The Seventh Amendment to the U.S. Constitution states, “[i]n 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.” The surface-level clarity of this Amendment is deceiving. What, after all, are “Suits at Common law”? Does this Amendment allow the Congress to assign certain cases for review by administrative law judges? Can the Congress create new “rights” that should be tried in federal (i.e., Article III) courts? Should there be a distinction between “public rights” and “private rights” in determining which court should adjudicate a given case? Even if the case is tried before an Article III tribunal, must a jury be present?
Wulferic v. FDA, No. 4:24-cv-1183 (N.D. Tex.), is a lawsuit filed by vape company Wulferic, LLC (d.b.a, Vapor Lab) against the U.S. Food and Drug Administration (“FDA”) that resulted in a landmark federal ruling on August 1, 2025, touching on exactly these issues. In Wulferic, the District Court for the Northern District of Texas was asked to determine whether civil money penalties issued by the FDA for violations of the Tobacco Control Act—which are adjudicated before administrative law judges in the Departmental Appeals Board, rather than before a federal judge—violate the Seventh Amendment.
In the following paragraphs, we will explore the statutory and regulatory provisions at play, the relevant case law, and finally the Wulferic opinion itself, and attempt to project what may happen as the case is appealed to the United States Court of Appeals for the Fifth Circuit.
Statutory and Regulatory Framework
According to 21 U.S.C. § 333(f)(9):
[A]ny person who violates a requirement of this chapter 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.
This law creates a potentially nondiscretionary framework under which the FDA issues fines for violations of the Tobacco Control Act. Such cases are adjudicated through administrative proceedings under 21 C.F.R. 17, which states, among other things: (1) FDA must file a complaint against the respondent, (2) serve said complaint against the respondent, and (3) respondent may request a hearing by filing an answer. Finally, 21 C.F.R. § 17.47 states:
Either the Center or any respondent may appeal an initial decision, including a decision not to withdraw a default judgment, or a decision granting summary decision to the Commissioner of Food and Drugs or other entity the Commissioner designates to decide the appeal. The Commissioner has currently designated the Departmental Appeals Board (DAB) to decide appeals under this part.
Thus, federal law authorizes the FDA to issue civil money penalties for violations of the Food, Drug, and Cosmetic Act, and adjudication of such penalties occurs within administrative courts, not within the context of an Article III court.
Case Law Framework
Although the history of the Seventh Amendment, dating to 1791, is extensive and fascinating, for purposes of understanding the meaning of Wulferic, we will explore just three important cases – Tull v. United States, Atlas Roofing Co. v. Occupational Safety & Health Review Commission, and Securities and Exchange Commission v. Jarkesy – in chronological order.
There is much to be said about Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994), and Axon Enterprise, Inc. v. Federal Trade Commission, 598 U.S. 175 (2023), which discuss, inter alia, establishing a test for determining whether a federal district court has jurisdiction over pre-enforcement challenges to an administrative agency’s actions when a comprehensive statutory review scheme exists. However, this brief article only examines the application of the Seventh Amendment to Civil Money Penalties in context of agency enforcement.
We begin our discussion of the case law with Tull v. United States, 481 U.S. 412 (1987). In Tull, the Court was asked to determine whether the Seventh Amendment “guaranteed petitioner a right to a jury trial on both liability and amount of penalty in an action instituted by the Federal Government seeking civil penalties and injunctive relief under the Clean Water Act.” Id. at 414. For purposes of our discussion, we will only address the liability issue.
To answer this question, the Court applied a two-prong analysis: (1) the Court must determine whether the type of action in question is one for which a jury would have been customarily afforded, and (2) the Court must examine whether the remedy sought is legal or equitable in nature. Id. at 417–18. The Court noted that, with respect to the first prong, “those action that are analogous to 18th century cases tried in courts of equity or admiralty do not require a jury trial.” Id. at 412.
Regarding the first prong, the Court concluded that the action is “clearly analogous to the 18th-century action in debt, and federal courts have rightly assumed that the Seventh Amendment required a Jury trial.” Id. at 420.
