According to a VitalLaw report dated August 27, 2026, the U.S. Court of Appeals for the Fifth Circuit vacated a Marketing Denial Order (MDO) issued by the U.S. Food and Drug Administration (FDA) regarding NicQuid LLC’s vape products.
The court held that the “comparative-efficacy standard” used by the FDA to review Premarket Tobacco Product Applications (PMTAs) for vapes constituted a binding substantive rule. As a result, the standard should have gone through the notice-and-comment rulemaking process required by the Administrative Procedure Act (APA), rather than being established through informal, case-by-case adjudications.
The court did not reject the FDA’s authority to evaluate the public health risks and benefits of flavored vapes. Instead, it vacated the MDO and remanded the case to the FDA for further proceedings.
Key Points of the NicQuid FDA Ruling
- The Fifth Circuit vacated the FDA’s MDO regarding NicQuid’s vape PMTA.
- The court determined that the FDA’s “comparative-efficacy standard” was a binding substantive rule subject to the APA’s notice-and-comment procedures.
- The court found that the FDA had applied the standard broadly through internal memoranda and more than one million denial decisions involving non-tobacco-flavored ENDS.
- The ruling did not find the FDA’s risk-benefit analysis itself arbitrary or capricious.
- The case was remanded to the FDA, which could reconsider the standard, establish it through formal APA procedures, or take other action consistent with the ruling.
- The decision creates a conflict with the Ninth Circuit’s recent ruling in MH Global, which reached a different conclusion regarding the FDA’s use of a comparative-efficacy framework.
The Dispute Focused on How the FDA Applied Its PMTA Standard
August 28, 2026 — According to the VitalLaw report, the case is NicQuid, L.L.C. v. FDA (Case No. 25-60369).
NicQuid, a manufacturer of electronic nicotine delivery systems (ENDS), joined with vape retailer Wood Creek Vapory to challenge the FDA’s decision to reject NicQuid’s Premarket Tobacco Product Application.
Under the Family Smoking Prevention and Tobacco Control Act (TCA), new tobacco products cannot be marketed without FDA authorization. Applicants must demonstrate that marketing a product is “appropriate for the protection of the public health” (APPH).
The FDA rejected NicQuid’s PMTA in 2024, applying what it described as a comparative effectiveness approach. The agency determined that NicQuid had not provided enough evidence to demonstrate that the potential benefits of the products—particularly smoking cessation or complete switching among adult smokers—outweighed the risks to youth.
The FDA pointed to the lack of randomized controlled trials, longitudinal cohort studies, or comparable evidence showing switching behavior among adult smokers.
NicQuid had submitted cross-sectional survey data, but the FDA concluded that the surveys did not focus specifically on NicQuid’s products or evaluate outcomes by flavor category. In the agency’s view, this evidence was therefore insufficient to support a comparison between tobacco-flavored products and other flavors.
The Fifth Circuit did not hold that this type of risk-benefit comparison was inherently unlawful.
Instead, the central question was whether the FDA could establish and consistently apply the comparative-efficacy requirement as a uniform standard across a large number of PMTA applicants without first going through formal rulemaking.
Fifth Circuit Says the FDA Standard Had Become a Substantive Rule
The Fifth Circuit concluded that the FDA’s comparative-efficacy standard had gone beyond individual case decisions and had effectively become a substantive rule.
The court highlighted several factors in reaching that conclusion.
First, the standard had an exceptionally broad reach.
The court noted that the FDA had issued MDOs covering more than one million applications for non-tobacco-flavored ENDS products, involving more than six million product applications. By comparison, the FDA had authorized only 45 ENDS products in total.
The court viewed the scale of these decisions as significant because the standard directly affected companies’ ability to place products on the market and therefore had substantial consequences for commercial and property interests.
Second, the court found that the standard effectively bound FDA reviewers.
Internal FDA memoranda indicated that the comparative-efficacy requirement was being used consistently across reviews of non-tobacco-flavored ENDS products. According to the court, this limited the agency’s ability to apply different review approaches based on the circumstances of individual applications.
