Wulferic, LLC v. FDA

Rebecca Jones McKnight, David Bender & Lily Barrett*

I. Why It Made the List

In 2025, a Texas federal court found in Wulferic, LLC v. FDA that the Seventh Amendment right to a jury trial applied to civil money penalties (CMPs) assessed on an FDA-regulated product under the Family Smoking Prevention and Tobacco Control Act (TCA).[1]

Wulferic is noteworthy to a broader audience of FDA-regulated companies as the court, citing the Supreme Court’s decision in SEC v. Jarkesy, 603 U.S. 109 (2024), analyzed the Seventh Amendment question by opining on the nature of the CMP action sought to be taken by FDA through administrative means, as well as the “public rights” exception in the context of health-related legal and regulatory regimes.

As of this publication, FDA’s appeal to the United States Court of Appeals for the Fifth Circuit and additional tobacco-related cases are pending. But regardless of those outcomes, Wulferic showcases the after-effects of Jarkesy and more broadly the post-Chevron[2] environment following Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024).

Since their issuance, the Supreme Court’s decisions in Loper Bright and Jarkesy have been widely viewed as curbing the roles of administrative agencies, prompting many FDA stakeholders to express concerns that judges would be thrust into rendering decisions without the benefit of the scientific, medical, or other relevant technical expertise held by those within FDA. Significant personnel changes at FDA in 2025 may, however, cause stakeholders to consider a different perspective.[3]

Wulferic highlights a time in our history when even those who have traditionally viewed health-related administrative agencies as relatively neutral, science-based safeguards to the public may be more sensitized to the potential for selective agency enforcement or overreach.

II. Discussion

A. Tobacco Civil Money Penalties Under the FDCA

FDA initiated its CMP administrative action against Vapor Lab under its regulations at 21 C.F.R. Part 17, which draw their statutory authority from 21 U.S.C. § 333. Notably, there is variation in the precise statutory provisions applicable across product types and compliance areas, a point to which we will return in our discussion of the impact of Wulferic.

The administrative action against Vapor Lab was grounded in the statutory langauge of the Federal Food, Drug, and Cosmetic Act (FDCA) codified in 21 U.S.C. § 333(f)(9). Congress has introduced CMPs under Section 333 for a range of FDA-regulated products and compliance areas since 1988.[4] Some CMPs codified elsewhere in Title 21 predate that section. The CMPs that FDA asserts are subject to administrative proceedings are listed in 21 C.F.R. § 17.1 and summarized below.

 

Statutory Provision	Topic	Year Enacted
21 U.S.C. § 360pp(b)(1)	Electronic Products	1968
42 U.S.C. § 262(d)(2)	Biologic Recall Orders	1986 (amended 1997)
42 U.S.C. § 300aa–28(b)(1)	Vaccine Manufacturer Records	1986
21 U.S.C. §§ 333(b)(2) and (b)(3)	Prescription Drug Marketing	1988
21 U.S.C. § 333(f)(1)	Medical Devices	1990
21 U.S.C. § 335b	Abbreviated New Drug Application‑Related and Debarment‑Related Conduct	1992
42 U.S.C. § 263b(h)(3)	Mammography Facility Certificate and Standards	1992 (amended 1998)
21 U.S.C. §§ 333(f)(3) and (f)(4)	Clinicaltrials.gov Registry and Reporting	2007
21 U.S.C. § 333(g)(1)	Direct-to-Consumer Ads for Approved Drugs and Biologics	2007
21 U.S.C. §§ 333(f)(5) and (f)(9)	Tobacco Products (under TCA)	2009

 

Congress added tobacco products in 2009. In doing so, concurrent with the addition it made at (f)(9) of § 333 (Enhanced Penalties), Congress added a cross-reference in the earlier general CMP portion—(f)(5)(A)—which provides in part: “civil penalty under paragraph (1), (2), (3), (4), or (9) shall be assessed, or a no-tobacco-sale order [present at (f)(8)].”[5]

Senator Mike Enzi (R-WA) added the Enhanced Penalties provision in (f)(9) for violations of the TCA by amendment when the law was in the Senate Health, Education, Labor and Pensions (HELP) Committee. Senator Enzi has stated: “I am pleased I was able to add a measure to the bill that increased civil penalties for violations of the new law and sends a strong message that we are serious about expecting compliance from the tobacco industry.”[6] Senator Chris Dodd (D-CT), a key supporter of the legislation, also referenced the stronger penalties in the bill when the it was introduced.

