The Vaping Dragon LLC v. US Food and Drug Administration et al

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
ABILENE DIVISION
THE VAPING DRAGON LLC, d/b/a
THE VAPING DRAGON,
Plaintiff,
v. 	No. 1:25-CV-081-H
U.S. FOOD AND DRUG
ADMINISTRATION, et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
In 2024, the U.S. Food and Drug Administration launched an ongoing enforcement
proceeding against The Vaping Dragon, an Abilene-based tobacco retailer, seeking civil
money penalties for alleged violations of federal law. Under the Federal Food, Drug, and
Cosmetic Act (FDCA) and related statutes, FDA may resolve the matter in-house before an
administrative law judge that it employs. Through this lawsuit, Vaping Dragon collaterally
attacks that administrative proceeding, alleging that FDA’s civil money penalty scheme for
tobacco products violates the company’s Seventh Amendment right to a jury trial. Vaping
Dragon seeks declaratory relief and an injunction barring the defendants from adjudicating
civil money penalties against the company in an agency tribunal, not an Article III court.
First, the Court has jurisdiction over this case. In crafting the review provisions for
final FDA orders, Congress did not implicitly preclude district court review of constitutional
claims like this one. On the merits, FDA’s civil money penalty scheme triggers the Seventh
Amendment because it is a “suit at common law,” especially after SEC v. Jarkesy, 603 U.S.
109 (2024). And that scheme does not involve “public rights,” which do not require a jury
trial. Thus, Vaping Dragon is entitled to a jury in an Article III court.
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Accordingly, the Court denies the defendants’ motion for summary judgment (Dkt.
No. 11), converts Vaping Dragon’s motion for preliminary injunction into a motion for
summary judgment (Dkt. No. 3), and enters final judgment for Vaping Dragon on the
merits. The defendants are permanently enjoined from adjudicating civil money penalties
against Vaping Dragon in an administrative proceeding. Therefore, the defendants are also
enjoined to dismiss with prejudice the administrative complaint against Vaping Dragon.
The company’s request for a declaratory judgment, however, is denied. Because the Court
enjoins the defendants from seeking civil money penalties against Vaping Dragon in an
administrative proceeding, a declaratory judgment would provide no further relief.
1. 	Factual and Procedural Background
A. 	Statutory Framework
FDA first tried to regulate tobacco 30 years ago. In 1996, the agency finalized a rule
targeting nicotine, the primary addictive substance in cigarettes and other tobacco products.
Nicopure Labs, LLC v. FDA, 944 F.3d 267, 272 (D.C. Cir. 2019) (citing Regulations
Restricting the Sale and Distribution of Cigarettes and Smokeless Tobacco to Protect
Children and Adolescents, 61 Fed. Reg. 44,396, 44,398–99 (Aug. 28, 1996)). The rule
concluded that nicotine was a “drug” under the FDCA. 61 Fed. Reg. at 44,397 (noting
nicotine’s pharmacological effects). With that finding, FDA asserted authority—despite
having disclaimed such power for decades—to regulate tobacco products as drug delivery
devices. Id. at 44,400; see FDA v. Wages & White Lion Invs., LLC, 604 U.S. 542, 550 (2025).
The strategy was short-lived. Four years after FDA issued its final rule, the Supreme
Court held in FDA v. Brown & Williamson Tobacco Corp. that Congress never authorized the
agency to regulate tobacco. 529 U.S. 120, 126 (2000). In fact, when it enacted the FDCA,
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Congress meant to “exclude” tobacco products from FDA’s reach. Id. at 142. Changes to
the regulatory scheme were left to the political process.
Congress responded with the Family Smoking Prevention and Tobacco Control Act,
commonly known as the TCA. See Pub. L. No. 111-31, 123 Stat. 1776 (2009). The TCA
amended the FDCA to create a detailed framework for federal tobacco regulation. At the
helm is FDA, which exercises “broad authority to address ‘the public health and societal
problems caused by the use of tobacco products.’” Big Time Vapes, Inc. v. FDA, 963 F.3d
436, 438 (5th Cir. 2020) (quoting TCA § 2(7), 123 Stat. at 1777). Today, FDA has the
authority that the Supreme Court rejected in Brown & Williamson: namely, the power to
control the sale, distribution, and marketing of tobacco products.
What are those products? At least “cigarettes, cigarette tobacco, roll-your-own
tobacco, and smokeless tobacco.” 21 U.S.C. § 387a(b). But the TCA also authorizes FDA
to regulate “any other tobacco products” that the agency “by regulation deems” to meet the
statutory requirements. Id. In 2016, FDA exercised that authority by issuing a regulation—
the Deeming Rule 1 —that subjected electronic nicotine delivery systems (ENDS), often
called vaping products or e-cigarettes, to the TCA. See Big Time Vapes, 963 F.3d at 439–40.
The TCA imposes several requirements on ENDS manufacturers. Relevant here, the
statute prohibits them from marketing or selling any “new tobacco product” without first
1 See Deeming Tobacco Products To Be Subject to the Federal Food, Drug, and Cosmetic Act, as
Amended by the Family Smoking Prevention and Tobacco Control Act; Restrictions on the Sale
and Distribution of Tobacco Products and Required Warning Statements for Tobacco Products
(“Deeming Rule”), 81 Fed. Reg. 28,973 (May 10, 2016). Several courts, including the Fifth
Circuit, have rejected industry challenges to the Deeming Rule. See, e.g., Big Time Vapes, 963 F.3d
at 444 (holding that the FDA’s deeming authority does not violate the non-delegation doctrine);
Nicopure Labs, 944 F.3d at 273–76, 281–82 (explaining that applying the Deeming Rule to ENDS
products is not arbitrary or capricious under the Administrative Procedure Act).
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receiving premarket authorization from FDA. 21 U.S.C. § 387j(a)(2). A tobacco product is
“new” if it “was not commercially marketed in the United States as of February 15, 2007.”
Id. § 387j(a)(1)(A). This category typically includes ENDS products: “[T]here were very few
(if any) [ENDS] products on the market before February 2007.” Big Time Vapes, 963 F.3d at
440. Accordingly, ENDS manufacturers must receive premarket authorization before
selling or marketing their products, unless an exception applies.2
There are “significant penalties” for bypassing these requirements. FDA v. R.J.
Reynolds Vapor Co., 606 U.S. 226, 229 (2025). Any ENDS product that has not received
FDA authorization is “adulterated.” 21 U.S.C. § 387b(6). And the “introduction or
delivery for introduction into interstate commerce” of any “adulterated” tobacco product is
“prohibited.” Id. § 331(a). Violators face up to one year in prison, a $1,000 fine, or both.
Id. § 333(a)(1). The adulterated product may also be seized. Id. § 334.
Prosecution aside, Congress also empowered FDA to enforce the tobacco-product
requirements—including the prohibition on introducing adulterated products into interstate
commerce—through administrative proceedings.3 See id. § 333(f)(5); 21 C.F.R. § 17.1(j).
FDA is authorized to use such proceedings to assess civil money penalties against “any
person who violates a requirement” of the TCA.4 21 U.S.C. § 333(f)(9)(A). Each violation
entails a penalty of not more than $21,348, with a cap of $1,423,220 for all violations
2 A manufacturer could instead claim that its product is “substantially equivalent” to a product
commercially marketed in the United States before February 15, 2007. See 21 U.S.C. § 387j(a)(3).
3 Technically, this authority rests with the Secretary of Health and Human Services. See 21 U.S.C.
§§ 321(d), 333(f)(5)(A). But the Secretary delegated his power to the Commissioner of Food and
Drugs who, in turn, tasked the agency’s Center for Tobacco Products with initiating enforcement
actions. Id. § 393(d)(2); see 21 C.F.R. § 17.5(a).
4 FDA could alternatively impose a “no-tobacco-sale order.” 21 U.S.C. § 333(f)(5).
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adjudicated in a single proceeding. See id.; 45 C.F.R. § 102.3 tbl. 1 (adjusting the statutory
caps for annual inflation). For “intentional[]” violations, the “enhanced” penalty rises to
$355,806. See 21 U.S.C. § 333(f)(9)(B); 45 C.F.R. § 102.3 tbl. 1.
A civil money penalty proceeding begins with an administrative complaint from
FDA’s Center for Tobacco Products (CTP). 21 C.F.R. § 17.5(a). The proceeding is then
assigned to an administrative law judge, or ALJ, who “shall conduct a fair and impartial
hearing.” Id. §§ 17.3(c), 17.5(d). The ALJ issues an “initial decision” that includes, to the
extent necessary, “findings of fact, conclusions of law, and the amount of any penalties and
assessments imposed.” Id. § 17.45(a). The ALJ may enter a summary decision—the
administrative equivalent of summary judgment—if there is no genuine issue as to any
material fact, and the movant is entitled to judgment as a matter of law. Id. § 17.17(b).
The FDCA constrains the ALJ’s decision-making. When “determining the amount
of a civil penalty,” the ALJ “shall” consider several factors—including the circumstances of
the violation, the violator’s ability to pay, any prior history of violations, and the degree of
culpability. 21 U.S.C. § 333(f)(5)(B). And per the FDCA’s implementing regulations, the
ALJ “does not have the authority to find Federal statutes or regulations invalid.” 21 C.F.R.
