Warning Letters: What Authority Do They Carry?

The past year of the COVID-19 pandemic and associated lockdown has brought a spate of warning letters from FDA that have attacked, in some cases, legitimate blogs that are not intended to market products. Other warning letters have offered questionable legal positions on whether certain ingredients are actually permissible dietary ingredients. 
 
While FDA has the right to issue these warning letters, they are often misused by class action plaintiff lawyers, platforms, e-tailers, and payment processors as a basis of cutting off business with companies or excluding products from the market. If this was not bad enough, plaintiff attorneys use these letters as a basis to allege that products are unlawfully marketed and, therefore, serve as a basis for deceptive trade practice class action under various state laws.
 
Also, enter into this world companies that have sold themselves to many platforms and e-tailers as gatekeepers of all things FDA. Yet, these companies themselves often do not understand the meaning behind warning letters. Rather—without any critical thinking or research— they even attempt to determine whether FDA’s position is legally valid.
 
Not Final Agency Action
Indeed, to put it bluntly, FDA can issue a warning letter for a host of things—and be wrong on every single point—knowing that a company has little legal recourse because a warning letter is not considered final agency action. Effectively, this strategy precludes a company from suing FDA over a position it has set forth in a warning letter. To make matters worse, FDA often does not publish the company’s responses to warning letters on its website, thereby only providing the agency’s view on matters.
 
The FDA’s most recent warning letters on CBD and NAC provide an excellent example of a one-sided conversation regarding the issues. As companies in the nutraceuticals world are aware, FDA has issued warning letters stating that CBD and NAC cannot be used as ingredients in dietary supplements. However, reliance on the FDA’s warning letters by third parties is misguided at best, and at worst removes validly marketed products from the marketplace.
 
Informal & Advisory
Importantly, FDA warning letters are not law, nor are they legally binding on any entity. Rather, warning letters constitute FDA’s request to a particular company to achieve voluntary compliance with its recommendations, and to establish prior notice as to that company. (See U.S. Food & Drug Administration, Inspections, Compliance, Enforcement, and Criminal Investigations Regulatory Procedures Manual (the “Manual”), Section 4-1-1.)
 
In this respect, an FDA warning letter “is informal and advisory. It communicates the agency’s position on a matter, but does not commit FDA to taking enforcement action.” The Manual states that the violations for which warning letters are issued “may lead to enforcement action if not promptly and adequately corrected,” not that they inevitably will. The Manual further provides that “[a] Warning Letter is informal and advisory. It communicates the agency’s position on a matter.” For these reasons, neither FDA nor reviewing courts consider warning letters to be final agency action on an issue. (Id. See also Holistic Candlers & Consumers Ass’n v. Food & Drug Admin., 664 F.3d 940, 943 (D.C. Cir. 2012).)
 
FDA has many enforcement tools available that have direct legal consequences. Such tools include filing an injunction in federal district court, initiating a seizure against violative products, and filing a criminal complaint. (See 21 U.S.C. § 331 et seq.) Warning letters, on the other hand, “[do] not mark the consummation of FDA’s decision making process.” (Holistic Candlers and Consumers Ass’n v. Food and Drug Admin., Brief of Food and Drug Administration, 2012 WL 3991471 (U.S.), at 9-10.) Instead, warning letters invite companies to respond with further information to aid the FDA’s considerations of the concerns raised.
 
Of great importance, multiple courts have reiterated that warning letters are not final agency action sufficient to establish legal obligations on the industry. (Holistic Candlers & Consumers Ass’n v. FDA., 664 F.3d 940, 944 (D.C. Cir. 2012).) FDA warning letters do not represent final agency action subject to judicial review, and “[i]n short, an FDA warning letter compels action by neither the recipient nor the agency.” (See also Orton Motor, Inc. v. United States Dep’t of Health & Human Servs., 884 F.3d 1205, 1215 (D.C. Cir. 2018).) “This Court has rejected the idea that an FDA warning letter itself is a consequence subject to judicial review … The lack of legal consequences distinguishes an FDA warning letter in this context…”); CytoSport, Inc. v. Vital Pharm., Inc., 894 F. Supp. 2d 1285, 1294 (E.D. Cal. 2012), “FDA warning letters are informal and advisory, and do not amount to an FDA action.”
 
Opening Arguments
Thus, FDA’s warning letters are not final agency actions, but rather an opening statement of its current reasoning and an invitation to those with legal and factual arguments to respond and present an alternative point of view. For instance, the hemp and dietary supplement industry has pushed back significantly on FDA’s position on CBD.
 
Similarly, the dietary supplement industry is pushing back on FDA in regard to NAC. Yet, third parties appear unwilling to consider the agency is incorrect in its application of the law, nor attempt to make an independent determination about whether FDA’s position within the warning letter is correct—except relying on another third party, which quite frankly does not appear to understand the meaning behind a warning letter. Rather, they simply believe if they sell or process payment then they are running afoul of the law. But FDA’s position is not binding on the legality or regulatory status of CBD or NAC.
 
No Redress
Unfortunately, other than engaging in these discussions, the industry’s current options to pursue redress against FDA’s position on CBD and NAC are limited. For example, the industry cannot file a lawsuit requesting that a court establish the legality of either ingredient challenging FDA’s warning letters because these letters do not constitute “final agency action” that can form the basis of such a lawsuit.
 
More specifically, the Administrative Procedures Act, which provides an avenue for challenging agency actions in federal district court, precludes such lawsuits unless FDA has taken “final agency action” establishing legal obligations, which it has not done with CBD and NAC (because, as noted above, its warning letters are only advisory and informal).
 
Final agency action in this instance would be either the issuance of a final rule finding that neither CBD nor NAC are dietary ingredients after formal notice and comment period, or a binding court decision establishing the ingredient’s legality.  
 
The greater issue, however, is that FDA simply leaves these warning letters sitting out there with no available recourse by a company that has received one, or other companies that are impacted by the warning letters. FDA often issues warning letters without taking formal enforcement action against a company—with no apparent regard for the necessity to resolve the issue by going through the administrative process to exclude a dietary ingredient.
 
Final Ruling
Indeed, the best way for the agency to deal with these concerns regarding whether an ingredient that has been on the market for decades (like NAC) is legal, is to issue an Advanced Notice of Proposed Rulemaking or a Proposed Final Rule and allow industry to comment on it. 
 
In the meantime, third parties should understand that a warning letter does not establish violation of the law, but only represents the FDA’s present thinking on a particular matter. In regard to CBD and NAC, the agency should go through the rulemaking process rather than raising issues in warning letters regarding the regulatory status of the ingredient.
 
By doing so, FDA would do itself and industry a favor because it would allow industry to engage in a public manner and allow the agency to issue a final rule (one way or the other), which can be challenged by industry if the final rule is believed to be wrong.
 
In the meantime, third parties should not treat a warning letter as a conclusive violation of the law, especially when there is a genuine dispute whether the agency is correct, and especially when dealing with a dietary ingredient that has been marketed for decades without any enforcement action. I encourage everyone marketing CBD and NAC to raise this significant issue and distinctions with companies that are unjustifiably relying on a warning letter to establish that a product violates the law.