B. Background on the Wulferic Case

In Wulferic, the plaintiff was a manufacturer and seller of tobacco products (specifically, e-liquids for use with electronic nicotine delivery systems (ENDS)), doing business as “Vapor Lab.”[7] Since the enactment of the TCA in 2009, companies such as Vapor Lab have been subject to a requirement for authorization by FDA prior to sale of their products.[8] With amendments included as part of that legislation, alleged “adulteration” and “misbranding” due to the lack of such authorization could subject companies to CMPs under 21 U.S.C. § 333.[9] The TCA specifically added (f)(9), which states:

Subject to subparagraph (B) [which provides for enhanced penalties], any person who violates a requirement of this Act which relates to tobacco products shall be liable to the United States for a civil penalty 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.[10]

The enhanced penalty provisions apply to certain intentional violations of specified tobacco requirements, such as those related to premarket authorization and reporting, and certain repeated or continuing violations after notice.[11] These amounts are adjusted for inflation; as of 2026, the maximum adjusted penalty is $21,903 for a single violation and $1,460,195 for all violations adjudicated in a single proceeding.[12] Enhanced maximum adjusted penalties increase to $365,050 for a single violation and $14,601,958 for all violations adjudicated in a single proceeding.[13]

On September 16, 2024, FDA filed an administrative complaint with the Department of Health and Human Services (HHS) Departmental Appeals Board (DAB) against Vapor Lab, initiating CMP procedures under 21 C.F.R. Part 17.[14] About three years prior to this action, on October 7, 2021, FDA had issued a Warning Letter to the company.[15] The DAB complaint derived from a June 29, 2024 FDA-commissioned inspection in which FDA identified an e-liquid product that FDA alleged to be adulterated and misbranded due to the lack of premarket authorization.[16]

In Vapor Lab’s answer, the company asserted a constitutional right to a jury trial, citing Jarkesy.[17] In parallel, it alleged “selective enforcement,” given that, upon information and belief, the Center for Tobacco Products (CTP) had not sought to impose CMPs on large, established tobacco companies that Vapor Lab suggested were similarly situated relative to unauthorized tobacco products.[18]

On December 3, 2024, while the administrative proceeding was still pending, Vapor Lab filed suit against FDA in the Northern District of Texas seeking to enjoin FDA’s CMP administrative proceedings on constitutional grounds and seeking an order declaring such unconstitutional.[19]

The court first concluded it had jurisdiction to hear the claim—under precedent established by Axon, Free Enterprise, Thunder Basin, and Elgin[20]—and then turned to the merits of “whether the FDCA’s civil money penalty provision, 21 U.S.C. § 333(f)(9), and FDA’s proceeding against Vapor Lab violate the Seventh Amendment.”[21]

C. The Court’s Analysis of the Merits of Wulferic’s Claims

The Wulferic court’s substantive analysis turned on two main questions:

• First, whether, as a threshold matter, the FDA proceeding at issue implicated the Seventh Amendment; and
• Second, whether the “public rights” exception to Article III jurisdiction applied.[22]

1. 1. The Court’s Seventh Amendment Analysis

The Seventh Amendment provides:

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.[23]

In examining what constitutes a “[s]uit[] at common law,” the Wulferic court relied primarily on the analyses set forth in Granfinanciera S.A., Jarkesy, and Tull.[24] The Wulferic court first cited Granfinanciera S.A. for the principle that the Seventh Amendment applies to suits traditionally decided in English law courts.[25] The Wulferic court then turned to Tull for instruction on how to analyze the matter further, looking to:

• How the proceeding at issue compares to “18^th-century actions brought in the courts of England prior to the merger of the courts of law and equity”; and
• Whether the nature of the remedy sought “is legal or equitable in nature.”[26]

The court signaled that the second consideration would weigh more heavily, citing Jarkesy for the principle that because some causes of action “sound in both law and equity,” the remedy is the “more important” consideration.[27]

As to that, the court in Wulferic observed that the CMPs at issue, like those in Jarkesy, were penalties with punitive and deterrent objectives and enhanced penalties for intentional violations. The court concluded that the FDCA’s CMP remedy is legal in nature, not equitable, as it is not designed in equitable terms (not intended to restore the status quo or provide for restitution of victims).[28]

Although the court observed that Vapor Lab “struggle[d] to identify common law roots for the FDA’s cause of action” and offered “no evidence of English causes of action decided in courts of law,”[29] it nevertheless determined (“in any event”) that the FDCA’s CMP provision implicates the Seventh Amendment because under Tull (quoting Curtis v. Loether, 415 U.S. 189 (1974)) the relief sought is more important than “finding a precisely analogous common-law cause of action.”[30]

Thus, the court concluded that “Vapor Lab ha[d] the right to a jury trial unless the public rights exception applies.”[31]

1. 2. The Court’s “Public Rights” Analysis

Having concluded that the facts of Wulferic implicated the Seventh Amendment, the court then turned to whether the “public rights” exception applied.[32]

The court began by laying the foundation for the “public rights” exception. As the court explained, under Article III, the judicial power of the United States cannot be shared.[33] An exception has developed in cases involving “public rights,” where courts have deemed that administrative adjudication does not infringe on judicial power. The rationale is that certain matters historically could have been decided exclusively by the executive and legislative branches.[34] Revenue collection is likely the least controversial application of this exception, due to an extensive applicable history of revenue collection by sovereigns.[35]