§ 17.19(c). These administrative proceedings do not include a jury. See id. § 17.19(b).
An aggrieved party may appeal the ALJ’s initial decision to a Departmental Appeals
Board within the Department of Health and Human Services (HHS). Id. § 17.3(g), 17.47.
There, three more ALJs decide whether to affirm or reverse the decision below. See id.
After exhausting the administrative process, any person “aggrieved by an order
assessing a civil penalty” may petition for judicial review in the D.C. Circuit or in any other
circuit in which such person resides or does business. 21 U.S.C. § 333(f)(6). The party need
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not pay until after judicial review is complete. See id. § 333(f)(7). But once there has been a
“final judgment” in the government’s favor (or the 60-day window for initiating judicial
review has expired), id., the aggrieved party must pay the penalty, which is “deposited as
miscellaneous receipts in the Treasury of the United States.” 21 C.F.R. § 17.54.
B. 	Administrative Proceedings Against Vaping Dragon
Vaping Dragon sells ENDS products at a retail store in Abilene, Texas. Dkt. No. 13-
1 at 33. In 2023, CTP sent Vaping Dragon a letter warning that, upon inspection, one of its
products, Why So Cereal, lacked premarket authorization and was therefore adulterated.
Id.; see id. at 36–38. The letter advised that the identified violations “do not necessarily
constitute an exhaustive list.” Id. at 37. CTP told Vaping Dragon to promptly address the
violations and to “take any necessary actions to bring [its] tobacco products into
compliance” with the FDCA. Id.
A year later, CTP inspectors again observed an adulterated ENDS product at Vaping
Dragon’s store—this time, a Geek Bar Pulse Berry Bliss. Id. at 33. Based on the inspection,
CTP filed an administrative complaint alleging that Vaping Dragon violated the FDCA by
receiving and offering for sale an adulterated ENDS product. Id. at 1–6; see 21 U.S.C.
§ 331(c). CTP sought the maximum penalty of $21,348. Dkt. No. 13-1 at 6.
In its answer, Vaping Dragon maintained that it was entitled to a jury trial on CTP’s
civil-penalty request. Dkt. No. 3-4 at 2. It also asserted selective enforcement, claiming that
CTP has not sought civil money penalties from “Big Tobacco” companies (specifically,
Altria and R.J. Reynolds) that allegedly market unauthorized tobacco products. Id. at 2–3.
Lastly, Vaping Dragon argued that the requested penalty was excessive considering the
lighter penalties assessed against retailers who sell combustible cigarettes to minors. Id. at 3.
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In January 2025, the assigned ALJ issued a scheduling order establishing deadlines
for discovery and pre-hearing briefs. Dkt. No. 13-1 at 9–20. The order noted that the ALJ
would entertain motions for summary decision. Id. at 16–17; see 21 C.F.R. § 17.17. As of
April 10, 2025, the ALJ had not yet set a hearing. See Dkt. No. 13-1 at 26.
C. 	This Lawsuit
In May 2025, Vaping Dragon filed this lawsuit against FDA, HHS, Martin Makary,
Commissioner of Food and Drugs, and Robert F. Kennedy, Jr., Secretary of HHS. See Dkt.
No. 1. In its complaint, Vaping Dragon seeks a declaration that FDA’s civil money penalty
scheme for tobacco products, as well as the accompanying proceedings against Vaping
Dragon, violate the Seventh Amendment. Id. ¶ 60. Vaping Dragon also seeks injunctive
relief (1) requiring dismissal of the administrative complaint with prejudice; (2) prohibiting
HHS and FDA from adjudicating civil money penalties against Vaping Dragon in an
administrative proceeding; and (3) barring HHS and FDA from adjudicating civil money
penalties in administrative proceedings entirely. Id. It also requests attorneys’ fees. Id.
At the same time, Vaping Dragon moved for a preliminary injunction staying the
ongoing administrative proceeding until this case is finally resolved. Dkt. No. 3 at 1. FDA
opposed the motion and moved for summary judgment. Dkt. No. 11. Because no material
facts are in dispute and the issues presented are pure questions of law, the Court informed
the parties that it intended to convert Vaping Dragon’s motion for preliminary injunction
into a motion for summary judgment and enter final judgment on the merits. Dkt. No. 24;
see Fed. R. Civ. P. 65(a)(2). The parties were given one week to object to that approach. See
Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981) (requiring that parties “receive clear and
unambiguous notice” of the court’s intent to consolidate (quotation omitted)). Neither did.
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Thus, the Court converts Vaping Dragon’s motion for preliminary injunction (Dkt. No. 3)
into a motion for summary judgment. The motions are fully briefed and ready for decision.
See Dkt. Nos. 3-1; 12; 21; 22.
2. 	Legal Standards
A. 	Permanent Injunction
The permanent-injunction standard is “essentially the same” as for a preliminary
injunction. Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531, 546 n.12 (1987). “A party
seeking a permanent injunction must show: (1) that it has succeeded on the merits; (2) that a
failure to grant the injunction will result in irreparable injury; (3) that said injury outweighs
any damage that the injunction will cause the opposing party; and (4) that the injunction
will not disserve the public interest.” Valentine v. Collier, 993 F.3d 270, 280 (5th Cir. 2021);
see eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006). The requesting party must
“‘clearly carr[y] the burden of persuasion’ on all four requirements.” Bluefield Water Ass’n,
Inc. v. City of Starkville, 577 F.3d 250, 253 (5th Cir. 2009) (quotations omitted).
B. 	Summary Judgment
A movant is entitled to summary judgment when there is “no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). “[S]ummary judgment is appropriate where the only issue before the court is a
pure question of law.” Sheline v. Dun & Bradstreet Corp., 948 F.2d 174, 176 (5th Cir. 1991).
3. 	Jurisdiction
“Jurisdiction is always first.” Louisiana v. U.S. Dep’t of Energy, 90 F.4th 461, 466 (5th
Cir. 2024) (quotation omitted). So before touching the merits, the Court must confirm its
authority to decide this case. Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S.
422, 430–31 (2007). Here, FDA maintains that Congress withdrew the Court’s jurisdiction
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to resolve Vaping Dragon’s Seventh Amendment claim. Dkt. No. 12 at 15–19. This claim,
the agency continues, is reviewable only in a court of appeals. Id. at 14. FDA is wrong.
A. 	Implicit Preclusion
The Constitution vests Congress with the authority “[t]o constitute Tribunals inferior
to the supreme Court.” U.S. Const. art. I, § 8, cl. 9; see also id. art. III, § 1. This “greater
power to create lower federal courts includes its lesser power to ‘limit the jurisdiction of
those Courts.’” Patchak v. Zinke, 583 U.S. 244, 252 (2018) (quoting United States v. Hudson,
11 U.S. (7 Cranch) 32, 33 (1812)). So long as it acts within constitutional limits, Congress
may choose what cases the lower federal courts can consider, including “when, and under
what conditions,” the courts can hear them. Bowles v. Russell, 551 U.S. 205, 212–13 (2007).
Congress used this authority to give district courts jurisdiction over all civil cases arising
under the Constitution and federal law. 28 U.S.C. § 1331; see U.S. Const. art. III, § 2, cl. 1.
What Congress gives, however, it can usually take away. This principle is no less
true when it comes to jurisdiction. See Sheldon v. Sill, 49 U.S. (8 How.) 441, 449 (1850).
Sometimes, Congress precludes jurisdiction explicitly, “providing in so many words that
district court jurisdiction will yield.” Axon Enter., Inc. v. FTC, 598 U.S. 175, 185 (2023).
Other times, it does so implicitly, leaving courts to divine Congress’ intent from the “text,
structure, and purpose” of the relevant statutes. Elgin v. Dep’t of Treasury, 567 U.S. 1, 10
(2012) (citing Thunder Basin Coal Co. v. Reich, 510 U.S. 200, 207 (1994)).
With challenges to agency action, Congress may implicitly preclude district court
jurisdiction by funneling claims to an “alternative scheme of review.” Axon, 598 U.S. at
185. Most commonly, this scheme involves exhausting the agency’s own review process
before seeking direct judicial review of the agency’s final decision in a court of appeals. See,
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e.g., id.; 15 U.S.C. § 78y(a)(1); see also Joseph W. Mead & Nicholas A. Fromherz, Choosing a
Court to Review the Executive, 67 Admin. L. Rev. 1, 15 (2015) (estimating that most of “more
than a thousand” federal statutes direct agency cases “to a regional circuit court, to the D.C.
Circuit, or, in limited instances, to the Federal Circuit”). The Supreme Court and the Fifth
Circuit have held that this scheme—where litigants leapfrog straight from the agency to the
circuit—may strip district courts of their ordinary power to resolve agency claims under
their federal-question jurisdiction. See, e.g., Thunder Basin, 510 U.S. at 207–12; Elgin, 567
U.S. at 10–15; Bank of La. v. Fed. Deposit Ins. Co., 919 F.3d 916, 923–30 (5th Cir. 2019).