With respect to the second prong, the Court did not find the fact that a district court judge was the finder of fact to be dispositive. As echoed in later cases discussed below, it is the remedy that matters, not the forum. To this end, the Court stated: “a civil penalty was a type of remedy at common law that could only be enforced in courts of law. Remedies intended to punish culpable individuals, as opposed to those intended simply to extract compensation or restore the status quo, were issued by courts of law, not courts of equity.” Id. at 422.
Among other things, Tull created a clear two prong analysis for determining the right to a jury trial under the Seventh Amendment. Additionally, it made clear that the right to a jury is determined chiefly by the type of remedy sought, not simply the forum for adjudication.
In Atlas Roofing Co. v. Occupational Safety & Health Review Commission, 430 U.S. 442 (1977), the Supreme Court considered whether the Seventh Amendment allows Congress to assign the adjudication of certain causes of action to non–Article III tribunals. In other words, where a penalty is imposed by an administrative agency, in that case, a fine for violation of the Occupational Safety and Health Act, may Congress require that such a case be adjudicated not in an Article III court, but in an administrative tribunal under the auspices of an agency? See id. at 449.
To make this determination, the Court first analyzed whether the matter constituted a “suit at common law” within the meaning of the Seventh Amendment, that is, the type of cause of action in which a jury trial would have been customary, as distinguished from cases in equity or admiralty, where jury trials were not traditionally available. See Parsons v. Bedford, 28 U.S. (3 Pet.) 433 (1830).
The petitioners in Atlas argued, unsurprisingly, that actions seeking monetary penalties were classical suits at common law and that depriving them of a jury therefore violated the Seventh Amendment. See Atlas Roofing, 430 U.S. at 449.
The Court disagreed, invoking the “public rights” doctrine. As the Court explained, in “cases in which the government sues in its sovereign capacity to enforce public rights… [the] Seventh Amendment does not prohibit Congress from assigning the factfinding function and initial adjudication to an administrative forum with which the jury would be incompatible.” Id. at 450. The Court therefore concluded that Congress may create new statutory “public rights” and may assign their adjudication to an “administrative agency with which a jury trial would be incompatible.” Id. at 455.
Relying on this historical analysis, the Court concluded:
The point is that the Seventh Amendment was never intended to establish the jury as the exclusive mechanism for factfinding in civil cases. It took the existing legal order as it found it, and there is little or no basis for concluding that the Amendment should now be interpreted to provide an impenetrable barrier to administrative fact-finding under otherwise valid federal regulatory statutes. Id. at 460.
This case stands for the proposition that Congress may, in certain circumstances, create new rights and new causes of action and assign their adjudication to an administrative agency. In doing so, the Court balances the interests of the executive, legislative, and judicial branches by reserving cases arising under the “common law” for Article III courts, while preserving Congress’s authority to create and assign the adjudication of new statutory causes of action.
In Securities and Exchange Commission v. Jarkesy, No. 22-859, slip op. at 2 (U.S. June 27, 2024), the Court deepened the two prong test we see in Tull and distinguished Atlas. In facts surprisingly similar to those in Wulferic, the Jarkesy Court was asked to determine whether the Seventh Amendment entitles defendants to a jury trial when SEC seeks civil penalties for fraud, particularly when those fraud provisions are purposefully modeled after common law fraud. As for the second prong in the Tull analysis, Jerkesy discusses whether or not the “public rights” exception to Article III adjudication applies when an action does not fall within one of the “distinctive areas involving governmental prerogatives where the Court case concluded that the matter may be resolved outside of an Article III court.” Id.
In Jarkesy, the Court deepened its articulation of how to determine whether the Seventh Amendment has been implicated. The right to a jury does not accrue only to those “common law forms of action recognized” in 1791 by English courts, but rather it “embraces all suits which are not of equity or admiralty jurisdiction” and are thus “legal in nature.” Id. at 3. This leads the Court to yet another blurry dialectic: whether the remedy or the forum is more dispositive when determining if an action resembles a common-law cause of action. Here, the Court makes clear that it is the remedy that matters most. Id. In the case of civil monetary penalties imposed to punish a wrongdoer—penalties not intended to make someone whole—they are not restitutive or equitable in nature and thus constitute a type of claim that would trigger the Seventh Amendment, entitling the defendant to a jury. Id. at 11.