Post-Jarkesy, the court recognized a mandate to apply a “narrow and extra-textual ‘exception’ to presumptively mandatory Article III jurisdiction,”[36] a position which sits in contrast to the dissent’s view that under Atlas Roofing v. Occupational Safety and Health Review Commission, 430 U.S. 442 (1977), Congress’s creation of a “new regulatory scheme” would justify non-Article III adjudication.[37]

The Wulferic court examined whether a “public-health purpose” could equate to a “public right.”[38] The court was unconvinced that it could. The Wulferic court emphasized the “substance of the enforcement action” and not the “object of the regulation” as being the correct point for analysis, to avoid “blow[ing] a hole” in the intended narrow exception with the plethora of laws that could be said to “promote public health.”[39]

The court was unpersuaded by the precedents offered by FDA to support its premise: Crowell v. Benson and Houston v. St. Louis. While “public health” was, in Crowell, one of a list of illustrative examples of “matters that may be assigned to the Executive Branch for determination,” the Wulferic court pointed out that Crowell was not actually a case about “public health” (rather, it was about public lands), much less one adopting a public health category of public rights.[40] The court also took issue with the case cited in Crowell—Houston v. St. Louis Independent Packaging Co.—as that case involved a meat-labeling regulation and did not involve agency enforcement, the Seventh Amendment, or Article III delegation.[41]

In further support of its ultimate decision, the court noted that FDA’s cited cases had not been “revisit[ed]” by the Supreme Court in the context of Jarkesy, and that the first case in the Fifth Circuit to apply Jarkesy did not include “public health” when that court listed recognized categories of public rights.[42] Further, the power to promote public health is not a “distinctive prerogative” of the federal government; states retain this as a police power under the Tenth Amendment.[43]

The court concluded that the CMP proceedings under the TCA did not, in its view, fall within any of the distinctive areas in which the Supreme Court had concluded “may be resolved outside an Article III court, without a jury,” and therefore “the public rights exception does not apply.”[44]

The court held that:

• “the FDCA’s civil money penalty provisions for tobacco products, 21 U.S.C. § 333(f)(9), violate the Seventh Amendment to the Constitution.”[45]
• “the FDA’s civil money penalty proceeding against Vapor Lab violates the Seventh Amendment to the Constitution.”[46]

The court enjoined HHS to dismiss with prejudice the administrative complaint against Vapor Lab, and enjoined HHS and FDA from adjudicating CMPs against Vapor Lab in an administrative proceeding.[47]

The court declined, however, to issue a nationwide injunction prohibiting HHS and FDA from adjudicating CMPs in administrative proceedings.[48] The court only addressed relief to Vapor Lab, as “the only plaintiff before the Court.”[49]

III.   Impact of Wulferic and Similar Litigation

The ultimate impact of Wulferic is still an open question. Indeed, as we describe more fully below, Wulferic is now on appeal and similar cases have been (and are being) litigated across the country. In addition, while this uncertainty plays out relative to tobacco products, stakeholders in other areas of FDA regulation may wonder how they are likely to fare if faced with a CMP proceeding, and whether their situation is likely to track the outcome of Wulferic. Below we explore this topic as well.

A. Wulferic’s Appeal to the Fifth Circuit Stayed

On September 29, 2025, FDA filed a notice of appeal to the Fifth Circuit from the Final Judgment entered by the United States Northern District of Texas on August 1, 2025 in Wulferic.[50] Less than two weeks later, on October 9, 2025, FDA filed with the Fifth Circuit an unopposed motion to hold the Wulferic appeal in abeyance pending the issuance of the Fifth Circuit’s mandate in the related matter of Texas Tobacco Barn v. U.S. Dep’t of Health and Human Services, No. 25-60200 (5th Cir.), which FDA stated presented a “similar Seventh Amendment challenge to an analogous administrative enforcement action.”[51] According to FDA:

Holding [the Wulferic appeal] in abeyance will conserve judicial resources and promote the efficient and orderly disposition of this case. Briefing in this matter has not yet commenced and there is a strong likelihood that the Court’s decisions in Texas Tobacco Barn will substantially affect the issues raised in this appeal. It is thus in the interest of the parties and the Court to hold this matter in abeyance pending the resolution of that case.[52]

The following day, on October 10, 2025, the Fifth Circuit granted FDA’s unopposed motion to hold the Wulferic appeal in abeyance until the mandate issues in Texas Tobacco Barn.