Even so, that kind of statutory review scheme “does not necessarily extend to every
claim concerning agency action.” Axon, 598 U.S. at 185. District courts must undertake a
“complex analysis” to determine whether the “claims at issue ‘are of the type Congress
intended to be reviewed within th[e] statutory structure.’” Bank of La., 919 F.3d at 923
(alteration in original) (quoting Free Enter. Fund v. Pub. Co. Acct. Oversight Bd., 561 U.S. 477,
489 (2010)). If so, the district court lacks jurisdiction to resolve the claim. If not, it may
proceed to the merits.
To guide this inquiry, the Supreme Court in Thunder Basin identified three relevant
factors: (1) whether precluding district court jurisdiction would “foreclose all meaningful
judicial review” of the claim; (2) whether the claim is “wholly collateral to [the] statute’s
review provisions”; and (3) whether the claim lies “outside the agency’s expertise.” 510
U.S. at 212–13 (internal quotations and citation omitted); see Bank of La., 919 F.3d at 923.
“When the answer to all three questions is yes, ‘we presume that Congress does not intend
to limit jurisdiction.’” Axon, 598 U.S. at 186 (quoting Free Enter. Fund, 561 U.S. at 489).
But Congress may have envisioned district court review even if the factors cut different
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ways. Id. In the end, the “ultimate question” is “whether the statutory review scheme,
though exclusive where it applies, reaches the claim in question.” Id.
B. 	The Axon Analysis
The Supreme Court recently elaborated on the implicit-preclusion analysis in Axon.
Axon involved two related challenges to administrative enforcement proceedings before the
Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC).
598 U.S. at 180–81. In both instances, the plaintiff claimed that the Commission was
unconstitutionally structured—specifically, that double-for-cause removal protections for the
agencies’ ALJs violated the separation of powers.5 Id. at 182–83. These alleged structural
violations, the argument went, tainted the administrative proceedings no matter their
outcome. Id. at 182–83. All agreed that the plaintiffs could raise their constitutional
challenges before the applicable Commission and then (if needed) in a federal court of
appeals. Id. at 181; see 15 U.S.C. § 78y(a)(1) (providing that “[a] person aggrieved by [an
SEC] final order . . . may obtain review of the order” by filing a petition in a court of
appeals); Id. § 45(c) (similar for the FTC). But like Vaping Dragon, the plaintiffs
sidestepped that process by suing in a district court, seeking to enjoin the Commission’s
proceeding. Axon, 598 U.S. at 182. The question, then, was whether the statutory review
schemes precluded the district court from exercising jurisdiction over the plaintiffs’
constitutional claims.
5 The plaintiff in the FTC case also challenged the Commission’s combination of prosecutorial and
adjudicative functions. See Axon, 598 U.S. at 183.
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The answer was no. The statutory review schemes for the SEC and FTC—though
exclusive for certain claims—do not implicitly withdraw a district court’s jurisdiction to
resolve the kinds of structural constitutional challenges raised in Axon. Id. at 185.
The Supreme Court reached that conclusion through a two-step analysis. See id. at
189. It first took a “30,000-foot view of the issue” by comparing the plaintiffs’ claims to
those in its prior implicit-preclusion cases. Id. at 188–89. In two cases, Thunder Basin and
Elgin, the Supreme Court held that the claims were committed to a statutory review scheme.
Id. In another, Free Enterprise Fund, the Supreme Court approved district court jurisdiction
despite the availability of direct circuit-level review. Id. The Axon Court reasoned that the
plaintiffs’ claims were more like the claim in Free Enterprise Fund—they all challenged “the
structure or very existence of an agency.” Id. at 189. Seeing no reason to treat them
differently, the Supreme Court concluded that the review schemes at issue did not foreclose
district court jurisdiction to resolve the plaintiffs’ “sweeping constitutional claims.” Id.
The Axon Court “[came] out in the same place” when, at the second step, it applied
the Thunder Basin factors. Id. All three factors pointed toward allowing district court review
of the plaintiffs’ claims “that the structure, or even existence, of an agency violates the
Constitution.” Id. at 195. In other words, the “more granular” inquiry confirmed what
precedent already compelled: district courts retain jurisdiction to resolve collateral disputes
over structural constitutional issues that have little to do with agency policy. Id. at 189; see
Cochran v. SEC, 20 F.4th 194, 212 (5th Cir. 2021) (en banc) (“[T]he Thunder Basin inquiry
simply reaffirms that Free Enterprise Fund controls this case and that [the] removal power
claim is within the district court’s jurisdiction.”), aff’d sub nom., Axon Enter., Inc. v. FTC, 598
U.S. 175 (2023).
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Like other courts post-Axon, the Court begins with the comparative analysis before
diving into Thunder Basin. See, e.g., Asbury Auto. Grp., Inc. v. FTC, No. 4:24-CV-950, 2025
WL 2317455, at *5–7 (N.D. Tex. Aug. 11, 2025) (O’Connor, C.J.).
i. 	At a “30,000-foot view,” the claim here is most like those in Axon
and Free Enterprise Fund.
Looking at the issue from 30,000 feet, Vaping Dragon’s Seventh Amendment claim
is of the same ilk as the claims in Axon and Free Enterprise Fund. See Axon, 598 U.S. at 188–
89. Making sense of that conclusion requires some background. So, before turning to the
specifics of this case, the Court begins with the relevant precedents.
a. 	Axon and Free Enterprise Fund
Axon and Free Enterprise Fund both involved challenges to double-for-cause removal
protections. With such arrangements, a subordinate agency official may be removed only
for good cause. What constitutes good cause is determined by a higher-level entity within
the agency, whose members themselves can only be removed by the President for good
cause. As a result, the ultimate decisionmaker—the President—is stripped of his power to
hold the subordinate officials accountable. In Axon, the subordinate officials were ALJs. Id.
at 182–83. In Free Enterprise Fund, they were members of the Public Company Accounting
Oversight Board—a nonprofit corporation overseen by the SEC that supervises the audits of
U.S. public companies. 561 U.S. at 485, 495–96. But the claims were otherwise the same:
the plaintiffs all argued that the subordinate officials’ “freedom from Presidential oversight”
rendered unconstitutional “all power and authority [the agency] exercised.” Id. at 508.
These claims are best understood as “structural” challenges. They did not “depend
on the validity of any substantive aspect” of a federal statute, rule, or regulation. Cochran,
20 F.4th at 207. Nor did they have any bearing on whether the plaintiffs were liable in the
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underlying administrative proceedings—say, for violating the Securities Exchange Act
(Axon) or for engaging in illicit accounting practices (Free Enterprise Fund). Id. That is, the
claims went to the “structure or very existence of an agency,” not the “substantive
decision[s]” that Congress viewed as within an agency’s particular expertise. Axon, 598
U.S. at 189. The claims were also structural in a different sense—they touched on the
broader allocation of power across our government. After all, the “structural principles
secured by the separation of powers protect the individual as well.” Bond v. United States,
564 U.S. 211, 222 (2011). To put it plainly: structural claims, like those in Axon and Free
Enterprise Fund, “charge that an agency is wielding authority unconstitutionally in all or a
broad swath of its work.” Axon, 598 U.S. at 189.
As Chief Judge O’Connor recently explained, the “structural defects” identified in
Axon and Free Enterprise Fund pose a “fruit-of-the-poisonous-tree” problem. Wulferic, LLC v.
FDA, 793 F. Supp. 3d 830, 840 (N.D. Tex. 2025) (concluding that FDA’s civil money
penalty scheme for tobacco products violates the Seventh Amendment). “Because part of
the agency is tainted, all work carried out under that (unconstitutional) authority is tainted
as well.” Id.; see Axon, 598 U.S. at 189. And it is not as simple as putting the proverbial
genie back in the bottle. “[B]eing subjected to unconstitutional agency authority” in an
administrative proceeding is itself a “‘here-and-now injury.’” Axon, 598 U.S. at 191
(internal quotation marks omitted) (quoting Seila Law LLC v. Consumer Fin. Prot. Bureau, 591
U.S. 197, 212 (2020)). A regulated party’s “right[] not to undergo the complained-of agency
proceedings” therefore cuts in favor of collateral district-court review. Id. at 192.
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b. 	Thunder Basin and Elgin
Now contrast those cases with Thunder Basin and Elgin. In Thunder Basin, a coal
company filed suit in federal district court challenging its apparent obligations under the
Mine Act to provide union officials with access to the workplace. 510 U.S. at 204–05.
According to the coal company, these requirements conflicted with its rights under the
National Labor Relations Act. Id. The company also objected on due process grounds,
arguing that federal regulators could not impose a fine before holding a hearing. See id.
Typically, Mine Act claims are brought before the Federal Mine Safety and Health
Review Commission and then (if necessary) a court of appeals. Id. at 204 (citing 30 U.S.C.
§§ 815, 816, 823). Relying extensively on the Mine Act’s legislative history, the Supreme
Court required the coal company to engage the Act’s alternative review scheme, holding
that the district court lacked jurisdiction over both claims. Id. at 209–11, 215–16. “The
Commission, [the Supreme Court] emphasized, had ‘extensive experience’ in addressing the
statutory issues raised, and could resolve them in ways that ‘brought to bear’ its ‘expertise’
over the mining industry.” Axon, 598 U.S. at 187 (quoting Thunder Basin, 510 U.S. at 214–
15). The Supreme Court acknowledged that the Commission’s proficiency in mining law
was less helpful for resolving the company’s due-process claim. Id. (citing Thunder Basin,
510 U.S. at 215). But it concluded still that the claim could be “meaningfully addressed in
the Court of Appeals.” Thunder Basin, 510 U.S. at 215.