Third, the court determined that the policy had been established in advance through internal agency documents rather than developed gradually through individual cases.
The FDA had formulated a forward-looking policy and then applied it across numerous PMTA reviews. The Fifth Circuit therefore concluded that the agency could not avoid APA rulemaking requirements simply by implementing the policy through individual adjudications.
The FDA Cannot Use Informal Adjudication to Establish a Binding Rule
The FDA argued that administrative agencies generally have discretion to develop regulatory standards through either rulemaking or case-by-case adjudication.
The Fifth Circuit did not completely reject that principle. However, it held that the discretion has limits.
When an agency establishes a fixed requirement that effectively binds reviewers and applies broadly to a large number of market participants, the court reasoned that the agency cannot give that requirement legal force through repeated informal adjudications.
The court characterized the FDA’s comparative-efficacy standard as a fixed and rigid requirement rather than a flexible approach that could be adjusted according to the facts of individual cases.
Under the APA, substantive rules generally require notice to the public, an opportunity for stakeholders to submit comments, and an agency response to those comments.
The Court Vacated the NicQuid MDO Without Eliminating Comparative-Efficacy Review
The Fifth Circuit ultimately vacated the FDA’s Marketing Denial Order against NicQuid and sent the case back to the agency.
That does not mean the FDA has been prohibited from considering comparative efficacy in future PMTA reviews.
The court identified several possible paths for the agency:
- Reconsider the existing comparative-efficacy standard.
- Re-promulgate the standard through the APA’s notice-and-comment process.
- Reconsider the relevant applications using another procedure consistent with the court’s opinion.
The court also did not determine that the FDA’s specific application of the standard to NicQuid’s menthol-flavored, tobacco-flavored, or zero-nicotine products was arbitrary or capricious.
The immediate significance of the decision therefore concerns the procedural basis for the FDA’s PMTA review standard, rather than a broad rejection of the agency’s authority to assess the public health risks and benefits of flavored ENDS.
Fifth Circuit Decision Conflicts With Ninth Circuit’s MH Global Ruling
The ruling is particularly significant because it differs from a recent decision by the U.S. Court of Appeals for the Ninth Circuit.
In MH Global LLC v. FDA, the Ninth Circuit upheld the FDA’s denial of flavored ENDS products and concluded that the agency was not required to use notice-and-comment rulemaking before applying a comparative-effectiveness framework during individual PMTA reviews.
The Fifth Circuit took a different view.
It found that the FDA’s framework had effectively become a substantive rule because the agency applied it uniformly across more than one million MDOs and used it as a binding standard for internal reviewers.
The two decisions therefore leave the federal courts with conflicting approaches to an important FDA regulatory question:
Can the FDA establish and consistently enforce comparative-efficacy requirements through individual PMTA decisions, or must it first establish those requirements through formal APA rulemaking?
What the Ruling Means for Vape Companies Seeking PMTA Authorization
The circuit split creates additional uncertainty for companies seeking FDA authorization for flavored ENDS products.
The decision does not eliminate the PMTA process or remove the requirement for manufacturers to provide scientific evidence supporting an “appropriate for the protection of public health” (APPH) determination.
However, the FDA may need to reconsider how it establishes and applies evidentiary requirements for certain PMTA applications, particularly where those requirements operate as broad and consistent standards across large numbers of products.
For manufacturers, the case is therefore important not because it creates an immediate pathway for all flavored vapes to enter the U.S. market, but because it could influence how the FDA structures its PMTA review process going forward.
Background on NicQuid
Founded in 2012 and headquartered in Ohio, NicQuid LLC is an independent manufacturer of e-liquids. The company primarily produces nicotine-salt e-liquids and other vaping products designed for open-system electronic nicotine delivery systems (ENDS).
NicQuid has also participated in regulatory discussions concerning FDA tobacco policies. Including submitting comments and petitions related to the agency’s regulatory approach.
The Fifth Circuit’s decision now places the FDA’s comparative-efficacy framework under renewed legal scrutiny, while the agency considers its next steps following the remand.