B. Texas Tobacco Barn v. U.S. Dep’t of Health and Human Services, No. 25-60200 (5th Cir.)

Texas Tobacco Barn involved an enforcement action that FDA initiated against Texas Tobacco Barn, a manufacturer and seller of e-cigarette products.[53] According to FDA, Texas Tobacco Barn violated the FDCA by manufacturing and offering for sale an e-cigarette product without prior FDA authorization.[54] FDA served on Texas Tobacco Barn an administrative complaint in August 2023.[55] The matter was heard by an Administrative Law Judge (ALJ), who found Texas Tobacco Barn liable and imposed a monetary penalty in the amount of $19,192.[56] Texas Tobacco Barn sought review of the ALJ’s decision before the DAB, which affirmed the ALJ’s decision.[57] Texas Tobacco Barn appealed to the United States Court of Appeals for the Fifth Circuit, arguing, among other things, that the Seventh Amendment barred CTP without a jury trial.[58]

Wulferic sought and received permission to file an amicus brief in Texas Tobacco Barn and filed its amicus brief on September 3, 2025.[59] In the amicus brief, Wulferic argued it was interested in Texas Tobacco Barn because it “anticipates FDA may seek to reinstate the administrative complaint against it should [the Fifth Circuit] deny [Texas Tobacco Barn’s] Petition for Review.”[60] Arguing in support of Texas Tobacco Barn, Wulferic contended that: (i) under the Supreme Court’s decision in Jarkesy, FDA’s CMP regime violates the Seventh Amendment right to a jury trial, and (ii) the “public rights” exception does not save FDA’s CMP scheme from the Seventh Amendment.[61]

For its part, on the Seventh Amendment issue, FDA argued that executive adjudication had been proper because the TCA implicates public rights, not private ones.[62] According to FDA, “[r]ather than mirroring existing private right claims, the Tobacco Control Act closely parallels the regulatory scheme already established in the rest of the [FDCA], which reflects a substantial innovation on existing protections provided by common-law liability.”[63] FDA also contended that “longstanding precedent recognized that the Executive may determine public rights in connection with comprehensive regulatory schemes relates to ‘public health.’”[64]

The Fifth Circuit heard oral argument on February 2, 2026.[65] A decision is forthcoming.

C. D and A Business Investments LLC v. FDA, No. 25-01074 (D.C. Cir.)

A similar issue has presented in D and A Business Investments LLC v. FDA, No. 25-01074 (D.C. Cir.). The petitioner in D and A Business Investments, LLC is the owner and operator of T.H.C. Smokes, a retail shop in Phoenix, Arizona.[66] Based on an FDA inspection of T.H.C. Smokes, FDA’s CTP filed an administrative complaint for CMPs against T.H.C. Smokes.[67] CTP alleged that one of the shop’s tobacco products was “adulterated” and “misbranded” per FDCA provisions because “there was no marketing granted order authorizing marketing of it nor a substantial equivalent or abbreviated [substantial equivalence] report submitted for the product.”[68] Accordingly, the complaint alleged that the shop had “received the adulterated and misbranded ENDS product in interstate commerce and delivered or proffered delivery thereof for pay or otherwise, in violation of 21 U.S.C. 331(c).”[69] The complaint sought a CMP in the amount of $19,192.

The dispute went before an ALJ, who found T.H.C. Smokes liable for the alleged violation and affirmed the proposed penalty of $19,192.[70] T.H.C. Smokes appealed to the DAB, which affirmed the ALJ’s decision.[71] T.H.C. Smokes petitioned for review in the United States Court of Appeals for the District of Columbia Circuit.

In its opening brief before the D.C. Circuit, T.H.C. Smokes argued, among other things, that it “may not be required to litigate both liability and the amount of a civil money penalty before an ALJ,” contending that CMPs are generally “punitive” and therefore “legal” remedies, and that the fact that CMPs are punitive means that the amount must be determined by a jury.[72] Wulferic in turn filed an amicus brief in support of T.H.C. Smokes, as in Texas Tobacco Barn, in which it contended that: (i) under Jarkesy, FDA’s CMP regime violates the Seventh Amendment, and (ii) the “public rights” exception does not save FDA’s CMP scheme.[73] As in Texas Tobacco Barn, FDA argued that the adjudication at issue in D and A Business Investments involved a “public health” matter, which implicated public rights, not private ones, determined in connection with “comprehensive regulatory schemes directing executive officials to determine which products are appropriate for public health,” and which fit within the public-rights exception to the Seventh Amendment.[74]

The D.C. Circuit heard oral argument on December 8, 2025.[75] A decision is forthcoming.

D. Vaping Dragon LLC v. FDA, No. 25-cv-081 (N.D. Tex. Feb. 2, 2026)

In Vaping Dragon LLC v. FDA, the United States District Court for the Northern District of Texas held that FDA’s CMP scheme triggers the Seventh Amendment because it is a “suit at common law” and that the scheme does not involve “public rights,” which do not require a jury trial.[76]

The case stemmed from an administrative complaint filed by CTP against Vaping Dragon. It alleged that Vaping Dragon had violated the FDCA by receiving and offering for sale an adulterated ENDS product, and sought a CMP in the amount of $21,348.[77] In its answer, Vaping Dragon asserted it had a right to a jury trial on CTP’s request. In May 2025, at which point the ALJ had not yet set a hearing, Vaping Dragon filed a lawsuit in federal court, seeking (among other things) a declaratory judgment that FDA’s CMP scheme for tobacco products, as well as the accompanying proceedings against Vaping Dragon, violated the Seventh Amendment.[78]