Elgin is similar. There, a statute allowed federal employees challenging discharge
decisions to seek review before the Merit Systems Protection Board and, ultimately, the
Federal Circuit. 567 U.S. at 6 (citing 5 U.S.C. §§ 7513(d), 7703(a)(1)). Yet Elgin sued in
district court after he was fired for failing to register for the draft. Id. at 7. The applicable
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draft law, Elgin argued, violated the Equal Protection Clause because it excluded women.
Id. Although Elgin’s claim presented a constitutional question, the Supreme Court held that
it was committed to the MSPB—part of a “comprehensive system for reviewing personnel
action taken against federal employees.” Id. at 5 (quoting United States v. Fausto, 484 U.S.
439, 455 (1988)). Much like Thunder Basin, the Supreme Court emphasized the MSPB’s
comparative know-how: “A challenge to removal is precisely the type of personnel action
regularly adjudicated by the MSPB.” Id. at 22. Similarly, the Supreme Court “observed
that such an action could involve ‘threshold’ and other ‘questions unique to the employment
context’ that ‘fall[] squarely within the MSPB’s expertise.’” Axon, 598 U.S. at 187
(alteration in original) (quoting Elgin, 567 U.S. at 22–23). Thus, when a claim implicates an
agency’s “distinctive knowledge,” it is likely to fall within an alternative review scheme. See
id. at 186.
c. 	This Case
With that background, recall the 30,000-foot analysis: Is Vaping Dragon’s Seventh
Amendment challenge akin to Axon and Free Enterprise Fund? Or is it more like Thunder
Basin and Elgin? In short, it is the former.
On the surface, Vaping Dragon’s Seventh Amendment challenge looks identical to
the due-process claim in Thunder Basin. Wulferic, 793 F. Supp. 3d at 841. “[B]oth could be
framed as alleging that the agency’s enabling statute is void of a procedural protection.” Id.
Viewed that way, this issue appears easy. The Supreme Court held in Thunder Basin that the
due process claim could be “meaningfully addressed” in a court of appeals. 510 U.S. at 215.
Moreover, the Axon Court expressly doubted that challenges to an agency’s “commonplace
procedures” are “‘of the type’” thought to fall outside a statutory review scheme. 598 U.S.
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at 186, 189 (quoting Thunder Basin, 510 U.S. at 208, 212). Unsurprisingly, FDA leans on
the procedural framing, arguing that “Vaping Dragon does not challenge ‘the structure or
very existence of’ FDA” or “contend the ‘agency is wielding authority unconstitutionally in
all or a broad swath of its work.’” Dkt. No. 12 at 19 (quoting Axon, 598 U.S. at 189).
FDA’s argument, however, rests on a false premise. While the Seventh Amendment
has procedural undertones, it is structural in nature. As discussed more below, the premise
of Vaping Dragon’s challenge is that FDA’s civil money penalties trigger the jury right
because they are “[s]uits at common law.” U.S. Const. amend. VII. If Vaping Dragon is
right, major structural consequences follow. “The Constitution prohibits Congress from
‘withdraw[ing] from judicial cognizance any matter which, from its nature, is the subject of
a suit at the common law.” Jarkesy, 603 U.S. at 127 (alteration in original) (quoting
Murray’s Lessee v. Hoboken Land & Improvement Co., 59 U.S. (18 How.) 272, 284 (1856)).
Therefore, if FDA’s civil money penalty scheme counts as a suit at common law, then “an
Article III court must decide it” with a jury. Id.; see Wulferic, 793 F. Supp. 3d at 842. Any
attempt to funnel that suit elsewhere—say, a juryless administrative tribunal—would run
afoul of the Constitution.
The Article III implications highlight that the Seventh Amendment is not solely
about procedural protection of individual rights; it also furthers structural ends. Critically,
the “Seventh Amendment’s jury-trial right does not work alone.” Jarkesy, 603 U.S. at 141
(Gorsuch, J., concurring). “It operates together with Article III,” dictating how and when
claims must be subject to judicial, as opposed to administrative, review. See id.; see also id. at
171 (Sotomayor, J., dissenting) (recognizing that a Seventh Amendment claim is “rooted in
Article III and the separation of powers”). As the Fifth Circuit put it, “[t]he test for whether
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an Article III court is necessary for an action at law is the same as the test for whether a
party has a Seventh Amendment right to a jury trial.” In re Clay, 35 F.3d 190, 194 (5th Cir.
1994) (citing Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53 (1989)).
What does the Seventh Amendment’s symbiotic relationship with Article III mean
for jurisdiction? Most notably, it shows that this case is most like Axon and Free Enterprise
Fund. The Seventh Amendment analysis goes to whether a particular non-judicial forum
(an administrative tribunal) can constitutionally resolve a certain type of suit (an action to
impose a civil money penalty). If the answer is no, then the proceeding is “illegitimate,”
thereby causing the “here-and-now injury of subjection to an unconstitutionally structured
decisionmaking process.” Axon, 598 U.S. at 191–92 (internal quotation marks omitted). On
that understanding, Vaping Dragon’s Seventh Amendment claim is hardly different than the
challenges to double-for cause removal protections in Axon and Free Enterprise Fund. All
these arguments allege that structural flaws rooted in the constitutional separation of powers
infect the decisional process beyond repair.
These were not the kinds of questions at issue in Thunder Basin and Elgin. Those
cases involved challenges to a “specific substantive decision” implicating unique agency
expertise—for example, “fining a company,” as was true in Thunder Basin, or “firing an
employee,” as was the case in Elgin. Id. at 189. But a Seventh Amendment claim like
Vaping Dragon’s does not allege injury “from this or that ruling.” Id. at 195. It stems from
“subjection to all agency authority.” Id. The ensuing “here-and-now harm would remain
no matter how much [agency] expertise could be ‘brought to bear.’” Id. (quoting Thunder
Basin, 510 U.S. at 215). Put another way, a case is more like Axon and Free Enterprise Fund
(and less like Thunder Basin and Elgin) when the charge is that “an agency is wielding
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authority unconstitutionally in all or a broad swath of its work.” Id. at 189. In such cases,
the constitutional claim may be raised in a district court outside the statutory structure.
To hear FDA tell it, that is not the situation here. It asserts that Vaping Dragon
challenges only “a fraction of the agency’s work implementing the TCA and a sliver of its
overall responsibilities.” Dkt. No. 22 at 3. The agency’s briefing, however, gives a different
impression. Proceedings to enforce the TCA’s premarket authorization requirements for
ENDS products are among “FDA’s highest enforcement priorities.” Dkt. No. 12 at 12. In
fact, “[c]ivil money penalties are one of CTP’s most effective tools to enforce the TCA.” Id.
at 11; see also id. (noting that CTP has brought over 37,000 administrative actions seeking a
civil money penalty as of May 2025). It is hard to see how a challenge to these penalties
does not strike at a “broad swath” of FDA’s work. See Axon, 598 U.S. at 189.
In short, Vaping Dragon’s Seventh Amendment challenge is less like Thunder Basin
and Elgin and more like Axon and Free Enterprise Fund. Therefore, as was true in Axon, the
“30,000-foot view” points toward resolving this case on the merits. Id.
ii. 	The Thunder Basin factors also favor the Court’s jurisdiction.
Zooming in, application of the Thunder Basin factors confirms what the “30,000-foot
view” already suggests. Id. Each factor signals that the Court retains jurisdiction here.
a. 	Could precluding district court jurisdiction foreclose all
meaningful judicial review?
Start with the first question: whether preclusion of district court jurisdiction “could
foreclose all meaningful judicial review.” Thunder Basin, 510 U.S. at 212–13. According to
Vaping Dragon, waiting to raise its Seventh Amendment challenge in a court of appeals is
simply not an option. Its alleged harm is subjection to an unconstitutional proceeding—one
where findings of fact are made by an ALJ, not a jury. Dkt. No. 21 at 10. There can be no
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meaningful remedy in a court of appeals, the argument goes, because the alleged harm will
have already occurred. Id. FDA disagrees, arguing that the Fifth Circuit can adequately
review Vaping Dragon’s Seventh Amendment claim via a petition for review of an ALJ’s
final order assessing a civil money penalty against the company. Dkt. No. 12 at 15–16.
On this score, Axon is virtually dispositive. Just like Vaping Dragon, the regulated
parties in Axon claimed harm from “subjection to an illegitimate proceeding, led by an
illegitimate decisionmaker.” Axon, 598 U.S. at 191. That “‘here-and-now injury,’” the
Supreme Court emphasized, “is impossible to remedy once the proceeding is over, which is
when appellate review kicks in.” Id. (quoting Seila Law, 591 U.S. at 212). Indeed, a
structural constitutional flaw persists even if the regulated party wins before the agency. Id.
For such grievances, “the court of appeals can do nothing: A proceeding that has already
happened cannot be undone.” Id.
