   and selling the products denied in the Order. But again, the APA says
   otherwise. Under 5 U.S.C. § 705, we may, under certain “conditions[,] . . .
   and to the extent necessary to prevent irreparable injury, . . . issue all
   necessary and appropriate process to postpone the effective date of an agency
   action or to preserve status or rights pending conclusion of the review
   proceedings.”
          The immigration context is instructive. Consider an alien that is
   unlawfully present in the United States. Suppose the Government attempts
   to remove the alien. Then the alien argues that he should not be removed
   because he deserves asylum, and he asks us to stay the removal pending our

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   review of his petition. Under the FDA’s logic, we couldn’t do anything. After
   all, we couldn’t order the Board of Immigration Appeals to grant the alien
   asylum or otherwise adjust his immigration status to make his presence
   lawful. But of course, we could grant a stay of the removal, giving the alien
   interim relief. See generally Tesfamichael v. Gonzales, 411 F.3d 169 (5th Cir.
   2005) (granting a stay of removal pending the court of appeals’ consideration
   of the party’s petition for review); see also Nken, 556 U.S. at 429 (“An alien
   seeking a stay of removal pending adjudication of a petition for review does
   not ask for a coercive order against the Government, but rather for the
   temporary setting aside of the source of the Government’s authority to
   remove. Although such a stay acts to bar Executive Branch officials from
   removing the applicant from the country, it does so by returning to the status
   quo—the state of affairs before the removal order was entered.” (quotation
   omitted)).
          Triton’s request is not materially different. It merely seeks to preserve
   the status quo ante, before the FDA issued the Order. In other words, “the
   relief sought here would simply suspend administrative alteration of the status
   quo.” Nken, 556 U.S. at 430 n.1. So we reject the FDA’s argument that we
   lack authority to grant a stay that provides interim relief.
                                   *        *         *
          Three factors—including the two most critical—favor granting a stay,
   while one factor is at worst neutral. Triton has thus met its burden. Contrary
   to the FDA’s suggestion, we have the authority to give Triton relief pending
   review. For the foregoing reasons, Triton’s motion for a stay pending review
   of its petition is GRANTED.

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