After determining that it had subject-matter jurisdiction, the court proceeded to the merits of Vaping Dragon’s Seventh Amendment claim.[79] First, the court found that FDA’s CMP scheme implicates the Seventh Amendment, observing that like the CMP scheme in Jarkesy, FDA’s CMP scheme is punitive and legal in nature.[80] And although the court acknowledged that “the relationship between the [FDCA] and a common law analogue is not as obvious as it was in Jarkesy,” the “relief sought is ‘[m]ore important’ than finding a precisely analogous common-law cause of action.”[81] Because the court concluded that FDA’s CMP scheme is a “textbook legal remedy,” the court found that the Seventh Amendment applied.[82]

Next, the court found that the public rights exception did not apply, noting the “presumption in favor of Article III courts, the continued debate over the vitality of the public rights doctrine, and the fact that public health is not an entrenched category of public rights.”[83] Accordingly, the court entered judgment in favor of Vaping Dragon, holding that FDA’s CMP scheme triggers the Seventh Amendment and that the scheme does not involve “public rights.”[84]

On March 31, 2026, FDA noticed an appeal to the Fifth Circuit.[85] On April 7, 2026, FDA filed with the Fifth Circuit an unopposed motion to hold the appeal in abeyance pending the issuance of the Fifth Circuit’s mandate in the related matter of Texas Tobacco Barn v. U.S. Dep’t of Health and Human Services, No. 25-60200 (5th Cir.).[86]

IV. Potential Impact of Commonalities and Differences Across FDCA CMPs

Given that to date the bulk, by far, of FDA CMP proceedings under Part 17 have been tobacco product related, Wulferic and its ultimate resolution will likely be most keenly watched by those involved in this sector.[87] Others, however, may still wonder: “Could this happen to me?”

As noted, CMPs codified in Title 21 of the United States Code were enacted over an extended period of time, and in a piecemeal fashion. Given the piecemeal nature, it is perhaps unsurprising that there is some variation in the statutory language associated with proceedings in which CMPs could be assessed. While Wulferic speaks to Seventh Amendment rights in the context of CMPs under current 21 U.S.C. § 333(f), finding Congress’s explicit direction of these matters to agency hearings (as is the case for other products and compliance requirements sitting in § 333(f) such as medical devices and clinicaltrials.gov registry and reporting requirements), there is variation in the language of other statutory provisions which could make attempts by FDA to pursue administrative proceedings in those contexts subject to even greater challenge (e.g., likely challenges on whether Congress even intended such matters to be subject to administrative hearings as opposed to being adjudicated in court).

The history of FDA’s implementing regulations for CMP proceedings is illustrative. These regulations first took effect in 1995 and provide the “practices and procedures for hearings concerning the administrative imposition of civil money penalties by FDA.”[88] At the time the regulations initially took effect, FDA stated: “This rule implements the civil money penalty provisions of several statutes: the National Childhood Vaccine Injury Act of 1986 (NCVIA), the Prescription Drug Marketing Act of 1988 (PDMA), the Safe Medical Devices Act of 1990 (SMDA), the Generic Drug Enforcement Act of 1992 (GDEA), and the Mammography Quality Standards Act of 1992 (MQSA).”[89]

The proposed implementing regulations were not, however, without controversy from industry stakeholders. For example:

• The Pharmaceutical Manufacturers Association (PMA) (later renamed PhRMA) took issue with FDA’s proposed administrative imposition of CMPs in contrast to seeking such penalties through a judicial proceeding. “Three of the statutes, the SMDA, the GDEA, and the MQSA, specifically authorize the FDA to impose civil monetary penalties administratively, . . . The other two statutes, the PDMA and the NCVIA, . . . do not grant FDA the power to impose those penalties administratively.”[90]
• The Administrative Conference of the United States (the “AC,” a policy-neutral, independent government agency), while generally advocating for the use of administratively imposed CMPs, noted that it had previously recommended that “agencies undertake to provide for imposing civil money penalties even in the absence of explicit statutory authority, if the relevant statute did ‘confer[] upon the agency authority to ‘assess’ or ‘mitigate’ a penalty, particularly if the agency is required to conduct a ‘hearing.”[91] The AC stated in its comment letter: “It does not appear [that the PDMA or NCVIA,] the two statutes not expressly authorizing administrative civil money penalties, contain such language.” While the AC stated that it believed challenges to FDA’s authority to do so “should be unsuccessful,” it also noted that “the issue has not been resolved definitively.”[92]

The relevant statutory language under the PDMA was enacted in 1988, and provides that, in relation to drug sample distribution violations, manufacturers or distributors “shall, upon conviction of [their employed or associated] representative for such violation, be subject to . . . civil penalties.”[93] For the NCVIA, the civil penalty language enacted provides simply that a vaccine manufacturer who “intentionally destroys, alters, falsifies, or conceals” required records or reports “shall . . . be subject to a civil penalty.”[94]