This case is just the same. Vaping Dragon seeks injunctive relief preventing it from
having to incur the time and expense of an allegedly unconstitutional proceeding. See Dkt.
Nos. 1 ¶ 60; 3. Without such relief, the company would be forced to undergo an illegitimate
proceeding that cannot be remedied after the fact. Yes, Vaping Dragon could invoke the
Seventh Amendment on appellate review from an adverse FDA decision. But that review
“would come too late to be meaningful.” Axon, 598 U.S. at 191. Even if the Fifth Circuit
agreed with Vaping Dragon, vacated the FDA’s order, and required a jury trial before the
agency could impose a civil money penalty, the company will still have been subjected to an
unconstitutional proceeding. As the Fifth Circuit recently noted, there is a lack of authority
“supporting the proposition that the constitutional guarantee of a jury trial is honored by a
trial occurring after an agency has already found the facts, interpreted the law, adjudged
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guilt, and levied punishment.” AT&T, Inc. v. FCC, 149 F.4th 491, 503 (5th Cir. 2025), cert.
granted, 2026 WL 73092 (U.S. Jan. 9, 2026); see United States v. Sagoo, No. 4:24-CV-1159,
2025 WL 2689912, at *3 (N.D. Tex. Sept. 19, 2025) (O’Connor, C.J.). If Vaping Dragon is
to have meaningful judicial review of a Seventh Amendment claim for injunctive relief, it
must come from this Court before being subjected to an allegedly unconstitutional
proceeding.
FDA lodges several counterarguments, none of which are persuasive. First, it notes
that the Seventh Amendment claim in Jarkesy reached the Supreme Court via the alternative
review scheme for final SEC orders, suggesting that Vaping Dragon may obtain review in
“the same way.” Dkt. No. 12 at 16. Two problems there. For one, unlike the plaintiff in
Jarkesy, Vaping Dragon is not seeking vacatur of a final agency order levying a civil money
penalty. See Jarkesy, 603 U.S. at 119. It asks the Court to enjoin a future unconstitutional
proceeding. See Dkt. No. 1 ¶ 60. Moreover, FDA’s reliance on Jarkesy puts the cart before
the horse. The FDCA only permits a “person . . . who is aggrieved by an order assessing a
civil penalty” to “file a petition for judicial review of such order.” 21 U.S.C. § 333(f)(6)
(emphasis added). FDA’s argument therefore assumes that the agency will prevail in the
underlying administrative proceeding.
But what if Vaping Dragon wins? On FDA’s view, there would be no way for the
company to challenge its subjection to an unconstitutional proceeding. Under both Axon
and Fifth Circuit en banc precedent, that is no answer. See Axon, 598 U.S. at 191; Cochran,
20 F.4th at 209 (“The Exchange Act’s statutory-review scheme does not guarantee [the
plaintiff] meaningful judicial review of her claim because the enforcement proceedings will
not necessarily result in a final adverse order,” which is a “prerequisite for judicial review”
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under the statutory scheme.). For there to be meaningful judicial review of its Seventh
Amendment claim, Vaping Dragon must be able to raise that challenge win or lose.
Second, and relatedly, FDA cites to Texas Tobacco Barn, LLC v. U.S. Department of
Health & Human Services, a case pending at the Fifth Circuit that squarely raises the same
Seventh Amendment issue. See Dkt. No. 12 at 16; No. 25-60200, Dkt. No. 1-1 at 2 (5th Cir.
Apr. 16, 2025). That case, unlike this one, arose out of a petition for review from a final
FDA decision imposing a civil penalty. The implication, then, is that Vaping Dragon can
also receive meaningful judicial review via a petition to the Fifth Circuit. Again, this
argument ignores the injury claimed. Vaping Dragon wants prospective relief: the alleged
harm “is the process itself,” not a penalty that has already been imposed. Space Expl. Techs.
Corp. v. NLRB, 151 F.4th 761, 771 (5th Cir. 2025). Therefore, Vaping Dragon can only
obtain meaningful judicial review before it “must endure an unconstitutional proceeding—
an injury that ‘cannot be undone’ ex post.” 6 Id. (quoting Axon, 598 U.S. at 191).
Third, FDA invokes two district court decisions—one from D.C. and another from
California—where the court concluded that it lacked jurisdiction to resolve similar Seventh
Amendment objections to FDA’s civil money penalty regime for tobacco products. E.g.,
Dkt. No. 12 at 18 (first citing Vape Cent. Grp., LLC v. FDA, Civ. A. No. 24-3354, 2025 WL
637416 (D.D.C. Feb. 27, 2025); then citing Huff & Puffers, LLC v. FDA, No. 8:24-CV-2110,
2025 WL 1092696 (C.D. Cal. Feb. 27, 2025)). To state the obvious, the Court is not bound
6 Qualified-immunity doctrine provides a useful analogy. See Axon, 598 U.S. at 192. In that context,
the Supreme Court recognizes “an entitlement not to stand trial or face the other burdens of
litigation.” Mitchell v. Forsyth, 472 U.S. 511, 526 (1985). That privilege is “effectively lost if a case
is erroneously permitted to go to trial.” Id. Thus, the Supreme Court has blessed interlocutory
appellate review of pretrial orders denying qualified immunity; otherwise, the harm of undergoing
an illegitimate proceeding cannot later be undone. Id. at 526–27. Similar reasoning applies here.
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by these decisions. Camreta v. Greene, 563 U.S. 692, 709 n.7 (2011). Nor does it find them
persuasive. Both decisions treat the Seventh Amendment as a mere procedural protection
despite its structural implications. See supra, Section 3.B.i.c. And both decisions look to the
Supreme Court’s consideration of a Seventh Amendment claim on direct review in Jarkesy
as if it is the end-all-and-be-all. Vape Cent. Grp., 2025 WL 637416, at *5; Huff & Puffers, 2025
WL 1092696, at *4. Jarkesy, for reasons explained, does not foreclose collateral review here.
Because Vaping Dragon will not receive meaningful judicial review absent this
Court’s intervention, the first Thunder Basin factor weighs in favor of jurisdiction.
b. 	Is the claim wholly collateral to the statute’s review
provisions?
Next is whether Vaping Dragon’s Seventh Amendment claim is “wholly collateral”
to the FDCA’s review provisions. Thunder Basin, 510 U.S. at 212 (quoting Heckler v. Ringer,
466 U.S. 602, 618 (1984)). Under Axon, a claim is necessarily collateral if it challenges the
agency’s “power to proceed at all.” 598 U.S. at 192. That is precisely what Vaping Dragon
is alleging in this case. If the Seventh Amendment entitles the company to a jury trial, then
the company is also entitled to adjudication in an Article III court. See Jarkesy, 603 U.S. at
127; see also Matter of Tex. Petroleum Corp., 52 F.3d 1330, 1336 (5th Cir. 1995) (“Whether an
Article III court is necessary involves the same inquiry as whether a litigant has a Seventh
Amendment right to a jury trial.”). Or said another way, if Vaping Dragon prevails on its
Seventh Amendment claim, the agency adjudication cannot proceed. Wulferic, 793 F. Supp.
3d at 845–46. The claim is therefore “collateral to any decisions [FDA] could make in
individual enforcement proceedings.” Axon, 598 U.S. at 195–96.
FDA resists this straightforward conclusion. Its argument goes like this: the FDCA
allows the ALJ to enter a summary decision when there is no genuine dispute of material
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fact. Dkt. No. 12 at 17, 19; see 21 C.F.R. § 17.17(b). “The Seventh Amendment is not even
potentially implicated,” however, “‘unless and except so far as there are issues of fact to be
determined.’” Dkt. No. 12 at 19 (quoting In re Peterson, 253 U.S. 300, 310 (1920)). Thus,
“the manifestation of any Seventh Amendment claim depends on how the administrative
proceeding unfolds.” Id. Here, there is no indication of disputed facts, meaning Vaping
Dragon’s Seventh Amendment right (to the extent it has one) has not accrued.7 Id. at 17.
This argument is a red herring. As explained fully below, the Court must decide
whether this case “implicates the Seventh Amendment.” Ortega v. Off. of the Comptroller of the
Currency, 155 F.4th 394, 402 (5th Cir. 2025). If so, and assuming the public rights doctrine
does not apply, Vaping Dragon is entitled to adjudication in an Article III court, with any
outstanding fact issues decided by a jury. See Jarkesy, 603 U.S. at 127–28. As Chief Judge
O’Connor explained, FDA’s single-minded focus on factfinding may carry some weight “in
an Article III court, but not in an administrative tribunal, where there are no jury trials.”
Wulferic, 793 F. Supp. 3d at 845. Moreover, Axon undermines FDA’s position. There too,
the applicable regulations allowed ALJs to grant a summary decision in the agency’s favor.
See 16 C.F.R. § 3.24 (2021) (FTC); 17 C.F.R. § 201.250 (2021) (SEC). Yet the Supreme
Court still held that the plaintiffs’ Seventh Amendment claim was collateral to the statutory-
review provision, despite the possibility that no disputed facts would arise. See Axon, 598
U.S. at 192. Therefore, under Axon, the collateral factor also favors the Court’s jurisdiction.
c. 	Is the claim outside the agency’s expertise?
