$80M in Tax Revenue at Stake: Triton v FDA Explained PT. 2
In the last issue of the ASFA Newsletter, we provided an in-depth discussion on the landmark Triton v. FDA case where the Fifth Circuit Court of Appeals ruled 10-6 in favor of Wages and White Lion Investments, doing business as Triton Distribution (collectively referred to as "Triton"). Unsurprisingly, the United States Food and Drug Administration (“FDA”) has petitioned the Supreme Court to review this decision, with arguments scheduled to be heard on December 2, 2024. This issue will explore the implications of the case for vaping and smokeless products in a world that is increasingly moving away from combustible tobacco.
The core arguments against the FDA’s decisions are based on the broad rejection of flavored vaping products. Critics claim that the FDA violated the Family Smoking Prevention and Tobacco Control Act (“TCA”) by not following a transparent rulemaking process before implementing restrictions on “tobacco products.” Moreover, Congress requires the FDA to consider all aspects of its decisions, including potential negative consequences, such as the possibility of creating a black market for flavored vaping products. The agency is also accused of imposing unfair and unrealistic expectations on vape manufacturers who are trying to comply with regulations by submitting Premarket Tobacco Authorization (“PMTA”) applications.
A major point of contention surrounding vaping products is safety and their role in helping smokers make the switch to a provably safer alternative. During the PMTA submission process, the FDA calls for clinical studies showing that every individual product has a notable health benefit as an alternative to smoking. Triton argues that this ignores nearly a decade of research from around the world, such as a recent American study that found vapers were “much more likely” to have quit smoking after a two-year observation period. Even the United Kingdom’s National Health Service (“NHS”) recommends vaping as an effective smoking cessation method, providing even more substantial evidence in support of the vaping industry.
The Triton case has the potential to be a turning point in a multi-billion dollar industry, affecting millions of jobs across the country. The economic impact, particularly at the state level, could be devastating. For instance, Arizona alone collects over $80M annually in tax revenue from this industry. If excessive regulatory constraints are imposed, an innovative sector focused on harm reduction may struggle to survive.