In the preamble to the final rule, FDA stated simply that it “disagree[d] with the position that civil money penalties in connection with the PDMA and the NCVIA may not be imposed administratively, for the reasons stated in the preamble to the NPRM [Notice of Proposed Rulemaking] (58 FR 30680 through 30681).”[95]

For context on areas in which FDA has, in fact, pursued CMPs through administrative proceedings, as noted FDA has utilized this procedure most frequently in relation to tobacco products. Specifically, “[t]hrough November 30, 2024, CTP has brought 35,883 total civil money penalty actions.”[96]

FDA has also pursued some CMP proceedings against mammography facilities under the MQSA, though such proceedings are relatively infrequent compared to tobacco-related actions, most likely due to FDA’s alternative enforcement mechanism options such as revocation of accreditation. In terms of CMP proceedings, as an example, in 1998, FDA entered a consent decree with an individual for $25,000 in CMPs after bringing an action for MQSA violations.[97] In 2005, the DAB affirmed an ALJ’s decision to uphold the imposition of $1,158,000 in penalties on Korangy Radiology Associates, P.A. and its owner Dr. Korangy for 193 violations of the MQSA.[98] Additionally, in 2014, the HHS DAB upheld the imposition of $2,920,000 in CMPs on Digital Radiology Center, Inc. (DRC), $1,460,000 on Oscar Alzate, DRC’s manager, and $83,750 on Brigitte Alzate, an operator and employee of DRC, for violations of the MQSA.[99]

Similarly, in the medical device context, in contrast to administratively imposed CMPs, it is much more common for medical device companies to encounter 483 Observations, Untitled Letters, “It Has Come to Our Attention” Letters, Warning Letters, and the need for (strongly encouraged) voluntary recalls. Medical device stakeholders have, so far, seen only a smattering of CMP administrative proceedings pursued over the years, many of which occurred in the early 2000s. For example, in 2001, FDA imposed CMPs against LaserVision Centers and some of its executives for selling an unapproved excimer laser; LaserVision was required to pay $1 million and its executives paid $500,000.[100] FDA also pursued CMP proceedings against Worldwide Medical Corporation and its first president around the same time based upon allegations that Worldwide Medical marketed drug testing kits as over-the-counter products when they had only been approved for professional use in a laboratory setting; in 2002, Worldwide Medical entered a settlement agreement to resolve the allegations for $250,000.[101] In 2003, the LaHaye Center for Advanced Eye Care of Lafayette and Dr. Leon C. LaHaye entered a settlement for $950,000 and $150,000, respectively, after FDA pursued CMP proceedings based on allegations that the parties used a laser to provide laser-assisted in situ keratomileusis (LASIK) without a Pre-Market Approval application or an Investigational Device Exemption approved by FDA.[102] In 2007, FDA ordered TMJ Implants, Inc. (TMJI) and two employees to pay $170,000 in CMPs based on allegations that the parties failed to submit Medical Device Reports for 17 adverse events associated with TMJI’s temporomandibular joint (TMJ) implants and accessories.[103]

From publicly available materials, it does not appear that those subject to clinicaltrials.gov have, to date, been subject to CMP proceedings.[104] And while FDA defended, in the preamble to the final rule at Part 17, its authority to bring administrative proceedings relative to the PDMA and NCVIA, we have not yet seen this tested.

So, in many instances FDA has historically relied heavily on the other administrative enforcement tools at its disposal, and the threat of potential CMP proceedings is just one element of the significant leverage it holds over regulated companies (not least of which is the overarching specter of potential criminal exposure under the FDCA).

V. Conclusion

CMPs have remained present over the years as a potential source of enforcement leverage for FDA, and—regardless of the limited extent of historical use in some areas—remain available as an option the government could seek to utilize against industry stakeholders. As a result, Wulferic remains a case of interest across FDA-regulated industries.

* Rebecca (Becca) Jones McKnight, a partner at Reed Smith LLP (Reed Smith), has been advising life sciences companies on FDA and health care matters for over two decades, through changing administrations and policy agendas, the rapidly developing science and technology driving the industry, and both incremental and abrupt changes to the legal and regulatory landscape. Her FDA practice spans a wide range of products, with an emphasis on medical device, pharmaceutical, and biological drug regulation and compliance.

David Bender is counsel at Reed Smith, where he represents health care clients before federal district and appellate courts and in arbitrations across the country in disputes relating to the False Claims Act, the Administrative Procedure Act, Medicare and Medicaid reimbursement, constitutional law, and contract law.

Lily Barrett is an associate at Reed Smith, where she concentrates her practice on civil and commercial disputes, corporate commercial advice and agreements, regulatory and compliance matters, and government investigations and related defense work for clients in the life sciences and health care space.