Lastly, the Court considers whether Vaping Dragon’s Seventh Amendment claim is
“outside the agency’s expertise.” Thunder Basin, 510 U.S. at 212. “On that issue, Free
7 To be clear, FDA does not argue that Vaping Dragon lacks standing or that its claim is not ripe.
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Enterprise Fund could hardly be clearer.” Axon, 598 U.S. at 194. There, the Supreme Court
distinguished “‘standard questions of administrative’ and constitutional law” from
“‘considerations of agency policy.’” Id. (quoting Free Enter. Fund, 561 U.S. at 491). The
former are within a district court’s bailiwick; the latter implicate an agency’s expertise.
Vaping Dragon’s claim raises a pure question of constitutional law—it does not
involve “distinctive knowledge” of federal tobacco policy that would favor review via the
statutory scheme. See id. at 186. In fact, “agency adjudications are generally ill suited to
address structural constitutional challenges” like the kind here.8 Carr v. Saul, 593 U.S. 83, 92
(2021). Because the Seventh Amendment analysis “lie[s] outside [FDA’s] core
competence,” Space Expl. Techs. Corp., 151 F.4th at 772, the third factor (like the first two)
weighs in favor of jurisdiction.
* 	* 	*
In sum, the Court has jurisdiction to resolve Vaping Dragon’s Seventh Amendment
claim. The “30,000-foot” analysis from Axon reveals that this case is more like those where
the Supreme Court endorsed district court jurisdiction over collateral constitutional claims.
598 U.S. at 189. And application of the three Thunder Basin factors confirms this result. See
id. The Court therefore proceeds to the merits.
4. 	Analysis
The Seventh Amendment provides that in “[s]uits at common law . . . the right of
trial by jury shall be preserved.” Whether FDA’s civil money penalty scheme triggers that
8 Vaping Dragon notes that ALJs cannot invalidate federal statutes. Dkt. No. 21 at 14 (citing 21
C.F.R. § 17.19(c)). But Axon makes clear that Congress may have implicitly precluded district
court jurisdiction “even if the agency itself” could not have resolved the claim. 598 U.S. at 190
n.2.
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right requires a two-step analysis. See Ortega, 155 F.4th at 402. “The threshold issue is
whether this action implicates the Seventh Amendment.” Jarkesy, 603 U.S. at 120. If so,
the Court then “consider[s] whether the ‘public rights’ exception to Article III jurisdiction
applies.” Id. If this action implicates public rights, then Congress may “assign [it] to an
agency tribunal without a jury, consistent with the Seventh Amendment.” Id. at 119.
Applying Jarkesy, FDA’s civil money penalty scheme undoubtedly implicates the
Seventh Amendment. And no public rights are involved. Thus, before FDA can impose a
civil money penalty, Vaping Dragon is entitled to a jury trial in an Article III court.
A. 	FDA’s civil money penalty scheme implicates the Seventh Amendment.
The Constitution, as written in 1787, guaranteed jury trials only in criminal cases.
See United States v. ERR, LLC, 35 F.4th 405, 409 (5th Cir. 2022) (citing U.S. Const. art. III,
§ 2, cl. 3). During the ratification period, the Founders debated whether to extend the same
right to civil litigants, “at least as a matter of federal constitutional law.” Consumer Fin. Prot.
Bureau v. CashCall, Inc., 135 F.4th 683, 695 (9th Cir. 2025) (R. Nelson, J., concurring). The
lack of a civil jury right prompted some of the “strongest objections” to the Constitution.
Parsons v. Bedford, 28 U.S. (3 Pet.) 433, 446 (1830). Indeed, the Founding generation grew
tired of the English regulating commerce through “juryless admiralty, vice admiralty, and
chancery courts.” Jarkesy, 603 U.S. at 121. Core to these objections was the jury’s role in
combatting acts of Parliament restricting “the export of certain commodities, such as
tobacco.” Matthew P. Harrington, The Economic Origins of the Seventh Amendment, 87 Iowa
L. Rev. 145, 162 (2001). So by 1791, the American people ratified the Seventh Amendment
as part of the Bill of Rights.
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The text of the Seventh Amendment guarantees the right to a jury trial for “[s]uits at
common law.” But the right is not limited to the “common-law forms of action recognized”
in 1791. Curtis v. Loether, 415 U.S. 189, 192–93 (1974). “[T]he Framers used the term
‘common law’ in the [Seventh] Amendment ‘in contradistinction to equity, and admiralty,
and maritime jurisprudence.’” Jarkesy, 603 U.S. at 122 (quoting Parsons, 28 U.S. at 446).
Therefore, the Amendment “embrace[s] all suits” that do not fall into those categories,
“whatever may be the peculiar form which they may assume.” Id. (alteration in original)
(quoting Parsons, 28 U.S. at 447).
The civil jury right “extends to a particular statutory claim if the claim is ‘legal in
nature.’” Id. (quoting Granfinanciera, 492 U.S. at 53). In deciding whether a claim is “legal
in nature,” courts “consider the cause of action and the remedy it provides.” Id. at 122–23.
While courts must evaluate both factors independently, In re Abbott, 117 F.4th 729, 734 (5th
Cir. 2024), the “remedy [is] the ‘more important’ consideration.” Jarkesy, 603 U.S. at 123
(quoting Tull v. United States, 481 U.S. 412, 421 (1987)).
i. 	Under Jarkesy, civil money penalties are a textbook legal remedy.
In Jarkesy, the Supreme Court considered whether the SEC can impose civil money
penalties in a juryless in-house adjudication consistent with the Seventh Amendment. Id. at
115. At the first step of the analysis, the Supreme Court explained that “civil penalties” are
“a form of monetary relief.” Id. at 123. “While monetary relief can be legal or equitable,
money damages are the prototypical common law remedy.” Id.; see Tull, 481 U.S. at 422
(recognizing that “civil penalt[ies are] a type of remedy at common law that could only be
enforced in courts of law”). Whether a monetary remedy is legal or equitable turns on its
purpose. If the remedy “is designed to punish or deter the wrongdoer,” then it is legal.
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Jarkesy, 603 U.S. at 123. But if it is meant to “‘restore the status quo’” or “‘serve a remedial
purpose’”—for example, by “order[ing] a defendant to return unjustly obtained funds”—
then it is equitable. Id. (first quoting Tull, 481 U.S. at 422; then quoting Austin v. United
States, 509 U.S. 602, 610 (1993)).
The SEC’s civil money penalties, the Supreme Court held, fall into the former
category. Id. The Justices based that conclusion on three characteristics of the applicable
statutes. First, federal law conditions the SEC’s ability to impose civil penalties on six
statutory factors—several of which “concern culpability, deterrence, and recidivism.” Id. at
123–24; see, e.g., 15 U.S.C. §§ 78u-2(c), 80b-3(i)(3) (factors include the degree of misconduct
involved, whether the defendant committed previous violations of securities laws or
regulations, the need for deterrence, etc.). “Because [these factors] tie the availability of
civil penalties to the perceived need to punish the defendant rather than to restore the
victim, [they] are legal rather than equitable.” Jarkesy, 603 U.S. at 124.
Second, the Supreme Court noted that the size of the available penalty also depends
on the seriousness of the defendant’s conduct. Id. (citing 15 U.S.C. §§ 77h-1(g)(2), 78u-2(b),
80b-3(i)(2)). Simple violations of a federal securities law or regulation warrant a “first tier”
penalty. Id. But progressively serious offenses—if the defendant’s violation involved fraud
or manipulation, for example—result in a higher-tier penalty with a larger sanction. Id.
The third and “final proof” is that the SEC need not return any civil money penalty
to victims. Id. The Commission “can choose to compensate injured shareholders from the
civil penalties it collects”; however, it “is not required to do so.” Id. “Such a penalty by
definition does not ‘restore the status quo’ and can make no pretense of being equitable.”
Id. (quoting Tull, 481 U.S. at 422).
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Taken together, these three characteristics reveal that the SEC’s civil penalties “are
designed to punish and deter, not to compensate.” Id. at 125. In other words, they are “a
type of remedy at common law that could only be enforced in courts of law.” Id. (quoting
Tull, 481 U.S. at 422). Accordingly, the Supreme Court held that the suit implicated the
Seventh Amendment, thus entitling the defendants to a jury in an Article III court.
ii. 	FDA’s civil money penalty scheme is indistinguishable from the one
in Jarkesy.
As in Jarkesy, the remedy here is “all but dispositive.” Id. at 123. Just like the
statutes governing the SEC, the FDCA directs ALJs to consider culpability, deterrence, and
recidivism when determining the amount of a civil money penalty for a tobacco-product
violation. The ALJ “shall take into account,” among other factors, the “gravity of the
violation,” the “degree of culpability,” and any “history of prior . . . violations.” 21 U.S.C.
§ 333(f)(5)(B). And note that the FDCA permits “[e]nhanced penalties” for “intentional[]”
violations, just as the SEC may impose a higher-tier penalty for more troubling conduct. Id.
