Family fireworks business sparks legal battle to open federal courts for regulatory challenges

Jake’s Fireworks, started in 1940 by the Marietta family in Pittsburg, Kansas, has played a huge role in the nation’s fireworks industry. Over the years, their products have illuminated countless skies during celebrations across the country. Today, Jake’s operates distribution centers in seven states and serves customers in more than 20 states.

At the same time, Jake’s has maintained its family focus and commitment to hard work, fairness, and giving back to the community by partnering with organizations like the Folds of Honor Foundation to support America’s military families and offering fundraising opportunities for a wide variety of charitable causes, churches, and entrepreneurs.

However, for over a decade, Jake’s has faced the threat of federal prosecution and millions of dollars in penalties because one of its products might sometimes make the wrong type of noise.

The Consumer Product Safety Commission’s “Audible Effects Regulation” is a rule meant to control hand-held devices with dangerously powerful explosives intended to make loud sounds and used by farmers for pest control.

Those aren’t the consumer fireworks that Jake’s sells, so the regulation shouldn’t even be applied to Jake’s products. And the Commission’s missteps don’t end there.

To determine whether a fireworks device is intended to have an audible effect, the Commission employs a “poof/bang” “test,” in which Commission staff—perhaps an individual—launch a shell into the air—under unknown conditions—and listen for a “poof” or a “bang.” If staff thinks the shell made a “bang,” rather than a “poof,” the device is (supposedly) intended to have an audible effect and thereby subject to the rule.

The Commission has peppered Jake’s with non-compliance notices for years, stating that millions of dollars’ worth of its fireworks failed an unscientific noise test and were thus banned under federal law. The CPSC notices demanded the fireworks be destroyed and threatened civil penalties of over $15 million for selling them.

In response, Jake’s diligently followed the CPSC’s process and demonstrated that the agency’s regulation doesn’t apply to Jake’s products at all. The agency’s own records confirm Jake’s products fall outside of the regulation’s purview.

But the agency ignored Jake’s efforts and doubled down on its interpretation, so Jake’s sued in federal court—twice. Both times, the court agreed with the CPSC that its notices were not “final agency actions” and thus couldn’t be challenged in federal court under the Administrative Procedure Act.

This has left Jake’s in legal limbo. The company is sitting on over $2 million of fireworks it can’t sell because the CPSC says they’re banned. Yet, Jake’s cannot challenge the CPSC’s determination that they’re banned because the CPSC says its determination isn’t “final”; nor does Jake’s have any means for making it so.

It is all too common for agencies to bully people through informal threats and notices, arguing when pressed that they’re seeking only “voluntary” compliance. It’s one of the most pernicious problems within government agencies. It also violates the law. As a unanimous Supreme Court said in PLF’s wins in Sackett I and again in Hawkes, government agencies can’t issue consequential determinations and threats for non-compliance—and then claim such decisions aren’t “final.”

The CPSC’s treatment of Jake’s is no exception. If Jake’s were to sell the disputed fireworks, the agency could use the supposedly non-final notices as evidence of knowing violations and hit Jake’s with even-more-severe penalties. In this case, the CPSC’s explicit determination that Jake’s fireworks “are banned hazardous substances” and the agency’s demand that Jake’s destroy its fireworks—followed by the CPSC’s explicit refusal to reconsider its interpretation—constitute final agency action that Jake’s should be allowed to challenge in court.

With no further review options and crushing legal consequences, Jake’s appealed the district courts’ dismissal. In June 2024, the Fourth Circuit Court of Appeals ruled that the district court was right and that the CPSC’s notices are not “final agency action” and, therefore, cannot be challenged in court.

Undeterred, Jake’s appealed that ruling to the United States Supreme Court in December 2024, asking the Court to rule, yet again, that regulatory agencies cannot play linguistic games with “finality” to avoid judicial review.