The authors would also like to thank Matthew Loughran, a health policy analyst at Reed Smith, for his analysis of the legislative history of CMP provisions in the FDA context.

 

[1]   Wulferic, LLC v. U.S. FDA, 793 F. Supp. 3d 830, 835 (N.D. Tex. 2025), appeal docketed, No. 25-11112 (5th Cir. Oct. 3, 2025).

[2]   Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984).

[3]   Lizzy Lawrence, 3 Key Issues to Watch at FDA as Makary Struggles to Stabilize the Agency, STAT (Dec. 22, 2025), https://www.statnews.com/2025/12/22/fda-2026-outlook-commissioner-makary-future-vaccine-policy-deregulation/ (highlighting “personnel turmoil” at FDA).

[4]   21 U.S.C. §§ 333(b)(2), 333(b)(3).

[5]   21 U.S.C. § 333(f)(5)(A).

[6]   155 Cong. Rec. S6499 (daily ed. June 11, 2009).

[7]   Wulferic, LLC, 793 F. Supp. 3d at 835.

[8]   Id. at 836.

[9]   Id.

[10] 21 U.S.C. § 333(f)(9)(A).

[11] 21 U.S.C. § 333(f)(9)(B).

[12] 45 C.F.R. § 102.3.

[13] Id.

[14] Wulferic, LLC, 793 F. Supp. 3d at 837.

[15] Brief in Support of Defendants’ Motion for Summary Judgment at 3, Wulferic, LLC v. U.S. FDA, 793 F. Supp. 3d 830 (N.D. Tex. 2025) (No. 4:24-cv-01183-O).

[16] Id. at 5.

[17] Complaint Exhibit B at 2, Wulferic, LLC, 793 F. Supp. 3d 830 (No. 4:24-cv-01183-O).

[18] Id.

[19] Complaint, Wulferic, LLC, 793 F. Supp. 3d 830 (No. 4:24-cv-01183-O).

[20] Wulferic, LLC, 793 F. Supp. 3d at 839–46 (citing Axon Enter. v. FTC, 598 U.S. 175 (2023), Free Enter. Fund v. Pub. Co. Accounting Oversight Bd., 561 U.S. 477 (2010), Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994), and Elgin v. Dep’t of the Treasury, 567 U.S. 1 (2012))

[21] Id. at 846.

[22] Id.

[23] U.S. Const. amend. VII.

[24] Granfinanciera, S.A. v. Nordberg, 492 U.S. 33 (1989); Tull v. United States, 481 U.S. 412 (1987).

[25] Wulferic, LLC, 793 F. Supp. 3d at 846. The Jarkesy court, too, relied heavily on Granfinanciera S.A. for its Seventh Amendment analysis. Jarkesy, 603 U.S. at 134 (noting “Granfinanciera effectively decides this case”). Citing Granfinanciera S.A., the Jarkesy court explained that “[e]ven when an action ‘originate[s] in a newly fashioned regulatory scheme,’ what matters is the substance of the action, not where Congress has assigned it.” Id. The Jarkesy court further cited Granfinanciera S.A. in explaining that the SEC actions at issue in Jarkesy “target[ed] the same basic conduct as common law fraud, employ[ed] the same terms of art, and operate[d] pursuant to similar legal principles,” and “[i]n short [the] action involve[d] a ‘matter of private rather than public right.’” Id.

[26] Wulferic, LLC, 793 F. Supp. 3d at 847–48 (quoting Tull, 481 U.S. at 417–18).

[27] Id. (quoting Jarkesy, 603 U.S. at 123).

[28] Id.

[29] Vapor Lab did reach back to identify cases from 1785 and 1787. Id. at 847. It posited that these examples presented analogous causes of action to those being pursued by FDA. Id. The court, however, noted the examples given involved actions under a criminal statute (penalties under Massachusetts law for selling “diseased, corrupted, contagious, or unwholesome provisions”) and admiralty laws (a Pennsylvania case involving forfeiture of a ship due to transporting goods without paying taxes). Id.

[30] Id. at 847–48.

[31] Id. at 848.

[32] Wulferic, LLC, 793 F. Supp. 3d at 848.

[33] Id.

[34] Id.

[35] Jarkesy, 603 U.S. at 131 (explaining that in Murray’s Lessee, 59 U.S. 272 (1855), the court previously “justif[ied] the application of the exception . . . by explaining that it flowed from centuries-old rules concerning revenue collection by a sovereign”).

[36] Wulferic, LLC, 793 F. Supp. 3d at 849.

[37] Id. at 848 (citing Jarkesy, 603 U.S. at 180 (Sotomayor, J., dissenting)).

[38] Id. at 850.

[39] Id. at 849 (emphasis added).

[40] Id. (citing Crowell v. Benson, 285 U.S. 22 (1932)).

[41] Id. at 849–50 (citing Houston v. St. Louis Independent Packaging Co., 249 U.S. 479 (1919)).