§ 333(f)(9)(B). Lastly, the money FDA collects in civil penalty proceedings is “deposited as
miscellaneous receipts in the Treasury of the United States.” 21 C.F.R. § 17.54. Like the
SEC, FDA need not give the money to those harmed by the violation. Accordingly, there is
no material difference between the FDA’s civil money penalty scheme and the SEC’s. See
Wulferic, 793 F. Supp. 3d at 847. Both are punitive, and both are legal in nature.
The Fifth Circuit recently applied the same analysis to reach an identical conclusion
with respect to the Federal Communications Commission’s civil money penalty scheme.
The question in AT&T, Inc. v. FCC was whether an in-house adjudication imposing a
forfeiture order on AT&T violated the company’s Seventh Amendment rights. 149 F.4th at
494. Like the Supreme Court in Jarkesy, the Fifth Circuit “start[ed] with the remedy.” Id. at
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498. The panel emphasized the FCC’s civil penalty provisions—singling out the statutory
factors requiring the Commission to assess the “gravity” of the violation, including whether
it was willful. Id. (quoting 47 U.S.C. § 503(b)(2)(E)). And there too “the penalties [were]
not remedial”: the FCC pays its penalties into the Treasury, not to victims whose location
data is compromised. Id. (citing 47 U.S.C. § 504(a)). “So, like the penalties in Jarkesy,” the
FCC’s penalties are a legal remedy. Id. As in this case, “[t]hat ‘is all but dispositive’ of the
Seventh Amendment issue.” 9 Id. (quoting Jarkesy, 603 U.S. at 123).
iii. 	The nature of the cause of action does not change the bottom line.
Putting aside the remedy, there is also the second consideration—the nature of the
cause of action. See Jarkesy, 603 U.S. at 122–23. FDA argues that “[u]nlike the fraud in
Jarkesy, an administrative TCA claim is not ‘modeled on common law.’” Dkt. No. 12 at 22
(quoting Jarkesy, 603 U.S. at 136). That is not obvious. Common-law fraud targets the
misrepresentation or concealment of material facts. Jarkesy, 603 U.S. at 125; see Wesdem,
LLC v. Ill. Tool Works, Inc., 70 F.4th 285, 291 (5th Cir. 2023) (identifying the elements of
common-law fraud under Texas law). The FDCA does something similar: it imposes
liability on retailers who sell “adulterated” tobacco products that have seemingly been
through the required premarket authorization process, but which in fact have not. See 21
U.S.C. §§ 331(a), 387b(6). That is, in essence, a misrepresentation of a material fact.
To be sure, the FDCA and common-law fraud are not “identical.” Jarkesy, 603 U.S.
at 126. But they do not need to be. See id.; AT&T, Inc., 149 F.4th at 499. Courts only look
9 The Fifth Circuit also rejected the FCC’s argument that the public rights exception applies to its
enforcement proceedings. 149 F.4th at 500–03. Therefore, after AT&T, “Article III adjudication”
with a jury “is mandatory” for FCC forfeiture orders. Id. at 503. Although the Supreme Court
recently granted certiorari in AT&T, the case remains binding on this Court.
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for a “close relationship” between the cause of action and a common-law analogue. Jarkesy,
603 U.S. at 126. And even that is “not dispositive” of the Seventh Amendment question if,
as here, the “action resembles a traditional legal claim.” Id. at 135 (citing Granfinanciera,
492 U.S. at 52); see supra, Section 4.A.i–ii.
In any event, Vaping Dragon does not press this fraud-centric argument. See Dkt.
No. 3-1 at 6–8. Instead, it points to a 1785 Massachusetts statute making it a crime to sell
any “diseased, corrupted, contagious or unwholesome provisions,” a 1787 South Carolina
case holding that a person charged with selling liquor without a license was entitled to a jury
trial, and a 1787 Pennsylvania decision granting a jury trial to a ship owner who faced
statutory forfeiture of his vessel because he used it to transport goods without paying taxes.
Id. at 9. In Vaping Dragon’s view, these examples show that “claims for the sale of
‘adulterated’ products . . . were being tried in courts of law by the time the Seventh
Amendment was adopted.” Id. FDA contends that the examples are irrelevant, either
because they are historically inapposite or involve unrelated matters. Dkt. No. 12 at 23–24.
The agency has a point. The Massachusetts statute and South Carolina case involve
criminal proceedings, which are “not affected by the [S]eventh [A]mendment.” Cap.
Traction Co. v. Hof, 174 U.S. 1, 18 (1899). The Pennsylvania case, for its part, implicates
admiralty and maritime jurisprudence—areas squarely outside the Seventh Amendment’s
scope. Jarkesy, 603 U.S. at 122; Dkt. No. 12 at 24. More broadly, all three examples have
nothing to say about English practice. See Tull, 481 U.S. at 417 (“[W]e compare the
statutory action to 18th-century actions brought in the courts of England prior to the merger
of the courts of law and equity.”). Thus, Vaping Dragon’s historical evidence, while
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addressing “‘the same basic conduct’” as the FDCA, is “deficient as an evidentiary matter.”
Wulferic, 793 F. Supp. 3d at 847 (quoting Jarkesy, 603 U.S. at 125).
In the end, “the relationship between the [FDCA] and a common law analogue is
not as obvious as it was in Jarkesy.” AT&T, Inc., 149 F.4th at 499. But ambiguity on that
score does not change the outcome. Remember: “[T]he relief sought is ‘[m]ore important’
than finding a precisely analogous common-law cause of action.” Tull, 481 U.S. at 421
(quoting Curtis, 415 U.S. at 196). As explained, FDA’s civil money penalty scheme is a
textbook legal remedy. Accordingly, the Seventh Amendment entitles Vaping Dragon to a
jury trial in an Article III court, unless the public rights exception applies.
B. 	The public rights exception does not apply.
Although FDA’s civil money penalty scheme implicates the Seventh Amendment,
the agency argues that a jury trial is not required under the public rights exception. Dkt.
No. 12 at 20–22. Under this exception, the Seventh Amendment poses no obstacle to
agency adjudication. But this case does not deal with public rights. So Congress cannot
circumvent the jury trial requirement by channeling it to an agency tribunal.
“The public rights doctrine is an ‘area of frequently arcane distinctions and confusing
precedents.’” Ortega, 155 F.4th at 402 (quoting Thomas v. Union Carbide Agric. Prods. Co., 473
U.S. 568, 583 (1985)); see Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 584 U.S.
325, 334 (2018) (recognizing that the Supreme Court “has not ‘definitively explained’ the
distinction between public and private rights,” nor have its precedents in this area “‘been
entirely consistent’” (quotations omitted)). That said, the Supreme Court has identified a
few matters that “historically could have been determined exclusively by [the executive and
legislative branches].” Jarkesy, 603 U.S. at 128 (alteration in original) (quoting Stern v.
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Marshall, 564 U.S. 462, 493 (2011)). These include “revenue collection, foreign commerce,
immigration, tariffs, tribal relations, public lands, public benefits, and patents.” AT&T, Inc.,
149 F.4th at 500. However, because the public rights doctrine is an atextual exception to
Article III, its application must be closely scrutinized. Jarkesy, 603 U.S. at 131. So “[e]ven
with respect to matters that arguably fall within the scope of the ‘public rights’ doctrine, the
presumption is in favor of Article III courts.” Id. at 132 (quoting N. Pipeline Constr. Co. v.
Marathon Pipe Line Co., 458 U.S. 50, 69 n.23 (1982)).
Here, FDA contends that the public rights exception applies because its civil money
penalty scheme implicates public health. Dkt. No. 12 at 20. This argument lacks merit. To
begin, the Supreme Court in Jarkesy did not identify public health as a recognized category
of public rights. See 603 U.S. at 130. Nor has the Fifth Circuit in its post-Jarkesy cases. See,
e.g., Ortega, 155 F.4th at 402–03; AT&T, Inc., 149 F.4th at 500. At most, FDA can point to
Crowell v. Benson, which included public health in a list of matters sometimes assigned to
administrative agencies. 285 U.S. 22, 51 (1932). But “Crowell itself concerned the
administration of public lands”—it did not purport to recognize public health as a distinct
category of public rights. Wulferic, 793 F. Supp. 3d at 849 (citing Jarkesy, 603 U.S. at 130).
Crowell’s apparent example of a public health case, Houston v. St. Louis Independent
Packaging Co., does not help FDA as much as it thinks.10 249 U.S. 479 (1919); see Dkt. No.
12 at 20. There, a sausage manufacturer challenged the Secretary of Agriculture’s authority
to make factual findings for enforcing a labeling regulation under the Meat Inspection Act.
249 U.S. at 479, 483. As FDA concedes, “Houston did not involve a defendant in an agency
10 The Supreme Court listed Houston in an 11-case string cite in a footnote. See Crowell, 285 U.S. at
51 n.13. That footnote contains no analysis, let alone any indication that Houston clearly placed
public health within the public rights doctrine.
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enforcement action.” Dkt. No. 22 at 11 (internal quotation marks omitted). And the case
said nothing about Article III adjudication, the Seventh Amendment, or public rights.
Houston is, at most, “an example of an executive official exercising delegated legislative
authority.” Wulferic, 793 F. Supp. 3d at 849. Thus, it does not do the work that FDA
wishes.