It is important to note that the Court did not treat the similarity between the statutory fraud claim and its common-law analogue as dispositive; rather, it viewed that similarity as merely confirmatory, reinforcing the notion that the inquiry centers on the nature of the remedy, not the forum or the historical pedigree of the claim. Id.
Somewhat sidestepping the public-rights versus private-rights issue, the Court referenced Northern Pipeline Constr. Co. v. Marathon Pipeline Co., 458 U.S. 50, another foundational case in Seventh Amendment jurisprudence, noting that “[a] hallmark that we have looked to in determining if a suit concerns private rights is whether it is made of the stuff of the traditional actions at common law tried by the courts at Westminster in 1789.” In other words, if a case seeks to adjudicate a common-law matter, it concerns “private rights” and therefore falls within the Article III realm. However, the Court again emphasized that “what matters is the substance of the action, not where Congress has assigned it… they provide civil penalties, a punitive remedy that we have recognized could only be enforced in courts of law.” Id. at 21.
In sum, the Jarkesy Court—without invalidating Atlas—stands for the proposition that when a cause of action seeks a remedy that is not equitable in nature and is punitive rather than restitutive, the defendant must be afforded a jury of their peers.
The Holding in Wulferic
In Wulferic, the plaintiff made and sold tobacco products without first having received a marketing authorization from the FDA under 21 U.S.C. § 387j. Wulferic v. FDA at 2. Pursuant to 21 U.S.C. § 333(f)(9), discussed above, the FDA issued a civil money penalty. Id. at 2. The plaintiff sued in the District Court for the Northern District of Texas, and the court was asked to determine whether civil money penalties issued by the FDA for violations of the Tobacco Control Act violate the Seventh Amendment.
The Wulferic court, following the Tull analysis, first sought to determine whether the civil money penalties at issue would qualify as suits at common law, thus implicating the Seventh Amendment. Id. at 20. After reviewing the case law referenced above, the Wulferic court stated:
[T]he civil money penalty scheme here shares the same features as that in Jarkesy. First, the penalty is designed to punish or deter the wrongdoer by requiring consideration of such factors as the gravity of the violation, history of prior such violations, and the degree of culpability…. Second, there are enhanced penalties for certain intentional violations…. Third, this scheme is not intended to restore the status quo by returning money to the victims; rather, the collection are deposited as miscellaneous receipts in the Treasury of the United States…. Thus, the… civil money penalty remedy is legal in nature, like those in Jarkesy. (Internal citations omitted). Id. at 20-21.
Returning to the first Tull prong, the Wulferic court made clear that the plaintiff had failed to provide analogous common-law causes of action that would have customarily provided for a jury. However, the court did not find this problematic, as “the relief sought is more important than finding a precisely analogous common law cause of action.” Id. at 22.
Regarding the “public rights” exception, the Wulferic court stated, “as a general matter, the FDA argues that the public rights exception applies because the [Tobacco Control Act] serves a public health purpose.” Id. at 24. The court did not find this persuasive, however, noting that “it is the substance of the enforcement action, and not the object of the regulation that matters.” Id. at 25.
Thus, the court held that the plaintiffs had “successfully establish[ed] that the FDCA’s civil money penalty provisions for tobacco products… violate the Seventh Amendment, and, therefore, so do the FDA’s proceedings against it.” Id. at 27.
FDA’s Appeal
FDA appealed the Wulferic decision in September, and the Fifth Circuit stayed the appeal pending the resolution of another civil money penalty claim in Texas Tobacco Barn, LLC v. HHS, No. 25-60200, Dkt. Nos. 43, 44 (5th Cir. Aug. 3, 2025). However, FDA seems to have a difficult road to plow moving forward. Tull, Atlas, and Jarkesy seem to all point in the direction of the Circuit Court holding that FDA’s civil money penalties are punitive in nature and certainly not restitutive. The remedy here, after examining the case law above, points squarely in the direction of being legal in nature, and not equitable. That being said, FDA must feel compelled to defend its civil money penalty scheme, as an unfavorable ruling would essentially dismantle all of 21 C.F.R. 17 and gut the agency’s enforcement scheme.