In early August, the U.S. District Court for the Northern District of Texas ruled that the civil money penalty (CMP) provision in the Food, Drug, and Cosmetic Act (FDCA) for tobacco products, 21 U.S.C. § 333(f)(9), is unconstitutional. Specifically, the court found that the FDCA improperly allows the U.S. Food and Drug Administration (FDA) to bring an administrative action to collect CMPs because the Seventh Amendment guarantees the right to a jury trial in such cases.
Although the court declined to issue a nationwide injunction barring the FDA from bringing administrative actions seeking CMPs against other defendants, the outcome has potentially significant future implications for FDA’s tobacco enforcement apparatus, particularly with respect to illicit e-cigarettes.
Background and Legal Challenge
The FDCA authorizes the imposition of CMPs through administrative processes for certain violations. See 21 U.S.C. § 333(f). As relevant here, CMPs are authorized for “any person who violates a requirement of this Act which relates to tobacco products … in an amount not to exceed $15,000 for each such violation, and not to exceed $1,000,000 for all such violations adjudicated in a single proceeding,” with greater penalties available for certain more serious violations. Seeid. § 333(f)(9).
FDA’s Center for Tobacco Products (CTP) initiated administrative proceedings before the agency’s Departmental Appeals Board (DAB) against Wulferic, LLC d/b/a Vapor Lab (Vapor Lab). CTP alleged that Vapor Lab sold e-liquid products not authorized for sale by the agency pursuant to the FDCA. In its answer to the FDA’s complaint, Vapor Lab argued that the Seventh Amendment right to a jury trial applies and, therefore, prohibits the DAB from adjudicating the case. The CTP moved for a summary decision (i.e., summary judgment), and the DAB administrative law judge (ALJ) stayed the administrative proceedings pending a ruling on the summary decision motion. The ALJ had not yet ruled on the motion at the time of the court case discussed here.
In Wulferic, LLC v. FDA, No. 4:24-cv-1183 (N.D. Tex.), Vapor Lab sued the FDA and the Department of Health and Human Services (HHS), alleging that the administrative proceeding to collect CMPs violates its Seventh Amendment right to a jury trial. Specifically, Vapor Lab sought a declaration that the FDCA’s CMP provisions and the FDA’s proceedings against it both violate the Seventh Amendment. The company also sought an injunction that (1) requires the DAB to dismiss the FDA’s administrative complaint against Vapor Lab with prejudice; (2) prohibits HHS and the FDA from adjudicating CMPs in the administrative proceeding against Vapor Lab; and (3) prohibits HHS and theFDA from adjudicating CMPs in administrative proceedings entirely.
Analysis and Decision on the Merits
The court concluded that the FDA’s CMP proceeding against Vapor Lab qualifies as a “[s]uit at common law” such that the Seventh Amendment ensures Vapor Lab’s right to a trial by jury. See U.S. Const. amend. VII. Citing the recent Supreme Court precedent of SEC v. Jarkesy, 603 U.S. 109 (2024), the court found that the FDA’s CMP actions for tobacco products are “suits at common law” because the CMP remedy is one that could only be enforced by courts of law under English common law. Regardless of whether a close common law analogue for CMP actions exists, the court said, the Jarkesy case holds that the remedy (i.e., money penalties) is “all but dispositive” to the Seventh Amendment analysis.
Furthermore, the court concluded that the “public rights” exception to the Seventh Amendment does not apply. Under this exception, “Congress may assign the matter for decision to an agency without a jury, consistent with the Seventh Amendment.” Jarkesy, 603 U.S. at 127. The exception covers matters concerning “public rights,” which are matters that “historically could have been determined exclusively by [the executive and legislative] branches.” Id. Although the FDA argued that “public health” matters should be included under this exception, the court disagreed, finding that “the power to promote public health is a police power retained by the states, through the Tenth Amendment, and has never been a distinctive prerogative of the federal government.” Wulferic, LLC v. FDA, 2025 U.S. Dist. LEXIS 148024, *34 (Aug. 1, 2025).
Analysis and Decision on Remedies
The court awarded Vapor Lab its desired declaratory relief, stating that the FDCA’s CMP provisions for tobacco products violate the Seventh Amendment; and the FDA’s CMP proceeding against Vapor Lab violates the Seventh Amendment.
The court also granted Vapor Lab permanent injunctive relief, ordering the DAB to dismiss the FDA’s administrative complaint with prejudice; and enjoining the FDA and HHS from adjudicating CMPs against Vapor Lab in an administrative proceeding. However, the court declined to enjoin the FDA nationwide from adjudicating CMPs in administrative proceedings against other defendants. Citing the recent Supreme Court decision in Trump v. CASA, Inc., 145 S. Ct. 2540 (2025), the court explained that a nationwide injunction was not “necessary to provide complete relief” to the plaintiff in this case.
Why It Matters
Although the FDA is not barred from initiating its usual administrative CMP proceedings against other defendants, the arguments set out in this case will likely be used by similarly situated future defendants. Such future cases could still result in a nationwide injunction if another court views it as a necessary remedy, or if the issue proceeds to resolution by the Supreme Court. In this case, FDA has until September 30 to appeal the district court’s August 1 ruling to the U.S. Court of Appeals for the Fifth Circuit. See Fed. R. App. P. 4(a)(1)(B).
Amid the agency’s ongoing struggle to clear retail shelves of illicit e-cigarettes, this ruling potentially jeopardizes a key enforcement mechanism. The e-cigarette market remains filled with illicit products, and there remains a lack of transparency about which products are lawfully sold pursuant to enforcement discretion. As we previously covered here, at least 14 states sought to fill perceived gaps in enforcement by enacting laws requiring e-cigarette manufacturers to certify the status of their federal premarket tobacco product applications to be sold in the state. We expect this trend in state legislation to continue, perhaps emboldened by the potential vulnerability of the FDA’s tobacco enforcement authority.