Next, the agency contends that Oceanic Steam Navigation Co. v. Stranahan confirms
Congress’ power to authorize civil money penalties without a jury trial. 214 U.S. 320
(1909); see Dkt. No. 12 at 22. Not so. Oceanic Steam blessed the imposition of an
administrative penalty on a steamship company that violated federal immigration law by
facilitating the entry of aliens with “loathsome or dangerous contagious diseases.” 214 U.S.
at 332–34. But Jarkesy cabined Oceanic Steam’s analysis to “Congress’s power over foreign
commerce.” 603 U.S. at 129 n.1 (emphasis in original); see Sun Valley Orchards, LLC v. U.S.
Dep’t of Lab., 148 F.4th 121, 130 (3d Cir. 2025) (noting that “Oceanic Steam related closely to
the admission and exclusion of aliens”) (Hardiman, J.). By contrast, Congress passed the
FDCA pursuant to its authority over interstate commerce. United States v. Walsh, 331 U.S.
432, 434 (1947). Jarkesy leaves no doubt on this distinction: “Nowhere does Oceanic Steam
Navigation say that the public rights exception applies to cases concerning . . . interstate
commerce more broadly.” 603 U.S. at 129 n.1.
Lastly, FDA’s attempt to shoehorn public health into the public rights doctrine risks
“blow[ing] a hole in what is meant to be a narrow exception to Article III.” AT&T, Inc., 149
F.4th at 500. Countless areas of federal regulation can be said to promote public health. If
disputes involving those disparate matters could be categorically assigned to an agency that
simultaneously functions as the “prosecutor, judge, and jury,” the Seventh Amendment’s
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promise of a “neutral adjudicator” would mean little. See Jarkesy, 603 U.S. at 140. Given
the presumption in favor of Article III courts, the continued debate over the vitality of the
public rights doctrine,11 and the fact that public health is not an entrenched category of
public rights, the Court concludes that the public rights exception does not apply.
* 	* 	*
The civil jury right is “of such importance and occupies so firm a place in our history
and jurisprudence that any seeming curtailment of the right” must “be scrutinized with the
utmost care.” Jarkesy, 603 U.S. at 121 (quoting Dimick v. Schiedt, 293 U.S. 474, 486 (1935)).
FDA’s civil money penalty scheme implicates the Seventh Amendment because it provides
a quintessential legal remedy. And the public rights exception does not otherwise permit
agency adjudication. Thus, Vaping Dragon is entitled to a jury trial in an Article III court.
5. 	Remedies
That leaves the remedies. Vaping Dragon seeks injunctive relief and a declaratory
judgment. Dkt. No. 1 ¶ 60. For the reasons below, it is entitled to a permanent injunction
but not declaratory relief.12
11 Vaping Dragon questions whether the public rights doctrine “still exists” post-Jarkesy. Dkt. No. 21
at 18. The Fifth Circuit recognizes that it does. See, e.g., AT&T, Inc., 149 F.4th at 500. No doubt,
most of the Jarkesy Court criticized the doctrine. See Jarkesy, 603 U.S. at 136–40 & nn.2–4; id. at
158 (Gorsuch, J., concurring). And those Justices were particularly suspect of its application in
Atlas Roofing Co. v. Occupational Safety & Health Review Commission, which held that OSHA could
impose civil penalties in an administrative tribunal. See 430 U.S. 442, 450 (1977). While FDA
does not rely on Atlas Roofing, Jarkesy still holds that courts should think twice before extending the
public rights doctrine any further.
12 Vaping Dragon also requests attorneys’ fees and costs. Dkt. No. ¶ 60. At this time, the Court
denies the company’s request without prejudice to it filing an appropriate motion after final
judgment. See Wulferic, 793 F. Supp. 3d at 852.
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A. 	Permanent Injunction
Vaping Dragon prevails on each permanent-injunction factor. See Valentine, 993 F.3d
at 280. As explained, Vaping Dragon has shown actual success on the merits of its Seventh
Amendment challenge. Moreover, it faces irreparable harm without an injunction. The
“here-and-now injury” of subjection to an unconstitutional proceeding cannot be undone
after the fact.13 Axon, 598 U.S. at 191 (quoting Seila Law, 591 U.S. at 212); see AT&T, Inc.,
149 F.4th at 503. And “[w]hen an alleged deprivation of a constitutional right is involved,
most courts hold that no further showing of irreparable injury is necessary.” Opulent Life
Church v. City of Holly Springs, 697 F.3d 279, 295 (5th Cir. 2012) (quoting 11A Charles Alan
Wright, et al., Federal Practice and Procedure § 2948.1 (2d ed. 1995)).
The last two factors—the balance of hardships and the public interest—merge when
the government is the defendant. Nken v. Holder, 556 U.S. 418, 435 (2009). FDA urges the
Court to consider the “public-health purpose” of its tobacco-control provisions. See Dkt.
No. 12 at 28 (quoting Big Time Vapes, 963 F.3d at 438). But those concerns, while valid,
cannot overcome the public interest in enforcing the Constitution. After all, “[i]t is always
in the public interest to prevent the violation of a party’s constitutional rights.” Jackson
Women’s Health Org. v. Currier, 760 F.3d 448, 458 n.9 (5th Cir. 2014) (quoting Awad v. Ziriax,
670 F.3d 1111, 1132 (10th Cir. 2012)). Vaping Dragon has therefore carried its burden on
each permanent-injunction factor.
Next, consider the scope of the injunction. Vaping Dragon seeks in part an “order
prohibiting HHS and FDA from adjudicating civil money penalties in administrative
13 Legal remedies are also inadequate. “Because [Vaping Dragon] sue[s] the government, money
damages are off the table.” Am. Hosp. Ass’n v. Becerra, 738 F. Supp. 3d 780, 804 (N.D. Tex. 2024)
(citing Wages & White Lion Invs., LLC v. FDA, 16 F.4th 1130, 1142 (5th Cir. 2021)).
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proceedings.” Dkt. No. 1 ¶ 60(g). That is, Vaping Dragon asks the Court to enjoin the
defendants from seeking administrative penalties against anyone. See id. But the company
does not explain how a universal injunction is necessary to afford it “complete relief.”
Trump v. CASA, Inc., 606 U.S. 831, 852 (2025). Nor is it otherwise clear: Vaping Dragon is
the only plaintiff before the Court. See id. Thus, to provide complete relief to Vaping
Dragon and to ensure that the injunction is “no more burdensome to the defendant[s] than
necessary,” the Court’s injunction need only reach FDA’s proceedings against the company.
Id. (quoting Califano v. Yamasaki, 442 U.S. 682, 702 (1979)).
The Court thus enjoins the defendants from adjudicating civil money penalties
against Vaping Dragon in an administrative proceeding and enjoins them to dismiss with
prejudice the administrative complaint against the company.
B. 	Declaratory Judgment
The Declaratory Judgment Act authorizes federal courts to “declare the rights and
other legal relations of any interested party seeking such declaration, whether or not further
relief is or could be sought.” 28 U.S.C. § 2201(a). “Any such declaration shall have the
force and effect of a final judgment or decree and shall be reviewable as such.” Id. Federal
courts have “discretion in determining whether and when to entertain an action under the
Declaratory Judgment Act,” even when the suit satisfies the “jurisdictional prerequisites.”
Wilton v. Seven Falls Co., 515 U.S. 277, 282 (1995).
The Court declines to enter declaratory relief here. “Ample precedent establishes
that [a court] should not exercise [its] discretion to extend declaratory relief when a
challenged law or policy no longer affects the plaintiff.” Texas v. EEOC, 933 F.3d 433, 451–
52 (5th Cir. 2019). Because the Court enjoins the defendants from adjudicating civil money
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penalties against Vaping Dragon in an administrative proceeding, a declaratory judgment
would be redundant and provide no further relief to Vaping Dragon. Id. at 451 n.38. See,
e.g., Texas v. Garland, 719 F. Supp. 3d 521, 599 (N.D. Tex. 2024) (Hendrix, J.) (declining the
plaintiff’s request to extend declaratory relief in addition to a permanent injunction), rev’d
and vacated on other grounds sub nom., Texas v. Bondi, 149 F.4th 529 (5th Cir. 2025), reh’g en
banc granted and vacated, __ F.4th __, 2026 WL 110948, at *1 (5th Cir. Jan. 14, 2026).
6. 	Conclusion
In sum, the Court has jurisdiction to resolve Vaping Dragon’s collateral challenge to
FDA’s civil money penalty scheme. That scheme implicates the Seventh Amendment, and
it has nothing to do with “public rights,” which do not require a jury trial. Accordingly,
Vaping Dragon is entitled to a jury trial in an Article III court. The Court therefore denies
the defendants’ motion for summary judgment (Dkt. No. 11), converts Vaping Dragon’s
motion for preliminary injunction into a motion for summary judgment (Dkt. No. 3), and
enters final judgment for Vaping Dragon on the merits. The defendants are permanently
enjoined from adjudicating civil money penalties against Vaping Dragon in an
administrative proceeding. Thus, the defendants are also enjoined to dismiss the
administrative complaint against the company with prejudice. Vaping Dragon’s request for
a declaratory judgment is denied as redundant.
So ordered on February 2, 2026.
JAMES WESLEY HENDRIX
UNITED STATES DISTRICT JUDGE
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