[42] Id. at 850.

[43] Id.

[44] Id. (internal citations omitted).

[45] Id.

[46] Id. at 851.

[47] Id. at 852.

[48] Id. at 851.

[49] Id. at 852.

[50] Dkt. 33, Wulferic, LLC (No. 4:24-cv-01183-O) (N.D. Tex.).

[51] Dkt. No. 5 at 2., Wulferic, LLC (No. 25-11112) (5th Cir.).

[52] Id.

[53] See Dkt. 30 at 1, No. 25-60200 (5th Cir.).

[54] See id.

[55] See id. at 9.

[56] See id. at 12.

[57] Id. at 12–13.

[58] See id. at 14.

[59] See Dkt. 29, No. 25-60200 (5th Cir.).

[60] Id.

[61] Id. at 5–15.

[62] Dkt. 30 at 18, No. 25-60200 (5th Cir.).

[63] Id. at 19.

[64] Id. (quoting reference omitted).

[65] See Dkt. 58, No. 25-60200 (5th Cir.).

[66] See Dkt. 19 at 2, No. 25-01074 (D.C. Cir.).

[67] See id. at 3.

[68] Id. (citation omitted).

[69] Id. (citing complaint).

[70] Id. at 8.

[71] Id. at 10.

[72] Id. at 12.

[73] Dkt. 23 at 5–15, No. 25-01074 (D.C. Cir.).

[74] Dkt. 26 at 14–15, No. 25-01074 (D.C. Cir.).

[75] See Dkt. 38, No. 25-01074 (D.C. Cir.).

[76] Vaping Dragon LLC v. FDA, No. 25-cv-081, 2026 U.S. Dist. LEXIS 20806, at *2 (N.D. Tex. Feb. 2, 2026).

[77] Id. at *8.

[78] Id. at *9.

[79] See id. at *34.

[80] Id. at *37–38.

[81] Id. at *42 (quoting references omitted).

[82] Id.

[83] Id. at *46.

[84] Id. at *50.

[85] Dkt. 27, No. 25-cv-00081 (N.D. Tex. Mar. 31, 2026).

[86] Dkt. 4, No. 26-10292 (5th Cir.).

[87] More than 30 DAB decisions involving FDA CMP administrative proceedings for tobacco products are available on the HHS website. See Board Decisions, U.S. Dep’t of Health & Hum. Servs. Departmental Appeals Bd., https://www.hhs.gov/about/agencies/dab/decisions/board-decisions/‌ index. html (last visited Apr. 9, 2026). CTP has also indicated that it has brought more than 35,000 CMP actions. See Wulferic, LLC, 793 F. Supp. 3d at 844.

[88] 21 C.F.R. § 17.1.

[89] 60 Fed. Reg. 38,612 (July 27, 1995).

[90] Letter from PMA, Re: Civil Money Penalties: Biologics, Drugs, and Medical Devices, Docket No. 91N-0447 (Aug. 25, 1993).

[91] Letter from the Office of the Chairman, Administrative Conference of the United States, Re: Notice of Proposed Rulemaking by the Food and Drug Administration To Establish Procedures for Administrative Imposition of Civil Penalties, Docket No. 1N-0447 (July 19, 1993) (citing 1 C.F.R. § 305.79-3 at Para D) (emphasis in original).

[92] Id.

[93] 21 U.S.C. § 333(b)(2).

[94] 42 U.S.C. § 300aa-28(b)(1).

[95] 60 Fed. Reg. at 38613.

[96] Wulferic, LLC, 793 F. Supp. 3d at 844.

[97] U.S. Food & Drug Admin. Ctr. for Devices & Radiological Health, Mammography: Administrative Civil Money Penalty (2002), https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/enforcement-story-archive/center-devices-and-radiological-health-2002.

[98] See Korangy Radiology Associates, P.A., t/a Baltimore Imaging Centers, DAB No. 1996 (2005).

[99] See Digital Radiology Center, Inc., DAB No. CR3270 (2014); Oscar Alzate, DAB No. CR3396 (2014); and Brigitte Alzate, DAB No. CR3395 (2014).

[100] Enforcement Record Shows New Compliance Approach, The GMP Letter No. 269 (Wash. Bus. Info., Inc. 2002).

[101] U.S. Food & Drug Admin. Ctr. for Devices & Radiological Health, In Vitro Diagnostic Test Kits: Civil Money Penalty Case for In Vitro Test Kit (2002), https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/enforcement-story-archive/center-devices-and-radiological-health-2002.

[102] FDA-2002-H-0065-0035, Settlement Agreement, Oct. 31, 2003.

[103] FDA-2005-H-0506-0110, Order, Sep. 25, 2007.

[104] U.S. Food & Drug Admin., ClinicalTrials.gov – Notices of Noncompliance and Civil Money Penalty Actions, https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/enforcement-story-archive/center-devices-and-radiological-health-2002 (last visited Apr. 10, 2026).